GREENWICH MILLENNIUM VILLAGE LIMITED - and - ESSEX SERVICES GROUP PLC (formerly known as ESSEX ELECTRICAL GROUP LIMITED) v Claimant 1st Defendant/ Part 20 [2013] EWHC 3059 (TCC)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

[2013] EWHC 3059 (TCC)

Case No Case No: HT-12-116

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Between

GREENWICH MILLENNIUM VILLAGE LIMITED - and - ESSEX SERVICES GROUP PLC (formerly known as ESSEX ELECTRICAL GROUP LIMITED)

Claimant 1st Defendant/ Part 20Claimant

HS ENVIRONMENTAL SERVICES LIMITED (in administration) - and - W T PARTNERSHIP LIMITED - and - HOARE LEA (a firm) - and - D G ROBSON MECHANICAL SERVICES LIMITED

3rd Party 4th Party 5th Party/2nd Defendant 6thParty

Before

THE HONOURABLE MR. JUSTICE COULSON

Mr Piers Stansfield QC

(instructed by Greenwoods) for GMVL, the Claimant

Miss Fiona Sinclair QC (instructed by Kennedys)

for Essex, the 1st Defendant/Part 20 Claimant

Mr Alexander Hickey (instructed by Berrymans Lace Mawer)

for Hoare Lea, the 2nd Defendant/5th Party

Mr Simon Hargreaves QC and Mr Karim Ghaly

(instructed by Clyde & Co) for HSE, the 3rd Party

Mr Roger ter Haar QC and Mr Alexander Macpherson

(instructed by Fox Hartley) for Robson, the 6th Party

Hearing dates: 2-4, 8, 10-12, 15-18, 29-30 July 2013

Date 25 October 2013

[1]The Hon Mr Justice Coulson: 1. INTRODUCTION On 1 August 2007, water was seen cascading out of the balconies and down the sides of a block of flats known as Holly Court on the Greenwich peninsula, in South London. The water came from two of the cold water riser mains within the Cores of the building which were leaking as a result of two separate but related failures. The damage that was done was extensive, and the eventual cost of the remedial works and other losses has been agreed at £4.75 million.

[2]At the time of its construction and the subsequent flooding, the owners of the building were the claimant, Greenwich Millennium Village Limited ("GMVL"). They paid for the remedial works and resolved the claims made against them by the leaseholders of the individual flats. They also made a successful claim on their property insurers. Accordingly, this is now a subrogated claim in which GMVL seek to recover the costs caused by the flooding against some of those who were responsible for the original design and construction of the building.

[3]Although the original design and build contractor was Laing O'Rourke ("LOR"), and GMVL's original agents were WT Partnership ("WTP"), neither is the subject of the subrogated claim [1] . Instead, GMVL pursue a claim against the mechanical and electrical sub-contractors, Essex Services Group PLC ("Essex") and the designers of the mechanical systems, Hoare Lea ("HL"). Those claims are pursued in reliance upon individual warranties provided to GMVL by Essex and HL respectively, although there are also alternative claims in negligence against both defendants. Essex pass on the claim against them pursuant to the mechanical sub-sub-contract that they entered into with HS Environmental Services Limited ("HSE") and HSE, in their turn, pass on the claim to the labour-only mechanical sub-sub-sub-contractor, D G Robson Mechanical Services Limited ("Robson"). Robson are the only one of the defendants and third parties who did not, on any view, have any sort of design obligation.

[4]Accordingly, in many ways this is old-fashioned TCC litigation, involving five parties, with different defences and claims up and down the line, depending precisely on where the parties sit in the contractual chain. It is also old-fashioned litigation in another sense: many of the factual issues are surprisingly basic, such as 'who over-tightened the nut?' and 'who closed the isolation valve when it should have stayed open?' However, despite this retro feel, it should be said at the outset that the trial was crisply conducted by all counsel and the process was greatly assisted by clear and cogent expert evidence provided with the rigour required by the newly modified CPR Part 35.

[5]There was a third (and less welcome) way in which the underlying facts of this case seemed redolent of another age. Skilful cross-examination revealed a situation, both on site and off, which was at times comically inept: important obligations were inadvertently muddled as they passed on down the contractual chain; warranties were provided in relation to contracts that were subsequently changed or services which were never provided; and everyone was so intent on avoiding responsibility for anything meaningful that no single organisation had overall control of the design, installation, supervision, inspection, testing and acceptance of the boosted mains cold water system ("BMCWS"). To use a phrase common in the UK construction industry 20 years ago, it was death by sub-contracting.

