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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> London Fire and Emergency Planning Authority (LFEPA) v Halcrow Gilbert Associates Ltd [2007] EWHC 2546 (TCC) (31 July 2007) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2007/2546.html Cite as: [2007] EWHC 2546 (TCC)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		31 July 2007

 


CONTENTS

		Paragraphs
1	Introduction	1 – 26
2	Court List and Witnesses of Fact	26 – 43
3	Expert Witnesses	44 - 82
4	The Law
	(a)Negligence	82 – 86
	(b)Damages	87 – 107
5	The facts of the January 2005 fire	108 – 257
6	Experts Opinions	258 – 270
7	Allegations of negligence against Halcrow – Discussion and Conclusions
	(a)Introduction	271 – 280
	(b)Failure to consider initially the effect of smoke oil in the ductwork	281 – 298
	(c)DW/142	299 – 312
	(d)The gaskets and sealants should have been specified to be oil resistant	313 – 319
	(e)Risk assessment	320 – 341
	(f)Risk assessment after discovery of defective sealant	342 – 347
	(g)Design Review after 2004 fire	348 – 363
8	The allegations against Lorne Stewart – Discussion and Conclusions	364 – 430
9	The History after 5 January 2006	431 – 559
10	The Remedial Schemes
	(a)The Schemes	560 – 595
	(b)The Feasibility of carrying out the work	596 – 608
11	Extract Ductwork	609 – 623
12	LFEPA's Intentions	624 – 647
13	Westemp Panels	648 – 658

His Honour Judge Toulmin CMG QC:

Introduction

1. This is a claim by the London Fire and Emergency Planning Authority ("LFEPA"), formerly the London Fire and Civil Defence Authority, against Halcrow Gilbert Associates Limited, the first defendant, and its parent company, Halcrow Gilbert Group Limited, the second defendant. The first and second defendants are referred to collectively as "Halcrow" and are a well known international multi-disciplinary engineering practice providing engineering, architectural, quantity surveying, contract administration and project management services.
2. LFEPA also claims against the third defendants Lorne Stewart PLC ("Lorne Stewart"). Lorne Stewart is a building services engineering contractor. Until just before the trial P & P Ducting Limited ("P & P") was the fourth party in the litigation.
3. Halcrow has settled its contribution claim against Lorne Stewart. The terms of the settlement are confidential save that the court has been informed that Halcrow is now on the record for Lorne Stewart. A settlement has also been agreed between Lorne Stewart and P & P. The court has no knowledge of the terms of this settlement.
4. The claims arise against these defendants in contract and tort as a result of a fire at LFEPA's training centre, The Firehouse in Southwark, on 5 January 2005. The Firehouse was being used to provide realistic firefighting training facilities in simulated operational conditions including fire, heat and smoke. There had previously been a small fire in the section of the duct work in the fourth floor plant room in June 2004, the relevance of which I shall consider in due course.
5. The uncontrolled fire which occurred in the ceiling void of the Office scenario room on 5 January 2005 was not very extensive, was quickly brought under control and caused minimal damage.
6. LFEPA claims that since then it has not been possible to use The Firehouse for a substantial part of the training of firefighters for which The Firehouse was designed and which it claims has had to be undertaken elsewhere at substantial additional cost.
7. LFEPA claims for (1) the cost of repair of the damage caused by the fire, (2) the cost of investigation of the cause of the fire, (3) replacement of defective ductwork and associated equipment, (4) loss of use of The Firehouse based on a 45 month shutdown for the investigation, remedial works and subsequent commissioning.
8. The claim for consequential loss is for the cost of alternative real-fire training for the whole of the period and alternative cold fire training for a period of twelve months during the remedial works. The Authority gives credit to take account of the reduced costs in operating the facility during this time.
9. Apart from the liability issues of negligence and breach of contract I shall have to consider (a) what remedial scheme would be appropriate and (b) on the balance of probabilities whether LFEPA will carry out that or any remedial scheme?
10. The original sum claimed by LFEPA has been the subject of extensive and helpful work by the quantum experts and will be the subject later of more detailed consideration. In the amended quantum schedule served by LFEPA on 18 December 2006 the sum claimed was £6,639,009.76. By the end of the trial the sum contended for by LFEPA after considerable work by the quantum experts has been reduced to £4,744,568.00.
11. The subject matter of this trial is confined to particular issues. By a written agreement dated 2 August 2005 and embodied in a Tomlin Order dated 12 August 2005 LFEPA and Halcrow settled other substantial claims made by LFEPA against Halcrow.
12. Under paragraph 4 of that settlement/agreement all claims made by LFEPA and Halcrow for present and future claims relating to Halcrow's services were settled except for:

"(a) the claims which LFEPA brought against Halcrow in relation to the uncontrolled fire at The Firehouse on 5 January 2005 as set out in paragraphs 271-275 and 279 in LFEPA's amended Particulars of Claim re-served on 30 June 2005 including, for the avoidance of doubt, any claims by LFEPA against Halcrow for fees paid to Halcrow as part of the investigation of the fire post-5 January 2005 and

(b) future claims in respect of defects in The Firehouse which were not apparent or could not with reasonable diligence have been discovered at the date of the settlement agreement."

13. Paragraphs 271-275 of the amended Particulars of Claim relate to

1. Halcrow's alleged defective design of the ducts and the exhaust system installed in the ceiling voids in The Firehouse. The relevant ducts are identified in the pleading as those which carry smoke during training exercises (para 271)

2. Para 272 of the pleading alleges that the ductwork was wrongly specified by Halcrow in that it was specified to comply with industry standard DW/142 when this standard was for normal commercial air conditioning and ventilation systems and was not designed to be airtight and was stated specifically not to be intended to handle polluted air.

3. It is alleged that the ductwork should have been specified to stainless steel fully welded construction with welded angle flanges and full faced gaskets (para 273).

4. As a result of the allegedly defective ducts LFEPA contends that oil leaked and an uncontrolled fire occurred. In order to prevent any possibility of a recurrence LFEPA claims that all the supply ductwork and possibly all the extract ductwork in The Firehouse needs to be replaced (para 274).

14. Paragraph 275 of the pleading alleges that Halcrow was in breach of duty in

"1. failing to produce a satisfactory design;

2. insofar as it is applicable, failing to ensure that an adequate design was prepared by others and/or failed to ensure that contractors carried out their works in accordance with the terms of the construction contracts; and …

4. accepted defective works and/or allowed unauthorised relaxations to the specifications."

15. Paragraph 279 of the pleading served on 20 May 2005, just under six months after the fire, particularised the quantum of damage as (1) direct cost of repair £1.6m, (2) construction costs and professional fees £200,000 (plus VAT), (3) cost of the loss of use of The Firehouse based on a 24 month shutdown for the remedial works £1.4m and (4) cost of the investigation and the ductwork which was installed.
16. Although paragraph 279 of the pleading was not amended, on 30 June 2005 a revised quantum schedule was served which increased these figures substantially. The final figures which take into account the substantial measure of agreement by the quantum experts, (subject to liability) are more in line with the figure contemplated in the original pleading.
17. The allegations against Halcrow set out in the Re-Re-Re-Amended Particulars of Claim are:

1. Failed to prepare a specification for the distribution ductwork appropriate for the use to which it was to be put (i.e. transfer of hot oil, air and smoke as opposed to normal temperature air).

2. Wrongly specified the ductwork to be manufactured and installed in accordance with HVCA Specification DW/142.

3. Failed to specify the ductwork to be either stainless steel or zintec of fully welded construction with welded iron flanges and full faced gaskets in accordance with HVCA Specification D1/171 (kitchen ventilation systems) or some other specification appropriate for the transfer without leakage of hot air/oil and/or smoke. (This may be a misprint for DW/171.)

4. Failed to provide a specification for the ductwork that was airtight.

5. Failed to produce a satisfactory design.

6. Failed to review its design.

7. To the extent that the material design was not prepared by Halcrow, failed to ensure that adequate design was prepared by others.

(8. Withdrawn)

9. Failed to ensure that the mechanical services contractor (Lorne Stewart) carried out works to the ductwork in accordance with the terms of the mechanical services contract by carrying out inspections of the works as completed or otherwise.

