Mouchel Ltd. v Van Oord (UK) Ltd. [2011] EWHC 72 (TCC)

[2011] EWHC 72 (TCC)Case No HT-07-229
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 25/01/2011
Before
THE HON. MR.JUSTICE RAMSEY
Between
Mouchel LimitedClaimantVan Oord (UK) LimitedDefendant
Steven Walker (instructed by Beale and Company Solicitors LLP) for ClaimantJonathan Selby (instructed by Fladgate LLP) for Defendant
Judgment

The Hon. Mr. Justice Ramsey :

[1]In these proceedings the Claimant (“Mouchel”) claims a contribution under the Civil Liability (Contribution) Act 1978 from the Defendant (“Van Oord”) in respect of Mouchel’s liability to Kier Construction Limited (“Kier”) which was settled by a consent order.

Background

[2]In about 1992 Humber Power Limited obtained permission for the construction of a combined cycle gas turbine power station at a site on the south bank of the Humber Estuary between Grimsby and Immingham which is referred to as the South Humber Power Station (“the Power Station”).[3]Members of the ABB group of companies were engaged in various ways in constructing the Power Station. The relevant work for present purposes is the cooling water system, in particular the offshore part of the cooling water system. These offshore works included separate intake and outfall culverts which terminated in the intake head and the outfall respectively. The intake head was further offshore from the outfall.[4]In February 1994 ABB Power Plants Limited (“ABB”) invited tenders for the design and construction of the onshore and offshore works for the cooling water system from a number of contractors, including Kier.[5]After discussions Kier decided that the offshore works for the cooling water system would be carried out by using an immersed tube method which involved dredging a trench, laying sections of the culvert on a bedding in the trench, placing “locking” fill at the side of the culvert and then backfilling the trench and protecting the areas around the intake head and outfall with scour protection to prevent erosion.[6]Kier tendered for these works to ABB on 25 April 1994. That tender was based on discussions which had taken place with Van Oord and Mouchel pre-tender and on tenders provided by Van Oord for the dredging and backfilling works and by Mouchel for certain design work. The tender provided by Van Oord included backfilling the trench with sand dredged from an area of the estuary known as “Grimsby Middle” and which was referred to as Grimsby Middle Sand (“GMS”). It also included protecting the areas around the intake head and outfall with a layer of rock as scour protection.[7]There followed a period of tender discussion between Kier and ABB involving questions being posed by ABB and answered by Kier with assistance from Mouchel, in particular questions about the suitability of GMS.[8]Kier’s tender was accepted by ABB on 26 September 1994 in a sum of about £30.4m. Kier was responsible under that contract for, among other things, the design and construction of the offshore works.[9]Kier entered into a sub-contract with Mouchel on 15 February 1995 for Mouchel to provide certain design services in relation to the offshore works. Kier also entered into the sub-contract with Van Oord on 21 February 1995 to carry out offshore works, including excavating the trench using a dredger and then backfilling of the trench and placing scour protection.[10]Mouchel began to perform their design works which included the design of the scour protection around the intake and outfall heads.[11]After the immersed tube units had been installed, Van Oord commenced backfilling the trench in October 1995. By December 1995 it had become apparent that scouring or erosion of the backfill had occurred and that there was scour around the intake heads. Remedial backfilling around the intakes and outfall was undertaken in January 1996 immediately before the rock scour protection was placed by Van Oord. On 15 January 1996 Van Oord wrote to Kier to say that they had completed the scour protection which had been approved.[12]A survey was carried out on about 12 January 1996 after the last rock dumping at the intake heads. The report was noted as being handed to Kier on 16 January 1996. That showed that adjacent to the intake heads the depth of material above the tunnel top varied from 1.045metres to 1.445m based on the distances measured from the underside of the intake heads to the top of the surface of the material and using a figure of 3.845m from the underside of the intake heads to the top of the tunnel. This was less than the required depth of 2 metres cover but it does not indicate whether those depths of material were made up of GMS backfill or the scour protection rock at those locations.[13]In early February 1996 divers undertook inspections of the outfall and intake heads. In relation to the intake heads they reported that the rock covered the entire bed around the structure but that the levels were shallower close to the intake heads where they said that the overhang had prevented rock filling beneath. The measurements showed depths of material above the tunnel top varying from 0.145m to 0.845m. This showed that there was neither the 2m overall cover of material to the top of the tunnel nor the required 0.5m depth of rock for the scour protection locally to the intake heads.[14]In mid March 1996 a survey of the trench showed that substantial amounts of fill were missing. Kier arranged for remedial works to be undertaken. The remedial works to the trench, excluding the existing scour protected areas, involved placing additional GMS and then installing a filter layer and a layer of rock armour.[15]In late April and early May 1996 a further survey was carried out which stated that the inlet heads were surrounded by rock to similar levels to the previous survey in February 1996 and that, except at one location, the bed was completely covered in rock around the towers. The exception was a scour hole on the upriver side of the inshore inlet head where the rock had been removed and sand was now filling the bottom of the hole. In June 1996 Kier also decided that remedial work to the existing scour protection around the intake structures was required comprising the placing of a filter layer and rock adjacent to each intake head. These Proceedings[16]On 19 July 2007 Kier commenced proceedings against Mouchel alleging that Mouchel had been negligent in the provision of the design services and that this had led to Kier having to spend sums in carrying out those remedial works. Mouchel subsequently issued a Part 20 claim against Van Oord alleging that Van Oord were liable to Kier in relation to the supply of unsuitable backfill material and defective installation of scour protection.[17]The main action and Part 20 claim were due to be heard together. Following a mediation, Kier and Mouchel settled the main action in February 2009 on terms that Mouchel pay the sum of £517,500 to Kier inclusive of interest and costs.[18]In these proceedings Mouchel now seek a contribution from Van Oord based upon that settlement. Evidence[19]Mouchel called evidence from three factual witnesses. Their first witness was Michael Lohn who is now retired but was a civil engineer running Mouchel’s Ports and Marine Group from 1984. From early 1994 he was involved in the Power Station project as a director but did not have day to day responsibility. His recollection of events was poor, to the extent that he did have any knowledge at the time. The second witness was Barry Johnson who is now chief engineer of Kier Engineering Services who was involved in discussions between Kier and Van Oord and Mouchel in the period February to July 1994. The third witness was Graham Dalton who is a civil engineer and was involved as Mouchel’s project manager for the Power Station project from September 1994 until May 1995, responsible to Michael Lohn.[20]Van Oord called evidence from David Smart who was the managing director of Van Oord from 1988 to 1998 and was involved in the Power Station Project at all stages.[21]I was provided with witness statements of Tom Tagg, Gavin Barratt and Neil Pates of Kier and also Howard Simpson, Timothy Sharp and David Binns of Mouchel. The parties agreed, with the exception of paragraph 13 in the statement of Mr Pates, that I should admit them as hearsay evidence. Whilst I have done so and have read them, I have only had to refer to them to the very limited extent to which either party has relied upon them. In relation to paragraph 13 of Mr Pates’ evidence where he deals with the question of Mouchel’s role in relation to Grimsby Middle Sand, I have taken account of what Mr Pates says but have had regard to all the evidence.[22]In addition, Mouchel served during the course of the hearing a witness statement from Heidi Kapadia, a solicitor at Beale & Co which contained evidence as to the total sum of legal costs which Mouchel had expended in their action against Kier prior to the settlement in February 2009. By that stage Mouchel had not provided Van Oord with any detailed information on those costs and it was evident that the court could not deal with the quantum of those costs. As I indicated at the start of the proceedings I proposed that the best way of dealing with this element of Mouchel’s claim would be for me to deal with any liability to make contribution and then consider contribution as to costs. If the quantum of costs could not be agreed, the quantum of such costs would probably have to be the subject of a detailed assessment. I therefore gave leave for Ms Kapadia’s statement to be served but reserved all questions of costs which might arise as a result of that late statement.[23]I heard evidence from two engineering experts. Mouchel called Mr Christopher Browne, the Technical Director in the maritime division of Royal Haskoning. He is a member of the Institution of Civil Engineers and a member of the Institution of Structural Engineers and has spent 42 years in the industry, with wide experience in both marine and structural engineering. Van Oord called Dr Roger Maddrell who has a PhD in Sedimentology and is a fellow of the Institution of Civil Engineers and a fellow of the Geological Society. He has over 40 years world-wide experience in the fields of coastal engineering together with additional specialist expertise in geology, sedimentology, geomorphology and oceanography. Prior to forming his own consultancy in 2002 he had been Chief Engineer and Technical Advisor for a number of major projects for Halcrow Group Limited.[24]Both of the experts contributed to a joint statement in which they helpfully reached many agreements on the issues in the case. Otherwise the issues which formed the basis of their oral evidence were limited. On some issues I have preferred the evidence of either Dr Maddrell or Mr Browne but that has been based on the particular issues, the reasons for their views and the answers which they gave in evidence before me.[25]In relation to quantum Mouchel instructed Mr Michael Ulyatt who is a member of the Royal Institute of Chartered Surveyors with over 30 years experience in the construction industry as a quantity surveyor, latterly as an expert witness.[26]Mr Ulyatt was not called to give evidence because, at the Pre-trial Review, Van Oord said they did not require him to attend trial for cross-examination. In such circumstances I consider that, unless Van Oord can show that Mr Ulyatt’s opinion has been based on incorrect factual or legal assumptions, they are in difficulty in attempting to challenge the quantum which Mr Ulyatt has verified. Chronology[27]Before turning to the issues which arise in relation to the problems with the GMS and scour protection around the intake, it is convenient to set out a more detailed chronology based on the documents which substantially formed the basis of the recollection of the factual witnesses after some 15 years. The main contract tender[28]On 9 February 1994 Van Oord wrote to Kier, having been sent the main contract tender documents which Kier had received from ABB. They noted that included in those documents, at Reference 8 in Appendix B of Volume 2 Part (i), was a licence dated 24 August 1994 granted by the Ministry of Agriculture, Fisheries and Food permitting the construction works at the power station. That licence referred to an application by Humber Power Limited dated 29 January 1993. In considering the tender documents, Van Oord reviewed that licence and in their letter of 9 February 1994 they stated that they had undertaken a preliminary study, but that in order to proceed further, they needed to know where dredged material was to be disposed of and where the trench backfill was to come from. They therefore enclosed a tender query referring to the MAFF Licence and requested a copy of the application dated 29 January 1993 “to know if it states where trench backfill is to come from.” That became Tender Query 7 when passed by Kier to ABB.[29]On 17 February 1994 Kier sent Van Oord the reply to Tender Query 7 which had been received from ABB. It stated that the licence was given on the basis of using what they stated was “granual” material. It also drew attention to Volume 2 Part (ii) of the main contract tender documents at Clause 22.7 which dealt with “specific design parameters”.[30]On 22 February 1994 Van Oord responded to correspondence from Kier concerning the tender. They proposed that rather than a joint venture they should be appointed as an exclusive subcontractor so that they would be responsible for the dredging and backfilling and Kier would be responsible for the remaining part of the works. A meeting had been arranged for 24 February 1994 and Van Oord said that the major issues for discussion included the following:
“d. Sequence of backfilling - what spec. of material do we need? Can we re-use dumped in situ material or do we base it on “as dredged”
Grimsby Middle sand which is very clean with a D50 of approx. 250 microns. (See grading curve + location plan enclosed). e. We need to decide if we should ask the Client to apply for a winning licence at Grimsby Middle.”[31]Kier responded later that day and said “the specification for the sand is up to the Contractor; what you propose looks good. I shall brood over the Contract Documents before replying about the licence for the backfill….”[32]At the meeting on the 24 February 1994 which was attended by Van Oord and Kier the following were noted in relation to Van Oord’s operations:
“2.3 Technical proposals – [Van Oord] to provide suitable wording for submission to Engineer for requirement and licence of Grimsby middle sand for backfilling. Clarification required whether side casting of fill is acceptable. 2.4 Grimsby middle sand - self replenishing used generally about every two years. [Van Oord] will shortly be dredging from it for filling Grimsby docks.”
[33]In relation to backfilling to the channel Kier said that they had no specific requirement for sand backfill. The conclusion of the meeting was that Van Oord would submit a lump-sum quotation taking onboard the risk of quantities of material for the trench.[34]On 25 February 1994 Van Oord sent Kier a further tender query in relation to the answer previously given to Tender Query 7 and this was passed to ABB. They stated :
“(c) We are considering using “as dredged sand” (D 50 ~ 250μ) from the “Grimsby Middle” as backfill. We understand that the authorities prefer that the licence application is made by the client. Can you assist in this matter? In respect of our commercial position is it possible not to publish this question (c) and your reply to our competitors?”
[35]ABB responded to the query on 7 March 1994 and stated that for all construction permits the Contractor would have to make his own arrangements.[36]On 28 February 1994 Mr Smart of Van Oord spoke to Mr Palmer of Kier. In relation to backfill he noted “Rodney Palmer agreed that we will have to backfill to existing sea bed level with Grimsby Middle material. We will try to get client to pay royalties.”[37]On 1 March 1994 there was a meeting between Van Oord, Kier and Smit International, the company who were going to be involved in the immersed tube construction. At that meeting it was noted that Smit would place the sand bed and locking fill for the immersed tube and that Van Oord would provide and place all other backfill material referred to as being “almost certainly Grimsby Middle Sand”. The involvement of Mouchel[38]Kier decided to involve Mouchel and on 3 March 1994 Kier sent Mouchel “the most obviously relevant documents for the design of the offshore elements of the cooling water system.” These included borehole logs with a location drawing, a siltation assessment and the hydrographic survey with contours.[39]On 9 March 1994 Mr Palmer of Kier contacted Mouchel and in a telephone conversation stated that there were concerns about Kier’s ability to cope with siltation aspects and hydraulic design and rather than Kier providing something and asking Mouchel to review it, they would prefer Mouchel to take over the design.[40]This led to a letter from Kier dated 15 March 1994 in which reference was made to the design works for the offshore cooling water system (immersed tubes) and Kier stated:
“It is the intention of Kier Construction to use Mouchel for the provision of tender design and support for the project and if the bid is successful for that design to be developed into working details.”
[41]The scope of work was detailed on an attached sheet which contained the following provisions:
“Review all available data particularly hydro graphic and siltation data. … Determine requirements for …: Scour protection …

