England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE

QUEEN’S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

BEFORE: HIS HONOUR JUDGE RICHARD SEYMOUR Q.C.

BETWEEN:

MATALAN DISCOUNT CLUB (CASH & CARRY) LIMITED

Claimant

and

1. TOKENSPRIRE PROPERTIES (NORTH WESTERN) LIMITED
2. RICHMOND CLADDING SYSTEMS LIMITED

Defendant

and

BETWEEN:

RICHMOND CLADDING SYSTEMS LIMITED

Part 20 Claimant

and

CHARLES EDWARD PARMENTER

(sued on his own behalf and on behalf of all others subscribing as Syndicate 1204 at Lloyds

Sued as CROWE UNDERWRITING AGENCIES LIMITED)

Part 20 Defendant

and

BETWEEN:

TOKENSPIRE PROPERTIES (NORTH WESTERN) LIMITED

Part 20 Claimant

and

1. THE LEGENDARY PROPERTY COMPANY LIMITED
2. RICHMOND CLADDING SYSTEMS LIMITED

Part 20 Defendants

and

BETWEEN:

TOKENSPIRE PROPERTIES (NORTH WESTERN) LIMITED

Claimant

and

1. THE LEGENDARY PROPERTY COMPANY LIMITED
2. RICHMOND CLADDING SYSTEMS LIMITED

Defendants

and

BETWEEN:

RICHMOND CLADDING SYSTEMS LIMITED

Part 20 Claimant

and

CHARLES EDWARD PARMENTER

(sued on his own behalf and on behalf of all others subscribing to Syndicate 1204 at Lloyds

Sued as CROWE UNDERWRITING AGENCIES LIMITED)

Part 20 Defendant

and

BETWEEN:

THE LEGENDARY PROPERTY COMPANY LIMITED

Part 20 Claimant

and

RICHMOND CLADDING SYSTEMS LIMITED

Part 20 Defendant

Cases numbers: HT 00/108 and HT 00/52

Dates of Trial: 5, 6, 7, 8, 12, 13, 14, 15, 16 and19 March 2001

Date of Judgment: 18 May 2001

Timothy King Q.C. and John Benson for the claimant in action HT 00/108, Matalan Discount Club (Cash & Carry) Ltd. (Hill Dickinson, Solicitors)

David Thomas for the first defendant in action HT 00/108 and claimant in action HT 00/52, Tokenspire Properties (North Western) Ltd. (Berrymans Lace Mawer, Solicitors)

Ian Pennicott for the second defendant in both actions HT 00/108 and HT 00/52, Richmond Cladding Systems Ltd. (Read Roper & Read, Solicitors)

Michael Black Q.C. for the first defendant in action HT 00/52, Pentask Ltd., formerly called The Legendary Property Company Ltd. (Zatman & Co., Solicitors)

Claire Blanchard for Charles Edward Parmenter, the defendant to a Part 20 claim by Richmond Cladding Systems Ltd. in each action. (Charles Russell, Solicitor

JUDGMENT

I direct that no further note or transcript be made of this judgment.

The text of the Judgment of His Honour Judge Richard Seymour Q.C. is as follows:

JUDGMENT

Introduction

1. In days gone by Triumph TR7 sports cars were manufactured at a factory at what is now called Hunts Cross in Speke Hall Road, Speke, Liverpool. That factory ceased production and the factory building was sold. It was converted into a shopping centre. The shopping centre is called the "Triumph Centre". At the time of the events with which I am concerned the former factory building, which hereafter in this judgment I shall call "the Building", comprised eight retail units, known, respectively, as Unit A, Unit B, and so on down to Unit H, and a warehouse ("the Warehouse") occupied by a company called Duni Ltd. ("Duni"). In this judgment I shall refer to the individual units within the Building by the letters by which they were referred to in the evidence given before me.

2. The Building is essentially square in plan, but there is a projection at one corner giving the building an "L" shape, although the long part of the "L" is much broader than the shorter part. The whole of one side of the long part of the "L" is the Warehouse. Units A to G inclusive existed side by side such that each abutted a part of the Warehouse. Unit G was, as it were, at one end of the long part of the "L", extending into the projection which is the short side of the "L". The end of the projection which is the short side of the "L" was Unit H. Since the events which have given rise to these actions Unit G has been combined with Unit H to form a single retail unit.

3. There was but one roof over the whole of the Building, in the sense that there were not separate roofs over the Warehouse and the individual retail units. However, the profile of the roof behind a façade was crenellated, there being alternating high-level and low-level roofs spanning across the whole width of the retail units and the Warehouse, so that one began with a low-level roof across a part of Unit A and extending across a part of the Warehouse, this was followed by a high-level roof, then there was another low-level roof, and so on. There were nine high-level roofs and eight full span low-level roofs, plus two half-span low-level roofs at either end of the Building. A full-span roof was eight metres wide. For the purposes of the trial the high-level roofs were numbered from R1 to R9, and the full span low-level roofs from R11 to R18. The low-level roofs at the ends of the Building were called R10 and R19. R17 and R18 were the low-level roofs over Unit G and Unit H, and the parts of the Warehouse adjacent to Unit G. It appears that all of the high-level and low-level roofs had originally been flat, or rather laid to a slight fall, both from an apex in the centre of each width towards the sides of the span, and from one end of the Building to the other. The roofs had originally comprised a profiled metal decking as the innermost layer. That layer was, by the time of the events with which I am concerned, if not from the outset, covered in bituminised felt. Drainage from the roofs at the time of the original construction was from the high-level roofs onto the low-level roofs, and then from the low-level roofs by gutters formed in the bituminised felt at the upstand of the high-level roofs on either side of each low-level roof into downpipes running internally within the Building. At some stage the original roof construction had been modified over all parts of the roof of the Building save R15. In most areas the original flat, bituminised felt covered roof had been overlain with a profiled metal decking set as a pitched roof with slopes falling from a central apex. However, the roofs at either end of the Building, R10 and R19, were mono-pitched profiled metal decking roofs. The roofs over R17 and R18 had also been overclad with profiled metal decking, but there the metal decking had been laid such that there were two mono-pitch roof slopes each falling from a high point beside the adjacent high-level roofs towards low points leading into a central gutter. That design of overcladding had rendered the original drainage from the roofs in question redundant, as the gutters in the bituminised felt at the upstand of the adjacent high-level roofs was beneath the high point of the mono-pitch slope on each side.
4. In 1996 the freehold owner of the Building was Tokenspire Properties (North Western) Ltd. ("Tokenspire"). According to the evidence of Mr. Charles Whittle, a director of Tokenspire Properties Ltd., Tokenspire is a wholly-owned subsidiary of Tokenspire Properties Ltd. and has no staff of its own. Tokenspire, Mr. Whittle said at paragraph 2 of his witness statement dated 2 January 2001, is simply a vehicle through which various properties are owned and leased. Mr. Whittle explained at paragraph 5 of that witness statement that Tokenspire had acquired the Building in 1991. The Warehouse and the various units in the Building were occupied by a number of different tenants.

The relevant contracts

5. Unit G was the subject of an Agreement for Lease ("the Lease Agreement") dated 5 September 1994 made between (1) Tokenspire and (2) Matalan Discount Club (Cash & Carry) Ltd. ("Matalan"). The business of Matalan was described by Mr. Noel Barraclough, who is by profession a loss adjuster, but who gave evidence on behalf of both Matalan and Tokenspire, as that of a discount clothing retailer. However, it is plain from the evidence of Mr. Jeffrey Bagnall, whose statement was put in evidence under the provisions of Civil Evidence Act 1995, that Matalan stocks a range of goods rather more extensive than simply clothing. In particular, at least in Unit G in October 1996, Matalan sold toiletries, torches and batteries, wooden bathroom fittings, duvets and pillows, kitchenware, crockery, travel goods, various gift items, toys, linens and towels.

6. In the Lease Agreement Tokenspire was called "the Developer" and Matalan was called "the Tenant". By clause 5.1 of the Lease Agreement it was provided that:-

"Subject as herein provided on the Completion Date the Developer shall grant and the Tenant shall accept and execute a counterpart of the Lease which shall be in the form of the Draft Lease."

For the purposes of the Lease Agreement the expression "the Lease" was defined as meaning:-

"the lease of the Property agreed to be granted by the Developer and accepted by the Tenant pursuant to this Agreement in the form of the Draft Lease."

The expression "the Draft Lease" was defined as meaning:-

"the form of lease annexed hereto which has been agreed between the parties prior to the signing hereof."

The expression "the Completion Date" was defined in a manner which meant that the date for completion had to be fixed by reference to the date of issue of a certificate of practical completion in relation to works of refurbishment to the Building in general, and to Unit G in particular. As I understand it, it is common ground as between Matalan and Tokenspire that "the Completion Date" passed before the events in October 1996 with which these actions are particularly concerned. However, no lease in the terms of the draft lease annexed to the Lease Agreement has been executed. Nonetheless, it is accepted that the effect of the decision in Walsh v. Lonsdale (1882) LR 21 Ch. D 9 is that the relationship between Matalan and Tokenspire in relation to Unit G as at October 1996 falls to be treated as governed by the terms of the draft lease annexed to the Lease Agreement. In this judgment I shall call that draft lease "the Lease".

7. By an agreement in writing ("the Supplemental Agreement") dated 17 October 1994 and made between (1) Tokenspire and (2) Matalan the Lease Agreement was varied so as to provide for some of the works which, under the Lease Agreement, Tokenspire was to have carried out to be carried out instead by Matalan.

8. The Lease contained the following covenants on the part of Tokenspire which are presently material:-

"6.1 To permit the Tenant peaceably and quietly to hold and enjoy the Premises during the Term without any interruption or disturbance from or by the Landlord or any person claiming through under or in trust for the Landlord or by title paramount

"6.2.1 clean maintain repair and (if necessary and where beyond economic repair) renew to such standard as the Landlord may acting reasonably and in accordance with the principles of good estate management from time to time consider adequate the Retained Parts

"6.8 At all times during the Term to keep the Tenant fully indemnified against all damage damages losses costs expenses actions demands proceedings claims and liabilities made against suffered or incurred by the Tenant arising directly or indirectly out of any breach or non-observance or non-performance by the Landlord of the covenants conditions or other provisions on the part of the Landlord contained in this lease provided always that if any such damage damages losses costs expenses actions demands proceedings claims and liabilities are made against or are suffered or incurred by the Tenant then the Tenant shall be entitled (but without prejudice to any other right or remedy the Tenant may have against the Landlord) to retain the rents until the Tenant has been fully indemnified in respect of the same."

The expression "the Retained Parts" was defined in clause 2.14 of the Lease as meaning:-

"all parts of the Estate but excluding

1. all parts of the Estate which from time to time are either occupied by a tenant or are so constructed or adapted as to be capable of being so occupied
2. all Pipes included within and exclusively serving the Premises or any Pipes included within and exclusively serving any part of the Estate referred to in clause 2.14.1"

The expression "the Estate" was defined in clause 1.2.1 of the Lease as meaning:-

"ALL THAT land and buildings known as The Triumph Centre Speke Merseyside shown on the Plan for identification only edged green".

9. At paragraph 6 of his witness statement dated 2 January 2001 Mr. Whittle said:-

"From the date of Tokenspire’s acquisition of the property and warehouse, until September 1996, a number of complaints from various tenants about the general condition of the roof were received. Tokenspire was obligated in some instances, whether under the terms of a lease or agreement for lease or other agreement to effect repairs to the roof of the property and warehouse. On occasions, incidences of ingress of water into the property and warehouse through the roof were reported. Any reports were dealt with by Tokenspire. As well as putting into effect repairs, Tokenspire did, on occasion, suspend or waive the payment of rent or reduce the amount of rent to be paid by the occupiers of the affected units, by way of compensation. It was possible to deal with complaints in this way, because although the occasions of water ingress were not isolated, usually no damage was caused or any damage that was caused to stock or to decoration was of a minor nature only. The penetration culminated in no more than drips of water and could not in any way be compared to that occurring after Richmond Cladding Systems Limited ("Richmond") commenced works to the property in September 1996, to which I refer below."

I accept that evidence as an accurate statement of the nature of rainwater ingress before October 1996 and of the damage which such ingress caused.

10. At paragraph 7 of his witness statement dated 2 January 2001 Mr. Whittle explained that:-

"In 1996, a decision was made that the property should be sold and negotiations were entered into with The Legendary Property Company Limited ("Legendary"). Legendary was aware that the roof required remedial work and that in order to secure tenants it would be necessary to effect those remedial works."

Again I accept that evidence of Mr. Whittle.

11. By an agreement in writing ("the Sale Agreement") dated 23 September 1996 and made between (1) Tokenspire and (2) The Legendary Property Company Ltd. ("Legendary") Tokenspire agreed to sell and Legendary agreed to purchase the property described in the First Schedule to the Sale Agreement as:-

"All that land and buildings at The Triumph Centre Speke Hall Road Liverpool Merseyside shown for the purposes of identification on the Plan and edged in red."

The property agreed to be sold was not the whole of the Building, but only Units A to H inclusive. At that time Tokenspire was to retain the Warehouse occupied by Duni Ltd., although Mr. Whittle told me in evidence that Tokenspire in fact sold its interest in the Warehouse sometime in 1999. Legendary has, since the date of the Sale Agreement, changed its name to Pentask Ltd. However, for convenience I shall refer to Legendary by that name in this judgment whatever its name in fact was at the time of which I am speaking.

12. The date for completion of the sale for which the Sale Agreement provided was fixed by clause 4 of the Sale Agreement as 31 December 1996. The copy of the Sale Agreement put before me was signed on behalf of Legendary and bore upon its face a number of manuscript annotations. The status of those manuscript annotations was not investigated in evidence and is not material to any issue which I have to decide. I shall therefore ignore the manuscript annotations in setting out the terms of the Sale Agreement which are relevant to the matters in dispute before me. By clause 14.8 of the Sale Agreement in the form originally typed it was provided, so far as is pertinent to this action, as follows:-

"Between the date of this Agreement and the Completion Date the Vendor (so far as permitted to do so by the Leases and at the risk of the Purchaser) will permit the Purchaser to freely enter onto the Property to carry out the works set out in paragraph 1 and paragraph 2 of the Developers Repair Schedule ("the Purchasers Works") prepared by Schofield Horsman Architects and annexed hereto ("the Report Schedule") provided that:

1. the works are carried out in a good and workmanlike manner and with good quality materials and with due and reasonable diligence and in accordance with any statutory requirements
2. the Purchaser will indemnify the Vendor against all liability arising out of the Purchasers Works

3) due regard is had to the efficacy of the roof on the Vendors retained property to the effect that it will not be detrimentally affected by the Purchasers Works"

By clause 15.1 of the Sale Agreement it was provided that:-

"The Vendor will transfer the Property in the same physical state as it was at the date of this Agreement (except for fair wear and tear) which means that the Vendor retains the risk until completion."

Provision was made in clause 15.2 for the rescission of the Sale Agreement in the event that, by the date fixed for completion, the physical state of the Building was such that it could not be used for the purpose for which it was being used at the date of the Sale Agreement. By clause 15.3 of the Sale Agreement it was provided that:-

"The Vendor is under an obligation to the Purchaser to insure the Property until completion in the full reinstatement value of the Property."

Clause 15.4 of the Sale Agreement was in the following terms:-

"If the Purchaser elects not to rescind this Agreement pursuant to 15.2 the Vendor will account to the Purchaser for the Insurance monies arising pursuant to the Vendor’s obligation under 15.3."

13. The "Developers Repair Schedule" ("the Repair Schedule") referred to in clause 14.8 of the Sale Agreement included, under the heading "THE ROOF", the following:-

"DEMOLITION

Strip and remove from site all existing profiled metal sheet overcladding, including all flashings, fillers and fixings, to leave the former felted roof finish exposed.

Remove overcladding from lower roof areas, upper roof areas and vertical sides of former glazed upstands.

"NEW OVERCLADDING

Supply and fix galvanised steel sub-purlins on cleats secured through existing felt and insulation to the main roof steelwork.

Supply and fix new single skin 0.7mm thick profiled galvanised roof sheeting, coated with HP200 Plastisol, colour Goosewing Grey, to all previously exposed areas of roof.

Supply and fix all necessary associated flashings, galvanised gutters, fillers, ventilated fillers, closers and fixings to form a totally weathertight construction on completion.

Include within the system for incorporating 80mm glass fibre insulation laid over the existing felt to improve thermal insulation and reduce the risk of condensation.

Include for the supply and use of all necessary scaffolding, protection, lifting equipment protective equipment etc. to comply with current Health and Safety legislation.

"Allow for modifications to existing rainwater drainage to take account of any changes in drainage outlet positions."

14. A separate part of the Repair Schedule was entitled "GENERAL BUILDER’S WORK". Within that section appeared the instruction:-

"Check that all rainwater downpipes, outlets etc. are in good working order and repair as necessary."

Later in the same section was the statement that:-

"Rainwater outlets are to be checked for condition and capacity, and repairs to outlets and down pipes are to be carried out as necessary."

That was followed by the instruction:-

"Undertake a specialist CCTV survey of the drainage to the shopping centre."

15. Legendary entered into an agreement ("the Roofing Contract") dated 24 September 1996 with Richmond Cladding Systems Ltd. ("Richmond") under which Richmond agreed to undertake the work briefly described in the first recital to the Roofing Contract as:-

"Re-roofing of the existing Retail Units & Service Road at The TR7 building, Hunts Cross Speke, Liverpool."

The Roofing Contract was in the standard form Agreement for Minor Building Works, 1980 edition, issued by the Joint Contracts Tribunal ("the Standard Form"). The price payable under the Roofing Contract was £241,839. The Roofing Contract provided for the works which were to be undertaken by Richmond under it, to which works I shall refer in this judgment as "the Roofing Works", to be commenced on 25 September 1996 and to be completed by 22 December 1996. The Roofing Contract also provided for Richmond to pay liquidated damages at a rate of £50,000 in the event that the Roofing Works were not completed by 22 December 1996 or such later date as should be fixed under the terms of the Roofing Contract. Mr. Christopher Greenfield and Mr. Jeffrey Seel, the two directors of Richmond at the material time, both gave evidence before me. Each of them accepted that the profitability of the Roofing Contract to Richmond depended critically upon completion of the Roofing Works not taking place later than whatever date was fixed for completion under the terms of the Roofing Contract.

16. The first recital to the Roofing Contract referred to a schedule annexed in which the Roofing Works were described. That schedule was in fact on the printed stationery of Richmond. The schedule set out what was called "SCOPE OF WORKS" as follows:-

"The area of the works and proposed details are generally as attached drawings TR7/1A, 3 & 4.

"The works involve the removal of the existing roof sheeting and the supply and fixing of galvanised steel support framework secured through the original felt and deck roof covering into the main structural trusses which are at 3.810 (12’-6’’) centres.

"Supply and lay 40mm thick rigid insulation to existing felted low level gutter section and fix new galvanised steel gutters with stop ends and wier overflows. New outlets to discharge into existing outlets.

