Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2016] CSOH 134

 

CA55/15

OPINION OF LORD DOHERTY

In the cause

ACOTEC UK LIMITED

Pursuer

against

MCLAUGHLIN & HARVEY LIMITED

Defender

Pursuer:  McNairney;  Morgan Legal

Defender:  Walker;  Brodies LLP

16 September 2016

Introduction
[1]        In 2013 the defender was carrying out construction work at Hatson Pier, near Kirwall for Orkney Islands Council (“OIC”).  The work involved construction of a pier extension.  In May 2013 OIC instructed the defender to carry out further work on the existing pier.  Metal wavescreens attached to vertical piles were to be removed and replaced by cast concrete wavescreens.  Access to submerged sections of the piles was needed so that flanges could be welded to them.  In order to carry out that work the defender decided to use a mobile cofferdam.  

[2]        The pursuer is a specialist contractor in marine works.  It designs and lets out on hire mobile cofferdams.  In early February 2013 the defender contacted the pursuer with a view to hiring a suitable cofferdam.  The pursuer provided a quotation on 5 February 2013.  On 6 March 2013 William Cunningham (the defender’s site manager) and Mr Young (a designer from Arch Henderson) went to Belgium and met with Wim Schalley (the pursuer’s managing director) and Mr Baert (the pursuer’s technical manager).  They viewed a cofferdam being used in Zeebrugge.  Further discussions took place at that time.  The pursuer’s quotation was revised on 8 April 2013 to reflect (i) a minimum period of hire of 10 weeks with a reduction in the weekly hire rate after the tenth week should the hire last that long, and (ii) other matters which are not relevant to the current dispute.  On 23 May 2013 the defender accepted the revised quotation.  The agreed hire cost was £10,850 plus VAT per week for an initial minimum hire period of ten weeks and £8,137.50 plus VAT per week thereafter.  It was also agreed that if the defender required to hire one of the pursuer's welding engineers the daily charge for that was to be £530 plus VAT per day plus flight costs, accommodation and subsistence.  

[3]        On 6 June 2013 a meeting took place at Hatson Pier between Philip Starr (a director of the pursuer), Mr Baert, Mr Cunningham, John Mariner (the defender’s contracts manager) and Ms Uprichard (the defender’s senior health and safety officer).  The cofferdam was delivered to Hatson Pier on or around 23 July 2013.  It was assembled on 23 and 24 July and tested on 25 July.  On 26 July a seal failed and the cofferdam filled with water.  There were welders on the cofferdam at the time.  One welder evacuated across the access bridge to the pier, the others went to the top deck while the cofferdam was raised using the mobile crane to which it was attached.  It took until 29 July to repair and test the seal.  Thereafter, for reasons which I outline below, the cofferdam was not used for certain further periods.  As a result the hire period was much longer than it should have been.  The hire ended on 31 January 2014. 

[4]        The pursuer seeks payment by the defender of the balance of hire charges which it maintains is due and has not been paid.  It also seeks payment of charges for carrying out certain repairs.  The defender denies that any sum is due by it to the pursuer.  It maintains that it is not liable to pay hire charges for periods when the cofferdam could not be operated, and that the sum it has already paid the pursuer exceeds the sum due.  It denies liability for the repair costs claimed.  In a counterclaim it seeks repetition of overpaid hire charges.  It also seeks damages in respect of loss and damage said to have arisen through breach by the pursuer of its obligations under the hire contract.  

[5]        I heard a Proof Before Answer on the commercial roll.  The evidence was adduced over three and a half days.  The pursuer led four witnesses:  Mr Schalley, Mr Starr, Kurt Claeys (a service engineer and project engineer employed by the pursuer), and Dr Robert Brown (an independent expert electrical engineer).  The defender‘s case comprised evidence from six witnesses:  Mr Cunningham, Mr Mariner, Paul Durnin (a site manager), Paul McDonough (an independent expert electrical engineer), Andrew Bayne (a construction expert who gave evidence in relation to delay analysis), and Jarlath Kearney (an independent expert quantity surveyor).  Each of the lay witnesses had prepared and signed witness statements in advance of the Proof.  Each of the expert witnesses had prepared reports.  In the case of Mr Kearney it was agreed that his report of 30 July 2015 and his letter of 5 May 2016 should be treated as being his evidence.  As a result of that agreement he did not give oral evidence.  All of the other witnesses gave oral evidence, with the witness statements of the lay witnesses and the reports of the other expert witnesses being treated as the substance of their evidence-in-chief.  Submissions occupied most of a fourth day, and I am indebted to Counsel for the assistance which they have given me. 

