Cooperative Group Ltd v John Allen Associates Ltd

This case concerns subsidence of the floor of a supermarket in Moat Sole, Sandwich in Kent. The site is overlain by a layer of soft and very soft clay which was treated by vibro replacement stone columns to stabilise or improve the ground. The concrete floor slab was then cast on the improved ground. The main building structure and outside walls were supported by piles with pile caps and ground beams.

The ground floor slab has settled by as much as 110mm and because it is supported in places on the pile caps which have not settled, there has been significant differential settlement. The overall result is that there are sloping floors which, it is common ground, require remedial work to re-establish a level floor and avoid problems, such as rolling shopping trolleys, which affect the use of the supermarket.

The Supermarket was developed by Cliveden Estates Limited (“Cliveden”) under a development agreement with Co-operative Retail Services Limited (“CRS”) dated 29 February 1996. The Claimant (“CWS”) is the successor to the rights and obligations of CRS.

Cliveden engaged consultants to provide the necessary professional services for the supermarket development. These included architects, quantity surveyors and engineers. In particular Cliveden engaged the Defendant (“JAA”), consulting civil and structural engineers based in Kent who had previously worked with Cliveden on a supermarket development in Brighton. Initially JAA were engaged on a speculative basis but, following the conclusion of the Development Agreement between CRS and Cliveden, that engagement by Cliveden was formalised by a deed of appointment dated 19 April 1996 (“the Appointment”). JAA also provided a direct warranty dated 10 July 1996 to CRS (“the Warranty”).

Cliveden entered into an agreement (“the Building Contract”) with John Mowlem & Company Plc, now Carillion JM Limited (“Mowlem”), in the 1980 JCT Standard Form of Building Contract, with Quantities Edition, dated 5 November 1996. That contract contained a Provisional Sum of £45,000 for vibro compacting ground improvement and also a Performance Specification for soil stabilisation by Vibro Replacement Techniques prepared by JAA. Mowlem also provided a direct warranty dated 23 December 1996 to CRS.

In addition Mowlem entered into a sub contract with Pennine Vibropiling Limited (“Pennine”) in July 2006 for the ground improvement works by vibro compaction, including full design of the ground improvement scheme.

Initially Mowlem was brought into these proceedings by JAA as Third Party and, in turn, Mowlem brought Fourth Party proceedings against Pennine. On the second day of the trial a Tomlin Order was agreed between JAA, Mowlem and Pennine and Mowlem and Pennine then took no further part in the proceedings.

In January 1995 there was a meeting between Peter Boam, a Director of Cliveden and Tony Smith, the National Property Manager of CRS, at which the possibility of Cliveden developing a store for CRS in Sandwich was discussed. Mr Boam confirmed a figure of £1,855,000 for the cost of the development in his letter of 15 January 1995 to Mr Smith. He said in that letter “We have estimated the cost of the foundations and once the soil tests results are to hand we agreed to adjust this element of the costs if appropriate.”

In correspondence which followed Mr Smith said in a letter to Mr Boam of 20 January 1995 “Just to recap, the position on piling is as follows: we have made an allowance in the costs for an additional figure of £75,000. A soil test has been commissioned and will be carried out shortly. As soon as the results are to hand, we shall be able to calculate the actual costs which may of course be more or less than our estimate. A suitable adjustment to price will then have to be made.”

Cliveden engaged LBH Wembley (“Wembley”), geotechnical and environmental consultants, to produce a desk study report to assess the likely ground conditions as a basis for specifying an appropriate site investigation. In their report dated January 1995, they noted that they had considered the Geological Survey Map and information from the District Council. They pointed to the derivation of the Saxon name of Sandwic, meaning “settlement on the sand” and said they expected an extensive thickness of beach sand at the site.

In relation to the new foundations they said: “It is anticipated at this stage that while shallow foundations may be possible for the envisaged supermarket building, piling or some form of ground treatment should also be considered in view of the possible high level past disturbance of the soils and possible high water table.”

A copy of that report was provided to JAA and on 6 February 1995 the director who was ultimately the person responsible for the project at JAA, Kevin Leach, wrote to Charles Brackenbury, Cliveden’s architect for the architectural concept, enclosing a copy of the site survey marked up with their proposed locations for boreholes and trial pits.

Wembley then carried out a site investigation and in a report dated May 1995 they reported as follows:

Mr Boam received that report and sent a copy to John Allen at JAA on 13 June 1995. In the covering letter he said: “I enclose a copy of the site investigation report prepared at our request by LBH. As you will see the news is not entirely good. Will you please let me know the implications of this from an engineering point of view as I am keen to establish whether the scheme remains viable given the ground conditions.”

Mr Allen passed it on to Mr Leach with the manuscript note: “Full comment back to Peter. Be positive.” That led to Mr Leach’s letter to Cliveden dated 27 June 1995 in which he said this:

“We have had discrete discussions with a geotechnical contractor to establish possible solutions to the problem encountered at the above.

We can now report that we consider that the superstructure will require piling, probably driven cast insitu piles approximately 13m long.

The slab can be ground bearing if we adopt vibro compaction of the subsoils. The vibro stone probes will be at approximately 2m centres in each direction.”

The reference in that letter to discussions with a geotechnical contractor was a reference to a meeting between Mr Leach and Derek Taylor a geotechnical engineer with Keller Limited (“Keller”) at some date after mid-June 1995. In his witness statement Mr Taylor said that Mr Leach discussed the development and provided him with a copy of the Wembley Site Investigation Report.

Mr Taylor informed Mr Leach at the meeting that with indicated superimposed loadings of 15kN/m², the ground conditions were probably too soft for the superstructure to be founded on improved ground and could require piling but that it should be feasible to use “vibro” to support the ground bearing slab. He said, though, that he would ask David Whyte, a senior estimating engineer with Keller, to look at the Site Investigation Report and carry out some calculations. He said that he would get back to Mr Leach with some figures for dimensions and prices.

Mr Whyte carried out calculations and agreed with Mr Taylor’s initial advice that vibro stone columns could support the floor slab, subject to the columns being spaced at 2m centres in each direction, with the columns being formed by the bottom feed system so that the stone was densely compacted and with trial pits being carried out to confirm the consistency of the soft clays. On the basis of the Site Investigation Report, the likely superimposed load (excluding the dead weight of the slab and any fill) and the calculations carried out by Mr Whyte, it was estimated that long term settlement would be 50mm.

As a result of receiving those calculations, Mr Taylor phoned Mr Leach to say that the slab could be ground bearing if vibro was used with stone columns at approximately 2m centres and that, with a superimposed load of 15kN/m², long-term settlement could be expected to be in the region of 50mm. Mr Taylor gave Mr Leach prices which were then set out by Mr Leach in his letter of 27 June 1995 to Cliveden, in which he reported on the advice received from Keller.

Mr Boam acknowledged Mr Leach’s letter on 28 June 1995 and said “We will respond more fully to the points raised at the design team meeting which will be arranged shortly.”

Mr Leach was on vacation from 29 June 1995 to 19 July 1995 and, on his return, he attended Design Meeting No 1 on 21 July 1995 at the offices of the Project quantity surveyor, Sawyer Fisher, in Maidstone. Mr Ron Dear had by then taken over from Mr Boam as the Cliveden representative for the construction phase of the project. Mr Zimber, a Chartered Building Surveyor, acting for Cliveden, also attended the meeting, together with others including representatives of the architects for the project, John Living Partners (“JLP”).

At the meeting two relevant matters were discussed. First Mr Dear asked the architects to review specifications for previous CRS projects at Pewsey (shell only) and Callington (shell and fit-out) and then prepare an outline specification or scope of works to tie down the scope of works for CRS. Mr Dear handed over a number of documents to the architects.

Secondly, JAA agreed to send a copy of the Wembley Site Investigation Report to the architects. The notes of the meeting record that the architects gave JAA a set of their preliminary scheme drawings and that this was said about the Wembley report: “The report basically indicates that the ground is peat/silt/clay. Piles will be required to a depth of 13m. These will be of the “vibro” type.” Clearly there was some misunderstanding of the difference between the piles and the stone columns which were to be placed by vibro replacement.

On 9 August 1995 there was Design Team Meeting No 2 and the minutes record under “structural matters” that: “It was agreed that ground stabilisation would be done in the main contract.”

The architects, JLP, produced a first draft of the shell specification on 26 July 1995 and circulated it for comment to Mr Zimber, with a copy to Mr Leach, amongst other people.

That draft specification contained the following under Part 2 Design Requirements at paragraph 2.4:

“Floors are to carry superimposed loadings, excluding weight of applied finishes as follows:

Sales Area, entrance and preparation area 15.00 [kN/m²]

Warehouse 31.50 kN/m².”

On 31 July 1995 Mr Leach wrote to Mr Zimber, with a copy to others, setting out his comments on matters arising from the notes of the meeting on 21 July 1995. In relation to the specifications he said :

“We note the slab imposed loads and would request the CRS consider the loadings in light of our correspondence of recent date.

We have proposed vibro treatment for the slab on the understanding that increased loads will result in greater long term settlement.

The specs call for an imposed load of 15kN/m² for the sales floor area. However the loading code indicates an imposed load of 2.4kN/m²/m height of storage. The available height to the ceiling is 3.2m thus giving an imposed load of 7.68kN/m².

We also note that the General Spec calls for a bearing pressure under the slab of 100kN/m². We believe this should relate to a minimum safe bearing pressure under foundation bases and not the slab

It is rare for normal development to achieve a bearing pressure under the slab of the magnitude required.”

Mr Zimber replied on 3 August 1995 to say, amongst other things: “With reference to the floor slab loadings, I have not received any correspondence regarding slab loadings from yourself and would be obliged if you could clarify this point. Your comments are noted and will be looking for recommendations from yourself as to an acceptable and institutional slab loading, which we will then put to the tenant.”

In response, Mr Leach sent through, by fax, an extract from BS 6399: Part 1: 1984 containing Table 9 which gave floor loading for a “Retail occupancy class (shops, departmental stores, supermarkets)” and which stated that the intensity of distributed load for “storage, other than types listed separately” was 2.4 kN/m² for each metre of storage height and for “shop floors for the display and sale of merchandise” the figure was 4.0 kN/m².

Mr Zimber replied to Mr Leach’s fax by a letter dated 7 August 1995 in which he said: “With reference to the floor loadings, we will need you to give recommendations on the proposed floor loadings, taking into account the use of the premises and the ground conditions. Your advice will then be put to the tenant for his formal approval.”

JAA produced a performance specification dated 10 August 1995 in which they included the following paragraph:

“Ground improvement process of vibrocompaction to be used to allow the construction of a ground bearing slab with an imposed loading capacity of 10kN/m² in the sales area and 25kN/m² in the storage area.”

Also on 10 August 1995 JLP produced a developer’s brief specification which contained the following:

JAA produced foundation and ground floor slab drawings (1427/L/01, 03 and 04). Drawing 1427/L/01, a General Arrangement of the Foundations, stated that in the supermarket area “Ground level treated with vibrocompaction Design by piling contractor to support a slab superimposed loading of 15kN/m²”. In the Warehouse area the superimposed loading was shown as 31.5 kN/m². The slab was shown to be 175 mm thick.

JAA also produced a Performance Specification for Soil Stabilisation by Vibro Replacement Techniques dated 21 February 2006 which had been produced from a draft dated 19 July 1993. It contained general provisions and at clause 2.00(e) stated:

“The Contractor shall include zone loading tests to model the working behaviour of slabs and foundations to demonstrate that settlements will not exceed 10mm with differential settlement not greater than 2mm to 4 m, all to be agreed with the Supervising Officer and the Local Authority.”

On 18 August 1995 JAA sent an Invitation to Tender for the design and installation of all piling for the development to Keller, Bauer Foundations and Roger Bullivant. They enclosed the drawings, their specification for Vibro and Piling work and the Wembley Site Investigation Report.

In response to that invitation, JAA received three tenders. In relation to Vibro Replacement the tenders provided as follows:

It seems that JAA sent the first two quotations to the quantity surveyor, Sawyer Fisher, on 22 September 1995. Tender documents inviting tenders for the project were sent out in September 1995 and on 20 October 1995 Mowlem submitted their tender.

In late October 1995 Mr Zimber and the professional team met the two potential contractors to discuss their tenders. In a tender report dated 6 November 1995 Mr Tollerfield of Sawyer Fisher recommended that Mowlem be appointed.

On 2 November 1995 Mowlem sent out invitations to tender for sub-contract work in relation to, amongst other things, the Vibro Replacement Work. They received the following tenders:

In the meantime CRS wrote on 23 October 1995 to Mr Jolliffe of Harris & Porter Management Services who was acting on their behalf in relation to the project cost to seek an updated development cost analysis for the project. He replied with an Interim Progress and Financial Review of 24 November 1995. CRS responded on 4 December 1995 to say this:

“Prior to completion of the Development Agreement, I must be able to report with certainty to the Food Division on the overall project cost. If this figure is to exceed that for which we have Board Approval, then it may be necessary to obtain further approval before completing the Development Agreement. You will understand, therefore, my concern that this task is undertaken urgently.”

On 5 December 1995 Mr Jolliffe replied to that letter giving comparisons between the cost of proposed stores at Pewsey and at Sandwich. This led CRS to consider whether they wished to proceed on the basis of these costs. Mr Smith, CRS’s National Property Manager, wrote to Mr Boam on 12 December 1995 to say that the CRS were looking into the financial implications of the additional costs and that would be in touch shortly.

On 11 January 1996 Mr Smith wrote again to Mr Boam to say:

“I refer to our recent discussions on the subject of the increased costs. As you know I indicated to you that in my view the proposed development would not stand up with the level of increased costs involved.

At the Executive Meeting last Monday the proposal was discussed once again and the cost analysis examined in relation to the profitability having regard to the new costs.

I regret to advise that the Executive decided that the proposal did not warrant proceeding with based on the inadequate return likely to be forthcoming from the development.

In my view at least £300,000 needs to be removed from the equation if the matter is to proceed.”

This obviously caused concerns for Cliveden which Mr Boam expressed in his reply to Mr Smith on 12 January 1996, following a discussion of the possibility of going ahead at a reduced cost. Mr Boam concluded his letter by saying: “We agreed that you will seek authority to exchange contracts, that are already agreed, at a price of £250,000 or thereabouts below the present figure. Once this has been done I will approach the Receiver on the basis that he either accepts the drastic reduction in his price or else the transaction fails and he is left to pick up the pieces. I need not repeat that there is only a slim chance that he will go along with this, however, we see this as our only opportunity to salvage something from the situation.” The reference to the Receiver was because part of the land belonged to a company in receivership.

On 31 January 1996, following further internal discussions, Mr Smith wrote to Mr Boam as follows: “I confirm that the Food Division have in principle agreed that the project can go ahead quickly if £250,000 is reduced from the purchase price of the land.”

This led to a review, not just of the land prices but also of the construction details. As part of the process, a meeting was held on 7 February 1996, attended by Mr Boam and Mr Dear of Cliveden, Mr Leach of JAA, Mr Zimber and other members of the design team. At that meeting a number of possible cost savings were noted. At paragraph 2.3 of the notes of that meeting it was stated: “Alternative vibro compaction method - subject to JAA review.”

At that meeting, it seems that a document was produced which listed potential savings and indicated that Mowlem could achieve a “buying” saving of £20,000 in relation to item 2/2/C of the Bill of Quantities for Vibro work. This appears to have been on the basis that Pennine or Van Elle had been suggested as vibro sub-contractors, subject to JAA approval.

At some stage after the meeting a document was produced which, for that item of the Bill of Quantities, noted that “[JAA] cannot adopt Van Elle alternative due to ground conditions”.

Also at that meeting JAA presented drawings which showed a change from steel frame to the use of timber trusses and load bearing masonry, a method of construction which saved costs and which was ultimately adopted.

In the end, the cost savings made, following this meeting, allowed Cliveden and CRS to finalise negotiations on the Development Agreement which was completed on 29 February 1996.

Mowlem was then appointed and sought further tenders on vibro-piling and received one dated 20 March 1996 from Pennine for dry top-feed vibro columns and one dated 7 May 1996 from Vibroflotation Limited for dry bottom-feed vibro columns in which they said:

“As per our telephone conversation last Friday we have allowed for treating on an approximate 2.0m grid pattern to a maximum depth of 7.3m as per the Engineers requirements. We enclose under item 7.0 a Method Statement on the ‘Vibroflo’ ™ bottom feed process which should be submitted to the Engineer for his appraisal.

Whilst we do not anticipate the need to modify either our proposals or prices our tender must remain subject to confirmation until we have inspected trial pits on this site to assess whether the upper firm clays can be penetrated without the aid of pre-boring techniques. [At] the moment our price is exclusive of pre-boring but we have given rates under item 6 of our Bill of Quantities.”

They also added in the “conditions and clarifications” of their offer that:

It seems that the Vibroflotation quotation was faxed by Mowlem to JAA, together with the May Gurney Omega piling system quotation, and on 8 May 1996 JAA wrote to Mowlem to say that they had no technical objections to either contractor.

In the sub-contract which was subsequently entered into between Mowlem and Vibroflotation it was stated that: “Total settlements will be in the order of 30mm not 10mm as the Specification. This has been accepted by the Engineer.”

This appears to be a reference to a conversation recorded in a letter to Mr Leach from Mowlem on 7 June 1996 where it was stated:

“Further to our telephone conversation regarding the use of Messers Vibroflotation Ltd as the ground treatment company for the above project:

We confirm the long term total settlements on the floor slabs on a bearing pressure of 15 kn/sq.m would be in the order of 30 mm at the centre and 15m on the edge and this is acceptable to you and we are to proceed with the use of Vibroflotation Ltd for the works.”

On 20 June 1996 Mowlem appointed Vibroflotation to carry out the design and supply of ground improvement by Vibro Compaction. On 26 June 1996 Vibroflotation sent JAA their design and settlement calculations for approval. Those calculations indicated a total settlement of 31.48mm for an imposed load of 15kN/m² at the underside of the slab.

Those calculations were considered by JAA and at Site Meeting No 1 held on 27 June 1996 the notes of the meeting stating that Mr David Denton of JAA: “requested that before additional vibro calculations are sent the Sub-contractor checks them; a number of silly errors have come through. ” It is not clear what this refers to but certainly it indicates that JAA were considering the calculations.

In early July 1996 there were discussions between Mowlem and Vibroflotation which culminated in a letter from Vibroflotation to Mowlem dated 8 July 1996 in which they stated that they were experiencing severe technical problems with the bottom feed rig intended for this project and they only had one rig which was capable of treating to the required depth. They said that they were endeavouring to overcome the problems but could not guarantee that the rig would be operational for July 1996. They suggested that, in those circumstances, it would be prudent for Mowlem to consider an alternative Sub-Contractor.

This caused Mowlem to approach Pennine who submitted a quotation on 8 July 1996 based on the use of a dry bottom feed process. They said that this quotation was based on “Slab Foundation Loading: 15 kN/m^{2 ”} and that “Treatment is for partial depth only with settlement being controlled to less than 30mm.”

On 9 July 1996 Mowlem had a pre-contract meeting with Pennine and issued a copy of minutes to Pennine saying that, on receipt of Pennine’s comments/approval, Mowlem would issue a letter of appointment with a view to Pennine commencing work on 12 July 1996.

On 10 July 1996 Mowlem appointed Pennine as subcontractor to “supply all labour, plant (inc. fuel) and material necessary to execute and complete the design, timely production of design information, supply, delivery and installation of the Ground Improvement by Vibro Compaction.” On the same date, Pennine sent JAA a settlement calculation which showed a long term settlement of 28mm. Mr Denton of JAA replied to Mowlem on 11 July 1996 to say “We have no comments to make regarding the calculations received.” On 12 July 1996 JAA forwarded Pennine’s calculations to Dover District Council.

On 24 July 1996 Mr Denton of JAA wrote to Mowlem to say that a suitable vibro-piling layout drawing was yet to be received and seeking confirmation “(1) That a true bottom-feed method is being employed by your Sub-Contractor; (2) That full compaction for the correct material is being achieved in the piles; (3) That the piles are being installed within vertical tolerance of 1:75.”

The quality of the vibro-compaction was queried by JAA at Site Meeting No. 2 on 25 July 1996 and this led to a post meeting note that load tests were to be carried out at four positions. The complaint about the quality of the work had, it seems, arisen because Mr Henley Wheaden of Keller, from whom I heard evidence, had visited site to see what Pennine, a competitor to Keller, was doing. He had apparently hidden behind a tree and taken some photographs of the Pennine rig which I have seen. He had a number of criticisms of the way in which Pennine were carrying out the placing of the stone columns which he expressed to JAA at the time.

On 26 July 1996 Mowlem wrote to Pennine to report that they had submitted to JAA the latest revision of the layout plans as well as all calculations for comment. They also said: “It has been witnessed on site by the Project Engineer the amount of skew that some of your piles are being placed at. His concern has resulted in a request that you carry out load testing of a group of your piles.”

Pennine replied on 26 July 1996 to say that the as built drawing would be forwarded to Mowlem upon completion of their works; that all design calculations had been forwarded and that stone grading would be forwarded within 5 days. They enclosed a zone test method statement. They added:

“Pennine confirm that all stone columns have been installed within verticality tolerance as stipulated by the ICE Specification.

Previous correspondence to yourselves have highlighted the dense upper layers. During penetration of this layer, the flot is ‘worked’ to make the void. However, when the flot has penetrated this strata, it is straightened up.”

Mowlem also wrote on 26 July 1996 to say that there were further requests from JAA who on checking calculations submitted noted that “there were no calculations for grid references 1 to 5, F to K. These references should have a loading requirement of 31.5 KnM².” Mowlem asked Pennine to issue all information by return and to discuss the matter further if they had any difficulties in submitting this information.

On 29 July 1996 Mr. Leach wrote to Mowlem seeking confirmation of the following matters in relation to the vibro replacement piling recently carried out:

“a)

You will provide calculations for the warehouse area to confirm the increased imposed load requirements.

b)

You are satisfied that the piles were formed in accordance with the specification and that the piles meet required tolerance in terms of position and verticality.

c)

You are satisfied that the technique adopted is the dry replacement bottom feed system as required by us and discussed prior to the sub-contract order being placed.

We would also ask that you accept responsibility for the installation should any of the above criteria not be met.”

Mowlem forwarded Pennine’s letter of 26 July 1996 to JAA on 29 July 1996 and stated that they considered any additional testing to be a variation to the contract and asked for instructions. They added that: “Hopefully if testing is required the instructions can be received by return as Pennines will be leaving site tomorrow.”

On 29 July 1996 Pennine sent calculations to Mowlem for settlement in area 1-5/F-K which showed a total long term settlement of 29mm. They also confirmed an instruction to carry out three plate tests which were carried out that day.

On 30 July 1996 Pennine sent JAA the plate load test results and the settlement calculation for area 1-5/F-K. On 31 July 1996 Mr Denton of JAA wrote to Mowlem to say:

“With regards to your fax of 30 July 1996 and Pennine’s enclosed calculations we comment as follows:

1)

We note that the thickness of the firm clay layer has been taken as 3m.

2)

Earlier calculations and the site investigation gives this material as being approximately 1.5 m thick.

The effect of this is that the later calculations predict a lesser settlement by reducing the effect on the softer underlying clay.

Without evidence to support the figures adopted, the calculations are not acceptable.”

At a site meeting held between Mowlem and the architects on 31 July 1996 the vibro-piling was discussed and the following was noted:

“Vibro-pilling: Steve Brunswick (Senior Mowlem’s Civil/Structural Engineer) has discussed/checked work and calcs. from Pennine and is satisfied with work. Mowlems are prepared to underwrite Pennine’s work. They are willing to organise independent testing if it is considered necessary by JAA. JAA to consult further with Mowlems and report conclusion.”

Pennine responded to JAA on 1 August 1996 in relation to the calculations. They referred to an attached letter they had sent on 18 July 1996 “which highlights the stiff clay encountered to 3.0m.” They added:

“Following the receipt of the plate load tests, we have calculated the coefficient of consolidation (Mv). These can be seen in Appendix A.

For Test No.1, Mv=0.075

Test No.2, Mv=0.095

For our design, we have used a value of 0.25 for the upper 3.0m. From on site experience, we know this is conservative.”

