Design life and meaning of building structure

It is a common occurrence in construction disputes for a party, generally the Employer, to allege that a building does not meet its intended design life. However, in reality, as Jesse Way discusses, it is not always easy to determine what the design life of a building (or a part of it) is intended to be.

In Blackpool Borough Council v Volkerfitzpatrick Ltd & Ors [2020] EWHC 1523 (TCC) the Court had to consider, amongst other things, the design life of components of the Starr Gate tram depot in Blackpool and which components formed part of the “building structure”.  The decision is lengthy so this article will only focus on these aspects of the decision.

Background

In 2009, the Blackpool Borough Council (“Blackpool”) and Volkerfitzpatrick Limited (“Volker”) entered into a contract by which Volker was to design and build a new tram depot at Starr Gate.

Volker completed construction of the tram depot in 2011 and it was brought into operation in 2012.  However, Blackpool alleged that remedial works were required to the depot, said to cost in excess of £6 million.  Specifically, Blackpool claimed that significant parts of the tram depot (a portal frame structure) did not meet their intended design life of 50 years and were not appropriate for the exposed coastal environment where the tram depot is located.  

Blackpool claimed the following items required remedial works:

1. The galvanised steel cold formed components connecting the wall and roof sections to the portal frame, namely the purlins, the cladding rails and the connecting brackets (items 1–3 of the Scott schedule).
2. The galvanised steel internal components of the roof, namely rails, clips and spacers (item 4 of the Scott schedule).
3. The wall cladding panels to the north, east and south elevations (items 5–6 of the Scott schedule).
4. The soffit panels to the underside of the roof overhangs on the north, east and part south elevations (item 7 of the Scott schedule).
5. The decorative wave-form cladding panels affixed to the wall cladding panels to the east and part north and south elevations (item 8 of the Scott schedule).
6. The tram access doors, glazed side panels and supports and operating mechanisms in the north elevation (items 9–10 of the Scott schedule).
7. Other general defects to the depot building (items 11–80 of the Scott schedule).

Volker defended, claiming that the design life was either 25 years or 20 years (depending upon the element in question) and denying that the elements did not meet their design life or were unsuitable.

The Arguments:  Design Life and Building Structure

Blackpool’s case was that the contractual design life for the components of the tram depot was 50 years or, alternatively, 25 years.  A key document relied upon by Blackpool was the Functional Procurement Specification (a contract document).  This was because the Works Information provided that the design life should be 20 years except where specified otherwise in the Functional Procurement Specification (which required the building structure to have a 50-year design life).  

Clause 3.3.1 of the Functional Procurement Specification entitled “design requirements” provided, under “(iii) Design Life”, that “[t]he design life of the building structure shall be a minimum of 50 years [142]”.  In relying upon this provision, Blackpool argued that the Functional Procurement Specification took priority over the contractor’s Works Information in the event of any inconsistency.  

Building structure was not defined in the contract; however, Blackpool’s position was that all components the subject of the case formed part of the building structure.  Blackpool argued:

“…in the case of a portal frame structure the building structure comprises three essential elements, namely the primary steel structure, the secondary steel structure and the external walls and roof, so that all are within the definition … (a) the term building structure naturally includes all load bearing or load transmitting elements of the depot building; (b) the cold formed components and the roof components are secondary structural elements within the building; (c) the wall cladding panels and cantilever soffits form part of the walls and the roof and, thus, form part of the building structure because: (i) as such, they are part of the overall structure of the building; and (ii) the walls and the roof transmit wind and other loads which bear on them as external structures.”1

Volker’s position was that the contractual design life of the wall cladding panels was 25 years and the contractual design life for the cold formed steel components, roof steel components and other components was 20 years (e.g. as per the default position in the Works Information).  In support of its 25-year design life contention Volker relied upon item 1.9 of the RPS design log (part of the contractor’s Works Information).  

