Rtz Pension Property Trust Ltd v Arc Property Developments Ltd (First Defendant) Asfa Ltd (Second Defendant/Applicant) Asfa Ltd (Third Party)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE POTTER,LORD JUSTICE ALDOUS,LORD JUSTICE SIMON BROWN |
| Judgment Date | 29 October 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J1029-4 |
| Docket Number | LTA 97/7711/1 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 October 1998 |
[1998] EWCA Civ J1029-4
Lord Justice Simon Brown
Lord Justice Aldous
Lord Justice Potter
LTA 97/7711/1
QBENF 98/1279/1
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEENS BENCH DIVISION
(OFFICIAL REFEREES BUSINESS)
Royal Courts of Justice
Strand
London WC2
MR N DENNYS QC and MS C-A DOERRIES (Instructed by Herbert Smith, Exchange House, Primrose Street, London EC2A 2HS) appeared on behalf of the Appellant
MR W GODWIN (Instructed by Messrs Cameron McKenna, Sceptre Court, 40 Tower Hill, London EC3N 4BB) appeared on behalf of the Respondent, MR M McMULLAN appearing to receive judgment.
Thursday, 29th October 1998
INTRODUCTION
This is a renewed application for leave to appeal by the second defendants, following refusal by the single Lord Justice, from an order of Mr Recorder Moxon-Browne QC sitting as an official referee made on 27th November 1997 in relation to the costs of an action previously discontinued by the plaintiffs by consent upon 22nd September 1997. On that earlier date it was ordered that the plaintiffs be at liberty to discontinue the action and the first defendants be at liberty to discontinue their third party claim and the claim for contribution against the second defendants on terms that all questions of costs of the action be reserved.
The costs order of 27th November 1997 was an unusual one in that it departed from the general rule that a defendant is entitled to costs when an action is discontinued by providing:
1. That the first and second defendants pay the plaintiffs' costs of the action up to and including 10th January 1997, such costs to be taxed if not agreed, and that thereafter there be no order for costs.
2. That there be no order for costs in the contribution proceedings brought by the first defendant against the second defendant.
It was also ordered that there should be no order as to the costs of the application and that leave to appeal be refused to all parties.
The application for leave to appeal related only to paragraph 1 of the Costs Order.
On 24th February 1998 leave to appeal was refused by the single Lord Justice who ordered that, if the application was renewed, the hearing should take place inter partes immediately following the grant of leave.
Leave to appeal was granted at the outset of the hearing before this Court for reasons which appear in the judgment which follows.
THE BACKGROUND
The first defendants were property developers and the second defendants were their architects in relation to a development of mixed commercial and residential premises in Bristol. The plaintiffs sued the first defendants for breaches of warranty and the second defendants for breach of the common law duty of care in respect of defects of design and in particular failure to provide proper access for the regular inspection, maintenance and cleaning of large parts of the external aluminium curtain walling on the eastern elevation of the development. Certain eyebolts which had been installed internally were, for various reasons pleaded, alleged to be inadequate to enable such inspection, maintenance and cleaning to be carried out safely, properly or at all. The statement of claim pleaded that investigation of the appropriate means of rectification was continuing but that the most effective remedial works would involve installing a powered cradle system on the east elevation consisting of a Monorail or similar device mounted on the main structure of the building. The estimated cost pleaded was some £82,500 plus VAT which had risen to over £100,000 by the date of trial. The defences pleaded were essentially general denials of liability and breach of the duty and an assertion that the rings provided were adequate. There were also pleaded issues about the adequacy of the plaintiffs' Monorail solution which was in any event said to be ineffective in certain respects. The matter progressed towards trial upon that basis.
