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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Pride Valley Foods Ltd v Hall & Partners & Anor [2002] EWCA Civ 805 (28 May 2002) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2002/805.html Cite as: [2002] EWCA Civ 805

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IN THE SUPREME COURT OF JUDICATURE
CIVIL DIVISION
ON APPEAL FROM THE HIGH COURT
QUEEN'S BENCH DIVISION
(TECHNOLOGY AND CONSTRUCTION COURT)
(His Honour Judge Toulmin CMG QC)

		The Royal Courts of Justice The Strand London Tuesday 28 May 2002

 


Tuesday 28 May 2002

1. LORD JUSTICE DYSON: This is an appeal from a decision of His Honour Judge John Toulmin QC on 17 May in relation to a hearing which is due to take place on 17 June. The problem arises in this way. Pride Valley Foods Ltd ("Pride") is the owner of a pitta and naan bread-making factory which was constructed for it in two phases. Hall & Partners ("Halls") were the project management consultants. In both phases, expanded polystyrene ("EPS") panels were applied to the walls and ceilings. These panels are highly combustible but they have good food safety properties. The oven flues were single-skinned and passed through the EPS panels without any thermal or other barrier between them. A fire occurred in the oven flue of phase 1. It spread and destroyed the whole factory.
2. Pride started proceedings against Halls, alleging, among other things, that the fire was caused by Halls' failure to advise on the particular fire hazard created by the EPS panels. The judge tried all issues other than quantum. At paragraph 160 of his judgment, he said:

"In answer to the question 'Should Halls have given Pride Valley advice particularly in relation to the use of EPS panels and compartmentation which if given would have prevented or limited the spread of fire? The answer is 'yes'."

3. The reference to compartmentation is to the introduction of a fire break between phases 1 and 2. The judge then proceeded to spell out the advice which should have been given in these terms:

"The advice that the Halls should have given in accordance with their knowlege at the time was

(a) EPS panels were combustible and offered no resistance to fire.

(b) If ignited there would be a rapid spread of fire.

(c) EPS panels would accelerate the risk of fire.

(d) There was a serious risk of fire if they were placed next to flues, hot plant or oven.

(e) The use of EPS panels would seriously compromise safety."

(f) The use of FRA would not reduce the risk significantly (although Mr Rezaei thought it would).

(g) It was essential on safety grounds that a fire break should be installed between phase 1) and phase 2)

(h) The use of EPS panels represented a much greater risk to safety to the building than available alternatives."

At paragraph 161 he made these important findings:

"This knowledge of the danger of installing EPS panels went beyond that which was generally accepted by Fire Officers and others in the industry for whom the use of such panels was acceptable. If Halls had such knowledge at the time they should have communicated the nature and extent of the risk of the use of EPS panels to Pride Valley. Equally if they had regarded compartmentation as essential they should have communicated this to Pride Valley. They should also have ensured that these panels were not placed next to flues, hot plant or ovens. If Halls had given Pride Valley this advice and it had been accepted I find that on the balance of probabilities the fire would not have occurred."

4. Mr David Friedman QC concedes that the last two sentences of this paragraph were based on paragraph 15 of the joint statement of the parties' fire experts, which was in these terms:

"The use of alternative non-combustible panels, such as mineral wool panels, for the construction of this building would have prevented fire spread through the building structure and it is likely that any heat/fire damage would have been localised to the immediate vicinity of the flue pipe. The presence of mineral wool panels, in the area of the flue pipe penetration of the ceiling, would have eliminated the risk of ignition of the ceiling by the hot flue pipe and the fire would not have developed unless there was a substantial quantity of loose combustible material stored in the vicinity of the flue pipe."

