Source: http://www.ipsofactoj.com/DecidedCases/international/2001/part06/int2001(06)-001.htm
Timestamp: 2019-03-19 19:08:33
Document Index: 7419902

Matched Legal Cases: ['art 6', 'art 24', 'art 24', 'art 24', 'art 24', 'art 24']

Royal Bromption Hospital v Hammond [CAEW]
Ipsofactoj.com: International Cases [2001] Part 6 Case 1 [CAEW]
In an agreement in writing entered into in 1987, Taylor Woodrow Construction Ltd agreed, as main contractors, to build a new hospital in Chelsea. The original contract price was nearly £20 million. These proceedings arise from that contract. The claimants, the Royal Brompton Hospital National Health Service Trust are the successors to the Board of Governors of the Royal Brompton National Heart and Lung Hospital which was the other party to the agreement. There is no need to differentiate between them and I will refer to them as Brompton.
The work on Phase One of the construction of the new hospital started in March 1987 and practical completion was certified to have been achieved on 22nd May 1990, 43 weeks and 2 days late. By October 1992 an additional payment to the contract price of £5,204,247 had been paid to Taylor Woodrow in respect of claims made by them for additional work and for extensions of time. They were not satisfied with that sum and in October 1992 gave notice to concur in the appointment of an arbitrator. In that arbitration Taylor Woodrow claimed an additional £17.1 million. The Board sought to set aside all of the extensions of time that had been given.
These proceedings were brought by Brompton to recover damages for breach of contract. The first to seventh and the thirteenth defendants were engaged by the Board as the project managers. There is no need to differentiate between them and I will refer to them as PMI. The eighth, fourteenth and fifteenth defendants were the architects. Again there is no need to differentiate between them and I will refer to them as WGI. The ninth and sixteenth defendants were employed as mechanical and electrical engineering services consultants. I will refer to them as AA. The claims against the other defendants have been compromised.
Although these proceedings were started in January 1993, the parties agreed that they should not proceed while the arbitration was in progress. It was settled in December 1995 on terms whereby the Board agreed to pay to Taylor Woodrow a further £6,230,975 which included the claim for costs. Since then the proceedings have marched slowly forward with the statement of claim being served in August 1997. There followed preparation for trial which involved a number of hearings to resolve issues between the parties. Ultimately it was decided to split the trial. The issues of liability concerned with disputes as to the mechanical and electrical installation, the instruction to apply Hydrotite and the extensions of time granted to the contractor were set down for trial to start in October 2000. The other issues of liability were to be tried in June / July 2001 with the hearing of any issue on quantum being held in January / February 2002.
The trial on liability of the mechanical and electrical disputes and the disputes relating to Hydrotite and the extension of time granted to the contractor was opened before His Honour Judge Richard Seymour QC on 18th October 2000. It was then adjourned to enable the judge to continue to read the papers. On the resumption of the trial on 30th October 2000, the judge indicated that he had doubts as to whether the evidence contained in the witness statements of Brompton’s expert witnesses established some of the alleged breaches of contract and negligence. There followed, over 4 days, submissions from counsel instructed by the parties as to whether certain of the allegations made by Brompton should be struck out. At the conclusion of those submissions, the judge told the parties that he had decided that the claimants’ evidence did not prove their case on certain of the allegations made and therefore those allegations would be struck out and that other claims would be excluded. He gave his reasons in a written judgment that was handed down on 8th November 2000. His order was in these terms:
The claimant’s allegations against AA in relation to quality of co-ordination drawings be struck out.
The claimant’s allegations against AA in relation to advice be excluded from consideration as a matter of case management.
The claimant’s allegations against PMI and WGI in relation to quality of co-ordination drawings be struck out.
The claimant’s allegations against PMI and WGI in relation to timing of co-ordination drawings be struck out.
The claimant’s allegations against PMI in relation to advice be struck out.
The claimant’s allegations against WGI in the alternative in relation to the extension of the time given on 6th April 1992 for mechanical and electrical drawings, be struck out.
The claimant’s allegations against PMI and WGI in relation to the instruction to lay hydrotite be struck out.
The result of the judge’s order was that only one of the mechanical and electrical disputes claims remained for trial, together with the Hydrotite dispute and the disputes relating to some of the extensions of time.
The claimant sought permission to appeal to this Court, but that was refused by the judge. However permission was given by this Court on 23rd November 2000. The trial of the surviving claims in relation to the extensions of time proceeded on 8th November 2000. Upon permission being granted on 23rd November 2000 the claimants sought an adjournment of what has been called the AA timing claim. On 29th November 2000 the judge refused the application for an adjournment, but decided to limit the trial of that claim to a particular issue.
He therefore directed that the following question be tried.
Was the Board’s provision of co-ordination drawings on the dates set out in paragraph 54.1 of the statement of claim in breach of clause 5.4 of the main contract?
In his judgment of 18th December, 2000 the judge answered that question in the negative and then dismissed the claims in section E of the re-amended statement of claim against AA. He refused leave to appeal. Leave to appeal was subsequently given by this Court with the result that the Court had before it an appeal by the claimants against the order of 8th November and an appeal against the order of 18th December 2000.
Mr. Bartlett QC who appeared for AA submitted in his skeleton argument that this Court should first hear and determine the appeal against the order of 18th December 2000 as that would, he submitted, dispose of, or at least considerably shorten, the hearing of the appeal against the order made on 8th November 2000. We concluded that an attempt to shorten the appeal was not wise and therefore heard argument upon the first issue that was dealt with by the judge, before coming to the matter dealt with in the judgment of 18th December 2000.
THE PROCEDURE ADOPTED
In his order of 8th November 2000, the judge struck out claims and excluded from consideration, as a matter of case management, one further claim: which is the subject of an appeal.
His decision to exclude claims from consideration must have been carried out under the Court’s management powers given in rule 3.1(2)(k). Clearly he had power to make an exclusion order even though no application had been made by the defendants (see rule 3.3). In fact there was no suggestion that the judge did not have the jurisdiction to make an exclusion order. Brompton’s case was that he made the order in error and also that he was wrong to make an exclusion order as that left the claim in the air, perhaps to be raised again. He should either have struck the claims out or tried them.
It was not suggested that the re-amended statement of claim did not plead a good cause of action, but that did not prevent the judge striking out certain claims. Part 24 CPR is concerned with summary judgment and rule 24.2 enables the court to give summary judgment against a claimant on a particular claim or issue if it considers "that the claimant has no real prospect of succeeding in the claim or issue."
As was pointed out by Lord Woolf M.R. in Swain v Hillman [2001] 1 AER 91, a judge who has come to the conclusion that a claim is bound to fail should make use of the powers given in Part 24. To do so saves expense and achieves expedition. The test is whether there is a real prospect of success in the sense that the prospect is realistic rather than fanciful.
Mr. Edwards-Stuart QC who appeared for Brompton accepted that the judge had jurisdiction to strike out the claims that he did, provided that they stood no real prospect of success. He submitted the judge had not adopted the appropriate standard and in any case had arrived at a conclusion that was contrary to the evidence and was plainly wrong. To decide whether that first submission is correct it is necessary to analyse the approach of the judge, whereas the second and third submissions require comparison of the evidence with the conclusion that the judge reached and an analysis of his reasons.
Mr. Bartlett submitted that the judge had not struck out the claims pursuant to the jurisdiction of rule 24. He had used the inherent jurisdiction of the court. When so doing, he had considered the evidence of the claimants and the submissions of the parties and concluded that on the balance of probabilities the relevant claims would not succeed. That exercise did not involve accepting the truth of the evidence contained in the witness statements, but did exclude the task of weighing the evidence against that in the defendants’ witness statements. In effect the judge, having read the witness statements of the Brompton, had decided there was no case to answer and therefore the claims should be struck out without the witnesses being called to give evidence.
Mr. Williamson, counsel for PMI, also submitted that the judge had not used the jurisdiction provided by rule 24.2. He submitted that the judge, having read the papers as part of the trial, had investigated whether there was sufficient in the evidence of Brompton, if left unanswered and not cross-examined, as would enable Brompton to succeed. In so doing the judge had applied the normal standard of proof. Thus his conclusion was that on the balance of probabilities Brompton would not succeed in establishing their claims and therefore the claims should be struck out without further trial. That submission was essentially the same as that advanced by Mr. Bartlett, but he did not suggest that the judge used the inherent jurisdiction of the Court. He supported the approach of the judge by reference to rules 1.2, 1.4 and 3.1 CPR. He submitted that the procedure adopted meant that the case was dealt with as cheaply and quickly as possible and with a proper regard for the court’s resources. He relied in particular on rule 1.4(2)(c) and rule 3.1(2)(k).
deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others;
Except where these Rules provide otherwise, the court may—
exclude an issue from consideration;
Mr. Taverner QC, counsel for WGI, accepted that where a claim or issue was dealt with summarily the test to be applied was that contained in rule 24.2, namely whether there was a real prospect of success. He submitted that the judge was entitled to strike out the claims made against WGI as he had concluded that they stood no real prospect of success. He made no submission as to what standard of proof had been used by the judge when he struck out claims against the other defendants.