[6]        I do not propose to rehearse all of the evidence.  A good deal of it turned out to relate to matters which were not in dispute.  Some other matters which were in dispute did not appear to me to be germane to the issues which I require to determine.  My impression was that all of the witnesses were doing their best to assist the court but, as will be apparent from my findings, I concluded that some of the evidence which I heard was unreliable. 

 

The Terms of the Contract

The issues
[7]        The defender avers in the counterclaim: 

“4. It was a term of the parties’ contract that the pursuer would supply a fully operational cofferdam that was capable of working 24 hours per day in all conditions and at the tidal ranges experienced at Kirkwall.  Such a cofferdam ought to have been designed so that the electrical box was protected to IP66 standards.  Such a cofferdam ought to be designed and built so that it is capable of being safely operated without the need for it to be permanently attached to a crane.  It was a term of the parties’ contract that the pursuer would supply the defender with a temporary works design certificate or similar confirming that the cofferdam was safe to be used for the purposes discussed between the parties …” 

During closing submissions Counsel for the defender clarified that the defender’s case in relation to the provision of a temporary works design certificate or similar was that it was an implied term of the contract that the pursuer should provide this. 

[8]        The pursuer does not dispute that it was a term of the contract that it would supply a fully operational cofferdam.  In closing submissions Counsel for the pursuer accepted that that was a continuing warranty.  It was a matter of admission that such a cofferdam ought to be capable of being safely operated without the need for it to be permanently attached to a crane.  It was accepted that the electrical box in such a cofferdam ought to be protected to IP66 standard.  It was not accepted that it was a term of the contract that a fully operational cofferdam required to be capable of being used safely no matter what the weather conditions;  nor was it accepted that it was a separate term of the contract that the cofferdam could be used no matter what the weather conditions.  The pursuer does not accept that it was a term of the contract that it would supply the defender with a temporary works design certificate or similar. 

 

Implied term that a temporary works design certificate or similar be provided?
[9]        The evidence was that following the visit to Zeebrugge Mr Cunningham emailed Mr Starr on 4 April 2013.  He indicated that the defender was not yet in a position to place an order for the cofferdam because it had not yet been awarded a contract by OIC for the wavescreen work to the existing pier.  The email continued: 

“Before we order the cofferdam I would like to discuss a few things with you.  We will need a temporary works design certificate or equivalent for the system to satisfy … ourselves and the client that the cofferdam has been checked for use as a temporary structure.  From the visit I know that the cofferdam is safe but it’s just one of those paper trails that we must complete nowadays.” 

Mr Starr replied by email the same day indicating that he was travelling but that he would “endeavour to review all you request and hopefully revert back ASAP with the relevant information.”  On 6 April 2013 Mr Cunningham emailed Mr Starr indicating that: 

“… OIC have asked for a couple of things to go along with what I requested. 

They are looking for the following; 

• Evidence that the cofferdam has been used in the UK and fulfils all UK health and Safety Requirements
• Document such as a method statement showing the safe system of work for installation of the cofferdam …”

 

By email at 19:50 on 8 April 2013 Mr Starr replied attaching two examples of Health and Safety Plans and stating that a specific Health and Safety Plan for the project would be created if a contract for the hire was concluded.  

[10]      Mr Starr’s recollection was that there had been no further request for a temporary works design certificate or equivalent until after the cofferdam had been delivered to Hatson.  In cross‑examination he accepted that lessees hiring cofferdams from the pursuer would expect the pursuer to be familiar with Health and Safety legislation and British Standards which impinged upon the design and use of cofferdams. 

[11]      Mr Schalley indicated that the pursuer had not agreed to produce a temporary works design certificate.  The contract of hire had been concluded notwithstanding that no such certificate had been prepared.  It had only become an issue after the seal failure.  In cross‑examination he accepted that anyone dealing with the pursuer would expect it to be aware of and comply with relevant UK standards and health and safety rules.  

