Stewart Milne Westhill Limited Against Halliday Fraser Munro
| Jurisdiction | Scotland |
| Judge | Lord Doherty |
| Neutral Citation | [2016] CSOH 76 |
| Court | Court of Session |
| Docket Number | CA162/14 |
| Published date | 02 June 2016 |
| Date | 02 June 2016 |
| Year | 2016 |
OUTER HOUSE, COURT OF SESSION
[2016] CSOH 76
CA162/14
OPINION OF LORD DOHERTY
in the cause
STEWART MILNE WESTHILL LIMITED
Pursuer;
against
HALLIDAY FRASER MUNRO
Defenders:
Pursuer: Broome; CMS Cameron McKenna LLP
Defenders: Young QC, Duthie; Clyde & Co
2 June 2016
Introduction
[1] The pursuer is a developer. The defenders are a firm of architects. In April 2007 the
pursuer and the defenders concluded a written contract of appointment (“the Appointment”). In terms thereof the defenders were appointed as architects in relation to the construction of a new office, workshop and leisure building development for Acergy UK Limited (“Acergy“) at Westhill Business Park, Aberdeen. Once completed the new development was to be let by the pursuer to Acergy. The pursuer appointed Stewart Milne Construction (“SMC”) as main contractors for the building work. SMC was the construction division of Stewart Milne Group Limited (“SMG”). The pursuer is a subsidiary of SMG.
[2] Practical completion of the building works to the office building was achieved on 26 September 2008. In December 2008 there was water ingress into the subfloor of the south wing of the office. Certain investigations and remedial works were carried out. In late October and early November of 2009 there was further, more extensive, water ingress into the subfloor. On this occasion investigations disclosed defects in the tanking of the building. Extensive remedial work was required.
[3] On 2 September 2014 the present action was raised. The pursuer maintains that the defenders were in breach of the Appointment, and that their breach of contract caused or materially contributed to the tanking defects. It maintains that the water ingress in 2008 was not caused by the tanking defects; and that it did not know within five years of raising the action, and could not with reasonable diligence have known, that it had suffered loss and damage. The defenders deny that they were in breach of contract. They aver that the 2008 water ingress was attributable to the tanking defects; that that ingress was material damage which the pursuer was aware of at the time it occurred; or that with the exercise of reasonable diligence it could have become aware that it had suffered material damage; and that accordingly the right to reparation which the pursuer asserts prescribed before 2 September 2009.
[4] The action came before me for a proof before answer. I heard evidence over the course of five days, and submissions on a further day. The pursuer led evidence from six witnesses. The defenders also led six witnesses. A number of agreed matters were set out in the Joint Minute of Agreement no. 43 of process.
The Appointment
[5] In terms of clause 2.1 of the Appointment the pursuer appointed the defenders to provide, and the defenders agreed to provide, “the Services fully and faithfully in accordance with this agreement”. The “Services” were described in Schedule 1. In general, they comprised architect’s management services, services as lead consultant, contract administrator services, and architect’s design services through all of the RIBA/RIAS work stages from Stage A (initial appraisal) to Stage L (post practical completion). The Services included (i) directing the design process; (ii) co‑ordinating the design of all construction elements; (iii) co‑ordinating and monitoring design work; (iv) making visits to the works in connection with the defenders’ design; (v) providing further information reasonably required for construction; and (vi) reviewing design information from contractors or specialists. In terms of clause 3.1 the defenders warranted to the pursuer that they had:
“… ‘exercised, and shall continue to exercise, in the performance of the Services all the reasonable skill and care to be expected of a properly qualified and competent Architect experienced in carrying out services for projects of a similar size, scope and complexity to the Project’…”
They also acknowledged that the pursuer “… has relied and will continue to rely upon the aforesaid skill and care in respect of the performance of the Services.” Clause 15.1 provided that the Agreement embodied the complete and entire agreement between the parties. It concluded: “… No amendments or modifications of this Agreement shall be valid unless reduced to writing and executed as a deed by both parties.”
[6] The defenders maintain that they provided all of the Services until Stage F, at which point they were instructed by the pursuer’s Mr David Anderson not to administer the building contract between the pursuer and SMC beyond being required to issue a certificate of practical completion as and when building works were completed.