When I first read the judgment, I thought that the judge had given summary judgment in favour of the defendants on the claims and it was for that reason that he had ordered them to be struck out. In so doing, he must have intended to adopt the approach advocated in Swain v Hillman. But I have been persuaded by Mr. Bartlett and Mr. Williamson that that was not what he did. The judge had analysed the evidence in the witness statements of Brompton and had concluded that they did not discharge the onus of proof that was required at a trial. In some paragraphs of his judgment he might have applied the standard of proof required by r.24.2, but that was coincidental. He intended, I believe, to be consistent throughout and therefore determined the issues before him using the balance of probabilities.
The judgment contains no reference to r.24.2. That was because the judge did not have his attention drawn to it. He therefore did not deal explicitly with the question of jurisdiction and in particular whether he had to apply the standard of proof for summary judgment laid down by r.24.2. In consequence he also did not consider what effect an exclusion order had and whether it was appropriate in a case such as this.
I believe the procedure adopted was wrong for six reasons. First, Part 24 provides for summary judgment. The standard to be applied is ‘a real prospect of success’. It would therefore be surprising if the court could give judgment, without a trial, adopting the standard applicable to a trial, namely the balance of probabilities. For my part I have not been able to think of circumstances where that would be appropriate. Certainly this was not such a case.
Second, the judge struck claims out. As 24PD-001 CPR makes clear, the Court when considering whether to strike out should consider the evidence which can reasonably be expected to be available at trial and the lack of it. In this case the judge had read the expert’s reports and had not ruled that they could not be supplemented during the trial. In fact he never considered whether they would be or could be nor what might arise during the trial. His decision was based upon perceived deficiencies in Mr. Down’s witness statement which was the evidence directed to the alleged sub-standard quality of the co-ordination drawings produced by AA. But the parties’ experts had met, but due to the lack of time had been unable to consider all the drawings that needed to be considered. The parties’ experts had made an agreed statement which included these paragraphs:
It was agreed that the Experts have examined CO10 from the Statement of Claim at 55.1 and an agreed Schedule of Comments is attached.
It was agreed that this is all that can be examined in detail at the Experts’ Meetings in the time available.
It was agreed that a further examination of areas .... would provide a reasonable sample of the queries and clashes raised in the Re-Amended Statement of Claim and in the Re-Re-Amended Defence.
It was agreed that in view of the progress that had been made, it should be proposed that further Experts’ Meetings would be of assistance to the Court.
That statement was brought to the judge’s attention. It follows that the judge knew that the totality of the evidence that the parties would wish to bring before the court was unlikely to be contained in the witness statements. Thus he knew that he was deciding what Mr. Bartlett termed a ‘no case to answer’ submission without deciding whether any further agreement between the experts would be forthcoming and, if so, whether it would be admitted and if so, whether it would support Brompton’s case.
Third, the procedure set out in the CPR is logical and meets the overall obligation that justice should be done in a cost-effective manner taking into account the court’s resources. Thus hopeless cases should be struck out under rule 24.2, preferably, as was stated in Swain v Hillman, at an early stage. To graft onto that a further procedure is likely to encourage delay and further costs. For example, a party who loses a strike-out application under rule 24.2 can, if the procedure adopted in this case is possible, apply for judgment in his favour before trial. If that does not succeed, the trial will proceed with cross-examination of the claimant’s witnesses and introduction of evidence on his behalf. That would be contrary to the overall objectives of the CPR and does not seem to have been contemplated as an appropriate procedure (see 3PD – 001, 1.7, 3PD – 006 and 26PD-005).
Fourth, the procedure adopted creates considerable difficulty in deciding the effect of the order made. If the conclusion of the judge is equivalent to a judgment after trial, then it is a final judgment which binds both parties. Thus reversal on the merits on appeal could mean that the defendants might be dealt with as if they had elected to call no evidence. If however the judgment was an interim decision, then it amounts to summary disposal without applying the standard required by rule 24.2.
Fifth, despite the wide powers given in rule 1.4(2)(c) CPR with, if appropriate, summary disposal, it does not contemplate a preliminary trial adopting the standard of proof applicable to a trial. As the practice direction makes clear, summary disposal under that rule is equivalent to and additional to that provided for under rule 24.2.
Sixth, the judge had power to make an exclusion order. But such an order does not appear to produce finality. That could have been achieved by a stay or a strike out. In the present case it was not appropriate to exclude a claim that was arguable on the pleadings. Such a claim needed to be decided and there was no point in just excluding it.
The approach of the judge is illustrated by paragraph 17 of his judgment. A central issue was whether the co-ordination drawings prepared by AA were of an appropriate standard.
As to that he said this:
In my judgment the evidence contained in the reports of Mr. Down and Dr Arnold does not establish any standard or standards which any reasonably competent mechanical services engineering consultant would meet in relation to preparing the co-ordination drawings … with sufficient clarity to enable the court to reach a reliable conclusion as to whether AA [Austen Associates], in preparing the drawings which it did prepare, fell below the standard of the reasonably competent mechanical services engineering consultant. In the absence of worthwhile evidence of such a standard or standards, it seems to me that the AA Quality Complaint cannot succeed, because there is no yardstick by reference to which AA’s actual performance can be judged. Consequently, in my judgment the AA Quality Complaint being incapable of success, it, and those other claims which depend upon the success of the AA Quality Complaint, namely the PMI Quality Complaint and the WGI Quality Complaint, should be struck out.
In that passage of the judgment the judge concluded that the witness statements did not provide a standard which would enable a reliable conclusion to be reached. No doubt that conclusion was relevant to the question of whether there was a real prospect of success, but it could not be conclusive. To decide whether there was a real prospect of success, the court had to go further and conclude that the evidence in the witness statements, perhaps supplemented at trial to amplify ambiguities, was bound to fail even though not challenged by any evidence of the defendants. That was not the approach adopted by the judge.
As I have said, the judge did not apply the correct standard of proof. It follows that the basis for his conclusions fall away. If he had realised that he was exercising the powers given by r.24(2), I believe he would not have proceeded as he did with a four day hearing with a possible appeal to follow. As the rule makes clear, claims should be struck out only when they stand no real prospect of success. This was not an appropriate case for summary judgment particularly as determination needed what in normal circumstances would be the length of a full trial. However I must go on and consider the judgment as the defendants submitted that even if the judge had applied the wrong standard of proof, his conclusions should be affirmed, adopting the correct standard, essentially for the reasons he gave.
Everybody accepts that the completion of the hospital was late, and that Taylor Woodrow incurred a substantial amount of extra costs. Brompton contend that the delay was not their fault. Having seen Taylor Woodrow’s case put forward in the arbitration, they accept that some of the extra costs, at least amounting to about £11.5 million, were not attributable to faults of Taylor Woodrow. The Board therefore contend in these proceedings that those extra costs must have been due to the fault of the architects, project managers or the mechanical and electrical services consultants. That is denied. They blame the Board, Taylor Woodrow and each other.
All but two of the allegations which was struck out or excluded by the judge were concerned with the co-ordination drawings. They were the responsibility of AA. It was Brompton’s case that the drawings were negligently produced, and were late. That, they allege, was primarily the fault of AA, but was also the fault of PMI and WGI. Co-ordination drawings are prepared using the designs of the architect and are needed in a project of this type to enable the contractors to complete the installation drawings.
In a hospital such as that being constructed, the mechanical and electrical installations are routed through the areas where access is available for further servicing and maintenance. Consequently nearly all of the services are routed together above suspended ceilings in corridors and vertically in ducts and risers. Preparation of the co-ordination drawings is a lengthy business requiring integration of individual services with each other and with the building structure and fabric. Thus, in general, the drawings need to show the layout and dimensions of the services, both horizontally and spatially.
AA were under a contractual duty to "exercise all reasonable skill, care and diligence in the discharge of the duties agreed to be performed by them." Subject to that qualification they were required to produce the co-ordination drawings in accordance with the Supplementary Annexure for Form D as amended. The relevant part is as follows:
CO-ORDINATION DRAWINGS shall mean drawings prepared with intent to show clearly the inter-relation of two or more engineering or public health systems.