5. The judge then found (at paragraph 179) that Halls did not give any "appropriate" advice which would have prevented or limited the spread of fire. At paragraphs 180-186 he considered the question whether, if Halls had given the appropriate advice, Mr Rezaei, Managing Director of Pride, would have accepted it. For the reasons that he gave, the judge found that Mr Rezaei would not have accepted such advice. The judge's finding on this causation issue was one of the grounds of appeal. On 28 June 2001 we allowed the appeal on this ground and ordered a retrial of the causation issue. At paragraph 65 of my judgment, with which Brooke and Sedley LJJ agreed, I said this:

"It follows that I would allow the appeal on the causation issue and the contracting party issue. My decision in relation to the contracting party issue can be reflected in an appropriate declaration. The causation issue is more difficult. The point, though of crucial importance, falls within a relatively narrow compass. I do not, therefore, consider that there should be a retrial of the whole case. It seems to me that the case should be remitted to Judge Toulmin for him to reconsider the issues addressed by him at paragraphs 180-186 of his judgment in the light of this judgment. This will require further evidence and argument."

6. There is disagreement between the parties as to the scope of the causation issue that is to be retried. In order to understand the problem, it is necessary to quote from it my judgment. At paragraph 28, I noted that:

"But he made no findings as to what additional costs would have been involved if EPS panels had been replaced in the areas adjacent to the flues and if compartmentation had been introduced."

At paragraph 29 I referred to the evidence of Mr Forbes Bramble, an architect and Pride's project management expert. I recorded that:

"He said that the extra [cost] of incombustible mineral wool panels in the area round all the flues in both phases would have been £5000, and that the extra cost of introducing compartmentation between the two phases would have been about £17,000."

At paragraph 42, I said:

"It seems to me that any intelligent business man, faced with advice in the stark terms that the judge said at paragraph 160 Halls should have given, would either simply have accepted the advice or would at least have wanted to know what needed to be done to comply with it and how much it would cost."

At paragraph 43, this:

"In my opinion, in reaching his conclusions at paragraphs 180-186 of the judgment, the judge did not give sufficient consideration to what would have happened if the paragraph 160 advice had been given."

Then, at paragraph 44 onwards:

"In these circumstances, it seems to me that it is very unlikely that, if he had been advised that the serious compromise to safety created by having single line flues adjacent to EPS panels could be cured for £5000, and that the risk of fire spreading from one phase to another by reason of lack of compartmentation could be eliminated or at least substantially reduced at a cost of about £17,000, Mr Rezaei would have ignored that advice. If that was the judge's view, he should have expressly said so and given his reasons. He did neither. I am very conscious of the difficulties of trying complex technical cases. I do not subscribe to the view that it is incumbent on a judge, especially in litigation like this, to make findings of fact on every disputed sub-issue, no matter how peripheral it may be. But the judgment must deal with all the central issues, and the principal facts found must be supported by adequate reasoning. I regret to say that in my opinion the reasoning at paragraphs 180-186 is inadequate. In view of the fact that there was a relatively inexpensive way of carrying into effect the advice that Halls should have given, the judge should have said why he nevertheless thought that Mr Rezaei would have rejected the advice. The need to give such reasons was all the greater in the light of the fact that Halls had advised Mr Rezaei to have FRA, and he had accepted that advice. It would have been perverse for Mr Rezaei to agree to spend £1861 on fire protection measures which he knew would achieve only a minor improvement, but refuse to spend £5000 for measures which would eliminate a serious fire risk.

45. I suspect that the truth is that the judge overlooked the fact that the experts had agreed that there was a cheap solution to the problem. I find some support for this suspicion in paragraph 144 of the judgment. At this point in his judgment, the judge was considering the role of the experts in this case, and the extent to which their reports were admissible. At paragraph 144, he said:

'I agree with Mr Friedman's criticism of the first joint statement of experts. The only relevant issue on which these experts were qualified to give relevant evidence was issue three. "To what extent could that risk (ie the fire risk of the baking operations undertaken in the factory) have been reduced and at what cost by alternative means?" Even here the agreement is to some extent overtaken by the evidence of the cost of the alternative panels which Mr Thompson estimated would cost three times the price of the EPS panels.'