[12]      In cross-examination Mr Claeys accepted that as the designer of the cofferdam it was for the pursuer to carry out design checks on it and, if asked to, produce a certificate relating to such checks. 

[13]      Mr Cunningham’s view was that the pursuer knew that temporary works design information would be needed before the cofferdam could be used.  It had been obvious that it was needed so that health and safety regulations and standards could be complied with.  The defender should not have needed to ask for it.  

[14]      Mr Mariner’s evidence was that at the meeting on 6 June 2013 it was agreed that the pursuer would provide temporary works design calculations and a temporary works design certificate to show that the cofferdam would meet all the necessary health and safety requirements.  Any construction firm using such an item of plant would need the design calculations.  

[15]      One of the other things decided at the meeting was that the defender would need a C‑shaped lifting beam to install the cofferdam.  Correspondence before the meeting tends to confirm that access configurations and health and safety aspects of the cofferdam were among the matters discussed there (see eg Mr Cunningham’s email of 19:02 on 28 May 2013).  Following the meeting (at 23.33 on 6 June 2013) Mr Cunningham emailed Mr Starr and Mr Baert with the latest drawings for the flanges to the piles.  In response on 14 June 2013 Mr Starr emailed the defender a revised drawing for the cofferdam and an indicative drawing for a C‑shaped lifting beam.  It appears that the parties were at cross‑purposes as to who should manufacture the lifting beam.  Once the defender realised that it was its responsibility it instructed Arch Henderson to prepare a structural design drawing using the dimensions provided in the pursuer’s drawing.  

[16]      Counsel for the defender submitted that it was an implied term of the contract of hire that the pursuer would provide a temporary works design certificate or equivalent prior to the hire commencing.  Without such design information the cofferdam could not be used without breach by the defender (and, in some respects, the pursuer) of statutory duties imposed by the Construction (Design and Management) Regulations 2007 (S I 2007/320) (“the 2007 Regulations”);  nor would there be compliance with the relevant and applicable British Standard, BS 5975:2008+A1:2011, “Code of practice for temporary works procedures and the permissible stress design of falsework”, section 9.  It was clear that the cofferdam was a temporary works structure and that the need for a temporary works design certificate was something which responsible designers and contractors in the construction industry would be aware of and would comply with.  It was also clear that only the pursuer would be in a position to provide the necessary information in relation to its design to enable a temporary works design certificate to be prepared.  It was necessary to imply the term suggested to give the contract business efficacy.  Reasonable persons in the position of the parties at the time of contracting would have understood the need for such information and would readily have agreed that it should be provided.  Reference was made to McBryde, The Law of Contract in Scotland (3^rd ed.), paragraphs 9-71 to 9-72;  and Scottish Power plc v Kvaerner Constructions (Regions) Limited 1999 SLT 721, per Lord Macfadyen at pages 725-6. 

[17]      Counsel for the pursuer submitted that the suggested term ought not to be implied.  Implication of it was not so obvious that it went without saying, nor was it necessary to give the contract business efficacy.  Counsel did not accept that health and safety law required either the defender or the pursuer to prepare a temporary works design certificate.  While it was not disputed that section 9 of BS 5975:2008+A1:2011 described the design information which should be provided and set out in a temporary works design certificate, that was no more than a code of practice.  The defender had been content to place the order for the cofferdam without obtaining such information or such a certificate.  It had only been when the seal failed that the absence of a certificate had become an issue. 

[18]      I approach matters on the basis that for a term to be implied into the contract it would either have to be necessary for business efficacy, or be so obvious that it went without saying:  Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742, per Lord Neuberger of Abbotsbury PSC at paragraphs 14-31;  Airtours Holiday Transport Ltd v Revenue and Customs Comrs [2016] 4 WLR 87, per Lord Neuberger of Abbotsbury PSC at paragraph 38. 

[19]      It is not without significance that the parties did not enter into a lengthy and carefully drafted contract.  Their agreement was reached in email exchanges and oral discussions.  