The clarity of the Co-ordination Drawings shall be such that the Contractor / Sub-contractor may use them for construction purposes although it is recognised that the provision of Installation Drawings may be necessary.
The drawings shall be prepared to a scale of not less than 1/50 and shall depict the services in their allotted and co-ordinated position using conventional semi-diagramatic style.
Where any dimension in cross-section is 150mm or more, duct work, electrical trunking and pipe work shall be shown in double lines. Drawings shall demonstrate that adequate space has been made available for access and maintenance.
The use of drawings having a superimposed grid and an associated convention for the indication of actual positions of ductwork and piping in relation to the grid may be used to reduce the necessity for dimensions.
Additional drawings to a scale of 1/20 may be prepared to amplify detail in certain areas of the Co-ordination Drawings if, in the opinion of the Consulting Engineer, these are necessary for clarity. Similarly, sketch details may be prepared to indicate typical arrangements, or repetitive assembly details e.g. trap sets, PRV sets, heater or calorifier connections. These need not necessarily be to scale and will be issued as a guide to installation only.
Note: the drawing requirements for co-ordination purposes will vary from project to project. It is not possible therefore wholly to define the appropriate provision in terms of numbers, extent and service groupings.
I have already set out paragraph 17 of the judgment which gives the basic reason why the judge stuck out the claim against AA. I will come later to the rest of the judgment, but before doing so, I will summarise the evidence of the witnesses using where possible extracts from their witness statements. The purpose is to enable a reader of this judgment to obtain an overall view of the evidence.
Mr. Down has had a distinguished career involved in designing and supervising mechanical and electrical services. He now acts as a consultant. His witness statement starts with a summary of his opinion. He said:
In my opinion, the design as evidenced by the drawings, prepared by AA as required prior and subsequent to tender was not to the standard required by the terms of their appointment, nor were the drawings to a standard that would be expected of a reasonably competent mechanical and electrical services engineer.
The drawings eventually produced, post-contract, in collaboration with the contractor were to a higher standard but still did not include the information that was required in co-ordination drawings.
Mr. Down went on to give particulars of those allegations. He said:
The problems and difficulties which TWC [Taylor Woodrow] encountered as a result of the failure of AA to produce proper co-ordination drawings required substantial additional work over a period of several months and, broadly, would have increased the drafting work for TWC by a factor of between 2 and 3 in order to produce information which they needed for the works.
AA regularly failed to produce adequate information sought by PMI and WGI and the rest of the design team during the design stage.
AA and WGI failed to produce properly co-ordinated information in time to enable TWC to plan the construction of the works properly and efficiently.
The above ceiling M&E installations on the project were extensive and congested, making the task of co-ordination and installation more difficult and exacting than might be considered typical, even for a hospital project.
Mr. Down went on to explain and to analyse the Supplementary Annexure. He said:
The effect of the Supplementary Annexure was that the Consulting Engineer had to produce co-ordination drawings in compliance with the specified requirements. These drawings were to be used by the Contractor for installation purposes, including, where appropriate or necessary, the preparation of installation drawings (as I explain below). The theory behind this was to ensure that co-ordination information was provided .... so as to avoid, so far as practicable, the over-spend which concerned the Parliamentary Public Accounts Committee. The work of preparing co-ordination drawings was extensive and a significant additional fee was agreed between DHSS and the ACE for this onerous task.
I shall have to come back to other parts of his evidence which analysed the Supplementary Annexure that followed as they were relied upon by the judge when he formed the view that he did. However in summary Mr. Down emphasised that a number of passages in the Supplementary Annexure indicated the degree of accuracy that co-ordination drawings should be drawn to. The services had to be indicated to a scale of not less than 1/50 in their allotted and co-ordinated position. It was his conclusion that, even without the use of dimensions, it should be possible to scale the drawings to an accuracy of plus or minus 50mm. In so far as the drawings could be semi-schematic, that did not mean that they were semi-accurate. The words "semi-schematic" referred to the essential drafting freedom needed to depict the layout clearly, not to their accuracy. Thus a significant number of section drawings or part sections and details were required in order to identify the spatial inter-relationships of the services. He also went on to refer to the sentence which allowed use of drawings having a super-imposed grid and an associated convention for the indication of actual positions. That he said recognised that a grid may be a substitute for showing dimensions. However if a grid were to be used it must be such as to enable the contractor to scale off it to the required degree of accuracy. It was essential that the drawings showed the actual positions of the duct work and piping in relation to the grid. He went on to point out that the co-ordination drawings produced by AA "did not use a super-imposed grid nor did they contain any significant dimensions". AA therefore failed in this respect. He continued:
In the final analysis the crucial test of co-ordination drawings is whether the Contractor can rely on them substantially to show where the services are to be installed at construction stage. Little input should be required by the contractor in the production of the Contractor’s installation drawings by way of determining the position of the services.
Later in his witness statement Mr. Down came to consider the quality of AA’s co-ordination drawings. He said:
As previously stated in this report, the true test of AA’s co-ordination drawings is whether the Contractor was able to use the AA drawings for construction purposes without difficulty. There are a number of tests that have been applied that indicate that the AA drawings fail this test.
He explained that in the arbitration Taylor Woodrow had produced a considerable amount of documentation in support of their claim that the drawings supplied were not adequate. In order that the mechanical and electrical services experts involved in this case could test the documentation, they agreed to look at sample areas of the Taylor Woodrow claim to ascertain the incidence of co-ordination clashes. Thus they agreed to look at clashes contained in CO10, those highlighted for level 1, zone 4 and those highlighted for level 3 zone 2. This task had not been completed.
He concluded, on a limited examination, that determining the vertical position of the services from the AA drawings was extremely difficult due to the limited number of sections produced. The co-ordination drawings inaccurately used certain conventions with the result that they did not convey accurate information regarding the vertical relationship of the various services on the planned layout. In order to determine the position of the services certain assumptions had to be made by the experts. That he said should not have been necessary had the drawings contained the level of information that proper co-ordination drawings should contain. The sectional information as shown on the drawings did not match the information shown on the planned drawings. He also drew attention to the fact that information shown on the match lines did not always tie up with the information shown on the drawing for the adjacent area. This indicated in his view that AA had attempted to co-ordinate the drawings on a zone-by-zone basis rather than as a whole.
There were seven clashes / errors detailed in CO10 which he confirmed as verifiable. In his view they showed that in the area concerned AA had failed to exercise the skill and care which he would have expected a consulting engineer to have applied to the task of co-ordination. A more detailed analysis by Mr. Dix, an expert who had helped him, had shown that around 58% of the clashes claimed by Taylor Woodrow appeared to be genuine. Further, it was his view that the drawings were not always drawn sufficiently accurately to scale, particularly in congested areas and did not match up with the WGI drawings.
It is clear that Mr. Down had only examined in detail a limited number of drawings. Further examination at Experts’ Meetings was contemplated.
Mr. Down also referred to a report that had been prepared by Cundall Johnston and Partners and another prepared by the Building Services Research and Information Association for Taylor Woodrow. Both of them concluded that the co-ordination drawings did not meet the required standard and that they failed to give sufficient information with sufficient clarity. He said that he agreed with both the conclusions reached. His conclusion was, I believe, summed up in this paragraph:
However, the lack of information and number of actual clashes shown on the AA co-ordination drawings lead me to the opinion that these drawings were below that of the standard which should have been achieved by reasonably competent consulting engineer[s] under AA’s terms.
Whilst these problems were ultimately overcome by AA and TWC, the time it took to do so considerably exceeds the 14-16 week period suggested above.
AA conceded that the evidence of Mr. Down was sufficient to show a real prospect of success on the AA quality claim when considered upon an application "in advance of the trial". That, as I have pointed out, must be the test as it matters not when the application is made.
Dr David Arnold is a partner in a firm of consulting mechanical and electrical engineers, Troup Bywaters and Anders. He was to give evidence for PMI and WGI. In his witness statement he went through the obligations required by a firm such as AA. He concluded:
Did AA’s drawings fulfil their contractual obligations?
The drawings were inadequate and not to the standard described in AA’s Agreement. They did not meet the mandatory requirements described in HN(78)6 in particular:
they lacked sufficient clarity such that they may have been used directly for construction purposes with or without installation drawings,
many of the services were not depicted in their allotted and co-ordinated positions and
they failed to demonstrate that adequate space has been made available for access and maintenance.
The drawings did not show the sizes of the services they were intended to co-ordinate.
The drawings did not show the spatial relationship of the services to one another without recourse to other drawings.
