AURUM INVESTMENTS LIMITED v AVONFORCE LIMITED (In Liquidation) [2000] EWHC 184 (TCC)

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY and CONSTRUCTION COURT
[2000] EWHC 184 (TCC)Case No Case No: HT-00-43Venue Royal Courts of Justice, Strand, London, WC2A 2LL
Between
AURUM INVESTMENTS LIMITEDClaimantAVONFORCE LIMITED (In Liquidation)Defendant
Before
Mr Justice DysonGeoffrey Brown of Counsel (instructed by Messrs Badhams for the Defendant)Oliver Ticciati of Counsel (instructed by Berrymans Lace Mawer for the Second Part 20 Defendants)Date 6 December 2000
[1]Mr Justice Dyson: The facts Aurum Investments Ltd ("Aurum") owns 68 Winnington Road, London N2 ("No 68"). By an agreement made in about October 1995 between Aurum and Avonforce Ltd ("Avonforce"), Avonforce agreed to design and construct substantial building works at No 68. The works included the excavation and construction of a basement and garage at the side of the property closest to No 70. In order to safeguard the flank wall of No 70, it was decided to underpin it. At all material times, Avonforce were being advised by Messrs Knapp Hicks & Partners ("KHP"), who are structural engineers. Advanced underpinning Ltd ("Advanced") are specialists in underpinning.[2]At about the end of November 1996, Mr Roberts of Advanced was approached by Avonforce and asked to prepare a quotation for the underpinning. He visited the site on 4 December, where he met Mr Cooper, who was the site manager of Avonforce. During the meeting, Mr Cooper showed Mr Roberts drawing no 1001/101B, that had been prepared by Kennedy Baker Associates Ltd (the project architects) and annotated by KHP. The drawing provided design details and construction notes for the underpinning work. In effect, it comprised a method statement regarding the underpinning works. The only aspect of the works that was not defined was the precise dimensions of the underpinning. Mr Cooper told Mr Roberts about the extensive work that was being carried out at No 68, and that this included the construction of a basement adjacent to the flank wall to No 70. The drawing included the legend "temporary works if required" at two sections of the perimeter of the proposed basement: these sections did not include any part of the length of proposed underpinning.[3]A formal invitation to tender was sent by Mr Cooper by letter dated 6 December. Mr Cooper wrote:
"as you were made aware there is a considerable amount of general excavation and reinforced concrete work to be done on this site."
On 9 December, Mr Roberts sent an estimate to Mr Cooper for the underpinning works. In his covering letter, Mr Roberts stated that it was intended to underpin to a depth of 4 metres below existing ground level, using the traditional mass concrete method of underpinning to a width of 0.9 metres "to facilitate the construction of a subfloor basement at the above property". The quoted price was £8830. The thickness of 0.9 metres had been discussed and agreed between Mr Cooper and Mr Roberts at their meeting: it was based on the thickness of the footings to the flank wall.[4]On 5 February 1997, Avonforce sent a fax indicating its intention to place an order with Advanced for the underpinning, and asking for a Method Statement and Risk Assessment and Damage Limitation Statements. On 12 February, Mr Roberts responded, enclosing the documents that had been requested. The work was carried out between 24 February and 13 March 1997. No criticism has been made about the way in which this was done. It was carried out in small sections followed by immediate backfilling. Advanced sent an invoice on 25 March, and was paid in full on 16 May.[5]On 22 May 1997, Avonforce started the excavation of the basement in the area adjacent to the flank wall. No temporary support was provided for the flank wall or the concrete bases that had bee installed by Advanced. Avonforce was unaware that the bases might not be capable of resisting the lateral load resulting from the excavation, and, therefore, did not take steps to provide temporary lateral support. On 6 June 1997, the central section of the excavation, alongside the flank wall, collapsed as a result of rotational failure of the underpinning. The toe of the mass concrete underpinning was displaced horizontally into the excavation because of the lack of passive soil resistance. It is common ground that it would have been possible to have designed and installed some form of propping which would have prevented the failure of the underpinning, and which would have allowed the proposed basement to be constructed safely. The proceedings[6]Aurum brought proceedings against Avonforce. Avonforce has sought an indemnity or contribution from KHP and Advanced. All aspects of this litigation have now been settled except for the question of the liability (if any) of Advanced to Avonforce. Avonforce has agreed to pay Aurum £400k, of which it is agreed that £300k is referable to the collapse of the excavation, and to indemnity it against any third party claims arising from the collapse. KHP has agreed to pay Avonforce one third of the damages payable by Avonforce to Aurum, ie £133k.