Practice and procedure – Pleadings – Summary judgment – Claimant supermarket alleging negligence by defendants in construction of car park – Third and fourth defendants applying for summary judgment and/or strike out of claim –Whether claim being properly particularised – Whether having real prospect of success – Applications granted
In 2006, a car park was constructed at the claimant supermarket in North Cheam. The claimant commenced proceedings against a number of defendants involved in the construction, alleging that the car park was defective as a consequence of inadequate design and construction and would have to be demolished. The third defendant was the inventor of a modular car park system and conducted business through the first defendant company. The fourth defendant company was joined to the proceedings because it had acquired the complete shareholding in NRM, a company that had assisted in the design of the car park installation. NRM was apparently still in existence but had not yet been joined to the proceedings.
The third and fourth defendants applied, pursuant to CPR r. 3.4(2)(a), to strike out the claims against them and, pursuant to CPR r. 24, for summary judgment. The third defendant contended that the claim against him did not allege that he was under a personal duty to protect the claimant from economic loss. Further, since there were no adequate allegations of breach of duty, the claim should be struck out. The fourth defendant contended that, among other things, the pleadings did not state whether the claimant had relied upon the work of NRM and that they did not supply a basis for finding that it had owed a duty of care to the claimant.
Held: The applications were granted.
(1) On the materials available to the court, the claimant’s claim against the third defendant was bound to fail. The mere fact of designing a novel design did not impose an obligation upon the designer if he attended the site in any capacity to check that the construction was in accordance with the design or to check the construction to see how it turned out. It was commonplace that a trader who transferred his business to a limited company would do so in order to benefit financially from its commercial exploitation: that and the benefits of separate legal personality and limited liability were the three obvious reasons for incorporation. If an inventor who wanted to make money was taken to have assumed personal responsibility despite trading through a limited company, the main benefits of incorporation would be lost. It was routine for a director of a company that he had incorporated to be the spokesman who promoted the company’s business and to use language which was consistent with his personal involvement without suggesting that he had personal responsibility over and above that of his company: Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830 applied; Fairline Shipping Corporation v Adamson [1975] QB 180, Smith v Eric S Bush (a firm) [1990] 1 AC 831 and Merrett v Babb [2001] 1 QB 1174 considered.
(2) In the present case, the fact that the third defendant had promoted the car park and extolled its virtues was no indication of an assumption of responsibility. The claimant had taken none of the steps routinely taken by an employer who wished to have the added security of an enforceable duty of care owed by someone other than the person who had contracted to procure the design and construction of the structure. There was no evidence to suggest that the claimant relied upon the third defendant in his personal capacity rather than upon the first defendant with which it chose to contract. The claimant had legal remedies against the first defendant if the car park was defective. The fact that it was now in liquidation was a risk that the claimant chose to take. It could have hedged its risk by obtaining insurance or a bond that would answer in the event of defects in the car park. Failure to do so was a commercial choice by a major, knowledgeable and sophisticated commercial organisation: White v Jones [1995] 2 AC 207 distinguished.
(3) The facts pleaded by the claimant against the third defendant did not sustain an allegation that he was subject to a personal duty of care to protect the claimant from economic loss. In any event, the court would have struck out the claimant’s pleading of the duty alleged to have been owed by the third defendant because simply repeating the alleged terms of the contract with the first defendant without taking into account the real nature of the complaints against the third defendant and the fundamental difference between the position of the second and third defendants was inappropriate and would not be a fair basis on which to proceed. Furthermore, there was no adequate pleading of any allegations of breach of duty by the third defendant. Accordingly, the claim against the third defendant would be struck out and summary judgment granted.
(4) Reasonable reliance by the claimant and knowledge on the part of NRM that the claimant would rely upon its expertise and advice were necessary building blocks for the imposition of a duty of care owed to the claimant by the fourth claimant (meaning NRM). The particulars of claim did not disclose whether and to what extent NRM had known that the claimant relied upon its work as opposed to that of the first defendant, and failed to plead either direct action between the claimant and NRM or any facts from which an assumption of responsibility or the existence of a special relationship of proximity could reasonably be inferred. The claimant’s pleadings did not disclose a legally admissible basis for a finding that NRM had owed a duty of care to it and the evidence adduced did not remedy that deficiency. Accordingly, the claimant’s pleading against the fourth defendant on the duty of care issue would be struck out and summary judgment granted on that issue: Henderson v Merrett Syndicates [1995] 2 AC 145 applied; Candler v Crane Christmas & Co [1951] 2 KB 164, Caparo Industries plc v Dickman [1990] 2 AC 605 and Architype Projects Ltd v Dewhurst MacFarlane & Partners (a firm) [2004] 2 PNLR 38 considered.
Alexander Hickey (instructed by SNR Denton UK LLP) appeared for the claimant; Helena White (instructed by SGH Martineau LLP) appeared for the third defendant; Claire Packman (instructed by Beale and Company Solicitors LLP) appeared for the fourth defendant.
Eileen O’Grady, barrister