The drawings when read with other drawings had an unusually high number of errors which most often resulted in services clashing.
A detailed examination of the drawings is necessary to identify the inadequacies of co-ordination.
The drawings even when read in conjunction with other drawings require further interpretation to establish locations of services. The allotted locations are not clear in many instances.
The co-ordination drawings that AA eventually produced presented the Contractor with an unduly onerous task the scale of which I believe could not have been anticipated. Experienced engineers from my practice had great difficulty in understanding and interpreting AA’s co-ordination drawings to enable them to identify the spatial relationships between services and locate errors. Demonstrating spatial relationships is the primary purpose of co-ordination drawings and something that ought to have been immediately evident to a reasonably competent engineer or contractor. In the event the Contractor was obliged to produce supplementary co-ordination drawings which ought to have been produced by AA.
Were AA in breach of the obligations in the Terms of their Agreement with the hospital in respect of co-ordination of the M&E services and the preparation by AA of co-ordination drawings? For the reasons explained above it is my opinion that AA were in breach of the terms in three main respects:
They failed to adequately co-ordinate the services at the appropriate time i.e. when preparing their single services drawings.
The co-ordination drawings they produced were inadequate.
The drawings contained numerous errors and omissions.
THE AA QUALITY CLAIM
As is apparent from the order made by the judge, most of the claims struck out had at their root the allegation that the co-ordination drawings were not of appropriate quality. Although the judge perceived that the evidence lacked the detail that he thought should have been provided by the witnesses, his basis for striking out the quality claim was his view, set out in paragraph 17 of his judgment which I have already quoted. Put shortly it was that the evidence did not establish "the yardstick" by which AA’s performance could be judged. His reasons for that decision were contained in paragraphs 18 to 25 of his judgment.
I accept that to decide whether AA failed to comply with their contractual duty, it was necessary to come to a conclusion as to what that duty was. In general terms it was to ensure that the co-ordination drawings satisfied the requirements of the Supplementary Annexure in the sense that AA had to exercise all reasonable skill, care and diligence to comply with the Annexure. That of course required the Court to find as of fact such matters as whether and what dimensions were given; whether there were clashes and if so what they were and in what respect the drawings did not accord with the Supplementary Annexure. Having found those facts, it should be possible to decide whether the drawings complied with the required standard. That the judge did not do. He concluded that the evidence as to the standard to be applied was deficient and therefore he could not decide whether the drawings were so deficient, when compared with the Supplementary Annexure requirements, as to fall below the standard. But would the standard of drawing have fallen below any possible reasonable standard?
In paragraph 18 the judge set out paragraph 54.2 of the re-amended statement of claim and referred to paragraph 55. He pointed out that the pleading made no positive allegation that "such and such a dimension which any reasonably competent mechanical engineering services consultant would have included on some particular drawing was omitted." That was correct, but it was Brompton’s case that, except for the single service drawings, no dimensions were put on the drawings and therefore the drawings did not in that respect comply with the Supplementary Annexure.
The judge also referred to paragraph 35 of the pleading which stated that Taylor Woodrow had raised 38 co-ordination queries arising from clashes and errors. The judge’s comment was
one might, therefore, have expected Mr. Down in his report to have said he had considered 38 co-ordination queries and the 26 drawings which Taylor Woodrow had apparently asserted were deficient because of clashes or errors. However, he seems to have confined his attention to one drawing only, that relating to Level 1 Zone 4, apart from considering also Taylor Woodrow’s co-ordination query CO10.
The judge was correct as to Mr. Down’s evidence, but he failed to take into account that further experts’ meetings were expected. He also failed to take into account this passage from the letter of 19th September from AA’s solicitors:
We understand from Mr. Stephen Edwards [AA’s expert] that the M&E experts for all three parties see little or nothing to be gained by looking at a larger sample of drawings than those that have already been considered in detail. Their findings, they believe, can be extrapolated so as to give a sufficient indication of the general picture. As we understand it, the principal difference between the experts is at the conceptual level and lies in their different understandings of what AA’s drawings ought to have been like. In the circumstances the cost and Court time involved in looking at a larger number of drawings cannot be justified. Do you agree?
This suggestion was not accepted, but does show what AA’s solicitors thought to be acceptable. In paragraph 20 of the judgment, the judge cited from paragraph 4.7 of Mr. Down’s evidence and concluded:
If, as Mr. Down says it is a matter for the professional judgment of the engineer the extent and type of information the co-ordination drawings need to show, the scope for saying that an engineer has been negligent because he has not shown as much information as another engineer might have, or because he has not shown information of a particular type seems to be limited. However, it is obviously possible that there might be some particular type of information which no reasonably competent mechanical services engineering consultant could have failed to recognise needed to be shown, or some minimum volume of information which was plainly necessary.
That conclusion is in my view the result of an inadequate quotation of the evidence of Mr. Down. Paragraph 4.7 quoted by the judge needs to be considered together with at least paragraph 4.6.
The co-ordination drawings also should show the dimensions/sizes of the services and, of necessity, the relationship of the services to the space in which they were to be placed … In my experience co-ordination drawings at a scale of 1/50 are capable of having all the necessary information shown in a clear manner but, if AA had not considered this to be possible, drawings to a larger scale were required by definition of co-ordination drawings.
This is why the Consulting Engineer is given an element of discretion. Hospitals in general contain very complex M&E services installations. However the extent of the complexity varies from department to department. Operating theatre suites and particularly pathology laboratories contain many specialist M&E and medical services installations. Other areas such as naturally ventilated ward blocks are relatively lightly serviced. It is for this reason that appendix A .... states:
Note The drawing requirements for co-ordinated purposes will vary from project to project and it is not possible therefore wholly to define the appropriate provision in terms of numbers, extent and service groupings.
It was Mr. Down’s evidence that the consulting engineer should exercise professional judgment in how co-ordination drawings were prepared. That included the extent and type of information that the co-ordination drawings need to contain in order to satisfy the overall aim of clearly indicating the allotted position of services. I believe that Mr. Down’s evidence, when read fairly, is to the effect that the information needed on the co-ordination drawings was accurate information with a scale of 1/50 being usual. The drawings had to show the dimensions, sizes and spatial relationships in a clear manner. Thus the standard was clarity for use by the contractor to enable installation. Whether that had been achieved depended on the drawings as a whole, not any particular dimension or piece of information.
The judge also referred to paragraph 4.24 as an example of Mr. Down’s evidence which failed to set with clarity the necessary yardstick. I believe he misunderstood Mr. Down’s evidence. Paragraph 4.24 is in this form.
Trade practice: Comparison of co-ordination drawings produced by Consulting Engineers will show differences in ‘draughtsmanship’ and in the techniques of presentation. Whatever method of detailing co-ordination drawings might be adopted, the end result has to be a co-ordinated design presented with clarity.
The judge ended his quotation there, but I believe what followed is important, particularly as the judge cited the first part as an example of the absence in Mr. Down’s evidence of any standard by which negligence could be judged.
In my experience the minimum standard that I should expect to see would be drawings to a scale of 1:50, with pipes / ducts above 150mm drawn double-line and pipes / ducts above 50mm drawn to accurate centre-lines in plan, with a 300mm grid to allow measurement of location and with inverts, gradients and cross-sections to show levels. Major plant would be drawn using dimensions provided by manufacturers.
In paragraph 21 of the judgment, the judge quoted paragraph 4.9 of Mr. Down’s witness statement but again this has to be read in the context of what he said in paragraph 4.8.
A number of paragraphs in the definition of co-ordination drawings indicate the degree of accuracy that co-ordination drawings should be drawn to. One states:
The drawings shall be prepared to a scale of not less than 1/50 and shall depict the services in their allotted or co-ordinated positions using the conventional semi-diagramatic style.
This clause states ‘their allotted or co-ordinated positions.’ I understand this to mean that they should be shown in the actual intended positions. Without the use of dimensions it should therefore be possible to scale off the drawings to an accuracy of +50mm or less. I do not take the term semi-schematic to imply that the positions are semi-schematic, or semi-accurate. The term semi-schematic refers to the essential draughting freedom needed to depict the layouts clearly.
If drawings do not retain a certain licence to show the position of the services in a semi-schematic way, on complex installations, the drawings will become unintelligible. To overcome this difficulty a significant number of section drawings, or part-sections, and details are required in order to identify the spatial inter-relationship of the services. (The AA drawings were inadequate in this respect, as they did not include sufficient sections to identify the vertical setting out of the M&E service installations properly.)
