Walter Lilly & Company Ltd v Giles Patrick Cyril MacKay and Another
| Jurisdiction | England & Wales |
| Judge | Mr Justice Akenhead |
| Judgment Date | 11 July 2012 |
| Neutral Citation | [2012] EWHC 1773 (TCC) |
| Docket Number | Case No: 2010-TCC17747 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 11 July 2012 |
[2012] EWHC 1773 (TCC)
Mr Justice Akenhead
Case No: 2010-TCC17747
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sean Brannigan QC and Anneliese Day QC (instructed by Reynolds Porter Chamberlain LLP) for the Claimant
David Sears QC, Serena ChengandDavid Johnson (instructed by Nabarros LLP) for the Defendants
Hearing dates: 12–15, 19–22, 26–29 March, 2–4 April and 3 May 2012
This litigation raises extensive disputes which have arisen on a substantial new building project at 3, Boltons Place, London SW5. The project commenced in about 2004 and it is common ground that, when the Contractor, Walter Lilly & Company Limited ("WLC"), was appointed as main contractor, design work was nowhere near completed. It was clear and became clearer that the employer, DMW Developments Ltd ("DMW"), had very high expectations. However, little if any design had been completed prior to the involvement of WLC. There were substantial delays, much of which initially at least were not the responsibility of WLC, and as time went on DMW fell out seriously with its Architect. It can certainly be seen with hindsight, and could probably have been foreseen, that the project was "a disaster waiting to happen". This certainly has proved to be the case.
The case raises a number of issues which may be of interest to the construction industry and specialist legal practitioners and these include global claims and concurrent delays. In one sense, this litigation is very old-fashioned because it has involved a full-blooded conflict between the parties in which there seems to have been little, no or belated room for compromise, although the quantum experts have gone some way to reducing what is in issue. There remain in effect hundreds of issues between the parties, hence the length of this judgment. Different approaches are adopted by each party on delay analysis. No quarter was given on any of the primary matters in issue. Some very personal criticisms and complaints have been made by each party about one or more of the other side's witnesses. There have been over 32,000 pages of documentation put before the Court (albeit with a significant amount of duplication and irrelevant material), there have been 9 factual witnesses and 8 experts and the trial hearing has lasted 16 days. The expert bundles themselves run to 33 in number, totalling some 11,000 pages. It seems that the parties have expended between about £9m and £10m by way of costs, which is obviously disproportionate to what is in dispute.
I propose to divide this judgement into a number of sections:
A. General Chronology.
B. Assessment of Witnesses.
C. The Contract.
D. The Proceedings and the Pleadings
E. Analysis of Major Causes of Delays and Major Defects.
F. Extension of Time.
G. Quantum Delay.
H. Other Defects.
I. Other Quantum.
In the General Chronology which follows, I will not set out in detail the history relating to the Light Wall, the ABW, the Courtyard Sliding Doors, the lift, the Barrisol Ceilings, the Stingray Doors, Leather in the Library, snagging or plaster defects which will be dealt with in the Analysis of Major Causes of Delays and Major Defects.
General Chronology
No, 3 Boltons Place, owned and occupied by Mr and Mrs Mackay, is one of three adjacent houses of similar design. DMW was a purpose designed vehicle for the acquisition of the land at what is now Nos. 1, 2 and 3 Boltons Place and was formed by three people, Mr Mackay, Mr Daniel and Mr West. The three houses were known during construction as Units or Plots A, B and C, of which C was to be Mr and Mrs Mackay's. The houses are of reinforced concrete construction on piled foundations and the external walls are brick, although the ground floors are rendered in a faux rusticated manner. There are five floors, with a basement containing a below garden swimming pool set across a narrow courtyard, a ground floor and three other floors. The third floor is located behind a mansard style slate clad roof. Whilst each house was built to a similar shell and core, the interiors were fitted out to suit the requirements of the individual owners.