On 5 August 1996 Pennine sent JAA the plate load test results and stated that the results were satisfactory and within the contractual tolerance.

JAA received a copy of the notes of the meeting held on 31 July 1996 referred to above. They commented in a letter to the architects of 7 August 1996 as follows:

“Vibropiling - JAA do not intend to pursue the issue on the understanding that the works are underwritten by the Contractor and that they respond directly to our letter of 29th July 1996.”

On 9 August 1996 Mowlem sent Pennine’s “as built” drawing and on 13 August 1996 forwarded to JAA a copy of a letter from Pennine of 6 August 1996 responding to JAA’s letter of 29 July 1996 in which Pennine stated: “All stone columns have been constructed within the verticality stipulated in the I.C.E. Specification for Ground Treatment. Stone column installation method was undertaken by the dry bottom feed method.”

At Site Meeting No 3 on 22 August 1996 Mr Denton of JAA was noted as saying that he “confirmed that the vibro-compaction work is now considered to have been satisfactory. They have received results of 2 “plate tests” both of which were OK. They have reviewed the as-built drawings and calcs. There is one minor outstanding issue regarding the proximity of vibropiling to an Omega pile.”

This appears to have concluded the correspondence on vibro replacement and Mowlem then carried out the construction of the remainder of the work. Practical Completion was certified on 3 February 1997 and the store started trading on 24 February 1997.

Cracks in the flooring at the supermarket became apparent by late summer 1997. Initially it was thought that the cracking had been caused by drying out. However by September 1997 concern as to the cause had increased and at a meeting on 12 September 1997 attended by Mr Jolliffe, Mr Leach and representatives of Mowlem and the architects it was noted:

On 1 October 1997 Mr Leach said he was of the opinion that the structural slab had not settled in any appreciable way and he concluded that the cracking was due to shrinkage or normal movement of the structural frame.

On 16 January 1998, as the end of the one-year Defects Maintenance Period approached, the architects wrote to Mowlem to express concern and again suggested that the Terrazzo Federation should produce a report to assist in remedying the problem with the floor.

An inspection then took place on 30 January 1998 attended by, amongst others, Mr Roy Stevens of JAA. On 2 February 1998 the architects wrote to say that the cracking suggested that there was a structural aspect to the problems. On 4 February 1998 Mowlem wrote to Pennine “to record that the ground bearing slab on the above project is showing signs of significant settlement causing the Terrazzo floor tiles to crack and move. It is the opinion of the Structural Engineer that this may be due to your vibro-piling failing. Can you contact the writer to progress the matter?”

On 5 February 1998 Mr Leach wrote to the architects saying that it was impossible to be specific as to the cause of the cracking but recommending a report from the Terrazzo Federation and exploratory investigations. The architects then instructed Mr Tiramani, the secretary of the National Federation of Terrazzo, Marble, and Mosaic Specialists, who inspected the slab on 30 March 1998. In his report sent on 6 April 1998 he said:

“The damage seen here, particularly the patch of diagonally fractured tiles, indicates a degree of stress seldom encountered in terrazzo floors - where normally defects are confined to minor imperfections in joints - and, in the light of 50 years’ experience, the writer’s opinion is that it is attributable to movement in the base or structure. However, we cannot offer suggestions as to possible causes, and only physical investigation can provide a solution.”

In a level survey carried out on 22 June 1998 it was found that there had been settlement of the slab of about 65 mm. It was decided to take a further level survey at a later date before carrying out any exploratory investigations. In about August 1998 the CRS instructed Jubb & Partners, a firm of consulting engineers. JAA then forwarded information to them on 4 September 1998.

On 30 October 1998, in response to a letter from Peter Boam of Cliveden, Mr Leach wrote to say that:

“The possible scenarios for full reinstatement should movement be continuing are as follows:

1)

Total removal of the slab and finishes, new vibro treatment if necessary, re-compact the subgrade and lay a new slab.

2)

Total removal of the slab, introduction of “ mini piles” on a regular grid and the construction of a geogrid mattress then reconstruction of the slab.

3)

Core drilling and insertion of mini piles to effectively “carry” the slab, re-level the slab with a structural topping.

4)

Remove finishes, chemically grouting the subsurface material to stabilise it, screed to level.

5)

Pressure grout under the slab to “lift” back to level.”

A further level survey was carried out and forwarded to the architects by Mowlem on 11 November 1998. That was inconclusive as the levels taken did not exactly correlate with the positions on the first survey. A further survey was therefore carried out.

On 16 November 1998 Mr Leach wrote to Mr Dear of Cliveden setting out his views on the failures. He summarised the overall position from the point of view of JAA as follows:

“During the pre-contract period, we had discussions with a reputable piling subcontractor, who was given a copy of the soil report and who confirmed that subject to tests carried out at construction stage to ensure compliance of material indicated in the report, vibro piling could be adopted for the ground treatment for the slab area on this project.

Main Contract tenders were sought and the Contractor was responsible for the selection of the piling subcontract, with our comment upon technical issues, and the main contractor was given our drawings and specifications.

The main contractor initially selected a company called Vibroflotation to carry out the ground treatment and we scrutinised their calculations and accepted the subcontractor proposed on the provision that they operated a bottom dry feed replacement system.

About a week to ten days before the subcontractor was due to commence, a substitute subcontractor, Pennine, was introduced. Again we scrutinised their calculations, commented that we believed the material properties used in the calculations were incorrect and after receiving revised calculations, again accepted the subcontractor provided they used a bottom dry feed replacement system, which we were informed they would.

During operations on site it was reported, and we have photographs illustrating this, that the subcontractor was not using a bottom feed rig, nor were the piles being placed vertically.

We wrote to the contractor requesting confirmation that they were using the equipment requested and that the piles were being installed vertically in accordance with our specification.

We received this confirmation from the subcontractor.

We also requested the main contractor accept all responsibility for the piling installation, which they did at a site meeting.

It now transpires that there may be a failure of the ground improvement installation, leading to excessive settlement of the slab.

As the contractor tendered for the work, having received drawings and specifications and has accepted full responsibility for the installation, we believe it is incumbent upon him to rectify any faults.

The design of the ground improvement is the responsibility of the main contractor and it is concluded that the fault, be it a design failure or an installation failure, must rest with the main contractor. ”

On 8 December 1998 a meeting was held to review the defective floor. It was agreed that no conclusions could be reached until the results of the further survey had been received. These results were received in mid-December 1998. On 22 December 1998 JAA sent to the architects some calculations and a graph of load/settlement of the slab. They stated:

“From the above, it would appear that the calculations provided by Pennine assume values for settlement post treatment which have not been achieved, either as a result of a variation in actual ground conditions, or treatment of the ground not being as effective as expected. The graphs also indicate that settlement should now be, in the main, complete.”

On 29 January 1999 Mr Leach contacted STATS Geotechnical, specialist engineering consultants, for proposals to “test the subsoils to establish the adequacy of the treatment, the current state of compaction of the material, your estimate of settlements and possible remedial proposals.”

STATS carried out fieldwork in April 1999 and produced a factual site investigation report dated May 1999 and an interpretative report dated June 1999. In that report they concluded that the structural distress had been caused by amongst other things:

STATS also provided a report dated August 1999 in which they set out the causes and responsibilities for excessive floor slab deformities. In calculating settlement STATS utilised the parameters adopted by Pennine but did not make any allowance for secondary consolidation settlement.

On 4 March 2000 there was a transfer of engagements pursuant to s.51 of the Industrial and Provident Societies Act 1965 from CRS to Co-operative Wholesale Society Limited who subsequently changed their name to Co-operative Group (CWS) Limited and then to Cooperative Group Limited, the Claimant in these proceedings.

Letters of Claim were exchanged between CWS and Cliveden in 2004. Cliveden then wrote Letters of Claim to Mowlem and JAA. There were also some further investigations and reports by Eastwood & Partners in July 2000 and by Cambridge Insitu in August 2005.

On 24 April 2006 CWS instructed Dr Martyn Stroud of Ove Arup & Partners (“Arup”) to advise on the problems. Dr Stroud produced a report in July 2006 which is not in the evidence before the court. In November 2006 he was asked to advise on a number of options to remediate the impact of the ground settlement.

Dr Stroud produced two reports in March 2007. One dealt with settlement and its causes and the other dealt with remedial options.

On 13 March 2007 CWS sent Letters of Claim to JAA, Mowlem and Cliveden and on 26 July 2007 CWS issued Claim Forms against JAA and Mowlem. On 3 August 2007 JAA responded to the Letters of Claim.

CWS served the Claim Form and Particulars of Claim on JAA in late November 2007 and directions were given which led to the trial of this action.

CWS bring these proceedings against JAA for breach of the Warranty given by JAA by deed dated 10 July 1996. CWS allege that JAA failed to exercise reasonable skill care and diligence in the performance of its duties under the Appointment with Cliveden dated 19 April 1996.

The particulars of negligence as originally pleaded at paragraphs 13.1 to 13.3 of the Particulars of Claim were as follows:

“13.

In breach of warranty the Defendant failed to exercise reasonable skill care and diligence in the performance of its duties under the appointment with Cliveden.

PARTICULARS

1.

The Defendant chose a ground improvement scheme known as Vibro Replacement being the construction of vibro stone columns

2.

That choice was inappropriate. It could never have worked on the site which was highly compressible and therefore was inevitably going to fail and the resulting building was bound to suffer from extensive and unacceptable differential settlement, which it did.

3.

No competent engineer would have recommended the use of Vibro Replacement.”

CWS pleaded that Dr Stroud’s March 2007 Report annexed to the Particulars of Claim “particularises and explains” the matters pleaded in paragraphs 13.1 to 13.3.

In the Reply at paragraph 38 CWS referred to section 11.1 of Dr Stroud’s March 2007 report and pleaded as follows:

“Particulars of the acts of commission or omission of Allen are set out in section 16(2)(a) to (l) of Dr. Stroud’s report. Allen was in breach of warranty by failing to exercise reasonable skill care and diligence in the performance of its duties to Cliveden in:

a.

Adopting vibro stone columns as a feasible solution for the improvement of the ground beneath the floor slabs;

b.

Continuing to recommend vibro stone columns after the results and circumstances of the tender for vibro specialist contractor became known;

c.

Failing to evaluate the technical suitability of Pennine for carrying out the vibro works;

d.

Not critically examining, prior to Pennine’s appointment, the basis upon which Pennine were maintaining that vibro stone columns would work successfully at the site;

e.

Not allowing for the weight of the slab and make-up fill in the design loading to be applied to the ground;

f.

Not carrying out adequate checks on calculations provided by Pennine;

g.

Not recommending that advice from others was needed if they, Allen, felt unable to check the calculations by Pennine;

h.

Overlooking the additional settlement that was likely to arise in soft clays due to secondary consolidation (so-called “creep settlement”);

i.

Not properly assessing the significance of effectively relaxing the specification in regard to settlement when Pennine’s settlement estimates of 28mm and 29mm became known;

j.

Not adequately assessing differential settlement where the ground bearing floor slab is supported around its perimeter and at internal columns positions;

k.

Not checking Pennine’s stone column layout in relation to the final positioning of the internal steelwork columns; and

l.

Not advising Cliveden that the use of stone columns would have been inappropriate at this project site, and that by adopting it the risks of substantial settlement developing with time were very high.”

By an amendment to paragraph 13 of the Particulars of Claim, CWS pleaded at paragraph 13.5 as follows and further particularised at subparagraphs (i) to (x):

“Furthermore, the Defendant:

(a)

Failed to undertake an independent evaluation of the feasibility and risks of the vibro solution at any material time or, if they felt unable to do so, to advise or recommend that other suitably qualified independent advice should be sought; and

(b)

Failed to appreciate that design input, independent of the specialist subcontractors, was needed on matters relating to the use, design and construction of vibro stone columns in very soft clay, and failed to recommend that if they, John Allen, felt unable to provide this independent assessment, then advice and design involvement should be sought from others with the appropriate expertise.”

JAA pleaded to the allegations contained in the Amended Particulars of Claim in the Re-Amended Defence.

As originally pleaded in paragraph 14 of the Particulars of Claim, the claim was as follows:

“The store must be rebuilt with a piling solution to deal with the compressible ground. Whilst the work is being done, the Claimant will trade from temporary premises close to the site. The losses are the direct remedial works, the construction (and later removal) of the temporary store, the refitting of the new store and trading losses caused by the remedial works and store closure.”

At that stage remedial works were quantified at £3,121,638 plus £951,000 for stripping out and re-commissioning the store. It was stated that an estimate of trading losses would be supplied in due course. On 14 November 2008 CWS quantified their case under the following two heads:

“The loss of contribution, between 2003 and 2009, arising from a refit not taking place in 2003, and the subsequent reduced contribution levels achieved relative to those seen in stores that were subject to refit at around the same time (“Refit Delay”).

The loss of contribution that is expected to arise as a result of using a smaller temporary store for six months, whilst remedial work is carried out to the main store (“Store Closure”).”

There are a number of technical and quantification issues arising in respect of the piling remedial scheme. In addition, JAA put forward alternative remedial work schemes. First JAA rely on a method developed by Uretek Limited by which chemical grout is pumped beneath the slab, under pressure, so as to restore the level of the slab. Secondly they propose a scheme by which the slab would be removed, the ground excavated, polystyrene blocks would replace the ground and a ground bearing slab would be cast again. There are similarly technical and quantification issues arising in respect of these remedial schemes.

In relation to the claim for loss caused by the Refit Delay and by the Store Closure, there are differences in principle as to the validity of these claims and also as to the way in which they are quantified. JAA’s position is that CWS has established neither claim.

At the request of the court a list of issues was provided by JAA prior to the trial. After the conclusion of the trial an amended list of issues was provided and I have taken those issues into account in considering the pleaded allegations in this case.

I heard evidence on behalf of CWS from Mr Peter Boam and Mr Ron Dear, directors of Cliveden; from Mrs Barbara Dunn the fresh food manager at the store who had worked there for 11 years and Mr Mujdat Gulum, who has been the store manager for 6½ years; from Mr David Zimber and Mr David Jollife; from Ms Sarah Layton, a Support Manager in CWS’s Retail Location Analysis team; from Mr Stephen Hassard who had been a Regional Manager responsible for managing the re-fitting of CWS’s Food Stores initially in the South West Region from 2000 and then from 2004 for the South East Region, which includes the store at Sandwich; from Mr Richard Shenton, a management accountant with CWS’s Store Accounting Team; from Mr Derick Pearce, a senior Project Manager with CWS who has been involved with the problems at the store since about November 2004 and from Mr Christopher Fielding, an accountant who is currently Investment Appraisal Manager (Portfolio) with CWS.

On behalf of JAA I heard evidence from Mr Kevin Leach, the JAA director responsible for JAA’s work at the store; from Mr Derek Taylor, a geotechnical engineer with Keller Limited and from Mr Henley Wheadon, a retired civil, structural and geotechnical engineer who had been employed by Keller Limited from 1962 until his retirement in 2003.

I consider that all witnesses who were involved at the time attempted to give their best recollection of what occurred some 13 to 14 years ago. Mr Dear’s memory was clearly impaired by his recent illness. Mr Leach was evidently nervous and, as the person ultimately responsible for the allegation of professional negligence, was defensive which meant his answers were not as full as they might have been and were sometimes abrupt. I have to take this into account in assessing his evidence. I was particularly impressed by the evidence of Mr Pearce who, although clearly involved on behalf of CWS, gave clear and objective evidence.

In terms of expert engineering evidence, CWS called Dr Martyn Stroud of Arup who dealt with all aspects of the case. JAA on the other hand, relied upon evidence from Mr Neil Tutt of Jenkins & Potter on civil and structural engineering issues; from Mr Nicholas Langdon of Card Geotechnics on geotechnical and remediation issues and Dr David Greenwood, a director of Kvaerner Cementation Foundations from 1968 to 1996, on matters relating to vibro stone columns.

In relation to quantum, the parties each called a quantity surveying expert and a forensic accountant. CWS called Mr Paul Barry of Navigant Consulting and Mr Simon Cuerden of Deloitte LLP. JAA called Mr Robert Palles-Clark of Brewer Consulting and Ms Antoinette Pincott of StoneTurn UK LLP.

At the pre-trial review it became clear that JAA considered that valuation evidence might be needed to deal with the issue of the value of the store in an un-remedied state and remedied by the alternative methods of remedial works. This led to a direction that there should be a single joint expert to deal with such valuation matters, thus avoiding a lengthy process by which each party would instruct experts who would need to meet, prepare joint statements and provide reports. In the event, the parties were able to agree and jointly instruct Mr Graham Chase FRICS, FCIArb of Chase & Partners and it was not necessary for him to be called.

I shall deal with the expert evidence when I come to consider the issues to which that expert evidence is relevant.

When the proceedings against Mowlem and Pennine were settled this meant that the status of the evidence of the factual and expert witnesses for those parties had to be considered. Neither party sought to rely on the factual witness statements, although some comments from the experts referred to those statements. However the matter of greater importance was the evidence of the engineering experts. They had up to that stage been involved in expert meetings and in providing statements of matters agreed and not agreed. They had then provided expert reports. I raised the matter with the parties and this led to CWS putting in a note, which was later amended, advising that they intended to refer to and rely on parts of the experts’ reports already served by the other parties.

The position of JAA on this aspect was not disclosed fully until a late stage when a note was served in response to CWS’s note. In that note JAA stated that the relevant principles were as follows:

JAA submit that, to the extent that CPR 35.11 was not dealt with on that basis in Gurney Consulting Engineers v Gleeds Health and Safety Ltd [2006] EWHC 43 (TCC), Shepherd and Neame v EDF Energy Networks (SPN) Plc [2008] EWHC 123 (TCC) and Anderson v Lyotier and Portejoie [2008] EWHC 2790 (QBD), the court should not follow those decisions.

In the context of these proceedings JAA objects to the admission of the parts of the evidence of Dr Richard Pugh (Mowlem’s geotechnical engineering expert), Mr Stephen Clamp (Pennine’s civil engineering expert) and Mr Allan Dishington (Pennine’s geotechnical engineering expert) relied on by CWS. JAA say that those are reports of Part 20 parties and do not come within CPR 35.11. If they do come within CPR 35.11 then JAA submit that CWS require permission and that the court should refuse permission or pursuant to the court’s power to control evidence under CPR 35.1 and CPR 32.1 and under the discretion in CPR 35.4, the court should exclude those reports. JAA say that those reports are not reasonably required to resolve the proceedings in circumstances where the parties themselves have called experts to deal with the expert issues. The reports, JAA submit, involve considerable overlap and duplication and are of so little evidential value as to be of no assistance to the court and would involve unnecessary expense, additional and disproportionate complexity and be contrary to the overriding objective. Finally, if the court were to permit reliance on the reports then JAA say that the whole of the reports must be considered and not just the parts relied on by CWS. On that basis JAA rely on other parts of the reports.

I now consider those submissions.

CPR 35.11 provides as follows under the title “Use by one party of expert’s report disclosed by another”:

“Where a party has disclosed an expert’s report, any party may use that expert’s report as evidence at the trial.”

In relation to JAA’s contention that the term “party” in CPR 35.11 is limited to parties to the claim and does not include Part 20 parties, I consider that there is no reason to interpret “party” in such a limited way. Rather, there is no such limitation generally in Part 35 and I see no reason why in interpreting Part 35, taking into account the overriding objective, it would be just to limit the parties who could use a disclosed expert’s report in the way suggested. Parties are often encouraged to reduce the number of experts and the fact that the party who discloses a report may be a party to the claim or a party to Part 20 proceedings should not affect the ability of a party to use a report to assist the court where appropriate. Equally, a common situation in which a report is disclosed but not used by a party is where that party has settled proceedings. It should not matter whether those proceedings were related to the original claim or to a Part 20 claim.

The facts of the present case are a good illustration of a case where a number of parties engaged experts who provided opinions, after taking part in meetings at which they exchanged views, reached agreements and defined their points of disagreement. In such circumstances it would be unrealistic to draw a distinction between evidence given by experts instructed by the original parties to the claim and those instructed by the parties to a Part 20 claim. They were all parties to these proceedings and the directions in these proceedings gave permission for the parties to call expert evidence and for the experts to meet, produce joint statements under CPR 35.12 and provide expert reports under CPR 35.5, with no distinction being made between the various parties. That is not surprising because issues arose which were common to the original claim and to the additional claim. Given that the purpose of expert evidence, as stated in the duty of experts in CPR 35.3, is for those experts “to help the Court on matters within their expertise”, I can see no grounds for construing CPR 35.11 in a limited way so that it only applies to an expert’s report submitted by the current parties to the original claim but not to an expert’s report submitted by a former party to an additional claim.

I accept JAA’s submission that the court retains the power to control expert evidence even where CPR 35.11 applies. I consider that there would be such power, in any event, under the overriding objective under CPR 1.1 and the court’s general powers of management including those under CPR 3.1(2)(m). Further the court also has a general power to control evidence under CPR 32.1 and a more specific power in relation to expert evidence under CPR 35.1. In my judgment, where the court give permission under CPR 35.4 for a party to call an expert or put in expert evidence, the court retains the power to control the evidence both in expert reports and given by oral evidence at the hearing. In the same way the court has the power to control any expert report which a party seeks to use under CPR 35.11. In particular where some part of the proceedings are settled the court will ensure that any evidence under CPR 35.11 is restricted to that which is reasonably required to resolve the remaining issues in the proceedings.

Subject to that, I do not consider that there is any particular requirement for the court to give permission before a party may use an expert’s report disclosed by another party as evidence at the trial under CPR 35.11. There is no express requirement in CPR 35.11 for permission, whilst otherwise in CPR 35 where something can or cannot be done without the court’s permission, this is dealt with expressly: see CPR 35.4, 35.6 and 35.13. Equally, by the time an expert’s report has been disclosed by a party, which is a pre-condition to CPR 35.11 applying, permission will have been given for that expert and the expert will have provided the expert’s report pursuant to that permission. Therefore, I do not consider that there is any need for express permission. Rather the court has a power to control expert evidence to ensure that the evidence is reasonably required to resolve the proceedings and this, in my judgment, is the proper extent of the court’s involvement in relation to CPR 35.11.

In the result, I respectfully adopt what was said by His Honour Judge Coulson QC (as he then was) in Gurney Consulting Engineers v Gleeds Health and Safety at [6] to [8]; the decision of Akenhead J. in Shepherd and Neame v EDF Energy Networks at [11] and [12] and the citation, with approval, by Foskett J in Anderson v Lyotier.

On that basis I now turn to consider the relevant passages of the expert reports relied upon by CWS. The passages which CWS rely on are as follows:

In addition CWS seek to rely on the evidence of Dr Pugh, Mr Clamp and Mr Dishington as set out in the engineering experts’ final joint statement dated 16 February 2009 where, generally, the experts instructed by Mowlem and Pennine agreed with the views of Dr Stroud on particular issues.

JAA object to this evidence. They say that the expert reports are not reasonably required to resolve the proceedings given the evidence of Dr Stroud, Mr Tutt, Dr Greenwood and Mr Langdon; that the reports without oral evidence, revision of views and cross examination are of so little evidential value as to be of no assistance to the court; that the reports involve significant overlap and duplication and that the use of those reports would involve unnecessary expense and additional and disproportionate complexity. In relation to the views expressed in the joint statement JAA object on the basis that the joint statement produced under CPR 35.12(3) is not an expert report and therefore does not come within CPR 35.11.

I shall now deal with those objections raised by JAA and decide whether, in the exercise of the powers to control expert evidence, I should exclude the views expressed by those other experts.

In considering whether this other evidence is reasonably required to resolve the proceedings I bear in mind that I gave permission to CWS and JAA to rely on expert evidence and, in general, a party will call expert evidence to support its case and will not rely on the expert called by another party for that purpose. However that is subject to the qualification that during the discussions which take place between experts involved in proceedings in this court and which result in agreements, defined disagreement and comments, each expert benefits from a full discussion of the relevant issues with the other experts. Where that has happened I consider that it is artificial for the assistance given to the court on the expert issues to be limited to the reports of the experts called by the parties and not, where appropriate, to take account of the evidence of the other experts. To the extent that CWS rely on expert evidence on issues which I have to decide then, in general, I consider that the evidence is reasonably required to resolve the proceedings in this case.

