CAUSATION AND REMOTENESS
If your little mistake turns out to be a massive mistake because of my little mistake, can you be made to pay the whole of the bill? Over to the Court of Appeal
When things come to the court of appeal, the loser is attacking the interpretation and understanding of the law. All this is especially useful for adjudicators and arbitrators
I told you last year about the ballcock valve that came loose causing a water tank to overflow and with extremely painful and expensive consequences (19 June, page 24). Supershield, the firm on the receiving end of the bill brought its case to the three-man Court of Appeal. It lost again. What do you make of it all?
The story was as follows. Skanska subcontracted the M & E and sprinkler work in a swish new City office block to Haden Young. The sprinkler work was subcontracted to Siemens Building Technologies, which subcontracted it again to Supershield. It got one of their blokes to fit the ball valve to the water tank. The tank sat on a 600mm-high bund. If the tank overflows because the laddy who fitted the ball valve made a mess of the job, or the valve was a tad iffy, the bund traps the water and three floor drains carry it to safety. Easy, isn’t it?
What happened here was that Supershield’s laddy did go wrong and the water overflowed – but then the bund overflowed and the water made a mess of the offices of solicitor Slaughter & May. A whopper of a bill went to Skanska, then Haden, then Siemens, then Supershield. We don’t know what happened to the laddy. What we do know is that those three floor drains didn’t work. They were blocked or partially blocked by packaging, insulating and other material on the tank room floor.
Now then, when things come to the Court of Appeal, it’s because the loser is attacking the “first instance” judge’s interpretation and understanding of the law. What happened on this occasion is especially useful for adjudicators and arbitrators because it could easily crop up in another dispute.
The legal issue was whether the mistake in fitting the ball valve left Supershield with the blame and the bill, despite the blocked drains. This is known to lawyers as “causation and remoteness”. Supershield obviously didn’t think it should carry the can for the blocked drains, nor did its lawyers.
Anyone, including my 86-year-old mother-in-law, knows that if a ball valve installation is botched, the water will run out of the overflow
The principle (which is a bit of a mouthful) says: “When a party breaches a promise in the contract it is only liable to pay damages or compensation for the losses fairly and reasonably considered according to the usual course of things or as may reasonably be supposed to have been in the minds of both parties when they made their contract as the probable result of a breach of any promise in the contract”. Well it’s plain that a botched ball valve installation will mean that the water keeps running. It will in my loo. It will in your roof tank. Where to? Well, says every architect, plumber, builder, engineer and my 86-year-old mother-in-law, “out of the overflow”.
In the usual course of things, said the barrister for Supershield, the duff ball valve would not cause damage. As quick as the water runs in, it will run out of the overflow; it will not run into your roof. It will run into my geraniums. As for the overflow from the sprinkler tank, it was in the minds of all the parties that the water would run out of the overflow drains in the floor in the bund. And if you pompously asked: “What was in the contemplation of the parties upon entering upon the contract, if the ball valve installer got it wrong?” The gallery is likely to shout “nothing will happen by way of water damage”. But remember, some wallah blocked the three drains with bits of insulation. Supershield argued that that turn of events was not contemplated by the parties in the contract.
The court explained that here we have “simultaneous failure of separate protection measures”. These days, multiple safety devices are ordinary, but unluckily, it happened that the valve and the overflow were both duff. True, that was an unlikely turn of events, but the Court of Appeal said, “it should be no answer to say the occurrence was unlikely”. It was no defence for Supershield to say that the precautionary back up measure should have worked. The ball valve was the first line of protection and it failed. The overflow was the second means, and overflows do get blocked. “Well, my dear”, said my mother-in-law, “All I know is that when the tank in the roof overflows, we get very nice geraniums”.
This article first appeared in Building Magazine on 5th February 2010
With full credit to Mr Tony Bingham
BDAS specialise in: providing contract advice, resolving construction disputes, managing construction claims & adjudications and will give you competitive, independent advice tailored to your specific construction problems. If you could benefit from this please call Jon now on 07795 231 231 or email:Jon@BDASweb.com