[7]Avonforce contends that Advanced was in breach of a duty to warn it of the need to provide lateral support during the excavation for the basement. That contention raises the question of the scope and content of the duty of a contractor to warn his client about risks and dangers. Was there a duty to warn? The submissions[8]It is submitted on behalf of Avonforce that on the facts of this case there was such a duty. Mr Brown relies on the following. Advanced are specialist underpinning contractors who were engaged to underpin the flank wall, and Mr Roberts is a qualified engineer. Advanced knew that a basement was to be excavated adjacent to the bases to the wall, and the underpinning was required "to facilitate the construction of" the basement: see their letter of 9 December. The need for temporary lateral support when the basement was excavated would have been obvious to Advanced. As a reasonably competent piling contractor, Advanced should have warned Avonforce that temporary lateral support was necessary, because it knew, and/or it was obvious, that there was a significant danger that Avonforce might excavate the basement without providing such support. The drawing 1001/101B did not indicate how the excavation would be carried out, or what support (if any) would be provided to the bases to the flank wall. In those circumstances, and bearing in mind the danger posed by an unsupported excavation, Advanced could not reasonably have assumed that the excavation would be done safely. Accordingly, it was under a duty to warn Avonforce not to expose the concrete bases without providing lateral support.[9]Mr Ticciati submits that Advanced owed no duty to Avonforce to warn about the need for temporary support of the basement excavation. It was asked to do a specific job and did it. It was not asked to advise on any other aspect of the project, and it undertook no design responsibility. The aspect of the work on which it is alleged that it was under a duty to advise (the excavation) was carried out after it had satisfactorily completed its work and left the site, in circumstances where no-one foresaw that it would return. Advanced could reasonably assume that it would have been obvious to Avonforce, as a competent contractor, that temporary lateral support would be required. Discussion[10]It is not in dispute that there are circumstances in which a contractor may be under a duty to warn his client that the work that he has been instructed to carry out is dangerous: see the review of the law by May LJ in Plant Construction PLC v Clive Adams Associates and JMH Construction Services Limited [2000] BLR 137. As May LJ made clear, a contractual duty to warn may arise as an aspect of a contractor's implied duty of skill and care. Whether such a duty in fact arises will depend on all the circumstances of the case. That case concerned the propping of a roof which JMH was instructed to carry out by the client's senior engineer. It was work that JMH was contractually required to carry out. The work should have been recognised by any competent engineer or contractor, and indeed was recognised by JMH, as dangerous. At page 147, May LJ said that the "crucial" elements were that the temporary works were obviously dangerous and were known by JMH to be dangerous. As he said:
"JMH were not mere bystanders and, in my judgment, there is an overwhelming case on the particular facts that their obligation to perform their contract with the skill and care of an ordinarily competent contractor carried with it an obligation to warn of the danger which they perceived...... The facts that the details of the temporary works had been imposed by Ford and that Plant had Mr Adams as their consulting engineer do not, in my view, negative or reduce the extent of performance which the implied term required in this case. The fact that other people were responsible and at fault does not mean, in my judgment, that on the facts of this case JMH were not contractually obliged to warn of a danger."
