Blue Manchester Ltd v North West Ground Rents Ltd

[2020] EWHC 2777 (TCC)

In 2014, some eight years after completion of the Beetham Tower in Manchester, the sealant bond failed in some of the shadow box units (“SBUs”) forming part of the glass curtain walling system in the external façade, leading to a risk that the glass might blow off which would pose a serious safety risk to pedestrians and traffic below. 

Carillion had built the tower. It provided a temporary fix but had not designed a permanent remedial scheme before going into liquidation. BML was dissatisfied with what it perceived to be the failure of the defendant (“NWGR”) as its landlord to resolve the problem. Accordingly, it brought proceedings seeking an order for specific performance of the landlord’s repairing covenant.

HHJ Davies held that BML was entitled to specific performance to compel NWGR to undertake a permanent remedial scheme which would restore the external façade to its condition immediately before the discovery of the defects in the SBUs. That was unless it was revealed by investigation and analysis by a suitably qualified consultant to be not reasonably practicable other than at disproportionate cost.

NWGR said that its investigations had revealed that the remedial scheme as ordered was not reasonably practicable other than at disproportionate cost, whereas there was an alternative remedial scheme which was reasonably practicable and could be undertaken at proportionate cost and more quickly. 

The Judge said that when it came to a question of disproportionate cost, that required an attempt to make some comparison between the benefit to be obtained from the remedial scheme and the cost of achieving that benefit. The Judge also commented that he would have to have regard to the contribution made by the particular design of the SBUs to the visual appearance of the tower, i.e. to aesthetic considerations, and give considerable weight to the design intent of the building as realised in the construction. 

The Judge agreed that the proposed remedial scheme was reasonably practicable. In their joint statement, the experts had said that “while challenging, these concerns are not without solution if a competent contractor were engaged”. There was a “real difference” between works not being reasonably practicable and works being extremely challenging, but those challenges being capable of being solved by a competent contractor. 

There were three very different tenders for the court scheme, ranging between £6 million and £16.3 million. There was also a very significant disparity in anticipated duration, between 57 weeks and 96 weeks. The tender analysis noted that both contractors demonstrated a good understanding and suitable method statement for the removal and procedure process. Therefore it could not be shown that the court ordered remedial scheme was not reasonably practicable in itself. 

What about the cost? Was that disproportionate? The Judge did not think so, in the context of a remedial scheme to put the tower back into its condition as at the date of the grant of the long (999- year) lease to BML’s predecessor in title and the premium paid by BML’s predecessor in title for its long leasehold interest of £60 million. The cost was not obviously disproportionate to the benefit to be obtained, both to secure a proper structural repair and to return to the original design intent. 

There was little evidence about cost at the original hearing. There was a suggestion that the option closest to the option that was tendered would have cost in the region of £3.7 million, although a full replacement scheme would have cost £5.1 million. 

What about the new remedial scheme? It was accepted that the alternative scheme was much faster and more economical and would carry fewer health and safety risks. The cost was likely to be around £3 million, with a contract programme of 30 weeks, reducing the contract programme by between 9 and 12 months.  

However, there were aesthetic considerations. It was said that the proposal was akin to “putting tape on a top-end luxury car” which would “ruin the entire look of the car”. Whilst the Judge thought that was going too far, he agreed that the proposal would result in a patchwork effect, whereas the initial unitised appearance gave the Beetham Tower an undoubted visual impact which was more impressive than the more typical glass facades which have more visually obvious connecting structures. 

Therefore to require BML to accept the new option would involve requiring it to accept a visual appearance which was materially different from and significantly less visually impressive than the original one. 

The Judge accepted that the alternative scheme had real advantages in terms of the relative practicability, timescale, cost and risk of unforeseen difficulties. He was also conscious of the increased health and safety risk involved, given the challenges of removing and replacing the SBUs whilst working at height. However, the decisive point was that everyone also considered that the originally ordered scheme was practicable, the challenges could be overcome and the differences in timescale and cost were not inordinate. 

The Judge had originally held at trial that BML was entitled to insist on a remedial scheme to restore the tower to its appearance as designed and constructed unless it could be shown that it was not reasonably practicable at disproportionate cost. That had not been done. The alternative scheme had a significantly different visual appearance and, further, BML’s genuine wish to have the tower brought back to its original appearance was neither idiosyncratic nor perverse. 

What about the position of the leaseholders? NWGR intended to seek recovery of a proportion of the remedial costs under the service charge. The Judge did not consider that this was something he could take into account. The court was in no position to investigate whether the leaseholders would be obliged to pay the difference in cost between the two schemes. For example, they may be able to argue that they should not have to do so because NWGR ought to have put this alternative scheme forward at the original trial. 

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