"Lay vapour check over existing felt roof covering.

"lay 80mm thick glass fibre insulation over existing roof covering and fix new profiled roof sheet of HP200 Plastisol coated galvanised steel secured to new framework.

"Lay breather membrane above insulation and stretch to minimise deflection between supports.

"System to be complete with all necessary flashings in material to match roof sheeting to provide a fully weathertight construction.

"Richmond Cladding Systems will provide a NFRC co-partnership guarantee for a period of 10 years to cover materials and workmanship."

The Roofing Works were only to be carried out over that part of the Building which Legendary was buying. No works were to be carried out to the roof over the Warehouse.

17. Clause 1.1 of the Standard Form is in the following terms:-

"The Contractor shall with due diligence and in a good and workmanlike manner carry out and complete the Works in accordance with the Contract Documents using materials and workmanship of the quality and standards therein specified provided that where and to the extent that approval of the quality of materials or of the standards of workmanship is a matter for the opinion of the Architect/the Contract Administrator such quality and standards shall be to the reasonable satisfaction of the Architect/the Contract Administrator."

18. By clause 6.2 of the Standard Form it is provided that;-

"The Contractor shall be liable for, and shall indemnify the Employer against, any expense, liability, loss, claim or proceedings in respect of any injury or damage whatsoever to any property real or personal (other than injury or damage to the Works or to any unfixed materials and goods delivered to, placed on or adjacent to the Works and intended therefore or, where clause 6.3B is applicable, to any property insured pursuant to clause 6.3B for the perils therein listed) insofar as such injury or damage arises out of or in the course of or by reason of the carrying out of the Works and to the extent that the same is due to the negligence, breach of statutory duty, omission or default of the Contractor, his servants or agents, or of any person employed or engaged by the Contractor upon or in connection with the Works or any part thereof, his servants or agents. Without prejudice to his obligation to indemnify the Employer the Contractor shall take out and maintain and shall cause any sub-contractor to take out and maintain insurance in respect of the liability referred to above in respect of injury or damage to any property real or personal other than the Works which shall be for an amount not less than the sum stated below for any one occurrence or series of occurrences arising out of one event:.."

19. Richmond had arranged through Crowe Underwriting Services Ltd. ("Crowe") a policy of insurance numbered 900/100756/96 ("the Richmond Policy"). The underwriters of the Richmond Policy were in fact Syndicate 1204 at Lloyd’s, of which Mr. Charles Edward Parmenter is, or was at the relevant time, a member. In the vernacular of this action the insurers under the Richmond Policy were called "Crowe", and it is convenient to refer to them by that, incorrect, name in this judgment. By the Richmond Policy Crowe agreed, amongst other things:-

"To indemnify the Assured and/or any Principal of the Assured against any liability at law for damages and claimant’s costs and expenses in accordance with the law of any Country but not in respect of any judgement, award or settlement made within countries which operate under the laws of the United States of America or Canada or to any order made anywhere in the World to enforce such judgement, award or settlement either in whole or in part.

"The indemnity afforded by this Section is in respect of

1. accidental Bodily Injury to or disease contracted by any person and/or
2. accidental loss of or damage to real and tangible property and/or
3. obstruction, trespass, nuisance or interference with any right of way, air or light or other easement

happening during the period of insurance in connection with the Business of the Assured carried on by the Assured in Great Britain, Northern Ireland, the Isle of Man or the Channel Islands but excluding all liability arising Offshore as defined in this Document."

The Richmond Policy included "General Conditions". General Condition 9 was in the following terms:-

"The Assured shall take all reasonable precautions to prevent injury disease and damage and to maintain all buildings, furnishings, ways, works, machinery, plant and vehicles in sound condition. The Assured shall as soon as possible after discovery cause any defect or danger to be made good or remedied and in the meantime shall cause such additional precautions to be taken as the circumstances may require. The Assured shall give the Underwriters as soon as practicable notice in writing of any changes or alterations which would materially affect this Insurance."

The Richmond Policy also included "Public Liability Exclusions", of which the presently material part read;-

"The Insurance by this Section shall not apply to, nor include any liability of the Assured for any claim arising in connection with..

6. any contract or agreement unless such liability would have attached to the Assured in the absence of such contract or agreement".

20. By a policy of insurance numbered 20 CPO 1115909-004 ("the Tokenspire Policy") under which the insured was named as Tokenspire Properties Ltd, but Tokenspire was named as an additional insured, Independent Insurance Co. Ltd. ("Independent") insured, in Section A, amongst other properties the Building in respect of

"Accidental physical Damage to Buildings and Contents at the Premises and loss of Rent Receivable caused by any event not excepted in this Policy."

"Damage", "Buildings" and "Premises" were all expressions defined for the purposes of the Tokenspire Policy, but it is not necessary in this judgment to set out those definitions, as nothing turns on them. By clause 2 of a part of Section A entitled "Extensions" it was provided that:-

"Transfer of Interest – if at the time of Damage to the Buildings insured by this Section the Insured shall have contracted to sell his interest in such Buildings and the purchase has not been but shall thereafter be completed the purchaser on completion of the purchase if and so far as the property is not otherwise insured by or on behalf of the purchaser against such Damage shall be entitled to the benefit of this Section so far as it relates to such Damage without prejudice to the rights and liabilities of the Insured or the Company under this Section up to the date of completion."

21. According to the evidence of Mr. Whittle, which I accept on this point, after the making of the Sale Agreement, and knowing of the intention of Legendary to enter into the Roofing Contract with Richmond, he arranged for Tokenspire’s insurance cover in relation to the Building to be extended to include both Legendary and Richmond. There was put before me a copy of a letter dated 25 September 1996 written by a Mr. Andrew Pearce on behalf of Independent to J. Rixon Matthews & Appleyard Ltd., Tokenspire’s insurance brokers, which evidenced that extension of cover. The material part of the letter was in the following terms:-

"I refer to our telephone conversation this morning and to my consequent discussions with Shaun and can confirm that we are able to accommodate the extension to cover required in respect of the Insured’s premises at Hunts Cross, Speke Hall Road, Liverpool.

"We understand the Insured is in the process of selling these premises and as part of the sale agreement the building is to be re-roofed.

"The contract conditions being worked to are JCT Minor Works Clause 6.3B which required the Insured as employer to arrange cover in respect of the contract works and existing structure of a joint names basis (ie Tokenspire/Contractor/Purchaser) in respect of damage caused by fire and specified perils as detailed in the contract.

"The basis of our extension to cover is as follows:

Premises: Hunts Cross, Speke Hall Road, Liverpool.

Joint Insureds as follows:

1. Owner: Tokenspire Holdings Ltd.,
2. Contractor: Richmond Cladding Ltd.,
3. Purchaser: Legendary Property Co. Ltd.,

&Employer -

Cover: Destruction or damage caused by fire or specified perils as detailed in the above contract conditions."

It was not in fact the case that clause 6.3B of the Standard Form had been incorporated into the Roofing Contract, but that circumstance is not, I think, relevant to the insurance cover actually arranged. It was also not the case that the owner of the Building was Tokenspire Holdings Ltd., but again nothing in the event seems to turn upon that fact.

22. According to the evidence of Mr. Thomas Cook, Richmond’s Contracts Manager, Richmond commenced the execution of the Roofing Works on 26 September 1996. It was not in dispute before me that in the afternoon or early evening of Monday, 14 October 1996 there was heavy rain in the area of the Building and substantial quantities of water penetrated Unit G and Unit H. Lesser quantities of rainwater penetrated other retail units. These actions are concerned principally with the question of which of the parties before me has what rights against which of the other parties as a result of those occurrences. However, there are also questions as to whether there had been a previous penetration of rainwater into the Warehouse occupied by Duni on 4 October 1996, and, if so, what rights, if any, Tokenspire has against Richmond or Legendary as a result of that penetration.

23. After the completion of the sale of the part of the Building for which the Sale Agreement provided a deed dated 5 February 1997 ("the Deed") was made between (1) Tokenspire (2) Matalan and (3) Legendary. The Deed contained the following recitals:-

"(1) By an Agreement dated the 5^th September 1994 and made between (1) Tokenspire and (2) Matalan ("the Agreement for Lease") and by a Supplemental Agreement dated the 17^th October 1994 and made between (1) Tokenspire and (2) Matalan ("the Supplemental Agreement") Tokenspire and Matalan agreed to the granting of a Lease of Unit G The Triumph Centre Speke Merseyside conditional upon the carrying out of the obligations contained in the Agreement for Lease and the Supplemental Agreement

"(2) A dispute has arisen between Tokenspire and Matalan as to the performance of the Agreement for Lease and the Supplemental Agreement ("the Dispute")

"(3) Legendary has entered into a contract with Tokenspire for the purchase of The Triumph Centre Speke ("the Contract for Sale") on the terms and conditions more particularly contained in the Contract for Sale (including the condition that Tokenspire should the Contract for Sale be completed would accept completion of the Contract for Sale in full and final settlement of any claim it might have against Matalan)

"(4) Legendary has entered into an agreement for lease with Matalan of the said Unit in The Triumph Centre ("the Lease Agreement") on the terms and conditions more particularly contained in the Lease Agreement (including the condition that Matalan should the Lease Agreement be completed would accept completion of the Lease Agreement in full and final settlement of any claim it might have against Tokenspire)"

Clause 2 of the Deed provided as follows:-

"THE Lease Agreement has been completed and Matalan has entered into this Deed in order to acknowledge and confirm that it has accepted the completion of the Lease Agreement in full and final settlement of any claim it may have against Tokenspire arising out of the Dispute or otherwise".

The Claims

24. There are two actions presently before the Court. In the first, action no. HT 00/108, ("the First Action") Matalan is the claimant and the defendants are Tokenspire and Richmond. In the second, action no. HT 00/52, ("the Second Action") Tokenspire is the claimant and the defendants are Legendary and Richmond. There are claims under Part 20 of Civil Procedure Rules in each action. In the First Action Tokenspire makes Part 20 claims against both Legendary and Richmond, while Richmond makes a Part 20 claim against Crowe. In the Second Action Richmond again makes a Part 20 claim against Crowe, but Legendary also makes a Part 20 claim against Richmond. The alleged foundations of these various claims need to be explained.

25. The claims made by Matalan against Tokenspire are claims under the terms of the Lease. The principal ground upon which it was contended by Mr. Timothy King Q.C., who appeared with Mr. John Benson for Matalan, that Tokenspire was liable for the consequences of the ingress of water into Unit G on 14 and 15 October 1996 was that the water came in as a result of the way in which Richmond set about undertaking the Roofing Works, Tokenspire had permitted Richmond to undertake those works, and therefore in the circumstances Tokenspire was in breach of the covenant for quiet enjoyment in clause 6.1 of the Lease. In his written opening note Mr. King submitted that:-

"This is a classic case of breach of quiet enjoyment."

Mr. David Thomas, who appeared on behalf of Tokenspire, submitted that, far from being a classic case of a breach of the covenant for quiet enjoyment, it was not a breach at all because, while Tokenspire had granted permission for the Roofing Works to be undertaken, that grant of permission had been subject to conditions, including that the work should be carried out in a good and workmanlike manner, and that condition had been broken. In those circumstances, submitted Mr. Thomas, Tokenspire could not be held responsible for the failure of Richmond to comply with the conditions which Tokenspire had imposed. On the contrary, submitted Mr. King, having granted permission for the undertaking of the Roofing Works, Tokenspire was, for practical purposes, strictly liable under clause 6.1 of the Lease for any interruption of Matalan’s quiet enjoyment of Unit G which ensued as a result of those works being undertaken, whether the conditions imposed by Tokenspire were complied with or not. Who is correct seems to me to depend simply upon the proper construction of clause 6.1 of the Lease, in the light of the authorities which were cited to me.

26. The other ways in which Matalan’s case was put against Tokenspire were but faintly pursued, in my view rightly. The first alternative ground upon which it was said that Tokenspire was liable to Matalan was that under clause 6.2 of the Lease Tokenspire was under an obligation to keep the roof of Unit G in good repair and that it was because the roof was not in good repair that water penetrated the roof on 14 and 15 October 1996. Whether this ground is well-founded depends upon whether, on proper construction of clause 6.2 of the Lease, Tokenspire owed to Matalan an obligation to keep the roof of Unit G in good repair. That in turn depends upon whether the roof of Unit G fell within the definition of "the Retained Parts" in clause 2.14 of the Lease, or, to put it another way, whether the roof of Unit G was included within the premises demised by the Lease. I consider that it is plain that the roof of Unit G was included within the property the subject of the demise. Mr. King did not seriously suggest otherwise. I need not, therefore, be further concerned with this way in which the case has been put against Tokenspire. The third way in which Matalan’s case was put against Tokenspire I can take even more briefly. Mr. King frankly accepted that Matalan could only rely upon the indemnity for which clause 6.8 of the Lease provided if he could point to a breach, non-observance or non-performance on the part of Tokenspire of some other obligation placed upon Tokenspire by the Lease. He accepted that he could not point to anything other than the alleged breaches of clauses 6.1 and 6.2 to which I have already referred. In the result, therefore, Matalan’s case against Tokenspire depends entirely upon the proper construction of clause 6.1 of the Lease.

27. Quite apart from the contention that upon proper construction of clause 6.1 of the Lease Tokenspire was not in breach of that covenant by reason of the incursion of rainwater into Unit G on 14 and 15 October 1996, Mr. Thomas submitted that any claim which Matalan might otherwise have had had been compromised by the terms of the Deed. He submitted that as a matter of construction of clause 2 of the Deed either a claim by Matalan against Tokenspire was a dispute arising as to the performance of the Lease Agreement, and so within the definition of the expression "the Dispute" for the purposes of the Deed, or such claim was caught by the words in clause 2 of the Deed "or otherwise". Mr. King submitted that on proper construction of the Deed the only matters to which clause 2 applied were claims arising out of the non-completion by Tokenspire of some of the works which by the Lease Agreement it had agreed to undertake.

28. Matalan’s case as pleaded against Richmond is based upon the contention that Richmond owed Matalan a duty of care in relation to the carrying out of the Roofing Works and was in breach of that duty of care. The case is pleaded as follows:-

"13. On or about October 1996, the Second Defendant commenced remedial repair works to the roof over the Claimant’s premises.

"14. In the premises, the Second Defendant owed a duty to the Claimant to act with reasonable skill and care when carrying out those buildings [sic] works.

"15. Wrongfully and in breach of their duty of care to the Claimant, the Second Defendant negligently stripped of [sic] too large an area of the roof prior to re-covering and/or failed to adequately protect the roof once they had stripped part of the roof off, so that the premises became exposed to the risk of rainwater penetrating the premises, as in fact it did so on 14^th October 1996, as pleaded in paragraph 9 above.

PARTICULARS

Immediately prior to the incursion of water into the premises, about 50% of the roof had been exposed by the Second Defendant so exposing the premises to the risk of an incursion of surface water in the event of rain.

The Second Defendant had not protected the roof against rainfall save to lay Visqueen over the surface of the roof secured by timber fillets. This was insufficient to prevent rain and accumulated surface water entering into the premises.

The Second Defendant had not allowed sufficient time or resources to re-cover the roof after stripping it and prior to leaving the premises at the end of the work day.

The nature of the original design of the roof was such that the Second Defendant should have planned the re-roofing operation so that only a comparatively small part of the roof was ever exposed to the elements at any one time, but the Second Defendant failed to do this."

The case is thus a fairly simple one. It is contended that in undertaking the Roofing Works over Unit G Richmond owed Matalan a duty to exercise reasonable care to protect the existing roof from the risk of penetration by rainwater, which duty it failed to perform.

29. In its Amended Defence in the First Action Richmond admits the duty of care pleaded in paragraph 14 of Matalan’s Particulars of Claim. However, it is denied that Richmond had been guilty of any negligence. Paragraph 6 of the Amended Defence is in the following terms:-

"For the avoidance of doubt, but without prejudice to the generality of the foregoing denial, the Second Defendant will maintain and aver at the trial hereof:

6.1 that the roof of the Claimant’s premises comprised of metal sheeting erected over an existing flat felt roof;

6.2 that before removing the metal sheeting from any part of the said roof, sections of metal sheeting were removed from the roof of an unoccupied part of the building in which the Claimant’s premises were situated exposing the original flat felt roof to the elements: the permeability of the exposed roof was then tested and found to be within acceptable limits in that it allowed only a few minor leaks;

6.3 that thereafter sections of the outer roof were removed from an occupied part of The Triumph Retail Park exposing the original flat felt roof to the elements; the permeability of the exposed roof was then tested and found to be within acceptable limits in that it allowed only one or two minor leaks, which had in fact existed prior to the removal of the outer roof;

6.4 that throughout the progress of the said works the Second Defendant used rolls of 1000 gauge Visqueen to provide additional temporary weatherproofing as agreed with Legendary and/or its architect: the Visqueen was laid over the existing felt roof, trapped under the existing gutters, sealed with mastic and weighed down with timber;

6.5 that the local weather conditions on the night of the 14/15^th October 1996 were particularly severe;

6.6 that there had been substantial problems of water ingress into the Claimant’s premises and/or other parts of the said building prior to the commencement of the said works."

30. In the First Action Richmond claims against Crowe under Part 20 of Civil Procedure Rules that it is entitled to an indemnity under the Richmond Policy in respect of the claim of Matalan, if that claim succeeds. Originally Richmond also claimed other general declarations as to its entitlement to indemnity under the Richmond Policy, but those more general claims were not, in the event, pursued. Crowe resists the claim to indemnity under the Richmond Policy on the ground that Richmond was in breach of General Condition 9 of the Richmond Policy in relation to how it set about the undertaking of the Roofing Works. Lengthy particulars of the allegation that Richmond had been reckless in how it undertook the Roofing Works were pleaded in the Part 20 Defence served on behalf of Crowe, but I need not set out those particulars in this judgment.

31. Also in the First Action Tokenspire makes a claim under Part 20 of Civil Procedure Rules against Legendary in which it contends that, in breach of clause 14.8 (1) of the Sale Agreement, the Roofing Works were not carried out in a good and workmanlike manner or with good quality materials or with due and reasonable diligence. The Particulars of that allegation pleaded at paragraph 8 of the Amended Part 20 Particulars of Claim are as follows:-

"a. Richmond undertook the works to the roof of the Triumph Centre with no or sufficient regard for the importance of programming the completion of sections of the re-roofing to ensure that the roof was at all times weathertight.

"b. Richmond failed to implement sufficient temporary weatherproofing.

"c. Richmond undertook works to install new guttering but failed to provide stop ends, with the consequence that rainwater collected in the gutter and cascaded from the ends into the building below;

"d. Richmond failed to form any outlets in the new guttering to allow collecting rainwater to drain away;

"e. Richmond failed to form suitable collar connections to rainwater downpipes with the result that the gutters filled up and overflowed;

"f. Richmond caused or permitted building materials and other discarded or surplus materials to be thrown or placed onto the roof with the consequence that the roof buckled and distorted and rainwater collected on the roof rather than draining away and then escaped into the area below the roof;

"g. Richmond caused or permitted rainwater falling onto the lower tier of the roof to form into a pond which, by reason of the lack of protection provided to the roof whilst the works were being undertaken, then escaped into the area below the roof;

"h. In the course of the works Richmond left exposed sections of the vertical cladding which were being renewed, thereby allowing rainwater ingress."