[6]This muddle resulted in pipework systems which, on completion, varied markedly from core to core, even though they should have been the same in each. Different valves could be found in different places on the risers where there was no logical distinction between the locations. Sometimes there was a valve in a particular place on the riser in one core, but no valve in the same place on the riser in the adjacent core. There was no proper paper trail dealing with the critical late addition of surge arrestors to the BMCWS which lies at the heart of this case, with the result that Robson, the labour-only plumber, was able to argue that it did not do the particular work now under scrutiny because there was no contemporaneous paperwork to suggest that it did. Most importantly of all, there was no specification or design drawing showing the detail of the surge arrestor installation, no record drawing showing what was actually installed; and no inspection report saying how and why that which had been installed was satisfactory. To crown it all, the Operating and Maintenance Manuals provided to GMVL did not refer to the critical surge arrestors (and their related components) at all. In those circumstances, it is perhaps less surprising than it might otherwise appear that the Millennium Village development was the subject of the catastrophic flooding on 1 August 2007. 2. THE ISSUES

[7]There were two separate flooding incidents on 1 August 2007. The first occurred in Core 3, Level 2, when an isolation valve ("IV") on a riser branch failed. The precise element which failed was the nut that connected the downstream pipework to the downstream part of the IV. It is agreed by GMVL and Essex (although this view was not universal), that the cause of the first flood in Core 3 was due to this plastic nut being over-tightened, and the presence of debris in the thread. The over-tightening was evidenced by tool marks, probably made by metal wrenches called Stilsons, which should not have been used on the plastic nut.

[8]GMVL allege that Essex over-tightened the nut prior to handover in August 2006, and was therefore responsible for the damage which led to the first flood. Essex deny liability, suggesting (principally through Robson) that the nut was over-tightened as part of GMVL's maintenance work in the period of almost a year after the handover and before the flooding.

[9]The claim in respect of Core 3 is passed on by Essex to HSE who, in turn, pass it onto Robson. HL are not involved in the Core 3 claim at all, either by reference to their design or their periodic inspections. Robson deny that any of their men would have over-tightened the nut using tools, and conclude therefore that the nut must have been over-tightened after completion. They also maintain that the debris was too small to have been capable of being realistically excluded from the thread.

[10]As a consequence of the flood in Core 3, the water tanks (which served both Core 3 and Core 2) emptied. The water in the riser in Core 2 therefore drained down. Once the system equalised, and water began to come back up the riser in Core 2, there was a separate problem. The riser had been fitted with a surge arrestor at the top of the riser, a kind of valve which allowed air to get into the riser and prevent a vacuum from being created if the water level fell. But below the surge arrestor in Core 2 was both a non-return valve ("NRV") and, a little further down the riser, an isolation valve ("IV"). The NRV, which was closest to the surge arrestor, prevented it from working because it stopped the air from getting into the riser to prevent a surge in water pressure. In addition, if the IV was closed on 1 August 2007, that also prevented the surge arrestor from working, again because it also stopped the air getting into the top of the riser.

[11]In this way, a vacuum was created at the top of the riser when the water level fell, so that when the water came back up the riser, there was a vacuum at the top, and no air cushion to slow down the velocity of the rising water. As a result there was a 'water hammer' event: the renewed water surge put pressure on the pipework that it was not designed to withstand. Pressure caused a breach in the riser on the sixth floor (the weakest point and not otherwise significant) and was the cause of the catastrophic Core 2 flooding.

[12]The principal issue in this case concerns causation. After significant changes of case by a number of the parties, the final position was this. Robson and Essex both submitted that the sole or primary cause of the flooding was the closed IV. HL and HSE argued that the sole or primary cause of the flooding was the NRV, although both they and Essex advanced a secondary case that both the NRV and the IV were effective causes of the flooding. GMVL have always maintained a case that both the NRV and the IV were the causes of the flooding, although some matters of emphasis in the presentation of that case changed during the trial.

[13]Unsurprisingly perhaps, the parties have adopted different cases on causation because of their potential liability for these different causes. Thus, if the NRV was the sole/primary cause of the flooding then Essex admits that the NRV was a breach, as do HSE; but both parties do so knowing that this is a claim that they can pass on down the line to Robson. HL say that, if it was the installation of the NRV, then the claim against them should be modest, because it does not involve any design failure. Robson deny that they installed the NRV but if they are wrong about that then, subject to my other findings, they have no defence to the claim. That explains the vigour with which they disputed the causal relevance of the NRV.

[14]On the other hand, if the IV was the sole/primary cause of the flooding then the position is more complicated. This is principally because, in order to establish liability against Essex and/or HL, GMVL need to show, not only that the IV was closed at the time of the flooding, but that it was closed when this part of Holly Court was handed over to them on 18 August 2006. That is very much in issue. If GMVL fail to prove that the IV was closed at practical completion, then it is said – particularly by Essex and Robson – that they have failed to discharge the burden of proof and/or that GMVL are themselves responsible for closing the IV (probably inadvertently) after handover. On behalf of HL, Mr Hickey candidly acknowledged in his closing written submissions that, in all the circumstances of this case, that would be an "unattractive result", which perhaps explains one reason why HL have a rather different case on causation.

[15]In addition, GMVL allege that, even if the IV was open at practical completion, and was subsequently closed, this was also the responsibility of both Essex and HL because they should have specified/installed a tamper-proof IV and/or put up clear warning notices to the effect that, if the IV was closed, then the surge arrestor would not work. Such notices were put up, but only after the flooding.

[16]HL, Essex and HSE all deny the claim in respect of the tamper-proof valve and/or the warning notices, in part because, in their different ways, they each deny that they had the necessary design responsibility. That in turn gives rise to arguments as to the precise nature of the warranties which Essex and HL provided to GMVL, and the precise scope of the 'back-to-back' nature of HSE's obligations to Essex. There is also a debate about whether or not such valves should have been specified anyway, and, if so, what causative effect (if any) they, or the absence of notices, could have played.

