[2018] EWHC 2339 (TCC)

This was another dispute about who had entered into a contract with whom. WTC was the main contractor on a housing development project, where because of a slope a retaining wall was required. WTC engaged Construction Site Services (UK) Ltd (“CSS”) as its sub-contractor. Mr Roylance provided civil engineering services in respect of the Site (doing this either in his personal capacity or through the First Defendant). It was common ground that Mr Roylance worked closely with CSS and that at first WTC did not engage either Defendant. During the construction of the retaining wall, a band of running sand was encountered. This meant that the water flows behind the retaining wall were greater than anticipated. The responses to these problems included WTC’s engagement of one of the Defendants in November 2010.

WTC said that the First or Second Defendant was engaged to design and provide a solution to the retaining wall problem ensuring that the wall would be fit for purpose. The Defendants said that the engagement did not require either of them to bring forward a solution to the problems with the retaining wall let alone warranting that the wall would be fit for purpose. Instead they were asked to design a drain which would address the problem with water inflow which was affecting access to the rear of the wall.

It was common ground that the retaining wall as constructed was defective. WTC successfully adjudicated against CSS contending that the deficiencies were the result of failures on the part of CSS in the course of the construction and installation of the retaining wall. The Defendants agreed. However, CSS went insolvent. This led the Defendants to say that the current claim was only brought to find a solvent party from whom to seek compensation. The allegations made against them were inconsistent with the case brought in the adjudication. The crucial issue was the scope of the November 2010 engagement. The Judge said this of the key witnesses:

“I am satisfied that each man believed that what he was saying in his evidence was correct. However, in assessing their evidence and their presentation in the witness box I have to be very conscious of the fact that both men were inevitably recollecting matters from a particular viewpoint and also to be conscious of the common human inclination to recollect past events as having actually happened in the way in which the person recalling them believes they would, or indeed should, have happened.”

HHJ Eyre QC said that he would look at the evidence:

“through the prism of the contemporaneous documents; of those actions which are accepted or clearly demonstrated to have happened; and of inherent likelihood. To the extent that the contemporaneous documents show a picture different from that depicted by either witness it is the former and not the latter which I should regard as more likely to be an accurate account of what happened.”

WTC believed that Mr Roylance was responsible for the design of the retaining wall as he was the only civil engineer involved in the project. However after a review of the various drawings and other documentation that had been produced, the Judge considered that the design had been carried out by a different party, and that the scope of the Defendants’ appointment was limited to the drain. For example, the retaining wall operated as a system consisting of the gabion baskets and the backfill behind them. The gabions and the backfill behind them were both important parts of that system and were designed by another party. For the system to work as a retaining wall it was necessary not only for there to be properly constructed and designed gabions but also appropriate backfill, and the wall composed of the gabions had to be built at the correct angle. The retaining wall was a system and the various elements of that system had to be designed to work together.

Whilst the Judge considered that the most likely analysis of the arrangements as between CSS and its contractors was that there was no one person with overall responsibility for the design, to the extent that there could be said to have been a principal designer, that would appear to have been the other party. The Second Defendant produced drawings which were used and intended to be used for construction purposes but that was in a context where he was developing the original drawing and adding material to it so that it could be used for construction. Therefore, the Second Defendant was not the designer of the retaining wall and neither Defendant accepted overall responsibility for the wall’s design.

It was common ground that in November 2010, WTC engaged either the First or Second Defendant to undertake civil engineering design works. The Defendants asserted that all dealings had been through the First Defendant and that the Second Defendant had not acted at any point in his personal capacity. However this was not what the documents said. The Judge concluded that:

“I accept the Second Defendant’s evidence that the sums received for his civil engineering work were paid into the bank account of the First Defendant and processed through that company. Indeed I accept that the Second Defendant personally regarded himself as operating through the First Defendant. However, that was not explained to the Claimant or to the other persons with whom the Second Defendant dealt. The company was not referred to on the letterheads which were used nor was it otherwise mentioned in correspondence...At no time before the engagement was there any express indication to the Claimant that the Second Defendant operated his professional activities through the First Defendant. The exchange of e-mails which constituted the engagement not only made no reference to the First Defendant but rather appeared to be from the Second Defendant in his personal capacity. In those circumstances the engagement was a personal one of the Second Defendant and he and not the First Defendant was the party to the agreement with the Claimant.”

WTC accepted that the engagement was “a bit of a rushed job”. This was because the problems with the retaining wall were holding up work on the Site generally and so WTC was “desperate” for a solution to those problems. The result was the need for a court case to establish who had contracted with whom and on what terms.