The basement at No.3 comprises on the west side a large habitable space, designated as the Library where the extensive bookcases are covered in stitched leather. The Library windows, which largely comprise a large sliding door, look out onto a courtyard with a water feature, on the other side of which behind a similar sliding door is the swimming pool, on the western side of which are glass screens behind which there are changing rooms, a lavatory and shower. The very substantial sliding doors which lead out from the swimming pool and the Library are known as the Courtyard Sliding Doors. The glass screens on the western side of the pool comprise and incorporate a lighting feature which allows a flow of changing coloured light from top and bottom to be diffused through the whole of the screen; this is known as the Light Wall. In the basement there is also a cinema and below the external area immediately outside the front door is a garage accessed by a car lift. The ceilings of the swimming pool and the cinema comprise what is known as Barrisol ceilings which essentially are a stretch light coloured fabric which conceals a substantial bank of lights which also change colour and are supposed to be diffused evenly through the ceiling downwards. There are also a wine cellar, guest toilet facilities, a kitchen, laundry and staff quarters. There is a secondary staircase to the ground floor. The ground floor comprises a large entry hall, to the west a large family room and to the east the drawing room in addition to which there are guest cloakrooms; the doors to these two rooms were known as the Stingray doors and were very substantial metal lookalike doors. The first floor contains the master bedroom suite, including bathroom and dressing rooms as well as two studies, referred to as His Study and Her Study. On the second floor there are two substantial bedrooms for each of the Mackays' children, each having a bedroom with en-suite bathroom and a study. The third floor comprises a guest suite on the east side and a gymnasium on the west side. Rising up and down from the ground floor is a reasonably capacious circular staircase in the middle of which there is a lift which runs all the way up the house. Much of the flooring is of American Black Walnut ("ABW"); ABW was also used for much of the cupboard joinery as well as for the skirtings.
Mr and Mrs Mackay assembled initially the following design and professional team:
Architect: Barrett Lloyd Davis Associates ("BLDA")
Interior Designer: Initially Fox Linton and later Janine Stone Interior and Architectural Design ("JSI")
Structural Engineer: Cameron Taylor Bedford
Services Consultants: Chapman Bathurst Partnership ("CBP")
Lighting Consultants: Equation Lighting ("Equation")
Quantity Surveyor: Gardiner & Theobald ("G&T")
Project Manager: Second London Wall ("SLW")
Fit-out Manager: Rider Levett Bucknall ("RLB").
BLDA was re-placed as architect by Navigant Consulting in about March 2008, which was itself placed by a Mr Mulhearn in about March 2009. A firm called Malishev Wilson Engineers was retained in late 2004 by DMW or possibly BLDA on DMW's behalf to design the lift shaft.
Planning permission had been obtained in 1999 and was subject to a condition that work had to start within 5 years (by 15 June 2004). The first permission was for the demolition of the existing Earls Court telephone exchange which had stood on the site for many years and the second was for the construction of three dwelling houses with basements and attached garages with access from Boltons Place. There was therefore some pressure on all concerned to get the job started within that timescale.
In early 2001 Mr Mackay became aware that BT was proposing to sell the site and he teamed up with two friends, Paul Daniel and Stephen West, to purchase the site for £13.2 million on the basis that each would have one of the three units, A, B and C, Unit C being for Mr and Mrs Mackay. In 2004 the three of them set up DMW as the corporate vehicle through which the development would be carried out. Initially, DMW used the original architects who had helped secure the planning permission. G&T were retained in 2003 as were SLW, CBP and BLDA. In mid-2004, the Mackays retained Fox Linton as the interior designers, in particular Anthony Bevacqua, known as "Bev". It was only later, in February 2005 that the Mackays retained Equation as the lighting consultants. In 2006, RLB was retained to provide a range of quantity surveying, building survey and project management services to manage directly employed artists and tradesmen.
Mr and Mrs Mackay wanted to create what they call their "dream home" for themselves and their two children. Mrs Mackay spent a very large amount of time in researching in particular the interior design and fit out. She collected images from magazines such as "House and Garden". They decided on the overall concept which was to be "modern, stylish, with great attention to detail, luxurious with the highest quality of finish with smart, shiny dark glossy floors, luxurious bathrooms, beautiful lighting and elegant perfect finishes", as Mrs Mackay said in her witness statement.
Separate contractors having been engaged to carry out the demolition work to remove the telephone exchange building, four contractors, including WLC, were invited to tender for the main building works. WLC was to describe itself as having particular and extensive experience of working on high-quality residential and new build projects. On 26...
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