In relation to the submission that the evidence is of little evidential value, I accept that the weight which has to be given to evidence only contained in reports will be much less that expert evidence which has been supported in oral evidence and tested by cross-examination. However I do not consider that the fact that the evidence is given less weight means that I should reject it. This is not a case where the evidence is of so little value as to be of no assistance to the court. Rather the weight is a factor that I have to take into account in assessing the evidence.

In relation to the question of overlap and duplication, whilst reports which repeat the same views without comment would not be of any use, I do not consider that duplication of evidence on particular issues is a reason for excluding that evidence. It is clear, though, that as observed in Gurney Consulting Engineers v Gleeds, the court must guard against an argument based on “weight of numbers”. In such cases the court must consider the reasons given by the experts to provide support for an opinion. Again, this aspect is a matter which needs to be kept in mind when considering the weight of the evidence.

Finally I do not consider the relevant evidence would involve unnecessary expense, additional and disproportionate complexity and be contrary to the overriding objective. The evidence has been dealt with in submissions and there is little additional expense and no additional or disproportionate complexity which would make it unjust for the evidence to be taken into account.

In those circumstances, subject to bearing in mind the various matters which go to the weight and evidential value of the expert reports when I come to consider the evidence, I consider that CWS can in principle rely on the evidence they have put forward. However I also accept the submission by JAA that once a report is relied upon to any extent the court must take account of the whole of that report, in so far as relevant. I agree with the view of His Honour Judge Coulson QC in Gurney Consulting Engineers v Gleeds at [4] and [9] on this aspect. I therefore also take into account the relevant parts of the reports of Dr Pugh, Mr Clamp and Mr Dishington on which JAA seek to rely.

In relation to the joint statement, I accept that it is not expressly within the terms of CPR 35.11. However, as I have stated above, the purpose of the expert discussions is to come to agreements, define disagreements and make comments which are intended to assist the court by narrowing the issues to be dealt with in experts’ reports both before and after expert reports have been exchanged. Where an expert has taken part in those joint discussions and they have led to agreements, disagreements or comments, I consider that it would be artificial for the court to consider passages within the expert reports but exclude from consideration comments, agreements or disagreements which are included in the joint statement. However, I must particularly bear in mind the reduced weight of such views as well as the fact that the mere weight of numbers does not improve the evidence. In general, I consider that an expert’s joint statement can be relied upon where one or more of the participants in the statement are not called to give evidence but submit an expert report. In such circumstances, the experts’ statement will assist in showing the scope of agreement on expert issues and in clarifying or amending matters which are contained in an expert’s report.

As a result, in reviewing the expert evidence, I shall take into account the particular matters in the experts’ joint statement referred to by CWS and, equally, the matters on which JAA also seek to rely on the basis that I take matters in the joint statement into account.

CWS called Dr Stroud to deal with all engineering expert evidence covering geotechnical engineering, civil and structural engineering and vibro replacement theory and techniques. He is a well respected geotechnical engineer who established and was responsible for Arup Geotechnics the specialist group within that consultancy. His career from the early time of his doctoral research at Cambridge has concentrated on geotechnical engineering. He has advised on geotechnical aspects on major projects worldwide and published widely on the subject. He is a Fellow of the Royal Academy of Engineering, Fellow of the Institution of Civil Engineers and Member of the British Geotechnical Society, serving on many committees concerned with geotechnical matters. He gave evidence which was clear, using illustrations to develop his explanations. His approach to the issues was to give full explanations and, at times, his answers were lengthy but I do not accept JAA’s criticism that his evidence tended to advocacy. Rather he was keen to give a full explanation.

JAA decided to call three experts one in each discipline. They called Mr Neil Tutt to give evidence on civil and structural engineering matters. He is a director in the well-known practice of Jenkins and Potter who are consulting structural and civil engineers where he has spent over 30 years after working on site for a building contractor. He has been involved in design, construction, refurbishment, research and investigation of a wide range of projects and has specified and used vibro methods on projects for which he has been responsible. He is a Fellow of the Institution of Structural Engineers and has been involved in a number of committees and produced publications concerned with masonry and wind loading. He impressed me with his evidence of the general practice which would be followed by consulting engineers, particularly in relation to geotechnical matters. He was able to speak from his experience of what consulting engineers do in relation to work carried out by specialist sub-contractors.

In relation to geotechnical engineering JAA called Mr Nicholas Langdon who is a director of Card Geotechnics Limited which he joined after being a principal lecturer in the department of civil engineering at the University of Portsmouth. He is a Fellow of the Institution of Civil Engineers and a Fellow of the Geological Society. On many items concerning geotechnical issues the experts were able to reach agreement. On some aspects his oral evidence was not as coherent and clear as I would have expected.

JAA called Dr David Greenwood to deal with issues concerning vibro replacement theory and techniques. Since 1959 he has been involved in the design, practice, development and innovation of ground treatment and improvement methods. He joined Cementation in 1956 becoming director of Kvaerner Cementation Foundations from 1968 to 1996. He is a Fellow of the Institution of Civil Engineers and a Fellow of the Geological Society, receiving the Skempton Medal in 1993 for his contribution to geotechnical engineering. He has been involved in a number of committees and produced research papers. He was able to give evidence from a long history of involvement in techniques such as vibro replacement. Whilst he produced some calculations at a late stage and his evidence of the practical limits of vibro replacement techniques changed, I found his evidence clear and cogent and given from the background of long practical experience.

The evidence of the three experts whose reports were relied on under CPR 35.11 was evidently not the subject of cross-examination. I note that Dr Pugh worked for a number of years for and became a director in the consultancy latterly known as the Weeks Group plc and had been involved in geotechnical issues, in particular, construction on soft soils including the use of vibro stone columns. He is a Fellow of the Institution of Civil Engineers. Mr Clamp is a Member of the Institution of Civil Engineers and is a senior consultant with Jacobs Engineering (UK) Limited. He has worked for 30 years on a wide range of structures and civil engineering works. Mr Dishington is a technical director with Jacobs Engineering (UK) Limited. He is a Member of the Institution of Civil Engineers and has 25 years of experience dealing with geotechnical aspects of engineering projects.

Before I deal with the engineering issues, it is necessary to deal with JAA’s submission that, in assessing whether JAA have fallen below the standard of an ordinary civil and structural consulting engineer, I should not take into account the evidence of Dr Stroud because he is a geotechnical engineer and not a civil or structural engineer.

JAA submit that it is generally necessary for a claimant making allegations of professional negligence to support them with evidence from an expert in the same professional discipline. They refer to the following passage from the judgment of Butler-Sloss LJ in the Court of Appeal in Sansom & Anor v Metcalfe Hambleton & Co [1998] PNLR 542 at 549A-C:

“…a court should be slow to find a professionally qualified man guilty of a breach of his duty of skill and care towards a client (or third party), without evidence from those within the same profession as to the standard expected on the facts of the case and the failure of the professionally qualified man to measure up to that standard. It is not an absolute rule … but, [un]less it is an obvious case, in the absence of the relevant expert evidence the claim will not be proved.”

That judgment followed a number of earlier decisions, including Worboys v Acme Investments (1977) 4 BLR 133 and Investors in Industry v. South Bedfordshire DC [1986] 1 All ER 787. In Worboys at 139 Sachs LJ dealt with a submission that the court could find a breach of professional duty without having before it the standard type of evidence as to what constitutes lack of care on the part of a professional person in the relevant circumstances. He said this:

“There may well be cases in which it would be not necessary to adduce such evidence - as, for instance, if an architect omitted to provide a front door to the premises. But it would be grossly unfair to architects, if, on a point of the type now under construction which relates to a special type of dwelling, the Court could without the normal evidence condemn a professional man.”

In the commentary to the report of that case in the Building Law Reports it was stated :

“It is submitted that the evidence should normally come from someone who is of equal experience or standing to the professional man in question, although evidence from the person who is acquainted with the standards may also suffice. For example, if the issue relates to a matter of structural design, evidence from a structural engineer may well be acceptable as to the standards expected of an architect who had undertaken the structural design. Such a course sometimes obviates a necessity of calling an additional witness to deal solely with the cause of the failure.”

However that commentary has to be considered in the light of the later decision in Investors where Slade LJ, giving the judgment of the court in the Court of Appeal said this, albeit obiter, at 808 in relation to a claim against the architect for approving a foundation plan:

“Expert evidence from suitably qualified professional persons is, in our judgment, admissible to show what competent architects in the position of Hamiltons could reasonably have been expected to know and do in their position at the relevant time. Indeed, in our judgment, there could be no question of the court condemning them for professional negligence on account of their failure to appreciate points (3) and (4) and to take the suitable consequential action, unless there were appropriate expert evidence to support the allegation that their conduct fell below the standard which might reasonably be expected of an ordinarily competent architect (cf. Worboys v Acme Investments Ltd (1969) 4 BLR 133 at 139 per Sachs LJ).

The expert evidence before the judge consisted of evidence from three engineers and one architect, Mr Foster. The questions put to the engineers and answered by them included questions relating to the nature and extent of the professional duties owed by Hamiltons to Anglia. However, we think that little reliance can be placed on their answers to these particular questions, which related to a profession other than their own. The only directly relevant evidence in this context was that of Mr Foster...”

In this case JAA point to the fact that Dr Stroud, who gave evidence covering geotechnical engineering civil and structural engineering and the vibro replacement work, is a geotechnical engineer and not a structural engineer. They say he was not qualified therefore to give evidence on what a structural engineer’s responsibilities are in relation to geotechnical matters. They say that it will be difficult, if not impossible, for a person with the specialist geotechnical knowledge and experience of Dr Stroud to give a reliable and objective view of how an ordinary structural and civil engineer without any particular expertise in geotechnical engineering, should approach a project like this. JAA also refer to the fact that Dr Stroud has never designed a building of the type concerned here, as a structural or civil engineer and had not consulted with any structural or civil engineers with that specialist background for the purpose of this case. They also say that he is not a specialist in vibro replacement and did not suggest that he had direct practical experience of vibro replacement works.

Dr Stroud is a well known and respected geo-technical engineer. He is a Fellow of the Institution of Civil Engineers and has been a director of Ove Arup Partnership in which he established and was responsible for the development of Arup Geotechnics, the firm’s geotechnical consulting group. It is clear that during his professional career he specialised from an early stage in geotechnical engineering. When he was asked whether he understood that his evidence was being put forward as that of an expert on structural and civil engineering he fairly said he was doing so with limitations and that he was not a structural engineer so did not pretend to give expert advice on detailed structural matters.

He did, however, say this: “What I am being asked to give a view on here is the professional responsibilities and actions of structural and civil engineers, particularly in relation to geotechnical matters. That I do feel qualified to advise on.” When he was asked whether as a specialist geotechnical engineer he was comfortable in giving opinions on what an ordinary structural and civil engineer might do he said that he had “lived and breathed the same air as structural engineers and civil engineers” for the whole of his professional life. He said that he had worked for organisations like JAA through his career taking on commissions for smaller consultants.

On the basis of that evidence I am satisfied that Dr Stroud can give useful evidence of the professional practice of civil and structural engineers in relation to geotechnics and what might be expected of them in relation to their approach to geotechnical issues which arise on projects. Compared to Mr Tutt who has the advantage of viewing matters from the perspective of being a practising civil and structural engineer, Dr Stroud approaches matters from the perspective of being a geotechnical engineer who has had widespread involvement with civil and structural engineers. Whilst Dr Stroud can therefore provide useful evidence, I must bear in mind that he is a leading geotechnical engineer and must be cautious not to attribute to JAA a duty to act as a professional geotechnical engineer would have acted in the circumstances of this case. Those are however matters relevant to the analysis of Dr Stroud’s evidence and the weight to be given to it, rather than matters which preclude Dr Stroud’s evidence from being relevant and admissible on the question of professional duties and performance of civil and structural engineers in the field of geotechnical engineering.

The applicable standard against which to judge the performance of JAA is that of an ordinarily competent structural and civil engineer, exercising ordinary care and skill. If a structural and civil engineer acts in accordance with the practice and views of a reasonable body of other structural and civil engineers, they do not act negligently: Bolam v. Friern HMC [1957] 1 WLR 582 at 587 to 588. The standard is that of “the reasonable average” as Bingham LJ said in his dissenting judgment in Eckersley v. Binnie & Partners (1988) 18 ConLR 1 at 79 to 80. The court has to be careful to judge the conduct by what was known at the time and not with the wisdom of hindsight.

In this case, JAA entered into the Appointment dated 19 April 1996 with Cliveden and also provided the Warranty dated 10 July 1996 to CRS. Under Clause 2.1 of the Appointment, JAA agreed to perform the Services “fully and faithfully in accordance with the instructions and directions of [Cliveden] and upon the terms and conditions set out in this Agreement.” Clause 2.2 provided:

“The Consultant warrants to the Client that he has exercised and that he will continue to exercise in the performance of the Services all the skill care and diligence as may be expected of a properly qualified and competent Structural and Civil Engineer experienced in carrying out work of a similar size scope and complexity to the Project.”

In Schedule 2 to the Appointment the services included at paragraph 4.2 the co-ordination of “structural information supplied by specialist suppliers and/or Contractors” which needed to be included in submissions to any appropriate authority.

By Clause 1 of the Warranty it was provided that:

“The Consultant warrants that it has exercised and will continue to exercise reasonable skill care and diligence in the performance of its duties to the Client under the Appointment provided that the Consultant shall have no greater liability to the Company by virtue of this Agreement than it would have had if the Company had been named as joint client under the Agreement.”

JAA submit that the scope of a professional’s duty may be limited by the terms of the contract under which he is engaged. They say that, on this project, there was nothing in either the Appointment or the Warranty requiring JAA to carry out any services or duties beyond the Normal Services which would be required under the ACE Conditions. CWS submit that the ACE Conditions are not incorporated into the Appointment or the Warranty in this case and therefore should not be taken into account in determining JAA’s obligations. I accept CWS’s submission. I must assess JAA’s conduct against the terms of the warranty and taking into account the expert evidence of the professional standard to be expected of an ordinary civil and structural consulting engineer.

Were JAA negligent in choosing vibro replacement as a ground improvement scheme for the site at Sandwich?

In summary, CWS say that vibro replacement could never have worked on the site which was highly compressible and therefore was inevitably going to fail and the resulting building was bound to suffer from extensive and unacceptable differential settlement. They also say that no competent engineer would have proposed vibro replacement for the site in question.

In summary, JAA submit that it cannot be contended that no competent engineer would have recommended vibro replacement given the number of engineers, specialising in such treatment who put forward vibro replacement as a method of ground treatment. JAA say that these included those specialised in vibro replacement: Mr Taylor and Mr Whyte of Keller; the engineers at Vibroflotation, RB Foundations and Pennine who prepared their tenders for the vibro works as well as Mr Leach himself and Mr Steve Brunswick of Mowlem who were not specialists. JAA say that whether or not other engineers took different views does not affect the position. They say that Bauer’s reservations were understandable as they were only proposing shallow stone columns to 3m depth and, as explained by Mr Taylor, Roger Bullivant only entered the market after this with equipment only capable of treating 4m depths.

JAA say that Wembley did not advise against the use of vibro replacement and the BRE Information Paper did not state any fixed or mandatory limits and the NHBC Requirements would not be relied on in preference to advice from a specialist. Further JAA say that they acted entirely reasonably in consulting Keller and relying on their advice.

The central issue in this case is whether vibro replacement “could never have worked on the site which was highly compressible and therefore was inevitably going to fail and the resulting building was bound to suffer from extensive and unacceptable differential settlement”. If I find that vibro replacement could have worked and was not inevitably going to fail then it follows that, on this central issue, CWS’s case fails.

If, however, I find that CWS are correct in their contention then JAA seeks to defend their position on the basis that they recommended it on the basis of advice from Keller and that the way in which matters proceeded with the design being carried out by specialist sub-contractors did not call into question the recommendation. They say that they reasonably relied on Keller and the design carried out by the sub-contractor and that in doing so they discharged their duty of care to CWS.

CWS submit that this provides no defence to JAA because JAA could not delegate their design liability by relying on the advice of Keller and the design carried out by a sub-contractor. They say that by asking Keller for their opinion and receiving it and accepting it, JAA did not discharge their obligations.

CWS refer to the commentary in Hudson’s Building and Engineering Contracts (Eleventh Edition) at paras 2-114-129 and in Keating on Construction Contracts (Eighth Edition) at para 13-030 and to the decisions in Moresk Cleaners Limited v Hicks [1966] 2 Lloyd’s Rep 338; 4 BLR 50, London Borough of Merton v Lowe (1981) 18 BLR 130; and Richard Roberts Holdings Limited v Douglas Smith Stimson Partnership (1980) 46 BLR 50.

They submit that those authorities establish the following propositions:

CWS submit that, in this case, there is no evidence that JAA communicated that it was incapable, as a firm, of providing the basic engineering services which it had warranted that it would and could provide. Had it done so, then someone else could have been commissioned to do the work and give a warranty to CRS. Rather CWS submit that JAA gave the warranty upon which they have been sued and it was JAA’s skill and judgment which was being relied upon. That was not discharged by asking someone else, however well respected that person or organisation may be, to carry out the work. CRS say that, otherwise, any engineer could ask another reputable engineer his opinion and then, if that opinion is wrong, escape liability.

JAA say that the decisions of the Court of Appeal in London Borough of Merton v Lowe and Investors in Industry v South Bedfordshire DC, provide clear authority that, in general terms, a professional is entitled to rely on specialist contractors or consultants. They accept that there are two first instances decisions in Moresk Cleaners Limited v Hicks and Richard Roberts Holdings Limited v Douglas Smith Stimson Partnership, together with the Commonwealth decision in Sealand of the Pacific v Robert McHaffie which might suggest that a professional is not entitled to rely on specialist contractors or consultants but submits that those decisions are understandable on the facts and do not detract from the general principle in London Borough of Merton v Lowe and Investors in Industry.

JAA submit that what emerges is that, first of all, there seems to be an acceptance that, in some circumstances, a professional may rely on input from a specialist; secondly, there is a suggestion that it is likely to depend on the contract of the professional concerned; and, thirdly, that it may well be affected by the contractual structure overall. In the present case JAA submit that there is nothing in the contractual structure that prevents reliance on the specialist advice that was given and indeed nothing from which one should conclude that relying on that advice was negligent.

In my judgment, the starting point is to consider the context in which JAA gave their advice. As His Honour Judge Newey QC said a number of years ago in Equitable Debenture Assets Corp Limited v William Moss Group Limited (1984) 2 Con LR 1 at 25 “modern developments in materials and technologies in the construction industry have been so numerous and so rapid as to exceed the ability of even the most talented and assiduous professional men to master them all. Architects and others must of necessity seek the assistance of specialists when they reach the limits of their knowledge.”

As the authors of Jackson and Powell on Professional Liability (Sixth Edition) state at para 9-172 the fact that professional people will seek assistance from specialists raises the question of whether a construction professional alleged to have been negligent in the performance of a task which that professional has agreed to perform can defend the allegation of negligence by showing two things: that he relied upon the advice or work of specialists or even delegated the performance of the task to them and that such reliance or delegation was reasonable. They point out that the authorities are not entirely consistent as to the answer to the question.

In Moresk v Hicks the architect was engaged to produce the necessary plans and specifications for an extension to commercial premises. The architect then invited a contractor to prepare the design for the building and contended that they had the right to delegate specialist design to specialist sub-contractors under an implied term of their engagement. His Honour Sir Walter Carter QC, sitting as an Official Referee, said at 342 that the design of the building was “being delegated by an architect to this firm of contractors, who owed no duty to the building owner and who were simply contractors who were trying to get what they hoped no doubt would be a profitable contract to construct this structure. In my view the defendant had no power to delegate this duty of design at all.”

At 343 he continued:

“In my view an architect cannot escape his responsibility for the soundness of the design of the structure by delegating his work to any other person, still less to a contractor who is seeking to obtain the contract.

If the defendant was not able, because this form of reinforced concrete was a comparatively new form of construction, to design it himself, he had three courses open to him. One was to say: “This is not my field”. The second was to go to the client, the building owner, and say : “This reinforced concrete is out of my line. I would like you to employ a structural engineer to deal with this aspect of the matter.” Or he can, while retaining responsibility for the design himself seek the advice and assistance of a structural engineer, paying for his service out of his own pocket but having at any rate the satisfaction of knowing that if he acts upon that advice and it turns out to be wrong, the person whom he employed to give the advice will owe the same duty to him as he, the architect, owes to the building owner.”

That decision was distinguished by the Court of Appeal in London Borough of Merton v Lowe where the architect had been engaged to design and supervise a new indoor swimming pool. Part of that design called for suspended ceilings rendered with a coat of “Pyrok”, a proprietary product. Pyrok Limited were nominated as subcontractors for the purpose of plastering the ceiling with their product, although they subcontracted the actual work to another firm. One of the issues in the case was whether or not the architect was negligent in making Pyrok part of their design. The judge at first instance had held that the architect was not responsible for any defects in the original design. The defect alleged was that the Pyrok final coat was of too strong a mix in relation to that underneath.

In the Court of Appeal Waller LJ considered the question of whether or not the judge should have held that the architects were in breach of their obligations by specifying Pyrok. He said this at 148:

“The argument was that the defendants were responsible, as architects, for the design, and therefore they were responsible for the faulty design used by Pyrok, that is to say, putting the Pyrok mix of cement, lime, and vermiculite onto undercoats of weaker mixes of cement, lime and sand. It was submitted that the fact that Pyrok maintained secrecy was immaterial, and reliance was placed on the case of Moresk Cleaners v Hicks [1996] 2 Lloyd’s Rep 338. I entirely agree with the judgment in that case. There the architect had virtually handed over to another the whole task of design. The architect could not escape responsibility for the work which he was supposed to do by handing it over to another.

This case was different. Pyrok were nominated sub-contractors employed for a specialised task of making a ceiling with their own proprietary material. It was the defendants’ duty to use reasonable care as architects. In view of successful work done elsewhere, they decided that to employ Pyrok was reasonable. No witness called suggested it was not at the beginning.”

In Richard Rogers Holdings Ltd v Douglas Smith Stimpson Partnership (1988) 46 BLR 50 His Honour Judge Newey QC had to consider a case where architects had been engaged to design a commercial building which included an effluent tank. It became necessary to design a lining for that effluent tank and the architects obtained quotations for a tank lining made with resin/glass. The tank lining failed shortly after installation. In finding that the architects were liable, Judge Newey QC said this at 66:

“If the architects felt that they could not form a reliable judgement about a lining to the tank, they should have informed Holdings of that fact and advised them to take other advice, possibly from a chemist.”

The Judge found that the architects’ investigation of the lining was limited and they did not seek help from other architects or professionals, research institutions or trade associations. He said that the initial quotation for the lining was not only suspiciously cheap, but obviously not properly considered. He referred to matters which he considered should have put the architects on notice. He said at 67:

“I think that figuratively all sorts of alarm bells must have been sounding for Mr Taggart, but instead of heeding them he put the ECC proposals to Mr Jackson without any warning whatsoever. He later wrote to Mr Jackson that all outstanding points had been met.”

On that basis he found the architects did not exercise the care to be expected of ordinary competent architects.

In Sealand of the Pacific v Robert C. McHaffie Ltd 51 DLR (3d) 702 the British Columbia Court of Appeal considered a case against naval architects who had been retained to make alterations to an underwater aquarium. The sales representative of a cement company recommended the use of particular lightweight concrete intended to increase buoyancy because it weighed less than water. In fact it was a complete failure because under the relevant conditions the concrete weighed more than water. It was accepted by the parties that it was part of the architects’ duty to consider the suitability of that lightweight concrete. The question was whether that duty was sufficiently discharged by the architects when they accepted representations and guarantees made by the representative of the cement company. There was evidence that if they had made any other enquiries, this would have disclosed that the use of this product was not a sound engineering procedure. That information quickly would have been given by the company that supplied material to the cement company. In addition, the architects had a pamphlet which dealt with the use of the product in a different manner and for different purposes and nothing said in it provided comfort for using the lightweight concrete under water.

At 705 Seaton JA, delivering the judgment of the court, said this about the conduct of the architect:

“McHaffie Ltd appreciated that this use of vermiculite concrete was somewhat experimental, and that it was retained to consider the suitability of the product. Under the circumstances McHaffie Ltd must be taken to have agreed to make enquires beyond talking to Ocean Cement and looking at the pamphlet. It failed to do so.”