Mr. Down’s evidence appears to me to provide a standard, namely that the drawings must be accurate (plus or minus 50mm) and depict the services in their actual positions. The way that that is done depends upon the complexity of the service and professional judgment. However the standard remains the same although the method of achieving it cannot be and is not laid down. I therefore disagree with the comment of the judge that Mr. Down’s evidence does not provide a basis upon which a court could decide whether there were insufficient sections shown on the co-ordination drawings. If the drawings were not clear and accurate so as to fulfil the function required, they would be likely to fall below the standard required of a reasonably competent mechanical and electrical services consultant exercising due care and skill.
The judge was right in paragraph 21 of his judgment that Mr. Down in his witness statement did not identify any particular cross-section that should have been produced. However he produced a supplement to his witness statement which was before the judge. It said:
I have with the assistance of Mr. Dix, prepared drawings PGD01 and PGD02 to amplify my report .... on the question of the extent of Sections. Drawing PGD01 is based on AA’s drawing 668.I/CH/04 .... annotated to identify the relevant clashes and other queries that are listed in the claim. Drawing PGD02 shows in red the sections provided on the AA drawings and further sections, shown in green, to indicate the minimum additional sections that I consider to be essential for an understanding of the vertical location of the services on the Co-ordination drawings.
In paragraph 22 of his judgment the judge came to consider the allegations that the drawings were inadequately dimensioned.
Another general criticism made in the Re-Amended Statement of Claim of the co-ordination drawings produced by AA is that:
they contained no sizes for pipework, ductwork or cables, no dimensional or ductwork locations were shown.
Complaints along those lines seem to be precluded, in large measure, by the following terms of the agreement between experts to which I have referred:
It was agreed that full dimensioning of the M&E services on the co-ordination drawings was not normal practice.
It was agreed that some consulting engineers showed invert levels for M&E services on their drawings, other consulting engineers did not. PGD [i.e. Mr. Down] stated that he did, SCE [Mr. Stephen Edwards, instructed on behalf of AA] stated that he generally did not ....
However, even if the possibility of some complaint survived the terms of that agreement, in fact neither Mr. Down nor Mr. Arnold, in their respective reports, identified any particular dimensions as missing from a co-ordination drawing prepared by AA which he contended that no reasonably competent mechanical engineering services consultant could have omitted, or any criteria by reference to which a Court could decide whether the absence of some particular dimension denoted negligence, so that, once more, no evidence is put forward on behalf of the Claimant which could justify any conclusion that AA had been negligent in omitting some dimension from a co-ordination drawing.
Again I believe the judge has misunderstood the evidence. Mr. Down accepted as stated in the agreement with the experts, that full dimensioning of co-ordination drawings was not normal practice. He accepted that it was not needed. However he pointed out that the Supplementary Annexure set the standard. When dimensions were not shown, a grid could be used as a substitute.
His evidence was:
Another relevant paragraph in appendix A of the Annexure that describes the accuracy required states:
This recognises that a grid may be a substitute for showing dimensions. If a grid is to be used then it must be such as to enable the contractor to scale off it to the required degree of accuracy, which would be of 50mm or less. At the time it was common practice for consulting engineers to use a superimposed grid on the drawings. … I agree that this was an option and not obligatory, but most consulting engineers chose to adopt this method, as it satisfied the needs for the brief and avoided the need for dimensioning the drawings. It should be noted that the clause states ‘the actual positions of ductwork and piping in relation to the grid’. There is no mention of intended positions, or schematic positions. The term used is actual positions. As it was the AA drawings did not use the superimposed grid, nor did they contain any significant dimensions. The AA drawings therefore failed in this respect.
Thus the evidence was that dimensions were not necessary if a grid was superimposed. Further invert levels were not mentioned in the Annexure. The minimum standard according to Mr. Down was clarity as to the position of the services. As to the AA drawings, the complaint was that they neither contained the appropriate dimensions nor a grid.
In paragraph 23 of the judgment, the judge cites this passage from Mr. Down’s evidence:
It would be unreasonable to expect that any complex co-ordination drawing would be totally free of co-ordination clashes. This is particularly so in the case of drawings detailing complex M&E services installations in hospitals. (I have borne this in mind when considering whether AA’s co-ordination drawings fell below an acceptable standard.)
Given this situation it should have been reasonably foreseeable that some queries would be raised on the RBH phase 1 project, or any other similar project.
From those passages the judge drew the conclusion that the existence of a clash or perhaps of a number of clashes or some queries did not of itself show negligence. He went on to conclude, taking into account the limited evidence as to particular clashes and queries, that:
In my judgment, yet once more the evidence relied upon on behalf of the Claimant just does not enable the Court sensibly to determine whether AA fell below the standard of the reasonably competent mechanical engineering services consultant in relation to the number of clashes and errors which were to be found in the co-ordination drawings which it produced.
However the judge failed to take into account that the experts had agreed to concentrate their examination to a number of areas. As at the date of their report, the experts had reached agreement on level 1, zone 4 (both as to Taylor Woodrow’s allegations as to clashes and as to one set of queries raised in 1987 by Taylor Woodrow about that area: CO10). As I have pointed out the judge was informed that the experts were still meeting. However the evidence made clear that over 750 clashes had been itemised and that what had been done so far showed that about 58% had been found to be justified. True Mr. Down did not say explicitly that it was legitimate to extrapolate from the areas that had been considered in detail, but such a conclusion was possible. It was clearly arguable, absent evidence to the contrary, that there was a real prospect of establishing that the extent of the clashes and queries found in relation to the particular areas considered were typical, particularly as the matter was being decided upon the basis that there was no evidence to the contrary and that the evidence of Mr. Down was not challenged. His overall view was that the number of actual clashes shown on the co-ordination drawings led him to the opinion that the drawings were below that of the standard which should have been achieved by a reasonably competent consulting engineer under AA’s terms. That evidence was borne out by the consideration of particular drawings in particular areas and there was nothing before the court to suggest that such evidence would not be typical of all the drawings.
In paragraph 24 of his judgment the judge considered the evidence of Dr Arnold and rejected the interpretation of it that Brompton had suggested was correct. That was a decision that was possible after trial. However when considering whether there was a real prospect of success the judge should have envisaged that any ambiguity could have been clarified at trial.
The judge went on in paragraph 25 to state:
Given that, in Mr. Down’s opinion, a level of clashes or errors is acceptable without an engineer being negligent, I just have no idea what number of clashes or errors marks the threshold between what is considered not to be negligent and what is thought to be careless. I might have expected that perhaps clashes or errors of a particular type would be considered evidence of negligence, but that is not something which was covered in the report of Mr. Down or in that of Dr Arnold.
For my part I would be very surprised if a witness could put a number on the clashes above which negligence would have been established. I would have thought that quality was more important than quantity, but in a case where over 50% of the clashes examined were considered to be established and over 750 clashes had been itemised by Taylor Woodrow, I would have thought that it was at least arguable that the level of clashes and errors exceeded that which was reasonable for a competent mechanical and electrical engineering services consultant to produce.
I have no doubt that the AA quality claim was not fit to be decided summarily. It stands a real prospect of success.
THE AA TIMING CLAIM
This was not struck out by the judge in his order of 8th November 2000. It was decided after a trial of a question had been directed. For convenience I repeat the question.
Clause 5.4 was in this form:
As and when from time to time may be necessary the Architect / Supervising Officer without charge to the Contractor shall provide him with 2 copies of such further drawings or details as are reasonably necessary either to explain and amplify the Contract Drawings or to enable the Contractor to carry out and complete the Works in accordance with the Conditions.
It was established that AA was obliged to provide the co-ordination drawings at such time or times as would enable Brompton to perform its obligation to Taylor Woodrow under clause 5.4. It was alleged by Brompton that AA had failed to do this. They should, according to Brompton, have supplied the drawings by 4th May 1987, whereas the first drawings were not provided until 14th August 1987.
The judge decided that the drawings had been supplied "as and when from time to time may be necessary" because
on the evidence which I have heard, and the documents which I have considered, it was clear to me that Taylor Woodrow did not need to have any co-ordination drawings any earlier than in accordance with the dates agreed between representatives of Taylor Woodrow .... and representatives of AA .... at a meeting between them held on 11 August 1987 ....
The judge made findings of fact which Mr. Edwards-Stuart QC, counsel for Brompton, did not attempt to challenge before us. The judge found that Taylor Woodrow could not possibly have needed the drawings until they had planned how they were going to undertake the mechanical and electrical services installation. They did not say that they required the drawings by 4th May 1987 and if they had received them on that date, they would not have done anything with them. In fact by early June 1987 they had not planned the services in any detail. Up to 11th August 1987 AA were unaware of Taylor Woodrow’s requests for the drawings. Had they needed them before that date they would have said so. It was only shortly before then, namely 11th August 1987, that Taylor Woodrow planned when they needed to have the drawings.