46. The reference to Mr Thompson's estimate that the cost of alternative panels would be three times the price of the EPS panels was to the cost of replacing all the EPS panels, and not just the few that were adjacent to the flues. It may well be that the judge assumed (almost certainly correctly) that Mr Rezaei would not be willing to pay for the extra cost of substituting all the panels, and failed to consider whether he would have been willing to pay for the far smaller cost of the other solutions.

47. Mr Friedman submits that we should infer that the judge did consider what he calls 'the mix and match' solution, and rejected it. As it turned out, the finding that Mr Rezaei would have rejected the paragraph 160 advice if it had been given was the most critical finding in the whole judgment. It was the rock on which the claim foundered. In these circumstances, it was essential for the judge to make explicit findings (supported by adequate reasons) on all the facts that were relevant to that finding. These had to include findings in relation to the 'mix and match' solution, and the compartmentation issue. The absence of findings cannot be saved by drawing inferences. If anything, paragraph 144 would lead me to infer that the judge had simply overlooked the point.

48. Mr Friedman also makes the point that the possibility of advising a mix and match solution was not explored with the Halls witnesses at the trial. That is so. But as Mr Davidson points out, it was common ground between the experts that such a solution was practicable. I am inclined to think that the point should have been put to the Halls witnesses. But the 'mix and match' issue had been pleaded (paragraph 31(g) of the re-reamended statement of claim). Mr Hall and Mr Thompson could have been asked questions about it by their own counsel. In any event, I do not see how the fact that the point was not put to them in evidence can be a good reason for upholding a finding which, for the reasons that I have given, is flawed. I shall consider what relief should be given when I have dealt with the remaining issues, to which I now turn."

7. I would emphasise four passages in those paragraphs. First, paragraph 44 and the sentence: "In view of the fact that there was a relatively inexpensive way of carrying into effect the advice that Halls should have given, the judge should have said why he nevertheless thought that Mr Rezaei would have rejected the advice." Secondly, the statement in paragraph 45 that "the experts had agreed that there was a cheap solution to the problem". Thirdly, the reference in paragraph 46 to the judge having failed to consider whether Mr Rezaei would have been willing to pay for the far smaller costs of "the other solutions". Fourthly, the passage in paragraph 48 where I say that it was common ground between the experts that the so-called "mix and match" solution was practicable. This last was reference to paragraph 15 of the joint statement. Mr Friedman lays emphasis on the passage at paragraph 47 where I said that it was essential for the judge to make findings in relation to the mix and match solution and the compartmentation issue, but in the light of the four passages to which I have drawn attention, paragraph 47 could not have been understood as meaning that I was criticising the judge for failing to make findings as to whether the mix and match solution would have been effective to prevent the spread of fire from the flues. Such a criticism would have been inconsistent with the four passages to which I have referred. My criticism in paragraph 47 was directed to the failure by the judge to make specific findings as to (a) the cost of the mix and match solution and (b) whether, if advised as to the likely cost of that solution, Mr Rezaei would or would not have followed that advice. I do not believe that paragraph 47 could reasonably be interpreted in any other way.
8. The opinion expressed in the experts' join statement was supported by the evidence of Mr Forbes Bramble. He said in his evidence (page 653 in tab 16):

"... the reasonable and practical advice in this case boiled down is, 'This should be compartmented. We must separate off phase one from phase two, so that in the event of fire we only lose part. We could compartment it more and look at the costs and consequences of that. There are measures we can take around the flue and over the ovens which are local to these and which are of modest cost which should eliminate the likelihood of fire occurring and spreading from that.'"

At page 749 he was asked this question:

"Question:The extra cost of providing some mineral wool panels in the area around the flues, can you assist his Lordship as to whether that would be a significant sum or not?

"Answer:It would not be a significant sum in view of the total number of panels involved.

-- Judge Toulmin: What do you mean by 'not a significant sum'?

"Answer:I have estimated that about three to four panels in the flue area would be appropriate, and the sum we are talking about is probably in the region of 5,000."

