Richard Roberts Holdings Ltd & Anor v Douglas Smith Stimson Partnership & Ors (No. 2)

Citation: 46 B.L.R. 50; 22 Con. L.R. 69

Nature of case:

Richard Roberts (“RR”) were the owner of a dyeworks, which was let to a subsidiary company.  Douglas Smith Stimson (“DSS”) were architects engaged in connection with alterations to the dyeworks, including the design of an effluent tank.  DSS designed a tank, but RR considered the design to be too expensive, and instructed DSS to consider cheaper alternatives.  DSS obtained quotations from specialists on the lining of the tank, including Erosion and Corrosion Control (“ECC”), whose proposal was substantially cheaper than their competitors.  DSS sought comment from ECC on the life expectancy of their proposal, but received no response.  DSS approved ECC’s scheme regardless, and RR employed ECC to provide the lining.  The tank lining failed shortly after installation.

RR claimed against DSS for breach of contract and negligence in recommending and allowing the use of ECC’s design, and in issuing a final certificate.  RR also sought to recover in respect of their subsidiary’s loss of profit. DSS denied liability in respect of the tank, and alleged contributory fault on the part of RR, as well as claiming a contribution from ECC. DSS also sought credit for betterment as a result of the remedial works.

HHJ Newey QC held that DSS’s role as architect had included the design of the tank, a role they could have limited expressly in writing had they wished to do so; they could not realistically claim to have been bystanders in connection with the choice of lining. Further, DSS had failed to adequately investigate ECC’s scheme. ECC were in breach of contract and were negligent, and were equally to blame for the damage. RR was not guilty of contributory negligence, having been entitled to rely on the judgement of DSS. The remedial scheme had granted no betterment, and so no credit would be given. Finally, as RR and its subsidiary were 2 separate companies, the former could not recover in respect of the latter’s loss of profit.

Counsel

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