[17]The experts are agreed that the original flood in Core 3 accounted for 8% of the costs and losses (£380,000), whilst the flood in Core 2 was responsible for the remaining 92% (£4,370,000). The total claim is thus agreed at £4.75 million, together with interest to be determined.

[18]The structure of this Judgment is as follows. I identify the relevant contractual chain in Section 3 below. I give an outline description and history of the development of the BMCWS in Section 4 . I detail the flooding on 1 August 2007 in Section 5 . In Section 6, I address the cause of the Core 3 flood. In Section 7, I analyse GMVL's claims against Essex arising out of the Core 3 flood and, in Section 8, I go to deal with the consequential claims (Essex against HSE and HSE against Robson) in respect of the Core 3 flood. In Section 9 , I address the cause of the Core 2 flood from a legal and factual standpoint. I then analyse GMVL's Core 2 claim against HL in Section 10 , and undertake a similar analysis of GMVL's claim against Essex in Section 11 . I apportion the claim between HL and Essex for the purposes of the contribution proceedings in Section 12 below. Thereafter, in Section 13 , I go on to deal with the consequential claims (Essex against HSE and HSE against Robson) in respect of the Core 2 flood. I address Essex's allegations of contributory negligence in Section 14 . There is a brief summary of my conclusions in Section 15 below. 3. THE CONTRACTUAL CHAIN "... Develop the Detailed Design from the approved Design in the Employer's Proposals in coordination with the other Consultants and Contractors and prepare Production Information for formal issue to the Employer in accordance with the Construction Programme and within the Cost Plan. Provide and agree with the Employer and regularly review on a two weekly basis a deliverable schedule for work up to completion of Production Information itemising each piece of design information to be submitted… Prepare Production Information of sufficient detail for construction purposes and in full coordination with the other Consultants and Contractors as reasonably required by the Employer, Production Information to include but not be limited to fully dimensioned and detailed drawings, specifications [in NBS format], schedules, descriptions of materials and finishes, workmanship and quality standards. Provide comments to the Lead Consultant on all Contractor and Supplier submitted design and technical information. Attend regular meetings with the Employer and other members of the Project Team as necessary in order to monitor the progress of the Works and the issue of Production Information to the Employer. Review with the Employer the design deliverables program in conjunction with the Information Required Schedule and the Construction Programme. Examine the Trade Contractors and Suppliers drawings and details with particular reference to tolerances and dimensional and spatial coordination, interfaces, finish, durability, appearance and performance criteria. Report to Employer. At all stages of Production Information check and coordinate the design produced by the Consultants and Trade Contractors for compliance with the Client's Requirements and Employer's Proposals and advise the Employer in writing of any likely non-conformities. Coordinate and answer Request for Information queries (RFI) from the Employer and/or the other Consultants or Contractors. In liaison with the other members of the Project Team issue to the Employer the requisite number of record drawings, schedules, specifications and guidance on the operation and maintenance of the project and its services as required by this appointment. Before obtaining the Employer's approval to proceed to the next Stage carry out a check to see that all drawings, specifications, bills of quantities, schedules or other documents have been produced in compliance with the Client's Requirements, Employer's Proposals, the agreed Cost Plan and Programme. Attend Consultants and Contractors design team meetings on site chaired and minuted by the Employer in connection with the design of the Works and to a programme agreed with the Employer. Respond to technical queries raised and update and reissue drawings and/or specifications accordingly for construction purposes. Visit the site at agreed intervals during the construction of the Works in order to inspect the quality of the work and to monitor progress and see that the Works are completed fully in accordance with the contract documents." "IT IS HEREBY AGREED as follows: 1. In consideration of the payment by the Beneficiary [GMVL] of £1…the Consultant ["HL"] hereby warrants and undertakes to and with the Beneficiary that:- 1.1 In respect of all the Consultant's Services to be performed under the Appointment the Consultant has exercised and will continue to exercise the reasonable skill care and diligence to be expected of a properly qualified and competent consultant of the Consultant's discipline experienced in performing duties similar to the Services on projects of a similar size scope and complexity to the Project… … 1.5 For the avoidance of doubt the Consultant's liability for loss or damage should be limited to such sum as the Consultant ought reasonably to pay having regard to their responsibility for the same on the basis that all Consultants shall where appointed be deemed to have provided to the Beneficiary contractual undertakings on terms substantially not less onerous than those set out in this Agreement on respect of the performance of their obligations in connection with the project…" "…we confirm on behalf of [GMVL] that your fee proposal dated 10 January 2005 in the sum of £77,500 has been accepted and that GMVL approved your appointment as Monitoring Services Engineer in respect of the Holly and Becquerel Court project. As stated in our previous correspondence, our appointment as Employers Agent is extended to include the employment of Monitoring Consultants…" (Emphasis added) "IT IS HEREBY AGREED as follows:- 1. The sub-contractor [Essex] warrants and undertakes to the Beneficiary [GMVL] that it has carried out and it will carry out each and all of its obligations duties and undertakings under and pursuant to the sub-contract when and if such obligations duties and undertakings shall become due and performable according to the terms of the sub-contract.