10. Acceptance by Halcrow of defective work and/or allowing unauthorised relaxation to the specifications.

18. At the end of the trial the liability claims against Halcrow are summarised clearly in LFEPA's closing submissions as follows:

1. Halcrow's ductwork design permitted the leakage of smoke oil through the cross joints in the ductwork insulation when it should not have done so.

2. Halcrow knew or ought to have known that its design would permit such leakage. Each of the options in DW/142 provided for permitted leakage and DW/142 contained a specific warning that special consideration was required for a design where the air in the ductwork was polluted. The ductwork was tested and accepted by Halcrow on the basis that it permitted such leakage.

3. Halcrow should have specified that the gaskets and sealant used in the flange joints needed to be oil resistant.

4. Halcrow failed to review and correct its design during the works and/or after the first fire in 2004.

5. Halcrow should have, but failed to ensure that Lorne Stewart corrected defects to the flange joints before accepting the work as complete and issuing taking over certificates.

19. I shall deal with the allegations against Lorne Stewart later as a discrete issue but the allegations against Lorne Stewart also form part of the background to the case.
20. These are also set out in the Re-Re-Re-Amended Particulars of Claim and are as follows:

1. Lorne Stewart selected and used an unsuitable sealant between the faces of the flanged joints that was incapable of withstanding exposure to smoke oil.

2. In some areas Lorne Stewart failed to apply any sealant at all and/or failed to apply it properly and/or continuously.

3. Lorne Stewart failed to install the appropriate number and spacing of clamps, cleats and fixings for the flanges at the cross joints.

4. Lorne Stewart selected and installed flanges for the cross joints that were not suitable because they did not provide air tight and/or oil tight joints.

5. Lorne Stewart was instructed to rectify the defects in the flange joints

(a) during the defects liability period and/or

(b) following the 2004 fire and/or

(c) after the 2005 fire

and failed to do so adequately or at all.

21. LFEPA claims against the defendants the costs of and associated with the replacement of the defective ductwork with ductwork which is capable of containing and draining oil deposited within it so as to eliminate the risk of uncontrolled fire.
22. It is accepted by LFEPA that the court will only award such damages on the basis that it is reasonable and proportionate to do so.
23. LFEPA claims that it is proportionate to do so because it has established by evidence that it intends to carry out the remedial works in its Scheme 3 recommended by the expert, Mr Evans, to enable it to meet its statutory obligations to provide real fire training.
24. LFEPA concedes that it has not yet determined the precise scope of the works but contends that on the balance of probabilities it will comply with its statutory obligations by providing the real fire training at the Southwark Firehouse by carrying out Scheme 3 and that in order to do so it will be obliged to expend considerable sums in addition to those claimed in this litigation in order to rectify other design defects. It underlines that the stated purpose of The Firehouse is to provide real fire training and LFEPA claims that it is entitled to the facility for which it has paid.
25. In relation to the remedial work, LFEPA claims that Halcrow's proposed alternative schemes are inadequate. It contends that neither Halcrow's Scheme 1 – repairs to the joints in the ductwork, nor its Scheme 2 – replacement of supply ductwork to Halcrow's original design, are adequate because they both fail to correct inherent defects in the design. LFEPA also contends that Scheme 5, advanced by Halcrow, providing smoke generation through local smoke generators has not been designed in sufficient detail and is, it contends, unlikely to provide any savings when compared with LFEPA's own Scheme 3. (There is no Scheme 4 for me to consider.)
26. The revised quantum of remedial Scheme 3 for which LFEPA contends, amounting to £4,744.568.00 plus interest, is made up as follows:

1.Cost of ductwork replacement	£2,082,904
2.Cost of alternative fire training	2,550,103
3.Fire and remedial scheme investigation fee	193,373
4.Less credit for operational savings	(81,812)
	£4,744,568

2. Cast List and Witnesses of Fact

27. The Chief Executive Officer of LFEPA is the Commissioner for Fire and Emergency Planning. He reports on behalf of his staff to a management board which I was told would have the ultimate responsibility for taking strategic decisions in relation to The Firehouse. Under the Commissioner, LFEPA is split into directorates, each of which has a Deputy Commissioner or equivalent. Within the Directorate of Resources Ms Barbara Riddell is Director of Resources. Reporting to her are Mr Gary Dobson, Head of Training and Development since February 2006, and Mr Nadim Moge, Head of Property Services since 2000.
28. Mr Watson was a member of the Property Department until 2002 and was responsible for the day to day supervision of the Southwark Firehouse project reporting to Mr Moge. Mr Norris now undertakes those responsibilities. His job is and was to monitor the completion of The Firehouse contract and to assist in co-ordinating the work to return The Firehouse to operation. He clearly liaised closely with Mr Richards, head of the Real Fire Training Team and thus responsible for the training of the Firefighters at Southwark. Both he and Mr Richards have written a number of important memoranda which I must consider.
29. Ms Laurence was at all relevant times Acting Solicitor to LFEPA. Ms Hadley is a member of the legal department who gave helpful evidence in relation to LFEPA's claim to privilege for various documents including in particular the meeting on 3 May 2006. As it turns out, I do not need to refer to her oral evidence further.
30. For Halcrow, Mr Tovey is the Technical Director of the company and from the relatively early stages he has also been the Project Director on the Project. Mr Tough has been for most of the relevant period the Project Manager on the Project. Both gave evidence before me.
31. For Lorne Stewart, Mr Quinn was the Project Engineer until 2006. Mr Clements and Mr Taylor are both directors of P & P.
32. The Canadian specialists, ICS, were retained by LFEPA to design and install the smoke generators and fireplaces.
33. Jacobs Engineering UK Ltd were project managers appointed by LFEPA in connection with remedial work. Their chief point of contact was Mr Livesey.
34. Concept Smoke Ltd were and are suppliers of smoke generation equipment who were retained by LFEPA to produce various reports and give advice.
35. Lorne Stewart employed J & M Insulations Ltd as sub-contractors for the insulation of the ductwork.
36. Knights Commissioning Services were retained by Lorne Stewart to commission the ductwork in The Firehouse.
37. In addition various Reports have been produced in relation to risk assessments in the course of the Project and in relation to the causes of the two fires.
38. Mr Moge and Mr Gary Dobson gave evidence for LFEPA. They were conscientious witnesses and helped as far as they could.
39. There were three witnesses who could have given very significant evidence if they had been called to give evidence, but they were not called by LFEPA and although I raised the matter directly at the trial, no explanation has been given. Ms Riddell was present at a number of the important strategy meetings. As head of the Resources Directorate she would have been in a much better position to assist me on the future plans for The Firehouse and, in particular, whether or not, if I were to award damages for the rectification of The Firehouse, what degree of likelihood, if any, there is that the rectification works would go ahead.
40. Mr Richards and Mr Norris could have given considerable help in relation to their parts in the history and the past, present and future training needs of the firefighters. Mr Dobson, who did give evidence, joined LFEPA over a year after the fire and was only able to be of relatively limited assistance.
41. Although Mr Richards and Mr Norris did not give evidence, I saw a considerable amount of documentary evidence including reports and letters prepared by them. On the basis of what I saw it seemed to me that both were extremely competent at the job that they were doing. I should make it clear at the outset that I have no reason to believe that those who are directly responsible for the operation of the firefighting training at Southwark are other than extremely competent at their jobs.
42. I should add that nothing that I have read in the documents or that I have heard from Mr Dobson provides any grounds for doubting that the firefighting training which is currently being provided for the London area is anything but of the highest standard.
43. Mr Tovey and Mr Tough gave evidence for Halcrow. It is clear that whatever is the outcome of this litigation they are highly competent engineers who were conscientious in the way they gave their evidence. LFEPA generously agreed in closing that Mr Tovey was distinguished in his job. Mr Tovey in particular was very impressive in the way in which he gave his evidence. Mr Hood, a Senior Operations Manager, also gave his evidence effectively for Lorne Stewart.

