Jersey Unreported Judgments

Dispute - reasons.

[2020]JRC019

Royal Court

(Samedi)

18 February 2020

Before     :

Advocate Matthew John Thompson, Master of the Royal Court.

 

Advocate D. S. Steenson for the Plaintiffs. 

Advocate C. Hall for the First Defendant. 

Advocate J. N. Heywood for the Second Defendant. 

Advocate D. P. Le Maistre for the Third Defendant. 

CONTENTS

			Paras
	1.	Introduction	1
	2.	Background	2-23
	3.	Submissions	24-40
	4.	Decision	41-56

 

judgment

the master:

Introduction

1.        This judgment represents my reasons in respect of an application by the defendants to order meetings of experts in advance of those experts producing reports. 

Background

2.        The background to the dispute concerns construction work carried out on two sites in St. Aubin.  The first site was the location of the former Hotel La Tour which I will refer to as "The Hotel Site".  Above the Hotel Site was a separate site known as Le Jardin which I will refer to as "The Le Jardin Site".

3.        The first plaintiff pleads it is owner of the Hotel Site.  The second plaintiff pleads it managed and operated the Hotel Site prior to redevelopment of the Hotel Site.  The third plaintiff is pleaded as being the owner of the Le Jardin Site.  The fourth plaintiff pleads it was the controller and ultimate principal owner of the other plaintiffs.  The plaintiffs are put to proof of these matters. 

4.        The first defendant provided certain construction services for the development of the Hotel Site. 

5.        The second defendant was the consulting engineer for the development of the Hotel Site. 

6.        The third defendant provided certain architectural and design services for the development of the Hotel Site. 

7.        The precise nature and scope of the retainer for each of the defendants is in dispute. 

8.        The proceedings were commenced by an order of justice dated 24^th October, 2018.  What led to these proceedings was a rock fall that took place at the Hotel Site on 11^th March, 2016. 

9.        The plaintiffs in summary firstly allege that the first defendant failed to undertake construction work with reasonable due care and skill.  They also allege that the second defendant failed to provide its services as consulting engineers with reasonable care, skill and expertise which caused the landslip.  Similar allegations are made against the third defendant as an architect. 

10.      The factual history relating to the development of the Hotel Site covers the period 2011 to 2016.  There is therefore a complex factual matrix about the involvement of each of the defendants leading to their alleged breaches of duty.  It is not necessary for the purpose of this judgment to set out the detail of the factual background or matrix. 

11.      The plaintiffs as a consequence claim loss and damage in relation to both the Hotel Site and the Le Jardin Site in particular additional costs of financing, the costs of temporary support to any unstable land, the cost of permanent stabilisation works and additional management time. 

12.      Each of the defendants has filed detailed answers in response.  The first defendant has also counterclaimed for unpaid invoices in respect of its work as contractor on the Hotel Site. 

13.      The first defendant summarises its position at paragraph 5 of its answer as follows:-

"5·       For the reasons set out in further detail below, Rok denies all the claims made against it for breach of contract, negligence and/or nuisance. 

(a)       Rok acted in a good and workmanlike manner and with the skill and competence to be expected of any reasonably skilled and competent contractor.

(b)       Rok had no contractual or other obligation in respect of the structural design.  In particular it had no responsibility for the design of the excavation and temporary propping works that should have occurred prior to and in preparation for Rok's works on site. 

(c)       Rok did not have any contractual or other obligation to advise on structural matters i.e. the stability of the site and the necessity for any temporary or permanent works to ensure the stability of the site before or during Rok's works. 

(d)       Where appropriate, Rok sought and acted upon the advice of the structural engineers (RGAL) and the geotechnical consultant  Robert MacKean of Geo-Design). 

(e)       Rok also acted on the instructions of JDL, in accordance with Rok's contractual obligations to AFL. 

(f)        Rok was entitled to rely upon: 

(i)        the contractual drawings (as varied) and the advice of RGAL and JDL as to the setting out of the works on the Hotel Site; and 

(ii)       RGAL and JDL's advice and opinions as to:

(1)       whether specialist advice was needed;

(2)       the extent of excavation to be carried out; and

(3)       the stability of the excavations (carried out for the Plaintiffs by a combination of persons unknown to Rok, whose involvement in the project at the Hotel Site had ceased prior to Rok's involvement, and Mr Freitas/Raul S Freitas Landscapes Ltd (cumulatively referred to as "RSFLL")). 