Investigate wave conditions and frequencies and wave forces on intakes/outfall structures.”

Determine requirements for …: Scour protection Investigate wave conditions and frequencies and wave forces on intakes/outfall structures.”[42]In reply on 29 March 1994 Mouchel confirmed that they were pleased to assist Kier with the tender design of the offshore works and quoted a lump sum fee with an attached estimate. This included:
“(a) review client brief. licensing aspects, relevant reports, hydro graphic and siltation data and identified problem areas including potential for siltation; … (d) investigate wave conditions, frequencies and wave forces on intake and outfall; (e) determine type and extent of scour protection.”
[43]A further meeting was held on 30 March 1994 between Van Oord, Kier and Smit at which the following points were noted:
“Van Oord and Smit between them would take on the risks associated with the volume of sand in the bed of the trench. They would also agree on a good quality of sand suitable for the bed, not necessarily the Grimsby Middle as the sand had to be suitable for pumping. … The outfall diffusers would be installed on the last unit before it was lifted from the casting yard. The intake diffusers would be installed as separate units, with the navigational lights already attached to one of them. Van Oord would supply and place the scour protection, to be designed by Mouchel.”
[44]In a manuscript note taken at that meeting Mr Johnson of Kier noted “bulk backfill must be a single operation. Design must allow silt to remain. Change design statement to say 2m min backfill (siltation will restore natural river level). Send scour protection design to Van Oord.”[45]On 8 April 1994 Mr Johnson of Kier sent Mr Stringer of Mouchel four sketches showing their proposals for the intake heads and outfall diffusers which had been discussed on the previous day.[46]On 15 April 1994 Kier sent Van Oord a memo in which they stated :
“Scour protection: Proposal is for 500 kg to 1000kg rock. Quantity about 2,600 Cu m (spread to a distance of 10 metres all round intake structures).”
Tenders from Van Oord and Mouchel[47]On 21 April 1994 both Mouchel and Van Oord sent tenders to Kier. Mouchel proposed a lump sum fee for the detailed design stage and attached a scope of works in a schedule. That consisted of these items:
“1.0 Review tender design and agree modifications with Kier. 2.0 Obtain, review and interpret additional wave data to obtain 1 in 100 year design wave. … 5.0 Detailed design, design basis statements and preparation of working drawings and bending schedules for : … (vii) scour protection to intake and outfall 6.0 Review of Client materials and workmanship specifications and preparation of additional clauses as required. 7.0 Preparation of design submissions for the Client to review and participation in the review process.” 2.0 Obtain, review and interpret additional wave data to obtain 1 in 100 year design wave. … 5.0 Detailed design, design basis statements and preparation of working drawings and bending schedules for : … (vii) scour protection to intake and outfall 6.0 Review of Client materials and workmanship specifications and preparation of additional clauses as required. 7.0 Preparation of design submissions for the Client to review and participation in the review process.”
[48]In their tender dated 21 April 1994 Van Oord set out the scope of works and schedule of prices at Addendum 1. In relation to trench backfilling works from Ch 240 to Ch 1830 they stated at paragraph 1.1.5: “After mobilisation of the backfilling spread, the following trench and backfilling works will be carried out by us during and after the installation of the offshore intake and outfall tunnel structures: trench from Ch 240 to Ch 1,830 for water outlet and intake tunnels• supply and placing of sand fill obtained from the Grimsby Middle borrow area on both sides and on top of both structures• backfill as per your Drawing No. CHB/02 KES/P376 up to an approx. layer thickness of 2.00m on top of the tunnel structures enlargement along trench from Ch 240 up to approx Ch 1,100• supply and placing of sand obtained from the Grimsby Middle borrow area in the enlargement of the trench• backfill up to a level similar as (i.e levelling with) on top of the tunnel structures.” trench from Ch 240 to Ch 1,830 for water outlet and intake tunnels

enlargement along trench from Ch 240 up to approx Ch 1,100

[49]In relation to scour protection around the intake structures they stated at paragraph 1.1.6:
“● supply and placing of approx. 500 kg to 1,000 kg rock; indicated volume by Kier max. 2,600 m 3 approx. layer thickness of 600 mm we refer to your fax dated 15th April 1994 ● spreading of rock to a distance of 10 metres all around intake structure at 2 locations ● rough grading and levelling of the rock” we refer to your fax dated 15th April 1994

● rough grading and levelling of the rock”