3. Expert Witnesses

44. This is a case where much hinges on the expert witnesses called by the parties. Unfortunately it is necessary to set out the law relating to expert witnesses, since significant expert witnesses failed to observe the basic requirements of acting as an expert witness.
45. The law relating to the duties and responsibilities of expert witnesses is clear and has been stated frequently. These duties and obligations were set out in the often cited and approved judgment of Cresswell J in The IkarianReefer [1993] 2 Lloyds Rep 68. These principles were approved most recently by Sir Anthony Clarke MR in Meadow v General Medical Council [2007] 2 WLR 286 at 297 and can be summarised as follows:-
46. 1. Expert evidence presented to the court should be, and should be seen to be, the independent product of the expert uninfluenced as to the form and content by the exigencies of litigation – see Whitehouse v Jordan [1981] 1 WLR 246 at 256 per Lord Wilberforce.
47. 2. An expert witness should provide independent assistance to the court by way of an objective unbiased opinion in relation to matters within his expertise. He should never assume the role of the advocate – see Garland J in Polivitte Ltd v Commercial Union Assurance [1987] 1 Lloyds Rep 379 at 386 and Cazalet J in re J [1990] FCR 190.
48. 3. The expert should state the facts or assumptions on which his opinion is based. He should not omit to consider material facts which could detract from his concluded opinion.
49. 4. The expert should make clear when a particular question or issue falls outside his expertise.
50. 5. If an expert's opinion is not properly researched because he considers that insufficient data is available, then this should be stated with an indication that the opinion is no more than provisional. Where an expert cannot assert that he has prepared a report which contains the whole truth and nothing but the truth without some qualification, that qualification should be stated in the report – per Staughton LJ in Derby v Weldon, The Times, November 9, 1990.
51. 6. If after exchange of reports, the expert changes his view, having read the other parties' expert reports or for any other reason, such change of view should be communicated (through the legal representatives) without delay to the other party and where appropriate to the court.
52. 7. Where expert evidence refers to photographs, plans, calculations, analyses, measurements, or similar documents, these must be provided to the opposite party at the same time as the report (see para 15.5 of the Guide to the Commercial Court).
53. Part 35 of the CPR and the Practice Direction which follows, reinforce the guidance for experts contained in the Ikarian Reefer. In Stevens v Gullis & Pile [1999] BLR 394 at 398, Lord Woolf made it clear that the provisions of the CPR confirmed the requirements set out in the Ikarian Reefer.
54. CPR Part 35.3 states:

"1. It is the duty of an expert to help the court on the matters within his expertise.

2. This duty overrides any obligation to the person from whom he has received instructions or by whom he is paid."

55. The Practice Direction to CPR Part 35 says:

"1.1 It is the duty of an expert to help the court on matters within his own expertise: Rule 35(1). This duty is paramount and overrides any obligation to the person from whom the expert has received instructions or by whom he is being paid.

1.2 Expert evidence should be the independent product of the expert uninfluenced by the pressures of litigation.

1.3 An expert should assist the court by providing objective, unbiased, opinion on matters within his expertise and should not assume the role of the advocate.

1.4 An expert should consider all material facts including those which might detract from his opinion.

1.5 An expert should make it clear

(a) when a question or issue falls outside his expertise and

(b) when he is not able to reach a definitive opinion, for example, because he has insufficient information.

1.6 If after producing a report, an expert changes his view on any material matter, such a change of view should be communicated to all the parties without delay and when appropriate to the court."

56. The Practice Direction goes on in paragraph 2.1 to identify in detail the form and content required in experts' reports.
57. In addition, the CPR provides a protocol for the instruction of experts and the obligation on those instructing experts to keep them fully informed of all material circumstances and changes of circumstances:

"14.3 Those instructing experts should keep experts informed of the progress of cases including amendments to statement of case relevant to the expert's opinion.

14.4 If those instructing experts become aware of material changes in circumstances or that information within their control was not provided to experts they should without delay instruct experts to review and if necessary update the contents of their reports."

58. The consequences of a failure to comply with these principles have been considered in a number of cases including Cala Homes v Alfred McAlpine Homes [1995] FSR 818; Cantor Fitzgerald v Tradition [2000] RPC 95; Anglo Group plc v Winther Browne & Co Ltd [2000] 72 Con LR 118; and Great Eastern Hotel v John Laing & others [2005] EWHC 181.
59. In each of these cases the failure to comply with the guidance as to the appropriate professional conduct of experts led to that expert's evidence being rejected.
60. In every case it is the judge's duty to consider the whole of the evidence. This includes, of course, a failure by an expert witness to observe the requirements set out in the Ikarian Reefer and the Civil Procedure Rules. It will only be in the most extreme case that an expert's evidence will be rejected out of hand and not even considered. In other cases his failure to follow the clear guidance which I have just set out will form the background against which his evidence must be considered.
61. In this case Halcrow complains about three of LFEPA's experts and in particular Mr Evans, who gave evidence on matters of professional negligence. Part of the problem may have been that Mr Evans was retained by LFEPA in a dual capacity both to devise and no doubt in due course for reward, to supervise the carrying out of his scheme for remedial works and as an expert in the litigation. This led to the situation where the Authority was claiming privilege for meetings which Mr Evans attended where it was claimed that the primary purpose was for him to advise in relation to this litigation, which was privileged, rather than to advise on the implementation of his own remedial scheme by the Authority, which would not have been privileged.
62. It is also clear that at a crucial stage in LFEPA's thinking, Mr Evans was not kept informed of other professional advice that was being obtained and indeed was not told about it until very much later in contravention of the Guidance to which I have just referred. In this respect LFEPA itself failed to observe the guidelines to which I have referred.
63. I do not accept, as LFEPA contends, that Mr Evans endeavoured in his written and oral evidence to provide impartial expert opinion on the matters in the dispute. By contrast it is right to record that he and Mr Rollason have spent a very productive time in discussing and agreeing a number of the issues entirely in accordance with the appropriate procedure.
64. In my view Mr Evans' written and oral evidence was partial, biased, and on occasions misleading to such an extent that it could not be described as independent. The errors in his written and oral evidence cause me reluctantly to question not only his reliability but also his overall competence as an expert.
65. A stark example of this related to Mr Evans' Report claiming (although it was not pleaded) at paragraph 2.36 and following that Halcrow was in breach of the Highly Flammable Liquids and Liquified Petroleum Gas Regulations 1972. In cross-examination Mr Evans admitted that the Regulations did not apply to Ondina oil, the relevant substance in this case. He was asked when he found this out. He replied that he had known that for a long time. Mr Evans agreed in oral evidence that what he had written was "misleading" and "wrong". He claimed that he wrote it as an "oversight". He refused to accept that he had made a mistake but could give no explanation as to how he came to assert that Halcrow was in breach of these Regulations.
66. On the basis of the answers which he gave in cross-examination it would appear that he took a deliberate decision to attempt to mislead the court. I do not think that it goes as far as this. The most likely explanation is that he made the assertion in his Report without analysing the Regulations in order to reinforce his claim that Halcrow should have carried out a risk assessment.
67. Equally at paragraph 3.68 of his first Report he refers to "designing and planning for any building which contains flammable liquids". The substance to which he was referring was the Ondina oil which is not defined as a flammable liquid either in the Regulations or within the industry. Mr Evans was forced to agree that paragraph 3.68 of his report would have to be quite considerably re-written if it was to give an accurate picture.
68. There are numerous examples in other paragraphs of Mr Evans' Report of biased and misleading comments. For example, in paragraph 4.15 of the Report it says:

"The consultant shall also assess the mechanical ventilation extract systems together with artificial smoke devices and materials for use within the scheme."