(g)       Finally, Rok had no contractual or vicarious liability for any works carried out by RSFLL."

14.      The reference to RSFLL is a reference to Raul S Freitas Landscapes Limited ("RSFLL").  RSFLL were carrying out clearance and excavation works on the Hotel Site.  The plaintiffs allege this was under the supervision of the first defendant.  The first defendant alleges that RSFLL were acting on the instruction of one or more of the plaintiffs. 

15.      In addition, the first defendant argued that any stabilisation works would have been required in any event and was not a result of the landslip. 

16.      The claims for financial loss are also said to fail for reasons of causation and are also said to be too remote. 

17.      The second defendant pleads in summary that its retainer "expressly excluded responsibility for excavation and associated works".  The second defendant also argues that "it warned of the need to take specialist geotechnical advice".  It also makes similar arguments on causation and loss as the first defendant.

18.      The third defendant admits it acted as architect at certain times.  It denies that it was instructed to act as structural or geotechnical engineer.  It also pleads that it made the plaintiffs, through the fourth plaintiff, aware of the need to consult geotechnical experts. 

19.      Directions were initially given on 1^st April, 2019, for discovery with the action then being stayed for alternative dispute resolution ("ADR").  The stay was extended on various dates, including by an act of court dated 9^th September, 2019, when the plaintiffs were ordered to provide a schedule of loss on a without prejudice basis.  This was for the purposes of the mediation.  Regrettably the matter did not resolve and the mediation did not take place.

20.      On 27^th November, 2019, the matter therefore came back before me for further directions.  At the hearing the defendants wanted trial dates to be fixed which I was persuaded to order, in particular because without trial dates in place the first defendant could not pursue its counterclaim.  I also issued directions for the exchange of witness statements, expert evidence and schedules of loss.  In relation to experts and schedules of loss I made the following orders:-

"6.      each party has permission to rely on expert evidence from one expert for each party in each of the following disciplines:-

a.        Geotechnical Engineering;

b.        Quantity Surveying;

c.        Civil Engineering; and

d.        Architecture; and

e.        Valuation.

7.        experts reports shall be served and exchanged by close of business Friday, 1st May, 2020;

8.        the parties shall forthwith attend upon the Master's Secretary to arrange a hearing in January 2020 to determine whether any discussions between experts should take place in advance of the production of experts reports;

9.        the Plaintiffs shall file and serve on all Defendants by 5:00 p.m. Friday, 15th May, 2020 a schedule of loss for each Defendant setting out the amount and categories of loss claimed against each Defendant and the breach or breaches relied upon said to give rise to each category of loss;

10.      each Defendant may serve a counter-schedule of loss by 5:00 p.m. Friday, 12th June, 2020..."

21.      At that stage the rationale for the schedules of loss being ordered after joint statements was so that the plaintiffs' schedules of loss could reflect any areas of agreement between experts. 

22.      The rationale for paragraph 8 of the order was because the defendants at the directions hearing last November argued that meetings of experts should take place in advance of the experts producing their reports, having regard to the approach taken in the Technology and Construction Court in England and Wales (the "TCC"). 

23.      At the hearing I felt I did not have sufficient information or input from counsel to address this issue and therefore left the issue over for a separate hearing which has led to the present judgment. 

Submissions

24.      Before I record the submissions generally I should set out that in advance of the hearing I was provided by the second defendant with a note from the English counsel instructed by the second and third defendants about the TCC.  The approach I took in relation to this note was that the first part was an explanation of the approach taken by the TCC.  This note simply reflected guidance published by the TCC itself.  The second part of the note from paragraphs 10 onwards I treated as submission and ruled that it had no more weight than submissions made by advocates themselves.  The fact that it came from English counsel did not mean the note had any greater weight or significance.  I took this view as Advocate Steenson for the plaintiffs initially objected to the note because it was not expert evidence and I had not given any permission for expert evidence on the practice of the TCC to be adduced.  However, he was content with the approach I indicated I would adopt in relation to the note.  In adopting this approach I intend no disrespect or discourtesy to the counsel involved in its preparation. 

25.      Advocate Heywood for the second defendant explained that the approach of the TCC in relation to expert evidence is different from that generally followed by the Royal Court and by other divisions of the High Court.  The general practice in the TCC is for experts to meet first to produce a joint statement indicating their areas of disagreement and only then are any experts' reports produced. 

