Pearson Pension Funds v Gurney Consultants

Neutral Citation Number: [2005] EWHC 2804 (TCC) IN THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION TECHNOLOGY AND CONSTRUCTION COURT Case No: HT-04-269 St. Dunstan’s House, Fetter Lane, London, EC4A 1HD Date: Thursday, 1 st December 2005 Before: HIS HONOUR JUDGE PETER COULSON QC - - - - - - - - - - - - - - - - - - - - - Between: PEARSON PENSION FUNDS - and - GURNEY CONSULTANTS Claimant Defendant - - - - - - - - - - - - - - - - - - - - - Tape Transcription by Marten Walsh Cherer Ltd., Midway House, 27/29 Cursitor Street, London EC4A 1LT. Telephone No: 020 7405 5010. Fax No: 020 7405 5026 - - - - - - - - - - - - - - - - - - - - - MR. MANUS McMULLAN (instructed by Messrs. Lane & Partners) for the Claimant MR. PAUL SUTHERLAND (instructed by Messrs. Reynolds Porter Chamberlain) for the Defendant - - - - - - - - - - - - - - - - - - - - - JUDGMENT HIS HONOUR JUDGE PETER COULSON QC: 1. 2. 3. 4. 5. 6. In this case the claimants, Pearson, claim damages against the defendant, Gurney Consulting Engineers, for breach of duty. The damages are put at about £2.5 million. They arise out of a catastrophic collapse of the frontage of 2-10 Beauchamp Place, London SW3 on 26th October 1998. The collapse occurred during extensive refurbishment works at the properties. Gurney were the structural engineers in respect of that work. Subsequently Gurney have commenced Part 20 proceedings against other parties involved in that refurbishment work, including Styles & Wood, the contractor; Gleeds Health & Safety Limited, the planning supervisors; Gleeds Management Services, the project managers; and GMK Associates, the architects. The trial is due to take place on 23rd January 2006 and is estimated to last 16 days. The pre trial review will be on 16th December. Although most of the necessary steps have been taken in advance of the pre trial review, I have been told today that, without reference to the court, the experts’ reports have not been exchanged in accordance with the court’s order. They should have been exchanged on 4th November. As I understand it, the present plan is for those reports to be exchanged on 13 th December. I hope that this does not have an adverse affect on the pre trial review. I also note that at least one of the reasons put forward by Gurney for the delay in exchange of experts’ reports is to allow the experts time to comment on the amendments which Gurney have proposed and which form the subject-matter of this application. Gurney’s proposed amendments affect their Part 20 particulars of claim, their case on causation and their counter-schedule of loss and damage. Some of the proposed amendments are accepted on various conditions. However, other amendments are opposed by Pearson who assert that they cannot deal with those amendments in the short time left before the trial. Before turning to the amendments themselves, it is sensible to identify two relevant principles related to late amendments such as these: (a) the court will not grant amendments if they cause irredeemable prejudice as a result of their lateness (see Woods v. Chaleff [1999] EWCA (Civ) 1522); (b) the court will not grant late amendments if it means that the trial date will be lost (again, see Woods v. Chaleff and Cobbold v. London Borough of Greenwich [1999] EWCA (Civ) 2074). In the present case there is no question at all of any adjournment to the trial date, particularly given that, because of the delay in the commencement of the action, the trial will take place eight years after the relevant events. No party seeks any such adjournment. Accordingly, any amendments that I permit are only allowed on the basis that the parties can, and will, deal with them properly by the time of the trial. As to evidence the application is supported by a statement from Gurney’s solicitor, Mr. Marcus Chipperfield. A statement in response from the respondent’s solicitor, Ms. Shiva Ostovar, was served by fax last night and I saw it this morning. Neither statement contains any real analysis of the amendments or their likely affect on the preparation of further evidence for the trial. As a result I have been placed in a rather unsatisfactory position, listening to one experienced counsel assert that he cannot be ready to deal with some of the amendments by the time of the trial, and another equally experienced counsel who assures him, and the court, that he can. 7. In addressing the proposed amendments, Mr. McMullan, who appeared on behalf of Pearson, helpfully put the amendments into three categories. I propose to use his categorisation. Category 1 contains those amendments which Pearson agree on condition that they will not give rise to an adjournment, and that responsive material can be put in to deal with the substantive points. Category 2 concerns those amendments which Pearson agree on condition that proper particulars are provided of the new allegations. Category 3 contains those amendments which Pearson dispute because, they say, they cannot deal with them properly by the date of the trial. It should be noted that the Part 20 defendants, who are unaffected by Category 3, also seek further particulars under Category 1. Other than that, their position is similar to that of Pearson. I now turn to deal with those three categories. 