John Watson Services Ltd v Mercia Plumbing & Heating

An appellate court will not readily interfere with factual findings substantially based on a trial judge’s assessment of witnesses. A trial judge may reject agreed expert evidence where it is inadequately focused or fails to address a material competing explanation, and may prefer credible factual evidence. A claimant must prove causation on the balance of probabilities. Difficulties caused by covering work before testing may prevent that proof. Under a separate labour-supply agreement, payment remained due where the labour was supplied and no pleaded or particularised contractual defence was established. The appeal was therefore allowed only for the unpaid labour claim.

John Watson Services Ltd v Mercia Plumbing & Heating concerned a labour-only subcontract for installing a polyethylene fire-hydrant pipe. The subcontractor alleged that poor preparation caused extensive leaks and claimed the cost of replacement and related losses. It also advanced a separate claim for labour supplied under an oral agreement.

His Honour Judge Boggis QC dismissed the liability claim after trial but did not determine the separate labour claim. The appeal concerned the trial judge’s findings on causation, the treatment of expert evidence, the recoverability and proof of quantum, and the omitted labour claim.

Disposition and liability

1. The appeal was allowed in part. The primary claim for breach of the implied term to use reasonable care and skill failed. The separate claim for payment for additional labour succeeded.
2. The Court of Appeal would not lightly interfere with findings of fact depending materially on the trial judge’s assessment of witnesses. The question was whether the conclusion reached was open on the evidence.
3. The trial judge was entitled to reject the experts’ agreed view that inadequate preparation was almost certainly a cause of the leaks. Their evidence did not adequately address the competing possibility of incompatibility between pipes and couplings. The judge was entitled to prefer Colin Howard’s evidence, supported by a contemporaneous complaint and limited evidence that the materials were a loose fit.
4. Watsons had not proved on the balance of probabilities that the major leakage was caused by Mercia’s poor preparation rather than incompatibility in materials supplied by Watsons. The failure to test the pipe before backfilling and concreting made the cause and extent of the leaks more difficult to establish. The liability appeal was therefore dismissed.
5. Quantum did not strictly arise. Nevertheless, the judge’s observations indicated that replacement of the whole pipeline and sums allegedly payable to the main contractor were not established, even if liability had been shown.
6. The evidence established a separate oral agreement under which Watsons supplied Mercia with additional labour. Mercia was liable to pay for that labour unless it could show that the necessity for it resulted from Watsons’ breach. No such case had been advanced or particularised, and the trial judge had overlooked the claim. Judgment was substituted for Watsons in the sum of £8,149.02 including interest.

Concurring observations

Mr Justice Wall agreed with the result and added that expert reports should focus on the specific issues in the case and state the substance of all material instructions, as required by Civil Procedure Rules CPR 35.10(3). He considered it preferable for experts to give evidence after the relevant factual evidence, so that their opinions could be tested against the facts. He also explained the position concerning disclosure of instructions under CPR 35.8.

The costs order allowed recovery of the costs that would have been incurred had the claim been limited to the labour claim, with Watsons responsible for the remaining costs.

• Court of Appeal (Civil Division) — The appeal was allowed in part and judgment was substituted in the sum of £8,149.02 including interest: [2001] EWCA Civ 2026.
• High Court of Justice, Technology and Construction Court — His Honour Judge Boggis QC dismissed Watsons’ claim after trial on 31 January 2001. The separate labour claim was not determined.