Case review: Blackpool Borough Council v VolkerFitzpatrick & Ors [2020] EWHC 1523 (HHJ Davies)
June 2020A recent decision (handed down on 15 June) highlights the importance of defining your contractual design life requirements and that without a clear definition to the contrary, some form of maintenance may be required (and in the case of sacrificial coatings, they may need to be replaced entirely).
Case details
The decision arises from the construction of the new Starr Gate Tram Depot (“Depot”) in Blackpool. The Blackpool Borough Council (“Claimant”) is the owner of the Depot and the Blackpool Tramway.
The Depot is about 100m long, 66m wide, orientated north – south and located 40 metres from the Sea. The Depot comprises steel portal frames at regular intervals. A galvanised coating protects the structural steel. The secondary steel supports (purlins supporting the roof, cladding rails supporting the wall cladding and brackets forming connections between the purlins/cladding rails and the main frame members) are pre-galvanised steel strips (the “cold formed components”).
VolkerFitzpatrick Limited (“VFL”) was engaged by the Claimant to design and construct the Depot, which was completed in 2011. Since completion the Depot has reportedly suffered from premature corrosion. It was claimed, therefore, that the Depot as designed and constructed does not meet the intended design life of 50 years and was not suitable for the exposed coastal marine environment where the Depot is located. It was contended that substantial remedial works were required at a total cost in excess of £6m. A significant part of the claim was for the costs of replacing the cold formed components.
The main contract was a modified NEC3 standard form design and build contract and included a Works Information and Functional Procurement Specification prepared by the Claimant. The Works Information required that VFL ensure its design for the works complied with various matters including that (a) there be no ‘non-standard’ or ‘unusually onerous’ maintenance requirements having regard to normal maintenance which is applicable for works of a similar character as the works (the “maintenance obligation”), (b) “the materials and design are suitable, durable and appropriate for a sea front location” (“the suitability obligation”) and (c) “unless otherwise specified in the Functional Procurement Specification, have a design life of at least 20 years” (“the minimum design life obligation”).
The Claimant submitted that these were strict obligations. Whereas VFL submitted that such obligations were reasonable care obligations only. All counsel placed reliance on the decision of the Supreme Court in MT Hojgaard v E.ON [2017] UKSC 59.
HHJ Davies has awarded the Claimant the total sum of c£1.1m only on the basis that the contractual design life obligation period was either 20 or 25 years (rather than 50 years contended for by the Claimant) and that the Claimant’s case that the cold formed components were inadequate for their design life or otherwise unsuitable was not proven. Limited replacement or repairs were needed to other aspects of the works.
The lessons learned
HHJ Davies concluded that there was no basis for construing the relevant obligations as being only “reasonable care” obligations. He was satisfied that they had the same essentially strict character.
As regards the minimum design life obligation, there was no contractual definition and so HHJ Davies looked to a number of industry standards for guidance, noting that design life was defined as the service life intended by the designer and the period for which a structure or part of it is to be used for its intended purpose with anticipated maintenance but without major repair being necessary.
Based on those observations it was confirmed “It cannot realistically be thought that a structure should be intended to be maintenance free for the whole of its design life, whereas it can reasonably be assumed that it ought not to need major repairs over that period.” The distinction between anticipated maintenance and major repair was noted as being a question of fact and degree.
In the absence of an express life to first maintenance provision for the cold formed steel, the Claimant contended that the design life applies to the component in question as a whole, so that major repair should not be required to the coatings during the design life of that component. VFL’s case was that these coatings are intended to provide protection for the cold formed components below, so that it is envisaged that they may be consumed (or “sacrificed”) during the lifetime of the component. The criterion then for failure of the cold formed components was said to be loss of the galvanised coating and sufficient loss of the steel
substrate such that it cannot perform its structural function of transferring the loads from the roof or walls to the main structural steel. Given the general reference in the contractual documents to the importance of the aesthetic qualities of the exterior design and the maintenance obligations, HHJ Davies preferred the Claimant’s position for the coated external works – ie. that the coating should be required to have the same design life as the underlying structure. Such arguments were said not apply, however, to the internal cold formed components. The evidence showed that they did not have the same aesthetic importance and it was expected that galvanised coatings will lose their ‘initial bright and shiny’ appearance.
On that basis it was found that “I do not consider that it could have been intended that the cold formed components would need to have been designed or supplied so as to ensure that they would not need major repairs to or full replacement of the galvanised coating within their 25-year lifetime even where that had no actual impact on the structural integrity of the tram depot.”
The full decision can be found at:
https://www.bailii.org/ew/cases/EWHC/TCC/2020/1523.html
For further information please contact Keith Lonsdale or Tristan Riley.
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