It is a little over 5 years since the tragic fire at Grenfell Tower saw a fire spread across the external envelope of the building due to deficiencies in its external wall system. The judgment handed down in Martlet Homes Limited v Mulalley and Co Limited [2022] EWHC 1813 (TCC) on 14 July 2022 is nonetheless the court's first substantive decision concerning fire safety defects in external wall systems since Grenfell.
Post-Grenfell investigations
In common with other organisations, Martlet Homes Limited ('Martlet') – a social housing provider and subsidiary of Hyde Group – carried out investigations into the external walls of five of its high-rise residential towers in Southern England, which were designed and installed by Mulalley and Co. ('Mulalley') pursuant to an amended JCT standard form building contract.
All five tower blocks were over 18m in height; only four were the subject of these proceedings.
Contractual obligation to comply with applicable Building Regulations
Contractually, Mulalley had the like design liability of an architect and was required to ensure that its design and construction works complied with applicable Building Regulations and related materials, including Codes of Practice, British Standards, manufacturer's and supplier's recommendations and BBA Certificates.
The specified system
The external wall system specified in this case was different to Grenfell in many respects. Here, it consisted of an inner layer of combustible expanded polystyrene insulation boards fixed to the existing external wall with adhesive and supplementary mechanical stainless steel fixings, underneath two coats of combustible render, which had a reinforcing glass fibre mesh layer sandwiched between them. Horizontal mineral wool fire barriers were specified for installation at each floor level above the third storey.
The dispute
Martlet contended that the design and installation of the towers' external wall system did not comply with applicable Building Regulations and thereby breached their contract. After obtaining expert advice (and inviting Mulalley to inspect and complete remedial works itself to no avail), Martlet instructed third party contractor, 'Axis', to replace the external wall systems with a non-combustible system.
Before court proceedings were commenced, an adjudication determined the parties' dispute on a temporarily binding basis in Mulalley's favour. The court was not bound by (and did not follow) that decision when the parties' dispute was 'finally' determined by the court in these proceedings.
Primarily, Martlet sought to recover circa £8m for the cost of replacing the external wall system and implementing a 'waking watch' service in which fire marshals patrolled its tower blocks until the combustible cladding was removed, and later during completion of remedial works.
What did the court consider?
The Court considered technical evidence adduced by both parties from experts in the fields of architecture, fire safety and quantity surveying, as well as the provisions of the entire regulatory framework relevant to the works, including the applicable:
- Building Regulations, being Building Regulations 2000 (in particular, regulations 4 and 7).
- Approved Document B, being ADB 2002.
- The BBA Certificate relating to the specified system, being the 1995 BBA certificate.
- BRE 135 performance criteria, being BRE 135 1998 and, more pertinently, BRE 135 2003.
The judgment
The court decided that the system specified and installed was not compliant with applicable Building Regulations because:
- the installed fire barriers left voids for fire to pass through,
- the installed insulation boards were not consistently fixed with adhesive,
- the installed stainless steel fixings were too short and created a medium for fire spread,
- no BS 8414-1 test was conducted on the specified system, which it needed to demonstrate compliance.
The court accepted that it might be possible to show that a different system specified for use in a high-rise building did not need a BS 8414-1 test but, here, the court decided that such a test was necessary because:
- the relevant BBA certificate was not enough to demonstrate compliance,
- the applicable Approved Document gave no guidance regarding the type of system Mulalley specified and, therefore, could not be followed as a means for demonstrating compliance,
- Mulalley could not prove that the specified system 'would have' passed BS 8414-1 testing, or that it did not create a medium for further fire risk when compared to other tested systems which bore similarities.
The court's award
The claim was decided almost exclusively in Martlet's favour, and Mulalley was ordered to pay Martlet the cost of:
- replacing the external wall system with a non-combustible system (save for some minimal deductions for variations instructed and loss/expense awarded to Axis without rationale).
- the waking watch (save for a deduction for the cost of one fire marshal) as such costs were a natural or reasonably contemplated consequence of Mulalley's breaches of contract.
If Martlet had only succeeded in demonstrating that the system installed did not comply with Building Regulations (but the system designed did), the court confirmed that it would only have awarded the cost of repairing the installed works that were non-compliant because such a scheme was considered a viable alternative by experts before Martlet completed remedial works. It would still have allowed Martlet to recover the cost of a waking watch, albeit for a reduced timeframe (as remedial works would have taken less time).
Comment
It is clear from the nuances in this case why the court has emphasised that it turned on its own facts, and – at the time of writing – it is still too early to say whether it will be appealed. This should be borne in mind when relying upon any guidance provided by the court in this judgment.
This judgment will, however, be met with widespread interest from any party currently involved in a dispute relating to fire safety issues connected with the external walls of high-rise buildings, as the positions adopted by the parties in this case broadly reflect the positions that are typically adopted in such disputes. While no two disputes are ever truly identical, the court has now provided welcome guidance as to how it might view such arguments in comparable fire safety disputes, the pertinent points of which are summarised