The RPS design log was a contract document entitled “RPS technical design log tender development architecture civil & structure”.  Its purpose was to “optimise and integrate structural, civil and architectural solutions [and] clarify technical tender design assumptions and intent”.  Item 1.9 of the RPS design log was entitled “minimum design life”.  The stated reason in the RPS design log for this item was “to clarify assumptions and intent”.  Item 1.9 provided:

“Structural frame and rail support structures = 50 years

* coating life to first maintenance o 20 years

Substructure and foundation = 50 years

External shell = 25 years

Internal drainage = 50 years

Floor finishes within offices = 10 years

Floor paint within workshop / maintenance / stabling areas = 5 years.”2

As to the meaning of building structure Volker argued that because there was no express definition in the contract, building structure meant the primary structural frame as made from hot rolled steel (the columns, rafters and cross-bracing) which excluded:

“…(a) the cold formed components (on the basis that their only function is to connect the wall cladding panels and roof structure to the structural frame, so that they are not load bearing (as opposed to load transmitting) structures); (b) the wall cladding panels and everything forming part of the roof structure (on the basis that neither the walls nor the roof have any structural function).”3

Volker argued that if there was any ambiguity, the RPS design log responded in its favour because it was not inconsistent with the terms of the employer’s Works Information or the Functional Procurement Specification (which Blackpool relied on).

The Decision

The Court adopted the usual principles of contractual construction in determining the design life issue stating:

“It is common ground that well-established principles of contract construction govern the approach which should be taken to answering this question. These, as recently and conveniently summarised by O’Farrell J in Entertain Video Ltd v Sony DADC Europe Ltd [2020] EWHC 972 (TCC) at [221], are as follows:

‘When interpreting a written contract, the court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It does so, having regard to the meaning of the relevant words in their documentary, factual and commercial context. That meaning has to be assessed in the light of:

(i) the natural and ordinary meaning of the clause;

(ii) any other relevant provisions of the contract;

(iii) the overall purpose of the clause and the contract;

(iv) the facts and circumstances known or assumed by the parties at the time that the document was executed; and

(v) commercial common sense; but

(vi) disregarding subjective evidence of any party's intentions.

See: Arnold v Britton [2015] UKSC 36 per Lord Neuberger at paras. [15] to [23]; Wood v Capita Insurance Services Ltd [2017] UKSC 24 per Lord Hodge at paras. [8] to [15].’”4

In the context of traditional brick-walled slate roofed structures the Court said the meaning of building structure was reasonably clear.  However, it was not so clear in the case of modern structures such as the tram depot.  The ordinary meaning could not answer the question and nor could reference to any established legal precedent.  The Court considered the evidence of structural engineers, references to definitions of structure in various standards and specifications, legal textbooks, and the contract documents, but did not consider any of them to be decisive.  Furthermore, the Court did not consider that “building structure” should be taken to mean “building” because it would require each and every part of the building to have a 50-year design life which was not intended by the inclusion of the word “structure” in the Functional Procurement Specification.  

The Court ultimately agreed with Volker as to what formed part of the building structure stating:

“In my view the defendant is right to say that item 1.9 of the RPS design log provides the clearest guidance as to what is and what is not included with the definition of the building structure for this particular purpose. It is headed ‘minimum design life’. It draws a clear distinction between the required design life of the ‘structural frame’ and the ‘external shell’, in the context of also making clear what is understood as being required as regards other items such as the substructure, the foundations and the floor finishes. It is information which one would expect a structural designer tasked with the design of a building such as the tram depot to produce.”5

The Court’s view was that “external shell” as used in the RPS design log included the wall cladding panels and the external aluminium roof trays.  The Court said if they did not, the words “external shell” would not have any sensible meaning (which could not be correct).  Furthermore, the Court was satisfied that each and every separate component forming part of the roof formed part of the external shell (on a sensible reading of item 1.9).  Thus, they had a 25-year design life.  

The conflict raised by Blackpool (i.e. the 50-year design life of the building structure against the 25-year design life of the external shell) assumed that the building structure included the external shell.  The Court did not agree with this because there was a lack of clarity in other contractual documents as to what was included in the building structure.  Accordingly, the Court held that no inconsistency arose between the RPS design log and the employer’s Works Information or the Functional Procurement Specification.  Furthermore, because the RPS design log was a contractual document it could not be ignored (Blackpool had said it was irrelevant).  The Court was therefore satisfied that item 1.9 of the RPS design log should be given contractual effect.  