Brompton challenged the way that the judge construed clause 5.4. I have already cited the sentence of the judgment which encapsulated his reasons. To that should be added this paragraph:
It is, I think, plain that the obligation on the part of the Board contained in clause 5.4 of the Main Contract to provide further drawings or details "As and when from time to time may be necessary" was an obligation which required to be performed as and when Taylor Woodrow in fact, having regard to the progress which it had made with the various operations which it had to undertake in order to carry out and complete the Works, objectively needed to have such drawings or details. As it happens, that is not only my view but is also the view expressed by Vinelott J. in London Borough of Merton v Stanley Hugh Leach Ltd (1985) 32 BLR 68 at page 88. Accordingly, unless and until Taylor Woodrow had planned how it was going to undertake the mechanical and electrical engineering services installation, and, in particular, when it was going to prepare its installation drawings, to which alone the co-ordination drawings were relevant, it could not possibly need the co-ordination drawings. Further, it seems to me that, while a contractor like Taylor Woodrow might contend that it needed to have all the information at the outset of a project, and, if it did so contend it would be necessary to consider whether such contention was well-founded, because it might not be, it is wildly improbable that a contractor would actually have required information before he said he did.
Brompton’s case was that the judge had construed clause 5.4 as containing a subjective element, whereas it imposed an obligation that was purely objective. Clause 5.4 required that Brompton had to be able to supply the drawings to Taylor Woodrow when they were necessary: not when Taylor Woodrow thought they were necessary. The two were not obliged to be the same. That could be demonstrated by the facts of this case where there was a dispute between Brompton and AA as to the quality of the drawings that should have been produced by AA.
The parties agree that Taylor Woodrow needed the co-ordination drawings a number of weeks before starting installation of the mechanical and electrical services. The actual number of weeks would depend upon the quality of the drawings supplied.
It is Brompton’s case that the date of 14th August 1987, agreed between Taylor Woodrow and AA for the supply of the drawings, was based upon Taylor Woodrow’s perception of the quality of the drawings that would be supplied. As it turned out the quality was substantially below that expected. The result was that after supply considerably more work had to be done to enable installation. Although a lead time of about 16 weeks was anticipated, in fact about 32 weeks was needed.
AA’s case is that the drawings were of appropriate quality and were supplied as and when requested by Taylor Woodrow and that Taylor Woodrow were not ready to use them before they were supplied.
It is apparent that there is a dispute between Brompton and AA as to the standard that the co-ordination drawings had to meet. Thus when deciding the AA quality dispute the court will need to decide which was the appropriate standard and whether the drawings were below that standard. It follows that the court could decide that the drawings should have met the standard contended for by Brompton or what appears to be the lower standard contended for by AA. If clause 5.4 is to be construed as setting a purely objective test then the drawings should have been ready for supply to Taylor Woodrow to meet the lead time necessary for Taylor Woodrow to start installation. But the lead time depended upon the quality of the drawings supplied. The judge assumed that the lead time was 10 weeks, namely the time that Taylor Woodrow expected would be sufficient. According to Brompton that 10 week lead time was based upon the assumption that the drawings would meet the tougher standard for which Brompton contended, not the lower standard for which, it seems, AA contend.
No doubt Brompton will receive appropriate damages from AA if they succeed on the quality claim. But as Mr. Edwards-Stuart pointed out the judge at trial might conclude that AA had not been negligent as the drawings met the lower standard for which they contend. If that be right, it is Brompton’s case that Taylor Woodrow’s agreement with AA was based upon an assumption that the appropriate standard was the higher level for which Brompton contend. As they were wrong, Taylor Woodrow needed a longer lead time so that the drawings needed to be supplied by mid-June not mid-August 1987 to meet the obligation in clause 5.4.
Mr. Bartlett placed the blame upon Brompton for the way that the judge dealt with the timing claim independently from the quality claim. He went on to submit that the findings of fact were conclusive on the issue. I do not agree. I believe that Mr. Edwards-Stuart is correct in his submission that clause 5.4 is a term which must be construed as imposing an obligation to provide the drawings when necessary in the sense that the drawings must be provided when actually necessary as opposed to when they were perceived to be necessary. No doubt in most cases the perceived need of a contractor will coincide with actual need, but this may not be such a case. Therefore the judge was wrong to believe that the agreement reached concluded the question he decided to determine.
The case on timing started to go wrong once the quality claim had been struck out. At that stage quality was not a pleaded issue and appeared to the judge to be irrelevant. The findings of fact do not go so far as to decide whether the drawings supplied by AA were of appropriate standard nor whether that standard was the standard that was expected by Taylor Woodrow. That being so, the agreement of Taylor Woodrow, based as it could have been on a particular expectation, could not be determinative of whether there was a breach of clause 5.4. In my view the issues of quality and timing are intertwined and the judge was wrong to try them separately. The AA timing claim must go back to be retried with the quality claim. In that way the trial judge will be able to form a view as to when it was necessary for AA to supply the drawings in the light of all the evidence.
THE PMI TIMING CLAIM
As appears from paragraphs 28-31 of the judgment, the judge struck out the timing claim against PMI because he perceived that there was a lack of material upon which the trial judge could find that any action by PMI would have resulted in AA producing the co-ordination drawings any earlier than they had. In essence, he concluded that the evidence did not show causation.
When coming to the conclusion that he did, I do not believe the judge applied the correct standard of proof. He had to decide whether there was a real prospect of success not whether causation had been established on the balance of probabilities. There was a considerable body of evidence which suggested that PMI should, at an early stage, have agreed a timetable for delivery of the co-ordination drawings which met the requirements of Taylor Woodrow and was accepted by AA to be achievable. Further, the evidence suggested that PMI allowed matters to proceed without a programme for the production of drawings until late on. In my view Brompton had a real prospect of persuading the Court that the late production of co-ordination drawings could have been avoided by early programming by PMI.
Mr. Williamson put forward an alternative submission. He submitted that PMI were entitled to assume that the co-ordination drawings, when provided, would be of appropriate quality. It followed that any timing claim against PMI could not be based upon the fact that the drawings were not of appropriate quality. As found by the judge, the drawings had been supplied according to an agreement between Taylor Woodrow and AA and therefore any timing claim against PMI must fail.
That submission assumes that Taylor Woodrow, AA and PMI contemplated the same standard of drawings. The standard might have been adequate, but for reasons I have already given, the drawings might have not been supplied in time. If so, it is arguable that PMI were in part responsible for the late supply. This issue was not fit to be decided summarily.
THE WGI TIMING CLAIM
The judge struck out this claim for two reasons. The first reason was the same as that which he relied on to strike out the PMI timing claim. For the reasons I have given that cannot support a decision to strike out. The second was based upon the agreement reached by the experts which was set out in paragraph 32 of his judgment.
To support this claim Brompton relied upon the evidence of Mr. Luder. It was his view, expressed in paragraph 2.38 of his witness statement, that WGI should have been deeply involved in establishing when the co-ordination drawings were likely to be produced. He went on to state that they, as team leaders and the named architects in the contract, should, when they had become aware that there was a problem, have raised such an important issue formally with PMI and ensured that appropriate steps were taken. It is Brompton’s case that it is reasonable to infer that had WGI acted as Mr. Luder said that they should, it would have made a difference to AA’s performance. That of course is an issue for trial, but in the light of the evidence of Mr. Luder it is impossible to conclude that there was no real prospect of it succeeding. This issue also was not fit to be disposed of summarily.
THE AA ADVICE CLAIM
The judge concluded that the advice claim added nothing to the AA time complaint and therefore ordered that it should be excluded from the trial. I am not sure how he envisaged the claim should be dealt with after exclusion. If it added nothing at all then it should have been struck out. But it was a pleaded allegation and needed to be disposed of.
An important element of AA’s defence to the allegation that they did not produce satisfactory co-ordination drawings at an earlier date was that that was caused by design changes made by Brompton which had to be incorporated into the drawings. Brompton do not accept that the design changes excused the late provision of co-ordination drawings. Thus they go on to plead, in the alternative, that if the design changes meant that AA could not or were unlikely to produce the co-ordination drawings in time, then AA was in breach of their duty owed to Brompton by failing to advise Brompton of the time that they would need to produce the appropriate drawings in the light of those changes. Although that issue is allied to the timing claim, it is not the same. I do not believe that this claim can be dismissed at this stage of the proceedings as adding nothing. It appears to me to be arguable and should be decided at trial.
