England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE TECHNOLOGY AND CONSTRUCTION COURT
(HIS HONOUR JUDGE RICHARD SEYMOUR QC)

		Royal Courts of Justice Strand London WC2 Friday, 9th February 2001

Friday, 9th February 2001

1. SIR ANTHONY EVANS: These are two applications for permission to appeal from a judgment given by His Honour Judge Richard Seymour QC in the Technology and Construction Court on 18 December 2000.
2. The judgment which runs to 77 pages and cannot be said to be unduly long is rightly described in the skeleton arguments as "exemplary". It was concerned with one part of one section of complex litigation arising out of the construction of the new Brompton Hospital in Sydney Street, Chelsea, between 1987 and 1990. The relevant parties are the claimants ("RBH"), who were the building employers, and the 8th, 15th and 16th defendants WGI International ("the architects").
3. The issue raised in this part of the proceedings was whether the architects were negligent and in breach of their professional duty of skill and care by reason of extensions of time for completion of the contract works which they allowed by various certificates and at different dates to the contractors, Taylor Woodrow. Thanks to the clarity of the judgment, and of the submissions made orally and in writing by Mr Edwards-Stuart QC for the claimants and Mr Taverner QC for the architects, I can summarise the relevant issues quite briefly.
4. The works commenced in 1987 and the contract date for completion was 23 July 1989. They were not completed in fact until 22 May 1990, on the face of it 43 weeks late. But the architects issued certificates having the cumulative effect of extending the date for completion until the date of practical completion, so that the claimants were unable to claim damages for late completion in the arbitration proceedings which followed between them and Taylor Woodrow.
5. They contend in these proceedings that the certificates were negligently issued and that the architects are liable to them in damages accordingly. The measure of damages they claim is compensation for their weakened bargaining position vis-a-vis the contractors, in negotiations to settle the arbitration proceedings. The negotiations were successful but the claimants say that they would have resulted more favourably for them if the extension certificates had not been negligently issued.
6. There were four grounds on which certificates were issued which the claimants allege should not have been issued. As regards two of them, the judge held that there was no negligence by the architects, and the claimants do not seek permission to appeal against those findings. These two grounds were first, delay caused by late release of the site to the contractors; and secondly, an item of work described as safety cabinets. The first came to be called the CHW ground because the site was formally occupied by the Chelsea Hospital for Women.
7. It is relevant for present purposes that the first of these periods of delay naturally occurred in the early part of the contract period, and that the second, a much smaller item, resulted from an order given towards the end of the period in February 1990. The periods of delay resulting from these two matters were found to be 11 weeks and 3 weeks respectively. The judge held that the architects were not proved to have been negligent in relation to either of these certificates although he had considerable reservations about the correctness of the first (paragraph 77), and no complaint is made about these parts of his judgment.
8. The two further grounds on which certificates were issued were the installation of Hydrotite (five weeks and seven weeks, total 12 weeks) and commissioning (20 weeks, of which 12 weeks were described as concurrent: paragraph 70). The former, Hydrotite, is a damp-proof membrane which was added to the specification as an underlay on concrete floors and thus fitted below the specified flooring. The judge held that the architects were negligent in certifying the second, seven-week, extension, which should not have exceeded two weeks (paragraph 82). The period negligently over-certified was therefore five weeks. He held that the first certificate for five weeks was not negligent (paragraph 80).
9. Commissioning, as the name implies, was the concluding stage of the works, and the reason for delay was a problem with machinery known as "chillers", presumably some kind of refrigerating or cooling apparatus. The 20-week estimate was reduced to 12 because of a perceived overlap with Hydrotite or other concurrent causes.
10. One final piece of factual information is that in about December 1988 the contractors produced a progress report which showed that the works were already 30 weeks behind schedule. This increased to 33 weeks by January 1989. On 21 February 1989 they reported that the works were 41 weeks behind programme but they issued a target programme reducing the delay in completion to 30 weeks (paragraphs 39 to 40). By April 1989 they were estimating total delays of 43 weeks (paragraphs 41 to 42), coincidentally or otherwise the actual delay which was incurred.
11. The judge directed himself as to the correct legal approach when it was alleged that the architects were negligent and not merely that they were incorrect in their estimates of delay; when it was necessary for them to consider (only) what period of delay in final completion was caused by a relevant event; and when there might be more than one cause of delay even where a relevant event had occurred and such causes might include default by the contractors themselves. The architects' task of estimating the likely date for final completion, and of delay caused to it by a relevant event, becomes particularly complex when there are concurrent or overlapping causes of delay, as the architects considered here that there were. No criticism is made of the judge's approach, indeed both parties accept that his analysis of the legal position was entirely correct.
12. Both parties, in support of their respective applications, underlined the nature of the architects' task when issuing certificates of this sort: they have to estimate a likely date for final completion without allowing for any delay caused by the relevant event, and then they have to determine whether and if so to what extent the relevant event will cause that date to be delayed. The same task has to be performed in principle even when, as happened here, a certificate is issued after final completion and the date of actual completion, therefore, is already known.
13. The claimants submit, first, that the judge was clearly wrong to hold that there was no negligence in issuing certificates which together total 18 weeks for the consequences of three relevant events, all of which occurred after February 1989, when the target programme was issued with an estimated delay of 30 weeks. Later events they contend cannot have caused more than an additional 13 weeks of delay. This argument does not allow for the fact that the contractor might catch up with some of the accrued delay, thus bringing the date for final completion, apart from the consequences of later relevant events, forward from the 30-week estimate.
14. The judge considered this argument (paragraph 76). I do not see any realistic possibility of this argument succeeding in the Court of Appeal as a ground for reducing the overall period to 13 weeks.
15. Their second argument is more subtle. They attack the finding that the delay caused by the commissioning was no more than 12 weeks (summary skeleton argument paragraph 8). This implies, they say, that at the relevant time the architects considered that the date of final completion, apart from post-February 1989 relevant events, was earlier than 18/22 February 1990 when the estimated 30-week period expired. They submit that the architects cannot non-negligently have thought this, and that there was no evidence, or insufficient evidence, to support the judge's implicit finding that they did.
16. The position with regard to evidence is spelt out by the judge in some detail. Only a limited number of witnesses were called and some of the expert evidence was rejected by the judge. He had to rely on contemporary documents, and these were mostly produced by the contractors whom he found were not necessarily reliable when it came to estimating dates and delay. There was no material, Mr Edwards-Stuart submits, supporting a non-negligent estimate of a likely date for final completion earlier than February 1990.
17. Mr Taverner responds that, during the second half of 1989 it was already apparent that delays would be caused by Hydrotite so that estimates made during that period took account of that additional work. They were not directed to what the date would have been without it.
18. The claimant's third submission is that if commissioning merited an eight-week extension, then the architects and the judge should have taken account of the fact that completion was delayed by the safety cabinets work also, and therefore they should have allowed only five weeks in addition to the three weeks for that item, or eight weeks in total.
19. The architects' application is directed at the judge's finding that a five-week extension was wrongly and negligently granted by the second Hydrotite certificates. They point to the fact that the commissioning delay was estimated at 20 weeks but reduced to eight weeks on account of the concurrent Hydrotite extensions which totalled 12 weeks. If five weeks of the 12 was negligently and wrongly granted, they submit, then the commissioning delay should be reduced by only seven weeks with the result that, notwithstanding their negligence, the total certified period remains the same.
20. The architects' second submission is that the judge's finding of negligence was flawed by his reasoning as set out in the judgment.
21. My conclusions are:

1. The judge formed a clear and comprehensive view of the progress of the works and of the history of each of the disputed certificates.

2. It was necessary for the architects and for him to consider not just the period by which progress was delayed by a relevant event but also the consequences for the final date in real time. Before actual completion, the final date could only be estimated.

3. The overlap of delays caused by up to four separate relevant events means that an overall appreciation has to be made on a number of different hypotheses before concluding what delay in final completion each of the events has caused or is likely to cause.

4. The inquiry made necessary even by the limited proposed grounds of appeal would make it necessary to examine the whole of the judge's perspective and to question the validity of his conclusions overall.

5. I do not consider that the claimants have any realistic chance of persuading the Court of Appeal that the judge's finding as to the total periods of extension which could non-negligently be granted were wrong or unsupported by the evidence.

6. Similarly, I do not consider that the architects have any realistic chance of satisfying the Court of Appeal that the judge's conclusion were wrong, or should be adjusted by reference to the suggested overlap of commissioning and Hydrotite delays. The consequences of both events and their relationship with each other was carefully considered and taken into account by him.

7. Further and in any event, the specific issues raised by these applications it appears cannot be decided without re-opening much of the evidence and revisiting the judge's conclusions on other issues which are not challenged by either party. I do not believe that this would be a proportionate or correct use of the appeal process in the circumstances of this case.

22. For these reasons both applications are refused.
(Applications refused; no order for costs in relation to the two applications 95 and 96. Separate order for costs in application 97).