The remedy claimed in relation to the matters complained of is pleaded at paragraph 11 of the Amended Particulars of Claim as:-

"In the premises, Tokenspire is entitled to indemnity and/or contribution to the claimant’s claim, the claimant’s costs, its own costs in relation to the claimant’s action and this action together with any interest thereon pursuant to the provisions of Section 35A of the Supreme Court Act 1991"

32. The Defence pleaded on behalf of Legendary to the Part 20 claim of Tokenspire raises a number of points which were not, in the event, pursued before me. The issues as between Legendary and Tokenspire at the trial were:-

(i) whether Legendary was liable to Tokenspire for damages for breach of clause 14.8(1) of the Sale Agreement;

(ii) whether Legendary was bound to provide an indemnity under clause 14.8(2) of the Sale Agreement to Tokenspire against both claims made against Tokenspire and in respect of Tokenspire’ s own losses; and/or

(iii) whether Tokenspire was entitled to an indemnity or a contribution from Legendary under the provisions of Civil Liability (Contribution) Act 1978 towards any liability which Tokenspire had to Matalan in respect of Matalan’s claim in the First Action.

As expounded by Mr. Michael Black Q.C. and Mr. Andrew Grantham, who appeared on behalf of Legendary, in their written opening note, Legendary contended that each of these bases of liability was unsustainable:-

"a. Clause 14.8(1) on its true construction is not a warranty by Legendary to Tokenspire that the works will be carried out in a good and workmanlike manner, it is a condition of Legendary’s right to enter the premises before completion and carry out the Purchaser’s Works;

"b. Tokenspire was solely concerned that it should not be exposed to any further claims from the tenants for the condition of property. Its remedy in this respect was provided by the indemnity in clause 14.8(2) and was limited [to] Tokenspire’s liability to third parties arising out of the works;

"c. Clause 14 cannot be read in isolation from clause 15. By clause 15.1 the risk of damage to the premises was expressly agreed to remain with Tokenspire. This would be subject to the express indemnity in clause 14.8(2), but is otherwise unqualified, hence the insuring obligation under clause 15.3;

"d. In accordance with clause 15.3, on 25/9/96 Tokenspire extended its insurance cover with Independent Insurance Company Limited to cover the risks identified in clause 6.3B of the JCT Minor Works contract. Clause 6.3B included damage to existing structures together with any contents owned by the Employer or for which he is responsible by storm, tempest, flood, bursting or overflowing of water tanks, apparatus or pipes. The letter from the Independent extending cover made it clear that Legendary is a co-insured with both Tokenspire and Richmond;

"e. Insofar as the damage caused by the ingress was not damage that Tokenspire itself agreed to bear, it was damage to which the joint names policy responded. A co-insured has no claim against another co-insured for indemnity or contribution under the 1978 Act (Petrofina (UK) Ltd. v. Magnaload Ltd. [1984] 1 QB 127; Co-operative Retail Services Ltd. v. Hoare Lea & Partners [2000] BLR 461 )."

During the trial I gave permission for the Defence of Legendary to be amended so as to bring it into line with the case which Mr. Black indicated Legendary in fact wished to advance. An additional point which was pleaded which had not been foreshadowed in the written opening of Mr. Black and Mr. Grantham was that it was said that Legendary was entitled to the benefit of the Tokenspire Policy under clause 2 of the "Extensions" to Section A of the policy.

33. The final set of proceedings under Part 20 of Civil Procedure Rules in the First Action is between Tokenspire and Richmond. While the Particulars of Claim served on behalf of Tokenspire in those proceedings formulate three alternative bases upon which it is said that Richmond is liable to indemnify Tokenspire against the claim of Matalan, or to make a contribution to any liability of Tokenspire to Matalan, as pursued before me the justification for the Part 20 claim was said to be the alleged negligence of Richmond in undertaking the Roofing Works. The particulars of the negligence relied upon are identical to those pleaded as against Legendary which I have set out above. In the Defence served on its behalf Richmond denied that it had been negligent and pleaded the same matters as it had pleaded in its Defence against the claim made by Matalan, which I have quoted above.

34. In the Second Action Tokenspire seeks to recover from Legendary and Richmond its own alleged losses as a result of the alleged breaches by Legendary of the Sale Agreement to which I have already referred and the alleged negligence of Richmond. The claims, so far as liability are concerned, are not formulated differently in the Second Action from how the Part 20 claims are formulated in the First Action. However, Tokenspire does seek to recover in the Second Action damages not only in respect of the ingress of rainwater on 14/ 15 October 1996 to which I have already referred, but also in relation to an alleged ingress of rainwater on 4 October 1996. The Schedule of Loss appended to the Amended Statement of Claim in the Second Action, as further amended in relation to loss of rent and service charges to bring it into line with the evidence of Mr. Whittle, included the following items:-

" £

"(a) Cost of reinstatement and repairs to the 59,368.74

units which were damaged

"(b) Works to rainwater distribution system 8,250.00

to prevent further flooding

"(c) Emergency works within the roof void of 2,609.37

the warehouse

"(d) Repairs to plasterboard partitioning within 6,830.00

the warehouse

"(e) Other emergency works 11,650.26

"(f) Quantity Surveyor’s fees 5,937.00

"(g) Consultant’s fees 1,500.00

"(h) Costs of overtime 4,750.00

"(i) Loss of rent and service charges:

Unit C 727.70

Unit G 4,027.17

Unit H 5,933.15

Warehouse 6,621.94"

In the event item (b) and the claim of loss of rent and service charges for the Warehouse were not pursued.

35. The points raised in the Amended Defence of Legendary in the Second Action for which I gave permission during the course of the trial were the same as those raised in its Amended Defence in the Part 20 proceedings in the First Action. A Reply was, with my permission, served on behalf of Tokenspire in relation to that Amended Defence. No permission was sought to serve a Reply in the Part 20 proceedings in the First Action, but, the points in the Reply having been raised, those points were treated as live in both the Second Action and in the Part 20 proceedings in the First Action. So far as relates to issues concerning the extension of the Tokenspire Policy to cover the Roofing Works, the points pleaded in the Reply are to the effect that Legendary is not able to rely upon the extension of the Tokenspire Policy because Independent has avoided the extension for breach of warranty as to how the Roofing Works were to be carried out and that the cover did not, in any event, extend to cover in respect of flood caused by negligence. Separately, the answers put forward to the allegation that Legendary is able to rely upon clause 2 of the "Extensions" part of Section A to the Tokenspire Policy are that that extension did not apply, as a matter of construction of the Tokenspire Policy, to damage to contents of the Building or to loss of rent, and that the benefit of the policy only enured to Legendary upon completion of the sale of the Building to Legendary, as at which time Legendary had not suffered any damage.

36. In its original form the Defence of Richmond in the Second Action was similar to the terms of its Defence in the First Action, save that it was denied that Richmond owed any duty of care in tort to Tokenspire. However, Mr. Ian Pennicott, who appeared on behalf of Richmond, sought permission during the trial to serve an Amended Defence. I granted such permission. The Amended Defence raised a joint insurance issue in favour of Richmond. It was pleaded that the Tokenspire Policy had been extended to Legendary and to Richmond in relation to the carrying out of the Roofing Works. The amended pleading went on:-

"(iv) Independent has responded to the Joint Policy by paying to the Plaintiff sums set out in the Schedule of Loss (Vol 1/68) in respect of damage to the premises and related losses, including loss of rent. In the premises, the claim advanced by the Plaintiff is a subrogated claim pursued by or on behalf of Independent.

"(v) It was an implied term of the contract of insurance that if Independent settled a claim from the Plaintiff in relation to an insured risk they (Independent) would not use rights of subrogation to recoup from the co-insured (the Second Defendant) any indemnity which they have paid to the Plaintiff.

"(vi) Further or in the alternative by agreeing as aforesaid to the provision of cover in accordance with the Joint Policy the Plaintiff waived any right on behalf of itself and /or Independent in its name to recoup from the Second Defendant (by way of a claim for damages, indemnity, contribution or otherwise) in respect of any losses that would be insured or other losses it may suffer arising out of the Works that were undertaken by the Second Defendant.

"(vii) It is denied that Independent, acting through rights of subrogation, can pursue in the Plaintiff’s name an action against the Second Defendant by reason of the implied term aforesaid and/or the waiver and in any event since they (the Second Defendant) were insured against the same risk under the same insurance policy as the Plaintiff."

In a Reply to that pleading on behalf of Tokenspire it is pleaded in relation to the passage just quoted from the Amended Defence of Richmond:-

"(a) Richmond failed to carry out the works as represented and warranted and Independent avoided the policy for misrepresentation and/or breach of warranty.

"(b) In the premises Richmond were not insured under the policy against their own negligence, nor against liability to third parties. In any event the extension of Tokenspire’s property insurance to cover Richmond was avoided. Accordingly Richmond were not insured against the events that have occurred under the same policy as Tokenspire."

As the trial unfolded it became apparent that the denial of the existence of a duty of care was being put by Mr. Pennicott as a refinement of the insurance issues raised on the pleadings. What Mr. Pennicott submitted was that it was because Tokenspire and Richmond were jointly insured that it was not just and reasonable that Richmond should owe a duty of care to Tokenspire in relation to the execution of the Roofing Works.

37. Richmond makes a claim under Part 20 of Civil Procedure Rules against Crowe in the Second Action similar to that which it makes in the First Action. No different issues arise in the different claims.

38. The final set of proceedings which is before me is a claim by Legendary under Part 20 of Civil Procedure Rules against Richmond for an indemnity against, or a contribution towards, any liability which Legendary might be found to be under to Tokenspire in the Second Action. The way in which the case is put is simply that the allegations of negligence pleaded in the Particulars of Claim in each of the First Action and the Second Action are adopted and it is contended that in the circumstances Richmond was in breach of clause 1.1 of the Standard Form as incorporated into the Roofing Contract and liable under clause 6.2 of the Standard Form as incorporated into the Roofing Contract to indemnify Legendary against the consequent claims. By its Defence Richmond denies negligence.

The incursions of rainwater

39. Although the main focus of the trial was the ingress of water which it was common ground occurred starting in the late afternoon or early evening of Monday, 14 October 1996 and continuing into part of Tuesday, 15 October 1996, it was part of Tokenspire’s case against both Legendary and Richmond that there had been an earlier ingress of water as a result of the failure of Richmond to use reasonable skill and care in protecting the existing roofs of the Building during the undertaking of the Roofing Works. That ingress is alleged to have occurred into the Warehouse occupied by Duni on 4 October 1996. I have already mentioned the evidence of Mr. Whittle of Tokenspire, which I accept, that there had been a number of occasions between Tokenspire acquiring the Building in 1991 and September 1996 upon which water had got into the Building, but that all these occasions had involved relatively minor ingresses. In comparison with the quantities of water which penetrated through the roof of the Building on 14/15 October 1996 the alleged ingress on 4 October 1996 was itself minor. However, Tokenspire’s case was that such ingress was the result of the failure of Richmond to take reasonable care to protect the roofs of the Building while undertaking the Roofing Works.

40. The evidence as to the ingress of water on 4 October 1996 was that of Mr. Whittle. At paragraph 16 of his witness statement dated 2 January 2001 Mr. Whittle said:-

"By 4 October 1996 I had become aware that a much more serious incident of ingress of water into the warehouse and property had occurred than any reported previously. I was advised of this by Tokenspire’s site manager, Dave Blundell. The occupiers of various units also complained that a substantial amount of water was collecting in the service corridor. I was aware that Richmond had commenced the removal of the existing roof sheeting and gutters and was concerned that they were not taking all necessary steps to protect the building during the course of the works. It seemed obvious to me, and I would have thought obvious to a roofing contractor, that without protection any rain water could penetrate the roof decking and, because of the nature of the roof construction and the lack of a barrier between the property and warehouse units, could subsequently enter the property, the warehouse unit and service corridor. The water was able to flow from the property where the sheets and gutters had been removed through the roof construction to the warehouse unit. The absence of effective gutters and the absence of the protection afforded by the roofing sheets resulted in a significantly greater amount of water transferring from the roof of the property to the warehouse unit than prior to the commencement of works by Richmond."

41. At paragraph 4 of his witness statement dated 23 February 2001 Mr. Whittle said:-

"In paragraph 16 of my witness statement I refer to water ingress to Duni being suffered on 4 October 1996. I have always maintained that the water ingress on 4 October into the warehouse occupied by Duni resulted from Richmond’s works. I acknowledge that prior to the commencement of Richmond’s works I was aware of a problem of minor water ingress into Duni, which was believed to have resulted from tracking of water from the gutters over the unit and the retail units to the warehouse. The more serious incident of water ingress into the warehouse on 4 October 1996 however, while also occurring as a result of tracking of water from the roof over the retail units to the warehouse, is attributable to Richmond because the circumstances described in paragraph 2 (b) of Duni’s memorandum dated 8 October 1996 exacerbated this occurrence. I saw the damage in the Duni warehouse after 4 October and it was more significant than anything which had occurred before. There was significant ponding close to the service corridor of such a depth that it was impossible to walk through the ponds wearing shoes. There were a number of ponds varying in size from 5 or 6 ft up to 20 ft in diameter. The nature of the leaks on 4 October and subsequently on 14/15 October bore no relation to any complaint we had received prior to 4 October 1996."

Paragraph 2 (b) of the Duni memorandum dated 8 October 1996, to which Mr. Whittle referred in the passage quoted, read as follows:-

"The contractors carrying out repair work on the MATALAN building had installed guttering which re—directed water onto our Speke Warehouse roof which, because of the volume had seeped through unprotected parts of the roof. Additionally, the contractors had removed the roofing felt in the adjoining tunnel during the storm, the rainwater seeping through the huge holes underneath onto girders and into the warehouse. Photographs had been taken for compensation purposes. A revised rain water distribution plan had been implemented by the contractors so it would not affect ourselves and it was felt the major leaks of last week had been resolved. A further downpipe is to be installed by the MATALAN building and appropriate drainage to make the job enduring i.e. currently running off guttering to the ground."

There was no evidence as to where exactly in the Warehouse rainwater penetrated on 4 October 1996 or as to where exactly in the service road between the retail units and the Warehouse water was found.

42.It appears that prior to 4 October 1996 there had been some ingress of water into some part of the Building and that the finger of blame had been pointed at Richmond. The supposed justification for blaming Richmond seems to have been an analysis no more sophisticated than "Richmond is undertaking works on the roof. Water is getting in. It must be Richmond’s fault." At all events, there is no claim against Richmond in any of the proceedings which are before me in relation to any incursion of water into the Building prior to 4 October 1996. There is, however, before me a copy of a letter dated 3 October 1996 written by Mr. Greenfield on behalf of Richmond to Legendary in response to the suggestion that Richmond was responsible. That letter was in the following terms:-

"Further to your telephone conversation of todays date with our Mr Cook, we would take this opportunity to write and confirm the following.

"We have this week taken delivery of a substantial amount of materials for the above contract, namely gutters, wall sheets and numerous sundry items such as fixings, fibreglass quilt etc.

"The wall sheets and gutters have been craned up onto the existing roof as previously agreed. The work undertaken to date has primarily consisted of laying gutters and fixing supporting zed bars to the existing wall cladding in order to eventually support the new wall cladding. We have however stripped off a small amount of roof covering local to a vacant unit in order to properly inspect the existing roof structure.

"The majority of the above has not therefore involved penetrating the existing roof covering. The excessive amount of water ingress experienced this week is basically due to the extremely sever [sic] rain fall coupled with high winds, finding its way in through the existing roof covering. It is not, as far as we are aware, a consequence of anything we have done.

"Obviously we will do all we can to prevent water ingress as and when we do commence the stripping operation. However the occupants of the building should be made aware that a certain amount of water may find its way in at some stage of our contract but that it will be kept to an absolute minimum."

43. It seems that after the complaint made to Richmond on 3 October 1996 of water ingress into the Building. Mr. Cook, Richmond’s Contracts Manager, went to the Building. Following that visit Mr. Greenfield wrote to Legendary as follows:-

"Further to our Mr Cooks visit to site today in response to problems due to leaks with-in the existing building, we would confirm the following.

"We were informed on site, that rain water had caused flooding with-in Token Spires stores yesterday and that goods with-in this area had consequentially been damaged. It was inferred that we were responsible as we were carrying out work on the roof at the time.

"Mr Cook was initially denied access to the area in question but was eventually allowed in. Some water was apparent on the floor. All the goods in the stores at the time of his visit were on pallets and shrink wrapped. When Mr Cook asked to inspect the damaged goods he was informed that they had all been despatched to customers.

"If this is the case then one can only conclude that the goods in question were in a suitable condition for there intended destination and use, thus obviating any claim against whom so ever was responsible. There was also no apparent damage to the structure or fabric of the building.

"Obviously we and our insurers will not accept any claims for what ever reason, which are levied against us without corroborative evidence in the form of damaged goods or materials which can be independently inspected.

"The water ingress was, we feel totally due to the freak weather conditions which prevailed yesterday and not directly attributable to our work."

44. There was no evidence adduced before me as to the stage to which the Roofing Works had advanced by 4 October 1996 beyond what can be deduced from Mr. Greenfield’s letter dated 3 October 1996 which I have quoted above. The impression created by that letter that little had been done is confirmed by a letter dated 16 October 1996 written by Mr. Selwyn Schofield, the architect who had prepared the Repair Schedule, to Tokenspire. In that letter Mr. Schofield wrote, so far as is presently material:-

"I did attend site on Monday 7^th October and can confirm that the overcladding to the lower section of roof over Unit F had been stripped. As an attempt to minimise tracking, in the event that this may have caused the leaks, the Contractor had opened up the felt roof and infilled the troughing. The Contractor undertook to minimise this risk in areas as opened up."

As I have already recorded, the execution of those works had commenced on or about 26 September 1996. Mr. Cook, Richmond’s Contracts Manager, told me, and I accept, that work on R17 and R18 did not commence until 8 October 1996. Following the incursion of rainwater on 14/15 October 1996 Mr. Barry Ryder, a partner in the firm of Messrs. Reginald Cook & Co., chartered surveyors, made an inspection of the then state of completion of the Roofing Works. That inspection was made on 16 October 1996. Mr. Ryder prepared a report following his inspection, and a copy of that report was put in evidence. Mr. Ryder was called as a witness to speak to the accuracy of the report, and I have no hesitation in accepting the report as an accurate record of what Mr. Ryder saw and noted. However, he did not note everything which, as matters have turned out, it would have been useful to know. In particular he did not note the direction of the fall of the roofs of the Building from one end to the other. Mr. Ryder did take some photographs of the work in progress, and those I have found of great assistance in reaching conclusions concerning the causes of the ingress of rainwater on 14/15 October 1996. I return to that issue later in this judgment. Mr. Ryder recorded in his report the state of completion of the Roofing Works as at 16 October 1996 as follows:-

"R1-R10 – No works undertaken to date

R11 – 50% stripped and vapour barrier laid, 50% gutters undertaken.