69. The implication is that Halcrow had failed to make such an assessment. Mr Evans had to agree in oral evidence that in order to give a fair picture he should have said that Halcrow had indeed made such an assessment.
70. In relation to documents on which he relied, Mr Evans failed to make full and frank disclosure. In 2005 Mr Evans approached a sheet manufacturer, ASM, to review the advice on re-sealing the existing ductwork. He failed to refer to this in his report or to disclose the documents evidencing these communications. This information was relevant to the court in considering the various remedial schemes.
71. Mr Evans had to admit in cross-examination that he had thought that re-sealing might be possible, or at least a theoretical option. He had apparently gone to ASM because Mr Rollason, Halcrow's expert, was putting forward the case that it might be a realistic possibility. ASM told Mr Evans that it was not something that could be practically achieved. Mr Evans said that "it was probably an oversight that I did not declare it".
72. A further glaring inaccuracy occurred in his supplementary report of February 2007. At paragraph 2.5 it was clear that he had failed to count the number of smoke generators. He said there were nine. He had to admit in cross-examination that there were 22.
73. Space does not permit me to record Mr Evans' other inconsistencies which are set out in the defendant's closing written submissions. My approach to Mr Evans' evidence is to consider it at each relevant stage but against the background of the findings of unreliability and partiality which I have set out.
74. Mr Rollason, by contrast, was an impressive witness. He gave his evidence directly, concisely and fairly. He was prepared to accept against Halcrow that after the fire in June 2004 Halcrow should have advised LFEPA that they should have stopped providing training at The Firehouse. Equally, he said that if he had been drawing up the mechanical work specification he would have stated expressly that the sealant should be oil resistant. Halcrow had not done so.
75. I was relieved in a difficult technical case to have Mr Rollason's expert evidence on which I could rely. On the basis of Mr Evans' evidence it would have been much more difficult to do justice between the parties. Taking into account the effective and balanced cross-examination of Mr Rollason by Ms O'Farrell QC, I am able to come to a proper conclusion on the difficult technical issues covered by Mr Rollason and Mr Evans.
76. LFEPA instructed Mr Walsh of Bowater Troup Ltd as their building services expert. He gave evidence on the scope of the remedial works. It is the first time that he has given evidence in court as an expert. It would appear that he was insufficiently briefed by his principal on the obligations of being an expert witness. He was a poor witness. In her final submissions on behalf of LFEPA Ms O'Farrell QC conceded, inevitably, that contrary to his obligations as an expert, Mr Walsh did not carry out sufficient investigation into the availability of replacement components for the communications equipment. As a result he reached a conclusion that was wholly unsustainable.
77. It became clear that, as he ought to have found out before he wrote his report, replacement components were available for the communications system and that therefore the complete and expensive replacement for the firefighter location system for which he was contending was not needed. This resulted in a saving of a substantial part of LFEPA's claim. If it had not been for the cross-examination of Mr Walsh by Mr Taverner QC, the court might well have been misled into concluding that LFEPA's claim was close to a million pounds more than in fact it legitimately was.
78. In addition to these witnesses, Mr Nimmo gave brief evidence as LFEPA's fire engineering expert. There is no criticism of his evidence.
79. As a result of the settlements, Mr Hyde, Mr Murray and Mr Heath did not need to give expert mechanical engineering or fire expert evidence for Lorne Stewart and P & P. I have not taken their reports or contributions to the Joint Statements into account except where they have been adopted by other witnesses, notably Mr Evans. In which case I have taken their views into account as part of his evidence.
80. Mr Wort, quantum expert for LFEPA and Mr Smith, quantum expert for Halcrow, worked very hard to agree quantum issues. This work saved much time at trial and I acknowledge it. However, some issues remain to be resolved and each gave brief evidence at the trial.
81. As with Mr Evans and Mr Walsh I am concerned at Mr Wort's lack of independence as an expert. As an example, after he had gone into the witness box, I encouraged Mr Smith and Mr Wort to continue to meet to see if they could agree figures as figures over the following weekend. To the defendant's evident surprise (and mine), Mr Wort put forward on the following Monday new and increased figures for design fees and contingency which he was then obliged to withdraw.
82. I have no such problems with Mr Smith's evidence. I am satisfied that he gave independent evidence on which I can rely. This does not absolve me from considering Mr Wort's evidence on specific issues but it is against the background that I can in general rely on Mr Smith's evidence, whereas I have less confidence in that of Mr Wort.

4. The Law

(a) Negligence

83. Clause 13.1 of the Articles of Agreement required Halcrow to carry out its obligations under the contract with due care and diligence. This required Halcrow to carry out its obligations with the reasonable care and skill to be exercised by a professional carrying on that profession.
84. Although many others have attempted to improve on it, the best articulation of the test remains that of Mr Justice McNair's address to the jury in Bolam v Friern Hospital Committee [1957] 1 WLR 582 at 586:

"But where you get a situation which involves the use of some special skill and competence then the test as to whether there has been negligence or not is … the standard of a skilled man exercising and professing to have that special skill. A man need not possess the highest expert skill; it is well established law that it is sufficient if he exercises the ordinary skill of an ordinary competent man exercising that particular art. I do not think that I quarrel much with any of the submissions in law which have been put before you by counsel. Mr Fox-Andrews put it in this way, that in the case of a medical man, negligence means a failure to act in accordance with the standards of reasonably competent medical men at the time. That is a perfectly adequate statement so long as it is remembered that there may be one or more perfectly proper standards; and if a medical man conforms with one of those proper standards then he is not negligent."

85. It is clear that Halcrow agreed to use their reasonable care and skill in the development of the project. They did not guarantee that they would bring the project to a successful conclusion. The case, rightly, is not put by LFEPA on that basis but on the basis that Halcrow fell below the standard of care and skill reasonably to be expected of professionals who profess a very high level of engineering and management skills that enable them to profess to LFEPA that they have the competence to develop and manage this innovative project.
86. An important question in this case is whether or not Halcrow should have appreciated in 1998 or later that oil would collect in the ductwork in sufficient volume that it would not form merely a film but would form small globules which would leak and in leaking would saturate the insulation, which would constitute a fire risk and whether, in failing to do so, they fell below the appropriate professional standard.

(b) Damages

87. If I find for the claimants a further question arises. What is the appropriate measure of damage?
88. The general principles of the law of damages were set out by Lord Haldane in British Westinghouse v Underground Railway of London [1912] AC 673 at 689 and have ever since been cited as good law for the following propositions:

1. The fundamental basis of damages is compensation for the pecuniary loss to a party naturally flowing from the breach.

2. This principle is qualified by the duty of a claimant to take all reasonable steps to mitigate its loss.

3. Where in the course of business a party has taken action arising out of the transaction which has mitigated its loss, the effect in actual diminution of the loss which it has suffered may be taken into account even if it had no duty to act. These principles were affirmed by the House of Lords in Banque Bruxelles Lambert SA v Eagle Star [1997] AC 191.

89. This formulation follows the general rule referred to by Lord Blackburne in Livingston v Rawyards Coal Company (1880) 5 App.Cas 25 at 37 that compensatory damages should as nearly as possible:

"… put a party who has been injured or who has suffered in the same position as he would have been if he had not sustained the wrong."

90. In Ruxley Electronics Limited v Forsyth [1996] 1 AC 344 at 357, Lord Jauncey set out the following further guiding principle:

"Damages are designed to compensate for an established loss and not to provide a gratuitous benefit for an aggrieved party from which it follows that the reasonableness of an award is to be linked directly to the loss sustained. If it is unreasonable in a particular case to award the cost of reinstatement it must be because the loss sustained does not extend to the need to reinstate."

However, Lord Jauncey emphasised in his speech (page 358) that

"What constitutes the aggrieved party's loss is in every case a matter of fact and degree."

I shall return to Ruxley in a moment.

91. In Radford v De Froberville [1977] 1 WLR 1262 at 1270, in a passage often quoted, Oliver J emphasised that damages were recoverable "with the proviso, of course, that he is seeking compensation for a genuine loss and not merely using a technical breach to secure an uncovenanted profit".
92. These issues were considered in the Southampton Containers case, [2001] EWCA Civ 717 and in particular in the judgment of Clarke LJ. He affirmed the following proposition relevant to this case:

"42. To award the plaintiffs the cost of reinstatement, theoretical or not, if it is intended thereby to put them in the same position as they would have been if the fire had not occurred insofar as money can, can also be reasonable. As between themselves and the defendants one must at least be able to contemplate the possibility if not the probability that the plaintiffs were indeed minded to rebuild their billiard hall and shops."

93. Clarke LJ went on to analyse Ruxley in detail. He emphasized various passages in the speech of Lord Lloyd of Berwick and in particular the passages at pages 369H-370A where Lord Lloyd said that

"If the court takes the view that it would be unreasonable for the plaintiff to insist on reinstatement as where for example the expenses of the work involved would be out of all proportion to the benefit to be obtained, then the plaintiff will be confined to the difference in value."

94. At page 56 of his judgment Clarke LJ gave the following interpretation of Ruxley:

"Ruxley also supports the proposition that, although what a claimant does with any damages he receives is irrelevant, his intention to reinstate or not to reinstate, while not conclusive, is relevant to the question whether it would be reasonable to reinstate the property – see Lord Jauncey at page 359C-D and Lord Lloyd at pages 372-373; see also for example the passage from the judgment of Sir Robert Megarry VC in Tito v Waddell No.2 [1977] Ch 106 at 132 …"

95. In order to succeed LFEPA must establish against Halcrow:

(a) Halcrow was negligent in its design;

(b) Halcrow's negligence caused LFEPA's loss as claimed;

(c) In considering (b) it is necessary to consider not only whether Halcrow's negligence caused the loss but whether LFEPA suffered a loss for which it should reasonably be compensated, and in particular whether it was reasonable for it to recover the cost of reinstatement of the property. In answering this question I should consider whether or not LFEPA have shown any intention to reinstate the property.