[50]In Addendum 4 at Paragraph 4.1 they stated:
“In the case of a conflict between our specific conditions detailed herein and any of your standard conditions or any of the Main Contract Conditions, then our conditions shall prevail.”
[51]At paragraph 4.2, Scope of Works, they stated :
“We have based our offer on the tender documents and drawings received from you, further clarified in our Addendum 1.1 with our Scope of Works and the subsequent Tender Addenda No.1 and No.2 subject to the conditions detailed hereafter.”
[52]At Paragraph 4.8 in relation to the defects correction period they provided:
“We are not in a position to accept this clause as we are not responsible for the design of the offshore tunnel structures. We will backfill the trench to the levels as indicated and requested by you and after completion of the backfilling works we have not allowed for any maintenance period/defects correction period.”
[53]At paragraph 4.17 in relation to fill material they said:
“Our Lump Sum rate for backfilling is based on providing “as dredged” sea sand from the Grimsby Middle borrow area approx. 4.50 nautical miles from site. In our offer we have allowed for the current royalties of £0.90/m 3 but require reimbursement for the actual cost net at the time of execution.”
[54]At paragraph 4.18 in relation to working tolerances and by reference to section 22.7.4 of Volume 2 Part (ii) Section B of the Tender Documents they said: “The trench backfilling works will be carried out by us as per Kier Drawing No CHB/02 KES/P 376 dated 10/03/93 up to an approx. layer thickness of 2.00 m on top of the tunnels structures. (We also refer you to our Addendum 1, scope of works, paragraph 1.1.5) As described in our Method Statement in paragraph 2.3 above, we will backfill the trench to the lines and levels as accurately as practically possible with our proposed equipment. However in view of the technical and physical limitations of the equipment, we require the following working tolerances: - trench backfilling : plus 0.50 m, minus 0.50 m. The finished level of the backfilled trench will give 2m cover on average. Isolated holes, however, should be acceptable to the Client without any remedial action being necessary.” - trench backfilling : plus 0.50 m, minus 0.50 m.[55]At paragraph 4.25 they stated in relation to design “We will not be responsible for the design of any of the permanent and temporary works for the offshore and onshore works as defined in Section 1.3.1 of Volume 2 - Part (I), Section ‘A’ and Section 1.2 of Volume 2 - Part (II), Section ‘B’. We can only take responsibility for the design of the trench slopes during the duration of our sub-contract works.”[56]In relation to scour protection around the intake structure they stated at 4.27.4 :
“The proposal is based on the assumption that the rock can be placed directly after backfilling the works with sand, and that there are no obstacles in place such as diffuser domes etc. during the rock placing operations.”
Kier’s tender to ABB[57]On 25 April 1994 Kier submitted their tender to ABB and in the appendix to the form of tender they stated as follows, in relation to the contractor’s design under clause 4 (2)(a) of the ICE conditions:
“The design works for which the contractor is responsible will be carried out by [Mouchel].”
ABB’s Questionnaires to Kier[58]On 18 May 1994 Kier forwarded to Mouchel a limited selection of 102 pages of questions which they had received from ABB. It is noted that Kier asked Mouchel and not Van Oord to provide comments and asked Mouchel, where they thought it useful, to provide a brief text for Kier to use to reply. Mouchel did so and Kier submitted a response on 21 May 1994 to ABB in relation to question K31 as follows:
“Query: Please provide details of the backfill material for the culverts and your assessment/calculation of the stability of the backfill. Contractor’s reply: Grimsby Middle sand to 2 metres minimum above the culverts. We do not expect it to be significantly disturbed by tides or currents.”
[59]On 21 June 1994 there was a post tender discussion involving ABB, ABB’s engineer (Allott and Lomax), Kier and Mouchel. At that meeting ABB tabled a further set of written questions which included question K217 concerning the selected backfill. As can be seen from Mouchel’s fax of 28 June 1994, Kier’s response corresponds to Mouchel’s draft response to that question. The question and response were in the following terms:
“Query: With reference to your response to K31, how will you satisfy yourselves that the selected back fill materials will provide a stable river bed during the design life? Contractor’s reply: The fill material is no less stable than the surrounding estuary bed and should therefore not suffer long term erosive effects. Furthermore, there is a minimum of 2m cover provided ensuring adequate margin against extreme events.”
[60]There was a further meeting between Kier and ABB in Baden on 7 July 1994. As a result of that meeting further questions were asked including question K306 which sought details of “the studies, mathematical modeling etc you will have in place to verify the responses given in K31 and K217” in relation to the stability of backfill. Kier sent that query to Mouchel on 8 July 1994 and, as recorded in an internal Mouchel memo, “ABB are pressing Kier for a more detailed response in respect of certain technical issues: Stability of backfill material on sea bed against current and wave attack.”[61]As a result in that memo Mr Steve Young of Mouchel was asked to review that and another issue and “provide a considered statement which covers” :
“i) Likelihood of problems occurring ii) The adequacy of existing data iii) What additional information should be obtained iv) What additional studies and/or numerical modeling would we recommend should be undertaken.” iv) What additional studies and/or numerical modeling would we recommend should be undertaken.”
[62]Following a conversation between Mr Gray of Kier and Mr Martin West of Mouchel, Kier approached Van Oord for further information, asking if Van Oord could advise Kier on the following:
“1) The expected gradings of the Grimsby Middle sand with which you intend to backfill over the culverts within the trench. This is required in order for our Consultants to complete the stability calculations. This follows requests by ABB Power Plants Ltd for ‘assessment/calculations of the stability of the backfill’. 2) Your fax to us on the 25/2/94 referred to using this material (D50~250m) please also advise of this significance.”
[63]On 15 July 1994 Mr Smart of Van Oord responded to Mr Gray of Kier in a 13 page fax. He enclosed the sieve analyses of six samples of “as dredged” Grimsby Middle Sand taken on 15 June 1994 during Van Oord’s then current contract for Tarmac at Grimsby. He said that the actual gradings had been plotted on the specification envelope for that contract. He also added :
“Please note that we have used this method to backfill the following trenches in the past 1) 1992/93 1395m long outfall for Ciba Geigy at Pyewipe 2) 1991350 m long cooling water intake trenches at Killingholme Power Station (Powergen)” + old Zanen projects + old Zanen projects 4) 1982 2600m long Pyewipe outfall for Anglian Water. We are not aware of any stability problems with the backfill on any of these past pipeline projects which are all very close to [South Humber Bank Power Station].”
[64]On 20 July 1994 Mouchel sent Kier a response to question K 306, as they had agreed to do the previous week.

(i) it was stated:

“A series of samples collected from the Grimsby Middle Sand source have shown that the medial grain sizes is 210 to 222μm with an average of 214μm. The source is well sorted with <5% of the material finer than 1—μm. Material from this source has already been used to backfill trenches at the following locations: Ciba-Geigy outfall at Pyewipe, 1395, long, 1992-1993 Tioxide outfall at Pyewipe, 2500m long, 1987 Anglian Water outfall at Pyewipe, 2600m long, 1982 We are not aware of any stability problems with the backfill on any of these projects which are all close to the South Humber site. ”
Ciba-Geigy outfall at Pyewipe, 1395, long, 1992-1993 Tioxide outfall at Pyewipe, 2500m long, 1987 Anglian Water outfall at Pyewipe, 2600m long, 1982 (2) In paragraph (ii) dealing with existing seabed conditions they referred to the material between the bed surface and 1 to 2.5 m depth as being shown to comprise of very soft to firm organic clay which was indicative of a mobile sediment environment with properties which vary with space and time. (3) In paragraph (iii) they set out their interpretation. They said that they had carried out a preliminary assessment of the longshore sediment transport to be expected along the line of the culverts using LITPACK, a state-of-the-art numerical modelling package developed by the Danish Hydraulic Institute. They set out the results and stated that the fill material would generally be more resistant to erosion than the very soft and loosely consolidated mud and that some of the firm material was likely to be more resistant than the loose surface layers of the sand. (4) At their conclusions at paragraph (iv) they stated as follows:
“Given the nature of the site, periodic erosion and deposition of the existing organic clay at the seabed is likely under existing and post construction conditions. With Grimsby Middle Sand in place the fine material will tend to fill the interstices and to smooth the roughness of the bed. As a result the potential for erosion at the bed will be reduced. Any changes in bed level post construction are unlikely to be outside those which currently occur given the dynamic tidal and wave conditions at the site. Under extreme conditions some movement of the backfill is likely but not to the extent that the buried culvert (>2m below bed level) will be exposed. It should be noted that erosion of the backfill under extreme conditions will be no more severe than that of the existing bed material. A more detailed analysis using the full capabilities of LITPACK will be undertaken during the detailed design stage to verify these preliminary conclusions.”
The main contract between Kier and ABB[65]Following the discussions between Kier and ABB and the answers to queries provided by Kier, ABB accepted Kier’s tender on 26 September 1994 in a sum of about £30.4m. Kier was responsible for the design and construction of the cooling water system, including the offshore works. The terms of the main contract incorporated a Basis of Contract with Appendices A, B and C, the ICE Design and Construct Conditions of Contract, Employer’s Requirements and Contractor’s Submission incorporating various other documents including tender questionnaire K 306.

(i) of the Employer’s Requirements):