(a) Scope of Works This document stated as follows:

"The following is a brief summary of the items included within the Sub-Contract Works but it is not exhaustive. The scope of the Sub-Contract Work is everything which is shown or described or can be inferred from the documents contained or referred to within this Sub-Contract Agreement together with anything which could reasonably have been foreseen generally including inter alia: 1.1 Developing the design of the Mechanical and Electrical works to suit the ongoing scheme. The Sub-Contractor shall take ownership of the design concept prepared by Hoare Lea. 1.2 Supply, delivery, off-loading of all necessary plant, equipment, materials (including all fixtures and fittings) and to provide all required labour and supervision to carry out the installation of the Mechanical, Electrical, Public Health, Plumbing Works associated Builders Works, to include but not limited to the following… Cold Water Supply including Cold Water Tanks, Booster Sets, Isolation Valves as necessary… Booster Pumps… Testing Commissioning and final Certification… Preparation and submission of fully compliant O and M Manuals…" (Emphasis supplied)

(b) Clause 1 of the Appendix to DOM/2 – Part 16 "Design Responsibilities The Sub-Contract Works and the Sub-Contract Sum therefore shall include for (a) The design thereof and the integration of that design with the works and/or designs of others, including the services and the structure, as indicated in any performance and/or other specification and/or drawing and/or bills of quantities and/or activity schedule and/or any other relevant information or documents… (c) Everything necessary for the design development in connection with the Sub-Contract Works. 'Design development' is defined as the progression and completion of any design, including any amendments and/or consequential works, required to make the Sub-Contractor's Proposals fully satisfy the Employer's Requirements insofar as they apply to the Sub-Contract Works… (e) Everything ancillary to and necessary for the proper execution of the Sub-Contract Works, including anything that may reasonably be implied and/or inferred as necessary for the safe and satisfactory installation and operation of the Sub-Contract Works." (c) Clause 5.3.1 of DOM/2 "To the extent that the Sub-Contractor has designed the Sub-Contract Works (including any further design which the Sub-Contractor is to carry out as a result of a Variation required by the Contractor) the Sub-Contractor shall have in respect of any defect or insufficiency the like liability to the Contractor, whether under statute or otherwise, as would an Architect or, as the case may be, other appropriate professional designer holding himself out as competent to take on work for such design who acting independently under a separate contract with the Contractor, had supplied such design for or in connection with works to be carried out and completed by a building contractor not being the supplier of the design." (a) At the meeting on 8 December 2004, where the minutes record that "Essex confirm that they will be liable for the design of the sub-contract works." (b) Mr Sampson's (of Essex) emails of 10 and 11 February 2005 which Essex expressly accepted that part of the sub-contract stated that "Essex will take ownership of the design concept prepared by HL." Mr Sampson's oral evidence was that, because of his agreement to it, this provision expressly remained within the sub-contract. (c) The exchanges on 15 and 16 March 2005 in which Mr Sampson identified various matters that Essex remained unhappy about and Mr Johnson of LOR's response which again made clear that the question of design was not negotiable. "Matters Agreed between the Contractor and the Sub-Contractor are as scheduled in the Addendum to the Appendix to DOM/2…part 15 Schedule D2SC/99/AN1 attached. In the event of conflict between the Matters Agreed and any other Terms and Conditions included in the Sub-Contract then Schedule D2SC/99/AN1 shall prevail." The argument is that the 'Matters Agreed' included the deletion of the warranty. But that is said to prevail only over the 'Terms and Conditions'. The critical 'Scope of Works' clause referred to at paragraph 41(a) above (which referred to the taking of ownership of the design by Essex) was not a 'Term or Condition' as defined, and was therefore outside the hierarchy provision in any event. "1.1…HS are to be responsible for the co-ordination of the Mechanical and Electrical Services both spatially and with the building fabric as agreed previously between Chris Phillips and Brett Cowlbeck… 7.1 HS accept that the sub-contract will be back to back with that of the contract between LOR and Essex. Where the contract refers to 'Employer', substitute with 'Essex Electrical group Plc' and where the contract refers to 'Contractor' substitute with 'HS Environmental Service Ltd'." (Emphasis added) Further, at 7.14 of the Minutes, there were references to the provision by HSE of certain design drawings by particular dates. They were generically referred to as "design development/drawing production". "Any liability, loss, claim or proceedings of whatsoever nature such as shall arise by virtue of the breach or breaches of this Subcontract Agreement by, or act, default or negligence of the Subcontractor." 