[20]      I am satisfied that the 2007 Regulations imposed statutory duties upon the defender relating to use of the cofferdam. Indeed since the project in which the cofferdam was to be used was scheduled to last at least six weeks, it was a notifiable project in terms of Regulation 2(3).  Accordingly, both Parts 2 and 3 of the Regulations were applicable.  The pursuer was a “designer” and the defender was a “contractor” within the meaning of those terms as defined in Regulation 2(1).  In terms of Regulation 13(2) it was the defender’s duty as contractor to plan, manage and monitor construction work carried out by it or under its control in a way which ensured that, so far as was reasonably practicable, it was carried out without risk to health or safety.  Other pertinent duties incumbent upon the defender as contractor included those imposed by Regulations 25(1), 26, 28 and 32(1)(a).  Duties incumbent upon the pursuer as designer included those described in Regulations 11(6) and 18(2).  Since the pursuer’s design was prepared outside Great Britain it was also incumbent upon the defender as the person who commissioned the design to ensure that Regulation 11 was complied with:  Regulation 12(a). 

[21]      I am also satisfied that in order for the defender to be in a position to comply with the guidance and recommendations set out in section 9 of BS 5975:2008+A1:2001 it would have to obtain from the pursuer structural design information for the cofferdam.  

[22]      A critical consideration is that at the time of contracting the pursuer was the only person in a position to supply the defender with the relevant design information which it required to have in order to perform its obligations under the 2007 Regulations;  and which it needed to comply with section 9 of BS 5975:2008+A1:2001.  Reasonable hypothetical contractors in the position of the parties would or should reasonably have been aware of that at the time of contracting.  Indeed, the pursuer had been told by the defender prior to the contract being concluded that the pursuer needed to provide a temporary works design certificate.  The pursuer had not dissented from that suggestion when it was made:  and Mr Starr had indicated that a health and safety plan specific to the project would be designed once the contract was concluded.  

[23]      In the whole circumstances, while I do not think that it is necessary to go so far as to imply a term that the pursuer was bound to provide a temporary works design certificate, I consider that a term falls to be implied that the pursuer would provide the defender with the cofferdam design information which it needed in order to put it in a position to fulfil its obligations under the 2007 Regulations:  and that that information would be provided a sufficient period in advance of the commencement of the project to enable the defender to comply with its obligations under the Regulations.  Without the information the defender’s use of the cofferdam would be illegal.  I am satisfied that such a term was necessary in order to give the contract business efficacy.  I am also satisfied that reasonable hypothetical contractors in the position of the parties at the time of contracting would have regarded it as being so obvious that it went without saying.  In my opinion the proposed implied term does not conflict with any of the express terms of the contract. 

[24]      The information which the defender needed in order to comply with the guidance in section 9 of BS 5975:2008+A1:2001 was the same, or substantially the same, as the information it needed in order to comply with the 2007 Regulations, but non-compliance with section 9 would not, per se, have been illegal.  In those circumstances the case for implying a term that the pursuer would supply the design information necessary to enable the defender to comply with section 9 is less compelling (a fortiori if a term is implied that the design information needed for compliance with the 2007 Regulations was to be provided).  In my view the implication of a term relating to compliance with section 9 was not necessary to give the contract business efficacy, nor was it so obvious that it went without saying. 

 

All weathers?
[25]      It was unclear from Counsel for the defender’s submissions whether his proposition was (i) that, properly construed, a “fully operational” cofferdam meant one which could be used in all weathers;  or (ii) that it was an independent term of the contract that the cofferdam could be so operated. I shall deal with both of those propositions. 

[26]      I am satisfied that, on an ordinary construction of the contract, by engaging to supply a “fully operational cofferdam” the pursuer did not undertake that it could be used in all weather conditions however severe.  The defender’s suggested construction is not the natural and ordinary meaning of the words used. In my opinion it also defies common sense.  It was obvious that construction work at sea would be likely to be unsafe in some severe weather conditions. 

