Although this case has attracted attention for a number of reasons, the principal focus here is its place in the development of construction law.
IGL is based in Caerphilly and provides geotechnical and geoenvironmental services, including land surveys.
In 2012, Bridgend Council instructed IGL to carry out an environmental report on land at Ogmore-By-Sea in the Vale of Glamorgan that it intended to sell for house-building. The land had previously been used as a residential education centre, and over time some of its buildings had been demolished. By 2012, some of that land was built on and some grassed over, including a part which had been used as a dry ski slope.
IGL carried out a desk top study and site investigation, excavating nine trial pits. The majority of these were inevitably in the more accessible areas which was not built over. The report then compiled, covering some 29 pages plus plans and appendices, acknowledged potential asbestos contamination within the building structures. It expressed no opinion on whether the clearance of the remnants of buildings might expose further contaminants though there was no ‘visual or olfactory’ evidence of contamination. However the report did recommend further testing once the site had been more fully cleared and was specifically a “working document for further development in discussion with all concerned” and it concluded that there should be further contamination testing once the site had been cleared. It incorporated standard Association of Consulting Engineers Conditions of Engagement to the effect that the contract did not purport to confer any benefits on third parties, and capping liability to £300,000.
The report did not only deal with contamination, but included wider observations about the site and gave recommendations for foundations, floor slabs and other geotechnical concerns. As HHJ Stephen Davies observed, “this report had not been commission nor was it provided on the basis that IGL had been asked to or was giving advice as to: (a) the suitability of the site for acquisition by a residential developer; (b) its value as a site to a residential developer; (c) the further steps which a residential developer proposing to acquire the site for residential development should take before committing itself unconditionally to the purchase of the site”.
The report said that it had been prepared for Bridgend Council and could not be passed on without consent, but also that it could be assigned to an eventual purchaser. In the event, it was in fact, inadvertently, not assigned to the purchaser BDW as part of the sale.
Once the site had been cleared, further asbestos contamination was identified in the demolished historic building structures and the BDW’s claim was that, had it known about it, it would have negotiated a lower price to account for the likely decontamination cost. The claim was, however, unsuccessful.
The report had been prepared for Bridgend, not BDW, and there was no contractual relationship between the parties. It followed that BDW would have had to establish that IGL owed it (and breached) a duty of care. Such a duty had expressly been disclaimed in the report. This, coupled with the exclusion of third party contractual rights and the limit of liability, defeated any potential liability arising from the foreseeability of BDW’s loss and the possibility that the benefit of the survey and report might have been assigned. Although capable of assignment, the report was not assigned expressly, nor could it have been assigned by implication. Furthermore, it was clearly material to the Judge that the report was provisional in its terms, such that BDW relied on it more perhaps than it might have done.
The case has also attracted comment because of the Judge’s criticism made of the extent of the intervention of solicitors in the expert evidence, and also makes important observations about the Court’s approach to measuring damages in such cases (were they to succeed).
Graeme Kirk / 11th Sep 2018
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