The Court determined that the purlins, cladding rails and connecting brackets (i.e. the steel cold formed components) were not part of the “structural frame” (which was to have a 50-year design life) in item 1.9 of the RPS design log.  In part, this was because they:

“…(a) would not be needed if there was no separate wall cladding or roof structure, since their only purpose is to connect the latter to the primary steel structure, so that there would be no obvious need to specify them as having a 50-year design life when the structures they are provided to support only have a 25-year design life; (b) are not part of the primary steel structure; and (c) are formed of cold formed rather than hot rolled steel”.6

The Court also said it was plain from other sections of the RPS design log that the purlins and cladding rails were not regarded as structural steel as they were not specified as having the same minimum galvanised coating as the primary steel structures.  Accordingly, they were not to be taken as being part of the “structural frame” in item 1.9.  As such, the Court held that the design life for the cold formed components was 25 years. 

The Court was also satisfied that:

1. The cantilever roof soffit panels and the wave-form cladding panels formed part of the external shell and were subject to the 25-year design life requirement.
2. The tram doors and supports and side panels had a design life of 20 years (as they were not part of the structure and it was not necessary to determine whether or not they formed part of the external shell).
3. The 20-year design life applied to the remainder of the items in the Scott schedule which were separate items not forming part of the building structure.  

The Court then considered what was required in relation to the design life of the coatings for the components.  For double-coated external facing components such as the wall cladding panels, tram doors, and the other coated external components including the remaining Scott schedule items, the Court held that the coating should be required to have the same design life as the underlying structure.  This was because it was (a) implausible that it was intended for Volker to design and supply coatings which were sacrificial and incapable of lasting for the required design life; (b) it was implausible that it was intended that Volker could design and supply external coatings which could fail during the design life period leaving large sections of the roof and walls blistering, corroding and delaminating over an extended area for an extended period; (c) early and repeat repairs to the coatings would breach the maintenance obligation; (d) practical difficulties of undertaking major repairs to or recoating coatings whilst leaving the underlying structure in situ.  

However, the Court did not consider that the same arguments applied to the cold formed components because they were not sited externally and did not have the same aesthetic importance as the other items.   The Court said there was no need to repair or replace the cold formed components unless they could not perform their function of supporting the roof and walls and that there were thousands of such components which were concealed or not visible.  Accordingly, Judge Davies said:

“…I do not consider that it could have been intended that the cold formed components would need to have been designed or supplied so as to ensure that they would not need major repairs to or full replacement of the galvanised coating within their 25-year lifetime even where that had no actual impact on the structural integrity of the tram depot.”7

After deciding what the contractually required design life of the various components was, the Court went on to consider whether the components had achieved the required design life.  Ultimately, Blackpool was awarded approximately £1.1 million, which was substantially less than the £6 million sought.  Judge Davies stated:

“The principal reasons why the claimant has failed to recover a more substantial award are because: (a) I am satisfied that the design life obligation period is either 20 or 25 years rather than 50 years; (b) I do not accept that claimant’s case that the cold formed components are inadequate for their design life or other unsuitable (nor in any event that they need replacement); (c) in a number of cases I am satisfied that limited replacement or repair rather than full replacement is required.”8

Conclusion

It will not always be easy to determine the design life of complex modern structures or parts of them.  In such cases, Courts will adopt the usual principles of contractual interpretation which, given the many documents normally included in construction contracts, could result in unexpected outcomes.  The best way to head off such a risk, is to ensure that the contract is drafted appropriately from the start and ensure that key terms are defined or set out in appropriate detail so that there can be little argument down the track. 

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• 1. Blackpool Borough Council v Volkerfitzpatrick Limited [2020] EWHC 1523 (TCC) at [200]
• 2. Blackpool Borough Council v Volkerfitzpatrick Limited [2020] EWHC 1523 (TCC) at [192]
• 3. Blackpool Borough Council v Volkerfitzpatrick Limited [2020] EWHC 1523 (TCC) at [202]
• 4. Blackpool Borough Council v Volkerfitzpatrick Limited [2020] EWHC 1523 (TCC) at [203]
• 5. Blackpool Borough Council v Volkerfitzpatrick Limited [2020] EWHC 1523 (TCC) at [215]
• 6. Blackpool Borough Council v Volkerfitzpatrick Limited [2020] EWHC 1523 (TCC) at [225]
• 7. Blackpool Borough Council v Volkerfitzpatrick Limited [2020] EWHC 1523 (TCC) at [238]
• 8. Blackpool Borough Council v Volkerfitzpatrick Limited [2020] EWHC 1523 (TCC) at [13]