96. LFEPA claims that it intends to carry out the necessary works to reinstate hot fire training in The Firehouse at Southwark but that it is prudent for it to wait and see what damages are awarded before commencing the works.
97. The defendants contend that LFEPA has no intention of carrying out such works and indeed that it would be unreasonable for it to do so in the face of the advice given by its own training department that because of the problem of stratification it would be dangerous to resume such training at Southwark.
98. The claimants claim damages not only for negligent design but also for failing to review the design. Jackson & Powell on Professional Liability 2007 6^th Edition make the point at para 9-302:

"It is submitted that the contractual measure of damages for failure to review a design where a claim in respect of the original design obligations is Statute barred should be such as to put a claimant into the position that he would have been in if the design had been properly reviewed. Thus if the failure to review occurred after practical completion a claimant should be obliged to give credit for the (possibly substantial) costs which would have been incurred at that stage in correcting the design."

This would seem to be correct.

99. Halcrow contends in the final written submissions that there is no difference between a Statute barred and a non-negligent original design. On the principle set out in Jackson & Powell above, LFEPA should, on this basis, give credit for the costs incurred in correcting the design. In fact, Halcrow makes no such pleaded claim (or counterclaim).
100. Halcrow puts its case rather differently. It claims that if the design was always negligent and needed putting right the costs incurred should be regarded as part of the claims arising out of the 2004 fire which was settled. There was no additional loss, so it contends, after the 2005 fire.

Stratification

101. The concept of stratification is central to many of the issues which I have to consider. It is convenient to discuss it at the outset. I do so in the context of a helpful note which has been agreed between the parties.
102. The dictionary definition of stratification is "to form a deposit in layers or strata".
103. The context in which it is relevant in this litigation is its effect on the usefulness of training in The Firehouse at Southwark.
104. In a real fire the smoke produced is a mixture of products of combustion and air which is at a higher temperature than the surrounding air. The smoke is therefore more buoyant than the surrounding air and rises upwards forming a layer from the ceiling downwards or "stratifying" at a high level until the whole space is filled with smoke. The smoke will stratify at a high level often with clear air below it.
105. Oil based artificial smoke is also at a higher temperature and lower density than the surrounding air and, with no other source of heat in the space, will also stratify at a high level with the clear space below, simulating a real fire condition.
106. Unfortunately when propane burners were operated in the fire rooms, the result was the opposite. The products of combustion from the burners and the entrained air (which will contain a proportion of oil based smoked air) are at a higher temperature and lower density than the oil based smoke in the remainder of the room. The combustion products and the entrained air, being more buoyant than the remaining air, form a layer near the ceiling and the oil based smoke is displaced downwards. When the temperature reaches a certain level the oil based smoke starts to evaporate and no longer remains opaque. Since the temperature is highest near the ceiling (due to hot gasses being more buoyant than cooler air and therefore rising to ceiling level) with reducing temperature to floor level, the smoke nearest the ceiling evaporates and any oil based smoke that remains is "stratified at low level" with a clear space above. The temptation for trainees is to stand up and look over the smoke, whereas in a real fire it is essential that they bend down and look under the smoke.
107. I was told that this was disastrous for real fire training since in a real fire, trainees should bend down to look under the smoke but as a result of the training would be likely to stand up to try to look over the smoke.

5. The Facts to the January 2005 Fire

108. In the early 1990s LFEPA received an Improvement Notice which stated that all reasonably practical steps had not been taken to ensure that all firefighting personnel had received adequate training as required by section 2(2)(c) of the Health and Safety at Work Act 1974.
109. The paper, "Strategy for Improvement" written in response, noted that the London Fire Brigade already provided very substantial operational training. The paper made various recommendations and set out the steps which were necessary in order to develop a new coherent programme. This plan was approved on 19 March 1992.
110. Among the steps which the Authority took was to visit the United States to look at what are described as "environmentally friendly firehouses". The result of the visit is set out in a detailed report dated 17 June 1993. As a result of the visit the Authority decided to press ahead with investigating the possibility of Real Fire Training at the Southwark Training Centre. The Authority Report informed members of the result of the visit making it clear that "this particular scheme will be unique in this country".
111. On 19 August 1993 Mr Moge, then the LFEPA Property Manager and Head of the Technical Client Unit, wrote to Mr Tovey, Managing Director of Halcrow, inviting him to set out Halcrow's expertise and, if it had the necessary expertise, to tender for the construction of a firehouse training facility at Southwark. The letter noted that a single lead consultant would be appointed to carry out all the consulting work involved. The letter set out the duties which would include not only feasibility studies and detailed design, but also preparing and obtaining tenders from contractors and undertaking contract administration duties to final completion of the project.
112. On 25 August 1993 Mr Tovey responded expressing considerable interest and saying, "I believe that together with other members of the Halcrow Group, HGa can provide the full service you require".
113. On 7 April 1994 the Authority issued its consultant tenderers' brief to pre-qualified tenderers including Halcrow. Although the design brief envisaged how The Firehouse was to be designed, it placed responsibility on the successful tenderer to investigate and assess various systems including various computerised systems for control of The Firehouse, whether existing or in the process of development and their suitability for use in the project.
114. The consultant's brief which later formed part of the contract documents, stated as follows:

"The Authority intends to extend its training facilities at its Southwark Training Centre by providing a firehouse building and associated drill tower on part of the Centre's No.1 drill yard.

The Firehouse building and associated drill tower is a structure providing facilities for recruits and firefighters to develop, maintain and improve their skills in using fire service equipment. This will be undertaken in conditions which simulate operational working conditions (including real fire) in a safe, controlled training environment. Exercises may be of a set programme or varied by prior arrangement by the trainers and the results monitored and recorded.

The exercises are to be carried out in increasingly stressful conditions of heat, smoke, fire, water and resulting humidity and steam. They are also designed to be undertaken in a variety of internal spaces which may need adaption as required for the particular exercise. This is required so that students do not become familiar with the building and their approach to any exercise 'incident'."

115. On 9 June 1994 Halcrow sent in its bid document. It started by saying that it had brought together a strong team. This included companies within the Halcrow Group together with two outside companies, Sleeman & Hoare and Warrington Fire Research, which would cover fire technology, firefighting experience and training advice. Mr Tovey said in oral evidence that they were both engaged by Halcrow as sub-contractors.
116. Mr Tovey agreed in oral evidence that it was understood that Halcrow's team would, itself, have to identify many of the risks associated with this innovative project without being able to rely on LFEPA.
117. In relation to mechanical and electrical services, Halcrow said that they had their own specialist engineers with the capability of providing all these services and that these services would be undertaken by various sections within the Halcrow organisation under the control of a design team leader. Mr Tovey said in oral evidence that the ductwork design was undertaken by Mr Thomas until July 1998 and after he left, by Mr Tough, who gave evidence before me.
118. Site supervision was to be undertaken by a resident engineer. This was initially Ms Joanne Hegarty and thereafter Mr Des Cole.
119. I agree with Mr Rollason's conclusion that the consultant brief makes Halcrow responsible overall for supervision of design although it may delegate some design responsibility.
120. This tender was followed on 9 August 1994 by a response to a questionnaire from Mr Watson, then LFEPA's buildings officer. Question 2 asked "What experience does your proposed design team have in designing firehouses and very similar complexes to firehouses?"
121. The answer given was:

"Although HGa as a company does not have specific experience in designing firehouses, the members of the team have considerable and relevant experience in the issues that need to be addressed in the design of firehouses and other similar projects that require a high level of operator interaction with a process in a hazardous environment.

"The team that HGa have drawn together represents expertise at its highest levels in each of the technology areas concerned … It is extremely unlikely that such expertise would be available purely from within a single entity."