In District of Surrey v Church 76 DLR (3d) 72 Munroe J in the British Columbia Supreme Court had to consider the duties of an architect who was asked to design a building and engaged an engineering firm to examine the soil. The engineering firm, which was not a soil expert, recommended deep soil tests but the architect said that the client would not approve the expense. The engineer later sent the architect a letter for transmission to the client in which it described its superficial examination of the soil, implying that the soil was adequate to support the proposed building and saying nothing about its recommendation for a deep soil test. After construction, the buildings subsided because of soil conditions which a deep soil test would have revealed.

In considering whether the architect exercised a reasonable degree of care, competence and skill in carrying out their duties, Munroe J held that the architect had breached his contractual duty to the client and was guilty of negligence in the discharge of his professional duties. He said at 727:

“His knowledge of instability in the Cloverdale soils placed upon him a duty to have appropriate investigations made by an expert. He knew that the consulting engineer that he selected was not qualified as a soil specialist. He knew that the plaintiff relied on him to supervise the construction of a useful, safe building on the site which the committee of which he was a member had recommended. He knew that the plaintiff would authorise the engagement by him of whatever competent specialists he needed. He knew that soils testing is a special branch of engineering in which some British Columbia firms specialise. He was not skilled in that specialty. By the contract and by his certificate of responsibility he assumed overall responsibility to design a building that was reasonably fit for the purpose intended and to “marry” the building to the site.”

That conclusion by the Judge was upheld by the British Columbia Court of Appeal in District of Surrey v Carroll-Hatch and Associates Limited 101 DLR (3d) 218.

From those decisions I consider that the following propositions can be derived:

Accordingly, in my judgment, whether JAA did discharge their duty to take reasonable care by relying on the advice or design of a specialist will depend on whether, in all the circumstances, they acted reasonably in doing so.

The first and central issue to decide is the question of whether vibro replacement would ever have worked at the site at Sandwich.

It is necessary to set out some background about the process of vibro replacement which I use to mean the process by which stone columns are placed in the ground to improve the load/settlement performance of that ground. The theory behind “ground improvement” by vibro replacement is that by replacing weaker soils with stone columns the settlement of the ground is reduced. Broadly the greater the number of stone columns the more the reduction in settlement. Thus the degree of improvement depends on the column size and the column spacing. A ratio can be established which represents the area of the stone columns compared to the area of the ground at the site. Because the stone columns act compositely with the soil, the mechanics of how the stone and the ground act together to transfer the load to the ground is complex and, as Dr Stroud states, has not been fully resolved by research. Dr Stroud refers to an article by Charles and Watts in 1983 on this aspect. Given this complexity, Dr Stroud’s view is that the designer of stone columns usually relies on a combination of theory and practical experience.

There are a number of calculation methods available principally those of Baumann & Bauer (1974), Hughes and Withers (1974) and Priebe (1995). The calculation method starts with a calculation of the settlements which would occur under the building without treatment. In this case, that was given by Wembley in the site investigation report in this case. A scheme design can then be made consisting of stone columns of a particular diameter, depth and spacing to achieve a particular settlement reduction factor. The resulting settlement given by applying the settlement reduction factor to the settlement without treatment then has to be compared with the specified settlement limit to see whether that limit is met.

Dr Stroud says that there are practical limits to the amount of settlement reduction that can be achieved and case studies show that, even with the tightest column spacing, the settlement reduction that will be achieved by using stone columns may be only 50%.

Dr Stroud says that there are few published case histories using stone columns in very soft clay and that what data there is was on sites which used wet top-feed methods rather than the dry bottom-feed technique which was used at Sandwich. He refers to two particular case histories:

Dr Stroud prepared three graphs to illustrate the ability of stone columns to reduce settlement. At figure 15A of his report he plotted these figures together with a trend line based on the research by Priebe (1995). He then added case histories from research on soft clays with undrained shear strength of greater than 20kN/m² by Greenwood and Kirsch (1983) derived from case histories by Wett et Al (1968), Greenwood (1970), Kirsch (1979), Vautrain (1977), McKenna (1975) and Eugelhardt (1974). Dr Stroud also plotted in figure 15B the relationship derived by Baumann & Bauer (1974) on the graph. On the basis of this analysis he expressed the view that the scatter of data was broadly similar and that the trend line by Priebe represented a reasonable upper bound to both sets of data. He concluded that Baumann & Bauer’s relationship between settlement and stone quantity significantly over-predicted the amount of improvement likely to be gained either in soft clays or in very soft clays. For example, he pointed out that Baumann & Bauer would predict a settlement reduction of 60% for 10% stone replacement but the trend line would suggest only 30%.

He said in his report that Baumann & Bauer developed their relationships for different types of soil and did not produce one for very soft clays and concluded that Baumann & Bauer was not a safe method to apply to very soft or soft clays. However, as he later accepted in cross-examination, the Baumann & Bauer research was carried out in Canada where the descriptions of soils differed from the British descriptions of soils so that the references by Baumann & Bauer to silty “soft clay” should be a reference to what Dr Stroud would describe as “very soft to soft clay”.

The data from case histories set out in Dr Stroud’s reports indicates that using a wet top-feed process, stone columns can be successfully installed in soft and very soft clays so as to achieve reductions in settlement of up to 85%.

Dr Stroud then went on to consider the difference between the wet top-feed method, on which the case histories were based, and the dry bottom-feed method as adopted at Sandwich. He referred to data which showed that with the wet top-feed method, where the clay is removed by water jets there is very little heave of the ground and the pore water pressures do not rise significantly. On this basis he concluded that this would indicate that the surrounding clay soil was little disturbed by the process. By contrast he says that, in a dry bottom-feed process, the vibrating steel tube or “vibro-flot” used to penetrate the ground displaces the clay sideways and the stone is introduced at the bottom and compacted. He says that in this process the clay is disturbed by shearing and loses strength so that, in his view, a strength loss of a factor of three from 12 kN/m² to 4 kN/m² would be entirely normal for the estuarine clays at Sandwich.

He says that the dry bottom-feed process is well tried in many soil types and works very well in loose fill materials which compact with the sideways movement. He says the same does not apply to very soft clays and that there is no well documented published case history where stone columns have been installed in very soft clays by the bottom-feed Vibro Replacement process. He refers to an article by Curtins (1994) where a 0.3 to 2.7m thick layer of soft to very soft clay was treated by using dry bottom-feed stone columns at 1.8m generally but reduced to 0.75m in localised areas of very soft clay. While full data is not provided he says that the stone columns were likely to be almost touching.

Dr Stroud plots the data from the graphs at figures 15A and 15B onto a composite graph at figure 15C. He concludes that whilst it is possible that using a dry bottom-feed process in very soft clays would follow the same trend line as the wet top-feed process in such soils, it is also entirely possible that, particularly for clays with strengths of less than 15kN/m², the performance would be poorer, leading to a lower reduction in settlement. During his evidence he produced a diagram to show the effect of the sideways displacement of the clay and also a diagram of the column spacing showing the remaining soil to illustrate the disturbance to the soil.

He says, however, that the dry bottom-feed process in which a “flot” is vibrated into the ground, displacing the ground sideways to produce a hole which is filled with stone and compacted when the flot is withdrawn does not achieve the same results. He does not say this on the basis of any published data or research but on his experience of the behaviour of soils, in particular very soft clay.

He says that the use of a wet top-feed method in which the hole is formed by soil being washed out and then being replaced by the stone to form the column produces a hole in undisturbed ground. This he compared with the bottom feed process which, he says, forces the ground sideways and causes the soft or very soft clay to shear and lose strength and pore water pressures to increase. On this basis, as explained in a figure produced during the course of his cross-examination, the soil is displaced from the hole formed by the flot into an annulus around the hole. On this basis he expresses the view that the sides of the hole will consist of weak material which will not provide proper lateral support for the stone in the column which will then “barrel” sideways when load is applied to the ground causing settlement of the top of the column and of any building which is founded on it. Thus, in his view, the graphs which he has set out in figures 15A, 15B and 15C do not apply to the dry bottom-feed process and much smaller reductions in settlement can be achieved in this way compared to the wet top-feed process. While Dr Stroud cannot point to any data in this respect, he referred in his evidence on Days 8 and 9 to the fact that he had excavated a stone column formed in this way in chalk fill and had found that “the chalk had been completely remoulded and the gaps between the pieces of chalk in the original structure had disappeared”. His view was that this supported his opinion.

Dr Greenwood disagreed with Dr Stroud on this aspect. His view was that any weakening of the walls of the hole formed by the flot was overcome by the fact that a stone skin was embedded in the layer of material close to the hole and that any increase in pore water pressure very rapidly dissipated when the stone was placed in the column as the stone acted as a drain to relieve excess pore water pressure. He referred in his evidence on Day 10 to experiments which had been carried out by his late colleague, Graham Thompson, to try to show that the ground around stone columns improved in strength. That consisted in testing to see whether the strength of the material in the side of the hole formed by a flot had been strengthened by the process. Dr Greenwood said that this research had shown that the material on the side of the hole had not been appreciably strengthened but also neither had it been weakened. This led him to the view that the process adopted to form the hole, whether wet top-feed or dry bottom-feed, did not affect the performance of the column under load and that therefore the settlement characteristics derived from sites treated with the wet top-feed process should be the same as those for sites treated by the dry bottom-feed process.

On this aspect I prefer the view of Dr Greenwood. His experience of dealing with vibro replacement and his use of both wet top-feed and dry bottom-feed processes are far greater than that of Dr Stroud. Dr Stroud’s views are based on a theoretical approach and his experience of the behaviour of soft and very soft clays and therefore command respect, but his lack of Dr Greenwood’s detailed experience in vibro replacement techniques meant that his views on this aspect must have less weight.

Whilst I can see that the process of forming the hole in the ground with the vibroflot may cause some local weakening of the soil at the side of the hole, the placing of the stone will be likely to lead to a layer of stone reinforced soil and any excess pore water pressures are likely to be relieved by the stone column. The lack of general weakening of the soil is confirmed, in my judgment, by the test results by STATS who put down boreholes as part of the investigation of the settlement. Those tests were therefore carried out in the ground which had been treated by Pennine using vibro replacement. Those borehole results do not show any lowering in strength values. Whilst, as Dr Stroud properly points out, there is uncertainty as to the location of the boreholes in relation to the stone columns, the results of the STATS boreholes do provide support for Dr Greenwood’s view by showing no evidence of the weakening which Dr Stroud suggests will have occurred.

In the light of that I find that there is no significant difference between the mechanism of settlement when vibro replacement has been carried out by a wet top-feed process or by a dry bottom-feed process. It follows that the data derived from the wet top-feed process which was taken and set out in Dr Stroud’s graphs in figures 15A, 15B and 15C is likely to be equally applicable to the treatment of ground by vibro replacement by the dry bottom-feed process. I note that, much of that data was collected together in the paper which Dr Greenwood co-authored in 1983 and included his earlier paper in 1970.

On that basis, in order for vibro replacement to have been able to reduce settlements from Wembley’s figure of 80mm to 50mm or from the experts’ range of 95mm to 165mm to 50mm on this site would have required about a 37.5% or a 50% to 70% reduction in settlement. On the Priebe (1995) curve in Dr Stroud’s figure 15C that would require 12% or 18% to 35% stone replacement. On the Baumann & Bauer (1974) curve on Dr Stroud’s figure 15B that would only require 4% or 7% to 15% stone replacement. Obviously to achieve lower settlements of 30mm or 10mm would require greater reductions, in some cases outside the range of possibilities on the curves.

In addition, both Dr Stroud and Dr Greenwood consider that there is a practical limit to the amount of stone replacement that can take place. There are essentially two reasons for this. First the practicality of being able to form columns in close proximity to one another means that there are practical limits. Secondly, the more stone replacement that takes place the more expensive would be the cost of vibro replacement and this would then need to be compared with the cost of an alternative piled solution. I deal here with the first aspect.

The pattern of stone replacement which Dr Greenwood has set out in his report, 700mm columns on a triangular pattern 1.5m apart represents, it seems, about 20% replacement. He indicated in his report that this was “at the margins of practicality”. In his evidence, he indicated that 35% replacement was “getting close to the edge” and that there was no fixed limit and columns can be closer together.

Dr Stroud produced a sketch which showed the arrangement of columns as Dr Greenwood proposed (700mm in a triangular grid 1.5 m apart) and 1m columns at 2m centres on a square grid, both of which seem to produce about 20% replacement. It is clear that, in principle, the column spacing could be reduced and the column size increased. Dr Greenwood referred to it being quite common for nine columns to be put under a 3m square footing and he concluded that it would have been technically feasible to go up to 35% replacement. Whilst Dr Greenwood’s view of what is the practical limit has not been consistent, having seen and heard his evidence and the diagrams produced, I am persuaded that Dr Greenwood is correct now in his evidence and that it is technically feasible to achieve 35% replacement.

There are therefore two situations to be considered. First there is the position based on the predicted settlement figure from the Wembley site investigation report. Secondly, there is the position given the experts’ current predictions of settlement caused by primary and secondary settlement.

There was much debate at the hearing about what a reasonably competent engineer would have understood by the statement in the Wembley site investigation report “long term vertical displacement” of “approximately 80mm”. Dr Stroud suggested that the word “approximately” meant that it could be 80mm, plus or minus 25%, giving a range of 60mm to 100mm. Mr Tutt’s view was that the word approximately would not have been treated as anything like plus or minus 25% but perhaps plus or minus 10%.

In my judgment, Dr Stroud’s opinion that the figure would be understood to be 80mm plus or minus 25% does not seem a realistic approach and I prefer the view of Mr Tutt. The importance of the estimated settlement figure was that it would be used to assess the foundation solution. In providing such an estimate of “long term vertical settlement” I consider that Wembley would have realised that this was the purpose and they would have been intended to refer to and would have been read by an engineer as referring to a predicted maximum value. This is supported by Mr Dishington’s view at para 71 of his report. Whilst it would have to be read as being “approximate” in the context of being an engineering estimate based on test data and empirical formula and therefore subject to a degree of uncertainty, I consider that it would be taken to represent a figure which could be used with confidence as a maximum value for the purpose of any calculations by such people as JAA, Keller or other specialist subcontractors.

There is also an issue of whether the figure would have been understood as referring only to long term settlement due to primary consolidation or to all long term settlement which, in this case, would be due to both primary and secondary consolidation. It seems to be common ground between the experts, in particular, Dr Stroud and Dr Greenwood, that 80mm cannot represent both primary and secondary consolidation. In fact, as set out in paragraphs 1.7 and 1.8 of the Experts’ Joint Statement, the experts have predicted a range of 65 to 115mm for settlement due to primary consolidation and 30 to 50mm for secondary consolidation. This gives a range of 95 to 165mm for settlement due to both primary and secondary consolidation. As the experts observe the Wembley figure falls within the range of 65 to 115mm for primary consolidation but outside the range if both primary and secondary consolidation are taken into account.

It therefore seems likely and I find that Wembley omitted to make any allowance in their calculations for the effect of secondary consolidation. I do not accept, as Dr Stroud suggests, that Wembley would, in effect, have calculated the 80mm figure without taking into account the effect of secondary settlement and then would not need to go further because the 80mm was too high in any case. Whilst a geotechnical engineer with Dr Stroud’s expertise might have drawn an inference that the figure only took into account primary settlement by the reference to the use of “data provided by the laboratory consolidation tests”, I do not consider that ordinarily competent consulting engineers would do so and, in fairness, Dr Stroud referred to that being a “clue”, reading it now.

It seems that, despite their undoubted expertise as geotechnical consultants, Wembley made an error in predicting the maximum settlement because they failed to allow for secondary settlement. In addition their figure of 80mm appears to be towards the lower end of the range of 65 to 115mm which the experts have calculated as the range of primary settlement. It was more than 40% lower than the maximum settlement prediction.

Wembley’s failure to take account of secondary settlement of the marine clay may perhaps be explained by the fact that, generally, in the British Isles the clay will have been normally consolidated by glacial action so that secondary settlement is not a factor which is taken into account. However marine clays which are deposited by the sea have not undergone any consolidation so that secondary settlement needs to be taken into account. As Dr Stroud said, whilst primary settlement can be derived from laboratory tests, calculation of secondary settlement depends on a number of factors which are difficult to quantify and it is necessary to go to specialist literature and obtain the correlation between secondary settlement and moisture content.

This was not something which was picked up by the geotechnical engineers who reviewed the Wembley report at the time. For instance, it is evident that the calculations carried out by Keller and the other vibro replacement sub-contractors were based on a reduction of the 80mm settlement predicted by Wembley to 50mm. They therefore interpreted the figure as Mr Tutt suggests consulting engineers generally would.

The experts say at para. 1.6 of the Experts’ Joint Statement that Wembley did not state whether secondary consolidation was included in their ground bearing slab settlement estimate, and if it were not they gave no warning of the need to consider it. It is evident that Wembley failed to take secondary consolidation into account and failed to give a warning that they had not done so and that in the situation at Sandwich it needed to be considered.

I do not accept that a reasonably competent engineer would have realised this failure. The purpose of the Wembley report was, amongst other things, for those specialist geotechnical engineers to provide the relevant information on settlement and I do not consider that, generally, those engineers receiving that information would have carried out any substantiation of the information or carried out calculations but would have relied on it as being an estimate of the maximum predicted “long term vertical displacement” with an accuracy of plus or minus 10%.

As set out in paragraphs 1.7 and 1.8 of the Experts’ Joint Statement, the experts have predicted a range of 65 to 115mm for settlement due to primary consolidation and 30 to 50mm for secondary consolidation. This gives a range of 95 to 165mm for settlement due to both primary and secondary consolidation. This shows that any calculations of settlement based on 80 mm would be likely to significantly under-predict actual settlement.

As Dr Stroud points out in his report the question of what loading the slab should carry is not the same question as what loading the settlement calculations should be based on. This arises because of two aspects. First, as Dr Pugh states the relevant loading is the increase in pressure applied to the clay layer which is less than that at the ground surface; see paragraph 3.21. and 3.2.2 of his report. Secondly, as Dr Stroud sets out in his report the ability of a slab to withstand uniform distributed load does not mean that settlement has to be based on the application everywhere of that maximum loading.

In the expert’s joint statement the experts have therefore set out the range of settlement of between 95 and 165mm and have not differentiated between the loading in the store or in the warehouse. On a review of this approach I am satisfied that this is the reasonable range of settlement for the loading conditions specified for the building.

In considering the position, it is first necessary to review what settlement reduction would have been predicted based on the figure of 80mm from the Wembley report. Keller calculated that with their design the settlement could be reduced to 50mm or some 37.5% of 80mm. That was the basis of the advice which JAA gave to Cliveden in the letter of 27 June 1995. Vibroflotation and Pennine estimated that settlement would be reduced to about 30mm or some 62.5% of 80mm. Based on the Priebe curve in Dr Stroud’s figure 15C this would have needed 25% stone replacement. This, on the basis of my findings above would have been possible.

Therefore, if Wembley’s estimate of long term vertical displacement had been accurate then I am satisfied that vibro replacement could have been carried out satisfactorily at the site at Sandwich and could have reduced the settlement to 50mm or 30mm.

It is now necessary to consider the position with the predicted long term settlement figures produced by the experts of 90 to 165mm.

Dr Greenwood at paragraph 25 of his report set out the following evidence as to the viability of Vibro Replacement at Sandwich based upon this:

“Having regard to both primary and secondary compression, I estimate that columns of 700mm diameter spaced in a triangular pattern 1.5 m apart could have restricted the total long term settlement of the floor slab to within 55mm. Calculations to derive this opinion are supported by published empirical data which embraces both primary and secondary compression (Greenwood & Kirsch ref 1). This arrangement would represent approximately doubling the number of columns actually constructed, and they would have needed multiple re-penetrations of the vibroflot to achieve the necessary diameter, preferably facilitated by additional “pulldown” capacity. Such a scheme would be at the limits of practicality due to uplift of the surface by soil displacement associated with high density of columns per unit area.”

There was no calculation produced in his report to support his figure for long term settlement of 55mm but he produced a typed up version of his calculation during the course of his evidence. That showed that, with 700mm columns on a 1.5m triangular grid, primary settlement would be 33mm and secondary settlement would be 28mm, giving a total settlement of 61mm. This settlement, he said, would arise in the following way:

“Thus total long term settlements would be about 35mm after one year with relatively slow increments thereafter; say to 40mm after 10 years and 60mmm at 2026 with this configuration of stone columns. Taken together with appropriate structural detailing of the floor slab to limit effects of differential settlements, the system should have been just feasible. Such a settlement regime would allow any building defects to be corrected inside the typical contract maintenance period with later settlements of about 25mm which are generally acceptable. It is unlikely that the building would ever be operated at the full specified loading over its whole life as assumed in the above calculation.

This solution would therefore have been feasible but at the margins of practicality.”

His calculation was based on total long term settlement of 175mm which means that 60mm represents a 65% (175-60/175) reduction from 175mm, with the stone columns of 700mm columns on a 1.5m triangular grid being at or close to the practical limit.

My conclusion is that vibro replacement could have worked on the site at Sandwich to bring down settlements from Wembley’s figure of 80mm to 50 or 30mm or from the experts’ figure of 95mm to 165mm to 35 to 60mm in the main supermarket store. Would these settlements have meant that, as CWS contend, “the resulting building was bound to suffer from extensive and unacceptable differential settlement”?

What was the settlement required for the main supermarket store? As I have stated above, the JAA specification stated that testing had to show that “settlements will not exceed 10mm with differential settlement not greater than 2mm to 4 m.” Whilst the experts are agreed that this required settlement to be limited to 10mm they say that the requirement for limiting differential settlement “contained a typographical error and was incomprehensible”. The experts cannot come up jointly or individually with any interpretation of the limit for differential settlement which would make sense. 2mm in 4m would be 1 in 2000 which is not considered feasible. I accept that this means that JAA included no effective specification for differential settlement.

This specification then raises two further issues. First, whether the required settlement remained 10mm in the light of the correspondence during 1995 and 1996. The second is, in the absence of any specified limit for differential settlement what would be a reasonable requirement for differential settlement.

It is clear that JAA informed Cliveden on 27 June 1995 that with vibro replacement and a superimposed load of 15kN/m², long-term settlement could be expected to be in the region of 50mm. Cliveden stated in their reply of 28 June 1995 that they would respond more fully at the design team meeting. Mr Leach says that at the design team meeting on 21 July 1995 he repeated his statement about 50mm settlement and said that it could only be estimated not predicted with certainty. In the light of the letter and response, I consider it highly likely that the 50mm settlement was raised at the meeting and that Mr Leach made these comments and also referred to differential settlement. While there were discussions about lower loadings, the final outcome was that the superimposed loading was to be 15kN/m² in the store and 31.5kN/m² in the warehouse area, as set out on JAA’s drawings.

JAA then sought tenders based on the specification of 10mm settlement and the uncertain specification for differential settlement. In response Keller stated that, after treatment, they estimated that under the action of the dead load of upfill and the slab and with live loading of 8kN/m², the long term settlement should not exceed 50mm at the centre of the loaded area and 25mm to the edge so that differential settlement should therefore not exceed 1:500.

Difficulties with achieving the specified settlement of 10mm were mentioned by Vibroflotation to Mowlem when Mowlem sought preliminary tenders in November 1995. It is not clear whether these were seen by JAA. However, after Mowlem had been appointed as contractor they obtained a tender from Vibroflotation in which they said that preliminary calculations indicated that long terms total settlements on the floor slabs based on a bearing pressure of 15kN/sq.m would be in the order of 30mm at the centre of the slabs and 15mm on the edge. They pointed out that this figure did not comply with the specification of 10mm settlement criteria.

JAA evidently saw this and, doubtless based on the previous discussions with Cliveden as to 50mm settlement, agreed that the figure could be relaxed, as recorded in Mowlem’s letter of 7 June 1996. In the sub-contract between Mowlem and Vibroflotation it was stated that total settlements would be in the order of 30mm not 10mm as specified and that this had been accepted by JAA. Vibroflotation produced calculations of settlement of 31.48 mm for an imposed load of 15kN/m². In the end Vibroflotation were not able to do the work and Pennine were appointed by Mowlem. Pennine submitted calculations which showed a long term settlement of 28mm and JAA said on 11 July 1996 that they had no comments on those calculations. Later, Pennine produced settlement figures for the warehouse of 29mm.