9. Mr Bramble's evidence was not challenged by Halls in cross-examination. It was also consistent with the evidence of Mr Warner, Halls' project management expert witness. In the light of this evidence, it is not surprising that the judge made the finding at paragraph 161 that, if advice had been given that the EPS panels should not be placed next to the flues, on the balance of probabilities the fire would not have occurred.
10. At the case management conference Halls made it clear that they wished to argue at the retrial that the mix and match solution might not have been suitable because although a proper mix and match solution would have prevented the spread of fire, it would have carried with it other risks. One example given is the danger of "burner flame migration". Halls wished to call an expert to give evidence about this and other risks inherent in a mix and match solution and to say:

"I believe that such considerations support my conclusion that the only course open to anybody designing this factory or giving appropriate advice would be to incorporate non-combustible panels to all walls and ceilings in the production areas of the factory."

11. The judge ruled it was in principle open to him to give permission for such expert evidence but he postponed making a final decision as to whether to give such permission. This ruling exposed his understanding of the scope of the issue that had been remitted, and it is this that is the subject of the present appeal.
12. In support of his understanding and in justification of his ruling, the judge said that his recollection was that the efficacy of the mix and match solution was not investigated in full at the first trial and that it was open to him to decide on a retrial whether the mix and match solution would in fact "have dealt with the problem; in other words, would have enabled the fire to be avoided": see page 5 of his judgment. He continued:

"I am clear that the issue is not something which I addressed specifically in my judgment on the first occasion. It is not something that was addressed by the fire experts in their agreed report. It was not something to which I was referring in paragraph 161 of my judgment, and it appears to me therefore, in those circumstances, that this is a matter which is still at large and about which evidence can indeed be led at the subsequent trial."

13. Mr Friedman supports the judge. Although he did not formulate the propositions precisely in this way, the effect of what he says is that the issue that has been remitted to the judge necessarily entails a consideration of the following questions: (a) what precisely did the mix and match solution involve; (b) how much would it have cost; (c) having regard to any shortcomings in the mix and match solution, should Halls nevertheless have recommended it; and (d) if Halls had recommended it, would Mr Rezaei have accept the recommendation in the light of the cost and any shortcomings that Halls should have identified? In my view questions (a) and (b) do fall to be answered by the judge when he considers the issue that has been remitted. In relation to (a), it may not be necessary to determine the precise extent of the mix and match solution, and therefore the precise cost of carrying it out, and it may be that approximations will suffice. That is not, however, for me to say. But in my view, question (c) plainly does not fall within the scope of the remitted issue. Whatever may have been in the judge's mind when he wrote paragraph 161, I am in no doubt that question (c) has already been answered. It has been answered by the judge in accordance with paragraph 15 of the joint statement. Halls should have advised the mix and match solution. It is common ground that the mix and match solution would have prevented the spread of the fire from the flue. The issue of whether there were other reasons for not recommending the mix and match solution has been disposed of by paragraph 161. As I see it, it is open to the parties to explore the precise nature and extent of the mix and match solution, not with a view to persuading the judge that it was unsuitable and/or should not have been recommended, but with a view to arriving at the cost, or range of costs, of the mix and match solution which Mr Rezaei would have want to have before deciding whether to accept the advice or not. As regards question (d), this will be in play but in the light of what I have just said should be answered in the light of Mr Rezaei's willingness or unwillingness to incur further expenditure, but without regard to any possible shortcomings in the mix and match solution.
14. In my judgment the scope of the remitted issue is very narrow. Current estimates of the likely length of the hearing range from six to eight days. The original trial took ten days. In view of what I have said, there should be no need for a lengthy hearing at all. So far as I can see, the issue should not take more than two days at most. For the reasons that I have given, however, I would allow this appeal.
15. LORD JUSTICE SIMON BROWN: I agree.
ORDER: Appeal allowed with costs summarily assessed at £6,000. (Order not part of approved judgment)