[27]      I am equally satisfied that it was not an independent term of the contract that the cofferdam could be so operated.  While I accept that there was some discussion between the parties about weather and tidal conditions at Hatson, I do not accept that the pursuer ever maintained that the cofferdam could be operated no matter what the weather, far less agreed that that be a term of the contract. I do not consider the events of 6 March 2013 at Zeebrugge to be critical in this regard.  There was a dispute as to whether a laptop demonstration of sea conditions at Hatson were shown to Mr Schalley and Mr Gaert by Mr Cunningham.  Mr Schalley was adamant there had been no such demonstration and Mr Cunningham was equally adamant that there had.  While my impression having heard the witnesses is that Mr Cunningham‘s recollection on this point is probably more reliable than Mr Schalley‘s, and that some form of demonstration did indeed take place, I am clear that the pursuer’s representatives were not asked to agree, and that they did not agree (at Zeebrugge on 6 March 2013 or at any other time or place), that it be a term of the contract that the cofferdam could be safely operated no matter how bad the weather conditions.  I think it highly improbable that Mr Schalley would ever have agreed to such an unusual term:  and I accept his evidence in that regard.  Given its unusual nature, had it been intended that the suggested term be a term of the contract I think it likely that the parties would have been careful to specify it in writing.  

[28]      In any case, when calculating the total hire charge to which the pursuer was entitled, and when quantifying damages for breach of contract, the defender has not treated the pursuer as being in breach on days when the cofferdam could not be operated because of bad weather. 

 

Breach of Contract

Breach of the implied term
[29]      The pursuer was in breach of the implied term.  The unchallenged evidence of Mr Mariner was that the pursuer did not supply the defender with the requisite design information until about 14 August 2013.  (For the avoidance of doubt I accept that the time taken by the defender thereafter (until 17 August) to process the information, obtain a certificate, and re-commence trials of the cofferdam was reasonable). 

 

Breach of the obligation to provide a fully operational cofferdam
[30]      There were several periods during the hire when the cofferdam could not be used.  

[31]      The first was between 26 and 29 July 2013 as a result of a defective vertical seal.  It was the pursuer’s responsibility to provide a cofferdam in working order.  Provision of the cofferdam with a defective seal was a breach of contract. 

[32]      Leaving aside for the moment the period when the defender was not in a position to obtain a temporary works design certificate, the next period the cofferdam was out of order was between 24 and 26 August 2013.  There was very limited evidence led in relation to this stoppage.  All that I can gather is that work stopped to enable adjustments and welding work to the cofferdam to be carried out.  There is insufficient detail as to what the problem was, or its cause.  The court is simply in the dark on the matter.  The defender’s case that this stoppage was caused through the pursuer’s breach of contract has not been established.  

[33]      Between 14 and 19 September 2013 the cofferdam’s flood valves failed.  Mr Claeys’ evidence was that the defender had replaced the inflatable seals (which were consumable items) itself but had not connected them properly.  Within a couple of weeks they had become too corroded to be connected properly.  I accept that evidence.  Mr Claeys’ service report of 19 September 2013 confirmed the existence of a corrosion problem.  While it is true that the report did not state that it had been caused by the defenders failure to connect the seals properly, I accept Mr Claeys’ explanation that at that stage his focus was to sort the problem and maintain good client relations.  This period when the cofferdam was out of order was not attributable to breach of contract by the pursuer.  

[34]      Between 19 and 22 October 2013 one of the double seals at the bottom of the cofferdam was out of order due to an electrical fault.  The pursuer did not suggest that the defender was responsible for this fault.  Mr Claeys did suggest that it might have been possible for the cofferdam to continue in operation with only one of the double seals working because it was not a safety feature - it was to catch awkward attachments.  However, there is no evidence that it was suggested to the defender that it should continue to use the cofferdam with only one seal.  The seal failure was a breach of contract by the pursuer and it does not appear to me to have been unreasonable for the defender to cease working the cofferdam until it was put in good order. 

[35]      Between 11 and 17 November 2013 the cofferdam was out of order when the pumps failed.  Mr Claeys accepted that the primary cause of the failure was ingress of water into the electrical box.  However, he also found that discarded rags and welding debris had damaged the pump and caused it to malfunction. I accept his evidence in that regard.  Accordingly while I find (for the reasons explained below) that while the primary cause of the failure (the water ingress) resulted from the pursuer’s breach of contract, it was not responsible for the secondary contributing cause (careless discarding of rags and welding debris which damaged the pump).  Causal apportionment was not further explored before me.  In those circumstances I shall wield a broad axe and hold the pursuer responsible for the consequences of four‑sevenths of this stoppage and the defender responsible for the remaining three‑sevenths.   