The layout of the basecourse of the office
[7] The perimeter walls of the office at basecourse level were comprised of (i) an outer leaf the lower part of which was concrete blockwork and the upper part of which was brickwork; (ii) an inner leaf of concrete blockwork; (iii) a cavity between the two leaves. Within the cavity there was a rigid insulation board and there ought to have been concrete fill up to just above external ground level. The brickwork contained weepholes. The cladding on the external wall began above the brickwork. The concrete floor slab intersected the inner blockwork leaf. Above the floor slab was a void where services were laid, and on top of the void there was a suspended floor. At regular intervals around the perimeter of the building there were steel columns, the bases of which were set in cube‑shaped concrete encasements. The columns and their encasements interrupted the inner leaf of blockwork, and the encasements protruded beyond the exterior and interior sides of it.
The tanking
[8] The defenders prepared a specification which was issued to SMC. Section J40 dealt with flexible sheet tanking/damp proofing. A Bentonite clay proprietary waterproofing product, Voltex, manufactured by CETCO Ltd (“CETCO”), was specified as a tanking membrane. Section J40 further stated:
“… Consult CETCO Ltd technical literature for details. CETCO can also provide a design and specification service and it is recommended that they are consulted early in the design process…
Joints: Staggered joints, 100mm min laps
…
Accessories: Bentoseal trowel grade sodium bentonite compound for detailing around penetrations and corner transitions…
WORKMANSHIP
…
Condition of membrane at completion:
- Neat, smooth and fully supported, dressed well into abutments and around intrusions.
- completely impervious and continuous.
…
INSPECTION
Give notice: Before covering any part of the membrane with overlying construction…”.
[9] The defenders also issued SMC with drawings A(1)01, A(1)02 and A(1)03 showing tanking details for the basecourse. These dealt with external wall to subfloor detailing and showed Voltex laid below the floor slab, lapped via a 5 x 50mm Bentoseal fillet to a load bearing damp proof membrane (“DPM”) which crossed the inner leaf of the wall and emerged in the wall cavity where it was sealed to a vertical Voltex tanking membrane using a further Bentoseal fillet. They also showed a 10mm smooth concrete render to the outer face of the inner leaf to take the Voltex tanking. The drawings which the defenders issued did not show details for tanking at peripheral column encasements. None of the standard details available in the CETCO literature showed tanking arrangements for peripheral column encasements.
The evidence
The pursuer’s case
Graeme Lawtie
[10] Mr Lawtie was construction manager with SMC from about 2005 until about September 2009. Between that date and about 2012 he was area construction manager. Prior to his promotion to area construction manager his immediate superior had been his predecessor as area manager, Fraser Taylor. Geordie Fraser had been SMC’s site manager for the office building. Derek Anderson had been SMC’s commercial director.
[11] Mr Lawtie’s understanding was that the pursuer had entered into a building contract with SMC to build the project. The job had started on site in September 2007, but Mr Lawtie had had some involvement in the project since 2006. Acergy had had a shadow design team (which had included architects and a mechanical and engineering consultant) which had taken part in meetings and had had the opportunity to comment on/disapprove any aspect of the design and construction.
[12] Mr Lawtie confirmed that while the horizontal tanking below the floor slab had been installed by specialist installers, Andrew Cowie Construction Ltd (“Andrew Cowie”), the vertical tanking had been installed by SMC’s direct labour force. When the horizontal tanking had been installed the installers had left sufficient Voltex sheeting at each edge of the floor to enable it to be continued vertically up the blockwork. Mr Lawtie stated that it “simply required to be folded up”. SMC had four or five men installing the vertical tanking. They had used Voltex on one previous job.
[13] Mr Lawtie had been aware that Mr McMurtie of CETCO had attended on site on a number of occasions to inspect Andrew Cowie’s work. He knew that CETCO had sent its inspection reports to Geordie Fraser as well as to Andrew Cowie. Mr Lawtie had seen the reports from time to time. He had also been aware in 2007 that CETCO had provided drawings to Andrew Cowie showing how Voltex should be applied in specific situations (such as where service connections required to go through tanking). Nonetheless, he had not thought there was any need to consult CETCO about the horizontal tanking, or to ask them to attend on site to inspect it. He had realised that the installation would involve forming junctions and overlapping. When asked by Mr Young whether it had been seen as an easy task which did not need inspection he said he thought it was: that, essentially, it involved folding up the lengths of Voltex which Andrew Cowie had left. He confirmed that there were processes...
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