The judgment in the first substantive claim concerning cladding defects on a high-rise building since the Grenfell Tower Fire has now been handed down by the Technology & Construction Court in the case of Martlet Homes Limited ("Martlet") V Mulalley & Co. Limited ("Mulalley").
Martlet owns five social housing tower blocks in Gosport ("the towers"). Following the Grenfell Tower Fire, Martlet undertook an inspection of the towers and found that the StoTherm Classic system specified and installed by Mulalley during refurbishment of the towers contained defects, including in the installation of the system and fire barriers which created a fire risk at the towers. Martlet took expert advice, put in place a 'waking watch' as a fire safety precaution and undertook remedial works to remove and replace the StoTherm Classic system with a non-combustible system. It sought the cost of doing this – approximately £8million – from Mulalley.
By the time of the hearing, Martlet had two distinct bases of claim:
- The Installation Breach Case – the claimant argued there were various defects in the installation of the system and its cavity barriers
- The Specification Breach Case – the claimant argued that the StoTherm Classic system did not meet applicable fire safety standards at the date of the contract
Whilst some defects in the installation were admitted by Mulalley, causation and liability were strongly denied. Mulalley contended that the defects were not enough to justify the complete replacement of the system, and repair works should have instead been carried out. Similarly, Mulalley argued that the provision of a 'waking watch' was not justifiable.
Martlet was successful on both bases of claim. This was fortunate for them, as the judge confirmed that they would have only been entitled to recover damages by reference to the cost of repairs if they had only succeeded in proving the installation breach case. The Court therefore found that Martlet was entitled to recover the cost of the replacement work carried out, as well as the waking watch costs, which were considered a reasonable step to mitigate the potential fire risks caused by the combustible cladding.
The court found that:
- Under the Contract, Mulalley were obliged to comply with the Building Regulations 2000. This included a requirement for external walls to "adequately resist the spread of fire".
- Mulalley sought to rely on a 1995 British Board of Agrément (BBA) certificate relative to the system which contained statements relating to conformance of the system with the Building Regulations. However, the Court held that the "BBA Certificate cannot be read as if it was a guarantee" of compliance with the requirements of the Regulations and that Mulalley's obligations meant they ought to have gone further to ensure the system was appropriate.
- The Court also referred to BRE 135, a report referred to in Approved Document B which provides guidance in relation to the use of external wall systems. The Court held that BRE 135 advised that systems such as StoTherm Classic should not be specified for use in high-rise residential buildings unless it met the performance standard set out in Annex A to BR 135 (demonstrated by passing tests undertaken in accordance with BS 8414-1). The Court held that there was no evidence that the as StoTherm Classic system had passed such a test.
- The Court also rejected an argument that Mulalley could avoid liability by showing that other professionals were acting in the same way as they were.
All of this placed Mulalley in breach of contract, leaving it liable for the full value claimed by Martlet.
The court also considered whether Martlet needed to show Mulalley's actions were the dominant cause of the repair (the "but for" test) or were simply an "effective cause" of the repair. Mulalley argued that the main factor influencing the decision to replace the cladding was not any deficiency in its works, but rather it was concern about the presence of combustible cladding post-Grenfell. The judge sided with Martlet, noting that the replacement remedial action taken was the "only sensible way to address" to address the problems caused by the defendant's defective installation and the presence of combustible cladding. As the installation breaches were one of the factors which led to the decision to replace the cladding, Mulalley were liable for the costs.
- Whilst the Court confirmed that this decision turned on the specific facts and contractual provisions for this project, it provides some further clarity as to how the courts will handle claims which involve fire safety defects and cladding issues post-Grenfell. In particular, confirming that those designing and installing cladding may be liable for fire safety remedial works.
- Those designing cladding systems cannot rely solely on BBA certificates, as a 'guarantee' or 'passport' to compliance with the relevant Building Regulations. Parties must ensure they have carried out the relevant investigations and that a BBA certificate is simply used as one of a number of aids to establish the suitability of use of a material for cladding purposes.