Housing developer Barratt Group has had its legal attempt to reclaim £2.2M of remedial costs on a South Wales housing development from Intégral Géotechnique dismissed after failing to prove the latter owed it a duty of care.
The case was heard in the Technology and Construction Court by Judge Stephen Davies and was triggered when Barrett incurred unexpected remedial costs from removing asbestos contamination from a development at Ogmore by Sea.
Barratt bought the site in July 2013 for £4.5M from Bridgend Borough County Council and placed reliance on a ground investigation undertaken by Intégral Géotechnique in 2012 for the council.
Bridgend told bidders that the ground investigation was intended to be relied upon by purchasers and provide warranties, however, Intégral Géotechnique stipulated that the report was for Bridgend only and should not be passed on without consent. However, Barratt failed to novate the report – and its liabilities – when it bought the site but used information within the report.
The ground investigation involved a desk study and trial pitting which found no evidence of contamination but did note that the age of buildings – some of which had been demolished and built over – could contain asbestos. Intégral Géotechnique recommended further investigation before redevelopment once remaining buildings had been demolished.
Davies said that the evidence showed that Barratt was aware before the purchase that asbestos may be within the soil from previous demolition and should have commissioned its own detailed ground investigation. The judge concluded that, on this basis, Barratt did not rely on Intégral Géotechnique’s report.
Following purchase, Barratt’s contractor found buried asbestos and initial estimates of the area affected and costs rose quickly from 3,000m2 and £500,000 to 8,500m2 and £860,000. Barratt claimed that the overall cost of the work and delays resulted in £2.2M of extra costs.
Barratt claimed that Intégral Géotechnique failed to give proper advice of the risk that materials containing asbestos might be present at the site.
However, Davies said that the case of negligence by Intégral Géotechnique depended on whether the geotechnical specialist owed a duty of care to Barratt. The judge concluded that there was no duty of care as Intégral Géotechnique’s contract was with Bridgend and the warranty arising from the report had not been reassigned.
Davies said that despite Intégral Géotechnique not clearly identifying the risk from previous demolition, it was fanciful to suggest that the council would undertake demolition before sale to allow further ground investigation as suggested in the ground investigation report.
During reporting of his findings, Davies called for “knowledgeable and experienced” clients with “in-house technical department” to be sure about who owns such ground investigation reports and the liabilities within. He said that even if Barratt had been successful in proving Intégral Géotechnique’s negligence, he would have reduced the damages payable to the developer by 30% as it did not query the position with the Intégral Géotechnique report before exchanging contracts with the council.