[11]So far as counsel's researches show, all the cases in which the question whether a contractor is under a duty to warn his client has been considered are ones where what was in issue was the safety or suitability of what the contractor was himself being asked to undertake. It has now been held by the court of appeal that if the duty to warn arises, it is part of the duty to act with the skill and care of an ordinarily competent contractor. What is to be expected of such a contractor will depend on the particular facts of the case. The facts of the Plant case show that, where a contractor is asked to do work, he is likely to be under a duty to warn his client if he knows that the work is dangerous, and that duty will not be negatived by the fact that the client is being advised by a professional person who knows, or ought himself to know, that the work is dangerous.[12]Thus, if Advanced had been instructed to carry out underpinning work which it knew to be unsuitable and dangerous, it would seem to follow from Plant that it would have been under a contractual duty to warn Avonforce, notwithstanding that Avonforce was being advised by KHP. No reasonably competent contractor would have failed to warn in such circumstances. It is interesting to note that at page 148, May LJ left over for future consideration circumstances where(a) the contractor did not know, but arguably ought to have known, that the design was dangerous, and(b) where there was a design defect, of which the contractor knew or ought to have known, which was not dangerous. This shows the cautious and incremental approach that has been adopted in this area of the law.[13]In the present case, Mr Brown seeks to persuade me to extend to the duty to warn further than ever before. First, the warning that he contends should have been given did not relate to the suitability or safety of the work that Advanced was asked to carry out. Rather, it related to the suitability of work to be done by others in the future which might affect the safety of the work that it had carried out. Secondly, this is not a case where Advanced knew that the work that was to be done in the future would in fact be carried out in a dangerous manner so as to affect the safety of its own work.[14]I accept that the mere fact that the alleged duty to warn did not relate to the work that Advanced was asked to carry out is not necessarily fatal to the case that Mr Brown seeks to put forward. Mr Ticciati conceded in argument that, if Advanced had understood, either from the drawing 1001/101B or by other means, that Avonforce intended to carry out the excavation in the way that it did, then it would have been under a duty to warn Avonforce of the dangers involved. As a competent and careful contractor, Advanced would have been under a duty to point out to Avonforce that the underpinning would not serve as a retaining wall, and that it would be at risk once the excavation had been opened up.[15]But on the facts of this case, Advanced did not know that Avonforce intended to carry out the excavation in the way that it eventually chose to carry it out. Mr Brown accepts that the drawing did not indicate how Avonforce intended to carry out the excavation. The legend "temporary works if required" did not indicate what, if any, temporary works would be used to protect the underpinning from the lateral loads applied to it by the earth on the No 70 side of the boundary. Mr Roberts said that he did not give any thought to the question of temporary propping for the underpinning, since he did not know what construction techniques would be used for the excavation. The excavation and the construction of the retaining wall to the basement at No 68 could have been carried out in short strips, thereby avoiding the exposure of more than a short length of the concrete bases at any one time. Mr Roberts also said that it would have been perfectly possible for temporary sheet piling to be installed between the bases and the retaining wall of the basement structure. Sheet piling would have retained the earth behind the bases, thereby reducing the lateral loads applied to them.[16]I do not accept Mr Brown's submission that it is sufficient to establish the duty to warn that it was possible that Avonforce would carry out the excavation in the way that it did. It seems to me that it is unreasonable to impose a duty to warn in such circumstances. It is common ground that Avonforce was negligent in excavating in the way that it chose to do. Why should Advanced assume that Avonforce would carry out the excavation negligently when it could have chosen a safe alternative way of doing it? The case for a duty to warn becomes even more difficult when there is added to the other elements of the case the fact that Avonforce was being advised by apparently competent engineers. It is true that Advanced did not know the scope of KHP's retainer, but Mr Roberts was aware that KHP were involved, because they had written annotations on the drawing. It is true that on the facts of Plant , the fact that the instructions had been given by the clients' engineer did not negative the duty to warn. But in that case, JMH was aware that what it was instructed to do was dangerous. Where, as here, the contractor is not aware of what is proposed, and at its highest, the case is that it ought to have known that what occurred might have been proposed, it seems to me that the position is quite different. In such a case, I consider that it is relevant to the question of whether there is a duty to warn that the client is being advised by an independent professional person. Why should the contractor assume that the client will act negligently, particularly when he is being independently advised by an engineer?[17]As I have said, in my view it is unreasonable to impose a duty to warn on Advanced in the circumstances of this case. The duty to warn is no more than an aspect of the duty of a contractor to act with the skill and care of a reasonably competent contractor. Reasonableness lies at the heart of the common law. As Lord Reid said in Lord Reid said in Young & Marten Ltd v McManus Childs Ltd [1969] 1 AC 454, 465 "no warranty ought to be implied in a contact unless it is in all the circumstances reasonable". Advanced was not asked to advise Avonforce what excavation techniques should be adopted, nor did Avonforce tell Advanced how it proposed to go about carrying out the excavation. It chose to employ a method that was negligent when suitable alternatives were available.[18]It is clear from Plant that the law is moving with caution in this area. In my judgment, a court should not hold a contractor to be under a duty to warn his client unless it is reasonable to do so. For the reasons that I have given, there was no duty to warn in this case, and the claim by Avonforce against Advanced must be dismissed.[19]If I had found that there was a duty to warn, I would have held that Advanced was at fault only to a very modest degree. I would have assessed its liability to contribute at 15%.

Cited in 2 later judgments