Hart Investments Ltd v Terence Maurice Charles Fidler (t/a Terence Fidler Partnership) & Anor

An engineer retained for permanent works must take reasonable steps to address a dangerous condition in temporary works where he observes that condition and it creates an immediate risk to the permanent works. The duty may arise from the scope and circumstances of the retainer, even if the engineer was not engaged to design or supervise the temporary works. Inspection duties should be proportionate to the nature of the works. A concurrent duty in tort may arise where the contractual relationship and the parties’ reliance justify liability for economic loss. Where the engineer’s warning would probably have prevented the danger, causation is established.

The claimant property developer sought damages from the first defendant, a structural engineer, after part of the façades of its building collapsed during redevelopment works. The contractor, the second defendant, was in liquidation and judgment in default had been entered against it.

The claimant alleged that the engineer had failed to design an adequate temporary propping scheme and had failed to warn the contractor after observing dangerous unsupported excavations. The engineer disputed his contractual responsibility, denied any relevant tortious duty, and denied causation. The court determined liability only; quantum was left for assessment.

1. Contractual scope and inspection. The engineer had been retained by the claimant in relation to the permanent structural works and was attending site regularly. Although no express inspection terms had been agreed, it was implicit that he should undertake the normal inspection duties of a structural engineer. The frequency and duration of inspection had to be proportionate to the works being undertaken, following Corfield v Grant (1992) 29 Con. L.R. at 58–59.
2. Duty to warn of dangerous temporary works. Where an engineer employed by an owner in relation to permanent works observes temporary works that are dangerous and create immediate peril to the permanent works, he must take such steps as are open to him to obviate the danger. That duty includes warning the contractor and, where appropriate, taking immediate practical steps to make the site safe. The duty was analogous to the principle discussed in Credit Lyonnaise v Russell Jones and Walker [2003] PNLR 17 at 24, para 28: a professional who becomes aware, in the course of the retainer, of a plain and obvious risk to the client must report it.
3. The court considered the similar discussion in Old School v Gleeson 4 B.L.R. 103 at 124, but held on the facts that the engineer was under a contractual duty to warn the claimant’s contractor. The engineer had designed, or knew of, the necessary propping scheme and must have appreciated the danger of unsupported excavation.
4. The court found that the excavation was already dangerously advanced when the engineer attended on 3 February 2004. He failed to warn the contractor or require immediate temporary support. That was a breach of contract. The contractor would probably have followed the warning, so the breach caused the collapse.
5. There was also a concurrent tortious duty extending to the claimant’s economic loss, applying the approach in Henderson v Merrett. Alternatively, if no contractual duty existed, the reliance, professional indemnity arrangements, and close interrelationship between the permanent and temporary works would have justified a duty on the special facts of the case. Judgment was entered for the claimant against the first defendant, with damages to be assessed.