R12 – 95% gutters, support frame and sheeting undertaken.

R13 – Gutters installed, no stripping undertaken.

R14 – 95% gutters, support frame and sheeting undertaken.

R15 – Gutters, vapour barrier and steel work undertaken.

R16 – Gutters and framework almost complete, sheeting 80%.

R17 – Stripped, gutters and vapour installed.

R18 – Stripped, gutters and vapour installed.

R19 - No works undertaken to date."

Mr. Ryder did not record that any works to gutters had involved the redirection of rainwater from the roofs over the retail units onto the roofs of the Warehouse. As no works were undertaken directly over the roofs of the Warehouse, if any rainwater did penetrate into the Warehouse as a result of how Richmond carried out the Roofing Works, the mechanism by which that happened must have involved water penetrating the roof over one of the retail units and then running in one or more of the troughs in the profiled metal decking which formed the innermost layer of the roof construction into the area of the Warehouse. That method of movement of water was called, in the jargon of the trial, "tracking".

45. Mr. Cook told me, and I accept, that how exactly the execution of the Roofing Works was to be undertaken was left by Mr. Greenfield and Mr. Seel to him, and his original plan was to do the work "piecemeal". What that meant was that no more of the existing metal deck roof would be stripped off each day than could be re-covered that day. That method of proceeding meant that at any one time only a small area of roof would be without a protective metal deck covering. The general intention was to remove the existing metal decking, save on R15 where there was not any; to lay Visqueen over the existing felt roof; to lay insulation on top of the Visqueen; to lay new gutters in the existing gutters formed in the roofing felt; to fix a framework to support new profiled metal decking roofing sheets which would rise to an apex on each high-level or low-level roof; and then to fix the new roofing sheets to the frame. Visqueen is now a generic name for thick polythene sheet. It was originally a proprietary name. A sample of the Visqueen used in the Roofing Works was put in evidence. It is apparently a robust material, not readily susceptible to damage if properly secured and supported, but far from indestructible. It is impermeable.

46. The method by which Mr. Cook originally intended to proceed involved the need each day, or at any rate on most days, to finish work with a night joint. A night joint is a temporary joint between the finished new work and the unreplaced old roof. The purpose of the joint is to provide a waterproof seal pending the resumption of work. Mr. Cook told me, and I accept, that a satisfactory night joint can be difficult to make. It is particularly difficult to make if the roof being removed has been constructed in such a way that the parts being removed are of different lengths. In such a case the night joint has to cover an area determined by how much of the existing roof has to be taken off for a worthwhile working area to be available. Mr. Cook’s evidence was that he instructed the men working on R17 and R18, when they started on 8 October 1996, that they should work in what I have described as a "piecemeal" fashion, stripping off four bays at a time. He said that when he went to site on the next day he found that, contrary to his instructions, seven bays had been stripped. When he challenged the men they told him that because of the lengths in which the central gutter, which had been formed as an extrusion, was laid, it had to be taken up in long pieces, that that made it difficult to form satisfactory night joints and so they had taken off more than Mr. Cook had instructed. It was proposed that, in order to provide a better temporary covering to R17 and R18 than the long night joints which would otherwise be forced upon Richmond, the whole of the existing metal decking should be stripped and the existing felt roof covered with Visqueen. Mr. Cook told me that he did not agree to that proposal at once, but went away to think about it. When he did think about it he thought that it was a sensible proposal, and instructed that the whole of R17 and R18 should be stripped and Visqueen laid. Visqueen comes in a variety of different widths and in rolls of different lengths. The Visqueen used on R17 and R18, I find, Miss Claire Blanchard, who appeared on behalf of Crowe, having raised an issue about it, came in rolls four metres wide and twenty-five metres long. The way in which Mr. Cook instructed the Visqueen should be fixed on R17 and R18 was by running two rolls in parallel down the length of each of R17 and R18, one roll on either side of the existing central gutter. One edge of each lengthwise sheet was to be run up a short distance at the upstand of the high level roof to one side of it and to be held in place by the new gutter laid in the trough formed in the existing felt roof as a gutter, and the insulation board which was to be laid underneath the new gutter. The other lengthwise edge was to be run up the side of the existing central gutter and turned over into the gutter at the top. That edge was to be held in place by pieces of wood pressed firmly against the outside of the central gutter where it abutted the existing felt roof. At the ends of rolls Visqueen was to be lapped and the laps sealed. As will be apparent, that way of providing temporary protection involved draining any water which did fall on the Visqueen off the roof by means of the redundant gutters at the base of the high level roofs on either side of R17 and R18 and down the drainpipes to which those gutters led.

47. The Roofing Works as set out in the schedule to the Roofing Contract did not include any work of checking any existing rainwater downpipes or repairing any such downpipes which were defective. The latter work did appear in the Repair Schedule, however, in the section entitled "GENERAL BUILDERS WORK". The Roofing Works as set out in the schedule to the Roofing Contract did in terms provide for drainage from the new roof to be into "existing outlets". Mr. Cook said in evidence that at a meeting at the Building on 7 October 1996 Mr. Schofield gave him a copy of the Repair Schedule. He said that his understanding of why he was given a copy of the Repair Schedule was because Richmond might be asked to quote for some of the work in it which was not covered by the Roofing Works, but he said that he was not asked at that time that Richmond should submit a price for any work in addition to the Roofing Works other than angle cladding panels. In a letter dated 18 October 1996 to Mr. Schofield Mr. Greenfield wrote as follows:-

"Further to your Developers Repair Schedule handed to our Mr Cook on site on Monday 7 October 1996 we would confirm the following in response to your request that we address certain items on your behalf.

"Item 3. Having now had the opportunity to engage dinorods [sic] services in order to check most of the existing downpipes, it would appear that the pipe stacks are not blocked and that they are able to transfer rainwater into the existing drains. However a number of stacks are leaking quite badly at either their junction with the existing roof outlet and or the swan neck arrangement immediately below the gutter line. In light of the recent problems with water ingress and the subsequent condition of the ceilings with-in certain units it may be wise to engage a plumber to repair or replace the defective stacks as a matter of urgency and we await your comments. The cost of the drainage inspection will be notified to yourselves shortly.

"Item 5. Carry out detailed site survey and subsequently strip off the existing flashband flashing presently sealing the vertical junction. Supply and install a purpose made site assembled GRP corner unit dressed onto the existing curved corner panels on site. Grp to be colour matched as near as possible to the existing cladding. (Please note, we cannot guarantee an exact colour match.) The above to 2No external corners and 1No internal corner.

All for the sum of - - - £3069.00

"Item 6. Hand wire brush and dust off prior to and including the application of 3 coats of paint consisting of red oxide primer, black undercoat and black Gloss, all exterior grade, to 36 No steel frames supporting the existing curved cladded fascia. Please note, we have not included for treating the curved cladding or the immediate horizontal light gauge galvanised supports to same.

All for the sum of - - ..£1931.00 Nett

"Item 7. Having inspected the vertical cladding to the respective units there appears to be some minor holes from previous signs amongst other small defects. We would therefore suggest that this work be carried out on a daywork basis, based on 2 men for a minimum of 8 hours a day at £14 per hour per man. Materials and plant will be charged at cost plus 20%.

"Item 8 and 9. A cost for both of these items will be forwarded to yourselves in due course.

"Item 10. Again having now had the opportunity to inspect the existing outlets through the felt roof we would confirm that the capacity of the outlets has been reduced over the years by different methods of repairs. We would now suggest it is best if we totally by-pass the existing outlets and connect our own outlets directly into the pipe stacks. Each outlet will have to be addressed individually as they all appear to differ to some extent."

Miss Blanchard submitted that I should draw the inference, on what basis I confess I am not quite sure, that the work for which Richmond quoted, or which it said it had done, in the letter dated 18 October 1996 it had actually been asked to quote for by a request of Mr. Schofield made to Mr. Cook at the meeting between the two of them on 7 October 1996. The significance of the point was that if Richmond had been asked to quote for the work referred to in the letter dated 18 October 1996 on 7 October 1996 it would have known then, if not before, that that work had not been undertaken by anyone else. In particular, Richmond would have known, if asked to quote on 7 October 1996 for checking rainwater outlets and downpipes, that such outlets and downpipes had not as at that time been checked.

48. It is not in dispute that in the late afternoon or early evening of 14 October 1996 there was persistent rain in the vicinity of the Building and that water in substantial quantities entered Unit G and Unit H. In a statement made by Mr. Cook to McLarens Toplis, loss adjusters acting on behalf of Crowe, dated 4 February 1997, at paragraphs 28 to 30, Mr. Cook gave an account of going to the Building on the night of 14 October 1996 and inspecting Unit G. He said that he found approximately fifteen to twenty leaks, two thirds of them in the central area. In his witness statement dated 7 December 2000 prepared for the purposes of this action Mr. Cook said that the water ingress in Unit G was particularly around the internal columns. I accept that evidence of Mr. Cook. There was evidence of a rather general character, principally from Mr. Noel Barraclough, who inspected the Building on 15 and 16 October 1996, of water penetration into other retail units. I shall consider later in this judgment whether that penetration was as a result of some deficiency in how Richmond went about the execution of the Roofing Works. However, it was not in dispute that a meeting took place on the roof of the Building on the morning of 14 October 1996 between Mr. Cook, Mr. Schofield, Mr. Pervaiz Naviede of Legendary and a Mr. Geoff Beesley, a surveyor employed by Matalan. According to the evidence of Mr. Cook, which again I accept on this point, all those present could see how Richmond was going about the Roofing Works and no one criticised what could be seen. That the immediate reaction of Mr. Schofield to the ingress of water on 14 and 15 October 1996 was not that Richmond had failed to do something which Mr. Schofield had asked it to do, or was otherwise obviously at fault, in his view, appears from the terms of a letter dated 17 October 1996 which he wrote to Mr. Cook. The significant parts of the letter for present purposes were as follows:-

"I know the events of the last few days have not helped but I would remind you that you agreed to provide a programme of works to help in the assessment of progress. I am now likely to be asked key dates by the tenants and would therefore ask that you provide this as quickly as possible.

"As I mentioned to Chris I would like a written report on why the method of working was changed from "small areas at a time", as discussed at your office with Pervaiz and myself, to the full bay stripping as was found on Monday 14^th October 1996. You stated that you would work in controlled areas from front to back since this offered you the best result from your workforce. These areas when stripped would have the vapour barrier laid to afford temporary cover until the new deck was installed, you were to have tarpaulins on site to cover up none completed sections.

"I would repeat my comments to both Chris and yourself that the vapour barrier should be laid under the insulation below the gutter. Would you please also as commented on Monday ensure that the surface is swept prior to laying the vapour barrier. Areas where this has not been done and which are getting trafficked should be checked and tears/holes overlaid and taped with the same material. Where the hole, as the one next to the access hatch, is caused by materials or entrapped fittings etc. these should be removed to prevent a re-occurrence.

"With regards to the tracking of water between the warehouse unit and our roof I think you should now look at a detail that will totally separate the structures. I think we should on our side of the party line trim the deck from below and remove a 100mm section of the deck. A gutter should then be installed below this aperture to catch any entrapped water. Rwp’s could then be connected from the gutter to the existing downpipes in the service area. The cladding should then oversail this detail up to the party line. Any structure which could be a route for tracking should have a barrier introduced, ie mastic bead, which would prevent the movement - .

"The events of Monday evening are obviously of concern to everybody but I do not want your men going hell for leather to get the deck on and leaving problems for later in their haste. Please be vigilant in achieving your stated aim of providing a watertight roof."

If Mr. Schofield had requested, prior to the ingress of water, that Richmond check the rainwater downpipes and outlets, one might have expected him to have mentioned that in this letter. The terms of the letter seem to me to indicate that a purpose of it, at any rate, was to assist Mr. Schofield, in the event of need, to satisfy his client that he, Mr. Schofield, had acted diligently in his client’s interest to prevent the incursion of rainwater into the Building during the carrying out of the Roofing Works and to avoid any recurrence.

49. Richmond replied to Mr. Schofield’s letter dated 17 October 1996 in a letter dated 22 October 1996 written by Mr. Greenfield, as both he and Mr. Cook told me, and I accept, after consultation with Mr. Cook. The material part of the letter read:-

"You are quite correct in your statement that we did discuss the need for a programme of work appertaining to progress and linked to payments etc. However, you may recall that we suggested that we actually get through the first week or so in order to properly enable us to ascertain the speed of each operation. Obviously until you actually start work on an existing structure of this nature, you never actually know how the work will progress and subsequently any programme offered prior to this would be based on conjecture and guess work. A detailed programme will however now follow this correspondence.

"You are also correct to state that a sequence of work which you describe as "small areas at a time" was discussed, amongst other methods. However, and not unusually, methods of work are often modified on site. This is generally to suit anomalies or conditions discovered on commencement of the work which were not for what ever reason, previously known.

"Obviously this did happen on this project, particularly over the Matalan store. The reasons for the change to the sequence of work were based on the following.

"A) 2 No. additional runs of gutters were discovered under the high points of the lower roof areas adjacent to the vertical cladding. This would obviously add to the labour time involved in that we would now have to strip them out prior to laying our own gutters.

"B) We had prior to working in the above mentioned areas completed approximately 2 No. similar roofs, eg stripped existing roof sheeting and gutters, laid new gutters, erected new steelwork and sheeted over. Consequently we now had a very good idea as to how long each of these particular operations would take.

"C) It was discovered that the roofs to this area appeared to fall back from Matalan towards the Liverpool Carpet store and consequently any water on the roof would always be running against our chosen direction of lay.

"Based on the above and allied to the fact that we were ever mindful that completion dates had to be achieved in order for the project to be a success for all parties concerned, it was decided to carry on the stripping operation closely followed by the visqueen vapour barrier (which doubled up as the temporary weather proofing). The visqueen was lapped up the sides of the existing gutters and linked to the existing roof outlets and as such was thought to be adequate temporary cover. This would, we hoped, also then speed up the follow on operations.

"At the time our workforce left site on Monday it was felt the above measures were adequate to afford the necessary temporary protection to the existing roof areas -

"With reference to the junction detail between our working areas and the adjacent units, we feel that to cut right through the existing decking and then link this to some form of internal gutter would necessitate the introduction of structural steelwork. This would be required in order to support at least one cut edge of the roof whilst creating space for the new proposed gutter."

50. In his witness statement dated 7 December 2000 Mr. Cook said, so far as is presently relevant:-

"17. Further, immediately after the incident [that is, the ingress of water into the Building on 14/15 October 1996] contractors were engaged to carry out repairs to the roof to the Duni unit itself.

"18. In relation to our subsequent discussions with the architect we agreed upon the following courses of action:-

18.1 since it was possible that the problems in relation to the flooding had been caused by water backing up caused by a drainage problem we engaged Dynorod to test the drains below ground level - .

18.2 we cut through the original felt at the junction with the Duni unit exposing the decking below which revealed to the Architect and to us that water was indeed tracking within the decking into the Matalan unit."

The documentary evidence as to the engagement of Dynorod put before me took the form of an invoice dated 15 October 1996 rendered by Machmade Ltd., a licensee of Dynorod, addressed to Richmond in relation to work described as:-

"To use high pressure water jet to desilt 9 downspouts on service road. Well tested and all clear. Will return at later date to check from roof level to ground level."

and a "Time Acceptance Note" also dated 15 October 1996 showing that the work the subject of the invoice was carried out between 9am and 3.30pm on 15 October 1996. Those documents seem to me to confirm the evidence of Mr. Cook that Mr. Schofield only asked Richmond to engage the services of Machmade Ltd. after the ingress of water into the Building on 14/15 October 1996. The suggestion made by Miss Blanchard that the request had been made earlier, on 7 October 1996, is unsupported by any evidence and seems to me to be fanciful.

51. At paragraph 7 of his witness statement dated 7 December 2000 Mr. Greenfield said:-

"After the bad weather on the night of 14^th/15^th October 1996, Tom Cook and I met with Selwyn Schofield of Schofield Horsman to discuss the contract and the water ingress which had occurred. Concerns were raised in relation to the programme of works. However, whilst it was [sic] originally been discussed that the programme of works would be for a fast track project, to take approximately twelve weeks it was agreed that a precise programme could not be produced until some work had been carried out on site, (and indeed one or two weeks of work completed) so that the progress achieved on site could be assessed. Additionally, we were asked to provide a price for doing certain further additional works which the Architect determined were necessary following a site inspection following the problems on the night of the 14^th/15^th October 1996. In particular a variation so as to create a gap and a separate internal gutter feature between the units we were working on and the Duni unit so as to prevent the tracking of water from the Duni unit to the client’s units was discussed and agreed upon. It had become apparent that water was tracking from the Duni unit into the client’s units."

Mr. Greenfield was not cross-examined as to the accuracy of that evidence and I find it to be reliable.

52.. In addition to the photographs taken by Mr. Ryder on 16 October 1996 to which I have referred, Mr. Barraclough also took photographs of the roof of the Building that day. Those photographs were also put in evidence. I have found all the contemporaneous photographs put before me helpful. In the case of Mr. Barraclough his photographs are of assistance in evaluating his evidence in his witness statement. At paragraph 9 of his witness statement dated 28 December 2000 on behalf of Tokenspire – he also gave evidence on behalf of Matalan- he said, in relation to his visit to the Building on 16 October 1996:-

" I saw that there had been attempts to weather proof the exposed roofs temporarily using visqueen sheet or similar and this sheet had been partly weighted down with wood off-cuts or similar to stop it being blown about. This weighting down had not been successful as much of the sheeting had been blown about or deranged in some way, leaving gaps through which water could flow. There were also gaps between the roofing sheets that replaced those which had been removed. The lack of effective weatherproofing had, in my view, allowed storm water to run through the unprotected roofs and to saturate the compartments below."

The substantial displacement of Visqueen sheets which Mr. Barraclough describes is not seen in any of the many photographs of the roofs of the Building taken after the ingress of water on 14/15 October 1996. What one does see in the photographs is some much more limited displacement of Visqueen sheet from the central gutter on R17 and R18 where the sheet has slipped from being draped into the valley of the gutter over the external side in shortish lengths. In some places the photographs seem to show that the sheeting at the base of the central gutter where intended to be held firm by pieces of wood is no longer held firm. I therefore reject the evidence of Mr. Barraclough as to the extent to which Visqueen sheet had been displaced save to the extent that his evidence is supported by the photographs. No photographs, including his own, show that sheeting had been blown about, and I reject the suggestion that that actually happened.

