Woolworths Plc v Henry Boot Management Ltd & Anor

A management contractor may owe a concurrent common-law duty of care to a tenant occupying part of a redevelopment site. The duty requires reasonable skill, care, initiative and diligence, with due regard to the tenant’s interests, where the contractor controls adjoining areas and its activities may foreseeably cause damage.

The scope of the duty depends on possession and control. The contractor was responsible for protecting an internal wall exposed to rainwater entering an unfinished adjoining unit. The tenant was responsible for protecting its own exposed screed edge within working space in its possession. A breach does not establish liability unless it caused the loss. Where the effective cause of damage was water entering through the tenant’s unprotected area, the claim failed.

The claimant occupied a new retail store during the redevelopment of a shopping centre. The first defendant was the management contractor and controlled adjoining unfinished areas, including a neighbouring unit separated from the store by an internal blockwork wall.

After the claimant laid screed and Amtico flooring, the adhesive failed in substantial areas. The claimant alleged that rainwater had accumulated in the adjoining unit and migrated through the wall into the screed. The defendant disputed both breach and causation, relying on residual construction moisture and rainwater entering through an unprotected edge of the claimant’s screed.

The claim against the second defendant had been discontinued. The court also considered an application to re-amend the claim after an earlier refusal of permission. The central issues were the scope of the defendant’s duty, breach, the source of the moisture and causation.

1. Duty. HBM owed Woolworths concurrent contractual and common-law duties after Store C was handed over. The relationship was sufficiently proximate, and it was fair, just and reasonable to impose a duty. The duty required HBM to exercise the skill, care, initiative and diligence expected of an experienced and competent management contractor, having due regard to Woolworths’ interests.
2. Scope and breach. HBM knew that Woolworths occupied Store C, that Unit 21 remained open to the elements and that the separating wall was an internal blockwork wall. A competent contractor should have taken reasonable steps to protect the wall against driving rain or rainwater collecting in Unit 21. HBM breached that duty. Woolworths, however, possessed the working space and the exposed edge of its own screed. It was responsible for providing temporary protection to that edge while the hoarding remained in place.
3. Causation. The moisture condition of the screed at the time of laying the flooring was not known because the recommended hygrometer testing had not been performed. Nevertheless, the extensive and rapid failure of the adhesive was inconsistent with the comparatively small quantity of water that could have passed through the internal wall. The principal and effective source was water accumulating against the unprotected screed edge beneath the shop frontages. That source was not attributable to HBM.
4. Although HBM had breached its duty, the breach did not cause the loss occurring by 21 or 22 September 1992. The claim therefore failed. The court observed that, had the claimant established causation on its preferred expert evidence, it would have awarded 15 per cent of the potentially recoverable damages. Permission to re-amend the claim was refused because the proposed case was statute-barred and could not succeed on the facts found.

The action was transferred by consent to the Technology and Construction Court on 17 April 2002. At a pre-trial review, Judge Havery QC refused permission to re-amend the claim; that decision was not appealed. The present first-instance claim against HBM was dismissed.