Multiplex Construction Europe Limited v Bathgate Realisations Civil Engineering Limited & Ors

In a complex construction project, an independent Category 3 checker engaged by a subcontractor did not owe the main contractor a duty of care for economic loss arising from defective temporary works. The duty had to be defined by reference to the kind of loss claimed, not considered abstractly. Objectively assessed assumption of responsibility, reliance, contractual structure, proximity and fairness were material. A detailed contractual allocation of design responsibility and risk may exclude any tortious duty between parties lacking contractual links, particularly where the claimant already had a contractual claim against the subcontractor. Knowledge that a certificate would be passed to the main contractor was insufficient. The certificates also contained no warranties directly enforceable by the main contractor where there was no contract, collateral warranty, authority or consideration between the parties.

Multiplex was the main contractor for a major construction project. Bathgate, formerly Dunne, was its design-and-build subcontractor and had responsibility for the temporary works. Dunne engaged RNP Associates Ltd to perform an independent Category 3 design check of a slipform rig. RNP supplied certificates to Dunne, which later provided altered or delayed versions to Multiplex. RNP was subsequently liquidated and Multiplex pursued Argo, its insurers, under the Third Parties (Rights against Insurers) Act 2010.

The parties agreed preliminary issues concerning whether RNP owed Multiplex duties or obligations in respect of the certificates and whether RNP provided warranties directly to Multiplex. The court also determined the contractual terms governing RNP's engagement by Dunne.

1. Contract formation. Dunne's letter enclosing a proposed Consultancy Agreement was a counter-offer. There was no evidence that Dunne later accepted RNP's quotation or that RNP accepted the proposed Consultancy Agreement. A contract nevertheless existed on simple terms: RNP would perform the Category 3 check for the agreed fee and would use reasonable care and skill. RNP's standard terms were not incorporated.
2. Duty of care. The court applied the principles in South Australia Asset Management Corp v York Montague Ltd [1996] UKHL 10, Caparo Industries plc v Dickman [1990] UKHL 2 and Customs and Excise Commissioners v Barclays Bank plc [2006] UKHL 28. The scope of any duty had to be determined by reference to the kind of loss claimed. Assumption of responsibility was an objective inquiry, assessed against the whole commercial, factual and contractual context. The three-part and incremental approaches were alternative analytical routes which would ordinarily lead to the same result.
3. RNP did not assume responsibility to Multiplex. Dunne had full contractual responsibility to Multiplex for the design of the temporary works and for obtaining the Category 3 check. RNP contracted only with Dunne, had no direct contact with Multiplex, received limited information, and provided no services directly to Multiplex. The contractual structure would be short-circuited by imposing a direct tortious duty. Knowledge that the certificate should reach the Temporary Works Co-ordinator did not establish responsibility for Multiplex's economic loss. Nor was this a liability-gap case. The first preliminary issue was answered No.
4. Actual reliance was not part of the preliminary issues, but legal reliance remained relevant. Multiplex did not allow the certificates to operate on its mind so as to cause the claimed economic loss. The certificate had to be considered as a whole, including its notes and observations.
5. Warranties. There was no contract or collateral warranty between RNP and Multiplex. Dunne had no authority to contract with RNP as Multiplex's agent, and payments by Multiplex to Dunne were not consideration for a separate contract with RNP. The certificates were not contractual warranties given directly to Multiplex. The second preliminary issue was answered No. The answers were unchanged even if the certifying words were considered separately from the certificates as a whole.