Yorkshire Water Services Ltd v Taylor Woodrow Construction Northern Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lord Justice May,Sir Peter Gibson |
| Judgment Date | 19 July 2005 |
| Neutral Citation | [2005] EWCA Civ 894 |
| Docket Number | Case No: A1/2004/1781/FC3 |
| Court | Court of Appeal (Civil Division) |
| Date | 19 July 2005 |
[2005] EWCA Civ 894
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM TECHNOLOGY AND CONSTRUCTION COURT
MR JUSTICE FORBES
HT-01–289
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice May
Lord Justice Jonathan Parker and
Sir Peter Gibson
Case No: A1/2004/1781/FC3
David Sears QC and Kate Livesey (instructed by Berwin Leighton Paisner) for the Appellant
David Streatfeild-James QC and Fiona Parkin (instructed by Pinsent Masons for the Respondents (1 & 2)
Timothy Elliott QC and Gideon Scott Holland (instructed by Immanuel & Co) for the Respondent (3)
Introduction
This is an application by Yorkshire Water Services Ltd for permission to appeal against the decision and order of Forbes J, sitting in the Technology and Construction Court, of 8th July 2004 dismissing their action against the defendants, Taylor Woodrow Construction Northern Ltd. Although this is a decision on an application, it is the considered reserved decision of a constitution of three judges, and may be referred to as such for the matters of principle discussed in paragraphs 19 to 32.
The claim related to works of improvement carried out by Taylor Woodrow for Yorkshire Water to sewage treatment works at Knostrop, near Leeds. The principal component of the works was the construction of a six basin Sequencing Batch Reactor ("SBR"). The works were needed to improve the treatment of sewage to enable Yorkshire Water to comply with revised effluent standards due to be required by the National Environmental Programme from 1st July 2000, and the Waste Water Treatment Directive from 31st December 2000. The effluent from the Knostrop sewage works is discharged into the River Aire.
Taylor Woodrow were engaged to perform the works under a written main contract dated 19th August 1998, which provided for the works to start on 8th December 1997. The accepted tender price was £12,458,537.19, which itself gives an indication of the scale of the works.
Biwater Treatment Ltd, the first Part 20 defendant, were the process sub-contractors appointed by Taylor Woodrow for the SBR. The judge had determined a preliminary issue as to the terms of the sub-contract between Taylor Woodrow and Biwater. Taylor Woodrow and Biwater reached a compromise during the trial of Yorkshire Water's claims. Biwater admitted liability to indemnify Taylor Woodrow against Yorkshire Water's claim and conducted Taylor Woodrow's defence of the action for them.
Elga Ltd, the second Part 20 defendant, had a sub-contract with Biwater to design, manufacture and supply the SBR. Elga are the UK associate company of US Filter Inc (sometimes known as Jet Tech), an American company that owns the design rights in the relevant type of SBR.
Taylor Woodrow, Biwater and Elga carried out the works, so that the plant passed with some qualification contractual takeover tests on 26th November 1999. Yorkshire Water took over the plant on the same day. The contract required further performance tests. These had not been undertaken by November 2000. It was then, and remains, Yorkshire Water's case that the plant as designed and constructed was defective. They seriously considered determining Taylor Woodrow's contract, but did not in fact do so. However, Taylor Woodrow, Biwater and Elga ceased to be operationally concerned with the plant in about November 2000. Yorkshire Water engaged others to carry out additional, or as they saw it, remedial works, including the construction of an external selector to overcome poor sludge settleability.
In these proceedings, Yorkshire Water by their amended claim form claimed payment of all sums due to them, being the cost of remedial work under clauses 34.8, 36.7, 36.11 and/or 35.10 and Schedule 10 of the contract. They also claimed declarations in support of their allegation that there was a defect or defects in the plant and to try to cover the fact that they had not incurred the costs of carrying out all the remedial work which they said was necessary. Yorkshire Water's pleaded monetary claim was for £12,010,640, which they said was the actual or prospective cost of remedial works.
Taylor Woodrow counterclaimed for costs said to be due to themselves and for a claim by Biwater against Taylor Woodrow for an extension of time and additional payments. Taylor Woodrow also had a Part 20 claim against Biwater which, as I have said, was compromised.