122. The experience of Warrington Fire Research, who it was said were currently advising on the provision of a firefighting facility to be built at a major UK airport in the south of England, Halcrow Design, Lyons Sleeman & Hoare who would deal with planning issues and Halcrow Gilbert Associates who would be involved in project management, were said to be a team providing expertise at the highest levels.
123. In September 1994 Halcrow was appointed under a bespoke agreement in respect of phase 1 of the Project (Feasibility and Design) and phase 2 (Planning Application). Halcrow's duties included the preparation of the mechanical services specification.
124. On 17 October 1994 the Articles of Agreement between the Authority and Halcrow were signed and witnessed. The following provisions are material:

Under Clause 1 Halcrow undertook to provide the services set out in the consultant's brief. These included:

1. Managing the Project (1.3.1)

2. Developing the design and preparing all necessary plans and drawings (1.3.2; 1.3.25 and 1.3.50)

3. Preparing the specification for the Project including the mechanical and engineering specification (1.3.53) and

4. Supervising any design or drawings by others, quality controls of materials, testing and commissioning (1.3.61-66 and 71)

125. The Model Form of General Conditions of Contract MF/1 (rev 3) 1988 Edition provided by Clause 13.1 that the contractor should carry out its obligations under the contract with due care and diligence.
126. Clauses 36 and 44 provided a regime which sought to limit claims under the contract to the specific provisions of those paragraphs. I shall need to deal with these paragraphs in some detail, particularly in relation to LFEPA's claim against Lorne Stewart, but it is convenient at this stage to set out briefly the more important paragraphs in order to provide the background.
127. Clause 36 as amended provides the contractual regime under which defects in the work must be rectified and damages must be claimed. Clause 44.1 provides that a party establishing or alleging a breach of contract is under a duty to take all necessary measures to mitigate the loss which has occurred, provided it can do so without unreasonable inconvenience and cost.
128. Clause 44.4 provides that the purchaser and the contractor intend their respective rights, obligations and liabilities as provided for in the conditions to be exhaustive of the rights, obligations and liabilities of each of them to the other arising out of under or in connection with the contract and the works. The clause continues:

"Accordingly, except as expressly provided for in the conditions neither party shall be obligated or liable to the other in respect of any damages or losses suffered by that other which arise out of under or in connection with the Contract or the Works whether by reason or in consequence of any breach of contract or of statutory duty or tortuous or negligent act or omission."

129. Clause 44.2 provides:

"Neither the contractor nor the purchaser shall be liable to the other by way of indemnity or by reason of any breach of the contract or of statutory duty, (including but not limited to negligence) for any loss of profit, loss of use, loss of production, loss of contracts or for any financial or economic loss or for any indirect or consequential damage whatsoever that may be suffered by the other."

130. Under Clause 36.1, as amended, the defects liability period is defined as

"(a) 12 months calculated from the date of taking over the Works under Clause 29 (taking over) or

(b) 12 months calculated from the date of replacement or rectification to the Engineer's satisfaction of the defect in that Section or part of the Works whichever is the later."

131. Clause 36.2 sets out the regime for remedying defects and the consequences of failing to do so. It provides, as amended, as follows:

"The Contractor shall be responsible for making good by repair or replacement with all possible speed at his expense any defect in or damage to any part of the Works which may appear or occur during the Defects Liability Period and which arises either:

(a) from any defective workmanship or design or

(b) from any act or omission of the Contractor done or omitted during the said period."

132. There is a serious dispute between the parties and particularly between LFEPA and Lorne Stewart as to the precise meaning and effect of these clauses, the answer to which will be crucial in resolving the nature and extent, if any, of Lorne Stewart's liability. I shall therefore return to this issue later.
133. There is no doubt that both LFEPA and Halcrow understood that they were embarking on an innovative project to provide real fire training for London's firefighters. The purpose of the Project was to adapt the Southwark Firehouse to provide real fire training using smoke. Halcrow assured LFEPA that it was able either in-house or through sub-contractors to develop the design and supervise the project. It was agreed that management of risks was an important element in the carrying through of this innovative project. In this process Halcrow understood from the outset that LFEPA had limited practical experience itself because there was no existing gas fired firehouse in the United Kingdom except the one used by the Navy. Equally, LFEPA was aware that although Halcrow claimed to have the necessary range of expertise, since the project was unique in this country, Halcrow had not undertaken such a project either.
134. Before Halcrow's meeting with LFEPA on 14 March 1995, LFEPA set out the issues which it wished Halcrow to address at that meeting. They were:

[1. not relevant]

2. the provision of realistic training for firefighters and the agreed limits of such training;

3. the provision of realistic heat as experienced in a real fire situation;

4. the provision of "stage" smoke to mimic smoke experienced in a realistic situation;

5. the provision of realistic fires in fire rooms;

6. the provision of circumstances for simulated fire training for firefighters in reasonable and controlled conditions of safety;

7. the presentation of the four options with their pros and cons.

135. The presentation by Halcrow took place on 14 March 1995. By then, as Mr Tovey told us in oral evidence, he had visited a facility in New Jersey, USA. It appears that in the United States these facilities used artificial smoke.
136. In the Tender Report prepared for the meeting, Halcrow said in relation to the application of smoke and its behaviour:

"2.iii) Artificial smoke is to be used in The Firehouse. It will provide realistic training conditions but as a liquid it will not behave as the carbonaceous particulate smoke created by fires in a house or light industrial premises that The Firehouse represents. It burns off at a temperature of 80 to 100 degrees C depending on the product selected."

Mr Tovey has added:

"HGa wil concentrate on artificial smoke that burns off at 180°C"

137. Halcrow's tender report identified the burn off stratification problem and claimed that realistic training conditions could be provided by setting appropriate combined levels of temperature, smoke density and light.
138. In February 1997 LFEPA appointed Canadian specialists ICS to design and install the smoke generators and fireplaces.
139. LFEPA was concerned about responsibility for design and Mr Watson wrote to Halcrow (Mr Coomber, then the Project Manager) on its behalf on 21 March 1997 to say

"As a general rule should any problem arise from the design, the Authority would seek redress in the first instance from HGa (Halcrow) and would call upon HGa's professional indemnity insurance."

140. Tenders were sought from Lorne Stewart and others for the mechanical services installation including ductwork on 29 September 1997. The project was re-tendered in December 1997.
141. On 20 March 1998 Lorne Stewart submitted its tender. Another tenderer, High Temperature Linings, noted to Halcrow, "Let's face it, no-one has constructed a fire project quite like this project".
142. Halcrow issued a Second Round Tender Report in May 1998. It included Lorne Stewart's comments where relevant. Mr Tovey in oral evidence noted that Lorne Stewart did not provide details of the sealants which they proposed to use.
143. Halcrow concluded the report with a recommendation to the Authority that it should place an order with Lorne Stewart subject to a satisfactory clarification of its tender. Lorne Stewart commenced work in 1998 prior to entering into their formal contract with LFEPA.
144. On 3 July 1998 Mr Tovey wrote to Mr Moge notifying him of a change of Halcrow's site manager. The letter made it clear that all correspondence would also be copied to Mr Moge.
145. Potential problems with the design of the ductwork were identified within Halcrow. On 10 July 1998 Mr Sturdy, Halcrow's Chief Architect, expressed concern in an internal note to Mr Tovey and Mr Tough that under the current design, ducts would rise in positions which restricted circulation and the flexibility of the space. He also suggested that the routing of the ductwork on the 4^th floor should be reconsidered.
146. By a letter to Mr Watson dated 28 July 1998 Mr Tovey confirmed that he was, in effect, Project Manager for Halcrow and he was primarily assisted by Mr Tough as Senior Mechanical Engineer.
147. Mr Watson of LFEPA was concerned as to whether checks to verify the ductwork design had been undertaken by Halcrow in accordance with Halcrow's quality control and wrote to Halcrow on 10 August 1998 to enquire whether or not this had been done. From September 1998 Mr Hark was retained by Halcrow to undertake this task.
148. There was a discussion between Mr Tough and Mr Quinn at Lorne Stewart on 7 September 1998, as a result of which some re-configuring took place. Mr Quinn said that Lorne Stewart had encountered difficulties in co-ordinating services into the existing space and asked Mr Tough how they should proceed. With the agreement of LFEPA, Halcrow prepared the detailed ductwork layout drawings.
149. A revised Mechanical Services Installation Particular Specification was issued by Halcrow on 7 October 1998. It is a very comprehensive document. It prescribed at Clause 1.61 that the equipment must be designed for a life of at least 25 years without complete replacement. It must cater for the rise and drop in temperature and adverse and extreme conditions expected during each training session for 350 days a year.
150. This clause ended:

"The contractor must ensure that all the equipment provided as part of this contract is capable of withstanding the conditions of extreme heat, steam, water from a jet to a fire spray, humidity, foam and flame etc that is likely to occur as well as

Water hoses …

Breathing apparatus, air cutting cylinders and similar."