8. Category 1 These amendments include all the amendments to the Part 20 particulars of claim (excluding paragraphs 55, 58(mm) and 79A) and paragraphs 1-11 of the further information on causation. Having heard the parties, it is clear that: (a) these amendments do not affect the trial date; (b) further particulars of the allegations are required and will be served by Gurney on either 2nd or 6th December; (c) it is appropriate and convenient for both Pearson and for the Part 20 defendants to deal with these new points by making consequential amendments and serving supplementary factual and expert evidence if so advised. That material will have to be served on Gurney no later than 4.30 p.m. on 13th December 2005. Category 2 (a) The reduction in the size of the column. 9. These amendments can be found at paragraph 12 of the further information on causation and paragraphs 58(mm) and 79A of the Part 20 particulars of claim. The amendments are the same each time so, by way of example, paragraph 79A says: “Further, any failure of the column and/or inadequacy in its ability to withstand vertical loads was attributable to the foregoing reduction in the size of the column without any reference to Gurney. Without that reduction the column would have been about 33 per cent larger in cross-section and would have had spare load capacity of about 50 per cent and the collapse would not have occurred.” 10. Pearson and the Part 20 defendants say that they do not understand how the percentage figures have been calculated and what the allegation that the column would not otherwise have collapsed is based on. They seek particulars of such matters and say that such particulars should be provided as part of any conditional permission to Gurney to amend. 11. I have no doubt that such particulars are vital. It seems that the particulars should be provided by Gurney on 2nd or 6th December pursuant to the consensus that emerged between the parties. Thereafter any material that Pearson or the Part 20 defendants want to put in in response (and by that I mean any pleadings, supplementary witness statements or expert evidence) should be served by 4.30 p.m. on 13th December 2005. (b) The Mechanism of Collapse 12. 13. Paragraph 55 of the Part 20 particulars of claim deals with the mechanism of collapse. Gurney seek to make significant amendments to that paragraph. Pearson say that those amendments need to be added in one way or another to Gurney’s defence to Pearson’s claim so that they (Pearson) can properly address the new points. More importantly, they seek particulars of the allegations. Finally, they express their concern that if these new allegations cannot be dealt with by structural engineers, and are instead matters which can only properly be addressed by a wind engineer, they may be at a disadvantage because they do not presently have a wind engineer. That relates back to a point that arose in this case last summer: then, the issue was dealt with on the basis that the evidence to be given by a wind engineer was of limited compass. I agree that the allegations in paragraph 55 must be treated as part of Gurney’s defence to Pearson’s claim, so that Pearson can respond to them. Mr. Sutherland, who appeared on behalf of Gurney, expressly accepted that. I also agree that proper particulars of this allegation are required. Again, those particulars will be provided either by 2nd or 6th December 2005. Again, I consider that both Pearson and the Part 20 defendants should have until 4.30 p.m. on 13th December to provide material in response, such material to include pleadings, supplementary statements and reports. I add in relation to this point that if there is still any lingering question on the point about the structural or the wind engineer, that can be addressed at the pre trial review on 16th December. 14. Category 3 Category 3 deals with amendments as to quantum. As I have said, it is of no interest to the Part 20 defendants. It is, however, of great interest to Pearson. On their behalf Mr. McMullan originally said that Category 3 appeared to comprise the entirety of Gurney’s counter-schedule of loss and damage. However, in essence it became apparent that Pearson’s objections boiled down to three points proposed to be added to the counter-schedule: (a) Point 1: Gurney’s case that, but for the collapse, the works would have been finished in August and December 1999, as opposed to Pearson’s case that the works would have been completed by February, March and May 1999; (b) Point 2: Gurney’s case that, following the collapse, numbers 8 and 10 should have been completed by 16th October 2000 not 15th or, in the alternative, 22nd January 2001, the dates asserted by Pearson; (c) Point 3: Gurney’s case that, following the collapse, the remedial works should have been commenced in May 1999 not the end of August 1999. I deal with each of those points below. Point 1: Notional Completion 15. 16. 17. 