Conflict between reasonable skill and care, and specific obligations

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M W High Tech Projects v Haase Environmental Consulting [2015] EWHC 152, TCC Coulson J (also Westlaw)

Facts

MW High Tech Projects wished to develop a waste energy plant and appointed Haase Environmental Consulting firstly to produce a basic design proposal and secondly, once a contractor was appointed, to develop the design. Biffa Waste were appointed to construct the works but within 12 days of Biffa being appointed, Haase had produced design changes which greatly increased the cost of the works and this process of repeated design changes and cost increases continued throughout the life of the project.

Haase’s contract contained an overriding obligation to use reasonable skill and care but it also contained specific commitments to meet an Output Specification and a Delivery Plan both of which were adversely affected by the various changes Haase had put through. Haase’s defence was that although they had breached the Specification and the Plan, they had not done so negligently but had always used reasonable skill and care.

Haase specifically argued that they were not obliged to stick to the basic design proposal where in their professional opinion there was a modification of design, which they considered appropriate in all the circumstances. MW sued Haase for over-specifying.

Held

  1. With reference to the obligation to comply with the Delivery Plan and the Output Specification, if 2 alternative non-negligent design solutions were available to the designer, and one was in accordance with the basic design as set out in those documents and the other was an enhancement of it (increasing the cost) then Haase should either have adopted the former or accepted responsibility of the cost consequences of adopting the latter.
  2. Although the duty to take reasonable skill and care trumped the duty to comply with the specification, this actually meant that the designer had a duty to comply with the specification (and the plan), while also avoiding negligence. Only if compliance with the Specification and the Plan would force the designer to come up with a design which was in some sense negligent would the designer be entitled to depart from compliance.

Comment

At first glance this case reminds one of the Court’s decision in MT Højgaard A/S v E.On. In that case, the Judge concluded that compliance with the performance specification was more important than the obligation to use reasonable skill and care so that non-negligent design which nevertheless failed to deliver compliance with the specification was held to be in breach of contract.

By contrast here the Judge was simply saying that the performance of the duty of reasonable skill and care necessarily involved taking into account all factors including the desirability, if non-negligently possible, of complying with the Basic Design Proposal, the Output Specification and Delivery Plan. It was up to the designer, acting with reasonable skill and care, to come up with a compliant design and if he wished to defeat a claim for negligence, he would have to show that it would not have been possible without negligence to have produced a design which was compliant.

The Judge went on to say Haase had come up with the Basic Design Proposal and very soon afterwards, when the client had signed up to the contract to build it, Haase then proposed a design which departed from the Basic Design Proposal and which they must have known would give rise to additional cost. “In those circumstances, Haase were in control of both the original and subsequent design, why is it not reasonable to expect them to pay for the cost consequences of the failure to comply with the terms of the appointment?

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