4. THE BOOSTED MAINS COLD WATER SYSTEM "WG introduced the recent problem experienced by the pressure tank cold water system (BMCW) at Grosvenor Waterside i.e.: 28 th February 2005 was to be hand over Mechanical Contractor running late BMCW pumps started up 'in a hurry' BMCW pipe joints failed, resulting in flooding of the building Flooding = £100k's damage HL working under abridged duties, so we cannot just walk away from this problem (already costing HL money to control the situation)" "Do you require vents at the top of each BCW riser in Holly and Becquerel Court. These are not indicated on drawings. These vents stop the compression of air at top of risers (hydraulic shock)." This could have been a shrouded reference to water hammer, but it was accepted in evidence that it did not raise the issue directly. In any event, HL replied and said that air vents were required. To demonstrate how little Essex/HSE were concerned about this aspect of the design, even when they got the reply to the RFI in September 2005, Essex/HSE still did not amend their design to show the air vents upon which HL had insisted. "In the aftermath of Grosvenor, you're probably all aware that I was tasked with developing a new S13 section, pro forma booster set equipment schedule, and generic boosted water schematic, to take on board lessons learned. Bill and Ed have reviewed these documents, and they are attached so that ALL OF YOU can use them for the next project with BMCW in it…" "This device shall incorporate automatic air venting with the facility to decelerate approaching water when air is venting. In addition, the device shall permit vacuum relief when draining down pipe work. The combined air release/vacuum breaker shall be as manufactured by Cla-Val UK Ltd…at a pressure rating suitable for the maximum BMCW operating pressure. Final selection of the valves shall be determined by the manufacturer. Install a lock-shield isolating valve at the head of the riser prior to the air release/anti-shock device to permit future maintenance." "If they are to be fitted, we really do need to be issuing an instruction soon. The tanks are now built and boosters onsite, these are however yet to be piped up, but this does not take too long. I am concerned that this issue does not get over-looked." "Are Essex going to put these in? This is urgent as the detailed design was carried out when we knew about the enhanced requirements. Can you talk to Essex and understand what they priced/are willing to do?" Although Mr Hart purported to argue in his oral evidence that it was not for HL to require or recommend the installation of these surge arrestors, I consider that the language of Mr Delvin's email makes plain that, on the contrary, it was their responsibility, and that he knew it. It was this email which prompted Mr Hart finally to take action; until then, it was something that he had wholly overlooked. "We are aware of a number of incidents in recent times of major failures of boosted cold water systems resulting in significant flooding of apartments. The prime reason for this would appear to be when the booster set comes back on after a period being off, either as a result of a power failure or as a result of a maintenance shutdown. Basically there is a surge of water as power is restored and this can burst pipes and joints. A number of these floods have been during construction and have resulted in significant insurance claims. In order to reduce the likelihood of this occurring we now incorporate into our new designs a special valve that automatically allows air in and out (to prevent a vacuum or trapped air) and also contains a surge arrestor. We attach detail page of a suitable unit as available from Grundfos Pumps. The scheme does not currently incorporate these valves, only AAV's [air vents] as it was designed some months ago. We think that you should seriously consider incorporating these valves, one at the top of each of the nine risers in Holly and Becquerel Courts. List price of each valve is £368. Allowing for a price discount of the sub-contractor and allowing for fitting we would expect the final cost to be circa £4,500-£5,000. We consider this to be money well spent." "I am a bit concerned that the Boosted Cold Water has been switched on in the Core 3 riser, yet the upper floors are incomplete and there is no surge arrestor fitted at the highest point in the riser. This is leaving this Core exposed to malicious damage, as well as increasing the risk of a pipework failure. I did mention it to LOR when I was on site (not Dave Byford) and they informed me it was being shut off (please check), but it is something which needs to be treated with caution, usually this is opened up when a block is being fully commissioned." In response, Mr Amundsen of HSE said that they were only turning the water on for the purposes of filling and providing domestic services and that they were requested to leave water on to prove flushing and the like during the inspection periods. He promised that HSE would ensure that the BMCWS was isolated when they were not using it. "DGR acknowledged that nobody wants any more floods at Greenwich but stand by my comments that once we have field tested and isolated a flat to HSE's satisfaction our scope of work is complete. DGR should not be demonstrating any works to your client LOR, or have no involvement in the chlorination and therefore it is the responsibility of your sub-contractor to ensure that he isolates the BCWS when his works are complete…" The problem with this stance was that it ignored the piecemeal way in which Robson's contractual workscope was being completed (see below). 5. THE CATASTROPHIC FLOODING ON 1 AUGUST 2007. "As I was driving along the road towards the village I saw from about 100 yards away a wall of water pouring out from the sixth floor windows and balconies and cascading down outside of Holly Court like a waterfall." He went into Holly Court at about 7 am on the morning of 1 August, immediately after the pumps had been turned off. He said that "water was running down the stairwells and cascading down the walls mixed with debris falling from collapsed ceilings." Mr Crawford also noted the debris falling from ceilings and said that it was lucky that people had not been injured. 6. THE CAUSE OF THE CORE 3 FLOOD 6.3.1 Metallic Particles/Debris "Q: It is emphasised both in the [manufacturers'] instructions and in the British Standard, which we will look at in a moment, that in joints of all materials, you are best advised to keep metallic debris out of them? A: That is correct. Q: It is well known in the industry and it is no surprise to anybody in the industry, is it? A: No." After the British Standard had been looked at the cross-examination continued:

"Q: …is there any ambiguity or difficulty with the words 'free from'? A: No. Q: When it says 'metal filings', are those precisely what are produced by these processes on site that you refer to? A: Yes. Q: So in a sense Mr Newbery, it is less about a hand lens and a light source, and rather more about not letting metallic debris in there in the first place, isn't it? A: Ideally there should be no metallic debris, I agree." 6.3.2 Over-Tightening (a) Mr Newbery originally said there was no evidence of significant over-tightening but he ultimately agreed that it was "possible to cause over-tightening to cause damage to the thread while producing the tool marks seen on the incident nut"; (b) Although Mr Newbery originally suggested that over-tightening the nut would impart a pre-load which would render it more resistant to fatigue cracking, he appeared ultimately to accept that, whilst that might be true for a steel bolt, it was not true for a polymer nut like this; (c) Although Mr Newbery originally disagreed that over-tightening could cause a crack which grew over time, he ultimately conceded the point and accepted that he had not appreciated the speed at which brittle fractures could occur in this material; (d) Although Mr Newbery appeared to rely on the 200 or so visible progression ridges as indicating that the nut had been subjected to 200 or so high pressure events, he ultimately accepted Mr Cooper's explanation that up to 90% of the fatigue life of a plastic component would typically produce no progression ridges at all; (e) Although Mr Newbery originally stated that the over-tightening/debris theory could not explain the propagation or the final failure of the nut and that each would require more substantial loads than would be generated in the ordinary operation of this system, he ultimately abandoned both of those positions. 6.3.3 The Pump System and Pressure Surges 7. GMVL'S CLAIM AGAINST ESSEX ON CORE 3 8. THE CONSEQUENTIAL CLAIMS AGAINST HSE and ROBSON ON CORE 3 169. (a) Robson accepted that the over-tightening which I have found was a breach of contract. However, in connection with the debris, Robson did not accept liability, arguing that the training/instructions that they received from the manufacturer, Georg Fischer, related to the cleaning of pipe joints prior to gluing, rather than the cleaning of threads before the hand-tightening of nuts. However, that does not seem to me to offer Robson any sort of defence, given that the manufacturer's instructions about hand-tightening were available in writing, and given that precisely the same reasons for keeping the joints to be glued free from debris applied to the need to keep the thread of the nut similarly uncontaminated. As Mr Newbery, Robson's expert, confirmed, however a joint is being made, "you wouldn't want them [the particles] in there." (b) In my view, this evidence (and similar views expressed by other experts) makes clear that the damage to the nut, and therefore the risk to the joint, was wholly foreseeable, an issue not raised by Essex or HSE, but raised by Robson. Furthermore, although Mr Ter Haar QC asserted, by reference to The Heron II [1969] 1 AC 350 at 385, that the type of damage which was foreseeable as a result of the debris would only occur in a small minority of cases, and so could not be regarded as arising in the usual course of things, I consider that that submission too was contrary to the evidence outlined above. It was foreseeable that foreign material in joints may cause all sorts of problems, including consequential over-tightening and failure. That is why, amongst other things, the British Standard prohibits such contamination. 9. THE CAUSE OF THE CORE 2 FLOOD "

This guideline principle is concerned to identify and exclude losses lacking a causal connection with the wrongful conduct. Expressed in its simplest form, the principle poses the question whether the plaintiff would have suffered the loss without ('but for') the defendant's wrongdoing. If he would not, the wrongful conduct was a cause of the loss. If the loss would have arisen even without the defendant's wrongdoing, normally it does not give rise to legal liability." As Hamblen J put it more recently in Orient-Express Hotels Limited v Assucurazioni General SA

[2010] EWHC 1186 (Comm)

at paragraph 33:

"As a general rule the "but for" test is a necessary condition for establishing causation in fact." "

Although, therefore, mesothelioma claims must now be considered from the defendant's standpoint a lost cause, there is to my mind a lesson to be learned from losing it: the law tampers with the "but for" test of causation at its peril." Lord Mance expressly agreed with that "lesson of caution". But it needs to be noted that, as Lord Phillips made plain in paragraph 1 of the judgment, both cases were governed by the 'special rule' applicable to mesothelioma cases. "73…Even the sophisticated variants of the 'but for' test cannot be expected to set out a formula whose mechanical application will provide infallible threshold guidance on causal connection for every tort in every circumstance. In particular, the 'but for' test can be over-exclusionary. 74…In this type of case, involving multiple wrongdoers, the court may treat wrongful conduct as having sufficient causal connection with the loss for the purpose of attracting responsibility even though the simple 'but for' test is not satisfied. In so deciding the court is primarily making a value judgment on responsibility. In making this judgment the court will have regard to the purpose sought to be achieved by the relevant tort, as applied to the particular circumstances." Similar references to the need for value judgments can be found in the judgment of Glidewell LJ in Galoo Limited and Others v Bright Grahame Murray and Others

[1994] 1 WLR 1360

, and in March v E and MH Stramare PTY Limited a decision of the High Court of Australia and reported at [1990-1991] 171 CLR 506. "However, there may be cases in which fairness and reasonableness require that it [the 'but for' test] should not be a necessary condition. This is most likely to be in the context of negligence or conversion claims, but I would accept that in principle it is not limited to tort or to particular torts. I would also accept that a case in which there are two concurrent independent causes of a loss, with the consequence that the application of the 'but for' test would mean that there is no cause of the loss, is potentially an example of a case in which fairness and reasonableness would require that the 'but for' test should not be a necessary condition of causation, particularly where two wrongdoers are involved." This passage reflects paragraphs 72-74 of the speech of Lord Nicholls in Kuwait , where he expressly addresses the problems created by two wrongdoers or two separate causes of the loss. At paragraph 74 he said:

"The classic example is where two persons independently search for the source of a gas leak with the aid of lighted candles. According to the simple 'but for' test, neither would be liable for damage caused by the resultant explosion. In this type of case, involving multiple wrongdoers, the court may treat wrongful conduct as having sufficient causal connection with the loss for the purpose of attracting responsibility even though the simple 'but for' test is not satisfied." "…the contractor cannot recover damages for delay in circumstances where he would have suffered exactly the same loss as a result of causes within his control or for which he is contractually responsible."

But this decision turned on the relevant contractual mechanisms governing extensions of time and loss and expense. I do not regard it as providing any wider guidance on issues of causation, a view I note expressly shared by Mr Stansfield QC and Ms Sinclair QC. (a) The IV (b) The NRV "The NRV orientated to allow only upward flow would also have prevented air from entering the riser but with the IV closed there would have been no means of drawing, or allowing, air in to the riser anyway. In summary, with the IV closed, the NRV had no influence on the Core 2 leak." However, beginning with Mr Hickey's cross-examination of Dr Sanders, it became apparent that this was an inaccurate summation of the position. True it is that, with the IV closed, there was another cause of the vacuum, but it was not right to say that the NRV had no influence on the Core 2 leak. On the contrary, the NRV also prevented the surge arrestor from working and also caused the presence of the vacuum. Indeed, on one view, the NRV was more important than the IV because the NRV permanently disabled the surge arrestor, whilst the IV only did so if/when it was closed; if the IV was open, it was causally irrelevant.

(a) Mr Hickey's cross-examination of Dr Sanders:

"Q: The reason why the air can't get into the riser is because of the presence of the NRV which you are asked to assume was present? A: Yes that is right. Q: That's why you say, in your scenario, whether the IV is opened, it would have happened anyway, and the principal reason for that, the dominant reason, is because the NRV prevents any air getting in to provide the cushion effect, am I right? A: Yes that is right. … Q: A surge arrestor has been provided and it needs to do its job. Its job is to avoid water hammer, or at least deal with it, and it is prevented from doing its job, not because the key is being switched on or off, but because there is a non return valve there and that is preventing it from letting air in. It is effectively as if you have built a riser without surge protection, am I right? A: I think I see what you are saying. I don't know that it is really for me to say which is the predominant or the main cause. The fact is that either or both of these features would have prevented the anti-surge valve from working.

(b) Mr Hickey's cross-examination of Mr Gosling: "

Q: So what is it that a locked open IV would have done to avoid water hammer? A: With the presence of the NRV there, and the isolating valve open, then it is likely that the floods would still have occurred… Q: So we keep coming back to the central point: the thing that stops the water hammer is the surge arrestor, if it is allowed to do its job? A: Yes. Q: And the thing that predominantly, if not exclusively, stops the surge arrestor from doing its actual job is the NRV that should never have been installed? A: Yes.

(c) Mr Stansfield QC's cross-examination of Mr Marshall:

"Q: As you say in paragraph 2.9(a), the non-return valve would have prevented the anti-surge valve from allowing air into the riser? A: Yes. Q: So it would have prevented the anti-surge valve from doing what it was supposed to do? A: Yes. Q: In those circumstances, at paragraph 2.9(b), you agree that the water hammer that would have occurred would probably have caused a similar core 2 leak? A: That is correct."

Subsequently Mr Marshall went on to say expressly that, even if the IV had been open, the NRV would have done the damage instead, and that such damage would have been very similar to (or exactly the same as) that which occurred.

(d) Mr Stansfield QC's cross-examination of Mr Parry:

"Q: With the NRV present below the surge arrestor, would you agree that air cannot enter the riser through the surge arrestor regardless of whether the isolating valve was open or closed? A: I would agree with that… Q: As far as the leak is concerned, the leak is going to occur when the riser fills, isn't it? A: Yes. As a result of the fast filling of the riser and the sudden abrupt halting of the water column. Q: So would you agree that it is not occurring because the IV is there but occurring because the riser has filled? A: Yes, that is correct. Q: When the isolating valve is closed, there are two blocks on the riser, aren't there? A: Yes. Q: So far as the air entering the riser is concerned, the first block is the non return valve? A: That is correct. Q: You would confirm that as a technical matter? A: Indeed." (e) Mr Hickey's cross-examination of Mr Newbery, in which (although Mr Newbery argued that there was no demand for air because the IV was closed), he also agreed that there were two blocks on the line and that the first physical block to air getting in was the NRV. Mr Newbery also agreed that, in allowing air to come in, the first step in that process may have been to open the IV, but that would not have made any difference, because of the presence of the NRV. 184. (a) Finally on the NRV, I accept Mr Stansfield QC's proposition that, since the experts' conclusion meant that the damage would have been the same whether the IV was open or closed, 'a degree of suspicion' (as he put it) must attach to the proposition that the closed IV was the sole effective cause of the flooding. To put the point a slightly different way, there was no leak at Level 8, where the relevant NRV and the IV were located; the Level 6 IV which failed would have failed whether the Level 8 IV was open or closed. (b) It seems to me that, for all these reasons, it would be idle to suggest that the NRV was anything other than an independent and effective cause of the flooding. This is particularly so given that the experts also generally agreed that, if the IV had been open at the time of the flooding then, not only would the NRV have been the sole cause of the flooding but also that, on the balance of probabilities, the same flooding and the same damage would have occurred on 1 August 2007. 10. GMVL'S CLAIMS AGAINST HL ON CORE 2 "