151. There is no specific stipulation relating to equipment designed to withstand smoke oil. The introduction section specified in the fourth unnumbered paragraph that artificial simulated smoke would be generated as required in the building by volatisation of non-toxic food quality oil.
152. Clause 2.4.2 relates to ductwork. The specification provides:

"Ducted supply and exhaust air shall be installed as indicated in the tender drawings. These are diagrammatic and show the philosophy and intended routing. The contractor will provide installation drawings based on those drawings …

From the supply plenum, ducted fresh air is provided to each of the smoke/heat zones as well as the fire rooms. Attenuation is provided on each supply duct with smoke generators and zone heaters (both free issue) installed duct mounted for each smoke/heat zone. For the fire rooms in duct mounted smoke generators (free issue) are to be installed."

153. Mr Rollason agreed that there is no reference in the specification to liquid smoke oil deposits or the requirement that the ducts shall withstand smoke oil deposits. This is a matter on which LFEPA criticises Halcrow.
154. Table 1 annexed to Clause 2.4.2, indicated that low temperature, i.e. - 4°C to 70°C and medium 70°C to 110°C. These were to be in galvanised steel. High temperature, 110° to 300°C should be in stainless steel. This was later changed to Durasteel. The table was revised in October 1998 (see paragraph 171 below).
155. The specification (2.4.2) went on to provide that the supply ductwork installation (both smoke/heat and firerooms) was to be classified as a high pressure system and the exhaust ductwork classified as a medium pressure system. Both were to be installed and tested in accordance with DW/142.
156. The specification went on:

"Sealants, joints and materials shall be as specified in DW/142. Where the required temperature rating for sealants, joints and materials exceed those in DW/142 the contractor shall submit with his tender full details together with the type of sealant, joints and materials for temperature ratings within DW/142."

157. Complaint is made by LFEPA that DW/142 was the wrong standard. Halcrow contends that, properly construed, the reference to DW/142 was appropriate.
158. The specification also provided in Clause 2.4.2 that all floor distribution ductwork was to be installed with a slight fall in the direction back to the plant room. The falls were omitted by Lorne Stewart on 9 November 1998 after discussion with Halcrow. LFEPA also makes complaint about this.
159. On 23 October 1998 Lorne Stewart entered into its formal mechanical services contract with LFEPA. Clause 2.5 of the contract dealt with co-ordination of the works. In Clause 2.5.8.1 headed "Ductwork" the specification provided that

"All ductwork systems shall incorporate sufficient hinged access hatches to facilitate inspection of ducts and for cleaning. Seals to access hatches must be airtight and the access hatches and dust aperture must not compromise the fire and resistance of the ductwork."

160. Clause 2.5.8.2 specified that supply air and return air ductwork shall be galvanised steel and shall be fabricated in accordance with the recommendations in the HVAC specification DW/142.
161. The exhaust ductwork to the fire rooms was to be in stainless steel but to the same standard and thickness as detailed in DW/142.
162. Clause 2.5.8.4 provided inter alia in relation to the erection of the ductwork that:

"All ductwork and connections shall be adequately braced and stiffened where necessary to prevent sagging, drumming and vibration and shall be completely airtight."

163. Clause 2.5.8.5 dealt with erection of metal ductwork. It provided that all longitudinal seams for metal ductwork should be of an approved type and should be sealed with an appropriate sealant. Joints in rectangular metal ducts would be provided where necessary to facilitate erection of the ductwork and disconnection for maintenance purposes.
164. The following instructions were particular:

"All site joints for metal ductwork other than flanged joints shall be properly swaged plain slip type with the inside lap in the fire detector airflow and shall be riveted or jointed with self-tapping screws at not more than 60 mm centres. All such joints shall be sealed and rendered airtight with a suitable sealant."

165. Clause 2.5.8.8 provided that gaskets/sealants used for painting ductwork shall be to the appropriate temperature ratings.
166. Clause 2.5.8.9 provided that flexible connections should be suitable for an operating temperature range of -4°C to 110°C for supply air and exhaust air from the smoke heat and heat zones. For the exhaust from the fire rooms the operating temperature should be -4°C to 300°C.
167. Clause 2.5.8.10 described Access Openings:

"Access openings shall be provided in the ductwork at suitable positions for the purpose of inspection and servicing of plant and equipment. They shall be rigidly framed with airtight covers designed for easy removal and replacement …

Access panels shall be of 1.2 mm thick galvanised sheet steel with a 25 mm by 6 mm thick approved sealing gasket fixed around the edge with suitable adhesive to form an airtight seating against the duct frame …"

168. Testing ductwork was the subject of Clause 2.5.8.12. It provided that

"All supply and extract ductwork which has an operating static pressure greater than 500 N/m2 (Newtons) and all ductwork which will be inaccessible shall be tested for air leakage after assembly on site and before any insulation is applied …"

169. Clause 2.5.8.12 also provided that the air leakage test was to be carried out in accordance with the procedure described in HVAC specification DW/142 and Guide DW/143. The manner of the test was prescribed to be as follows:

"The test shall be maintained for a period of 15 minutes during which period the aggregate leakage shall not exceed 1 per cent of the total design flow rate. Any leakage must at once be made good before proceeding with tests on the next section of the ductwork."

170. Finally the specification provided that a test certificate should be issued for each section of the ductwork which was tested satisfactorily.
171. The addendum to the specification (7 October 1998) provided a revised Table 1 setting out temperatures and materials. Low temperature ductwork was from - 4°C to 70°C, medium temperature was specified as - 4°C to 110°C and high temperature - 4°C to 300°C.
172. It was understood by Halcrow that the ductwork would conduct air which was polluted by smoke and oil of a temperature above those specified in Standard DW/142 and was exceptional in terms of humidity.
173. I adopt Mr Rollason's conclusions at paragraph 7.6 to 7.20 of his report. I find that Halcrow's specification made Lorne Stewart responsible for the preparation of installation drawings and for the satisfactory working of the completed works.
174. Importantly Lorne Stewart was responsible for submitting with its tender full details of the type of sealants, joints and materials for temperature ratings exceeding those in DW/142. This included those for the medium temperature ductwork which was to operate outside the range of DW/142. Halcrow prepared a bespoke specification based on DW/142 and DW/143. The specific terms in the specification set out where joints were to be sealed. Otherwise the specification provided that leakage should not exceed 1 per cent of the total design flow rate during a 15 minute test.
175. I also agree with Mr Rollason's conclusion at paragraph 7.20:

"By choosing from the range of options permitted by HGa's specification LS was able to fabricate an appropriate ductwork system for The Firehouse."

176. I also agree with Mr Rollason's conclusion at paragraph 8.3 of his first Report that Lorne Stewart remained responsible for the preparation of the fabrication drawings, for the choice of the type of longitudinal seams, flanges and sealants to be installed and for detailing the hangers and supports for the ductwork system.
177. In accordance with the contract which was in the form MF/1 (Revision 3) 1988 edition, Lorne Stewart sub-contracted the ductwork to P & P as it was entitled to do.
178. There was correspondence between Halcrow and Lorne Stewart over responsibility for the design of mechanical and engineering services. Lorne Stewart maintained that these rested with Halcrow. On 17 February 1999 Halcrow responded:

"1. Design is not included in your scope of works. You are, however, required to carry out elements of design development in turning diagrammatic tender drawings into fabrication/workshop drawings.

2. Selection of equipment is not design … It is the contractor's responsibility to select the ductwork to comply with the specification.

3. Although the specification calls for low and medium temperature ductwork to be DW/142 there are a number of options, e.g. cross joints. DW/142 does not indicate manufacturers of sealants or gaskets. These need to be confirmed by the contractor. The suitability of the equipment, e.g. the amount of expansion in the joints that can be accommodated can only be provided by the manufacturer."