Biwater had a Part 20 claim against Elga, and Elga had a counterclaim against Biwater for £101,894.55, which was mainly the agreed outstanding balance of their subcontract price.
Subject to the ramifications of Yorkshire Water's claim against Taylor Woodrow, the disputes about the counterclaims and Part 20 claims were limited. The judge decided such issues as there were. They are not the subject of the present application.
The judge dismissed Yorkshire Water's claims in their entirety. In the round, Taylor Woodrow's, Biwater's and Elga's claims all succeeded. It was a comprehensive defeat for Yorkshire Water both overall and in detail. Yorkshire Water seek permission to appeal against this decision. There are some 19 proposed grounds of appeal, which between them would seek to overturn most of the judge's findings against Yorkshire Water both of fact and law. The first 7 grounds raise points of construction of the contract and are, so far as they go, points of law. The remaining grounds of appeal between them seek to reverse the main thrust of all the important findings of fact. There are incidental points of law in some of the grounds which Yorkshire Water say are important, and which affected the judge's findings of fact, such that these require to be reviewed.
Rix LJ considered this application on the papers. He spent three days reading them, at the end of which he granted a necessary extension of time and adjourned the application for hearing on notice. He gave these as his reasons:
"1. My provisional view is: that PTA could be granted on questions of law but that I am not currently persuaded that PTA should be granted on questions of fact or in any event without first hearing the respondents on notice.
2. As for questions of law, I am provisionally of the view that certain at least of the questions of construction might in themselves have a reasonable prospect of success and on that basis I should not be minded to pick and choose between them.
3. It is not clear to me, nevertheless, whether the judge's findings of fact are wholly determinative of the claim however all questions of law are decided. I think they are (see judgment at para 533), save possibly in cases where the questions of law other than the preliminary issues relate closely to the judge's findings, viz Grounds 6, 8, 10 and 16 (skeleton para 206). However even in those cases, it provisionally seems to me that the judge's findings overwhelm the issues of law identified.
4. In these circumstances, it would seem that no PTA should be given unless the court can be persuaded that the judge's findings should be reviewed."
Rix LJ drew attention to four particular points, which he suggested Yorkshire Water might consider concentrating upon.
The judge heard the action on about 35 intermittent hearing days between 21st May and 20th November 2003. I imagine that some of the breaks in continuity were because the parties required time to prepare the presentation of immensely complicated technical evidence and argument. The judge then delivered his judgment eight months after the conclusion of the hearing. This is not a criticism, only perhaps a commentary—mild in this case—on an overloaded litigation culture. The judge, no doubt, had much else to do. The judgment runs to 557 paragraphs covering 165 single-spaced A4 pages in what looks to be no larger than a 12 pt font. It is a masterpiece of analysis of highly complicated technical detail of a mechanical and biochemical nature.
This is an application for permission to appeal, not an appeal. The judge spent more than 13 months immersed in the detail of the claim. It was at one stage a matter for consideration how long it was necessary for this Court to devote to this application. The answer in general is, of course, as long as is reasonably and proportionately necessary to do justice to the parties. The provisions of rule 1.1 of the CPR are in point. At a directions hearing on 14th February 2005, the parties agreed and accepted Rix LJ's direction that the oral hearing should be confined to one day. The parties' joint view was that the Court would need five days pre-reading, which each member of this Court has had and taken. The parties have economically provided each member of the Court with only two cardboard boxes containing only ten lever arch files. I say "only", because I am sure that Forbes J had vastly more paper than this.
I have read the judge's judgment and the parties' long skeleton arguments, together with so much of the accompanying paper as appears to be central. I reckon, with some diffidence, to have understood in the round the main technical points dealt with by the judge and the parties' commentary on them. The very nature of our respective input necessarily means that I do not have anything approaching the judge's depth of understanding of the interlocking finer points of what in detail is an immensely complicated subject. I trust, however, that my understanding is sufficient for the court's present purpose. I do not propose in this judgment to recite vast chunks of technical fact or...
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