53. There were put in evidence a number of photographs taken by Dr. T.V. Parry of Dr. J.H. Burgoyne and Partners, who was instructed on behalf of Crowe. The photographs seem to have been taken on about 30 October 1996. They were principally of rainwater downpipes within Unit G. For reasons which are obscure the view seems to have been taken within Crowe or its legal team that these photographs were privileged, along with the narrative report which accompanied them. Shortly before the trial Crowe abandoned any claim to privilege in the photographs. When, at the trial, Mr. Pennicott, on behalf of Richmond, having come to know of the existence of the report, sought production of a copy of it, the claim to privilege in respect of the report was abandoned also. Dr. Parry’s report was never properly in evidence before me and I have ignored it. Dr. Parry’s photographs were put before me without objection, but their value is decidedly limited without any real evidence concerning the downpipes. All one can say from looking at Dr. Parry’s photographs is that some of the pipes photographed appear to have been the subject of the application of some sort of sealant around joints. The sealant has been applied in a manner which is not aesthetically pleasing. None of the pipes photographed has a joint which has come apart.

54. I have referred already to evidence from Mr. Cook and from Mr. Greenfield to the effect that the roofs over the Building sloped from the Warehouse down across the retail units. If I accept that evidence, it means that, whatever the cause of whatever penetration of rainwater into the Warehouse took place on 4 October 1996, it could not have been anything to do with the carrying out of the Roofing Works. Even if, contrary to the evidence that very little opening up of the existing roof had taken place by 4 October 1996, water had penetrated the roof over the retail units, it could not have got into the Warehouse unless the roof fell from the retail units towards the Warehouse. In support of Tokenspire’s case that at least the roof over Unit F sloped down towards the Warehouse Mr. Thomas relied upon a passage in the witness statement given by Mr. Cook to McLarens Toplis dated 4 February 1997. That passage was as follows:-

"17. R16 roof area was over a vacant unit. I decided to strip approximately 30m of 8m overroof sheets in this area to determine firstly, how the overroofing was supported and secondly to see what the condition of the original flat roof was in. My intention was to use this trial area for our new overroofing system.

"18. The roof was found to be in very poor condition, ie large cracks and numerous holes in the felt and insulation.

"19. After heavy rain, water was draining into the metal decking and tracking 15m over the access road into premises occupied by Duni. The roof above Duni did not form any part of our contract work. Filler blocks were sealed into deck corrugations to prevent this happening again."

Mr. Cook explained to me the circumstances in which that statement had been taken from him. As one would expect in relation to the preparation of a witness statement for a person who is not accustomed to giving evidence, Mr. Cook did not write his own account. He was interviewed by a representative of McLarens Toplis who asked him questions. He answered the questions which he was asked. The questions were, I imagine, dictated by what the interviewer wanted to know. The answers were written up by the interviewer, using, in all probability, the interviewer’s words, not the interviewee’s, and applying whatever emphasis the interviewer thought appropriate. A draft was then supplied to Mr. Cook for his comments or approval. Unless he considered that something which was in the statement was positively wrong, it seems to me that he would have accepted it as being what the interviewer wanted, and signed it. As what is said about the direction of the fall on the roof of the Building so far as R16 is concerned can only be reconciled with what Mr. Greenfield has said in his evidence, with what Mr. Cook has said in his evidence in this trial, and with what was asserted in Richmond’s letter dated 22 October 1996, at a time when the accuracy of the assertion could easily have been checked had it been thought to be doubtful, if the direction of the fall on R16 was different from the direction of the fall on R17 and R18, that is what Mr. Thomas urged me to find. However, I am not satisfied that that would be a proper finding. One would not expect that the falls on the roof of the Building would be in different directions, although, given the fact that the roof was composed of a number of separate high-level and low-level roofs, it is possible. What I think is much more likely is that the person taking Mr. Cook’s statement misunderstood what he was told and that Mr. Cook failed to detect the mistake when going through the draft statement. While it was necessary, if the complaint of Duni was to be justified, that the fall should be in the direction recorded in the statement, Mr. Cook may only have said that in his interview and not that the direction of fall recorded in the statement was the actual direction of fall. For the purposes of the interviewer the issue was not important. It follows, in my judgment, that, whatever the cause of whatever penetration of rainwater occurred on 4 October 1996 into the Warehouse, it could not have been anything for which Richmond was responsible.

55. McLarens Toplis took witness statements not only from Mr. Cook, but also from Mr. Greenfield and from Mr. Seel. The statement of Mr. Greenfield, dated 14 November 1996 included:-

"12. I visited the site shortly prior to the incident giving rise to these claims. I found that gutters had been laid, unbeknown to us, by previous roofing contractors at the side of the channels. Due to the liquidated damage penalties within our contract with Mr.Pervez, time was of the essence. Our Mr.Cook therefore took the decision to take on extra labour to enable us to speed up the contract. We were therefore able to strip away wider areas of roofing in this regard. The fundamental consideration was the liquidated damages clause within our contract with Pervez. To have worked on much shorter sections of roofing in a piecemeal fashion, would have been very much slower -

"15. We decided to save time by stripping away larger areas. We could have done it in a piecemeal fashion but this would have taken much, much longer."

In his statement dated 14 November 1996 Mr. Seel said:-

"12. It was necessary for us to strip off more than one channel of roof due to the programme agreed within our contract. The contract expires on 22 December 1996 and there is a time penalty of £50,000 per week thereafter."

Both Mr. Greenfield and Mr. Seel were cross-examined closely by Miss Blanchard in relation to the passages from their respective statements to McLarens Toplis which I have just quoted. The suggestion made was that in its desperation to avoid the imposition of the liquidated damages for which the Roofing Contract provided Richmond cast caution to the winds in a frantic rush to complete the Roofing Works. That suggestion, as it seemed to me, flew in the face of the evidence as a whole and common sense. Given the nature of the existing roof structure, had it been necessary it would, as Mr. Cook told me, and I accept, have been possible for each high-level and each low-level roof to be worked on simultaneously. The men who actually carried out the Roofing Works were not regular employees of Richmond, but labour-only sub-contractors. Had additional labour been required to speed up progress on the Roofing Works, it could readily have been found. It was not, therefore, the case that there was an urgent need, more than two months before the date fixed for completion of the Roofing Works, to proceed at such speed that there was no time to take precautions to protect the existing roof during the carrying out of the work. The evidence from the photographs to which I have referred is that steps were taken to protect the existing roofs while the Roofing Works were being carried out. Whether those steps were effective, and whether they were devised with reasonable skill and care, are other matters. If one wonders how, in those circumstances the statements of Mr. Greenfield and Mr. Seel came to include the passages which I have quoted, which, in my judgment, give an erroneous impression as to the position, the answer, it seems to me, is that the significance attributed, and emphasis given, to the question of the liquidated damages provision in the Roofing Contract reflect the interests of the gentleman who interviewed Mr. Greenfield and Mr. Seel for the purpose of taking the statements, and do not accurately reflect the significance of the issue for Mr. Greenfield and Mr. Seel at the time. I am completely satisfied that the approach adopted by Richmond to devising and putting into effect measures to protect the existing roofs during the execution of the Roofing Works were wholly unaffected by any desire to make swift progress with the work.

56. I should not leave the question of the statements taken by McLarens Toplis without recording my disquiet about the circumstances in which the statements were obtained. In the context of a debate as to whether some one or more of the statements was the subject of legal professional privilege I was told that, at the time the statements were taken, solicitors had been instructed on behalf of Crowe and the question of cover was under active consideration. It seems to me that it was totally inappropriate in those circumstances for statements to be taken from Mr. Greenfield, Mr. Seel and Mr. Cook which dealt with matters relevant to cover without Richmond being warned that cover was in question and being given an opportunity to obtain independent advice. The fact that the statements gave an emphasis to matters bearing upon cover with which the maker of the statement may well not have agreed had he appreciated the significance which could later be attributed to such emphasis only serves to underline the impropriety of the procedure, it seems to me.

57. I find that the direction of the fall of R17 and R18 was from a high point, in each case, over the end of the Warehouse furthest from Unit G to a low point at the end of Unit H furthest from the Warehouse. It follows that in my judgment there was the possibility of the tracking of rainwater which penetrated the roofs over the Warehouse, which were themselves defective to a degree, along the profiled metal decking which formed the internal layer of the roofs into Unit G and Unit H. However, that possibility had existed for some time prior to the ingress of rainwater into Unit G and Unit H on 14/15 October 1996 and I accept the evidence of Mr. Whittle that that ingress was much worse than anything which had been experienced previously. Although the probability must be that some of the water which penetrated the retail units on 14/15 October 1996 originated in penetrations of the roofs over the Warehouse, that cannot, in my judgment, have been the major source of the water. As a matter of common sense, since the ingress of an unprecedentedly large quantity of rainwater into Unit G and Unit H occurred after Richmond had stripped off the existing profiled metal decking over R17 and R18, it seems likely that the ingress of water is connected in some way with the undertaking of the Roofing Works. The relevant part of the Roofing Works involved both removing the existing profiled metal decking and providing a temporary weatherproofing of Visqueen sheeting, and bringing back into use gutters and downpipes which had not been used for some time as the means of taking water from the low-level roofs. The photographs put before me of the downpipes in Unit G indicate that, at some point or points in the period before they were rendered redundant by the construction of the profiled metal decking roofs on R17 and R18 which Richmond removed, those downpipes probably leaked. However, each of the downpipes photographed had intact joints, and that indicates to me that the potential for major ingress of water through the joints in the downpipes was limited. The photographs also show that in some areas the Visqueen sheeting run up the side of the central gutter on R17 and R18 and turned over into the gutter at the top had become dislodged after the rain on 14/15 October 1996. That meant, in my judgment, that in the places in which the Visqueen was dislodged rain could get behind, and then underneath, the otherwise impermeable Visqueen sheeting, and thus into Unit G and Unit H through defects in the bituminised felt roof covering on which the Visqueen was laid. I am satisfied that such was the means by which by far the greater part of the water which penetrated Units G and H on 14/15 October 1996 got in. This explanation is unique to R17 and R18, on which, at the time in question, Visqueen was draped over the central gutters, being held in place by wood pushed up against the external sides of the gutters, but not sealed, so that it could be dislodged as shown in some of the photographs. It cannot explain water penetration in other areas of the Building. The cost of remedial work claimed in respect of other areas in the retail units indicates that the extent of the water penetration was nothing like as severe in those areas as in Units G and H. It could, therefore, be simply a further instance of the water penetration to which, on the evidence of Mr.Whittle, which I accept on this point, the Building had been subject periodically before the Roofing Works were commenced. At all events, I am not satisfied on the evidence put before me that it has been demonstrated that the water penetration into any retail unit other than Units G and H had anything to do with the carrying out of the Roofing Works.

Richmond’s duty of care

58. The fact that I am satisfied that the principal cause of the ingress of rainwater into Unit G and Unit H on 14/15 October 1996 was the dislodging of Visqueen sheeting in some parts of R17 and R18 where draped over the central gutter does not, of itself, mean that Richmond was in breach of a duty of care owed to Matalan or in breach of a duty of care owed to Tokenspire. In order to address the question whether there was, in the circumstances, any breach of a duty of care, it is necessary to consider, in the case of each of Matalan and Tokenspire, whether a duty of care was owed, and, if so, the nature of that duty. In the case of Matalan, as I have already recorded, a rather generally formulated duty of care is contended for and admitted, but in order to reach a conclusion whether there has been a breach of a duty of care it seems to me that it is necessary to go behind the pleaded admission to consider in what any duty of care consisted. Only then can one decide whether the duty of care was performed. In the case of Tokenspire there is a live issue as to whether a duty of care was owed at all.

59. The way in which Mr. Timothy King opened Matalan’s case against Richmond was to suggest that liability was almost self-evident: Richmond had been undertaking the Roofing Works over Unit G at the time rainwater penetrated into Unit G on14/15 October 1996 and therefore must be responsible both in fact and in law for that incursion. That formulation, were it correct, would mean that Richmond owed a duty to Matalan to ensure that water did not penetrate Unit G during the execution of the Roofing Works. It is plain, in my judgment, that that formulation cannot, with respect to Mr. King, be correct. In no circumstances, so far as the law has yet developed, does a person owe a duty of care to another person to procure a result. The generally understood nature of a duty of care, where one is owed, is to exercise reasonable care and, if appropriate, skill, to avoid harm to another. A duty of care is not intended as a means, after the event, of fixing someone with liability. Rather a duty of care is intended to encapsulate the type of conduct which, in a civilised society, is expected of one party in relation to another in a particular factual situation. This is important, for it is inherent in the concept of a duty of care, as it seems to me, that the person who owes it should be capable, at least in theory, of recognising, before the question of whether he has performed his alleged duty of care arises, that he owes it and of what it consists. The duty is intended to be performed, so that liability for breach of it is avoided. It is not intended simply as a trap into which the law deems, after the event, the unwary to have fallen.

60. In the course of the expert evidence which has been given in this case quite a lot of attention has been devoted to what amounts to an assessment of the technical competence of Richmond in approaching and undertaking the Roofing Works. For example, criticisms have been made of the quality of the pre-contract survey made by Richmond and of its failure to produce a written programme or a written method statement. The fact that such criticisms have been made indicates a failure on the part of the witnesses making them to understand the issue which they should have been addressing. Such a failure is, alas, relatively common. If, as is the case, the essential nature of a duty of care is an obligation to take reasonable care to avoid harm, then, if the duty has not been performed, the result must be that harm has been caused. If no harm can be identified, it must follow that there has been no breach of any duty of care. If harm can be identified, then the proper focus of expert evidence must be what caused that harm and whether the person who caused it could, by taking reasonable care, have avoided causing it. Criticising the performance of an alleged wrongdoer in respects which have not caused harm is both irrelevant and unhelpful. It is unhelpful because it may divert attention from relevant matters and because it takes up time and resources both in preparation for, and at, the trial without purpose.

61. On my findings, the harm caused to Matalan by the ingress of rainwater into Unit G on 14/15 October 1996 was the result, principally, of water getting behind and underneath the Visqueen sheeting on R17 and R18. The real question, as between Matalan and Richmond, is whether Richmond took reasonable care to avoid the ingress of rainwater into Unit G by laying Visqueen in the manner it did. The failure, if failure it was, of Richmond to take reasonable care to protect Unit G from the ingress of rainwater during the execution of the Roofing Works could be characterised as an omission. It is a fundamental principle that the common law does not impose a duty of care positively to act – see per Lord Diplock in Home Office v. Dorset Yacht Co. Ltd. [1970] AC 1004 at p.1060; and per Lord Goff in Smith v. Littlewoods Organisation Ltd. [1987] 2 AC 241 at p.247. However, that principle only applies to what are termed "pure omissions", that is to say, if the person said to be under a duty has done nothing at all. That situation is thus to be distinguished from the case in which, by his action, a person has created a hazard which may cause harm unless steps are taken to avoid such harm. In such a case the person by whose action the hazard has been created may come under a duty to act so as to avert the possible consequences of the hazard – see, for example, Vacwell Engineering Co. Ltd. v. BDH Chemicals Ltd. [1971] 1 QB 111. It seems to me that in the present case Richmond did owe to Matalan and to all the other occupiers of the Building a duty of care to take reasonable steps to avoid the ingress of rainwater into the Building during the execution of the Roofing Works. Richmond was, after all, removing, at least for a period, part of the existing roof, namely anything above the bituminised felt, which made some contribution to keeping out the rain. To the extent that such removal increased the risk of water penetration, it seems to me that Richmond owed a duty of care to take reasonable steps to provide substitute protection. However, the mere fact that rainwater did enter Unit G, while a necessary ingredient of a cause of action against Richmond, is not, of itself, sufficient to make out a case that Richmond was in breach of its duty of care.

62. In considering what steps Richmond ought reasonably to have taken to protect the occupiers of the Building from harm from the ingress of rainwater during the execution of the Roofing Works it is necessary, in my judgment, to consider a number of factors. One factor is what was physically possible. Another factor is the cost of providing what was physically possible, as compared both with the possible consequences of not taking the steps in question and as compared with the nature and value of the works which Richmond was itself to undertake. A further factor is the terms of the Roofing Contract. In the present case there was a hint of a suggestion at the trial from time to time that perhaps Richmond should have provided a temporary roof over the particular part of the roof of the Building on which it was working. I accept that such would have been physically possible. It would also have been very expensive. On the evidence of Mr. Duncan Taylor, a structural engineer who gave evidence on behalf of both Matalan and Tokenspire, it would have cost about £50,000. Expenditure at that level seems to me disproportionate when, in my judgment, a perfectly satisfactory temporary weatherproof covering could have been made much more cheaply using Visqueen, if it were properly sealed at the edges, and Richmond’s contract price was only £241,839. So far as the risk of water penetration through the re-use of redundant downpipes in Unit G and Unit H is concerned, it was suggested that Richmond should not have devised a temporary weather proofing system which involved using Visqueen sheeting draining water to the previously redundant downpipes without checking that those downpipes would not leak. In the light of my findings as to the principal cause of water ingress on 14/15 October 1996, this issue is not, perhaps, particularly significant. However, the specification of the Roofing Works clearly provided for the new roofs to drain to the existing outlets, so that as between Richmond and Legendary Richmond had no obligation to do any checking of, or repairs to, any of the existing downpipes. It is plain from the terms of the Repair Schedule that Mr. Schofield was aware that the existing downpipes might be defective and in need of repair. I imagine that Mr. Naviede of Legendary was aware of that also, but whether he was or not, as between Richmond and Legendary the risk that the downpipes might not be suitable to take the run-off from the new roofs which Richmond was installing lay with Legendary. It seems to me that that is the position whether or not Richmond knew at any particular time that the downpipes had not actually been checked. The suggestion that Richmond owed a duty to Matalan not to utilise the downpipes without checking them meant, if such a duty was to be performed, that Richmond would either have had to trespass into Unit G, if Matalan did not agree to its entry, to check, at its own expense, the downpipes, and then, again at its own expense, repair any downpipes which were defective, or refuse to perform the Roofing Contract. None of these steps seems to me to be something which could reasonably be required of Richmond. I therefore hold that Richmond did not owe to anyone any duty to check or to repair any of the downpipes in the Building.