Whilst the specification remained at 10mm, it is evident that JAA had discussed with Cliveden both by their letter of 27 June and at the meeting on 21 July 1995 a figure of 50mm and Cliveden did not raise concerns about settlement of up to 50mm. It is evident that 50mm was Keller’s figure; that Vibroflotation’s figure was 31.48mm and that Pennine put forward figures of 28mm in the store and 29mm in the warehouse.

There is no evidence which shows how the specified settlement of 10mm was derived by JAA, except the explanation that it was taken from a standard specification. Whilst there was no formal process by which JAA sought and made a change in the requirement from 10mm to 50mm or 30mm, I do not consider that Cliveden could complain if 50mm settlement were to be achieved. It seems that JAA initially took the view that a settlement of 50mm could be accommodated and that the later calculations produced by Vibroflotation and Pennine showed predictions of settlement closer to 30mm. This then raises a question of the extent to which the current difficulties would have been encountered if a settlement of 30mm or up to 50mm had in fact been achieved.

Dr Stroud puts forward a specification of 1:200 as a reasonable specification for differential settlement but there is a difference between them as to how that is to be applied. Dr Stroud considers that a maximum gradient of 1:200 would have been a reasonable serviceability limit for differential settlement and that this required the total settlement to be limited to 10 to 15mm. He is supported by Mr Dishington at para 67 of his report. Mr Tutt and Mr Langdon disagree and consider that 30mm settlement would satisfy the 1:200 differential settlement criterion. They say that a 30mm central settlement over a 7.5m length would give a linear slope of 1:250. Mr Tutt, in his evidence also said that if overall settlement had been limited to 50mm the slab would have been acceptable in serviceability terms. Mr Clamp at para 37 of his report appears to base his calculations upon the same method as Mr Tutt and Mr Langdon, although he also refers to Dr Stroud’s method which allows for bending.

There is therefore a difference of approach to the measure of differential settlement in this case. Dr Stroud considers that the 1:200 limit should be applied so that, with settlement of the slab in the shape of a curve, the maximum slope of that curve should never exceed 1:200. As the slope of the curve is steepest at the sides of the slab, he has assessed the 1:200 criteria for the maximum slope there. He demonstrated this by a diagram at Figure 16 of his report. Mr Tutt, on the other hand, measures, instead, the average slope between the edge of the slab and the maximum deflection at the centre of the slab. Whilst I accept that Dr Stroud’s approach measures the maximum gradient, I consider that the important aspect of differential settlement is not the instantaneous localised steepest slope but the average slope measured by the difference in overall level, as measured by Mr Tutt.

Using Mr Tutt’s method of measuring the slope, for a 30mm difference in levels the slope would, as set out above, be 1:250. If a 50mm difference were taken then, over 7.5m this would give 1:150 which would not comply with the 1:200 requirement which would require a maximum 37.5mm difference.

On this basis, had a settlement of 30mm or 37.5mm been achieved then, in my judgment, the differential settlement of 1:200 which the experts have proposed would have been complied with. Given that there is no specified limit and that the 1:200 limit is what the experts consider to be reasonable I am not persuaded that, on the expert evidence, a further settlement to 50mm would be unacceptable in serviceability terms in respect of differential settlement. Put another way, if instead of 115mm there had been differential settlement of 50mm I do not consider that any party would have contended that these proceedings or the proposed remedial works were justified.

As Mr Tutt observes the problem with cracked terrazzo was the first sign of any problem in the floor and when there was found to be settlement of 65mm this caused surprise. It was not the slope of the slab which was causing the problem. Similarly, when I visited the site and could see the effect of the settlement of 115mm it was clear that whilst this was causing some problems the same could not be said about areas where the settlement was less.

If proper detailing had been carried out, overall settlement of 50mm or even some 60mm, as Dr Greenwood has calculated, would have been acceptable. This is even with the poor design by JAA of the detail at the pile caps at the central columns or adjacent to the ground beams which carried brickwork around the perimeters. At these pile caps the slab was detailed by JAA so that it passed over these relatively rigid supports. This meant that the slab in these areas settled by some 5mm and therefore exacerbated the differential effect between that limited settlement and the larger settlement mid span. If they had been detailed differently to cater for this deflection then settlement of the slab would have caused less differential settlement.

On the basis of my conclusions set out above, I consider that a vibro replacement system which had been properly designed and carried out would have been able to limit the overall long-term settlement to levels which, with proper design detailing, would have provided an acceptable level of serviceability for the slab.

In my judgment a vibro replacement system could have worked on the site at Sandwich to bring down settlements from Wembley’s figure of 80mm certainly to 50 or 30mm or from the experts’ figure of 95mm to 165mm to some 35 to 60mm in the main supermarket store. With these levels of settlement I do not consider that serviceability problems would have been caused.

It follows that, contrary to CWS’s contention, the choice of ground improvement by vibro replacement was not inappropriate and could have worked on the site at Sandwich and was not inevitably going to fail nor was the building bound to suffer from extensive and unacceptable differential settlement.

As a result I consider that CWS’ case in relation to the central issue fails because the use of vibro replacement at Sandwich was not bound to fail.

If I had come to a contrary view, the question would have arisen as to whether JAA were negligent in specifying vibro replacement. As I have stated above this depends on whether JAA acted reasonably in relying on the advice of Keller and others.

Dr Stroud’s evidence at paragraph 11.1 of his report is that the use of stone columns in soft clays was the subject of advice in various publications which were available in 1995. He referred to BRE Information Paper (IP 5/89) which notes a lower limit of undrained shear strength of 15 to 20 kN/m² for the use of stone columns in soft soils. For housing, which he accepts is not strictly applicable to retail sites, Dr Stroud refers to the NHBC Practice Note 16 (1988) which states that “Under no circumstances can the treatment of clays with an undrained shear strength of 15kN/m² or less be accepted”. He also refers to “Engineering Treatment of Soils” by FG Bell (1993) which advises that “Stone columns have been formed successfully in soils with undrained cohesive strength as low as 7 kN/m² , but normally it is not used in soils with undrained shear strengths of less than 14 kN/m².” He says that the advice in 1995 shows that the application of vibro-replacement to very soft clays of strengths below about 15kN/m² should be approached with extreme caution and a full appreciation of the risks.

In his report at paragraphs 5.3.8 and 5.3.9, Mr Tutt deals with Dr Stroud’s reference to BRE Information Paper IP5/89, the NHBC Practice Note and the book by Mr Bell. He notes that Mr Bell states that “Vibroreplacement is commonly used in normally consolidated clays, soils containing thin peat layers, saturated silts and alluvial or estuarine soils… Stone columns have been formed successfully in soils with undrained cohesive strength as low as 7kN/m2, but normally it is not used in soils with undrained shear strengths of less than 14 kN/m2 because of the low radial support afforded the stone columns.”

Mr Tutt says that whilst the clay at Sandwich was found to be soft and Dr Stroud quotes an average shear strength of 12 kN/m² with some other experts considering that this figure should be a little higher, so that the ground conditions were therefore clearly marginal, he believes that the proposed use of vibro replacement, if carried out properly, was not an inappropriate concept design.

I consider that the publications to which Dr Stroud and Mr Tutt have referred are publications which a reasonably competent engineer who was considering the use of vibro replacement should have been aware of. Such an engineer would know of such publications either because of previous experience or because they would need to have a basic understanding of vibro replacement techniques if they were thinking about specifying those techniques on a project. Those publications would have provided a warning that, with shear strengths generally less than 15kN/m² at the Sandwich site, the use of vibro replacement was something which needed further investigation before it could be used. I consider that Dr Stroud’s reference to the need to proceed with “extreme caution” is putting the matter too high. Rather, I consider that, as Mr Tutt says, it would be appropriate to include it at concept design stage but a reasonably competent engineer would have known that further work was needed to confirm the use of vibro replacement. That further work could be in the form of calculations carried out by the engineer himself or within the firm or could be obtained by advice from a third party.

In this respect, Mr Leach decided to contact Mr Taylor at Keller, a specialist subcontractor familiar with vibro replacement techniques. Evidently the purpose of that contact was to see whether there was any alternative to the piling which Wembley referred to. It is accepted by the experts at para. 1.6 of the Experts’ Joint Statement that whilst Wembley put forward piling, this did not preclude the use of ground bearing slabs. It is to be noted that Wembley dealt with matters in para. 5.2 of the report which could only refer to ground bearing slabs and indeed they said expressly that certain things were needed “if a ground bearing slab were to be adopted.” Whilst JAA did not make reference to the documents which would have identified the risks of proceeding with vibro replacement in the low shear strength material, I consider that they did what they would have done if they had been aware of those risks. They sought expert advice from a specialist in geotechnical engineering at Keller. Were they entitled to rely on that advice?

In this case JAA do not say, as in Moresk v Hicks that they can avoid liability because they had the right to delegate the question of the suitability of and the detailed design of the vibro replacement to other parties. Rather they say that vibro replacement is an area where competent civil and structural engineers reasonably seek the assistance of specialists; that Keller were such specialists who were well respected for their knowledge and experience; that they did not need to seek advice from other professionals, research or trade associations or others; that there were not matters raised which gave rise to a need to provide warnings to the client; that this was not a case where either they should have engaged independent professional advice or should have advised Cliveden to do so and that any protection which was necessary would be provided through the mechanism of the main contract and the use of a specialist sub-contractor.

I consider that JAA are broadly correct in those submissions. The evidence shows that competent civil and structural engineers often seek advice from specialist contractors in the fields of piling and ground treatment. Mr Tutt’s view was that JAA should have sought independent specialist technical advice and, having himself sought advice from Keller, he cannot criticise JAA in considering that the advice from Keller was sufficiently independent and he would not have expected JAA to advise that Cliveden should go to the expense of consulting a geotechnical consultant. He says that, in his experience, it is not uncommon for geotechnical reports to refer consulting engineers to specialist contractors for technical advice on piling and ground treatment.

As Dr Pugh points out in his report, the Wembley site investigation report, which contained information on piled foundations by those geotechnical consultants, concluded by stating that:

“It should be noted that the above example is provided for guidance only and is not intended to constitute a firm recommendation with regard to pile type, diameter or founding depth. The advice of a specialist piling contractor should be sought in the formulation of a final pile design.”

This supports Mr Tutt’s view which seemed to me to reflect the practice of ordinarily competent consulting engineers. Dr Pugh also accepts at para 5.1.7 of his report that Keller would be expected to have the necessary geotechnical expertise to perform settlement calculations and to assess the suitability of vibro stone columns and the amount of ground improvement but he says, essentially, that JAA should have chosen Wembley to give advice. Mr Clamp says at para 22 of his report that it was sensible for JAA to consult with ground improvement contractors to see what works they felt they could offer to improve the ground but says that they should not have relied on that advice.

Dr Stroud says that it was reasonable for JAA to approach Keller as informal and unpaid geotechnical advisors but he criticises JAA for relying on Keller without “independent and critical review”. In his evidence Dr Stroud elaborated on the review which he would have expected and I have no doubt that a specialist geotechnical engineer could have carried out such a review. However, on this aspect of the evidence I prefer Mr Tutt’s evidence which I consider is more founded in the practical realties of what a reasonably competent consulting engineer would do in those circumstances. Whilst I have no doubt that Dr Stroud would have carried out such a critical review himself and there may well be some consulting engineers, with a particular interest in geotechnics, who might have done so, I am concerned with a standard of the ordinarily competent engineer. Further the premise that JAA reasonably sought advice from Keller, which is common ground, but then should have sought further advice on that advice in order to be able to rely on it seems to me to derive to a large degree from hindsight now that this problem has arisen and the spot light comes upon this aspect, isolated from all the other design tasks which JAA were dealing with at the time.

It is quite evident that Keller were extremely highly regarded within the industry and had for many years been regarded as one of, if not the, leading experts in the field of ground treatment. They had been used by JAA over a number of years to provide specialist foundation advice. It is also clear from the articles and publications before the court that Keller companies around the world have had a great deal of experience in vibro replacement techniques.

Given that Cliveden had obtained the site investigation report from Wembley and JAA had provided that to a leading specialist in ground treatment, I do not consider that they should have taken other professional advice or sought advice from research or trade associations. Even if they should have done so, I am satisfied on the evidence from Mr Tutt and supported by the Wembley Site Investigation Report that the likelihood is that in the end, whatever advice might have been sought, this would still have led to taking advice from an experienced specialist sub-contractor, such as Keller.

The matters raised when JAA sought tenders from other specialist sub-contractors were not such as to sound “alarm bells” or raise warnings. As set out below, I consider that, properly interpreted, the matters raised were merely concerns that the particular method proposed by the contractors might not work if the actual soil conditions were worse than indicated in the Wembley report. Rather, the fact that a number of sub-contractors were prepared to tender, carry out design and provide calculations of settlement would have supported the advice from Keller as to the feasibility of vibro replacement at the site.

Any question of liability for the detailed design or construction of the ground treatment was, it seems, taken by JAA to be a matter which would be dealt with under the contractual arrangements between Cliveden, Mowlem as the main contractor and the specialist subcontractor employed to carry out the vibro replacement. The position on contractual liability and the provision of collateral warranties is not altogether clear on the documents but it is not suggested that JAA were in some way responsible for those contractual arrangements.

I accept Mr Tutt’s evidence that, given the pre-eminence of Keller, it was reasonable for JAA not to seek professional advice themselves or to advise Cliveden to seek their own professional advice on matters relating to vibro-replacement. In all the circumstances I do not consider that JAA sought to delegate their obligations to advise Cliveden on ground improvement and to carry out civil and structural engineering design of the project. Rather I consider that in the discharge of their duties they acted reasonably in seeking advice from Keller and relying on that advice. On that basis, even if the advice of Keller had been negligent, I do not consider that JAA would have failed to discharge their duty of care to Cliveden under the Appointment or to CWS under the Warranty.

I also consider that, as JAA submit, looking at the matter more broadly it would be difficult for JAA to be held to have acted as no reasonably competent civil or structural engineer would have done when others more experienced in geotechnical engineering and vibro replacement supported the choice of vibro replacement. In addition to Keller, the other sub-contractors put forward tenders for the work based on vibro replacement.

Given that finding I now consider the other matters which have been alleged against JAA at paragraph 38 of the Reply.

The first allegation relates to the adoption of vibro stone columns as a feasible solution for the improvement of the ground beneath the floor slabs. That choice was not negligent, for the reasons set out above.

CWS say, secondly, that JAA were negligent by continuing to recommend vibro stone columns after the results and circumstances of the tender for vibro replacement specialist contractors became known. CWS say that JAA dismissed the Bullivant and Bauer tenders and the reservations made in them and that they also dismissed the reservation in Keller’s tender that acceptance of the tender was subject to a site visit.

In relation to the Bullivant tender Mr Leach said in evidence on Day 6 that he believed that Bullivant made a commercial decision that they did not want to carry out vibro replacement. He pointed out that later, Bullivant did produce a tender for Mowlem.

In their letter dated 4 September 1995 Roger Bullivant Limited said that they did not consider that vibro replacement would be cost effective due to the presence of soft recent deposits to a depth of some 7.0m and advised JAA to consider piling as an alternative option. However, RB Foundation Systems then sent a tender to Mowlem dated 16 November 1995 in which they provided a quotation for vibro replacement which they said would increase the available bearing capacity and reduce the settlement characteristics to acceptable levels. It seems that Bullivant therefore did make a commercial decision in September not to tender for vibro replacement but accepted in November 1995 that vibro replacement was possible. Mr Taylor of Keller provided his recollection of the period when Bullivant entered the vibro replacement market which would support this interpretation. I do not consider that there was anything wrong with Mr Leach’s view of Bullivant’s tender.

In relation to the Bauer tender he said that Bauer were saying that the site may not be amenable to vibro-displacement because they were only quoting for 3m depth columns and wanted to carry out trial pits and in-situ tests. He said that he had asked his colleague Mr Affleck to obtain a quote from them for site investigation work, as stated in the handwritten notes.

It seems that Bauer were offering a price based on 3m depth of treatment in the supermarket and 4m depth in the warehouse but were saying that they wanted further investigation before they would commit. Likewise Keller in their letter dated 1 September 1995 said that they would need to examine trial pits over the site to confirm that the soils were suitable for improvement by their proposed process. I do not see that these statements in the tenders should have affected the approach being taken by JAA. Both sub-contractors wanted to see trial pits to confirm that the soils were treatable by vibro replacement. They obviously had the site investigation report and, in the case of Keller the concern was to ensure that the soil was as described in that report whilst Bauer wanted confirmation of the soil conditions, given the low values in that report, before they would confirm that they could use their proposed system.

I see nothing in these preliminary tenders which should have diverted JAA from their course of specifying vibro replacement. Their approach to Bullivant’s tender cannot be criticised and, whilst Bauer raised concerns that the site might not be amenable to ground improvement by their vibro displacement technique and they would require trial pits and tests before they would confirm the position, Keller, in whom JAA had confidence which had been built up over a number of years, were prepared to quote based on the Site Investigation Report but wanted to confirm soil conditions from trial pits.

I therefore do not accept that JAA were negligent by continuing to recommend vibro replacement stone columns after the results and circumstances of the tenders from the vibro replacement specialist sub-contractors became known.

The third contention is that JAA failed to evaluate the technical suitability of Pennine for carrying out the vibro works.

The circumstances in which Mowlem appointed Pennine have been set out above. In summary, the sub-contractor whom Mowlem was about to appoint, Vibroflotation, wrote to Mowlem on 8 July 1996 setting out problems and suggesting that it would be prudent for Mowlem to consider an alternative sub-contractor. Mowlem approached Pennine who submitted a tender on 8 July 1996. At a meeting with Pennine on 9 July 1996 Mowlem indicated that they would issue a letter of appointment with a view to Pennine commencing work on 12 July 1996.

It seems that Mowlem did not seek any approval from JAA before appointing Pennine as sub-contractor in place of Vibroflotation. It is not clear on what basis JAA could have evaluated Pennine’s tender and, it is assumed CWS must allege, have evaluated that Pennine were not suitable to carry out the vibro replacement work.

I therefore do not accept that that JAA were negligent in failing to evaluate the technical suitability of Pennine for carrying out the vibro works.

Fourthly, CWS say that JAA did not examine critically, prior to Pennine’s appointment, the basis upon which Pennine were maintaining that vibro replacement stone columns would work successfully at the site.

I do not consider that JAA were given the opportunity, prior to Pennine’s appointment, to examine Pennine’s design. Therefore they were not given the opportunity which is the premise of this allegation. They were, however, provided later with calculations and I deal with the allegation in relation to these below.

It follows that I do not accept that JAA were negligent in failing to examine critically the basis upon which Pennine were maintaining that vibro replacement stone columns would work successfully at the site, prior to Pennine’s appointment.

Fifthly, CWS say that JAA failed to allow for the weight of the slab and make-up fill in the design loading to be applied to the ground.

The superimposed loading, as specified, was to be 15kN/m² in the store and 31.5kN/m² in the warehouse area, as set out on JAA’s drawings. In addition to that “live” load there would also be the dead load imposed by the floor slab and by the fill below the floor slab to bring the ground up to the correct level.

I accept Mr Tutt’s evidence that the note on JAA’s drawing referring to superimposed loading was clear and unambiguous as meaning live loading and not including the dead load of the slab or fill. He also points out that Keller’s tender of September 1995 referred to calculating long term settlement based on “dead load of upfill and slab” and a long term average live loading of 8kN/m² but had allowed for treatment to support superimposed floor loading of 15kN/m².

I accept that JAA properly specified the superimposed live loading and that this should have been understood as not including the dead weight of the slab and fill. I therefore do not consider that JAA failed to allow for the weight of the slab and make-up fill in the design loading to be applied to the ground.

So far as the way in which the loading should be applied in terms of the increase in pressure on the clay layer, this is evidently a matter for interpretation and judgment, as the experts in this case have shown. The fact that a loading of less than the uniformly distributed load might be applied in calculating settlement does not show a failure to take the weight of the slab and make-up fill into account.

Sixthly, CWS say that JAA did not carry out adequate checks on calculations provided by Pennine. The seventh contention is that JAA did not recommend that advice from others was needed if JAA felt unable to check those calculations.

The calculations put forward by the specialist vibro replacement sub-contractors, Vibroflotation and Pennine, were passed to JAA evidently for the purpose of checking. The central question is how far that checking should have gone. Should it have been a full check of the geotechnical design or was it limited to checking that the input data was correct, that the output data satisfied the required specification and that the arithmetic was correct?

As I have set out above, I have come to the conclusion that JAA were entitled to rely on the geotechnical design carried out by specialist vibro replacement contractors in discharging their duty to Cliveden under the Appointment and CRS under the Warranty.

This was a case where Pennine, as sub-contractors to Mowlem, took design responsibility to Mowlem, although the contract between Mowlem and Cliveden does not seem to have contained similar provisions. In relation to the detailed design carried out by those specialist sub-contractors I consider that the duty of JAA was to check those matters which were within the skill and knowledge of an ordinary competent consulting structural and civil engineer.

In this case, I consider that, in discharging their duties, the check which had to be carried out by JAA was limited to that set out by Mr Tutt as being limited to checking that the input data was correct, that the output data satisfied the required specification and that the arithmetic was correct. These matters would all be within the skill and knowledge of an ordinary competent consulting structural and civil engineer and I accept Mr Tutt’s evidence that the calculations from Pennine did not call for JAA to recommend the additional expense of appointing a geotechnical specialist to check the calculations. As can be seen from the criticism by the experts of the calculations of Vibroflotation and Pennine, the criticisms are essentially criticisms of the detailed geotechnical design within those calculation, such as the application of Baumann & Bauer’s method, the choice of approximate and un-conservative stress reduction with depth, the use of un-conservative M_v values and such matters. These were not the type of matters which ordinary competent civil and structural engineers would have checked.

I therefore do not accept that JAA failed to carry out adequate checks on calculations provided by Pennine or that they failed in not recommending that advice from others was needed to check the calculations by Pennine.

The eighth contention is that JAA overlooked the additional settlement that was likely to arise in soft clays due to secondary consolidation (so-called “creep settlement”).

The question is essentially whether JAA should have gone further than accepting what was said in the Wembley Site Investigation Report and should have themselves carried out their own calculations to estimate settlement.

Mr Tutt says at paragraph 5.3.7 of his report that he would not expect to question a site investigation report which estimated that a “long term vertical displacement of approximately 20mm at the corner of the floor slab increasing to approximately 80mm at the centre of the slab”. He points out that no qualification was given in the Wembley Site Investigation Report in relation to this value and no mention of secondary consolidation was made.

I accept Mr Tutt’s view that a consulting structural and civil engineer receiving a site investigation report from a specialist geotechnical in the terms set out in the Wembley Report would accept and use that advice and would not attempt to make their own further calculations to verify that information. I do not see therefore that JAA should have themselves undertaken a detailed geotechnical calculation to come to their own conclusion as to the likely settlement. In relation to what Dr Stroud said that a consulting civil and structural engineer should do, I consider that his approach was based too much on what a specialist geotechnical engineer would do.

I also accept Mr Tutt’s evidence that he would expect a reasonably competent engineer to be aware that in soft clays settlement is an important consideration for the design of spread foundations and ground bearing slabs and that there is a long term element to this. This is supported by the general reference to secondary consolidation in textbooks which would have been used by civil and structural engineering students. However, given the fact that generally secondary consolidation is not an issue in relation to normally consolidated clay in the British Isles, I do not accept that the complex considerations debated by the specialist geotechnical engineers in this case would have been within the general competence of ordinary structural and civil engineers. As Mr Tutt points out, the early editions of the widely read text book for engineers “Foundation Design and Construction” by M J Tomlinson, made no reference to secondary consolidation in the section dealing with settlement of foundation until the more recent editions, after 1995.

Whilst I accept that other textbooks referred to in evidence, including some written in North America, mention secondary consolidation and I would expect a competent civil and structural engineer to be aware of short and long term effects, I would not expect them to have the expertise to assess it. I do not accept Mr Langdon’s evidence that secondary consolidation was a phenomenon only known to geotechnical engineers, site investigation organisations and other geotechnical specialists by 1995 but I do accept his evidence that the risks that it posed in the particular circumstances of the marine clays at Sandwich, which should have been perceived by geotechnical specialists, should not have been perceived by an ordinarily competent civil or structural consulting engineer.

