Stonewater Ltd v BAM Construction Ltd

When claims concerning the same defects are brought against different defendants, the starting point may be a joint trial to avoid duplicated proceedings and inconsistent findings. That starting point remains subject to a case-management balancing exercise. The court must consider readiness for trial, delay, prejudice, additional cost, fairness, and the overriding objective. A late application which would require an imminent trial to be abandoned may properly be refused, even where the claims substantially overlap.

A preliminary issue should be tried separately only where its determination would dispose of the whole case or a significant aspect of it, with a substantial saving of time or cost. It should be refused where most issues would remain, the final outcome would be unaffected, or the separate hearing would disrupt the trial timetable and generate likely appeal costs.

Stonewater Limited brought separate claims concerning fire-safety and other construction defects at two residential blocks. The first claim was against BAM Construction Limited under a deed of warranty relating to the contractor’s obligations. The second was against RPS Design Limited under a deed of warranty relating to the architect’s obligations.

Stonewater applied for the claims to be tried together. RPS applied for a preliminary issue concerning whether its warranty imposed an absolute obligation to comply with building regulations or merely an obligation to exercise reasonable skill and care. The applications raised questions concerning case management, delay, trial efficiency, and the utility of determining the warranty issue separately.

1. The application to try the claims together was refused. The court had power under CPR 3.1 to order claims to be tried at the same time and, if necessary, to adjourn the existing trial. The discretion had to be exercised in accordance with the overriding objective in CPR 1.1 and with regard to section 49(2) of the Senior Courts Act 1981.

2. The substantial overlap between the claims was the starting point. A joint trial could avoid multiplicity of proceedings and inconsistent findings. That factor was not determinative. The court had to balance it against the disparity in preparation, the explanation for delay, fairness to the parties, additional costs, and the prejudice caused by prolonging an already stale claim.

3. BAM’s proceedings were ready for trial, whereas the RPS proceedings were at an early stage. Stonewater had not satisfactorily explained why proceedings against RPS had not been commenced and progressed alongside the BAM claim. Requiring BAM to abandon its trial after two years of preparation would cause delay, additional expense, and unfairness. The risk of inconsistent findings was relatively limited because the principal issues concerned expert evidence, construction, and law rather than sharply contested witness credibility. The lateness of the application therefore justified refusal.

4. The application for a preliminary issue was also refused. The first question in such an application is whether determination of the issue would dispose of the case or at least one significant aspect of it. The proposed warranty issue would leave virtually all of the reasonable-skill-and-care allegations, defects, and quantum to be determined. It would produce no substantial saving of time or cost, and any trial saving would be outweighed by the cost of the separate hearing.

5. A separate preliminary hearing would also interrupt the timetable and might lead to an appeal affecting the planned trial. The court was not satisfied that determining the issue in advance would confer a substantial benefit.