As the Recorder stated in his judgment, neither defendant pleaded, nor (until delivery of their expert's report in December 1996) raised any positive case on what eventually became their defence, namely that no permanent means of access was required at all because men working from a cradle machine called a Nifty Lift Heightrider (known as a "Cherry Picker") could do the job sufficiently well on an ad hoc basis whenever cleaning or maintenance was required. That solution, which had never before been considered by the plaintiffs or their experts, was first mooted by the defendants' experts in a meeting with the plaintiffs' experts in July/August 1996, following which it was incorporated in writing in the defendants' experts' reports served in mid-December 1996. On 2nd December 1996 the first defendants had amended their defence to plead such a solution. The 10th January 1997 was the date by which the Recorder found that the plaintiffs had had reasonable opportunity to digest the contents of those reports which gave details of the solution proposed.
Following such suggestion, the plaintiffs' experts did not accept the Cherry Picker as an appropriate solution and the plaintiffs continued to trial expressly on the basis that the suggested system was in practice wholly unproven as an effective method of cleaning and maintenance in the conditions available on site. The trial started on 10th March 1997 and the evidence was largely completed when it was adjourned on 25th March 1997 for lack of time. The second defendants then decided to provide a demonstration of their proposals to be carried out at the plaintiffs' building on a basis acceptable to the plaintiffs with a view to calling further expert and/or video evidence at the resumption of the trial. That demonstration proved that the Cherry Picker solution was effective, so that the plaintiffs decided to discontinue their action, to which course the defendants consented subject to reservation of the argument on the question of costs.
THE JUDGMENT OF THE RECORDER
The core of the Recorder's reasons for making the order as to costs which he did appear from three passages in his judgment. First, having heard virtually all the evidence, although he made no express finding on liability, he expressed the view that it was
"… extremely difficult to see how, even if this case had continued to its end (and there was only a little more evidence to hear, and then argument) ASFA [the second defendants] could have avoided a finding that a failure to follow this standard [i.e. the applicable British Standard in question] was inconsistent with the exercise by them of due care. The question in the case was whether the plaintiffs suffered any real harm as a result."
The question of "real harm" was whether the building required a permanent means of access to be installed for inspection and maintenance purposes at substantial cost.
The Recorder expressed this view against the background that it was conceded to be the responsibility of the second defendants, under their terms of appointment and/or warranties which they had given, to consider what means of access were required to clean the eastern elevation and to design a suitable means for obtaining such access if required. Further, it was common ground that the design of the building made no special provision for access to any elevations of the building and no evidence was called nor any document referred to which showed that the defendants had ever given consideration to the question of access. Indeed, there was positive evidence to show that they had not.
The Recorder noted that the problem of access had first been raised in 1989, after completion of the development, by a tenant of the plaintiffs and that, when approached for advice, the second defendants had referred the plaintiff to a company called Technitube for a solution and it was Technitube which had proposed the installation of the permanent Monorail access system. The Recorder emphasised that subsequently neither defendant had pleaded or indicated what would eventually become their case, namely that no means of access was required at all because of the ability to carry out the inspection and maintenance work with a Cherry Picker, the defendants hitherto having relied upon the already installed eye-bolts as sufficient. After a careful review of events the Recorder stated:
"In my judgment, it was wholly unreasonable for the defendants to defend this case up until the end of 1996 without identifying their Defence. If either defendant had earlier identified the Nifty-Lift solution by an appropriate pleading, supported and particularised either by that pleading or by expert'sv reports, there is at least a prospect that the plaintiffs would have adopted that solution and dropped the action. What the position would have been about costs is a matter for speculation into which I need not go.
The failure to plead the case on which the defendants ultimately came to rely was a serious omission. I think it was unreasonable. The plaintiffs were first led into the litigation as the only means of recovering the costs of what was at that stage the only remedial scheme that anybody had ever suggested, they were then forced to continue the litigation at least to the point when for the first time the defendants suggested that no remedial scheme at all was required. In my judgment, and bearing in mind in exercising the discretion to award costs it is never possible to do complete justice between the parties, but doing the best I can, the right order is that the defendants pay the plaintiffs' costs of the action up until 10 January 1997."
The Recorder then turned...
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