“The Works comprise both offshore and onshore sections. The offshore works are to be procured on a fixed price lump sum design and construct basis and the onshore works on a measure and value basis from the Employer’s design. The offshore works include the intake and outfall structures, with the intake and outfall culverts up to the external north-east face of the pumphouse and seal weir...” (2) Clause 4.4.16 of Section A Particular Requirements (Volume 2 Part (i) of the Employer’s Requirements): “Scour protection shall be placed around the intake structures to prevent erosion of the bed. The top of the layer shall be flush with adjacent bed level.” (3) At Clause 4.4.25 of Section A Particular Requirements (Volume 2 Part (i) of the Employer’s Requirements): “Scour protection will be placed around the outfall structure to prevent erosion of the bed. The top layer shall be flush with adjacent bed level.” (4) At Clause 4.4.27 of Section A Particular Requirements (Volume 2 Part (i) of the Employer’s Requirements): “The minimum cover to the offshore conduits shall be 2.0m.” (5) Clause 1.2.4 of Section B Technical Specification for the Civil Works (Volume 2 Part (ii) of the Employer’s Requirements): “Portions of this specification provide performance requirements for materials and workmanship to be furnished by the Contractor. The Contractor shall perform and assume responsibility for his design and/or testing for product qualification as needed to justify the work and satisfy this specification.” (6) Clause 1.3.1 of Section B Technical Specification for the Civil Works (Volume 2 Part (ii) of the Employer’s Requirements): “All Articles and material shall be new and of good quality suitable for the purpose specified and shall, unless otherwise specified in the Technical Specification, conform to the appropriate Specifications, British Standards, Codes of Practice, IEE, American Standards or other recognised Standards where stated, in that order of precedence.” (7) In relation to immersed tube tunnels at Clause 22.1.2 of Section B Technical Specification for the Civil Works (Volume 2 Part (ii) of the Employer’s Requirements): “The Contractor shall be entirely responsible for the design and provision of all permanent and temporary works associated with immersed tube tunnels in accordance with the requirements of Section A.” (8) In relation to specific design parameters at Clause 22.7.4 of Section B Technical Specification for the Civil Works (Volume 2 Part (ii) of the Employer’s Requirements): “The backfill material to the finished structure shall be so designed and constructed as to maintain the tunnel in the required position, provide protection from erosion and restore the sea bed to its original profile and condition.” (9) In relation to specific design parameters at Clause 22.7.5 of Section B Technical Specification for the Civil Works (Volume 2 Part (ii) of the Employer’s Requirements): “Anti-Scour material shall be placed around the intake and outfall structures so as to prevent localised erosion of the sea bed and ingestion of sediment into the culvert.”
The sub-contract between Kier and Van Oord[66]The subcontract document entered into in February 1995 between Kier and Van Oord was in the standard form of sub-contract for use in conjunction with the ICE Conditions of Contract (6th Edition - September 1991) and contained the following provisions: (1) Clause 1:
““The Sub-Contract works” means the works described in the documents specified in the Second Schedule hereto.”
Where any part of the Sub-Contract Works has been designed by or on behalf of the Employer or the Contractor and that design has been included in the Contractors’ Requirements the Sub-Contractor shall check the design and accept responsibility [therefor] first having obtained approval of the Contractor for any modifications thereto which the Sub-Contractor may consider necessary, which approval shall not relieve the Sub-Contractor of his responsibility under this sub-clause.” (3) Clause 2(2), as amended: The Sub-Contractor shall provide all labour, materials, Sub-Contractor’s Equipment, Temporary Works and everything whether of a permanent or temporary nature and undertake any performance tests or other tests before completion….” (4) Clause 3(2):
“Save where the provisions of the Sub-Contract or otherwise require, the Sub-Contractor shall so execute, complete and maintain the Sub-Contract works that no act or omission of his in relation thereto shall constitute, cause or contribute to any breach by the Contractor of any of his obligations under the Main Contract and the Sub-Contractor shall, save as aforesaid, assume and perform hereunder all the obligations and liabilities of the Contractor under the Main Contract in relation to the Sub-Contract Works.” (5) In the Second Schedule at paragraph B the “sub-contract works” were described as: “The provision of plant and/or tools labour and materials for the sub-contract works of dredging and backfilling as specified and in accordance with the above mentioned documents and terms at South Humber Power Station CW Works.”
[67]The Sub-contract also incorporated a number of documents including at Document No 16, Van Oord’s tender of 21 April 1994. Mouchel’s agreement with Kier[68]Kier entered into an agreement with Mouchel on 15 February 1995 for Mouchel to provide certain design services in relation to the offshore works.[69]On 22 March 1995 Mouchel wrote to Kier following discussions at the progress meeting on 10 March 1995. They confirmed their conclusions with respect to the scour protection to be laid on the sea bed around the intake and outfall risers. At the end of the letter Mr Dalton of Mouchel added the following comment:
“Having completed this aspect of the design, we would note that the type of material required for scour protection around the risers corroborates our earlier concerns regarding the potential stability of Grimsby Middle Sand for backfilling the dredge trench up to original seabed level. We are still awaiting information from Van Oord relating to performance of their proposed material on previous projects in the area, and would appreciate your assistance in expediting release of this. If in fact there is no data available demonstrating that the Grimsby Middle sand is stable under the prevailing conditions then we will need to further consider laying of a larger grading protective layer at the top of the trench backfill.”
[70]On 24 March 1995 there was a design review meeting between Kier and Mouchel. As set out in the notes of that meeting “Mouchels are concerned about stability of the trench backfill - long stop is to place material similar to the scour protection over the Grimsby middle backfill but initially place the sand and survey after 6 months, ie Spring 1996. It may be possible to convince the client that the fill/depression is stable.”[71]Subsequently on 10 April 1995 Mouchel wrote to Kier in relation to a survey report supplied by Van Oord showing cross-section profiles measured in December 1992 and April 1993 on the Ciba Geigy outfall at Grimsby. They said:
“Generally, the surveys suggest that the seabed has not significantly eroded over the 3 month period. However, Van Oord have not provided the supplementary data requested detailing depth and width of the dredged trench, and caution should therefore be exercised in concluding that the South Humber trench will also be stable if backfilled with Grimsby Middle sand. As we have discussed, our predictions are that Grimsby Middle sand placed as trench backfill may be liable to erosion by river currents, this conclusion being based on the limited river current data available. However, prediction of erosion of bed material in this context is not well documented. Indeed, Van Oord’s experience is that the proposed backfill is stable in a similar environment, albeit in narrower trenches. Following our recent discussions on the subject we confirm our opinion that, whilst Van Oord have been unable to demonstrate using previous project data that erosion of the Grimsby Middle Sand will not occur, it would be reasonable to backfill over the culverts with this material as proposed and to monitor stability over the one year of the contract period remaining after programmed completion of construction. In the event that erosion does occur during that time, then a larger sized protective layer may be installed over the lengths of backfill found to be the subject to erosion.”
[72]In a final project review on the 10 May 1995 Mr Dalton, in response to a question “has the performance of the culvert backfill material been assessed?” noted the following:
“Backfill material has been assessed by M. West and M. Caporilli. Possible instability identified and basis for proceeding agreed with Kier.”
[73]On 16 June 1995 Mouchel responded to questions from ABB arising from a review of the cooling water culverts. In relation to scour protection around intake shafts and outfall risers they said as follows: “This will be in the form of a rock blanket and is indicated on drawing No 30072/03. It will extend 10 metres both sides of the culverts and to the landward and seaward of the shafts. Round the outfall, the blanket will be 500mm thick, and round the intake it will vary from approximately 500mm to 1500mm thick to suit the shape of the seabed on the side of the navigation channel. The quality of the rock will be controlled to ensure that the scour protection does not deteriorate during the design life of the project.[74]In relation to the risk of scour of fine dredged sand, they said:
“The trench round the units will be backfilled using Grimsby Middle Sand. Due to its fineness, this material may be susceptible to scour. However it is understood that the culverts are situated in an area of deposition where siltation is likely to take place. It is therefore proposed that the backfill will be monitored over a six month period and suitable measures could be taken if necessary.”
[75]At a weekly meeting on 20 June 1995 attended by Van Oord and Kier, Van Oord stated that they did not allow originally for temporary works to protect the intake and outfall structures during stone dumping. Kier said that Van Oord’s method of work must ensure that those structures are not damaged.[76]On 21 June 1995, having received Mouchel’s response of 16 June 1995 on the risk of scour of fine dredged sand, ABB wrote to Kier and said as follows:
“Please justify your selection of backfill material. “May be”, “it is understood” and “taken if necessary” are unacceptable terminology. Your answer to questionnaire K306 gives a preliminary assessment and states “a more detailed analysis…will be undertaken during the detailed design stage to verify these preliminary conclusions”.”
[77]On 30 June 1995 Mouchel prepared a draft “design life statement” in which they stated the following, in relation to backfill. This statement also appeared in the revision to the document sent on 15 September 1995:
“The trench around the culvert units will be backfilled using Grimsby Middle Sand. Due to its fineness, this material may be susceptible to scour. However the culverts are situated in an area of deposition where siltation is likely to take place. The backfill will therefore be monitored over a six month period to identify any occurrence of scour and to take any ameliorative measures necessary, such as armouring of the backfill.”
The performance of Van Oord’s sub-contract works[78]At a weekly meeting on 14 or 15 November 1995, attended by Van Oord and Kier, scour protection was discussed. The quantities measured by Kier coincided with those by Van Oord being 400 cubic metres at the outfall and 800 cubic metres at the intake. It was stated that rock had to be placed uniformly over the area and that any additional rock required, for example due to placing outside of the agreed area was to be to Van Oord’s account. A method statement was to be developed.[79]On 4 December 1995 Van Oord sent Kier for their approval a method statement incorporating a revised method for scour protection. They also informed Kier of a revised lump sum taking into account the fact that Van Oord were now stockpiling, loading and placing 2,500 tons of rock which had been supplied by Kier to a local quayside. In the method statement at paragraph 5 they said in relation to the scour protection around the intake and outfall structure that the placement would be by the side stone dumping vessel Avelingenand that “Upon arrival in the Humber, the Avelingen will go directly to the Union Dock, Grimsby for loading. Initially approximately 500 tonnes will be side dumped around the outside of the outlet area and 1150 tonnes around the outside of the intake area. The remaining areas will need to have the rock accurately placed.” They said that a 360° excavator with an integral hydraulic grab would be used so that, when positioned over the relevant area, the grab would be lowered into position and the rock would be released around and in between the structures. They said that a scanner on the Avelingen would locate the outlet and intake structures and the vessel would be positioned so that one side of the vessel was in direct line with the structures. They said that, in this way, the operator of the grab would know where the structures were in relation to the vessel and could place the rock accordingly.[80]There was a telephone conversation between Kier and Mouchel on 14 December 1995 after the discovery of scour of sand around the intake heads. A hydrographic survey of the area around the intake heads by Van Oord had shown extensive scour of sand 2.5m down the side, up to 10 m away in the worse case. Similarly there was a problem at the outfall although it was not as extensive. However no problem appeared to be occurring along the length of the units. It is noted that Mr Sharp of Mouchel was asked whether he was surprised at the extent; whether he had confidence that the scour protection would be of a suitable size; and whether the extent of scour protection was adequate. He is noted as having said that he was somewhat surprised at the speed but on reflection not surprised that it was happening; that this correlated with the fairly large rock needed and that the extent tied up with that experienced. The note also mentions the need to monitor the position closely for 1 year after placing and that “backfill all with stone – too expensive”.[81]Van Oord then continued to backfill the trench and by 22 December 1995, based on a survey, had restored the bed to its pre-construction levels. They carried out remedial work by placing further GMS around the intake and outfall areas in early January 1996 prior to placing scour protection.