In this case, it does not seem to have struck a number of geotechnical specialists as being a risk. Wembley did not take it into account and those sub-contractors who tendered relied on the Wembley report or did not pick up Wembley’s omission. In those circumstances I find it difficult to accept that a reasonably competent structural and civil engineer should not have relied on the Wembley report but should have carried out calculations of the additional settlement that was likely to arise in soft clays due to secondary consolidation or creep.

The tenth contention is that JAA did not properly assess the significance of effectively relaxing the specification in regard to settlement when Pennine’s settlement estimates of 28mm and 29mm became known.

It was evident from the time of the initial involvement of Keller that JAA’s specification of 10mm settlement in the Vibro Specification could not be complied with. Keller advised that the long term settlement would be 50mm and JAA informed Cliveden of this in their letter of 27 June 1995. The Vibro Specification continued to refer to 10mm settlement but Keller stated that this was “excessively low” and proposed 50mm long term settlement in their initial discussion with JAA and in both of their quotations in September and November 1995. Vibroflotation raised a similar concern with options for settlements of 50-60mm or 25-35mm in their tender of November 1995 where they said that it was not possible to comply with the 10mm settlement criteria.

The way in which JAA dealt with this aspect was not satisfactory. It is evident that Cliveden was aware that there would be 50mm settlement and did not raise any concerns. Despite this, JAA in their Vibro Specification included a figure of 10mm with an uncertain differential settlement requirement. In reality, JAA appear to have proceeded on the basis of 50mm settlement despite what was in the Vibro Specification and 50mm was the figure notified to Cliveden.

In the light of my finding above that a settlement of 50mm with proper design detailing would have provided an acceptable level of serviceability, I consider that the fact that JAA relaxed the specification from 10mm to 50mm, in an unsatisfactory way but with the knowledge of Cliveden, is not something which has led to the problem in this case.

In relation to the allegation that JAA effectively relaxed the specification in regard to settlement when Pennine’s settlement estimates of 28mm and 29mm became known, I consider that they had done so earlier to the 50mm relaxed specification before they came to consider the figures of 28 and 29mm in the Pennine calculations.

The eleventh contention was that JAA did not adequately assess differential settlement where the ground bearing floor slab is supported around its perimeter and at internal columns positions.

With a maximum settlement of 50mm there would necessarily be differential settlement. Keller in their quotations said that “the long term settlement should not exceed 50mm at the centre of the loaded area and 25mm to the edge”. This gave a differential settlement of 25mm over some 8m and this led Keller to say that differential settlement would not exceed 1:500.

The issue of differential settlement arises particularly because the internal columns and the external columns and ground beams are supported on pile caps on piled foundations. These therefore settle far less than the ground floor slab supported on ground improved by vibro replacement.

The detailing of the connection where the slab meets the pile caps consists of hardcore and 150 mm of MOT Type 1 material between the pile cap and the slab which therefore rests on the pile cap. There was then an isolation joint at the edge along the ground beams and around the columns consisting of 12mm flexcell and polysulphide filler as a sealant.

Mr Tutt says that the purpose of this joint was to reduce the effects of differential settlement and his view is that, if the maximum settlement had not exceeded 50mm, he does not believe that differential settlement would have caused any significant problem for the operation of the store.

I accept Mr Tutt’s view. If the settlements had been limited to 50mm then I consider that some local cracking of the floor slab may have occurred but there would not have been the type and extent of the differential settlement that has occurred. I agree that it would not have caused any significant operational problems for the store and would have been dealt with by some local remedial work.

The twelfth contention is that JAA failed to check Pennine’s stone column layout in relation to the final positioning of the internal steelwork columns. There was, it seems, a layout drawing 95/953/1 produced by Pennine but it is not clear when, if at all, it was sent to JAA. In JAA’s letter to Mowlem of 11 July 1996 they refer to a comment in Mowlem’s letter of 10 July 1996 referring to a “need to revise the vibro-pile layout drawing”. On 24 July 1996 JAA wrote to Mowlem saying “we would confirm that a suitable vibro-piling layout drawing is yet to be received either by ourselves or Building Control.” This was also noted to be the position at Site Meeting 2 on 25 July 1996 and in a request from Mowlem to Pennine on 26 July 1996. Pennine replied that they would produce an “as built” drawing upon completion of their works.

That drawing was requested again by JAA on 26 July 1996 but was only forwarded by Mowlem to JAA as an “as built” drawing with a letter dated 9 August 1996. As stated at Site Meeting 3 on 22 August 1996 JAA had reviewed the “as built” drawing and calculations and referred to one minor outstanding issue. By then, Pennine had left the site.

Dr Stroud has compared the positions of the stone columns and in his report concluded, by reference to his Figures 7A and 7B that the stone columns were laid out to an out-of-date column layout so that there were gaps where columns would have been on the out-of-date drawing and stone columns where the piles were placed. Whilst I accept that this shows that JAA did not consider the Pennine “as built” drawing carefully, it does not appear to have caused any problem, in itself. Equally, it seems that JAA did not see the layout drawing until after Pennine had completed their work. It is not suggested by Dr Stroud that JAA should have done anything in those circumstances.

The final contention is that JAA failed to advise Cliveden that the use of stone columns would have been inappropriate at this project site, and that by adopting it the risks of substantial settlement developing with time were very high.

It is evident, as Mr Tutt points out, that JAA did not believe that vibro replacement was inappropriate and they advised Cliveden in their letter of 27 June 1995 that long term settlements in the region of 50mm could be expected and in their letter of 31 July 1995 that they had proposed “vibro treatment for the slab on the understanding that increased loads will result in greater long term settlement”.

As I have found above, JAA acting as reasonably competent structural and civil engineers would not have been aware that settlements in excess of 50mm would have been encountered at the site after Vibro Replacement and, in those circumstances, I do not consider that they should have advised that the risks of substantial settlement developing with time were very high.

At paragraph 13.5 of the Amended Particulars of Claim CWS also advanced two other contentions. First that JAA failed to undertake an independent evaluation of the feasibility and risks of the vibro solution at any material time or, if they felt unable to do so, to advise or recommend that other suitably qualified independent advice should be sought.

Secondly it is said that JAA failed to appreciate that design input, independent of the specialist subcontractors, was needed on matters relating to the use, design and construction of vibro stone columns in very soft clay, and if they felt unable to provide this independent assessment, failed to recommend that advice and design involvement should be sought from others with the appropriate expertise.

It is evident that JAA relied on the evaluation carried out by Keller and did not themselves carry out any independent evaluation or seek advice independent of that from the specialist sub-contractors. Essentially they relied on Keller and the fact that other specialist sub-contractors tendered for the work of carrying out the detailed design and construction of the vibro replacement work.

As set out above, Dr Stroud criticises JAA for not carrying out their own evaluation of vibro replacement but, instead, relying on the advice of Keller. He says that this is not independent advice, it did not examine the risks and there was no recourse against Keller if the advice turned out to be wrong.

Equally Mr Tutt says that, having sought advice himself from Keller, he cannot criticise JAA from seeking advice from Keller and would not have expected JAA to go to the expense of consulting a geotechnical consultant. He says that, in his experience, it is not uncommon for geotechnical reports to refer consulting engineers to specialist contractors for technical advice on piling and ground treatment.

As I have set out above, this is not a question of JAA delegating their duty to a third party but a question of whether JAA acted with reasonable skill and care in seeking and relying on advice from Keller instead of carrying out their own evaluation or obtaining independent advice.

On this aspect, I consider that the evidence of Mr Tutt more closely reflects the practice of reasonably competent consulting engineers in respect of specialist work in relation to piling and ground treatment than does the evidence of Dr Stroud. JAA had the site investigation report from Wembley and they provided this to geotechnical engineers at Keller who had expertise in vibro replacement. It was clear that Dr Stroud did not have the level of detailed knowledge of vibro replacement shown by Dr Greenwood who had worked for specialist sub-contractors and it is evident that the level of expertise in the major companies carrying out vibro replacement is very high. I accept Mr Tutt’s evidence that much of the detailed technical advice available to consulting civil and structural engineers in the area of piling and ground treatment, including vibro replacement, will come from specialist sub-contractors. Whilst that advice will not be from an independent firm of consulting engineers, the advice on whether vibro replacement is feasible and what loads will be carried with what settlements is likely to be as good as, if not better, than that provided by consulting engineers who, as Mr Tutt says and I accept are likely to refer clients to specialist subcontractors for that information. Whether there is potential liability for that advice depends on how it is given.

In my judgment, JAA discharged their duty of care by consulting and seeking advice from a specialist sub-contractor with the reputation of Keller and did not themselves need to carry out an evaluation to confirm or criticise that advice or seek an evaluation from another consulting engineer for that purpose. I regard the evidence by Dr Stroud of what he would expect a civil and structural engineer to do as being derived from the conduct of geotechnical engineers and being derived by hindsight given the problems which have arisen from the vibro replacement.

It follows that I do not consider that JAA were negligent in relying on the evaluation carried out by Keller and not themselves carrying out an independent evaluation or seeking advice independent of that provided by Keller as specialist sub-contractors.

For the reasons set out above, JAA did not fail to exercise reasonable skill care and diligence in the performance of its duties under the Appointment with Cliveden so as to be in breach of the Warranty to CRS in relation to proposing vibro replacement.

To the extent that settlement without treatment was going to be either 80mm (as estimated by Wembley) or even 95 to 165mm (as estimated by the experts) I do not consider that vibro replacement could never have worked on the site or was inevitably going to fail so that the building was bound to suffer from extensive and unacceptable differential settlement. In that respect I do not consider that vibro replacement was an inappropriate choice. Nor do I consider that no reasonably competent engineer would have recommended vibro replacement or that JAA was negligent in recommending vibro replacement.

The combination of vibro replacement and a ground bearing floor slab was incapable of achieving a 10mm settlement limit but Cliveden accepted that the limit was 50mm. Whilst there was no comprehensible specification for differential settlement contained in the design brief and, whilst the differential settlement with a 50mm settlement would exceed what might be a reasonable specification for a supermarket development, I do not consider that failure has caused the problem in this case.

I find that JAA were entitled to and did reasonably rely on the advice of Keller Limited as a contractor with specialist expertise in vibro replacement techniques and were not under a duty to undertake an independent evaluation of the feasibility and risks of vibro replacement nor to recommend that geotechnical advice should be sought from a consultant other than a specialist sub-contractor.

In this case, it seems that the problems on the site can be attributed to a number of factors. First, the Wembley report failed to take into account secondary consolidation and the predicted figure of 80mm for settlement of untreated ground, a necessary input into calculations, was too low. Secondly, the Pennine calculations of settlement, on the expert evidence, did not properly estimate the settlement for a number of reasons set out in the detailed calculations which reasonably competent civil and structural engineers would rely on specialist ground improvement and piling contractors to produce. Thirdly, there were failures in the way in which Pennine constructed the stone columns. There was clearly a defect in the size of the columns between the size which they said they would construct and the size actually constructed. Whilst it is difficult to assess the overall impact of the evidence from Mr Wheadon’s visit to the site, it raises concerns that even the smaller stone columns were not constructed properly. These are all reasons why the actual settlements at the site have been greater than the 50 or 30mm which were predicted. They are not, in my judgment, matters for which JAA can be held responsible.

On the basis of my findings on liability, it is unnecessary for me to deal with issues of causation and quantum. However, having heard detailed evidence, it is convenient to deal with both causation and quantum issues.

The case is pleaded on the basis that JAA was in breach of warranty in failing to exercise reasonable skill, care and diligence in the performance of its duties under the Appointment with Cliveden. It is said that by reason of the breach of warranty CWS suffered loss and damage. That loss and damage consists of the cost of the remedial works and trading losses caused by defects and by the remedial works and store closure.

At paragraph 62.4 of the Amended Defence JAA plead that it is for CWS to prove what would have happened if the breaches of warranty they allege had not occurred and what their financial position would have been in that event as against its actual financial position. They say that, in particular, it is for CWS to prove that, pursuant to their pleaded case, if JAA had given advice in favour of a pile solution or further advice about vibro replacement, as CRS allege it should have, Cliveden and CRS would not have proceeded with vibro replacement and would have abandoned the project.

JAA say that, if it is contended that they should have advised a piled solution for the floor slab, it is denied that Cliveden or CRS would have taken and acted upon any such advice. JAA say, if they had given advice in favour of a piled solution or further advice about vibro replacement Cliveden and CRS would either have proceeded with the vibro replacement in any case or would have abandoned the project. They plead that if Cliveden and CRS had proceeded with vibro replacement the financial position would have been no different from what it is now. Alternatively, if Cliveden and CRS had abandoned the project, CWS’s financial position would have been worse than what it is now.

CWS plead at paragraph 44.13 of the Reply that had a piled solution been required at the outset, Cliveden and/or CRS would have firstly sought other cost savings in the project and, if the costs could not be recovered elsewhere, seriously reconsidered whether the project was viable and should proceed at all. At paragraph 44.14.2 of the Reply CWS say that, although it appears that JAA took the decision to use vibro stone columns in the design of the ground bearing floor slab at sometime between June and November 2005, JAA had a continuing duty to keep its design under review. They say that in accordance with that continuing obligation and at the latest when it reviewed Pennine’s calculations in July 1996, JAA ought to have realised that vibro replacement would not work.

CWS say that by July 1996 CRS was contractually and financially committed to the project and Mowlem had taken possession of the site and had commenced work. Accordingly CWS say that, had JAA advised even after review of Pennine’s calculations in July 1996 that their design was inappropriate and could not deliver the necessary floor loading or settlement tolerances required by the project, CRS would either have had to agree to meet the increased costs being incurred under the building contract or sought to make further savings or omissions from the project. CWS say that equally had JAA realised at an earlier stage that the design was inappropriate and a piled solution was necessary, CRS could either have sought to negotiate down the price being paid for the land or sought savings in the project cost. Finally they say that if appropriate savings could not be found, CRS, at an early stage, would have had the option to pursue development opportunities or investments elsewhere.

The claim is made under the Warranty which provides at paragraph 1 that JAA warrants to CRS that it has exercised and will continue to exercise reasonable skill care and diligence in the performance of its duties to Cliveden under the Appointment. Under paragraph 2.1 of the Appointment it was provided that Cliveden appointed JAA and that JAA agreed to perform the services fully and faithfully in accordance with the instructions and directions of Cliveden and upon the terms and conditions set out in the Appointment.

The claim is therefore a contractual claim for a failure to exercise reasonable skill and care and diligence in the performance of those obligations. The agreement was not that JAA would design the project to be reasonably fit for purpose but was an agreement to exercise reasonable skill and care and diligence in designing the project. In dealing with the question of the measure of damage for the failure of a construction professional to carry out design with reasonable skill and care, the author of Hudson’s Building and Engineering Contracts (Eleventh Edition) at paragraph 2.112 said this:

“The measure of damage for breach of the design obligation will obviously differ widely according to the nature of the breach; it may be nominal if the error can be rectified simply at an early stage, or it may be for loss of value or loss of commercial profitability in the case of a non-structural suitability breach, which cannot be rectified. Where the design failure relates to the structure itself, the difficult question of cost of repair or diminution of value as the proper measure of damages may be raised. It has been authoritatively held in a leading case in the Court of Appeal of New Zealand that, applying the basic compensatory principle in breach of contract cases, the measure of damage will be the cost of rebuilding to a proper design, but less a credit for any higher cost which would have been payable for a proper design in the first place, on the assumption that the client would have proceeded with the properly designed project),and the “indemnity” or diminution of value basis of assessing damages (cost of demolition, return of abortive expenditure, etc), which had been earlier suggested in an Australian case, should be rejected in such a situation.”

The reference to the leading case in the Court of Appeal of New Zealand is a reference to Bevan Investments Ltd v Blackhall and Struthers (No 2) (1979) 11 BLR 78. In that case the court had to consider the measure of damages for negligent design of floor slabs by the “lift slab” technique. In that case Richmond P said this at 96:

“It must be accepted however that usually a plaintiff in an action for damages for breach of contract against a builder is in an easier position, so far as the onus of proof is concerned, than a plaintiff claiming damages for breach of contract against an engineer. In the former case the plaintiff need only prove the builder’s contractual obligation to erect a building in accordance with the contract. If the builder has failed to do so then prima facie the plaintiff is entitled to be put, in terms of money, into the same position as he would have been in if the builder had duly completed the building. A plaintiff who is suing an engineer, on the other hand, must establish what his position would have been if the engineer had in fact exercised proper care and skill. There could be a case, as indeed was the position in the Auburn case, where on the probabilities the plaintiff would have proceeded to let a contract, on the basis of a properly prepared design, at a cost which would have been substantially higher than the contract price for the building erected in accordance with a defective design. This higher cost factor would be automatically taken care of when determining the amount of money required to put the plaintiff in the same position as he would have been in if he had let a contract on a design prepared with proper skill and diligence by the engineer. If it appeared, on the other hand, that proper skill and diligence by the engineer would have led to a situation where the owner would have completely abandoned all idea of building then the approach which I think to be the proper one would lead to the same result as found favour with Hutley JA.”

At 97 Richmond J continued:

“However, it must be accepted that if Bevan Investments wished to obtain damages calculated by reference to the correct principles applicable in claims for breach of contract then it carried the onus of establishing, at least on the probabilities, that if Mr Struthers had used proper care and skill it would have proceeded with the erection of a building in accordance with his plans. Proof to that effect would in turn involve a question as to the probable price of a properly designed building. For that would be relevant to the question whether Mr Bevan would have gone ahead with the project and also the quantum of any damages.”

I was referred to the decision of the New South Wales Court of Appeal in Auburn Municipal Council v ARC Engineering Pty Ltd [1973] 1 NSWLR 513 which was considered by the New Zealand Court of Appeal in Bevan v Blackhall Struthers. In Auburn the foundations for a building were placed upon filled land. The land did not settle evenly and because of the inadequacy of the foundation there were serious defects which meant that the building had to be demolished and rebuilt on piled foundations. In the court at first instance the case had proceeded on the basis that damages were to be measured in the same way as those in Bellgrove v Eldridge (1954) 90 CLR 613 at 617, namely by ascertaining the amount required to rectify the defects complained of and so as to give to the building owner the equivalent of a building on his land which was substantially in accordance with the contract.

In Auburn it was conceded that, since there were to be piled footings, the damages should be reduced by what would have been the original cost of the pile footing because, if they had been included in the original design, the cost of construction of the premises would have been greater than it was on the basis of the design actually used. In the Court of Appeal, Hardie and Hutley JJA held that there was no sound basis for applying the measure of damages in Bellgrove v Eldridge because in that case the breach of contract complained of was the failure to build the foundations of a building in accordance with plans and specifications prepared by another, whereas on the facts in Auburn the breach was a failure soundly and correctly to design the foundations for erection by another.

In coming to the conclusion as to how damages should be assessed Hutley JA drew the following distinction at 534: “there is a radical difference between a contract to produce a result and a contract to exercise skill with a view to producing a result, and I find difficulty in applying the formulae for the limitation of damages which is appropriate to contracts for the sale or carriage of goods to contracts to exercise professional skill.”

He said this at 534E:

“I have not been able to find any reported case in which the total destruction of the buildings has been found to be necessary, but as a matter of principle it would seem to me that the total destruction of the building and the restoration of the site to its original state must provide the terminus of the engineer’s responsibility. Once that is done the consequences of his contractual liabilities are exhausted.

In England it is established that a builder of a house which has to be demolished because it was erected in breach of contract is bound to pay by way of damages the values which the house properly built would have had at the time when the defective performance was discovered: Applegate v. Moss; Archer v. Moss; King v. Victor Parsons & Co. It might be argued that this measure of damages is applicable here. The structures erected for the respondent would not have market value in any real sense of the word but, instead of their market value, the cost of erecting equivalent structures at the date upon which it is proper to begin the new construction should be given.

However, with some diffidence because the Court did not have the benefit of argument on this question, I do not consider that the argument should prevail. This would be equivalent to committing the engineer to providing the building rather than the design. The loss which the respondent experienced qua the appellant was not the loss of the building which it contracted to get, but the loss of money in a futile enterprise.

In my opinion the claim for the cost of piling and for the cost of redesign should be rejected.

It follows that the following items of damage which His Honour allowed should not be recovered, because they are items which follow from the assumed obligation to rebuild:

….

The respondent, however, should have been entitled to recover the sums of money which it threw away on the useless construction.”

In Bevan v Blackhall Struthers Richmond P expressed the view that the approach of Hutley JA in Auburn was incorrect because he said:

“Hutley JA approached the whole question on the assumption that the only possible measure of damages, in a case involving a completely useless building, was to be fixed by such an amount as would put the owner of the building back into the position in which he was at the time when he was induced by the negligence of the engineer to embark upon a futile enterprise.”

He then cited a passage from the then current thirteenth edition of McGregor on Damages which set out the general rule that a plaintiff is entitled to be placed, so far as money can do it, in the same position as he would have been in had the contract been preformed. Richmond P then continued:

“There is ample authority for the propositions as put forward in McGregor as with great respect to the views expressed in the Auburn case, I can see no reason why the general rule that the plaintiff is entitled to be placed in the same position as he would have been in had the contract been performed should not provide the starting point in the case of an action for damages brought against an engineer for failing to carry out his implied contractual undertaking to use proper care and skill in the design and supervision of a building.”

In my judgment the proper approach is that expressed in Hudson and by the Court of Appeal in New Zealand in Bevan v Blackhall Struthers (No 2). That approach can be expressed in the following terms:

I now proceed to consider those questions in the context of the current case.

Given the findings that I have set out above, I evidently proceed on the basis that, contrary to the view I have expressed above, JAA were negligent in designing the building with ground improvement by vibro replacement and should have designed a supermarket with piled foundations.

JAA submit that, on the evidence, CRS and/or Cliveden would not have been prepared to pay for a fully suspended slab supported on piled foundations. They say that all the savings which could have been achieved on the project had already been achieved and that sufficient savings could not have been made to accommodate a piled structural solution. They therefore say that Cliveden and CRS would either have proceeded with vibro replacement, in any event or would have abandoned the project on cost grounds.

JAA submit that if Cliveden and CRS had proceeded with vibro replacement then their financial positions would be the same as it is now. JAA say that if the project had been abandoned, CWS would not have had the benefit of the profits received from the store and those benefits substantially exceed the cost of capital expenditure on the project and the cost of funding those sums since. They therefore submit that CWS have suffered no loss.

CWS, on the other hand, submit, first, that the factual evidence that CRS would not have gone ahead with the project is not made out. They say that the premise put by JAA to the witnesses assumed that a piled solution to the suspended slab would have been over £100,000 more expensive than the solution which was chosen. However, they refer to the expert quantity surveyors’ fourth joint statement where the “piling credit” has been agreed in the sum of £35,896.29 representing the additional costs of piling in 1995.

CWS say, secondly, that even if it were established that CRS would not have gone ahead with the project had the piled solution been put forward as the proper foundation design, the conclusion by JAA that CWS would have suffered no loss is not correct. They say that it would be wrong in principle for the quantum of damages in defective structure cases to be dependent upon the profitability of the project. They submit that if that were so then the recoverable damages would be higher if the project had turned out to be less profitable and that is not a matter to be taken into account: see Lord Hoffmann in Banque Bruxelles Lambert SA v Eagle Star Insurance Company Limited [1997] AC 191. In any event CWS submit that had CRS not built the supermarket at Sandwich, then CRS would have built another defect free store somewhere else with that money.

It is evident that, by October 1995, CRS wanted to review the costs of various projects which they were considering, including the project at Sandwich. That was the background to the request to Mr Jolliffe to provide them with costing information. When he responded on 24 November 1995 he reported that the shell and limited fit-out costs had gone up from £1.855 million to £1.977 million which included what he described as a cautious estimate of £55,000 for the additional costs of abnormal ground conditions. Following a telephone conversation with Mr Candelent, the construction manager for CRS, Mr Jolliffe wrote on the 5 December 1995 setting out a cost comparison between a potential store at Pewsey and the store at Sandwich. That indicated that for the store at Sandwich there were “abnormal” costs of some £400,000. That included £130,000 for abnormal ground conditions. This led Mr Candelent to report to the Development Manger of CRS on 8 December 1995 that the costs for the development at Sandwich had risen considerably since board approval was obtained. The developers’ offer by Cliveden was stated to stand currently at £2,442,862 which included the £400,000 for “abnormals”. He said that they were fast approaching the stage where the development agreement would be ready for execution and wanted to know whether the CRS food division wished to proceed on the basis of the costs given.