[36]      The cause of all of the other periods when the cofferdam was out of order (25 November to 8 December 2013, 11 to 15 December 2013, 13 January 2014, 15 January 2014, and 17 to 23 January 2014) was water ingress into the electrical control box.  The box bore to be resistant to water ingress to IP66 standard (ie water projected in powerful jets against the box from any direction for a period of three minutes should have no harmful effects).  A rating of IP66 does not protect against harmful effects in the event of submersion in water.  The box was located on a handrail on the uppermost level of the cofferdam.  Neither the handrail nor the box ought to have been submerged in water.  

[37]      The pursuer maintained that the water ingress must have been caused by the box being dipped in the sea when the cofferdam was being moved by crane from one pile to another.  The defender denied that any such dipping had taken place.  It contended that a much more likely cause was that the watertightness of the box had been compromised when it had been modified to adapt it for use with a cofferdam. 

[38]      There was no direct evidence that the box had been submerged at any time.  The evidence from Mr Cunningham and Mr Durnin was that it had not been, and that movement of the cofferdam had been carried out carefully by skilled and appropriately trained crane operators and banksmen.  

[39]      The box was manufactured by Ilinox Limited.  While it was certified by the manufacturers as being IP66 rated, that did not necessarily mean that the particular box had been tested.  For certification purposes the manufacturer would have carried out random testing of boxes in each batch produced.  After its manufacture the box was modified for the pursuer to use on cofferdams.  The modifications involved making multiple penetrations in the box and the insertion of electrical components, elements, wiring and cables.  Maintenance of the box’s IP66 integrity depended upon each of the penetrations being appropriately sealed.  The modifications were carried out by Elmeco in January 2012.  Following the modifications Elmeco prepared a certificate certifying that the IP66 integrity of the box had been maintained notwithstanding the modifications.  The evidence did not disclose whether or not the box was used on hires by the pursuer between January 2012 and June 2013 but in June 2013 it was returned to Elmeco for some refurbishment.  Following that refurbishment Elmeco again certified the box’s IP66 rating. 

[40]      Both electrical engineering experts agreed that an effective IP66 rating was all that would be expected of a box on a cofferdam where the box was not to be submerged.  

[41]      On the basis of the material available to him Dr Brown’s opinion was that the likely cause of water ingress in the box had been its submersion in the sea.  While he accepted that the making of multiple penetrations could undermine a box’s integrity, it would not do so if the penetrations were appropriately sealed.  That appeared to be the case here because Elmeco had certified that the modified box had an IP66 rating.  Dr Brown was also of the view that given the quantities of water observed inside the box any defect in a seal or seals would have had to have been substantial, and would have been likely to have been noticed by service engineers.  The fact that salt water was found inside the box also tended to suggest that submersion may have occurred.  Since Dr Brown considered that there was no evidence of any significant defect or defects in the seals, by a process of elimination the likely cause was submersion.  He proffered the view that submersion could have occurred quite easily and unwittingly because the crane operator would not be able to see under the edge of the pier when the cofferdam was being lowered into position. 

[42]      Mr McDonough confirmed that the integrity of a box could easily have been undermined by penetrations made in it.  Great care had to be taken to ensure that an adequate seal was obtained:  and seals could be compromised through degradation over time following their installation.  It was not possible to identify from the Elmeco documentation the precise nature of the testing which had been carried out or who had carried it out.  If it had been carried out by Elmeco itself rather than by an independent tester, Mr McDonough would have been much less inclined to rely upon it because it would have been a case of Elmeco testing its own work.  The evidence of Mr Durnin indicated that on 7 December 2013 there appeared to be significant water ingress coming from the area of one of the penetrations in the box (where a light had been inserted).  That was indicative of a problem with the integrity of the seals.  If a seal was defective the presence of salt water in the box would be unsurprising given its exposure to the elements at Hatson.  None of the material placed before Mr McDonough indicated that the box had been submerged.  Rather, the more likely cause of water ingress was one or more defective or degraded seals. 