[82]Van Oord commenced scour protection on 2 January 1996 and in the period 2 to 6 January 1996 the total rock placed and dumped at the outfall was 780 tonnes, as recorded in the Van Oord weekly progress report dated 8 January 1996. The Van Oord weekly progress report dated 15 January 1996 for the period 7 January to 13 January 1996 showed that the total rock placed and dumped at the intake was 1596 tonnes.[83]On 17 January 1996 Kier wrote to Van Oord to confirm that their works were complete, subject to certain qualifications expressed by Associated British Ports (“ABP”) in the joint discussions on 22 December 1995 and also final inspection of the intake and outfall structures. ABP were the relevant port authority and had imposed requirements for consent to the works.[84]A survey was carried out at the intake and outfall structures in mid-January 1996 which, as summarized above, indicated that there was less than 2 metres cover of material adjacent to the intake heads but did not show the depth of GMS and of rock scour protection. Surveys after completion[85]On 28 February 1996 Kier sent Mouchel a copy of a diver’s survey report on scour protection at the three inlets at the intake structure and the 16 diffusers at the outlet structure. That report stated:(1) In relation to inlet 1: “The rock covers the entire bed around the structure although the levels prove shallower close to the tower where the over-hang has prevented rock filling underneath. These levels show good rock cover but not to the two metre level required.”(2) In relation to inlet 2: “The rock covers the bed around the structure and the same problem underneath the over-hang applies.”(3) In relation to inlet 3: “The rock covers the entire bed around the structure with the same problem occurring close-in underneath the overhang.”(4) In relation to the 16 outlet diffusers the diver’s report stated that the rock covered the entire bed for six metres out from the centre line and the levels of rock throughout were good. It stated that, in places where the sand was located, there was rock underneath.[86]On 7 March 1996 Mouchel responded to Kier’s letter enclosing the diver’s survey. They provided sketches and stated:
“It can clearly be seen that the as-constructed sea bed profile in the vicinity of the intake and outfall culverts is substantially lower than the existing sea bed either side of the culvert trench, and in particular, is lower than the required minimum cover. Although the report states that there is good rock cover around the structure, the depth of the rock was not determined and it is unlikely that the required depth of scour protection has been achieved. It obviously has not been achieved around the intake structures, where the total cover to the culverts is less than the required rock thickness. Based on the available information from the Divers Report, we are also concerned that the backfill over the rest of the culverts may be below the required level. We would like to see further survey reports which could confirm this or otherwise. On the basis of the survey information submitted, additional rock placing around the Intake and Outfall structures appears to be required.”
[87]Kier forwarded Mouchel’s response to Van Oord on 7 March 1996 and said they would discuss with Van Oord the reasons/causes for the apparent low areas of scour protection and any necessary remedial measures. On 11 March 1996 ABP carried out a survey of the trench with a representative of Van Oord being present.[88]There had previously been a discussion between Van Oord and Kier as to the value of Van Oord’s final account and on 13 March 1996 Van Oord and Kier signed a full and final settlement of the final account in the sum of £7.8 million from which a contra-charge of £279,450 was deducted for royalties in respect of the backfill material, limited to 414,000 cubic metres, as set out in a letter from Kier of 20 February 1996.[89]At a meeting on the 27 March 1996 between ABB and Kier it was reported as follows:
“Results of ABP survey show fill to culvert trench is missing. A Van Oord representative present during the survey requested a different frequency be used at certain points during the survey - this only yielded differences in result of the order of 100mm. Results will be forwarded to [Kier] shortly.”
[90]On 3 April 1996 Kier sent Van Oord a copy of the ABP survey carried out on 11 March 1996. Kier said:
“The survey shows significant differences in level from your out survey particularly between the [inlet] and outfall structures.”
[91]In a letter dated 17 April 1996 Kier wrote to Mouchel and said that the survey showed that scour of the Grimsby Middle Sand back fill was taking place and that the scour extended to depths sufficient to expose the top of the culvert units (approximately 2 metres) and over an approximate 400 metre length of the trench between Ch 1420 and Ch 1820. They asked Mouchel to address the cause of the scour and requirements for emergency and permanent repairs.[92]In response on 19 April 1996 Mouchel said:
“It would appear that the scour protectionaround the outfall structure is still relatively intact, but the scour protection around the intake structure has already been partly undermined. There is particularly heavy scour evident just to the landward and eastward sides of the intake scour protection and, although we do not have any survey information on the seaward limit of the intake we would assume this area may also be undermined. We feel there is no danger of the scouring undermining the culverts themselves as they will act as an obstruction to the scour effects.”
[93]Mouchel proposed that remedial works should take the form of further placing of GMS with a protective layer.[94]On 24 April 1996 Mouchel enclosed sketches showing the levels of the scour protection around the intake and outfall structures.They summarised the position in the following terms:
“it appears that the scour protection has been placed below the correct levels and with insufficient thickness.”
[95]On 26 April 1996 Mr Smart of Van Oord responded to a letter from Mr Tagg at Kier saying “One of the key points you must bear in mind is that we agreed to construct the scour protection in a “Bowl Type” profile, ie the work was to be undertaken by dumping/placing from the surface and therefore it is inevitable that rock would be low under and adjacent to the heads but then very close to this was the full depth of rock to its correct thickness and level.”[96]In relation to the backfilling with GMS he said that Kier had “signed and agreed that sand had been placed to the correct levels ready for the installation of scour protection”. In relation to the scour protection he said that, on the basis of the depths of scour protection Kier had supplied 2500 tonnes and that prior to demobilisation there were 100 tonnes remaining. Kier then signed off the scour protection. Discussions as to liability between Kier and Van Oord[97]After some correspondence in which the question of Van Oord’s responsibility was discussed, a meeting took place between Kier and Van Oord on 7 May 1996. At that meeting the parties discussed liability for remedial works to areas where the backfill material had been lost. The agreed position, as set out in Kier’s letter dated 9 May 1996 and Van Oord’s reply dated 22 May 1996, was as follows:
“a) From chainage 1750 eastwards to the deep channel remedial works are the liability of Kier. b) From chainage 1750 to chainage 1590 [Van Oord] accept the liability to replace the backfill material to the originally reinstated levels once only if the loss of this material is due to the action of normal river currents. Van Oord liability would be limited to the volume assessed from a hydrographic survey to be carried out in early June 1996. Should the loss of material prove to be due to the turbulence effect from the diffusers and corresponding lack of designed scour protection then remedial works are not the liability of [Van Oord] Van Oord aim to fully discharge any liability by providing an appropriate commercial rebate to be agreed prior to mobilization for the remedial works. c) From chainage 1590 to 1480 remedial works are the liability of Kier. d) From chainage 1480 inshore up to the cofferdam the liability lies as in b) above. All of the above does not relieve [Van Oord] of their originally envisaged liability for backfill between initial reinstatement and seabed levels. ”
[98]In a letter dated 14 May 1996 Sea Technical Services (“STS”) enclosed their findings having carried out a diving survey on the inlet towers to the intake and the diffusers to the outfall. They said that:
“The three inlet towers are surrounded by rock to similar levels to our previous survey of February 1996 and except for one location (see plan) the bed is completely covered in rock around the towers out to 15 metres in all directions except offshore where the rock ends at 10 metres away from the tower. … Close to the inshore tower on the up river side there is a large scour hole. This has been caused by [an] eddy-current based by the tide hitting the tower wall and scouring out the thin layer of rock close to the tower. The bed in this area is now backfill sand in the bottom of the hole and this problem needs backfilling generally…. Our survey of Feb 1996 picked up the low rock cover close to the towers with the guides exposed and this scour hole is a problem caused directly from this lack of rock cover.”
[99]When, on 22 May 1996, Van Oord responded to Kier’s letter of 9 May 1996 agreeing to the “agreed position” they added this:
“With reference to our ongoing discussion with respect to the remedial works and with particular reference to the section from chainage 1750 to chainage 1590 referred to in (b) of your letter, we understand that you/your designers consider it necessary to blanket the whole of this area with not only rock armour but also a filter layer on top of replaced Grimsby Middle sand. In our view this revised design, by inference, confirms the inadequacy of the initial design. We therefore consider that we have no liability for replacing Grimsby Middle sand in this section.”
[100]On 24 May 1996 Mr Greenough of Kier sent Mouchel some notes of telephone calls which he had made concerning the information which had been provided by Van Oord in relation to previous projects where Grimsby Middle Sand had been used. Those notes were as follows:(1) A conversation with Mike Holmes of ABP regarding the Pyewipe outfall pipelines for Ciba Geigy, Tioxide and Anglian Water. It was noted that Mr Holmes was not aware of any similar problems on the neighbouring trenches and as far as he knew the other trenches were not capped with armour.(2) A conversation with Mr Keith Duckett of Tioxide who had been involved with the construction but said that he only had a minimal recollection of the position. He thought the immediate pipe was backfilled with possibly GMS and armoured only at the outfall end but thought the main backfill was a different material, not sand.(3) A conversation with Mr Edmondson of Anglian Water who spoke to a retired Resident Engineer who thought that the immediate backfill was gravel from a marine source with final backfill being sand and clay. He had no knowledge of any subsequent scour.(4) A conversation with Cameron Lindsey of Babtie, Shaw and Morton who had looked at the files after an earlier conversation. He said the specification at Pyewipe called for 2 metre cover bedded on sand and then backfilled with a granular dredged material which he thought was dredged from within the estuary probably downstream but was not a fine bedding material.[101]On 30 May 1996 Van Oord sent Kier an offer for the remedial works to the offshore trench backfill and scour protection. The terms provided for payment less a retention of 15% up to a maximum of £60,000. It was stated that “This represents the maximum limit of any liability of Van Oord as defined in item (b)” of Kier’s letter dated 9 May 1996, as discussed and agreed at a meeting on 29 May 1996.[102]On 4 June 1996 ABP Research sent Kier a report which reviewed the conditions in the vicinity of the works to determine the cause of scour. They concluded as follows:
“Field data, modelling and desk calculations have confirmed that the Grimsby Middle sand used as backfill is susceptible to erosion at the outer end of the Power Station intake outfall. Inshore of about 1,400m it will remain stable except under the most severe storm conditions. During neap tides however some deposition should occur. Erosion is predominantly influenced by spring tidal currents. Wave action particularly storm events will increase the erosion rates particularly on springs. The flow regime in the Humber between Grimsby and Immingham shows that the erosion potential at the ends of the Ciba-Geigy (Tioxide) and Anglian Water (Pyewipe) outfalls is less than at the new outfall and generally equivalent to the conditions which would be experienced from about 1,400m shorewards on the new outfall. This would therefore explain why erosion of these outfalls has not been a problem.”
[103]During the course of carrying out the reinstatement of the scour protection Van Oord were instructed to mobilise an excavator and grab to put on the side stone dumping vessel Frans. They commented “we would like you to be aware, that the excavator with grab, allows only to place rock onto the bottom and it cannot work under constructions.” The Issues[104]Although originally Van Oord challenged the reasonableness of the settlement there is now no issue as to that. The issues concern liability and quantum and may be summarised as follows:(1) Was Van Oord liable to Kier for the suitability of GMS?(2) Was Van Oord liable to Kier for failing properly to place the scour protection around the intake structures?(3) If Van Oord was liable to Kier, was Mouchel liable to Kier in respect of the same damage?(4) If so, what contribution should Van Oord make to that liability?(5) What should the quantum of that liability be?[105]It is convenient to take each of those issues in turn. Suitability of Grimsby Middle Sand Submissions[106]Mouchel say that Van Oord were liable to Kier for the selection of GMS. They say that the provisions of the main contract between Kier and ABB and the terms of the sub-contract between Kier and Van Oord were back to back so that any liability which Kier had to ABB in respect of the backfill material was also a liability which Van Oord had to Kier under the sub-contract.[107]Mouchel point to clause 1.3.1 of Section B of the Technical Specification for the Civil Works in the main contract which states that materials shall be suitable for purpose and say that under the sub-contract Van Oord were responsible for this obligation in relation to the GMS. They rely on a number of clauses of the Sub-contract: Clauses 1(1)(c); 1(1)(h); 2(1); 2(2); 2(3); 3(2); 3(3); 3(4) and 12(1) and the fact that the definition of the Sub-Contract Works at paragraph (B) of the Second Schedule refers to documents which include the Engineer’s invitation to Tender for the main contract.[108]In the alternative, Mouchel says that there was an implied term that materials supplied by Van Oord should be suitable for their purpose. They refer to the decision of the House of Lords in Young & Marten v McManus Childs [1969] AC 454 which approved GH Myers v Brent Cross Service Co [1934] 1 KB 46 and Rotherham MBC v Frank Haslam (1996) 78 BLR 1.[109]Van Oord submit that whilst Kier was liable to ABB for the design and construction of the offshore works, Van Oord did not have liability to Kier for design in relation to the selection of the GMS. They rely on clause 4.25 of document 16 to the sub-contract which was Van Oord’s tender letter of 21 April 1994 and provided:
