Willmott Dixon Construction Ltd v Prater & Ors

Factual and Procedural Background

This opinion concerns an urgent application by the fourth to sixth parties, referred to collectively as the "German parties," for a stay of an additional claim brought against them by the fourth defendant, Aecom. The additional claim is also made against the third party, Lindner Prater Ltd ("LPL"), an English company, which supports the stay application. The main claim arises from a large mixed-use commercial and residential development project in Woolwich, involving a Tesco Extra store and residential units. The claimant, a design and build contractor, claims over £46 million from the defendants based on alleged use of unsuitable or defective external wall materials from a fire safety perspective. The defendants deny liability and there are contribution claims among them, including Aecom’s claim for contribution against Prater and Lindner.

The additional claim seeks a Building Liability Order under section 130 of the Building Safety Act 2022 against LPL and the German parties. This claim is contingent on findings of liability in the main claim and concerns the financial viability of Prater and Lindner, who are alleged to have divested assets leaving them unlikely to satisfy any judgment. Aecom contends that LPL and the German parties are associated companies and more financially viable, justifying the additional claim.

The application was heard urgently because the Defences to the additional claim were due shortly after the application was made. The court granted an extension of time for Defences to be served following the hearing.

Legal Issues Presented

1. Whether the court should grant a stay of the additional claim for a Building Liability Order against the German parties and LPL pending the outcome of the main claim.
2. Whether it is just and equitable under section 130 of the Building Safety Act 2022 to make a Building Liability Order against the German parties and LPL.
3. The appropriate case management approach for hearing the additional claim in relation to the main claim.

Arguments of the Parties

Aecom's Arguments

• Prater and Lindner have divested assets, leaving them with limited financial resources unlikely to satisfy any judgment.
• The additional claim for a Building Liability Order targets LPL and the German parties as associated companies that are more financially viable.
• It is necessary and just to proceed with the additional claim without a stay to ensure enforceability of any judgment.

German Parties and LPL's Arguments

• The additional claim is contingent on findings of liability in the main claim, which may never arise if Prater and Lindner are found liable or pay judgments.
• The additional claim should be stayed until after judgment in the main claim to avoid undue burden and unnecessary costs.
• They are willing to be bound by any findings of liability and culpability in the main claim relevant to the additional claim.
• Determinations of "relevant liability" and whether it is just and equitable to make a Building Liability Order are better decided after the main claim judgment.
• Participation in the main trial would impose undue burden, which can be managed by case management and costs orders.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court acknowledged that the Building Liability Order is a relatively new legal mechanism under the Building Safety Act 2022, with little existing authority. The court explained that while the legislation does not require the party against whom such an order is sought to be part of the main claim, it is generally sensible and efficient for the additional claim to be heard alongside the main claim for case management and judicial economy.

The court considered that the German parties’ willingness to be bound by findings of liability and culpability in the main claim supports their participation without needing to fully engage in the trial, limiting their involvement to relevant issues for the Building Liability Order. The court rejected the argument that the additional claim should be stayed, reasoning that the issues of relevant liability and just and equitable considerations may not be fully addressed in the main claim judgment and would require separate hearings later, which is inefficient.

The court also rejected the submission that the issues regarding building safety risk would necessarily be determined in the main claim, noting that judgments do not have to resolve every pleaded issue and that some findings relevant to the Building Liability Order may not arise in the main claim.

Overall, the court emphasized the importance of efficient case management, the avoidance of multiple hearings, and the benefits of having the additional claim heard concurrently with the main claim, with appropriate case management controls to limit the burden on the parties involved.

Holding and Implications

The court REFUSED the application for a stay of the additional claim.

The additional claim for a Building Liability Order will proceed with the intention that it be heard concurrently with the main claim. The court indicated that a case management conference will be necessary to address procedural issues such as disclosure, witness evidence, and the timing for Defences from the German parties and LPL. The refusal of the stay means the German parties and LPL will participate in the main proceedings, but their involvement can be managed to avoid undue burden. No new legal precedent was established; the decision primarily reflects sound case management principles in the context of new legislation and complex multi-party litigation.