[43]      Both experts appeared to me to be doing their best to assist the court.  However, at a number of points during his evidence Dr Brown appeared willing to stray beyond his expertise (eg in giving evidence as to his experience of crane operations and expressing views relating to the formation of water droplets).  I did not find that evidence to be of any assistance.  Dr Brown also impressed me as being less measured in his assessments than Mr McDonough, and less willing to entertain the possible force of points which might be thought to undermine his thesis.  

[44]      I am satisfied that it is more likely that ingress of water into the box was the result of defective or degraded sealing than that the box was accidentally submerged in the sea.  I am also satisfied on the balance of probabilities that ingress of water into the box was the result of defective or degraded sealing.  I am persuaded by Mr McDonough’s evidence for the reasons which he gives.  Like Mr McDonough, and for the same reasons, I attach little weight to the Elemco certificates upon which Dr Brown placed reliance.  Mr Durnin’s email of 00:11 on 8 December 2013 provides a contemporaneous record of his observations on 7 December 2013.  In retrospect that evidence suggests that there was indeed a problem with a seal at a penetration.  On each occasion water was found in the box it was dried out.  If Dr Brown’s theory is correct the defender’s employees submerged the box time after time.  I find that implausible.  There is no direct evidence that that happened even once - the evidence of Mr Cunningham and Mr Mariner is to the contrary.  

[45]      Accordingly I am satisfied that the water ingress into the electrical box was caused through the pursuer’s breach of contract.  One or more seals of penetrations to the box were defective or degraded.  As a result the cofferdam broke down and ceased to be fully operational. 

[46]      Before leaving this topic I record that Mr Claeys and Dr Brown also spoke to Elmeco noting that the electrical box had an indentation on the top when it examined the box on 15 May 2014.  Both attributed this to negligent handling by the defender during the course of the hire.  Both were prepared to suggest that this may have compromised the integrity of the box and that it was a possible source of water ingress.  This possible explanation had not been foreshadowed in the pleadings;  and it was not founded upon by Counsel for the pursuer in his closing submissions.  His position was that there were two theories as to who was responsible for the water ingress viz the pursuer if the box had not been IP66 compliant;  or the defender if the box had been submerged.  In any case, the evidence relating to the indentation fell far short of satisfying me (i) that the indentation noted by Elmeco existed at the times of water ingress;  or (ii) that if it did exist at those times that it was the cause of the ingress;  or (iii) that if it did exist at those times that the defender was responsible for the indentation. 

[47]      Finally in relation to breach, while there were further disputed matters (viz whether the cofferdam could be used without it remaining attached to the crane;  and whether it could be used at low tide), in my opinion it is unnecessary for the court to seek to resolve them.  None of the unproductive days for which the defender holds the pursuer responsible were caused by either of those factors.  

 

The C-Shaped Spreader Beam
[48]      The pursuer maintained that even if it had been in breach of contract in not providing cofferdam design information needed by the defender, that breach had not been what prevented the defender using the cofferdam between 30 July and 17 August 2013. The reason the defender could not use the cofferdam was the C- shaped spreader beam which it needed was not yet available.  

[49]      I accept the evidence that this beam was required in order for the defender to use the cofferdam.  

[50]      Mr Schalley and Mr Claeys said that they had asked the defender to bring the beam to the pier but that the defender had delayed in doing so.  They inferred that that was because the defender had not completed manufacturing it.  The evidence of Mr Cunningham and Mr Durnin was that the beam had been manufactured and was ready for use before 30 July 2013.  It was bulky and, rather than bring it to the pier (where there was a limited working area) before it was needed, it had been stored at the defender’s compound about a mile away.  

[51]      I accept the evidence of Mr Cunningham and Mr Durnin on this matter.  It was supported by contemporaneous documentation.  In an email at 18.33 on 1 August 2013 Mr Cunningham had stated that the beam was ready.  On the other hand, I attach no weight to the fact that during this period Mr Durnin signed timesheets for employees of the pursuer which referred to the beam being awaited.  The writing on the timesheets was in Dutch, a language that Mr Durnin did not speak. 