“We will not be responsible for the design of any of the permanent and temporary works for the offshore and onshore works as defined in Section 1.3.1 of Volume 2 - Part (I), Section ‘A’ and Section 1.2 of Volume 2 - Part (II), Section ‘B’. We can only take responsibility for the design of the trench slopes during the duration of our sub-contract works.”
[110]Mouchel say that clause 4.25 does not have the effect contended for by Van Oord and was not intended to exclude liability for the suitability of GMS. Mouchel submit that the relevant provision of the main contract is Clause 1.3.1 of Section B of the Technical Specification for the Civil Works at Volume 2 Part (ii) of the Employer’s Requirements which provides:
“All Articles and material shall be new and of good quality suitable for the purpose specified.”
They say that the reference in clause 4.25 is not to that Clause 1.3.1 but to Clause 1.3.1 in Section A Particular Requirements which refers to the onshore and offshore works which do not form part of Van Oord’s Sub-contract. Decision[111]In February 1994, during the tendering period, the question of where the backfill material should come from was raised by Van Oord. They asked whether their tender should be based on re-use of the dumped in-situ material from the trench or whether they should base it on “as dredged” GMS for which they gave a description and enclosed a grading curve. The suggestion of GMS evidently came from Van Oord. It is clear that after that the decision was made not to use the in-situ material and that, by default, GMS should be used. Attention then passed to the need to have a licence to use GMS. Kier’s response to the detail which Van Oord produced was to say that GMS looked good and at the meeting on 24 February 1994 Kier stated that, in relation to backfilling to the channel, they had no specific requirement for the sand backfill but that Van Oord were to consider this requirement. As Mr Smart said in his witness statement, Van Oord were asked by Kier to see what range of materials might be available for backfilling bearing in mind that Van Oord had some knowledge of the Humber. The GMS then became the preferred choice but that was based on the fact that Van Oord was putting it forward as an alternative to the re-use of in-situ material.[112]By the meeting on 1 March 1994 the position had been reached that GMS would almost certainly be used. On the basis of that evidence in the period up to the submission of Van Oord’s tender I consider that it was Van Oord who initially put forward the proposal of using GMS and this was accepted by Kier as being the most likely material for use as trench backfill if the in-situ material was not re-used.[113]When it came to Van Oord’s tender, they had documents which showed that Kier’s obligations under the main contract included both design and construction. They evidently wished to avoid liability for design and included Clause 4.25 in their tender which became numbered document No. 16, incorporated in the Sub-Contract. They also stated that they had based their tender on the use of GMS for the backfill.[114]The provisions of the Sub-contract followed the Standard Form of Sub-Contract (September 1991) for use with the ICE Conditions of Contract (6th Edition), commonly known as the Blue Form. That form, in general terms, seeks to make the sub-contractor responsible for performing the main contractor’s obligations in relation to the part of the main contract works which the sub-contractor is performing. In this case, under clauses 1.2 and 1.3 of Section B Technical Specification for the Civil Works at Volume 2 Part (ii) of the Employer’s Requirements Kier was responsible for the design of the works and for the suitability of materials to be used in the main contract works.[115]In that specification there is a distinction drawn between Design in clause 1.2 and the selection of suitable materials under Materials in clause 1.3. Clause 1.2 made clear that Kier had a responsibility for the design of permanent and temporary works and where the specification contained performance requirements for materials then Kier was responsible for the design to satisfy that specification. In relation to materials, clause 1.3 provided that they had to be suitable for the purpose specified.[116]The provisions of the Standard Form of Sub-Contract incorporated into the Sub-Contract, relied on by Mouchel, are effective to pass on the general construction obligations of the Main Contractor to the Sub-Contractor. In relation to design Clause 2(1) of the Standard Form provides that Van Oord“shall exercise all reasonable skill care and diligence in designing any part of the Sub-Contract Works for which design he is responsible”. In this case by an amendment to Clause 2(1) the scope of design was increased so that even if part of the Sub-Contract Works had been designed by ABB or Kier and included in the Contractors’ Requirements, Van Oord had to “check the design and accept responsibility [therefor] first having obtained approval of the Contractor for any modifications thereto which the Sub-Contractor may consider necessary.”[117]However, as I have said, the Sub-contract also included Document No 16, Van Oord’s tender of 21 April 1994 which by clause 4.1 prevailed over the standard conditions and the conditions of the main contract. Document No 16 provided at Clause 4.25 in relation to design that Van Oord “will not be responsible for the design of any of the permanent and temporary works for the offshore and onshore works as defined in Section 1.3.1 of Volume 2 - Part (I), Section ‘A’ and Section 1.2 of Volume 2 - Part (II), Section ‘B’.” In my judgment this provision was intended to and was effective to remove any responsibility of Van Oord in respect of design for the offshore and onshore works, except for the one remaining area where Van Oord accepted “responsibility for the design of the trench slopes during the duration of our sub-contract works”.[118]Mouchel submitted that Clause 1.3.1 of Section A Particular Requirements referred to works outside the scope of Van Oord’s Sub-Contract. However it clearly refers to the offshore works which are part of Van Oord’s Sub-Contract Works when it states “The Works comprise both offshore and onshore sections. The offshore works are to be procured on a fixed price lump sum design and construct basis and the onshore works on a measure and value basis from the Employer’s design. The offshore works include the intake and outfall structures, with the intake and outfall culverts up to the external north-east face of the pumphouse and seal weir...”[119]I consider that Clause 4.25 had the effect of removing design, except for limited design of trench slopes, from Van Oord’s workscope. However, what it did not do was to remove the obligation under Clause 1.3.1 of Section B Technical Specification for Civil Works (Volume 2 Part (ii) of the Employer’s Requirements) in respect of suitability of materials. There was though a clear distinction between design obligations under Clause 1.2 and obligations of suitability of materials under Clause 1.3.[120]The question then arises as to the extent to which the obligation under “Design” in Clause 1.2 which relates to materials is to be distinguished from the obligation under “Materials” in Clause 1.3.1 which also relates to materials. In particular Clause 1.2 includes provisions as to materials in Clause 1.2.4. I consider that the difference between the obligations in Clauses 1.2.4 and 1.3.1 is that Clause 1.2.4 refers to a case where there are “performance requirements for materials” in the specification which requires design and/or testing to satisfy the specification whilst Clause 1.3.1 refers to a case where there are not performance requirements of that type so that design and/or testing are not necessary but the materials must be suitable. In this case the relevant suitability of GMS fell, in my judgment, within the first category of design of materials under Clause 1.2.4 and not within suitability of materials under Clause 1.3.1.[121]There were “specific design parameters” in the specification which related to the backfill material. Those parameters were set out at Clause 22.7.4 of Section B Technical Specification for the Civil Works (Volume 2 Part (ii) of the Employer’s Requirements). They specifically required design to be carried out and stated that:
“The backfill material to the finished structure shall be so designed and constructed as to ... provide protection from erosion and restore the sea bed to its original profile and condition.”
[122]It is evident that the design of the backfill to comply with these specific design parameters had to take account of the complex interaction of the sea bed, tides, waves and currents, similar to the process required for the design of any scour protection, with which such design was closely linked. Indeed this is why Kier looked to Mouchel and not Van Oord to consider the suitability of the backfill both in the period after Kier submitted their tender and after ABB had awarded the main contract to Kier.[123]I do not consider that, in respect of suitability in relation to these specified parameters, the GMS could come within both Clause 1.2.4 Design and Clause 1.3.1 Materials. In other words, if as I have found, Clause 4.25 is effective to remove the obligation for Van Oord to design the backfill so as to provide protection from erosion and restore the sea bed to its original profile and condition, I do not consider that Van Oord can have that design liability re-imposed as an obligation as to suitability by Clause 1.3.1 so as to require them to carry out that design. There might however, on other facts, be liability of Van Oord under Clause 1.3.1 if, for instance, the GMS was not suitable for some other suitability requirement which was not, as here, the subject of performance requirements but that does not arise in this case.[124]Where the parties have in their contract agreed that liability should be excluded then there is no possibility for that liability to be imposed by an implied term. Indeed given the express provisions in this case, including Clauses 1.2 and 1.3 of Section B Technical Specification for Civil Works and Clause 4.25 of Document No 16, I do not consider that there is any room for an implied term as to fitness for purpose, as Mouchel contend.[125]Accordingly, under the sub-contract with Kier there was no obligation on Van Oord that the GMS should be suitable as backfill in terms of providing protection from erosion or restoring the sea bed to its original profile and condition. That was a matter of design under Clause 1.2 of Section B Technical Specification for Civil Works which was not within the scope of Van Oord’s work because of the terms of Clause 4.25 of Document No 16. Scour protection around the intake structures[126]Mouchel say that Van Oord’s failure to lay the required depth of 500mm of scour protection rock caused or contributed to the scour that occurred around the intake heads. Van Oord say that the full depth of rock was laid and that the loss of GMS was due to the lack of a filter layer. The parties therefore disagree as to the reason for the reduced level of cover at the intakes.[127]Under the sub-contract Van Oord had an obligation to place the scour protection rock around the intake structures after they had placed the backfill. The obligation was originally stated in Van Oord’s tender letter of 21 April 1994 at clause 1.1.6 to be “Supply and placing of approx 500kg to 1000kg rock; indicated volume by Kier max 2,600m 3 approx layer thickness 600mm; spreading of rock to a distance of 10 metres all around intake structure at 2 locations; rough grading and levelling of the rock.” At clause 4.27.4 it was also stated that “The proposal is based on the assumption that the rock can be placed directly after backfilling the works with sand, and that there are no obstacles in place such as diffuser domes etc. during the rock placing operations.”[128]There were changes in relation to the scour protection around the intake structures after the sub-contract had been entered into in February 1995. First, it became apparent that the intake structures would be in place when the scour protection was to be placed. Secondly, Mouchel produced a drawing of the scour protection, drawing No 30072/03, which showed the scour protection to be 500mm thick.[129]In December 1995 Van Oord sent Kier for their approval a method statement incorporating a revised method for scour protection. They also informed Kier of a revised lump sum taking into account the fact that Van Oord were now stockpiling, loading and placing 2,500 tons of rock which was being supplied by Kier to a local quayside. In the method statement at paragraph 5 they said in relation to the scour protection around the intake and outfall structure that the placement would be by the side stone dumping vessel Avelingen which would place 1150 tonnes around the outside of the intake area and that the remaining areas would need to have the rock accurately placed. For this they said that a 360° excavator with an integral hydraulic grab would be used so that the rock would be released around and in between the structures and that a scanner on the Avelingen would locate the intake structures so that the operator of the grab would know where the structures were and could place the rock.