63. I was impressed by Mr. Cook, Mr. Greenfield and Mr. Seel as witnesses. I formed the view that each was a very experienced and competent roofer and conscientious in seeking to provide a good service to the customers of Richmond and to those who might be affected by the works which Richmond carried out. I am entirely satisfied that each of them gave evidence honestly and accurately before me. I noted that Mr. Naviede of Legendary expressed himself satisfied with the Roofing Works as completed. I also noted that, despite the incursion of rainwater on 14/15 October 1996 and the requests of Mr. Schofield that Richmond undertake extra work following the events of 14/15 October 1996, the execution of the Roofing Works was completed within the period fixed by the Roofing Contract. All of these factors testify to the skill and competence of Richmond. I reject any suggestion that the decision to strip the whole of R17 and R18 of the existing profiled metal decking and to use Visqueen, which would be a vapour barrier in the completed new roof anyway, as a temporary weatherproofing was done in order to increase the speed of working, or otherwise than for sound practical reasons after Mr. Cook had taken a proper opportunity to reflect and to consider the implications of the change in working method. The change was, I consider, well-conceived and could have proved effective. However, it was essential to its success that all edges of the Visqueen sheeting were satisfactorily sealed. I find that at the edges adjacent to the high-level roofs the Visqueen sheeting was held fast, having been run up the upstand of the high-level roof some distance, by the insulation board and the new gutter. I find that in the two or three locations on each side of the central gutter on each of R17 and R18 where a roll of Visqueen came to an end the joint was properly lapped and sealed. That is what Mr. Cook told me he had himself checked on 14 October 1996, and I accept his evidence. Where the system broke down, in my judgment, was that, unless the edge of the Visqueen which was run up the side of, and turned into, the central gutter was secured to that gutter, the unsecured edge turned into the gutter was liable to be caught by wind. Once caught by wind, the Visqueen could be blown back towards the high level roofs on either side of the central gutter, with only rather flimsy pieces of wood to counteract the force of the wind. As some of the photographs put before me show, in some instances the wind proved able to dislodge the Visqueen sheeting. I consider that the possibility of that happening is something which Richmond ought reasonably to have anticipated. Had it been anticipated, the fairly obvious means of eliminating the risk was to secure the Visqueen sheeting to the central gutter by tape or sealant on a temporary basis. I therefore find that Richmond was in breach of the duty of care which it owed to Matalan.

64. The question upon which whether Richmond owed a duty of care to Tokenspire turns is the effect in law of the attempt to extend to Richmond and to Legendary the benefit of the Tokenspire Policy. Mr. Pennicott drew to my attention the decision of the Court of Appeal in Co-operative Retail Services Ltd. v. Taylor Young Partnership [2000] BLR 461. The leading judgment is that of Brooke LJ. In the course of his judgment Brooke LJ said, at pages 476-477 of the report:-

"78. It must be observed that although Hall was not in a direct contractual relationship with CRS, it was expressly provided in its sub-contract that it was either to be recognised as an insured under the Joint Names Policy to be taken out under Clause 22A of the main contract (of whose conditions it had notice) or that the insurers under that policy should waive any rights of subrogation they might have against Hall. We have been shown a copy of the CGU contractors All Risks Policy issued in 10^th October 1994 from which it appears from the first page of the Schedule that Hall was expressly insured under that policy.

"79. Mr. Acton-Davis showed us two recent cases in which courts were invited to consider whether it was fair just and reasonable to impose a duty of care on a sub-contractor vis-à-vis an employer against a contractual background of this kind. In Norwich City Council v. Harvey [1989] 1 WLR 828, a case where the owners had assumed responsibility for all risks under clause 22C of the JCT contract, this court held that although there was no direct contractual relationship between the employer and the sub-contractor, they had nevertheless each contracted with the main contractor on the basis that the employer had assumed the risk of damage by fire. In those circumstances there was no sufficiently close and direct relation between them to impose on the sub-contractor any duty of care to the employer in respect of such damage. The mere fact that there was no privity of contract between them did not make it just and reasonable that such a duty should be owed.

"80. In British Telecommunications Plc v. James Thompson & Sons (Engineers) Ltd. [1999] 1 WLR 9, another clause 22C case, the House of Lords reached a different conclusion in a case where a distinction had been made between nominated sub-contractors and domestic sub-contractors in the conditions of the insurance policy to be taken out by the employer under the main contract. The effect of this was that the insurer did not waive any right of subrogation it might have against a domestic sub-contractor. Lord Mackay of Clashfern observed at p.16 that the existence of this right would legitimately affect the question of premium. In his view these contractual provisions reinforced rather than negatived the existence of a duty of care by the sub-contractors towards the employers in the circumstances of that case.

"81. I accept Mr. Acton-Davis’s submissions and his further submission that the existence of the direct warranty by his clients to CRS does not affect the position. If CRS asserted that it had suffered damage, following a fire, by reason of Hall’s breach of warranty, Hall would have a defence to that claim to the effect that CRS had sustained no loss which it could recover from Hall because a single contractual scheme was in place, buttressed by a joint all risks policy to which it, CRS and Wimpey were all named as insured, which provided that the cost of restoration caused by fire (and associated professional fees) would be covered by that policy, which would be procured by Wimpey. As to the Schedule 3 claim, Mr. Acton-Davis observed that CRS brought no such claim against his clients: indeed their insurers’ solicitors had expressly asserted in correspondence that they had no claim. The reason for this was that under the contractual framework the risk of delay caused by fire was expressly provided for and the parties knew where the relevant risks were to fall and assented to this scheme. In any event, if no duty was owed by Hall in respect of the physical damage caused by the fire, a Schedule 3 claim for consequential losses could not found a successful negligence action on its own, being a claim for pure economic loss which no recognisable principle of the evolving law of negligence would support. These submissions appear to me to be well-founded."

Mr. Pennicott submitted that the fact that Tokenspire had attempted to have extended to Richmond cover under the Tokenspire Policy, even though in the event cover in respect of the extension was avoided on the ground of breach of warranty and misrepresentation, meant that it was not fair, just and reasonable to impose upon Richmond in favour of Tokenspire the duty of care which he accepted would otherwise have been appropriate, Tokenspire being, to the knowledge of Richmond, the freehold owner of the Building.

65. In my judgment there is an important difference in principle between a case in which, by a network of contracts in well-known standard forms, risks of damage from certain types of occurrence are the subject of insurance cover expressed to be for the benefit of each of those involved in the network, whether in direct contractual relations with each other or not, and the sort of ad hoc arrangement made in the present case. In this case there was no question of any network of contracts. Legendary wished, in advance of completion of its purchase under the Sale Agreement, to have the Roofing Works carried out. Tokenspire had no real interest in whether the Roofing Works were carried out at all, and certainly no real interest, other than that such was provided for under the Sale Agreement, in when the Roofing Works were carried out. There was no pre-existing contractual right or expectation that Tokenspire would arrange to extend the cover provided by the Tokenspire Policy to include Legendary and Richmond. It appears that Mr. Whittle was prepared to arrange the extension of the cover really as a gesture of goodwill. In those circumstances it seems to me that there is no reason not to conclude that the duty of care which it is accepted it would be appropriate to impose if no insurance had ever been arranged by Mr. Whittle which was intended to be for the benefit of Richmond should be imposed. I find that Richmond was in breach of that duty of care for the same reasons as justify that conclusion in the case of the duty of care owed to Matalan.

The covenant for quiet enjoyment

66. In his closing submissions Mr. King modified somewhat the position which he had adopted in his opening submissions on the question of whether there had been a breach of the covenant for quiet enjoyment in the Lease on the part of Tokenspire. Rather than putting his client’s case on the basis that the circumstances of the present case were a classic example of such a breach, he now submitted that, in the circumstances of the present case, whether there was a breach of the covenant was uncharted territory. What prompted this change of position seems to have been a very learned and extremely interesting submission by Mr. Thomas in which he traced the history of covenants to answer for the acts of another back to the decision in Foster and Wilson v. Mapes (1590) Cro. Eliz. 212. Notwithstanding Mr. Thomas’s broad chronological sweep, his essential point was that it was not a breach of a covenant for quiet enjoyment of the usual, qualified kind if the landlord gives permission for the undertaking of some activity subject to some condition as to how that activity may be undertaken which, if complied with, would have meant that the undertaking of the activity did not constitute a breach of the covenant for quiet enjoyment, and the person to whom the permission is given does not observe the condition and thereby causes an interference with the quiet enjoyment of the tenant. Mr. Thomas relied in support of his submission, amongst other things, upon the statement of Lord Cozens-Hardy M.R. in Malzy v. Eicholz [1916] 2 KB 308 at pages 315-316 that:-

"I apprehend there is no authority and no principle for holding a landlord liable under a covenant for quiet enjoyment – that is to say, that he has done anything which renders him liable to damages under the covenant in respect of quiet enjoyment – merely because he knows of what is being done and does not take any steps to prevent what is being done. There must be something much more than that. There must be something which can fairly amount to his doing the act complained of or allowing the act complained of, either by actual participation by himself or his agents, or by what Lord Collins called active participation in that which is being complained of - It is quite a novel doctrine to me that permission by a lessee to use demised premises for a purpose which may or may not involve or create a nuisance is a wrong act on the part of the landlord, and that the landlord can be rendered liable merely because a person does carry on that business in such a manner as to create a nuisance. It would be different, of course, if it were let for a purpose which necessarily involved a nuisance, but this letting did not necessarily involve a nuisance."

Mr. Thomas also relied upon the decisions in Sanderson v. .Mayor etc. of Berwick–upon–Tweed (1884) 13 QB 547; Williams v. Gabriel [1906] 1 KB 155; Matania v. National Provincial Bank Ltd. [1936] 2 All ER 633; and Toff v. McDowell (1993) 69 P&CR 535. Against this line of authority Mr. King submitted that the true principle is that if a landlord authorised the undertaking of an activity which, unless steps were taken to prevent such interference, would amount to a breach of the covenant for quiet enjoyment, he was liable if those steps were not taken. It seems to me, both in principle and on the authorities to which Mr. Thomas drew my attention, that Mr. Thomas’s submission is sound and I accept it. It follows that in my judgment Tokenspire was not in breach of clause 6.1 of the Lease by reason of the failure of Richmond in the respect which I have identified to carry out the Roofing Works in a good and workmanlike manner.

The Deed

67. In the light of my finding that Tokenspire was not in breach of the covenant for quiet enjoyment in clause 6.1 of the Lease it does not matter whether, had I found that there was liability in principle, such liability was compromised by clause 2 of the Deed. However, the point is a short one and the competing arguments have been fully ventilated before me.

68. The expression "the Dispute" as defined in the second recital to the Deed is ambiguous. In order to attribute meaning to the expression it is necessary to know to what reference is being made as

"A dispute [which] has arisen between Tokenspire and Matalan as to the performance of the Agreement for Lease and the Supplemental Agreement".

For that purpose, on ordinary principles of construction, extrinsic evidence is admissible. The only such evidence put before me was that of Mr. Mark Barker, a solicitor who acted on behalf of Matalan in relation, amongst other things, to the making of an agreement in writing dated 19 September 1996 between Legendary and Matalan. A copy of that agreement was put in evidence. In the agreement Legendary was called "the Landlord" and Matalan was called "the Tenant". Clause 2 of the agreement was entitled "Recitals" and included the following:-

"2.1 By an Agreement dated the 5^th September, 1994 and made between (1) Tokenspire Properties (North Western) Limited ("Tokenspire") and (2) the Tenant ("the Agreement for Lease") and by a Supplemental Agreement dated 17^th October, 1994 and made between (1) Tokenspire and (2) the Tenant ("the Supplemental Agreement") Tokenspire and the Tenant agreed to the granting of a Lease conditional upon the carrying out of the obligations imposed on Tokenspire in the Agreement for Lease and the Supplemental Agreement

"2.2 A dispute has arisen between Tokenspire and the Tenant as to the performance of the Agreement for Lease and the Supplemental Agreement ("the Dispute")

"2.3 The Tenant has agreed with the Landlord that in the event of this agreement being rendered unconditional and being completed in the manner herein contained that the Tenant will accept the performance of this contract in full and final settlement of any claim it has against Tokenspire arising out of the Dispute and will assign to the Landlord all rights of action (if any) which the Tenant has against Tokenspire and will enter into the Deed of Settlement on the Completion Date in the manner hereinbefore set out subject to the Declaration in Recital 6 of the Third Schedule hereto."

The expression "the Deed of Settlement" was defined in clause 1.14 of the agreement as meaning the deed in the form appearing in the Fifth Schedule to the agreement. That form of deed is identical in all material respects to the Deed. By clause 6.1 of the agreement dated 19 September 1996 it was provided:-

"The Deed of Settlement shall be executed in triplicate by Tokenspire the Landlord and the Tenant and no more than ten Working days before the Completion Date the Tenant shall deliver to the Landlord the Deed of Settlement executed in escrow to the Landlord’s Solicitor who shall hold the same on the terms set out in the next following sub-clause."

69. From the references to it in the agreement dated 19 September 1996, and from the fact that the Fifth Schedule to that agreement contained a form of deed so far as material identical in terms to the Deed, it seems to me that it is obvious, first that "the Dispute" referred to in the Deed, whatever precisely it concerned, cannot have included anything which became in contention after 19 September 1996, and, second, that the words "or otherwise" in clause 2 of the Deed, when included in the draft of the Deed, were not actually intended to refer to any claim relating to the influx of water into Unit G on 14/15 October 1996.

70. I have been reminded of the principles of construction of written instruments enunciated by Lord Hoffman in Investors Compensation Scheme Ltd. v. West Bromwich Building Society [1998] 1 WLR 896 at pages 912 to 913. Those principles include:-

"(1) Interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.

"(2) The background was famously referred to by Lord Wilberforce as the "matrix of fact", but this phrase is, if anything, an understated description of what the background may include. Subject to the requirement that it should have been reasonably available to the parties and to the exception to be mentioned next, it includes absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man -

"(4) The meaning which a document (or any other utterance) would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. The background may not merely enable the reasonable man to choose between the possible meanings of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reason, have used the wrong words or syntax: see Mannai Investments Co. Ltd. v. Eagle Star Life Assurance Co. Ltd. [1997] AC 749.

"(5) The "rule" that words should be given their "natural and ordinary meaning" reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. On the other hand, if one would nevertheless conclude from the background that something must have gone wrong with the language, the law does not require judges to attribute to the parties an intention which they could not have had - "

71. Part of the background to the execution of the Deed was the agreement dated 19 September 1996 and the provisions in it relating to a draft of the Deed. Anyone aware of that background would at once appreciate that nothing in the Deed when originally drafted was intended to affect events which had not then occurred. Consequently, in my judgment, neither the use of the words "the Dispute" nor the use of the words "or otherwise" in clause 2 of the Deed has the effect for which Mr. Thomas contended. His argument on this point was avowedly based solely upon the words used in clause 2 of the Deed, and he made it plain that his submission was that the words used should be considered in isolation. In the light of the principles enunciated by Lord Hoffman, to which I have referred, I do not consider that submission to be well-founded.

The Sale Agreement

72. Mr. Black submitted that clause 14.8 (1) of the Sale Agreement was not a promissory term or a warranty, breach of which could sound in damages, but rather simply a condition of the permission given to Legendary by Tokenspire to arrange for the undertaking of the Roofing Works. That submission seems to have been based principally upon a consideration of the grammar of clause 14.8, and in particular upon the point that sub-clause (1) was introduced by the words "provided that:". However, Mr. Black accepted that sub-clause (2) of clause 14.8, which stated

"the Purchaser will indemnify the Vendor against all liability arising out of the Purchasers Works"

was promissory, notwithstanding that that sub-clause also followed the introductory words "provided that". Mr. Black obviously sought to draw some distinction between the treatment of the two sub-clauses, but I confess that I find any suggested distinction illusory. Mr. Black submitted that clause 14.8 needed to be construed in the light of the provisions of clause 15 of the Sale Agreement, and I think that it is certainly correct that clause 14.8 must be construed in the context of the Sale Agreement as a whole. Mr. Black’s suggested construction was that Tokenspire bore the risk of damage to the property the subject of the Sale Agreement pending completion of the sale for which the Sale Agreement provided, and was bound to insure against that risk – see clauses 15.1 and 15.3. It followed, he submitted, that Tokenspire bore the risk even of damage caused by a failure to carry out the Roofing Works in a good and workmanlike manner. However, he accepted that Tokenspire did not bear the risk of claims from third parties as a result of the carrying out of the Roofing Works.

73. With great respect to Mr. Black, his construction of the Sale Agreement strikes me as artificial and actually inconsistent with the words of the Sale Agreement. It is, in my judgment, clear that, notwithstanding that all of the sub-clauses of clause 14.8 are introduced with the words "provided that:", they are all promissory. Mr. Black accepted that that was so in relation to sub-clause (2). I see no reason to treat sub-clause (1) differently and every reason to treat it in the same way. If clause 14.8 (1) were not promissory, Legendary, having obtained conditional permission to undertake the Roofing Works, could disregard the conditions with impunity. I cannot imagine that such can have been intended. The true meaning of clauses 14.8 and 15, it seems to me, is that the risk borne by Tokenspire under clause 15.1 did not include the risk of the consequences of a failure on the part of Legendary to comply with the condition in clause 14.8 (1), but was subject to that condition being complied with.

74. I do accept Mr. Black’s submission that clause 14.8 (2), on proper construction, only provides for an indemnity against claims by third parties, and does not extend to losses suffered directly by Tokenspire. The use of the word "liability" in the sub-clause connotes, in my judgment, the exposure of Tokenspire to claims by others. It is not apt to describe damage to property belonging to Tokenspire. Since, if the Roofing Works were not carried out in compliance with the condition in clause 14.8 (1), Tokenspire has a cause of action for damages against Legendary, as I have found, it is not necessary to give an extended meaning to clause 14.8 (2) in order to provide Tokenspire with a remedy in the event that there was a breach of the conditions attached to the permission granted to undertake the Roofing Works.

The Tokenspire Policy

75. In his closing submissions Mr. Black sought to rely on the extension to the cover provided under the Tokenspire Policy arranged by Mr. Whittle as giving rise to an implied term of the extended cover that in the event that Independent settled a claim from Tokenspire in relation to the risks insured under the extended cover Independent would not use rights of subrogation to recoup from Legendary any sum which Independent had paid to Tokenspire. Mr. Pennicott made a similar submission on behalf of Richmond. It was common ground that all of the sums which Tokenspire sought to recover in the Second Action were sums which had been paid by Independent in settlement of Tokenspire’s claim under the Tokenspire Policy following the ingress of water on 14/15 October 1996. Mr. Black also sought to rely upon the terms of the extension in the Tokenspire Policy as originally written in favour of a purchaser. As summarised in his written closing submissions the conclusion for which Mr. Black, referring to his client as "Pentask", contended was:-

"Thus, payment was made under the policy in respect of damage to the building in respect of which either Pentask was co-insured or was to be treated as if the insurance were for its benefit. In either case the Independent cannot recover its outlay from Pentask by reason of an implied term in the policy that it would not exercise its subrogation rights against Pentask."

76. In Stone Vickers Ltd. v. Appledore Ferguson Shipbuilders Ltd. [1991] 2 Lloyd’s Rep 288 Colman J said at page 302:-

"Where a policy is effected on a vessel to be constructed and it is expressed to be for the benefit of sub-contractors as co-assured, if a particular sub-contractor negligently causes loss or damage to the whole or part of the vessel which has been insured under the policy and the sub-contractor has an insurable interest in the vessel, it is not open to underwriters who have settled the insured shipbuilders’ claim to exercise rights of subrogation in respect of the same loss and damage against the co-assured sub-contractor. To do so would be completely inconsistent with the insurer’s obligation to the co-assured under the policy. The insurer would in effect be causing the assured with whom he had settled to pursue proceedings which if successful would at once cause the co-assured to sustain a loss arising from loss and damage to the very subject-matter of the insurance in which that co-assured has an insurable interest and a right of indemnity under the policy.