 

Damages
[52]      Mr Bayne produced a careful report analysing the effects of the pursuer’s breaches of contract on the prolongation of the hire, and he further explained his methodology during his oral evidence.  The defender took 84.5 productive days to complete the work.  Mr Bayne’s conclusion was that but for the non-productive days attributable to the pursuer’s breach of contract, and making allowance for non-productive days which would have occurred anyway during the work that were not the responsibility of the pursuer, the work could have been completed by 28 October 2013.  

[53]      While I accept Mr Bayne’s approach and his methodology, his conclusion requires to be modified to reflect my findings in relation to breach of contract.  Giving effect to my findings has the consequence that 12 fewer days are attributable to the pursuer’s breach (24‑26 August, 14‑19 September, and three days between 11 and 17 November), and that work would have been affected in any event by one more strong wind day (3 November 2013).  The result is that but for the pursuer’s breach of contract the hire could have been completed by 10 November (ie in a total period of 107.5 days).  In fact the hire lasted a further 84.5 days (including the Christmas shutdown).  

[54]      Prolongation costs are the extra time-related preliminary costs and overheads which were incurred by the defender itself as a result of the breach of contract.  Direct costs are costs which were incurred by the defender to other contractors because of the additional time which those contractors had to spend on site by reason of the breach.  Mr Kearney’s methodology for calculating prolongation costs and direct costs was not challenged.  However his conclusions require to be modified to reflect my findings in respect of breach of contract.  

[55]      Mr Kearney’s prolongation costs can be modified using the data in the second table in Appendix 2 of his report.  No prolongation costs are due for the periods 24‑26 August, 14‑19 September, 3 November, or for three days between 11 and 17 November.  Accordingly, a total of £18,941.90 (£3,699.16 + £8,397.26 +£1,808.24+ £5,037.24 (ie three‑sevenths of £11,753.57)) falls to be deducted from Mr Kearney’s total prolongation costs of £130,644.34 giving a revised total of £111,702.44. 

[56]      Mr Kearney’ direct costs can be modified using the date in the first table in Appendix 3 of his report.  No direct costs are due for the periods 24‑26 August, 14‑19 September, 3 November, or for three days between 11 and 17 November.  Accordingly, a total of £45,083.87 (£5,226.86 + £23,575.66 +£4,017.63+ £12,263.72 (ie three-sevenths of £28,615.35)) falls to be deducted from Mr Kearney’s total direct costs figure of £218,753.54 giving a revised total of £173,669.67. 

[57]      It follows that total damages for the pursuer’s breach of contract are £285,372.11 (£111,702.44 + £173,669.67). 

 

Overpayment of Hire Charges
[58]      At pages 11 and 12 of his report Mr Kearney calculated the sum the defender had overpaid the pursuer.  That calculation requires to be adjusted to reflect my findings.  But for the breach of contract the work ought to have been completed in 107.5 days (15 weeks and 2.5 days).  The cofferdam was hired on a weekly basis.  In my opinion the pursuer was entitled to charge £157,325 for the hire (i.e. £108,500 for the first ten week period and six weeks at £8,137.50 per week thereafter), and £9,540 for welding engineers, giving a total of £166,865 (excluding VAT).  The defender has already paid the pursuer £194,225 (excluding VAT).  It follows that it has overpaid the pursuer £27,360 (excluding VAT). 

 

The Pursuer’s Claim for Repair Costs
[59]      In the Summons the pursuer also sought payment of an invoice (201401001) for “Extra costs due to misuse (dipping)”.  The invoice was for 18,270.22 euro.  Ultimately I did not understand that claim to be insisted upon.  In any case since I have found that the defender did not submerge the electrical box the premise upon which the claim proceeded was ill-founded.  

 

Conclusions and Disposal
[60]      The pursuer is not entitled to any of the payments which it seeks in the principal action.  

[61]      The defender overpaid the pursuer for the hire.  It is entitled to repetition of the overpayment (£27,360 (excluding VAT)).  It is also entitled to damages of £285,372.11 in respect of the pursuer’s breach of contract. 

[62]      I shall put the case out By Order to give Counsel the opportunity to identify any arithmetical error in my calculations and to address me in relation to the terms of an appropriate interlocutor to give effect to my decision (which interlocutor should also deal with interest on the sums awarded, and expenses).