Q: So anyone who had given it a moment's thought and said 'what's that? I had better look at it' would have appreciated that this is a non-return valve? A: Absolutely. If you took the trouble to go up close to it and look at it you would know that it was a non-return valve, yes." 11. GMVL'S CLAIMS AGAINST ESSEX "Q: Well, under the circumstances where the instruction doesn't specify every item in the design, and Essex decides to go ahead anyway, making its own decision regarding the design, in those circumstances you would expect the remaining design to be carried out by your design office, wouldn't you? A: Possibly; nobody asked for any information on the details of the surge arrestors. Q: You are anticipating my next question, but do you agree with me, first of all, that in the circumstances I have just described, you would expect the remaining design to be carried out by the design department? A: Yes. Q: But in this particular instance nobody contacted you or your department to ask for further details or determination of the design? A: No." 12. APPORTIONMENT BETWEEN HL and ESSEX (CORE 2 ONLY) (a) They installed the NRV without justifiable reason; (b) They knew that the IV should be left open at all times; (c) They selected the type of IV and installed them. 13. THE CONSEQUENTIAL CLAIMS AGAINST HSE AND ROBSON ON CORE 2. "The real question under [the contractual indemnity] is whether the charterers' order to load the cargo was an effective cause of the owner having to bear a risk or cost of a kind which they had not contractually agreed to bear. I use the expression 'effective cause' in contrast to a mere 'but for' cause which does no more than provide the occasion for some other factor unrelated to the charterers' order to operate. If the charterers' order was an effective cause, in this sense, it does not matter whether it was the only one." 255. (a) As to the 'own breach' point, I do not accept Mr Ter Haar QC's broad submission. If it were right, it would mean that, in circumstances where B was liable to A for a breach of contract, but had sub-contracted all its relevant contractual obligations to C and obtained an indemnity in respect of C's performance, B would never be able to recover pursuant to the indemnity. It would destroy the ability of parties to pass claims down the contractual chain. No authority was cited in support of the submission. To the extent that Mr Ter Haar QC relied on the same paragraph in Hudson , I consider that the cases cited in that paragraph are not relevant to this issue, being personal injury cases concerned with negligence, which forms no part of Essex's claim against HSE or HSE's claim against Robson. (b) I therefore conclude that his submission is contrary to both principle and business commonsense. I should also add that, if this argument were right, it would give HSE a defence to the claim from Essex, but they do not advance any such defence. Moreover, Ms Sinclair QC, on behalf of Essex, submitted to me that the argument was wrong in principle. For the reasons I have given, I respectfully agree with her. "Q: Then the commissioning of the Core 2 heating systems and HIU's and so on. We've already discussed, this was all work on a live system? A: Yes. Q: That system had already been tested and commissioned so far as you are aware Mr Kelly? A: Mr Hughes. Q: I am so sorry. Forgive me. So it was important to leave the system operational when you had completed all of these works wasn't it? A: Yes." 14. CONTRIBUTORY NEGLIGENCE (a) If the maintenance procedures prescribed by the O and M Manuals had been carried out as required then the Core 2 flooding would not have occurred; (b) Had GMVL acted reasonably in respect of maintenance, the Core 2 leak would have been avoided. (a) Where the defendant's liability arises from some contractual provision which does not depend on negligence on the part of the defendant; (b) Where the defendant's liability arises from a contractual obligation which is expressed in terms of taking care (or is equivalent) but does not correspond to a common law duty to take care which would exist in the given case independently of contract; (c) Where the defendant's liability in contract is the same as his liability in the tort of negligence independently of the existence of any contract. He decided that it was only in a category (c) case that an allegation of contributory negligence can operate to reduce the claimant's recovery. 15. CONCLUSIONS Note 1 At one point, WTP were introduced into these proceedings as a Fourth Party, but no live claim is now pursued against them. Note 2 This expression was used at HL’s insistence, rather than the word “ensure”. Note 3 This was all too typical of HL’s erratic performance: they had had months to recommend/require the installation of surge arrestors and had not done so; they then sent a general recommendation for the surge arrestors and did nothing more about it, but less than three weeks later they were complaining about the failure to install them. Note 4 As I have said, the IV was at least a metre below the surge arrestor. There was no discernible reason for this. The manufacturer’s drawings indicate that the IV should have been immediately underneath the surge arrestor. Note 5 Mr Stansfield QC made clear that that is not accepted by GMVL and the evidence was not entirely clear-cut.