18. It is an essential part of Pearson’s pleaded case that, but for the collapse, numbers 2 to 5 would have been completed on 15th February 1999; number 8 would have been completed on 3rd May 1999; and number 10 would have been completed on 8th March 1999. Pearson used those as commencement dates for the purposes of their loss of rent claim. From there, they took the period for which rent is claimed down to the dates on which those properties were actually completed following the collapse and the consequential remedial work. Accordingly, the notional completion dates are the starting point of Pearson’s claim for loss of rent. Gurney did not admit those notional completion dates, so it was always for Pearson to prove them. I am told that at present Pearson’s evidence as to those dates comes from the witness statement of Andrew Jeanes. He identifies the contractor’s programme that was in existence immediately prior to the collapse in October 1998 and which shows a completion date, for instance for numbers 2 to 5, of 17th January 1999. Mr. Jeanes then adds some more time to arrive at what he describes as “the most realistic date when the works would probably have been completed” and arrives at a notional date for numbers 2 to 5 of 15th February 1999. It is important to note that no party ever sought permission from the court to rely on expert programming evidence. Accordingly, no such expert evidence was envisaged by the court, or by Pearson, prior to Gurney’s amendments. Pearson had no such expert evidence in respect of the notional completion date. It appears that Gurney’s quantity surveyor, Mr. Tipling, is also a programming expert, as quantity surveyors often proclaim themselves to be. He has apparently challenged the notional completion dates put forward by Pearson. It appears that Gurney’s alternative dates, which suggest that numbers 2 to 5 would not have been ready until 27th August 1999 and that numbers 8 to 10 would not have been ready until 17 th December 1999, are all based upon Mr. Tipling’s advice. It is, however, right to say that beyond the bare dates which I have outlined, no other information has been provided by Gurneys of those notional dates or how they are arrived at. 19. Mr. McMullan objects to the amendment in respect of Point 1 on the basis that Pearson have no programming evidence and that they could not be ready to deal with this allegation at trial. As I have said, on this latter point he is obliged simply to assert that position, because there is no relevant evidence before me that demonstrates in any sort of satisfactory way that if this amendment were allowed it would give rise to any sort of risk in respect of the trial date. 20. I have found the proposed amendment in respect of Category 3, Point 1, the most difficult aspect of Gurney’s application. However, I have concluded that, subject to the conditions set out in paragraph 21 below I should allow Gurney to make the amendment in respect of Point 1, that is to say, the notional completion dates. The two principal reasons for that conclusion are these: (a) Pearson always had to prove the notional completion dates which they relied on. This point was always, therefore, in issue. Furthermore, as a result, at least some of the points raised by Gurney in their Point 1 amendment would have beeen permissible by way of cross-examination in any event; (b) I am not persuaded that Point 1, on its own, first advertised by Gurney on 11 th November, will have the consequences asserted by Mr. McMullan. I accept, of course, that it is going to involve additional work that Pearson are going to have to carry out, but on the material that I have I am confident that Pearson can be ready to deal with Point 1 properly by the time of the trial in the latter part of January. It is perhaps right to point out that an adjudicator could deal with and decide this point in less than the period available to Pearson to prepare the additional evidence that they will need in order to supplement the statement of Mr. Jeanes. 21. The conditions that I attach to the permission in respect of Point 1 are: (a) that the parts of Mr. Tipling’s report that support the three notional dates relied on by Gurney together with all the supporting material be provided to Pearson by 4.00 p.m. tomorrow, 2nd December; (b) that permission to Gurney to rely on expert programming evidence is limited to those parts of Mr. Tipling’s report that have been provided to Pearson by 4.00 p.m. on 2nd December 2005; (c) that Pearson have permission to produce and rely on their own expert programming evidence and further factual evidence in response, confined solely to this issue, such report and further evidence to be provided to the other parties and the court by Thursday, 12th January 2006. Point 2: Actual delay in completion on number 8 and number 10 22. 23. The relevant completion dates for the purposes of Pearson’s claim are 15th or 22nd January 2001. Gurney now want to say that completion should have been achieved three months earlier due to a combination of delay on the part on the remedial work contractor and delay due to changes to the scope of work carried out by that contractor. It seems to me that this is an entirely new point. Unlike Point 1 it is not right to say that it is already in issue. It does not arise out of Pearson’s particulars of claim or Gurney’s existing defence. Pearson rely on the actual completion date which does not appear to be disputed. Gurney want now to say that the remedial work contractor was delayed and that they should not have to pay for that delay. But that would involve a detailed analysis of the entire progress of the remedial work contract which has never been scrutinised before. It would mean, for instance, looking to see what critical delay was caused by each of the variations to the work scope. It is a potentially mammoth task. In addition, it is not clear what these points might ultimately be worth. Mr. Sutherland, in answer to my question, put the value of the point at just £38,000. 