[130]Van Oord carried out the scour protection work around the intake structure in the period 7 January to 13 January 1996 and records show that the total rock placed was 1596 tonnes.On 17 January 1996 Kier wrote to Van Oord to confirm that their works were complete, subject to certain qualifications and the final inspection of the intake and outfall structures. The January 1996 survey showed that locally at the inlet structures there was not 2 metres of cover but did not identify the relative depths of GMS and of rock scour protection.[131]In the divers’ report on scour protection at the three inlets at the intake structure after a survey in February 1996, it was reported that at each inlet the rock covered the entire bed but that there was a problem close to the structure where the over-hang has prevented rock filling underneath. Mouchel provided sketches based on the divers’ survey and stated that they showed that the required depth of scour protection had not been achieved around the intake structures. They said that the total cover to the culverts was less than the required rock thickness and that additional rock placing appeared to be required around the intake structures.[132]Mr Smart of Van Oord had written to Mr Tagg at Kier in April 1996 saying that Van Oord had agreed to construct the scour protection by dumping/placing from the surface and therefore it was inevitable that rock would be low under and adjacent to the heads but then very close to this was the full depth of rock to its correct thickness and level.[133]In the report of the diving survey on the inlet towers carried out in May 1996 they said that the three inlet towers were surrounded by rock to similar levels to the previous survey of February 1996 and, except for one location, the bed was completely covered in rock around the towers. They reported that close to the inshore tower on the up river side there was a large scour hole. They expressed the view that their survey of February 1996 had picked up low rock cover close to the towers and that the scour hole was caused by this lack of rock cover.[134]The issue between the parties is whether the scour hole and erosion discovered in May 1996 was, as Mouchel say, the result of Van Oord having laid an inadequate thickness of scour protection rock adjacent to the inlet towers or whether, as Van Oord contend, that it was caused by the GMS being drawn through the layer of scour protection because there was no filter layer. It is common ground between the experts that the scour protection as originally designed around the intake structure was inadequate because it did not have a filter layer between the rock protection and the underlying GMS.[135]The information from the divers’ surveys has to be read with a degree of caution given the “cold pea soup” conditions in which, as Dr Maddrell said, the divers were working. As established in Dr Maddrell’s evidence, the initial divers’ survey of January 1996 carried out for Van Oord provides evidence that the overall thickness of GMS and rock protection was about 1 metre instead of 2 metres (whether on average or not) but that survey does not identify what the relative thickness of rock and GMS was at that stage. The next survey carried out by STS in February 1996 provides evidence that there is less than 500mm cover in two locations but again does not provide information of the thickness of rock or GMS. The STS survey in May 1996 then provides evidence that there is a scour hole.[136]On the basis of this information Mouchel submit the surveys show that there was less than 500mm rock laid at locations around the intake structure and that this was the cause of the problem at the intake risers. Van Oord say that, on the evidence, there was an adequate thickness of rock laid and that it does not show that the cause of the problem was due to inadequate workmanship by Van Oord.[137]Although there were submissions by Van Oord to the effect that the requirement was only to have an average of 500mm because of the difficulty of laying rock around the intake structure as set out in Mr Smart’s letter of 26 April 1996, the requirement on drawing 30072/03 G is quite clear in stating that “Scour protection to be not less than 500mm thick.” The obligation was therefore for Van Oord to place at least 500mm rock.[138]I consider that the evidence of the January 1996 survey indicates that 2 metres of cover has not been provided and, in my judgment, there was likely to be less than 500mm of rock at that stage. First, as Dr Maddrell said, it would be easier for Van Oord to place GMS around the intake and they went back and placed further GMS just before they placed the rock. That would indicate that there would be more GMS than rock. Secondly, there is the difficulty of placing rock close to the intake structure. Whilst Van Oord evidently attempted to do so, the method adopted would be unlikely to cause rock to be placed to the required thickness adjacent to the intake structures.[139]I accept that the later surveys would be affected by the scour of the GMS which would have taken place, albeit over a short period. I consider that it would be likely that both of the mechanisms suggested by the experts would then have been at play. First, as Mr Browne suggests, there would be erosion of GMS which would then cause rock to go into the hole formed in the GMS close to the intake. Secondly, as Dr Maddrell suggests, there would be some removal of the GMS through the interstices of the rock because of the lack of the filter layer. In my judgment Mr Browne’s explanation is likely to be the more active effect at first in early 1996 than that suggested by Dr Maddrell. I therefore consider that the inadequate rock cover at the intake with the resultant scour hole was likely to have been contributed to by Van Oord’s failure to place 500mm of rock. However, I do not consider that Dr Browne’s reliance on his calculations based on the analysis by Pilarczyk (1990) shows that the 500mm thickness of rock was adequate in the conditions pertaining at the Humber. That analysis only takes into account currents and does not take into account the effect of waves which evidently are important features both in fact and in the analysis of scour.[140]As a result, I consider that Van Oord were in breach of contract and liable to Kier for failing to place 500mm of scour protection rock close to the intake structures and that this caused remedial work to be necessary in those areas. Was Mouchel liable to Kier in respect of the same damage?[141]In this case Mouchel entered into a settlement with Kier and therefore the provisions of section 1(4) of the Civil Liability (Contribution) Act 1978 (“the 1978 Act”) apply. That sub-section provides:
“A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.”
[142]This provision means that Mouchel do not have to prove that they would have been liable to Kier. Rather the only matter which has to be shown is that they would have been liable to Kier assuming that the factual basis of Kier’s pleaded claim against Mouchel could be established.[143]In relation to the scour protection, Van Oord submit that there were two breaches of Clause 5.1 of the Conditions of Engagement. First they say that Mouchel were liable for failing to design the scour protection to a sufficient area because they designed it to extend to only 10 metres from the heads when it should have covered the full width of about 25 metres and the full length of the trench where the GMS would erode. Secondly, they say that, for the scour protection designed by Mouchel, Mouchel failed to include a filter layer between the GMS and the rock.[144]Mouchel submit that on the assumed facts, based on liability in paragraph 63 of Kier’s Re-Amended Particulars of Claim, Mouchel’s liability for the scour protection was limited to the second breach, the failure to provide for a filter layer. They deny that the first is a breach on which Mouchel’s liability to Kier for the purposes of the contribution claim can be based.[145]In this case I consider that the relevant breaches to found contribution are the breach by Van Oord in failing to lay rock to the depth of 500mm and the breach by Mouchel in failing to design the scour protection with a filter layer. The wider liability of the failure to provide scour protection over a greater area was not, in my judgment, a relevant breach alleged by Kier on which Mouchel’s liability to contribute for this damage should be assessed.[146]Do the relevant breaches against Mouchel and Van Oord give rise to liability for the same damage?[147]I accept, as Mouchel submits that, as stated in Royal Brompton NHS Trust v Hammond [2002] 1 WLR 1397, there is a distinction between “damage” and “damages” in the context of the 1978 Act. At [6] Lord Bingham of Cornhill said this:
“When any claim for contribution falls to be decided the following questions in my opinion arise: (1) What damage has A suffered? (2) Is B liable to A in respect of that damage? (3) Is C also liable to A in respect of that damage or some of it? ... I do not think it matters greatly whether, in phrasing these questions, one speaks (as the 1978 Act does) of "damage" or of "loss" or "harm", provided it is borne in mind that "damage" does not mean "damages" (as pointed out by Roch LJ in Birse Construction Ltd v Haiste Ltd [1996] 1WLR 675, at p 682) and that B's right to contribution by C depends on the damage, loss or harm for which B is liable to A corresponding (even if in part only) with the damage, loss or harm for which C is liable to A. This seems to me to accord with the underlying equity of the situation: it is obviously fair that C contributes to B a fair share of what both B and C owe in law to A, but obviously unfair that C should contribute to B any share of what B may owe in law to A but C does not.”
[148]At [27] Lord Steyn said this:
“The critical words are "liable in respect of the same damage." Section 1(1) refers to "damage" and not to "damages": see Birse Construction Ltd v Haiste Ltd [1996] 1 WLR 675, 682 per Roch LJ. It was common ground that the closest synonym of damage is harm. The focus is, however, on the composite expression "the same damage"…. The legislative technique of limiting the contribution principle under the 1978 Act to the same damage was a considered policy decision. The context does not therefore justify an expansive interpretation of the words "the same damage" so as to mean substantially or materially similar damage. Such solutions could have been adopted but considerations of unfairness to parties who did not in truth cause or contribute to the same damage would have militated against them. Moreover, the adoption of such solutions would have led to uncertainty in the application of the law. That is the context of section 1(1) and the phrase "the same damage". It must be interpreted and applied on a correct evaluation and comparison of claims alleged to qualify for contribution under section 1(1). No glosses, extensive or restrictive, are warranted. The natural and ordinary meaning of "the same damage" is controlling.”
[149]In relation to scour protection the relevant damage was scour caused by the reduction in the level of scour protection adjacent to the intake structure. This was caused by Mouchel’s breach in failing to design a filter layer and also by Van Oord’s failure to lay 500mm scour protection. In that respect both breaches caused the same damage and led to the need to carry out remedial work.[150]Although I have held that Van Oord were not liable for the suitability of the GMS, I consider that I should nonetheless deal with the issue of whether there would have been liability in respect of the same damage.[151]At paragraph 63 of Kier’s Re-Amended Particulars of Claim Kier set out the alleged breaches and it is the factual basis of those breaches on which Mouchel’s liability is to be based under section 1(4) of the 1978 Act. I consider that, as Van Oord submit, there were breaches as pleaded both in relation to the period between Kier’s tender and ABB’s acceptance of it and also in the period after ABB’s acceptance of Kier’s tender. Mouchel failed to advise Kier that GMS was unsuitable at either stage. I consider that at either stage the damage suffered by Kier was that the GMS used as backfill was unsuitable. On the premise that, contrary to my view, Van Oord was liable to Kier for the suitability of GMS then Mouchel and Van Oord would be liable for the same damage in that the GMS was unsuitable backfill and was removed by the action of the waves and currents in the conditions of the Humber estuary. What contribution should Van Oord make to any liability?[152]Section 2 of the 1978 Act then deals with the assessment of contribution. Section 2(1) provides that, subject to section 1(3) which does not apply here, “in any proceedings for contribution under section 1 above the amount of the contribution recoverable from any person shall be such as may be found by the court to be just and equitable having regard to the extent of that person's responsibility for the damage in question.”[153]The contribution therefore has to be “just and equitable” having regard to Van Oord’s “responsibility for the damage in question”. As Hobhouse LJ said in Downs v Chappell [1997] 1 WLR 426 at 445:
“The extent of a person’s responsibility involves both the degree of his fault and the degree to which it contributed to the damage in question. It is just and equitable to take into account both the seriousness of the respective parties’ faults and their causative relevance.”