"In my judgment so inconsistent with the insurer’s obligation to the co-assured would be the exercise of rights of subrogation in such a case that there must be implied into the contract of insurance a term to give it business efficacy that an insurer will not in such circumstances use rights of subrogation in order to recoup from a co-assured the indemnity which he had paid to the assured. To exercise such rights would be in breach of such a term. In such a case the law recognises the rights of the co-assured by enabling him to rely on his rights under the policy by way of defence in the proceedings which the insurers have caused to be commenced in breach of their implied obligation under the policy. This is an effective means of enforcing the co-assured’s rights and makes it unnecessary for him to join the insurers as third parties in the action."

77. Colman J returned to the issue in National Oilwell (UK) Ltd. v. Davy Offshore Ltd. [1993] 2 Lloyd’s Rep 582. At page 613 he said:-

"The explanation for the insurers’ inability to cause one co-assured to sue another co-assured is that in as much as the policy on goods covers all the assureds on an all risks basis for loss and damage, even if caused by their own negligence, any attempt by an insurer after paying the claim of one assured to exercise rights of subrogation against another would in effect involve the insurer seeking to reimburse a loss caused by a peril (loss or damage even if caused by the assured’s negligence) against which he had insured for the benefit of the very party against whom he now sought to exercise rights of subrogation. That party could stand in the same position as the principal assured as regards a loss caused by his own breach of contract or negligence. For the insurers who had paid the principal assured to assert that they were not free to exercise rights of subrogation and thereby sue the party at fault would be to subject the co-assured to a liability for loss and damage caused by a peril insured for his benefit. As I said in Stone Vickers, it is necessary to imply a term into the policy of insurance to avoid this unsatisfactory possibility. The implication of such a term is needed to give effect to what must have been the mutual intention (on this hypothesis) of the principal assured and the insurers, as to the risks covered by the policy. On this basis the purported exercise by insurers of rights of subrogation against the co-assured would be in breach of such a term and would accordingly provide the co-assured with a defence to the subrogated claim in the manner which I explained in the passage cited from my judgment."

At pages 614 to 615 in the report Colman J stated his conclusion in the following terms:-

"For these reasons I am firmly of the view that the conclusion arrived at by Mr. Justice Lloyd in Petrofina was right: an insurer cannot exercise rights of subrogation against a co-assured under an insurance on property in which the co-assured has the benefit of cover which protects him against the very loss or damage to the insured property which forms the basis of the claim which underwriters seek to pursue by way of subrogation. The reason why the insurer cannot pursue such a claim is that to do so would be in breach of an implied term in the policy and to that extent the principles of circuity of action operate to exclude the claim."

78. The approach of Colman J in the passages which I have cited was approved by the Court of Appeal in Co-operative Retail Services Ltd. v. Taylor Young Partnership [2000] BLR 461.

79. In support of his alternative submission that, even if not a co-insured, the effect of the extension of the benefit of the Tokenspire Policy to a purchaser was that Legendary was able to claim the benefit of the insurance Mr. Black relied upon the decision of the Court of Appeal in Mark Rowlands Ltd. v. Berni Inns Ltd. [1986] 1 QB 211. In that case the plaintiff was the freehold owner of a building. It had let part of the building to the defendant. The plaintiff insured the building. The defendant covenanted to pay to the plaintiff an insurance rent equal to the proportionate cost of insuring the part of the building occupied by the defendant, and did pay such rent. The building was destroyed by fire caused by the negligence of the defendant. The insurer paid the plaintiff the sum due under the policy and brought an action in the name of the plaintiff to recover its outlay from the defendant. The defendant was not named as a co-insured in the relevant insurance policy. At pages 232 to 233 in the report Kerr LJ, who gave the leading judgment, said:-

"The intention of the parties, sensibly construed, must therefore have been that in the event of damage by fire, whether due to accident or negligence, the landlord’s loss was to be recouped from the insurance moneys and that in that event they were to have no further claim against the tenant for damages in negligence. Another way of reaching the same conclusion, on which Mr. Harvey also relied, is that in situations such as the present the tenant is entitled to say that the landlord has been fully indemnified in the manner envisaged by the provisions of the lease and that he cannot therefore recover damages from the tenant in addition, so as to provide himself with what would in effect be a double indemnity. Although the receipt of insurance moneys by an innocent party is of course normally no defence to a wrongdoer (see Bradburn v. Great Western Railway Co. (1874) LR 10 Ex 1), Mr. Harvey relied on a number of passages in Parry v. Cleaver [1970] AC 1, 13 to show that considerations of "justice, reasonableness and public policy" (per Lord Reid) may require exceptions to this general principle. I do not think it necessary to elaborate upon this line of argument in the present case save to say that I accept it and regard it as complementary to the conclusion which is to be derived from the construction and effect of the terms of the lease itself, as indicated above."

80. In the present case Legendary was not, as matters turned out, co-insured with Tokenspire because Independent avoided cover under the extension arranged by Mr. Whittle for breach of warranty and misrepresentation. The problem which prompted Colman J to suggest that a term should be implied into a policy of insurance under which more than one party was insured to the effect that an insurer who settled the claim of one insured would not use rights of subrogation to seek to effect recoupment from a co-insured of the amount of his outlay was that the co-insured was himself entitled to indemnity under the policy if held liable in respect of the subrogated claim. Such a result means that the pursuit of the subrogated claim serves no economic purpose and the implication of the term suggested by Colman J avoids the absurdity of pointless proceedings. That problem does not present itself in a case in which the joint cover has been avoided. Where a joint policy has been specially written in respect of a risk one would expect that either all co-insured would be held covered or that none would be. Why the present case is unusual is because the joint cover was arranged as an extension to an existing policy under which, in the event, and notwithstanding the avoidance of the joint cover, Tokenspire was held covered. The question is whether a term such as that suggested by Colman J should be implied into the joint cover extension which should be held to survive the avoidance of cover under that extension and thus prevent a subrogated claim by Independent against a party which it does not hold covered. I think that the answer is negative. It seems to me that in circumstances such as those of the present case, while it is right to imply a term into the joint cover extension to deal with rights of subrogation, that term should contemplate the possibility that the joint cover might be avoided, leaving the original cover in place. The term which it seems to me should be implied is to the effect that the insurer will not exercise any right of subrogation against any of the co-insured provided that, and so long as, cover in relation to the particular co-insured has not been avoided. Such a term is of no value to Legendary in the present case.

81. In Mark Rowlands Ltd. v. Berni Inns Ltd. the conclusion that the tenant was entitled to the benefit of the fire insurance arranged by the landlord depended, in my view, amongst other things, upon the fact that there were between the landlord and the tenant contractual obligations on the part of the landlord to obtain, and on the part of the tenant to contribute towards the cost of, the relevant insurance. In the case of the Tokenspire Policy, leaving aside the joint extension arranged by Mr. Whittle, Legendary had no direct interest in whether there was cover, and, if so, on what terms and in respect of what risks. Although clause 15.3 of the Sale Agreement placed Tokenspire under an obligation to Legendary to insure the property the subject of the Sale Agreement, that sub-clause did not provide that the insurance was to be for the benefit of Legendary, and it seems to me that that obligation was simply intended, as is made clear by the terms of clause 15.4, to require Tokenspire to put itself in a position to pay cash to Legendary at completion if by that time the property which Legendary had agreed to purchase had suffered damage to the extent that Legendary would have been entitled to rescind the Sale Agreement under clause 15.2 but Legendary wished nonetheless to acquire it. The important thing is that the insured was to be Tokenspire and Legendary’s only economic interest in the insurance was contingent upon Legendary not exercising a right to rescind the Sale Agreement under clause 15.2. These are, I think, important differences from the situation in Mark Rowlands Ltd. v. Berni Inns Ltd. However, it is not really necessary, in my judgment, to consider the proper ambit of that decision. The reason is because, on proper construction of the "Extensions" part of Section A of the Tokenspire Policy, it seems to me that clause 2 of that part is concerned with a very limited situation, namely where, at the time when damage occurs to buildings insured thereunder, the insured has contracted to sell and completion takes place at a time before a claim under the policy in respect of that damage has been settled. In such circumstances the benefit of the claim is, in effect, assigned to the purchaser on completion of his purchase. That is not this case, and it appears to me that the provision in question is of no assistance to Legendary. I accept the submission that the cover provided by clause 2 of the "Extensions" part of Section A of the Tokenspire Policy does not, in any event, extend to damage to the contents of the Building or to loss of rent.

82. Mr. Black made a general submission that the effect of the terms of the Sale Agreement as to insurance and risk, coupled with the insurance arrangements actually made, had the effect that Tokenspire had waived any entitlement to look to Legendary for compensation in the event that the Building sustained damage as a result of any failure to carry out the Roofing Works in a good and workmanlike manner. I do not consider that that general submission adds anything to the more specific points which I have already dealt with. In the result in my judgment Legendary is liable to Tokenspire for breach of the obligation in clause 14.8 (1) of the Sale Agreement.

The Roofing Contract

83. Mr. Black contended that, in the event that I found, as I have, that Legendary was liable to Tokenspire in respect of a breach of clause 14.8 (1) of the Sale Agreement by reason of a failure on the part of Richmond to carry out the Roofing Works in a good and workmanlike manner, Legendary was entitled to an indemnity in respect of such liability under clause 6.2 of the Roofing Contract. Mr. Pennicott did not seriously dispute that on behalf of Richmond, and I think that the submission is well-founded. Mr. Black also submitted that it was appropriate for Richmond to be ordered, under the provisions of Civil Liability (Contribution) Act 1978, to make a contribution of 100% towards any liability which came to rest upon Legendary as a consequence of any default of Richmond in the carrying out of the Roofing Works. Again Mr. Pennicott did not seriously contest that, and again I consider that the submission is sound. Mr. Black also submitted that Legendary was entitled to recover from Richmond as damages for breach of the terms of clause 1.1 of the Roofing Contract any amount which it was found liable to pay to Tokenspire by reason of a breach of clause 14.8 (1) of the Sale Agreement. Again I think that that is correct.

The Richmond Policy

84. Crowe’s case has always been that it is not bound to indemnify Richmond against any of the claims made arising out of the ingress of water into the Building on 14/15 October 1996 because of the failure of Richmond to take reasonable precautions to avoid loss, as required by General Condition 9 of the Richmond Policy. It was common ground that in order to show a breach of that condition it was necessary for Crowe to demonstrate that Richmond had been reckless. It was accepted by Miss Blanchard on behalf of Crowe that the proper approach to a condition of this kind was that indicated by Diplock LJ in Fraser v. B.N. Furman (Productions) Ltd. [1967] 2 Lloyd’s Rep 1 at page 12:-

"Obviously the condition cannot mean that the insured must take measures to avert dangers which he does not himself foresee, although the hypothetical reasonably careful employer would have foreseen them. That would be repugnant to the commercial purpose of the contract, for failure to foresee dangers is one of the commonest grounds of liability in negligence. What in my view is "reasonable" as between the insured and the insurer, without being repugnant to the commercial object of the contract, is that the insured should not deliberately court a danger, the existence of which he recognises, by refraining from taking any measures to avert it. Equally the condition cannot mean that where the insured recognises that there is a danger, the measures which he takes to avert it must be such as the hypothetical reasonable employer, exercising due care and observing all the relevant provisions of the Factories Act, 1961, would have taken. That, too, would be repugnant to the commercial purpose of the contract, for failure to take such measures is another ground of liability in negligence for breach of statutory duty. What in my judgment is reasonable as between the insured and the insurer, without being repugnant to the commercial purpose of the contract, is that the insured, where he does recognise a danger, should not deliberately court it by taking measures which he himself knows are inadequate to avert it. In other words, it is not enough that the employer’s omission to take any particular precautions to avoid accidents should be negligent; it must be at least reckless, that is to say, made with actual recognition that a danger exists, not caring whether or not it is averted. The purpose of the condition is to ensure that the insured will not refrain from taking precautions which he knows ought to be taken because he is covered against loss by the policy."

The essential elements which need to be proved if recklessness is to be found are thus:-

1. actual recognition on the part of the insured of the particular risk;
2. a conscious decision either to take no precautions at all to avoid that risk or to take precautions which are known to be inadequate, not caring whether the risk is averted.

It is a very substantial burden to shoulder.

85. In the circumstances of the present case it is plain that Richmond did recognise that there was a risk of penetration of rainwater into the Building during the execution of the Roofing Works unless appropriate measures were taken to protect roofs which had been stripped of the existing covering pending the installation of the new profiled metal decking. It is also plain that that risk was addressed in that a scheme of protection was devised and implemented. That scheme proved to be inadequate over R17 and R18 on 14/15 October 1996. However, without more Crowe’s case has always been speculative. What needed to be considered was what evidence there was to suggest that some individual who could be said to be the personification of the insured, Richmond, had deliberately neglected to take precautions to protect R17 and R18 against the risk of ingress of rainwater on 14/15 October 1996. In fact no attempt seems to have been made even to consider what individual could be treated as synonymous with Richmond for the purpose of considering whether Richmond had been reckless. The statements taken by McLarens Toplis showed that all critical evaluations and decisions were made by Mr. Cook, the Contracts Manager, and not by either of the two directors of Richmond, Mr. Greenfield and Mr. Seel. Mr. Pennicott expressly disavowed any suggestion that Mr. Cook could not be treated as the personification of Richmond for the purpose of fixing Richmond with the consequences of his decisions and actions if he were reckless. I am not sure that that concession was correctly made. In the event it does not matter because I am completely satisfied that neither Mr. Cook nor any other representative of Richmond deliberately failed to take any precautions which he recognised should have been taken. Nonetheless, the issue does not seem to have been addressed on behalf of Crowe at all.

86. It seems to me that any dispassionate analysis of the facts of the present case on behalf of Crowe should from the outset have indicated that the position adopted that Richmond had been reckless was more or less hopeless. At very least in order to satisfy a court that Richmond had deliberately run a risk it was necessary either to obtain an admission to that effect from someone who could be treated as Richmond or to achieve a position in which it could be submitted with some chance of such submission being accepted that a denial from such a person that a risk had been run deliberately should not be believed. The latter possibility involves a situation in which the court is invited to disbelieve someone upon his oath. The circumstances of the present case provided no encouragement for the view that there was a realistic prospect that such was a likely scenario. The former possibility cannot seriously have been regarded as probable.

87. I am firmly of the opinion that the position of Crowe in relation to recklessness was untenable from the start and should never have been adopted.

88. A completely separate point arises in relation to the Richmond Policy and that concerns the scope of the cover. The question is whether the expression "liability at law for damages" covers liability to indemnify a party or to make a contribution under the provisions of Civil Liability (Contribution) Act 1978. There is an express exclusion in respect of liabilities arising in connection with any contract or agreement, unless such liability would have attached in the absence of such contract or agreement, so a pure contractual indemnity which does not duplicate a common law liability is not covered. A claim for damages for negligence in an amount which would give the claimant an indemnity would be within the scope of the cover provided the liability to pay such was "liability at law for damages".

89. The expression "damages" is not, I think, a term of art. "Damages", in my view, as a word simply describes monetary compensation payable for breach of some obligation imposed by law, whether at common law, by statute, or by contract. The expression "indemnity" when used correctly refers, and refers only, to a right created by contract to be indemnified against some particular liability. However, in general usage in litigation, an indemnity is often claimed when a more accurate formulation of the claim would be damages in an amount which would give the claimant complete reimbursement of his expenditure in satisfying a claim against him. The liability to pay damages in such an amount is clearly, it seems to me, "liability at law for damages". That expression is also apt, in my judgment, to describe a liability to make a contribution to damages which have been awarded against another.

90. The result is that Crowe is liable under the Richmond Policy in my judgment to indemnify Richmond against all the liabilities which I have found Richmond to be under to any other party. Legendary’s claim to an indemnity under clause 6.2 of the Roofing Contract duplicates, in my view, Legendary’s claim for damages for breach of clause 1.1 of the Roofing Contract, and that in turn duplicates a claim for damages for negligence which has not been, but could have been, pleaded.

Quantum

91. The quantum of Matalan’s claim against Richmond has been agreed as between Matalan, Richmond and Crowe, subject to liability, in the sum of £812,046.03 plus interest. No evidence as to the quantum of that claim has been led before me. Tokenspire’s claim has been the subject of evidence as to quantum from Mr. Whittle and the subject of submission from Mr. Thomas, on behalf of Tokenspire, and Miss Blanchard.

92. Before I come to a consideration of the details of the individual elements in Tokenspire’s claim a general point which arises and affects all of those elements, save the claim for loss of rent and service charges, is that, while the freehold title to the Building was, at the material time, vested in Tokenspire, the expenditure incurred as a result of the ingress of water on 14/15 October 1996 was all met by its parent company, Tokenspire Properties Ltd. Miss Blanchard submitted that in those circumstances any loss had been suffered not by Tokenspire, but by its parent company, which is not a party to either the First Action or the Second Action. I have already set out above the various elements in Tokenspire’s claim. Most of those elements which are pursued, those set out at (a), and (c) to (g) inclusive, of the pleaded Schedule of Loss obviously relate to the costs of repair of the Building. Item (h), pursued in a reduced sum of £2,057.50, Mr. Whittle said related to the costs of employees of the parent company in working overtime in order to advance the progress of repair works. Only item (i) did not relate in some way to repair costs.

93. It seems to me that Miss Blanchard’s general submission that in so far as repair costs were actually paid by the parent company and not by Tokenspire itself Tokenspire cannot recover as it itself has suffered no loss, confuses, on the one hand, the suffering of loss, and, on the other, the incurring of expenditure in order to remedy that loss. As a result of the ingress of rainwater on 14/15 October 1996 the Building sustained physical damage. Tokenspire, as the freehold owner of the Building, is in principle entitled to compensation in respect of that damage. Actually, as is common ground, the expenditure incurred in order to remedy the physical damage to which I have referred was, in the first instance, incurred by Tokenspire’s parent company and such expenditure was then reimbursed by insurers. In the same way that it is no answer to the claims for the costs of repair, as Miss Blanchard implicitly accepts, that ultimately the expenditure was reimbursed by insurers, in my judgment it is no answer that the relevant costs were met immediately by the parent company. As physical damage had been caused to property, the owner of the property is entitled to compensation, regardless of how such owner funded repair works. That such is the correct analysis was pointed out by Neill LJ in giving the leading judgment in Jones v. Stroud District Council [1986] 1 WLR 1141 at pages 1151 to 1152:-

"The second point I have found more difficult. The plaintiffs failed to provide any documents relating to the work carried out by Marlothian Ltd. and there is no evidence that the plaintiffs have paid or are liable to pay any sum to Marlothian in respect of that work. It was submitted on behalf of the plaintiffs, however, that if the repairs were necessary and were carried out it was not to the point that the plaintiffs had not proved that they had paid for the repairs themselves. Our attention was drawn to The Endeavour (1890) 6 Asp. M.C. 511, where repairs to a vessel were carried out but before paying for them the plaintiff had gone bankrupt. It was there argued that the plaintiff could not claim the cost of the repairs because the sums recovered would only go to swell the creditors’ funds. This argument was rejected and it was said, at p. 512:

" If somebody out of kindness were to repair the injury and make no charge for it, the wrongdoer would not be entitled to refuse to pay as part of the damages the cost of repairs to the owner."