26.      The present proceedings were the sort of disputes that in England would be heard by the TCC, both because of the extent of the damages claimed (albeit these were disputed as noted above) and because the dispute involves claims against a contractor, an engineer and an architect. 

27.      The reasons why meetings of experts in advance of reports would be useful at this stage, it was argued, was because of the lack of particularity as to what was alleged that each of the defendants failed to do, what they should have done and what costs and losses flowed from any such breaches.  The order of justice despite its length was therefore said to lack the required particularity.  What was not outlined for each defendant was which precise contractual obligation was breached, what the precise acts amounting to any alleged breaches were, and what losses flowed from each breach. 

28.      The concern was that, without a meeting of experts, the various categories of experts permitted would produce reports based on very different instructions and significant further costs would then have been incurred to identify the real issues in dispute. 

29.      Why meetings of experts would help was because the cause of the rock fall was a technical issue and getting the experts to meet would identify the areas in dispute.  This would then narrow the focus of what was in dispute and would limit cross-examination at trial. 

30.      While generally experts produced reports before any meeting, this was not a rigid approach and there was a discretion to allow meetings of experts to meet first where to do so promoted active case management.  Advocate Heywood accepted this would not necessarily apply in every construction case but it was appropriate in this case where a number of different defendants had been convened and where there was a need for clarity in the pleaded case. 

31.      Advocate Heywood also supported the third defendant's request that the plaintiffs' schedule of loss should be produced earlier so that the defendants understood what breaches were alleged against them. 

32.      His position was supported by Advocate Hall for the first plaintiff who emphasised the importance of a schedule of loss at an earlier stage clarifying the breaches alleged as well as the losses claimed.  She also reserved the right to seek to file supplemental witness statements once the nature of the plaintiffs' case became clearer. 

33.      Advocate Le Maistre also supported the position of the second defendant.  Requiring a schedule of loss to clarify breaches and losses much earlier was consistent with the approach of the TCC at paragraph 5.6.1. of the TCC schedule. 

34.      If a schedule of loss was not provided earlier then his client would have to make requests for further information in respect of the plaintiffs' case. 

35.      Why it was important to identify which contracts were breached and what the breaches were mattered in this case because of the length of time of the development of the Hotel Site.  This required clarity about when it was said that each of the defendants were involved, in particular his client and therefore what their retainer was at any particular time. 

36.      The other challenge with the plaintiffs' pleading was that it failed to explain what steps it was alleged that the defendants should have taken. 

37.      Clarity was also required in respect of what losses flowed from each breach for each defendant. 

38.      Advocate Steenson's position was that appropriate directions had been decided the previous November.  The only issue for the court was whether or not to change the order for meetings of experts.  Otherwise matters had been decided and were res judicata and so could not be revisited.  He accepted however that a schedule of loss could be provided earlier than the timeframe set out in the order of 27^th November, 2019, as long as there were consequential amendments to the remainder of the timetable. 

39.      In reply all the counsel for the defendants challenged the assertion that my previous decision was res judicata and contended that in relation to case management earlier decisions could and often were revisited. 

40.      In addition, given that the plaintiffs had already retained experts, requiring a schedule of loss at an earlier stage did not cause any prejudice to the plaintiffs. 

Decision

41.      The primary focus of the present hearing was to decide whether or not meetings of experts should take place in advance of experts producing reports as contemplated by paragraph 8 of the Act of Court of 27^th November, 2019.  Why this issue has arisen is said to be a lack of clarity in respect of the plaintiffs' case.  The focus of that lack of clarity concerned why each defendant was said to be liable for failing to prevent the rock fall, the lack of any clarity as to what steps each of the defendants should have taken, what they failed to do and what loss flows from each breach relied upon.  The rationale of experts meetings in advance of the production of reports was so that experts could understand the matters in issue between the parties and produce more focused and effective reports. 

42.      Firstly I have concluded that I possess power to revisit case management orders where there has been a change of circumstances applying by analogy Bogensberger v Sinel [2018] JRC 228.

43.      However, in this case I did not need to decide if there was a change of circumstances because in the present case the door had been not closed to the issue of a meeting of experts taking place at the November hearing. 