Mr Smith informed Mr Boam on 12 December 1995 that they were looking at the financial implications of the additional costs and that he trusted that the food division would still approve the development, albeit the return was not satisfactory as it stood at the moment. In response, Mr Boam wrote to Mr Smith on 20 December 1995 saying that the news was unwelcome. He said that there was very little they could do about the cost of the building or the extent of professional fees and that if the scheme did not work at the present level, the only way to reduce costs was to renegotiate the land purchase.

On 11 January 1996 Mr Smith wrote to say that at the recent executive meeting it had been decided that the proposal to develop the store at Sandwich “did not warrant proceeding with based on the inadequate returns likely to be forthcoming from the development.” He said that, in his view, at least £300,000 needed to be removed if the project was to proceed. That figure was subsequently reduced to £250,000 and there then followed the process of review of the design and costs savings in February 1996. That cost review led to a reduction in costs of the required £250,000 and this then allowed Cliveden and CRS to enter into the Development Agreement dated 29 February 1996.

The question therefore is whether the development would have proceeded if JAA had proposed that piling and a suspended slab should have been used instead of vibro replacement and a ground bearing slab.

Several witnesses dealt with this aspect. In his witness statement at paragraph 23 Mr Boam said that, if JAA had recommended the piled solution, then Cliveden would have sought to ascertain the cost and whether CRS would have been prepared to meet that cost or whether a saving could be made elsewhere to bring the project back to budget. He said that if the cost was too much the scheme could not go ahead. In his oral evidence Mr Boam explained that they would have done whatever they could to overcome the additional costs. He accepted that by March 1996 every last pound that could be cut from the cost of the project had been cut and there really was not any scope for any further savings. He accepted that it would be fair to say there would be no more to be reduced from the project costs so that Cliveden would have to look at their margin. When asked whether a cost overrun of £106,000 would have meant that the project would not go ahead he said that, with such a figure of 5-10% more, it was difficult to say what would have happened and he could not say what the CRS would do. He added “All I can tell you is that from a long experience with working with retailers, both for them and as a direct employee and as a developer, I can only tell you that the only thing you should not be surprised about is that you get surprised.”

Mr Zimber stated at paragraph 20 of his Witness Statement that if the matter could not proceed successfully using vibro replacement they would have ended up piling the floor and that “in the scheme of things it was not such a significant cost so as to be a deal breaker in itself.” Whilst he said that this was his recollection, when he was asked whether he could say what would have happened if somebody had proposed piling the floor he said he could not, because it was never discussed.

The other witness who dealt with it was Mr Jolliffe who was asked what the position would have been, if at any point during the cost review, CRS had been told that another £106,000 was going to be necessary for piling the whole of the ground floor slab. He agreed that it was very unlikely that the project would have proceeded.

When those questions were asked the evidence before the court was that the additional costs of a suspended slab and piling compared to Pennine’s scheme for vibro replacement was £106,596. The quantum experts were able to make further agreements during the course of the proceedings and this led to an agreement that the extra costs in 1995 for providing piling and a suspended slab were £35,896.29. It follows that the basis on which questions were put to the witnesses was subsequently shown to be incorrect. However on the basis of that figure Mr Boam and Mr Zimber could not say whether CRS would have continued, whilst Mr Jolliffe was much more certain that CRS would not.

It is evident though that there would be a difference of approach to a figure of £35,000 compared to a figure of £106,000. Whilst it is clear that a figure of £106,000 would have had a major impact, when viewed in the context of savings already made of £250,000, a figure of £35,000 would evidently have had a lesser impact. It is to be noted that CRS found no difficulty in reducing the figure they wished to save from £300,000 to £250,000, a figure of £50,000.

On the basis of the evidence, I consider that in the context of the costs savings exercise, the parties are likely to have agreed to piling if that were of the order of £35,000 and that the project would not have been abandoned. The sum was obviously much smaller than the £106,000 figure. It was much less than the figure of £250,000 which the CWS saved and there was the possibility of Cliveden’s margin being used in part. I consider this is particularly so if the need for piling occurred after the date of the Development Agreement and when construction works were being carried out. At that stage it is far more likely that the project would have proceeded to completion than that the whole project would have been abandoned because of the extra cost of £35,000. In those circumstances I have come to the conclusion that so far as causation is concerned, if CRS had been advised that piling was necessary, the project would still have proceeded whether that occurred in the earlier stages of the project or when work had commenced on site.

Accordingly I consider that the correct method of establishing damages is to assess the cost to make good the defective floor slab but giving appropriate credit for the sums which would have been expended in any event to carry out a piling scheme and suspended slab.

There are therefore three aspects of quantum: the cost of remedial work, the claim for loss of profit due to the store closure and the loss of profit due to the refit delay.

In relation to quantum I have received expert evidence from quantity surveying experts, forensic accountants and from a valuer.

Mr Barry and Mr Palles-Clark were able to make substantial progress on agreeing quantum and there was little in dispute between them. Both experts continued to develop their evidence even up to the time they gave evidence but this was partly because of developing evidence, uncertainty as to CWS’s intentions and late information. I have assessed the reasoning behind contested figures and based my preference for the evidence of one expert on that.

Mr Cuerden and Ms Pincott approached matters from different perspectives. In reality, Mr Cuerden’s evidence was based on information and methodologies contained in the factual statements from CWS’s witnesses and his input was more by way of confirmation of lost profits on this basis than a wholly independent exercise carried out by him. Ms Pincott, on the other hand approached the matter by wishing to have much more support in terms of substantiation of figures where Mr Cuerden based his view on CWS’ evidence. This led to criticism from CWS and, as is now common, reference to judicial comment in another case on Ms Pincott’s approach. In my judgment as set out below, particularly in relation to CWS’ claim for refit delay costs, I consider that Ms Pincott’s approach was appropriate.

Mr Chase, the joint expert on valuation, produced a report in which he reached the following conclusions on the value of the property, compared to the value of the property in good condition of £2,840,000:

In addition he said:

“I am of the opinion that the commercial uses of the premises if sold in the open market with the existing defect is likely to be restricted to the use of the site. However with the Uretek and polystyrene scheme repairs this could be for lower value food and non-food discount retail or lightweight storage.

It is not unusual for food store operators to change the layout of the premises on a number of occasions during their occupation and although it varies from retailer to retailer and property to property, at least one change in every ten years would not be unreasonable, in my opinion.

The design life of premises of this nature is usually in excess of 40 years although it is not unusual for cladding to be replaced but where the frame and floor slab are expected to remain in situ without amendment. Given the design and nature of the subject property, it is unlikely that there would be any significant alterations undertaken to the property and, in my opinion, I would expect its design life span to be in excess of 40 years.”

On receiving that report JAA wished Mr Chase to give further consideration to the position where the Uretek solution was used. In a letter from Hill Dickinson they set out certain further assumptions. Mr Chase provided a response by way of a further report in which he said that the amended assumptions meant that, at best, the Uretek method would be considered as achieving similar results to the polystyrene replacement method, with a valuation of £1,290,000.

Neither party applied to call Mr Chase and I therefore proceed on the basis of his unchallenged evidence.

There are three possible remedial work schemes in the evidence before me. CWS base their claim on a scheme of remedial works which would involve breaking out the existing 175 mm thick ground bearing slab and installing a fully suspended reinforced concrete slab supported on a grid of mini-piles (“the mini-piling scheme”). This scheme would enable the existing building shell to be retained but would require store closure, if done in one phase.

JAA put forward two alternative remedial schemes. One scheme involves the drilling through the existing ground bearing slab and injecting polyurethane based grout below it by the use of a proprietary method (“the Uretek method”). The pressures which develop in the injected grout then “jack-up” the floor in a reasonably controlled way. Depending on the floor loading and future settlement it might be necessary to carry out further work using the Uretek method at some dates in the future. This option could be carried out in a phased manner with less interruption to the store.

JAA also put forward an alternative which requires the removal of the sales area floor slab and the excavation of the existing ground to a certain depth and then replacement of the ground with polystyrene blocks before casting a replacement slab on top (“the polystyrene replacement method”). The principle on which this method relies is that, by replacing the ground with lower density polystyrene, the floor slab can be loaded without causing settlement.

There are differences between the parties as to the cost of the mini-piling scheme. CWS rely on the evidence of Mr Paul Barry who in the Fourth Joint Statement concludes that the cost would be £1,984,520. JAA relies on a figure of £1,332,679 based on a calculation by Mr Palles-Clark. JAA have put forward a figure of £947,382 for the polystyrene replacement method and £463,192 for the Uretek method. In addition there is a question of whether credit should be given for the additional cost of piling in 1996 of £35,896 and for the costs of funding that sum from 1996 to date in the sum of £33,000.

In this case it is not in dispute that remedial works are appropriate to remedy the effect of excessive differential settlement in the floor slab at the supermarket. The question is what the scope of those remedial works is. That question, in my judgment, has to be answered by reference to two principles. The first is that CWS are entitled to that sum of money which will put them in the same position as they would have been in had the contract been performed: see Livingstone v Rawyards Coal Company (1885) App Cas 25 per Lord Blackburn at 39; Robinson v Harman (1848) 1 Ex 850 per Park B at 855.

The second principle which applies to the recovery of damages is that of reasonableness. In this case, where there are three different remedial schemes, CWS would be entitled to the cost of their preferred remedial scheme providing that such a remedial scheme was not unreasonable. In assessing whether such a scheme is unreasonable the court has to consider the cost of those remedial works compared to the benefit obtained by the remedial works; the intention to carry out the more expensive remedial works, to the extent that it goes to reasonableness; whether comparing the preferred remedial works with the other proposed remedial works there is no sufficient overall advantage in the proposed remedial works. Overall therefore there is a requirement that the sum to be awarded by way of damages is to be reasonable as between the parties in addition to the obligation on a party to act reasonably in mitigation of its loss: see Ruxley Electronics Ltd v Forsyth [1996] 1 AC 344 per Lord Jauncey at 357 F; per Lord Mustill at 361 B and per Lord Lloyd at 368 B and 369 G; British Westinghouse Electric and Manufacturing Company Ltd v Underground Electric Railways Company of London Ltd [1912] AC 673 at 689.

Applying those principles to the present case where CWS have not carried out any remedial works I consider that the following issues are of relevance: first, the relative cost of CWS’ remedial scheme compared to the alternative schemes; secondly, the advantages of the CWS scheme compared to the other remedial schemes and thirdly, whether CWS intend to carry out the works.

CWS say that they have been advised by Dr Stroud that the mini-piling scheme would provide a permanent solution to the structural defects in the building and that it is a reasonable choice for them to make. They say that JAA does not contend that the mini-piling scheme is unreasonable, but that there are other reasonable remedial schemes in the form of the Uretek and polystyrene replacement methods. They point to the evidence of the joint expert valuer, Mr Chase, as demonstrating that the alternative solution would leave CWS with a very substantially less valuable store than it would have with the mini-piling scheme.

CWS say that the disadvantages of the Uretek method are that it is not a permanent solution because, while it restores the ground level, the underlying problem remains. They say that only the sales area of the store is designated for treatment, there is no warranty as to future performance and there is disagreement as to whether the work can be achieved in the manner proposed so as to avoid closure of the store. They say that parts of the store will have to be closed and the solution does not properly address the effects of that on the store. They criticise the specification and pricing information before the court.

In relation to the polystyrene replacement method CWS say it is a new and novel approach which has not been well tried in relation to operational buildings. They say that because of the uncertainties of settlement prediction there is no confidence that the floor gradient of the floor supported on the polystyrene could be maintained within a 1 in 200 limit. They say that the proposal would require closure of the store. They also point to the fact that there is a potential for uplift of the polystyrene during high water conditions which has not been properly dealt with. Again they say that the specification and scope of works is poor and is not capable of sensible evaluation.

In relation to the mini-piling scheme CWS say that this provides a permanent solution to the problem and is specified in detail and properly costed. They refer to the valuation evidence of Mr Chase and say that this method has the benefit that the premises will be returned to the state of being a valuable asset.

JAA accept that the mini-piling scheme would be a “once and for all” low risk solution as the store would not be subject to post-remedial settlement. However they say that it comes at a high price of about twice the cost of the polystyrene solution and five times the cost of the Uretek solution. They also point to the fact that it will be highly disruptive, requiring store closure and attendant losses for a period of about 6 months. They say that those remedial works would be a wholly disproportionate response to the problems at the store in the light of the degree of damage at the store with which CWS has lived for a number of years. Rather JAA say that there is available cheaper and technically workable options capable of achieving an acceptable result. So far as valuation is concerned, they say that the overall quantification of the cost, including trading losses, would not achieve the same increase in value of the store. They say that CWS has made no decision to carry out the works and is deferring any decision about remedial works until these proceedings have been concluded.

In relation to the Uretek solution JAA point to the fact that it was put forward as a remedial option by Dr Stroud in his March 2007 report where he described it as “a technically feasible” option although not providing a permanent solution. Dr Stroud remains of the view that it is a feasible, although temporary, repair. He accepts that the method has been carried out successfully in a number of large building in the UK and this is borne out by information provided by Uretek. JAA submit that the Uretek solution provides a practical, proportionate and reasonable solution and avoids major trading losses. They say that the costs advantages of the scheme are obvious and that the scheme has been properly specified and costed.

They refer to Dr Stroud’s view that it is a sensible and practical option for CWS if the existing layout and loading distribution at the store remains unchanged, which JAA contend is likely to be the case. In such circumstances, JAA say that there would only be the need for one retreatment, assuming a 40 year design life. They say that if there is a future redistribution of loading then localised treatment can be carried out and, to the extent that the option is “non- permanent”, the need for re-treatment is predictable and the experts have been able to agree likely timeframes and numbers of treatments. They say that much of the work could be completed outside normal working hours over a period not exceeding six weeks, with little disruption. They point to evidence of Uretek having been used in factory and retail buildings without the need for closure or suspension of operations. JAA also submit that CWS have had Uretek under active consideration and as recently as September 2008 information was sent by Uretek to CWS concerning this store.

JAA accept that the Uretek treatment would not be able to restore the store loadings to 15kN/m² and 31.5kN/m² as originally specified. However they say that it would be unreasonable for CWS to insist on those loadings and that this is a prime example of a case requiring the approach in Ruxley. They say that these loadings were always excessive and exceed actual loadings over the last 12 years of 0.8 kN/m² to 9.5kN/m² maximum in the sales area and 1.2kN/m² to 7.5kN/m² in the warehouse area. They point out that the specified floor loadings exceed the loadings required by BS6399: Part 1:1984 which require respectively 4kN/m² for shops and 7.69kN/m² for storage. JAA also refer to the evidence that the specified loadings exceed the loadings which CRS had eventually indicated they would accept of 10kN/m² and 25kN/m² respectively as set out in their letter of 25 August 1995.

In relation to the polystyrene solution JAA say that, were the court to determine that the appropriate remedial scheme should enable loads of 15kN/m² and 31.5kN/m² then the alternative polystyrene solution is capable of achieving this with less expense and disruption then the mini-piling scheme. They say that the principle behind the scheme is accepted by Dr Stroud as a reasonable one but accept that he considers that it is uncertain whether it will work in practice. They say that these matters have been properly dealt with in the specification and in the expert evidence.

In my judgment, CWS are entitled to have remedial works carried out in accordance with the mini-piling scheme. That scheme provides a permanent well-tried solution in accordance with what, for these purposes, I have assumed would have been advised by JAA in the first place. It enables the floor loading originally specified to be achieved and, as the evidence of Mr Chase shows, restores the value of the store compared to the other two solutions.

In relation to the Uretek scheme it is evident from the documents that this is a practical scheme which allows floor slabs to be re-levelled with minimal disruption to the premises. I have no doubt that such a scheme would provide a pragmatic solution for commercial clients who were prepared to take the risk of needing future re-treatment to deal with changes in lay out or increased loading and were not concerned with the impact upon the value of the building which Mr Chase considers applies in this case. Thus it provides a practical low cost solution but does not represent a remedial solution which, on the facts of this case, would properly restore CWS to the position they would have been in, on the assumption I am making, they had been properly advised to use piling.

I do not accept that it is unreasonable for CWS to seek to achieve a structure which would provide floor loadings as originally envisaged. It is true that the store, as currently loaded, does not require the floor loading specified. This however ignores the possibility that changes in layout and use of the store by CWS may require increased floor loadings and also that the store represents a commercial asset. As Mr Chase’s valuations shows, the value of that commercial asset depends on the remedial works providing a solution which is able to return the property to its original construction. Whilst CWS currently use a lower floor loading I do not consider it to be unreasonable for them to wish to have the property restored to a condition in which it can properly deal with the higher loadings.

In relation to the polystyrene replacement method, there is no doubt that the engineering principle of removing the fill and replacing it with a lightweight material is based on a sensible approach. However I share the concerns of Dr Stroud as to the practicality of such a solution and the effect of high water tables. I do not consider that CWS should have to accept a solution which has risks as to practicality and is a scheme which is untried and untested. Again, like the Uretek solution, I do not consider that a party has to have imposed on it a solution which carries both additional risk as to implementation and future efficacy and also does not restore value of the asset to its original value. Whilst I could see some commercial clients deciding that this was an appropriate solution provided that they were willing to take the risks inherent in an untried and untested solution and were not concerned about the end value of the building, I do not consider that it provides a viable remedial scheme in this case.

It is evident that the mini-piling scheme is more expensive but equally it restores the store to one where there is essentially no diminution in value of the asset. Whilst diminution in value and remedial work are characterised as alternatives in the award of damages this case illustrates an overlap between a claim for remedial works and diminution in value. If the remedial work properly restores the building there will be less diminution in value. However if alternative remedial solutions are adopted, with the risks that I have set out above, there will be a residual diminution in value of the premises. This is, I consider, an important factor to be taken into account in comparing the various remedial schemes.

It is accepted that the mini-piling scheme requires closure of the store for a more extensive period. I am doubtful that the store could continue in proper operation even during the Uretek works and it is accepted that a period of store closure will be required for the polystyrene replacement solution. I do not consider that the fact that the store has to be closed is determinative of what remedial works are reasonable.

In conclusion I consider that it is not unreasonable for CWS to carry out the mini-piling scheme which properly restores them to the position they would have been in, limits the risk inherent in the alternative remedial schemes, is accepted as a reasonable scheme and, whilst more expensive than the other remedial schemes, restores the commercial value of the property.

I now turn to consider what the scope and cost of the mini-piling scheme would be.

There are limited points of principle which divide the quantity surveying experts, most of which depend on engineering considerations of the remedial scheme. The overall position is that the cost of the remedial scheme, at prices applicable in the Third Quarter of 2009 range from £1,949,913 as assessed by Mr Barry to £1,226,474 as assessed by Mr Palles-Clark, using an alternative piling design based on a scheme by engineers previously involved, Bradshaw Gass and Hope. Those consultants had produced an alternative design which was disclosed by CWS during the course of the trial. In their submissions, JAA make it clear that they do not contend that that alternative design should be adopted but rely on the valuation of £1,226,474 as supporting a figure of £1,332,679 which represents the cost of an alternative design put forward by Mr Tutt and Mr Langdon.

I therefore turn to consider the differences between Dr Stroud’s design and the alternative design of Mr Tutt and Mr Langdon. I do so under the following headings:

The experts have agreed that the piling costs of Dr Stroud’s scheme would be £502,214 and the cost of the alternative scheme would be £390,829, a difference of £111,385. Mr Palles-Clark has also considered a costing based upon an estimate dated 13 April 2008 from Roger Bullivant for mini-piles which was disclosed by CWS during the trial. That cost estimate comes to £194,269. There are a number of issues relating to the piling which are matters of engineering evidence and can be summarised as follows:

Mr Langdon considers that the 15 metre long piles proposed by Dr Stroud are unnecessarily long and could be shortened to 11 metres. He says that the 15 metre length allows for an additional 50kN or 20% of working load for negative skin friction which he does not consider appropriate. He says that it is appropriate where soft comprisable ground is loaded for the first time but that is not the case here. He also considers that the use of a factor of safety of two on skin friction instead of 1.5 has given rise to a pile which is longer than necessary. In his view a pile of equivalent diameter to the one proposed by Dr Stroud could be shortened to 11 metres and have an adequate working load of 200 kN. Dr Stroud on the other hand considers that for the site at Sandwich with the estuarine environment and changes in water level there could be further creep settlement and it is prudent to allow for the down drag caused by future negative friction. He says that because it is impossible to guarantee that drilling debris is removed from the base of the bore his design has ignored any contribution of support from the base and relies on shaft capacity only. This shaft capacity has been estimated from a back analysis of the Omega pile test.

I accept that the assumptions on which Dr Stroud has designed the pile are conservative both in making allowance for negative skin friction and ignoring any contribution to load bearing capacity from the end of the pile. However this is a case where there could still be continuing creep settlement and where making allowance for end bearing capacity does not take into account the problem of debris raised by Dr Stroud. Given the particular ground condition at Sandwich I consider that Dr Stroud’s approach is appropriate and that the pile design in the remedial works should allow for 15 metre piles as proposed by him.

Dr Stroud proposes the use of a 25 mm diameter threaded reinforcement bar joined together with couplers at three metres intervals which is to be lowered into the centre of the whole: see figure E1d at Appendix E to his expert report. He says that this bar is intended to be taken to full depth and that it not only gives structural integrity to the pile throughout its length but that the act of inserting the bar confirms that the bore has not collapsed or blown out and is therefore an important quality control check. Mr Tutt considers that this central reinforcing bar is unnecessary. Having considered Dr Stroud’s explanation I am satisfied that the use of this bar is justified and that it should be included in the design.

Dr Stroud’s piling scheme has allowed for 75 hours of rig time to bore through obstructions at the price of £25,875. Mr Langdon has expressed the view that the only obstructions would be those arising from the existing vibro replacement columns and that the use of a digger to expose the stone column tops would avoid the need for this allowance. Mr Palles-Clark has allowed the cost of a digger for 8 days at a cost of £1,640 to cover Mr Langdon’s proposal. I consider that given the previous work on this site Mr Langdon is correct that the major cause of obstruction will be the existing stone columns and that the risk of obstructions can be minimised by the use of a digger as proposed. However, there is also the probability that there will be other obstructions. In the circumstances I consider that the allowance made in Dr Stroud’s design should be reduced so that 7.5 hours is allowed for at a cost of, say, £2,590 in addition to the digger at £1,640, making a total of £4,230.

Risk of reboring (£4,100): Dr Stroud’s design has allowed £6,500 to re-drill 10 bores following collapse and £3,000 to back fill and re-drill 10 piles in new locations. Mr Langdon considers that this allowance of about 10% is excessive and should be reduced to 5%. He says this would cover piles which are close to existing columns where those columns are at an acute angle which might cause problems. On this basis £3,900 and £1,500 would be allowed. I consider that Dr Stroud’s allowance of 10% is reasonable as an allowance for the need to re-drill piles in the circumstances of the site.

Main Contractor’s Discount: As a result of the above adjustment this needs to be reduced by, say, £500 and £2,285 is therefore allowed.

Dr Stroud’s design provides for reinforcement of 225kg/m² to the 250 mm slab in the sales area and 215 kg/m² to the 300 mm warehouse slab. Mr Tutt considers that the weight of reinforcement is excessive and notes that the basis for the allowance has apparently been to rationalise the design and simplify fixing. His view is that rationalisation and simplification could be achieved with about half the weight of reinforcement proposed by Dr Stroud. Mr Palles-Clark has calculated a revised cost on the basis of Mr Tutt’s view so that the figure originally allowed of £118,729 would be reduced to £85,928.

Whilst I accept that some degree of rationalisation and simplification reduces cost I do not consider that this justifies the basis upon which reinforcement has been allowed in the slab design. In my judgment Mr Tutt’s estimate on which Mr Palles-Clark’s figures are based provides a more realistic approach to costing this item.