THE PMI ADVICE CLAIM
The complaint made is that PMI by letter dated 16th February 1987 negligently advised Brompton that AA had the bulk of design information ready for issue. The judge struck this claim out on four grounds. First, that the advice, given in the letter of 16th February 1987, was not necessarily inaccurate. Second, that after a lapse of 14 years he could not be persuaded that Mr. Teale, who was the person who supplied the information did not believe what he was told. Third, no evidence had been put before the judge that Brompton had suffered any loss from the statement in the letter. Fourth PMI were not obliged to verify the accuracy of what AA told them as they were entitled to rely upon what another member of the team had told them.
Mr. Williamson did not seek to support the third and fourth reasons. Even so, he submitted that there was no real prospect of this claim succeeding. He accepted that there was scope for dispute between PMI and AA as to what AA told or showed Mr. Teale, but due to the delay that issue of fact was no longer capable of being fairly tried. Thus the claim was properly struck out.
I disagree. The delay in trial creates obvious difficulties, but does not mean that a fair trial is not possible. In any case there was no evidence to support such a submission.
Second, Mr. Williamson submitted that even if it be assumed that PMI were negligent in the advice they gave to Brompton in February 1987, no consequence flowed from that advice. The drawings were produced in sufficient time to meet the needs of Taylor Woodrow as expressed at the meeting with Taylor Woodrow.
I cannot accept that submission as it depends upon the assumption that the drawings that were produced were drawn to the standard expected by Brompton and Taylor Woodrow. It is arguable on the evidence that if the correct standard was the lower standard, which AA seem to contend to be the correct one, then a longer period was needed and PMI should have advised Brompton of the lack of preparation by AA.
THE HYDROTITE CLAIM
There is no dispute between the parties that the flooring took an unusually long time to dry out. Further the parties accept that the contract placed an obligation upon Taylor Woodrow to dry out. The delay in drying that occurred prevented the floorings being laid. The solution ultimately decided on was to lay an impervious layer of hydrotite on the concrete floors.
When the problem occurred it was clear that the laying of floor covering could not proceed without some action. Theoretically, therefore, Brompton could either stand upon its contractual rights under the main contract entitling them to liquidated damages or the problem could be addressed at a practical level. It is the claim of Brompton that they were not given appropriate advice in that neither WGI nor PMI advised them of all the options available before the decision as to how to proceed was taken. In particular they failed to advise them that they could hold Taylor Woodrow to their contractual obligations, and did not advise that adopting the option finally selected could expose Brompton to claims by Taylor Woodrow for extensions of time and compensation for loss and expense. In essence the claim is that there was a duty upon WGI to provide Brompton with advice as to the options available and that they failed to supply all the material needed for Brompton to make an informed decision.
The judge concluded in paragraph 42 of his judgment that the allegations against WGI should be struck out as it was plain that they were intended to report to PMI and not directly to the Board. That is a conclusion that the judge would have been entitled to reach after a trial. But it was not one which was open to him upon the unchallenged evidence of Mr. Luder. His evidence as to the responsibilities of the architects was clear, namely that they had an overall responsibility to the Board. Thus there was a real prospect that Brompton’s claim could succeed against WGI.
As to the allegations against PMI, the judge concluded that it was right to proceed on the basis that PMI could have reasonably supposed that it was dealing with a client which had commercial awareness and with individuals in that organisation of reasonable intelligence. He concluded that PMI were entitled to deal with the Board on the footing that not everything was needed to be explained comprehensively on each occasion. He said that he was far from convinced that PMI did not explain perfectly adequately in a letter dated 18th May 1989, what options were available to the Board and what the implications of each option were.
The fact that Mr. Plant (Brompton) did not ask suggests to me that, in practical terms, the Board had little alternative but authorise the issue of an instruction if it wanted the new hospital to be completed in the foreseeable future.
The relevant letters written by PMI are set out in paragraphs 40 and 41 of the judgment. The letters sent to Brompton do not explicitly set out all the options open to the Board, nor advise them as to the benefits and deficiencies of each option. It could be that after a trial the judge could conclude that even so the letters were sufficient. However that position had not been reached.
In paragraph 44 of the judgment the judge reached the conclusion that causation had not been established. The evidence, relied on to establish causation was contained in the witness statement of Mr. King. He said that if Brompton had been properly advised they would not have authorised the instruction that was ultimately given. As to that the judge said:
Mr. King does not state any grounds for his professed belief. He does not describe any process which had to be gone through before authority for the issue of instruction could be given or identify anyone other than Mr. Plant who would have been involved in any such process. I am consequently left with no justification for acting on the word of Mr. King, although I do not doubt that he genuinely believes what he has said in his witness statement. In the result therefore, it seems to me that the Hydrotite claim must be struck out also against PMI.
The evidence of Mr. King lacked detail, but it must be remembered that there had been no trial and the judge was assuming that the evidence was unchallenged. Upon that assumption I can see no basis for the judge disregarding the evidence of Mr. King. Further it was open to Brompton to ask the Court to infer that they would not have authorised an instruction which cost them around £70,000 when there was an obligation on Taylor Woodrow to provide dry floors. The evidence is sufficient to establish a prospect of success that required a trial. This issue also needs to be tried.
For my part I would allow both appeals and set aside both orders. The issues raised must be remitted back to be tried. I have no doubt that the judge who has the task of trying these issues will wish to consider the whole dispute on liability at the same time so as to be able to see how the claims interrelate. He will, I am sure, consider whether restrictions on the length of cross-examination would be appropriate and whether to cut away the continuous reference to past submissions to which we were subjected.
Clarke LJ
I agree that these appeals should be allowed for the reasons given by Aldous LJ. I add a few words of my own because of the importance of case management in substantial cases of this kind.
The Woolf reforms have emphasised the importance of case management at every stage of an action. Accordingly CPR 1.1(1) sets out the overriding objective of the rules, namely that of enabling the court to deal with cases justly, and CPR 1.1(2) sets out a number of particular factors which must be taken into account in doing so. CPR 1.4(1) provides that the court must further the overriding objective by actively managing cases and, as Aldous LJ has pointed out, by CPR 1.4(2) active case management includes
deciding promptly which issues need full investigation and trial and accordingly disposing summarily of the others
A distinction is thus drawn between a trial of an issue or issues on the one hand and summary disposal of it or them on the other. As I read the CPR they set out two principal ways in which a claim may be disposed of summarily, namely striking out and summary judgment. CPR 3.4 contains the court’s power to strike out a statement of case. For present purposes the only provision of CPR 3.4 which is potentially relevant is CPR 3.4(2)(a), which provides:
that the statement of case discloses no reasonable grounds for bringing or defending a claim.
CPR 24.1 provides that Part 24 sets out a procedure by which a court may decide a claim or a particular issue without a trial and CPR 24.2 provides that the court may give summary judgment against a defendant on the whole of a claim or on a particular issue if it considers that the claimant
has no real prospect of succeeding on the claim or issue
There is no suggestion in the CPR that the court has power either of its own motion or otherwise to proceed in some different manner. Thus, as I see it, the CPR contemplate that the court may strike out a claim under CPR 3.4, determine it summarily under CPR 24.2 or determine it at a trial. In addition the court has wide powers of case management, which include the exclusion of an issue from consideration under CPR 3.1(1)(k) and indeed deciding how a trial should proceed.
The rules and practice directions show that there is a close relationship between an application to strike out under CPR 3.4 and an application for summary judgment under CPR 24.2. For example paragraph 1.7 of the practice direction relating to striking out a statement of case (inaccurately quoted at 3PD-001) is in these terms:
Equally paragraph 5.1 of the practice direction on case management (at 26PD-002) provides that part of the court’s duty of active case management is the summary disposal of issues which do not need full investigation and trial. Paragraph 5.2 states that the court’s powers to dispose of issues in that way include those under CPR 3.4 and 24.2.
As I see it, in the vast majority of cases of a substantial nature the question whether an issue or claim should be disposed of summarily should be determined long in advance of the trial so that the preliminary costs of a trial are avoided and so that all parties know what issues are to be decided at the trial. I would expect cases in which it is appropriate to consider striking out a claim or giving summary judgment at the trial to be very rare, although every case depends upon its own circumstances and such cases might occur.