In Re-Source America v Platt [2004] EWCA Civ 665 at [51] Tuckey LJ pointed out that causative potency was “likely to be the most important factor in the assessment of relative responsibility which the court has to make.”[154]In relation to the scour protection, the design of the scour protection by Mouchel was inadequate because Mouchel failed to provide for the filter layer to prevent the GMS from being removed through the interstices of the rock used as scour protection. I agree with Van Oord’s submission that the workmanship defects in the context of that fundamental design error would only have speeded up the inevitable consequence of the defective design. In this case it did so by causing some local immediate consequences in the form of scour holes. Whilst the immediate cause of problems may have been the lack of depth of rock I consider that the rock scour protection designed by Mouchel was inadequate in any event. Overall I consider that the design failure had the greater degree of fault and contributed to a larger degree to the damage in terms of inadequate scour protection. I would therefore assess the relative contributions as 65% to Mouchel and 35% to Van Oord.[155]I have found that Van Oord was not liable for the suitability of the GMS and therefore do not need to decide the position in relation to the GMS. However, if I had found that they were liable for that suitability then I consider that they would have had the larger share of responsibility in relation to the suitability of GMS. The role of Mouchel, on that premise, would then have been more in the role of checking the suitability which would have been the responsibility of Van Oord under the sub-contract and Mouchel would have breached their contractual responsibility to Kier in not advising them that the GMS was unsuitable protection. Van Oord submit that Mouchel had a number of opportunities to advise Kier that the GMS was unsuitable. I accept that, as can be seen by the questions passing between ABB, Kier and Mouchel in relation to the suitability of GMS, this is a factor to take into account. But, as Mouchel correctly state, they had no involvement in the selection of GMS at the initial stages pre-tender and that they became involved in advising as a result of queries. If I had found that Van Oord were responsible for the suitability of GMS, I consider that the relative contributions would have been in the order of 75% to Van Oord and 25% to Mouchel. The Quantum of Damages[156]In this case the settlement between Kier and Mouchel was in the sum of £517,500 to Kier inclusive of interest and costs. That sum was broken down as to £100,000 for damages, a further sum for interest with the bulk of the settlement sum relating to costs.[157]In determining the sum payable by way of contribution both Mouchel and Van Oord have considered what sums Kier would have recovered from Mouchel and Van Oord in relation to their liability.Whilst I have found that there was no liability on Van Oord in relation to the suitability of GMS I consider that, given the evidence and submissions, I should set out my conclusions on that aspect as well. I therefore first set out my conclusions in relation to the cost of the work in placing additional scour protection around the intake and then I deal with the cost of the replacement of the GMS from chainage 1420 to 1864. Scour Protection[158]In relation to the placing of scour protection around the intake structure, Mr Browne originally calculated that 600 tons of armour rock were required. In their written closing submission Mouchel relied on a figure of 490 tons whilst Van Oord had put forward a figure of 566 tons. During the oral closing the parties were able to agree that the appropriate figure should be 450 tons.[159]In his quantum report Mr Ulyatt commented on an analysis of the cost of placing 600 tons of armour rock which had been put forward by Mouchel in the sum of £54,540. Mr Ulyatt considered that the assessment made by Mouchel was generally reasonable but he increased the cost of mobilisation/demobilisation by £10,208 and added 2% for overheads/profit. This gave a figure of £64,748.[160]As I have stated above, unless Van Oord can show that Mr Ulyatt’s opinion has been based on incorrect factual or legal assumptions, they are in difficulty in attempting to challenge the quantum which Mr Ulyatt has verified. With that in mind I now turn to consider the figure of £64,748 given by Mr Ulyatt in the light of the agreed quantities and the submissions of the parties.[161]Van Oord seek to contend that the survey costs of £2,366 should be disallowed on the basis that the survey to the rock at the intake was to a limited area. Mr Ulyatt considered this issue at paragraph 2.8.6 of his report and I accept his view and consider that the sum of £2,366 should be allowed.[162]Van Oord also criticise the inclusion of £9,800 for mobilisation and a further £9,800 for demobilisation. Van Oord say that the cost of mobilisation should not be allowed on the basis that the Frans, used to carry out the work, was carrying out remedial works in any event. The plans and documents indicate that the Frans had a limited involvement in this aspect of the work and Mr Ulyatt indicates that the total incurred by Kier for mobilisation and demobilisation was £29,808. Given that the Frans was used for other tasks I consider that there should be a reduction and I propose to allow only one figure of £9,800 as the cost for the relevant mobilization and demobilisation.[163]In relation to the cost of the vessel based crane and the Mesotech, Van Oord submit that the figure should be £8,100 and not £8,640 plus £600. The sum of £540 represents additional working time and £600 was the cost of the Mesotech survey equipment to assist in locating the structures. I consider that the proper sum is that allowed in the original calculation of £8640 and £600, to include additional working time and the Mesotech.[164]The next item is the cost of a working day to carry out the work. The cost put forward by Mouchel is £10,620 and is based upon there only being a rate for the Frans to be used on a 24 hour basis. The evidence shows that the Frans carried out other work on the particular day and I consider that there should be a reduction from the full rate for a 24 hour day. However, I do not consider that the proper allowance is 25% as Van Oord contend but rather a reduction to 50%, giving a figure £5,310.[165]The next item is the rate for rock supply which is claimed at £13.50 and which Van Oord say should be £9.08. In his report Mr Ulyatt says that the rates used by Mouchel for costs incurred by the rock suppliers are supported by contemporaneous documents and in his opinion are the correct rates to use for the evaluation exercise. He says that he has spot-checked the documents and the rates used are accurately transcribed from the documents checked. In those circumstances I adopt the rate of £13.50. The other rates are agreed.[166]The only other matter is preliminaries and overheads. Mr Ulyatt concluded that Kier had not incurred, or had not provided evidence to establish that it had incurred, additional preliminaries but he thought that, with regard to overheads and profit, it was reasonable for Kier to make a 2% recovery. I therefore add the 2% as the figure for that recovery.[167]Accordingly the overall figure is £36,380 calculated as follows:(1) Survey Costs £2366(2) Mobilisation/Demobilisation £9800(3) Vessel Based Crane £8640(4) Mesotech £600(5) Working Day £5310(6) Rock Supply 450 tonnes at £13.50 £6075(7) Placing Rock 450 tonnes at £3.71 £1669.50(8) Loading Rock 450 tonnes at £1.22 £549(9) Wear/tear 450 tonnes at £1.08 £486(10) Dock Reinstatement 450 tonnes at £0.38 £171 Sub-total £35666.50(11) Add 2% overheads and profit £713.33 Total £36379.83 or £36,380 Cost of GMS[168]The second aspect of quantum is the cost relating to the GMS which was placed as part of the remedial works to the trench. On this cost there are issues of principle as well as issues of quantum. Those issues are as follows(1) Whether Mr Ulyatt’s figure for the quantum of this work should be £948,163 as set out at paragraph 2.7.1 of his report or £920,380 as set out at paragraph 2.7.21 of his report.(2) Whether an allowance should be made for the sum of £60,000 which was allowed by Van Oord to Kier.(3) Whether the cost of a correct design scheme of £464,510.19 should be deducted.(4) Whether a reduction should be made to reduce the cost between Ch 1420 and Ch 1860 so that the cost only relates to Ch 1555 to Ch 1783.(5) Whether the cost of the additional scour protection work should be deducted. Base cost of remedial work[169]In relation to the base figure, I have considered the figures set out by Ulyatt in paragraphs 2.7.1 and 2.7.21 of his report. The figures at 2.7.1 appear to have deducted the £60,000 allowed by Van Oord to Kier on the final account and to have allowed preliminaries at 10%, being £84,507. By comparison, the calculation at paragraph 2.7.21 has not made that deduction of £60,000 and has made no allowance for overheads. It seems that at paragraph 2.5.3 Mr Ulyatt assessed preliminaries at 10% but at paragraph 2.5.4 said that he excluded preliminaries from his assessment of quantum.[170]In the circumstances I consider that the quantum at paragraph 2.7.21 being £920,380 should be the base figure that I adopt. I deal separately with the £60,000 figure below. The sum of £60,000[171]In relation to the £60,000 the question is whether the sum was a commercial discount in the sense that the true cost of the work was £60,000 less than it would have been or whether the true cost of the works should be increased by £60,000 on the basis that the £60,000 is a contribution from Van Oord towards any liability for the work. Mr Smart’s oral evidence on this aspect and the internal document dated 23 April 1997 which referred to “60k retention now treated as discount” tends to support the view that this was a discount and therefore the true price was less. However looking at the documentation which was produced at the time I consider that the reality is that the cost of the works was £60,000 greater than the sum which was paid to Van Oord and that the £60,000 was, in fact, an allowance in respect of any liability.[172]On that basis it follows that the £60,000 should be added to £920,380 to give the proper figure for the cost of the remedial works. When overheads and profit are taken into account the sum to be added should therefore be £61,200. Contrary to Van Oord’s submissions it should not be increased by 10% for preliminaries as Mr Ulyatt excluded these. Measure of Damages[173]In relation to the measure of damages against Van Oord, on the basis that, contrary to my decision, Van Oord were liable for a warranty of fitness for purpose, I consider that the measure should be the contractual measure of putting Kier into the position that they would have been in had Van Oord’s work been fit for purpose. On that basis I do not consider that the sum of £464,510.19 (excluding preliminaries or overheads and profit), which represents what Kier would have to have paid originally for this work, should be deducted.[174]I consider that Van Oord are correct and that from these costs the cost of the remedial works for the work necessary because of the breach of contract in relation to the scour armour should be deducted. That figure as set out above is £35,666.50.[175]I accept that, as submitted by Van Oord the overall cost set out above is for the work between Ch 1420 and Ch 1860 but should not include the work between 1555 and 1783 relating to the intake and outfall structures. I also accept Van Oord’s pro-rata approach to reducing the cost so that it applies to the relevant length and I am satisfied that the appropriate percentage is about 52% which is the percentage I propose to use.[176]Accordingly, the damages for which Van Oord would have been liable to Kier are £491,875.02 which is 52% of £945,913.50 calculated as follows:(1) Base costs of the works£920,380(2) Addition of £60,000£61,200 Total£945,913.50[177]In relation to Mouchel, I consider that its liability should be based on a measure which reflects the fact that had they not given negligent advice Kier would have had to place rock armour or another scour protection measure in the trench and would have had to pay more in order to carry that out. On that basis the liability of Mouchel would only be for the cost of replacement of GMS in the trench. The cost of that, as assessed by Mouchel was £105,731.25. Mr Ulyatt at paragraph 2.8.10 and 2.11 of his report adds in certain survey costs and 2% for overheads and profit to give a figure of £112,968. I consider that this figure properly represents the damages for which Mouchel would have been liable to Kier on the basis of liability. The amount of contribution[178]In their closing submissions Mouchel set out a methodology which they say can be used to deal with the actual sum which should be awarded on the basis of contribution. In general that seems a sensible basis for proceeding.[179]The first thing which has to be done is to consider what sum forms the basis of the contribution. In this case the sum which formed the settlement was £100,000. Mouchel at one stage suggested that a contribution from Van Oord would not be limited to the settlement sum. I do not accept that. It seems to me that the question is: what amount is it just and equitable for a party to contribute and for the other party to recover in respect of the same damage. This means, in my judgment, that it is not just and equitable for a person to contribute more than the sum paid by the other party and the other party should not recover more than it has paid.[180]On the figures that I have calculated, Mouchel were liable to Kier for £112,968 in respect of GMS and £36,380 in respect of scour protection making a total of £149,348. That means that on each head of claim, Mouchel has paid out pro-rata from the £100,000, the sum of £75,640 for the GMS and £24,360 for the scour protection.[181]On the basis that there was no liability for GMS then it seems that the £60,000 would not need to be taken into account as it related to potential liability for the GMS as identified in paragraph (b) of Kier’s letter of 22 May 1996 and not liability for failure properly to install scour protection.[182]It follows from the contribution of 35% that I have found to be the appropriate percentage that Van Oord should contribute for the scour protection that Van Oord are liable to contribute £8,546, being 35% of £24,360 to Mouchel for that liability. The same pro-rata calculation should also apply to the sum paid by way of interest.[183]So far as costs are concerned, Van Oord accepted that, in principle, there would be a liability to contribute in relation to the costs paid by Mouchel. I consider that there are a number of factors which might affect the contribution to costs including my finding on the extent of Van Oord’s liability to Kier. In the circumstances, given the fact that the evidence of costs is limited I consider that I should hear further submissions on the contribution to costs, if it cannot be agreed. Summary[184]For the reasons set out above, I find that Van Oord were not liable to Kier for the suitability of GMS to comply with the performance specification in terms of providing protection from erosion but they were liable to Kier for workmanship defects in failing to lay the required depth of scour protection rock in the vicinity of the intake structure. This gives rise to a liability for Van Oord to make a contribution of 35% to Mouchel in respect of that liability. As Mouchel have paid £24,360 to settle that claim, excluding interest and costs, Van Oord are liable to contribute £8,546 plus a sum for interest to be calculated on the same basis. In addition they are liable to contribute for costs as to which the parties are invited to make further submissions if the matter cannot be agreed.

Cited in 1 later judgment