Mr Barry has assessed the fittings and furnishings at £50,530 and Mr Palles-Clark has assessed them at £5,500. The basis of Mr Barry’s costing is set out in his report at paragraph 3.7.3. He and Mr Palles-Clark have agreed that the figure of £50,530 is their best estimate of the cost for stripping out the existing fittings and equipment, storing them and then replacing them in the store at the end of the reconstruction work. Mr Palles-Clark considers that these fittings and equipment would have been removed in any event as part of any regular refurbishment of the store and therefore the cost would be incurred irrespective of whether the remedial scheme was carried out. So far as the cold rooms are concerned, Mr Palles-Clark considers those are effectively part of the building fabric and he has allowed an agreed sum of £5,500 for removing and reinstating the cold rooms. I consider that on the basis of Mr Pearce’s evidence the likelihood is that the fixtures and fittings would be removed and disposed of. In those circumstances the figure to be included should be the allowance agreed by the experts of £5,500.

There are two aspects of drainage which are in dispute. First, there is a claim for £15,822 in respect of external drainage and secondly there is a claim for £1,500 for internal drainage. In relation to the external drainage I am not persuaded that there is any defect relating to the vibro replacement which has given rise to the need for replacement of that external drainage. I accept what Mr Langdon says at paragraph 2.2 of his report and note that Dr Stroud effectively accepts that this is a change which has not been caused by problems with the vibro replacement columns. In those circumstances I do not consider that the cost of the particular external drain run is recoverable.

In relation to the internal drainage Mr Langdon says that the particular run of drainage is additional to that shown on the original design and Dr Stroud agrees. In those circumstances the sum of £1,500 is not recoverable.

There are two elements in dispute. First there is a difference of £13,077 which depends upon whether architects’ fees should be allowed for the cost of the temporary store furnishings and fittings because of the way in which this element of the work would be procured. CWS say that the architects’ fees should apply to the total cost of the work. I consider that the furnishings and fittings are likely to be arranged directly by a specialist within CWS and not by external architects. In those circumstances, I do not consider that architects’ fees should be assessed on the figure for furnishings and fittings.

The second element relates to a difference of £29,700 in respect of the rate and time for the structural engineer. A full time resident engineer has been allowed for at a cost of £750 per day. Mr Tutt considers that only 50% of the time of the resident engineer is needed and Mr Palles-Clark has assessed the costs at £600 per day. Given the problems which have occurred on this site I consider it is important that there is proper supervision at the appropriate senior level and in those circumstances I make no deduction for the cost of the resident structural engineer.

There is also a small further sum which seems to relate to a reduced period which should not be deducted. In the circumstances I propose to allow Mr Barry’s estimate of £227,212 but deduct £13,077 to give £214,135.

There is an issue between the parties based upon a one week difference in the period for the work. JAA says that, based on the reduced scope of piling given in the supplemental opinions of Mr Tutt and Mr Langdon, there would be a one week reduction in the time needed. Given the findings I have set out above I do not consider that any reduction should be made.

The claim for the cost of the temporary store gives rise to three issues between the parties. First there is a difference because CWS has included the cost of an option in the roof to the temporary store. This relates to the additional cost of £21,624 relating to an option for an integrated heating and air-conditioning system for the temporary store during the summer months. I am not persuaded that this additional facility has been proved to be necessary. Much will depend on the programming the works and what other provisions there will be for heating and cooling at the relevant time of the year.

Secondly, there is a difference of £923 because JAA has reduced the period of use of the temporary store by one week because of their contention that the period for the works would be reduced. This issue does not give rise to a deduction given my findings above.

Thirdly, CWS have included an item for fittings and furnishings for the temporary store. Mr Barry has allowed £119,596 for this item and Mr Palles-Clark has allowed £36,703, a difference of £104,833. Mr Barry produced evidence to support the substantial part of his figure just before he gave evidence. The total sum amounted then to £118,797.50 relating to the hire of chillers and freezers, the cost of display shelving and ancillary furnishings and fittings. Mr Palles-Clark made an allowance for the installation, removal and any necessary repair of equipment on the basis that other cost would not be recoverable. It is not clear what CWS’s intentions are in respect of fitting out the temporary store and whilst they may decide to hire equipment they may also use some new equipment which would then be transferred to the refurbished store. There should clearly be some allowance and I consider that an appropriate allowance would be to allow the figure of £36,703 assessed by Mr Palles-Clark together with an allowance of £19,745, being 50% of the figure of £39,490 which Mr Barry allowed for additional and ancillary furnishings and fittings, giving a total of £56,448.

Mr Barry has applied a 5% contingency to all of the costs whereas Mr Palles-Clark says that the piling works have their own contingency and a further 5% should not be added to that element. I consider that this is correct. There are clearly elements of the piling cost which deal with contingency and I do not consider that any further additional contingency is needed. In those circumstances the 5% contingency should not apply to the piling costs. Having made a reduction to the piling costs I reduce the overall contingency by 5% of the piling costs.

The sum which should be allowed should be as follows:

Accordingly, the cost of providing the mini-piling scheme would be £1,715,263. From this should be deducted the cost of the original piling scheme of £35,896. In addition this sum should be brought up to date by the addition of “interest” of £33,000, as Ms Pincott’s assessment. The overall recoverable cost of remedial work would therefore have been £1,646,367 (£1,715,263 less £68,896).

With the mini piling solution it is common ground that the store will have to be closed for a period of about 6 months. In mitigation of their loss, CWS say that they will seek to continue trading in a more limited capacity from a temporary store erected in its car park. The size of the temporary store will be some 4,000 sq feet compared to the existing store which is 8,750 sq feet. CWS say that the lost trading in the period of closure without the temporary store would be £3,050,000.

The issue is the extent to which that loss can be mitigated by the temporary store in the car park. CWS claim the sum of £326,000 as damages arising from the store closure, mitigated by the use of the temporary store. JAA contend that the figure should be £118,000.

JAA make a number of criticisms about the way in which the claim was formulated and presented and I shall deal with those when I consider the relevant issues. The parties agree that over the period of store closure the contribution of the main store would have been £323,000. CWS rely on the evidence of Mr Cuerden who has concluded that the temporary store would, overall, make a loss of £4,000. After taking account of a rounding error of £1000, this gives the figure claimed of £326,000. JAA rely on the evidence of Ms Pincott who has concluded that the temporary store would have made an overall contribution of £216,000. After allowing for an additional cost of £12,000 for advertising and a rounding error of £1000, the result is the figure of £118,000 (£323,000 + £12,000 - £1,000 - £216,000).

The main issues arise therefore on the amount which would be earned from the temporary store and the costs of the temporary store. In relation to earnings Mr Cuerden and Ms Pincott differ by £67,000 in respect of “retros” or “retro” income so that Mr Cuerden assesses earnings at £659,000 and Ms Pincott at £726,000. In relation to costs, Mr Cuerden and Ms Pincott differ by £153,000 made up of £92,000 on payroll costs, £45,000 on fixed/controllable costs, £2,000 on other income/loyalty cards and £18,000 on distribution costs. Mr Cuerden therefore assesses costs at £663,000 and Ms Pincott at £510,000.

I now turn to deal with the issues arising from those differences in the quantification of the earnings and costs of the temporary store.

This is a reference to money received from suppliers for the stocking and selling of their products during, for instance, various promotional periods. Those suppliers pay money, not to an individual store, but centrally and it is then allocated to stores by allowing a percentage of total sales.

Mr Cuerden contends that retros fall broadly in line with the decrease in turnover, Ms Pincott contends that they are unlikely to change significantly. JAA submits that there is no evidence to suggest that the Claimant would lose retros income during any period of temporary trading. They refer to the evidence from Mr Shenton in his exhibit RS1 where he explained how the “retro” income was allocated and stated that it was not cost effective to allocate on a store basis and for the purposes of the statutory accounts, a global number was adequate.

Mr Shenton accepted in evidence on Day 4 that he was not aware of what he described as the “complexities” of how deals with the suppliers were structured. Mr Cuerden accepted on Day 16 that he had not investigated the matter but he said that the logic was that retro income varies with sales but the proportion of retro income that varies with sales is difficult to identify.

Mr Cuerden has allowed a figure of £102,000 for retros reducing the figure broadly in line with turnover whilst Ms Pincott has allowed £169,000 making no reduction.

In my judgment whilst the fact that CWS allocate the retro income on turnover is a matter of accounting convenience rather than assessed allocation of retro income, there is logic in retro income decreasing with turnover. But the effect will depend on which products attract retro income and it is likely that the temporary store will seek to stock promotional goods. Some reduction is therefore necessary from the actual figure but not a figure directly proportional to turnover. I assess that the figure is likely to be closer to £169,000 and allow £150,000.

Mr. Cuerden makes an allowance to reflect the possibility of some limited savings in payroll costs and reduces the payroll costs by 10% or £29,000 to £262,000. Ms Pincott makes a reduction in payroll costs directly proportionate to the reduction in net sales, giving a figure of £122,000 on the £291,000 payroll costs.

CWS submit that Mr Cuerden’s approach is to be preferred and that on analysis there is no sound basis for Ms Pincott’s approach.

JAA point to CWS’s opening position that they would be unable to cut payroll costs at all during any period of temporary store trading. They refer to the evidence given by Mr Shenton and say that it showed that the matter has not been properly considered. They reject any suggestion that their case is that there would be redundancies. Rather, they say that it is reasonable to expect CWS to be able to eliminate overtime costs entirely during the period of temporary store trading when it will be operating with more staff than it needs and say that the additional commentary in Mr Cuerden’s Payroll Note provides no support for the contention that overtime cannot be eliminated. JAA also say that Mr Cuerden makes no allowance for natural wastage or for savings in National Insurance and pension contributions which will be achieved by cutting overtime costs.

I consider that Miss Pincott’s reduction in overtime costs and associated NI and pension contributions of £34,000 provides a solid basis for assessment. In addition there will be natural wastage and her assessment of £13,500 for this appears to be sensible. However, whilst I accept that there might be some further ways in which payroll costs might be reduced such as pay freezes and reduced hourly working, as Ms Pincott suggests, I am not persuaded that the payroll costs could be brought down to £176,000 from some £291,000. I consider that allowing £47,500 and about another 50% of that figure would reduce the figure to £220,000 which I consider to be reasonable.

CWS adopts the approach taken by Mr. Cuerden who considers actual costs incurred in the existing store. JAA relies on the approach of Ms. Pincott who analysed CWS’s evidence from Mr Shenton who looked at costs which might be avoided in relation to the main store and Mr Fielding’s evidence of costs for the temporary store based on a comparison with a group of stores of about 4000 square feet.

As the experts have adopted different approaches, a direct comparison is not possible. In relation to Ms Pincott’s approach, she looked first at Mr Shenton’s evidence at RS2 where he identifies that there are costs of £484,727 of which he identifies £154,129 as “not avoidable” costs and £330,597 as “avoidable” costs. The “not avoidable” costs are in seven categories, of which three have been considered by Ms Pincott and one developed in Mr Shenton’s evidence:

This would give a revised total of about £115,000 which, overall, is about equivalent to Ms Pincott’s figure. I therefore adopt her figure of some £62,000 which she has calculated as set out in footnote 11 on page 11 of Appendix 9.1 to her report.

In relation to the temporary store Mr Fielding has considered the overall fixed and controllable costs of comparator 4000sq ft stores so that it is not possible to see from his analysis exactly what sum he has allowed for particular heads of costs. Ms Pincott has evaluated those costs and made adjustments set out in Appendix 9.1 and Appendix 9.1b to her report. She has approached Mr Fielding’s costs on what she refers to as Basis 1 and Basis 2.

On Basis 1 she has made reductions of £2,289 to eliminate discrepancies between Mr Fielding’s figures and the actual store data and on Basis 2 has removed £11,804 from Mr Fielding’s costs relating to Planned Maintenance, Service Charges and Rates as those costs as unlikely to be incurred in the temporary store. Her conclusion is that the figure originally put forward by CWS of £66,000 for the fixed/controllable costs of the temporary store should be reduced to about £54,000.

I have considered that analysis and am satisfied that, on Ms Pincott’s methodology, which appears correct, the total figure combined from the unavoidable costs of the main store and the additional fixed costs of the temporary store would be as she has calculated, some £117,000. Ms Pincott thereby comes up with a total figure for fixed and controllable costs of £177,000, inclusive of ‘internal rent’ of about £60,000 for the purposes of comparison with Mr Cuerden’s figures.

This compares to Mr Cuerden’s valuation of £222,000. In relation to Mr Cuerden’s analysis, he has considered the heads from accounts as set out in Appendix 9 to his report and Appendix 1c to the Joint Statement dated 26 March 2009. JAA did not deal with his method in cross-examination but have made certain comments on it in their closing submissions. I bear in mind that Mr Cuerden has not therefore responded to those comments. The relevant items are as follows:

On that basis, Mr Cuerden’s figure would reduce by £19,500 from £222,000 to £202,500.

My overall conclusion has to take into account the fact that the two approaches differ. The approach adopted by Ms Pincott based on the way in which CWS originally formulated their case is £177,000 and Mr Cuerden’s reformulation is £202,500. In my view a proper assessment is somewhere between the two and I consider that a figure of £185,000, closer to that of Ms Pincott should be adopted.

There is only a difference of £2000 between the experts on this issue and I adopt a figure of £5000 for this.

These are delivery and logistics costs incurred by CWS centrally and allocated back to stores at a rate per case delivered. CWS operates its own distribution network and allocates the centrally incurred distribution costs to stores. CWS rely on Mr. Cuerden’s view that the costs are unlikely to fluctuate in line with reduced sales. JAA rely on Ms Pincott’s view that the costs have variable elements for which she applies a 10% reduction in those costs.

JAA point out that, despite requests for documents, there is no detailed evidence, information or disclosure as to how these costs are incurred and allocated and how they might change in real terms for CWS if turnover in one store increases or decreases.

In his evidence on Day 4 Mr Shenton agreed that delivery costs would change if increased turnover resulted in an increased number of deliveries to the store but this needed analysis of delivery schedules. Mr Fielding calculated a reduction in distribution costs for the temporary store based upon his analysis of the level of distribution costs incurred in his selected comparator stores of equivalent size.

In the absence of any other information it seems to be likely that if the store is reduced in size the delivery costs based on a rate per case will reduce and logically there will be variable distribution costs. If CWS had wished to support the fixed nature of the costs they could have done so. In the circumstances, I consider that it is reasonable to deduct a proportion of the distribution costs to reflect the decreased turnover forecast for the temporary store and I propose to adopt Ms Pincott’s reduction of 10%.

I have therefore come to the conclusion that the Temporary Store Loss is £ calculated as follows:

CWS rely on the fact that, had it not been for the defects in the store, they would have undertaken a refit of the store in 2003 and that this refit would have led to increased turnover and they claim the lost contribution which would have accrued from increased profits from a refit in 2003.

JAA say that this was a late claim, put together as an afterthought and developed from a general claim to underperformance in the years 1997 to date. They say that the store at Sandwich has not been a poorly performing store and that the claim rests on a contention that CWS’s stores are refitted on a six-yearly cycle; that the store at Sandwich would have been the subject of a decision to refit in 2003 had it not been for the settlement problem and that a refit at the store would have boosted profits. JAA challenge each of those contentions and contend that CWS failed to mitigate any loss because they acted unreasonably in not refitting the store.

CWS say that stores, particularly supermarkets, habitually update their premises with re-branding or “make-overs” to make them more attractive to their customers. CWS say that this is done either to increase sales and profitability or to prevent or abate a decline in trade. They say that whilst the store at Sandwich was a profitable store that does not mean that it would not have been the subject of a refit in accordance with the general retailing strategy of CWS. They submit that the question to consider is whether on the balance of probabilities the store would have had had a refit in 2003.

CWS rely on the evidence of Mr. Pearce and Mr. Fielding that the general cycle of refits within the CWS’s stores was five to six years. They accept that a refit may occur more often or less frequently but say that the likelihood that the store at Sandwich would have been subject to a refit in 2003, but for the defects in the floor, is high. They say that in 2003, the store was in its seventh year of trading since it opened in February 1997 and that as it was a successful store in a good location, there would be every reason to keep it in good order and up to date. They refer to the evidence in Mr Pearce’s exhibit DWP 3 that the store was put onto a list for consideration for a refit in 2003. They say that it was a good calibre store in the “D&S Category”, it had a reasonable but not special turnover per square foot at that time and it was forecast that sales could be increased by 7.3% on the basis of a refit cost estimate of £110,085. CWS therefore say that there is evidence that Sandwich was a good candidate for a refit in 2003 and it was under active consideration. They also say that, in the event, it was not refitted in 2003 and has not been refitted subsequently.

CWS submit that the reason why it was not refitted in 2003, on the balance of the available evidence, was the presence of the defects in the floor and the inability of the Co-op to persuade those responsible to accept liability for their mistakes and fund the remedial works. They say that from 2004, there is evidence from Mr. Pearce that he was aware of the problems with the floor at Sandwich and until they were sorted out, no refit would take place but he anticipated that this would be soon, “within 18 months”. CWS say that by 2003 the floor slab was suffering from serious differential settlement and required serious remedial action.

CWS also refer to evidence which shows that in 2004 retail consultants LEK Consulting Limited were confirming the Co-op’s refit strategy for stores. They also refer to further evidence that in the last two to three years, the Co-op has refitted or rebranded a major proportion of its stores and say that this would support a more frequent refitting strategy.

JAA say that the claim has not been established on the factual evidence. In opening, they posed the following questions:

JAA say that Mr Pearce was only involved with the store from November 2004 and that Mr Hassard, who provided general information as to the Claimant’s refit policy was Refit Manager for the South West region in 2003 and was not involved with the store at Sandwich in 2003. They were therefore not involved in the operation of the store in 2003 or any decision not to refit it and could not say who took the decision, when or why, nor is there any documentation evidencing such a decision. JAA say that, in fact, the evidence suggests that in 2003 CWS was concentrating on re-branding the Alldays stores that had been taken over, rather than existing CWS stores like Sandwich. DWP2: Q(3)/1036 and Q(3)/978, Mr Fielding’s ‘Refit Explanation’ document.

With no evidence of any planned refit in 2003, JAA say that it is impossible to say what the scope or cost of any such refit would have been. They point out that Mr Pearce’s original Witness Statement at paragraph 46 referred to a refit costing £75 per sq ft to be carried out over a 6 week period involving reconfiguration and ‘without doubt’ considerable realignment of refrigeration cabinets. Mr Pearce’s second statement at paragraph 7 explained that the original statement was wrong and that, in fact, the refit at Sandwich would only have cost £20.41 per sq ft and would not have involved reconfiguration of refrigeration. Mr Pearce’s oral evidence was that there would be a “relatively simple re-badge” whilst Mr Hassard spoke of “more of a rebrand of a store as opposed to a refit” and “a minimal spend…a rebrand”.

The £75 per sq ft figure was a “ball-park figure” originating with Mr Hassard whilst the £20.41 per sq ft figure is a calculated average of the refit costs for Mr Fielding’s refit group stores indicated in Mr Pearce’s exhibit DWP2.

On the evidence, JAA say that CWS does not operate any fixed refit cycle and that the refits are ‘infinitely variable both as to extent, cost and frequency’.

JAA say that Mr Fielding and the accountancy experts have been asked to quantify something that cannot be quantified without the relevant factual information. Hence they say that Mr Fielding’s attempt to model the effect of an ‘average’ CWS refit provides no assistance in quantifying a specific head of loss in this case.

The evidence of CWS’s intention in relation to refitting of the store at Sandwich derives essentially from Mr Pearce’s exhibit DWP3 which is a “Summary-Trading Potential-2003 Refit Programme”. It includes the store at Sandwich and shows that there was a forecast of a 7.3% increase in turnover after the refit. From this it is evident that, at some stage, a refit at Sandwich was under consideration. I have no doubt that CWS had a general policy of refitting stores and that they decided when to refit stores on the basis of a number of considerations. I have seen the presentation produced by LEK Consulting LLP dated 16 November 2004 which at pages 13 to 16 sets out a proposed refurbishment strategy which seems to suggest that for a Market Town store with no competition, which would match the description of the store at Sandwich, refurbishment needs to be considered if competitive entry occurs and there is a possible refit cycle of 6 years. It is not clear to what extent this strategy was followed.

Equally, it is not clear what factors led to any decision not to refit the store in 2003. Competition is one aspect and LEK’s recommendation was to focus on the stores which faced competition. Mr Hassard said that it differed depending on store size and store trading or as Mr Hassard said “store specifics”. It is also clear that one of the purposes of a refit for older stores is to carry out refurbishment which appears to be the reason for the difference between the £75 per sq ft and £20.41 per sq ft put forward later. There is also the document which shows that Sandwich was not refitted in 2003 which says that “Due to Alldays/Balfour acquisitions less Co-op Market Town stores were refitted than would normally have been expected in standard year.”

Mr Pearce says and I accept that from 2004 he advised that a refit should not take place until the defects in the ground floor slab were remedied. However, apart from the one document which refers to the store at Sandwich being included in the 2003 refit programme, there is no evidence that a refit was proposed, what the scope of the proposed refit was or the reason why it was not carried out in 2003. Whilst Mr Pearce may have advised against a refit, there is no evidence that CWS wished to carry out a refit in 2004 or any particular year since.

This seems an inadequate basis for CWS to found a claim which Mr Cuerden assesses at over £1m.

There is also the question of what refurbishment would have been carried out. There is no detail of this and as described by Mr Pearce and Mr Hassard in their evidence now seems to be much less of a refit and more some minor changes to signing and branding which clearly, as is now accepted, would not cost £75 per sq ft. Whilst £20.41 per sq ft is an average, it is made up of figures ranging from £8.73 to £36.42. Without some proper documentation of what refit was proposed and what it would have cost, it is difficult to come to a conclusion as to quantum. The figure which is used by CWS is £197,000 which is 9660 sq ft at £20.41.

Without the detail of the scope of the proposed refit, I consider that it is difficult to say what the effect of the refit would have been on increased turnover. This is demonstrated by the fact that Mr Fielding who provided the calculations used by Mr Cuerden in his report, has again had to make a series of assumptions. He has had to choose a group of comparable stores. But, as JAA point out there are difficulties with the comparisons and there is a range of figures for different stores which makes it difficult to use average figures from a group where comparisons are not easy to make. In particular, there is no evidence that the stores chosen as refit stores comparable to Sandwich, are in fact comparable with Sandwich because market town stores of similar size do not take into account such things as age of store, competition and regional differences. There is no evidence that the stores received comparable refits in scale, type or cost. For instance some poorly performing stores or ones which had competition are likely to have adopted different refits. The assumption that there would be a two year sales uplift following a refit is not borne out in all stores and the basis for the future projection from the two years is not established. All of these factors and others relied on by JAA in their criticism give me cause for concern at the robustness of the claim and the calculation of loss.

JAA also submit, with some force, that the settlement of the ground floor slab would not have prevented the carrying out of a cosmetic ‘refit’ or ‘re-brand’/‘re-badge’, particularly if the scope was as limited as now appears and nor would the settlement have prevented the carrying out of works of general maintenance and repair to maintain the store’s appearance. JAA say that Mr Pearce accepted that he had not carried out any analysis of the financial consequences of his own advice that a refit should not take place and could not say that the Food Retail Department had either. Whilst I can see that Mr Pearce was put into a position where the timing of the remedial works would make decisions difficult, if CWS had been losing such large amounts of profit I would have expected CWS to review the position. In the circumstances I do not think that there was a failure to mitigate but I would have expected to see far more analysis and consideration of the position if such large sums were being lost for this reason. I am supported in this view by the way in which this late claim developed.

Whilst some of these difficulties individually and in themselves might have been looked upon as not being sufficient to prevent CWS from making a recovery, I consider that taken together the evidence put forward by the CWS in terms of the factual basis for the claim and the sums claimed means that CWS have failed to prove that they have lost the sums claimed and the court is not in a position to say what, if any, contribution has been lost at the store at Sandwich by any particular refit in 2003 where the refit itself and the reason for it not being carried out in 2003 have not been properly established.

For the reasons set out above JAA did not fail to exercise reasonable skill care and diligence in the performance of its duties under the Appointment with Cliveden so as to be in breach of the Warranty to CRS in relation to proposing vibro replacement.

In those circumstances the claim by CWS against JAA fails.