McGlinn v Waltham Contractors Ltd

In a construction defects claim, professional liability is governed by the services actually undertaken, not every function normally associated with the profession. An architect who undertakes design and inspection must provide an adequate specification, co-ordinate specialist designs, and tailor inspections to the work’s stage and importance. The duty is to exercise reasonable skill and care, not to guarantee a perfect or boat-fitting standard.

Repair costs are the proper measure where reinstatement is reasonable. Expert advice is important but does not make demolition and rebuilding automatically recoverable, especially where the defendant is liable for only some of many alleged defects. The court must award loss caused by that defendant and keep the result objectively fair.

The claimant engaged four defendants in connection with the design and construction of a substantial house in Jersey. The contractor became insolvent and took no part in the trial. The claimant alleged defective design, specification, inspection, specialist co-ordination and workmanship against the architect, structural and mechanical and electrical engineers, and quantity surveyors/project managers.

The house was left incomplete after the contractor departed, extensively opened up, and eventually demolished. The principal issues were the defendants’ contractual responsibilities, liability for individual defects, whether demolition and rebuilding costs were recoverable, the proper measure of repair damages, and disputes concerning professional fees.

1. Contractual responsibilities. The court determined the professionals’ obligations from the documents, conduct and surrounding circumstances. It would be wrong to impose conventional project functions merely because they were commonly performed by a particular professional. HTA’s retainer incorporated the relevant RIBA work stages, subject to functions clearly assigned elsewhere, and included preparation of a proper specification.
2. HTA’s duties. HTA owed duties to design and inspect with a very high standard of finished work in mind, but not to achieve a perfect or boat-fitting standard. DJH retained responsibility for detailed structural and mechanical and electrical design, and TDD for detailed interior and finish design. HTA nevertheless had to co-ordinate those designs with its own work and identify clashes. The court also held that HTA had no blanket prohibition on issuing instructions. Oral and written instructions could have equal effect, although variations generally required the client’s consent and TDD controlled interior and finish instructions.
3. Inspection. The principles in Sutcliffe v Chippendale & Edmondson [1971] 18 BLR 149, Consarc Design Ltd v Hutch Investments Ltd [2002] 83 Con LR 36 and George Fischer Holdings Ltd v Multi Design Consultants Ltd [1998] 61 Con LR 85 were adopted. Inspection frequency and duration had to reflect the nature and stage of the works. Important repeated elements required early inspection. An architect did not guarantee detection of every defect, but obvious or substantial completed defects had to be raised and pursued rather than left to snagging.
4. Damages. Following Ruxley Electronics v Forsyth [1996] AC 344, Southampton Container Terminals Ltd v Schiffahrisgesellsch “Hansa Australia” MGH & Co (The MV “Maersk Colombo”) [2001] EWCA Civ 717 and Rahman v Arearose Ltd [2001] QB 351, the court selected a reasonable and objectively fair measure of loss. The demolition and rebuilding claim was not recoverable against defendants responsible for only limited parts of the alleged defects. The appropriate measure was the agreed cost of repairing the defects for which each defendant was liable.
5. Outcome. Judgment was entered against HTA for £438,850.76 and against DJH for £134,825.61. The claims against WL were dismissed. The claim to reopen HTA’s compromised fee claim failed. DJH’s fee entitlement was to be calculated by reference to the final ascertained project cost, using the agreed percentages; its additional transition-fee claim failed.