In my judgment, on the facts of this case this submission is correct.

"It is true that as a general principle a plaintiff who seeks to recover damages must prove that he has suffered a loss, but if property belonging to him has been damaged to an extent which is proved and the court is satisfied that the property has been or will be repaired I do not consider that the court is further concerned with the question whether the owner has had to pay for the repairs out of his own pocket or whether the funds have come from some other source."

Mr. Thomas helpfully drew this passage to my attention.

94. In her useful written note on quantum Miss Blanchard made a number of general points as follows:-

"Causes of loss

3. The Court has concluded that the ingress on the 14^th October 1996 was in part caused by tracking from the Duni roof. Richmond is not responsible for this and a reduction falls to be applied to quantum overall to reflect this. The Court is invited to apply a global percentage reduction of say, 20%.

Pre-existing damage

1. The Schofield Horsman photographs show some pre-existing damage. Absent any more scientific basis, the Court is invited to apply a global percentage reduction to reflect this of say, 10%.

4^th October 1996

2. Mr. Whittle was unable to be specific about which units suffered ingress on 4^th October 1996 in addition to the warehouse. Absent any more scientific basis, the Court is invited to apply a global percentage reduction to reflect this loss of say, 10%."

In my judgment none of these points has any merit. I have indeed found, and indicated, in an effort to assist counsel to focus their submissions, before hearing submissions on quantum that I had found, that a cause of the penetration of rainwater into Unit G on 14/15 October 1996 had been tracking from the roof over the Warehouse. However, the possibility of such tracking had existed for a long time before 14/15 October 1996 and only relatively minor leaks into Unit G had occurred. I am satisfied that by far and away the major cause of the ingress of rainwater on 14/15 October 1996 into Units G and H was the inadequate precautions taken by Richmond to which I have referred. I do not consider that however much water tracked into Unit G from the adjacent roof of the Warehouse made any real contribution to the extent of the damage and I am confident that I can, and should in justice, ignore that contribution in assessing damages. It is correct that some photographs taken before 14/15 October 1996 showed water-stained ceiling tiles in some of the retail units in the Building. However, those tiles were in place in the suspended ceilings, and, apparently, were serviceable as ceiling tiles, although not aesthetically pleasing. The ingress of rainwater on 14/15 October 1996 brought down ceiling tiles which were saturated with water and thus no longer serviceable. It was not possible to replace water-stained tiles with other water-stained tiles, and there was no evidence that the water-stained tiles would have been replaced in any event if not brought down by the influx of rainwater on 14/15 October 1996. I do not consider that it has been proved that any of the retail units were damaged by rainwater on 4 October 1996. The evidence goes no further, in my judgment, than to indicate that the Warehouse may have suffered some water damage on 4 October 1996.

95. Another point taken by Miss Blanchard concerned only the alleged cost of repairs, and other elements of Tokenspire’s claim, which related to damage to Unit H. The occupier of Unit H, The Liverpool Wallpaper Centre Ltd. ("LWCL"), commenced proceedings against Tokenspire, Legendary and Richmond in relation to the damage to Unit H caused by the ingress of rainwater on 14/15 October 1996. Those proceedings were compromised by a consent order made on 15 February 2001. A copy of that consent order was put before me. In the Schedule to the order appeared this term:-

"5. All parties, comprising LWCL, Tokenspire, Legendary, Richmond and Parmenter, agree that the payment of the said sums will amount to full and final settlement of all claims of all parties against all other parties arising out of or connected with action number HT-00-58 and arising out of or connected with the flood damage occasioned [to] LWCL on 14^th October 1996 whether known or unknown and whether arising at law or in equity or otherwise howsoever."

Miss Blanchard submitted that the effect of that term was that it was not open to Tokenspire to pursue a claim against Richmond in relation to damage suffered by Tokenspire within Unit H as a result of the ingress of rainwater on 14/15 October 1996. I reject that submission. It seems to me to be plain, on proper construction of the term which I have quoted, that the settlement in question only related any claim which satisfied each of two conditions, namely

1. that it arose out of or was connected with action number HT 00/58; and
2. that it arose out of or was connected with flood damage occasioned to LWCL on 14/15 October 1996.

Tokenspire is claiming in these actions in respect of its own loss, and that claim is not in any way affected, in my judgment, by the terms of settlement of the claim of LWCL.

96. The total cost of reinstatement and repairs to the retail units in the Building said to have damaged by rainwater on 14/15 October 1996 is £59,368.74. That figure was broken down in the final account of C & C Interiors, the contractor which undertook the work, as between different units as follows:-

1. Unit A £1,049.32
2. Unit B £5,995.85
3. Unit C £2,236.44
4. Unit D £1,050.00
5. Unit E £795.00
6. Unit G £18,710.10
7. Unit H £8,773.70
8. Rear Service Corridor £7,018.63
9. Warehouse £79.80

To these sums needs to be added a sum of £13,700 in respect of Preliminaries. I have found that only the damage to Units G and H was a consequence of the negligence of Richmond, so that the sum recoverable under this head of claim is £18,710.10 for Unit G plus £8,773.70 for Unit H plus an apportionment of the Preliminaries cost. I consider that the appropriate method of apportionment is by value, as Mr. Thomas contended. On that basis the apportioned part of the Preliminaries to be added in the evaluation of this part of the claim is that part of £13,700 which bears the same proportion to the whole as £27,483.80 bears to £45,668.74, namely 60%. The total award to Tokenspire under this head of claim is thus £35,663.80. It was suggested to Mr. Whittle in cross-examination that the damage repaired by C & C Interiors included damage sustained after 14/15 October 1996 as a result of further episodes of rainwater ingress. While I find that there were, indeed, further occasions after 14/15 October 1996, up to and including 16 December 1996 upon which rainwater penetrated Units G and H, I accept the evidence of Mr. Whittle that the extent of the damage caused on 14/15 October 1996 was so severe that no significant further damage was caused by rainwater ingress after that occasion.

97. Tokenspire claims a sum of £2,609.37 in respect of works of repair to a fire-stop barrier which Mr. Whittle said, at paragraph 6 of his witness statement dated 23 February 2001 was

"within the roof void over the warehouse at the junction of the warehouse and the service corridor.."

In the light of my finding that rainwater which penetrated the roofs over the Warehouse could track from there into the roofs over the retail units in the Building because of the fall from the roofs over the Warehouse down towards the roofs of the retail units, it must follow that the cause of any water damage to the relevant fire-stop barrier cannot have been rainwater which penetrated into the roofs over Unit G or Unit H as a result of the failure of Richmond properly to secure Visqueen to the sides of the central gutters on R17 and R18 on 14 October 1996. The cause of the relevant damage must have been penetration of rainwater into the roofs over the Warehouse or over the service corridor, for which Richmond was not, in my judgment, responsible. This element therefore fails.

98. For the same reason, namely that rainwater did not, on my findings, flow from R17 and R18 onto or into the roofs of the Warehouse, it must also follow that the cause of damage to plasterboard within the Warehouse cannot have been rainwater penetration made possible by Richmond’s failure to secure Visqueen sheeting to the sides of the central gutters on R17 and R18. Tokenspire’s claim for £6,830 for the cost of repairing damage to plasterboard within the Warehouse also fails.

99. Tokenspire’s claim for £11,650.26, reduced to £10,930.26, in respect of "Other emergency works" was not the subject of any real analysis prior to closing submissions in relation to quantum. Mr. Thomas therefore made submissions on the footing that only certain elements within the total sum claimed for this item had been challenged. Miss Blanchard, however, made a number of submissions by reference to the documents which were relied upon in support of the total sum sought in respect of this item. It was, of course, for Tokenspire to prove its case in relation to the damages which it sought. By limiting his attention to matters which had been the subject of specific challenge, Mr. Thomas may have lulled himself into a false sense of security, for a number of the points taken by Miss Blanchard seem to me to have been well taken. The main problem, from Tokenspire’s point of view, identified by Miss Blanchard concerned either the dates indicated by the documents put before me when particular operations were undertaken, or the nature of the operations indicated by the documents. For example, part of the claim under this head was for £41.59 for "Hire of 3" sludge pump" for one day. It is a small item in itself, but Miss Blanchard submitted that it should not be permitted. In fact Mr. Whittle in his witness statement described the hire of this particular item of plant as necessary in order to remove water from the Building, and I accept his evidence on this issue. Of more substance was Miss Blanchard’s challenge to costs claimed in respect of the activities of MC Industrial Cleaners. Mr. Thomas accepted that of the total of £1,230 claimed for MC Industrial Cleaners £720 could not be pursued. In fact I suspect that the sum which he was prepared to concede was arrived at by adding to a figure of £280 for works in respect of using a gully sucker in August 1996, which plainly had nothing to do with the ingress of rainwater on 14/15 October 1996, an amount of £440, which was not a separate charge but the aggregate of the £280 and two labour charges each of £80, for the supply of a labourer for cleaning flooded alleyways on 4, 5, 18 and 19 November 1996. The latter work did not obviously relate to the consequences of water ingress on 14/15 October 1996. The MC Industrial Cleaners invoices are not dated and do not always indicate the date upon which particular work was done. Doing the best I can, it seems to me that Mr. Thomas was right not to pursue a claim for the particular invoice which I have mentioned, the true value of which was £440, but that an invoice for a total of £300 for work done on 26 and 27 November and on 17/18 December 1996 probably does not relate to any consequence of the ingress of rainwater on 14/15 October 1996, nor does an invoice in the sum of £100 for cleaning shop fronts. On the other hand, an invoice in the sum of £480 for

"Cleaning works carried out to main alleyways.

Supplying waste skips and filling of same with rubbish thrown out from flood damaged shops.

Cleaning of empty unit.

Supplying one gully sucker to clean drains and clear excess water.",

although not dated, probably does relate to clearing up after the water ingress on 14/15 October 1996.

100. Miss Blanchard drew attention to the fact that each of three invoices rendered by J. Blundell, carpet and upholstery cleaner, referred to supplying machines and labour to extract water from the factory floor of Duni. Those invoices total in amount £625 and they do not obviously relate to damage to Unit G or to Unit H. I therefore disallow those costs.

101. At paragraph 9 of his witness statement dated 23 February 2001 Mr. Whittle said, amongst other things:-

" - works involved the installation of visqueen and sealants to the junction between the roof over the Duni warehouse and the roof over the retail units, which was left vulnerable by the works carried out by Richmond - Materials required in connection with the works intended to prevent or limit further water ingress were obtained from Integrated Polymer Systems (UK) Limited, invoice number 6398, and from Jewson Limited, invoices dated 14 and 16 October 1996. All works commenced as soon as possible after notification of the ingress of water on 14/15 October 1996. The services of S Gibbon, D Snowden, J Crook, P Cross and K Dixon were employed to assist with both the clean-up operation and carrying out works to prevent or limit the further ingress of water. Invoices presented by these individuals total £5,581.99."

In cross-examination by Miss Blanchard Mr. Whittle accepted that the decision to undertake the works to the junction between the roof over the retail units and the roof over the Warehouse was taken before 14 October 1996. I accept that evidence, from which it follows that the works in question, which were in any event desirable because of the direction of the fall of the roofs from the Warehouse onto the roofs of the retail units, were not related to the events of 14/15 October 1996. The costs of those works are not, in my judgment, recoverable by Tokenspire as damages from Richmond. The supporting material so far as labour charges are concerned is, it seems to me, unsatisfactory. The problems are twofold. First, so far as the alleged clear-up operation following rainwater ingress on 14/15 October 1996 is concerned, the dates of the sub-contractors invoices cannot really be reconciled with Mr. Whittle’s account in his witness statement of the work to which they are supposed to relate. The dates are as follows:-

1. J. Crook week of 14 October 1996 and week ending 8 November 1996;
2. P. Cross week ending 8 November 1996 and week ending 12 December 1996;
3. S. Gibbon week ending 18 November 1996;
4. K. Dixon week ending 22 November 1996;
5. D. Snowden week ending 28 November 1996.

The relevant men do not seem all to have been working at the same time and much of the recorded time is much later than Mr. Whittle appears to suggest that the work was done. I do not feel able to accept that all these invoices relate to clearing up after ingress of water on 14/15 October 1996 into Unit G or Unit H, and I am unable to determine which charges are properly recoverable. Second, while there were put before me invoices relating to both S. Gibbon and K. Dixon for each of the weeks ending 17 October 1996 and 24 October 1996 which apparently concerned the work to the junction between the roofs between the Warehouse and the retail units, the total value of which was £2,478, plus £480 for accommodation expenses for Mr. Gibbon, there was also put before me a document which began:-

"To supplying labour and materials for bridging roof on 8 valleys in an effort to mitigate any further rain damage to adjoining premises. This was mostly temporary but did save further substantial ingress of water.",

in which the labour charge was put at £2,738.72. The reason for this apparent discrepancy was not investigated in evidence. The latter document was not on printed stationery and was not obviously an invoice. I was not, in the end, able to reach any conclusion as to its status and have therefore disregarded it. As it seems to me that the cost of works at the junction between the roofs over the Warehouse and the roofs over the retail units is not recoverable as damages from Richmond anyway, my inability to reach a conclusion as to the document does not appear very significant.

102. The final element included within the total of £11,650.26 is £2,830 in respect of what was described by Mr. Whittle at paragraph 9 of his witness statement dated 23 February 2001 as follows:-

"Several employees of Tokenspire became involved in the clean-up operation, including Kevin Ellis, a director of Tokenspire, David Blundell, site manager of the Triumph Centre and S P Cuthbert. The valuable time of these employees was incapable of being utilised on other projects as a result of the problems at the Triumph Centre. David Blundell supervised the work carried out. He spent approximately 70% of his working week at the Triumph Centre dealing with the problems which resulted from Richmond’s works and I believe that the cost to Tokenspire was significant. David Blundell was at that time paid an annual salary of £20,000 by Tokenspire. Tokenspire assessed that the cost to the business of Dave Blundell’s involvement in the works at the Triumph Centre amounted to £1830. It was in all probability much more than this. Insurers accepted our arguments in this regard. Similarly, Tokenspire would not have expected K Ellis or S Cuthbert to become involved in works of this type in normal circumstances. Kevin Ellis was responsible for new-build projects and the workforce. However the water ingress took him away from his day to day duties at Beverley. S. Cuthbert was responsible for sourcing materials and dismantling buildings. I assessed the loss to Tokenspire flowing from K Ellis’s and S. Cuthbert’s involvement in these works at £1,000."

Although the passage which I have just quoted does not create this impression, Mr. Whittle told me in oral evidence that the figures which are claimed for Mr. Blundell, Mr. Ellis and Mr. Cuthbert represent overtime, not some apportionment of the ordinary salary of any of them. I am unable to accept that. If the costs claimed did indeed represent actual additional wage or salary costs, it ought to be possible both to be precise about how much was paid and to provide evidence of payment. Lack of precision indicates to me that each of the sums which I have mentioned has been assessed on a rough and ready basis as a proportion of some other amount. No documentary evidence in support of the sums allegedly paid has been produced, although pay-slips ought to exist if extra payments were made. I am not satisfied that any additional wage or salary cost at all was incurred.

103. In the result of the sum claimed as "Other emergency works" I find that only £521.59 has been proved.

104. It is common ground that quantity surveyor’s fees should allowed at 10% of whatever I found to be due in respect of item (a) in Tokenspire’s Schedule of Loss. I have found that amount to be £35,663.80, so the appropriate allowance for quantity surveyor’s fees is £3,566.38.

105. Mr. Whittle has charged a fee of £1,500 for acting as planning supervisor in connection with the execution of the works of reinstatement following the ingress of rainwater into the Building on 4 and 14/15 October 1996. There is no dispute in principle that some fee is appropriate, but Miss Blanchard submitted that, if, as is the case, I did not allow the whole of the cost of reinstatement claimed as damages against Richmond, I should reduce the award in respect of Mr. Whittle’s fees in proportion to the amount by which I did not allow the claimed cost of reinstatement. I think that that submission is well-founded. I therefore award under this head 60% of £1,500, that is £900.

106. The claim for £4,750 for costs of overtime was reduced to a claim for £2,057.50 during Mr. Whittle’s oral evidence. His evidence both in his witness statement dated 23 February 2001 and orally as to what this element represented was, I felt, confused. I had the impression that Tokenspire’s case might be that it had made overtime payments to operatives engaged on carrying out remedial works at the Building, but I was uncertain about it. No documents were produced in support of this element of claim, although if additional wages had been paid to some worker there would need to be some record of the payment for income tax purposes, if for no other. In the end I find that this element of claim fails for want of proof.

107. The last part of Tokenspire’s claim is for sums which it is said Tokenspire allowed to tenants of the Building as compensation in respect of the period for which they, respectively, did not have beneficial occupation of the parts of the Building of which they were tenant. Mr. Whittle’s evidence, which I accept, was that Tokenspire did not charge Matalan any service charge for the period after 14 October 1996. The claim is for a sum of £4,027.16, being 93 days at £303.12 per week pro rata. Matalan did not pay rent, but it had, up to 14 October 1996 paid a service charge. The period of 93 days represents an estimate of the period for which Matalan would have been out of occupation of Unit G if all that had prevented Matalan from re-occupying was the need to await completion of the repair of Unit G. In fact, before resuming occupation Matalan took over Unit H from LWCL, and the actual date of re-occupation was dictated by the need to incorporate Unit H and Unit G into a single unit. Matalan did not go back into occupation until April 1997. I therefore assess this element of Tokenspire’s loss at £4,027.16. There is a claim similar in principle for loss of rent and service charge for Unit H. Again I accept Mr. Whittle’s evidence that the allowance in question was made, and again it seems to me that the amount of the allowance made is recoverable as damages from Richmond. The amount of the allowance of which Mr. Whittle spoke in his witness statement was £5,933.15, and that is the amount which I find represents this head of loss.

Conclusion

108. There will be judgment for Matalan against Richmond in the First Action for the sum of £812,046.03, plus interest, which I understand has been the subject of agreement between Counsel. There will be judgment for Tokenspire against Matalan in the First Action. The Part 20 claims of Tokenspire in the First Action against Legendary and Richmond will be dismissed, as those claims each depend upon Tokenspire being found to be liable to Matalan, and Matalan’ s claim against Tokenspire has failed. There will be judgment for Richmond against Crowe in the Part 20 proceedings in each action. There will be judgment for Tokenspire against both Legendary and Richmond in the Second Action for a total of £50,612.08, and judgment for Legendary against Richmond in the same sum.