24. Accordingly, it seems to me that if I were to allow this amendment there would be a large amount of extra work for Pearson to do which they simply could not have anticipated. It would involve a large amount of new, expert evidence and the trial date would plainly and obviously be at risk. In addition, all such a new case would achieve would be to allow Gurney to argue that they might be able to reduce the loss of rent claim by a maximum of £38,000. It seems to me, therefore, that it would be both disproportionate and unfair to allow the amendment in respect of Point 2 in those circumstances. I therefore reject it. 25. I should also say that, given that the remedial works were carried out pursuant to professional advice, Pearson might also have had a complete or at least partial answer to Point 2 by reference to the decision of His Honour Judge Newey QC in Hospitals for Sick Children v. McLaughlin & Harvey [1990] ConLR 25. That point could have been dealt with by way of a preliminary issue. It could not be now. That is another reason for my decision to refuse permission to add this new allegation. Point 3: Actual Delay in Commencement 26. 27. 28. 29. Pearson’s claims are based on the actual start of remedial work at the end of August 1999. The date does not appear to be disputed. Again, the point that now arises is that Gurney wish to say that the remedial work contract should have started 16 weeks before. The direct value of this item is relatively small, about £32,000. However, Mr. Sutherland says that the point also goes to the loss of rent claim and may therefore be worth in total about £115,000. Again, it seems to me that this is a completely new point. Again, unlike Point 1, it is not right to say that it is already in issue. Again, it seems to me that it would involve a large amount of additional evidence – largely expert evidence – as to programming, critical delay and the like. On this point the evidence before me clearly demonstrates how much work might be involved to get this ready for trial. The 16 weeks delay is argued by reference to a document (which I think is a document attached to Mr. Tipling’s draft report) called Appendix W. On any analysis of Appendix W one can count nine activities which were carried out during the period between May and August 1999 and which Mr. Tipling says should have either started earlier or taken less time. The scope of the potential investigation and issues involved in relation to that part of the potential amendment is therefore vast. I should make another point in relation to Appendix W. It is dated 3rd October 2005. It seems to me, therefore, that if Gurney wished to rely on Appendix W in support of their case as to the notional completion date, it is information that should have been provided to Pearson in early October at the latest. The information was clearly available. It was not so provided, and there is no explanation for why it was not. Again, therefore, that seems to me to be a highly relevant factor when I consider whether or not the proposed amendment in respect of Point 3 should be allowed. It seems to me that if I allow in Point 3 there would be a large amount of programming evidence and a good deal of detailed work required from programming experts, including w/p meetings, exchange of reports and the like. Given that five months have already elapsed since the exchange of witness statements and the parties are not yet ready to exchange their reports on the main issues, it is I think idle to suggest that such reports could be properly prepared, exchanged and the programming evidence fully ready for a trial which, excluding Christmas, is about five weeks away. I also take Mr. McMullan’s point that this is material on which he might also have 30. 31. wanted to adduce factual evidence and that that, again, is something that he probably would not be able to arrange in the time if the late amendment was allowed. In addition, it seems to me that if the point had been raised some months ago, as it should have been, it would have again been possible to decide, in advance of the trial, the extent to which the point was covered by the principle in Hospitals for Sick Children. Because the application is made so late, that is simply not possible. Accordingly, because of the amount of work involved in Point 3, because it is a new point, and because the relevant information was not provided by Gurney at the time that they had it, it seems to me that it would be both disproportionate and unfair to allow the amendment in respect of Point 3. I do not believe that Pearson would or could be ready to deal with that amendment at the trial. I therefore reject the proposed amendment in respect of Point 3. Conclusion on Category 3 32. For the reasons which I have explained I allow the amendment which adds Quantum Point 1. I refuse the amendments in respect of Quantum Points 2 and 3. I consider that such a result is, in the round, fair to both parties. It admits the highest value item relied on by Gurney but allows Pearson the time to concentrate on that one single aspect of delay. I am, on the material that I have, confident that Pearson can properly be ready to deal with that point at the trial. I am equally in no doubt that Pearson could not have been ready to deal with all three Points, whether properly or at all, if I had allowed the amendments in respect of Points 2 and 3 as well. Since, unlike Point 1, Points 2 and 3 raise entirely new issues that form no part of this case at present, they should not be permitted. In this way, I am satisfied that the conclusion which I have reached maintains the balance of justice between the two parties.