Under CPR 3.4 the focus is on the statement of case rather than on the evidence, whereas under CPR 24.2 it is on the evidence which is or is likely to be available at the trial. Under CPR 24.2 the court only has power to give summary judgment against a claimant if the claimant has no real prospect of success on a particular claim or issue. As Lord Woolf MR said in Swain v Hillman [2001] 1 All ER 91 at 92, the word ‘real’ in the expression ‘real prospect of success’ distinguishes fanciful prospects of success and directs the court to the need to see whether there is a ‘realistic’ as opposed to a ‘fanciful’ prospect of success. I cannot at present envisage a case in which it would be correct to dispose of an issue against a claimant without a trial unless the defendant persuades the court that the claim should be struck out under CPR 3.4 or that the claimant has no real prospect of success in the sense just described under CPR 24.2. Moreover, the test must be the same whenever the application is made and even if (for some good reason) it is made at the trial. The test must also be the same if the question is raised of the court’s own motion.
As I read them, the CPR do not contemplate conducting a form of trial on the balance of probabilities at the outset without allowing a trial to take place. While it is no doubt unwise to lay down rigid rules because of the importance of flexibility in managing substantial litigation of this kind, for my part I can see no justification for the approach adopted by the judge in this case. In my judgment the proper course was to either to consider whether the claims or any of them should be disposed of summarily under CPR 3.4 or CPR 24.2 or (subject only to appropriate trial management) to conduct a trial in the ordinary way.
The AA quality claim was not tried, but, as appears from paragraphs 1 and 3 of the order quoted by Aldous LJ, was struck out. Like Aldous LJ, when I first read the judgment I thought that the judge had given summary judgment on the quality claim and that it had been struck out on the ground that it had no reasonable prospect of success. However, like him I have been persuaded that the judge concluded that the claim failed on the balance of probabilities on the basis of the evidence to be relied upon by Brompton, principally that of Mr. Down and Dr Arnold.
Paragraphs 10 and 11 of the judgment form a section of the judgment entitled "the approach to what should be tried". So far as relevant to the AA quality claim paragraphs 10 and 11 are in these terms:
A matter for concern to me from an early stage of this sub-trial, once I had digested the claimant’s pleadings, had read the written submissions of the various parties, had heard the oral submissions of the parties’ counsel in opening their respective cases and, as I was asked, had read the parties’ experts’ reports prepared on behalf of the various parties, was the question whether the material upon which the claimant sought to rely as proving its case against a particular defendant in relation to a particular matter was actually such as, if it were the only material before the court, would prove the claimant’s claim in respect of that matter. Consequently, it seemed to me that, quite apart from the applications made on behalf of the various defendants, I should consider also whether to exercise of my own volition my powers of case management
I invited submissions as to by what standard or standards I should decide whether to allow claims which the claimant apparently wished to purse in this trial to proceed .... Mr. Andrew Bartlett QC, who appeared on behalf of AA, submitted, as it seems to me rightly, that I should consider, in relation to each of the claims which the claimant had indicated in the short summaries to which I have referred it wished to pursue, whether, if, on the material upon which Mr. Edwards-Stuart indicated the claimant desired to rely, a submission of no case to answer had been made, I should have acceded to it .…
The exercise performed by the judge was thus to treat the case as if Mr. Bartlett had made a submission of no case to answer and to decide on the balance of probabilities whether Brompton was or would be entitled to succeed on the assumption that the only evidence before the court was the written evidence upon which it said that it wanted to rely. If that question had been answered in the affirmative, the trial would no doubt have proceeded, Brompton’s witnesses would have been called and cross-examined and AA would perhaps have been afforded a further opportunity to submit that there was no case to answer, at which stage it might have been put to its election as to whether it wished to stand on such a submission or call evidence on its own behalf.
I am less sure that the judge applied the same approach to all the claims which he held to be open on the pleadings. However that may be, I respectfully agree with Aldous LJ that the judge did not approach the AA quality claim correctly as a matter of principle. There was no suggestion that it should be struck out under CPR 3.4. It follows that, on the basis of the conclusions expressed above, he should in my opinion either have considered whether Brompton had no real prospect of success and, if he held that it had no such prospect, have given summary judgment for AA, or he should have allowed the trial to continue, subject to whatever directions he thought appropriate to keep the expert evidence within reasonable bounds, perhaps by restricting cross-examination.
I should perhaps add that none of the above conclusions is directed to the question whether it would be appropriate to entertain a submission of no case to answer at the end of the claimant’s case at a trial and, if so, whether the defendant should be put to his election either to make the application or to call evidence. Those are matters which can be left to be determined in a future case if they arise. They did not arise here.
Neither the rules nor the practice directions support the approach adopted in this case to the quality claim against AA. I agree with Aldous LJ that that approach ought not to have been adopted for the reasons which he gives. In short it was not to my mind consistent with the overriding objective of dealing with the case justly. Brompton should have been allowed to proceed with the trial and to call their evidence unless its quality claim had no reasonable prospect of success, that is unless its prospects of success were fanciful or (put another way) it was bound to fail.
At the hearing of the appeal Mr. Bartlett put in a document which contains this sentence:
If, notwithstanding the above, the judge ought to have adopted the real prospect test, as that test is normally understood in relation to an application for summary judgment under CPR Part 24 in advance of the trial, then AA concede that the evidence of Mr. Down was sufficient to show a real as opposed to a fanciful prospect of success in that sense.
[Mr. Bartlett’s emphasis]
If I understood him correctly, Mr. Bartlett subsequently said that that concession was limited to the situation as it would have been if the matter had been considered before the trial. It was no doubt for that reason that the expression ‘in advance of the trial’ was put in italics.
However, in my view, if the concession was correctly made with regard to the situation days or weeks before the trial, as in my judgment it was, it should equally have applied after the trial had begun. I can see no reason in principle why there should be any difference between the two stages. The test should be the same at whatever stage an issue is to be decided summarily and it seems to me that the judge was in effect deciding the matter summarily. It was no doubt for that reason that he struck the AA quality claim out and did not give judgment for AA as if after a trial.
One striking reason why the concession was correctly made and, indeed, why it was unjust to determine the matter in the way in which the judge did is the agreement which had been made by the experts together with the letter dated 19th September 2000 written by AA’s solicitors, both of which have been quoted by Aldous LJ. One of the complaints made by AA was that Mr. Down had only examined AA’s co-ordination drawing relating to Level 1 Zone 4 and that he did not say in his report that that drawing should be treated as typical of all the co-ordination drawings. The judge placed significant emphasis on that fact in paragraph 22 of his judgment.
Yet according to paragraph 11 of the note dated 4th August 2000 made by the experts after their meeting, they agreed that a further examination of two specific additional areas together with the balance of Level 1 Zone 4 "would provide a reasonable sample of the queries and clashes" raised in the pleadings. The letter to which Aldous LJ has referred shows that the experts formed the view that nothing was to be gained by looking at a larger sample because their findings could be extrapolated to "give a sufficient indication of the general picture". It thus seems plain that before the trial began the parties contemplated that there would be further meetings between the experts at which limited further areas would be examined which the experts had agreed would provide a reasonable sample of the queries and clashes relied upon.
This case perhaps highlights the importance of all experts’ meetings taking place well in advance of the trial and not after it has begun, but, given the agreement which had been reached between the experts and the approach proposed in the letter, it was in my opinion unjust to determine the quality claim against AA on the balance of probabilities without permitting such a meeting and without hearing the evidence.
It was suggested by Mr. Bartlett that the transcript shows that Mr. Edwards-Stuart agreed to that approach, but he was faced with a strong view expressed by the judge of his own motion that that was the way in which he was minded to proceed and I do not think that it is fair to Brompton to hold that Mr. Edwards-Stuart conceded that it was appropriate to do so. In truth, as Aldous LJ has said, there was no argument as to the parts of the CPR under which the issue raised by the judge was to be determined. If there had been, the correct conclusion would have been that the issue should either be tried or summarily determined under CPR 3.4 or 24.2, and on the facts the correct conclusion would have been that the quality claim should have been allowed to proceed to trial for the reasons given by Aldous LJ.
With regard to all the other claims, I agree with the conclusions and reasons Aldous LJ and do not wish to add anything of my own.
Civil Proceedings Rules: R. 1.2, R. 1.4, R. 3.1(2)(k), R. 3.3, R. 24.2,
A. Edwards-Stuart QC and Mr. M. Cannon (instructed by Masons for the Appellants)
M. Taverner QC and Mr. R. Edwards (instructed by Fishburn Morgan Cole for the eighth, fourteenth and fifteenth defendants "WGI")
A. Williamson (instructed by Davies Arnold Cooper for the 1st to 7th and 13th defendants / respondents "PMI")
A. Bartlett QC and Miss J. Davies (instructed by Berrymans Lace Mawer for the ninth and sixteenth defendants / respondents "AA")
The 10th, 11th and 12th defendants were not present or represented.