44.      I also did not agree with Advocate Steenson that the choice I faced was limited to whether or not to order meetings of experts in advance of production of reports.  In other words the issue before me was not to simply to grant or refuse the request; I consider I also possess a power to make other orders if I am satisfied that the reasons for the defendants' applications or requests were justified, and a different approach or different directions were required to address the concerns raised.  I did not therefore regard the directions given on 27^th November, 2019, as preventing any variation to those directions where one issue was left over for further analysis. 

45.      In the present case, the issues in dispute are not as clear as they could be.  While the order of justice is relatively lengthy, it takes something of a broad brush approach as to why each of the defendants is said to be negligent or in breach of contract.  In addition the plaintiffs have not filed any reply in relation to the answers of the second and third defendants at all.  In the case of the first defendant the only reply filed is a general denial of all matters pleaded in response. 

46.      However, the TCC guide at paragraph 5.5.3 states:-

"A reply to the defence is not always necessary.  However, where the defendant has raised a positive defence on a particular issue, it may be appropriate for the claimant to set out a reply how it answers such a defence."

47.      In this case the plaintiffs should have filed a reply given the extent of positive averments made by each of the defendants to set out the plaintiffs' position in response.  Such a reply would have identified more precisely the areas of dispute in issue between the parties.  It is this lack of clarity that was at the heart of the defendants' applications. 

48.      It is also right to observe that the defendants have not made any requests for further information to seek the clarity they now complain about.  Again, had such steps been taken the extent of the issues between the parties might have become clearer. 

49.      While therefore I am persuaded that a lack of clarity exists, I am not satisfied that the way to tackle this lack of clarity is meetings of experts in advance of expert reports.  This is firstly because a major part of the dispute between the parties is about the extent of the responsibility of each of the defendants and whether or not they agreed to take particular steps or whether the risk of not doing so was for the plaintiffs.  This is a question of fact and not an issue the expert evidence can ultimately determine.  Yet, it is a significant part, if not the most significant part, of the matters in dispute between the parties.  It is in respect of this issue where the defendants now seek clarity about the plaintiffs' position in circumstances where the defendants have each set out precisely why they are not liable. 

50.      While therefore I consider I possess the power to order meetings of experts in advance of reports this is not a case where I regard such an order as the most effective way to actively manage the case given the issues that emerged in argument.  My decision does not mean that meetings of experts in construction cases in advance of reports may not be ordered in other cases.  I can envisage scenarios where such meetings may well be helpful, in particular if the primary issue in the case relates to whether work carried out by a contractor engineer or architect was in breach of duty or not.  In other words such meetings may well assist where the analysis the experts are focusing on is what the particular defendant did and whether that was to an acceptable standard.  This contrasts with the present dispute in which, as noted above, the argument mainly focuses on how far each of the defendants accepted responsibility and what was the nature of their retainer. 

51.      In light of this conclusion I therefore ordered the most effective step at this stage was to require the plaintiffs to file their schedule of loss earlier than contemplated by paragraph 9 of the Act of Court of 27^th November, 2019.  In addition, I made it clear that the schedule should specify the precise contractual duty relied upon in addition to setting out the precise breach and what losses flowed from each identified breach.  Such a schedule should therefore make it clear for each of the defendants the case against them, what it is said they agreed to do, what they failed to do and what loss flows from any such failure.  In effect this was a requirement for a Scott Schedule to bring greater clarity to the plaintiffs' pleaded case. 

52.      I further made it clear that if the schedule of loss did not contain the level of detail required, then I would be sympathetic to an application either for replies to be filed or for appropriate requests for further information with sanctions if appropriate. 

53.      I required the schedule of loss to be filed by 27^th March, 2020, after witness statements.  I felt I was able to make this order because of the indication by Advocate Steenson for the plaintiffs that experts had already been retained and had provided opinions to the plaintiffs (albeit on a privileged basis which privilege was not waived). 

54.      This variation to the directions previously made led to consequential amendments as to when experts would produce reports.  I also issued directions about when meetings of experts were to take place as such meetings had not previously been ordered. 

55.      Following meetings of experts I also issued directions for the plaintiffs to update their schedule of loss to reflect any conclusions reached in any joint statements.  The defendants would then produce their schedules of loss in reply. 

56.      Finally, I ordered costs in the cause because I had granted some relief in respect of the defendants' complaints albeit not the precise relief they were seeking. 

Authorities

57.      Bogensberger v Sinel and Sinel v Hennessy and Ors [2018] JRC 228