179. On 23 February 1999 Halcrow issued revised drawings to Lorne Stewart noting that drain points were to be provided at the bottom of vertical ductwork and at all low points.
180. By 26 February 1999 Halcrow was still waiting for details of the sealants that Lorne Stewart was proposing to use – see record of the co-ordination meeting at which representatives of Halcrow and Lorne Stewart were present. It was still outstanding on 29 April 1999 (see note of meeting).
181. By 15 March 1999 Mr Tough was writing to Lorne Stewart complaining that the specification in Clause 2.4.2 required the contractor to supply full details of the type of sealants, joints and materials for temperature ratings specified within DW/142. These had not been specified and Halcrow would not permit the installation of the ductwork to begin until Halcrow had received the details.
182. Mr Tough agreed in cross-examination that he did permit installation of the ductwork to begin without having the information relating to the sealants because he thought that it was important that the job be moved forward. Mr Tough agreed that in retrospect he should have insisted on receiving the details of the sealant before permitting the installation of the ductwork to begin.
183. A note of outstanding issues discussed at a meeting on 30 March 1999 between Halcrow and LFEPA emphasised the need to clean the ductwork internally to remove smoke oil deposits and it was awaiting advice on the frequency of cleaning from ICS. The note of the meeting records that Halcrow was of the view that build up would occur at bends.
184. Mr Tough said that Lorne Stewart sent details of the sealant that it proposed to use on 5 May 1999 when a fax enclosed a barely legible information sheet. LFEPA has cast doubt on whether Halcrow did receive details of the sealant. No further information was supplied by Lorne Stewart but in the note of the co-ordination meeting on 10 June 1999 (see note of 5 July 1999) it is acknowledged that "LS-M had issued ductwork sealant details". I find that Lorne Stewart did send the information probably on 5 May 1999, that Mr Tough accepted the sealant on the basis that it would be Tecseal 300 and that he requested an acceptable copy. The temperature limits for Tecseal are recorded on the information sheet as - 60°C to + 200°C.
185. I say "probably" because the note of the meeting of 13 May 1999 might indicate that the information was still to be sent.
186. On 17 July 1999 Lorne Stewart forwarded to Mr Tough P &P's specimen of an air leakage test. Lorne Stewart, in its covering note, said "This is as per DW/142 and if this is acceptable to yourselves we will instruct the other ductwork contractors to utilise the same sheet".
187. The specimen air leakage testing chart set out the maximum permitted leakage of the ductwork. For medium pressure tests it required 10 per cent of the ductwork to be tested at random. "The duct shall be tested at the pressure recommended in Table 17 of DW/144 for the classification for the section of the ductwork that is to be tested." It concluded "The contractor shall provide documented evidence of the calculations used to arrive at the allowable loss for the section to be tested and the client, or his agent, shall witness and sign the results of the test".
188. I have seen air leakage test sheets dated 4^th, 7^th and 12^th October 1999. All these tests show leakage of 12, 14 and 15 litres/sec in relation respectively to the basement extract ductwork, basement supply ductwork and the first floor supply ductwork.
189. There was an important meeting on 9 September 1999 (see note dated 23 September 1999) convened at Lorne Stewart's request, to obtain clarification of the contractual documents and previous documents which had been submitted. Representatives of LFEPA, Halcrow and Lorne Stewart were among those present. Mr Hood represented Lorne Stewart.
190. At the meeting LFEPA made it clear that in order to provide flexibility for training purposes, The Firehouse would be divided horizontally and vertically as needed. What was described as the radiating network was to be capable of withstanding the following temperatures:

1.Heat and smoke training areas	80°C with hot spots of 100°C
2.Ceiling voids	80°C with hot spots of 90°C
3.Plant rooms	45°C with hot spots local to the heat smoke units of 50°C
4.Fire rooms	400°C for some rooms, other fire rooms up to 1000?C in the flames impingement areas for short durations
5.Other rooms	350°C
6.Above fire room doors	Within the heat and smoke rooms and some of the corridors/refuge areas: 400°C with short bursts of hot air up to 800°C from two of the fire rooms.

191. An independent design review and validation exercise was carried out by Mr Hark for Halcrow. There is some dispute as to how the document should be read but it is clear to me that the initial stage was carried out for the period to the end of 1998 and the second stage on the basis of the completed design. Someone has written "3 October 1999" on the bottom of the first page of the Report but it may well have been completed after that date. A letter from Halcrow dated 3 February 2000 indicates that after the review was completed Halcrow produced a schedule annexed to that letter showing the changes that had taken place as a result of the review and their implications on training.
192. The summary of the first stage review noted:

"that there is no concise record of the interpreted requirements and the way in which each is to be met by the facilities provided. There is hence no clear "approval of these by [the Authority]". There is the possibility of difference of understanding between the parties involved …"

193. Mr Tovey in oral evidence accepted that this was the case at the time of the initial Report.
194. The Review also noted at the first stage:

"Shortcomings in the level of definition of the design process, the appropriateness of design methods used and the certainty of the results"

195. The passage headed "Second Stage Review", recorded that the problems identified in the first review had been addressed and largely resolved. It noted that the record of the design process is more complete and accessible. The Report said that the operation and control of the ventilation system had now been re-defined and that, as a result of changes, a workable ductwork layout had been achieved.
196. The Report noted importantly:

"2.2 Second Stage Review

A resolution of the questions relating to the adequacy of the facilities provided awaits a clear and final definition of the ways in which the facility will be used. This must come from the client. The actual performance of the facility under these operating conditions now becomes an issue for testing and a proper documented basis for this must be developed and agreed."

197. Under "Client's Requirements" (3.1.1) described as part of a First Stage Review there is a note that "in view of the above lack of clarity (in relation to the Fire Places) there is a risk that current drawings and quantitative provisions may not fully meet the client's requirements. It is for consideration whether this risk should be addressed by means of further review. This may involve generating a summary of client's requirements and a corresponding note of how they are to be met, together with the current state of the process".
198. Mr Tovey said in evidence that no further such review was undertaken.
199. The ductwork was specifically addressed. Mr Hark noted (3.1.2) that

"Ductwork in both supply and exhaust system will routinely carry the simulated 'smoke' which consists of an aerosol suspension of mineral oil. Over a period it is to be expected that this oil will condense and collect on the internal surface of the ductwork. This may pose a risk of duct fire which does not appear to have been addressed."

200. LFEPA says that despite this "stark warning" Halcrow failed to take any steps to modify the design to eliminate or minimise the identified risk. This may well not be a fair point. Section 3.1 appears to refer to the First Stage Review. It is not clear that the whole of the Report is before the Court.
201. Mr Tovey said in evidence that this problem had been addressed by early 2000. I accept his evidence.
202. The Hark Report said at paragraph 3.1.3, presumably relating to the First Review, (again it is not clear whether or not it is subject to the earlier conclusions relating to the second Review or whether part of the Report is missing)

"Design Risk

On the basis of the findings to date, the effect of the issues outlined above is to constitute a serious design risk. This may be in non-achievement of certain requirements; in failure to achieve the specified equipment life or at the extreme an 'unsafe facility'."

203. Paragraph 3.1.3 of the Report concluded by saying that the responsibility for the overall system, performance and achievement of the broad requirements set by the client rested with Halcrow and that any design risk proved to exist had implications for Halcrow. This statement would not change after the second Review.
204. There was clearly some continuing concern over the amount of oil deposit inside the ductwork because on 27 March 2000 Mr Tough sent a note to Mr Tovey saying that he had been unable to get any indication from ICS as to the amount of oil deposits that could be expected inside the ductwork. He pointed out that "the monitoring vanes and dampers became fouled the more frequently the ductwork would need to be cleaned out". This would cause major disruption and cost implications. It is clear that undertaking cleaning of the ductwork was disruptive to the training and costly for LFEPA.
205. In June 2000 an independent consulting firm, Det Norske Veritas, carried out a detailed risk assessment on behalf of LFEPA and Halcrow. In relation to the risk of a fire hazard it reached positive conclusions. In paragraph 4.8.6 headed "Smoke Generation Oil" it describes various experiments and went on:

"The experimental results indicate that when these smoke generators are properly maintained and used in the prescribed manner under the conditions prevailing during the course of these trials there is little risk of the formation of flammable atmosphere, except possibly in the immediate vicinity of the nozzle. When a smoke generator similar in type to those used in the trials was run for long periods in a small enclosure in a laboratory experiment, concentrations exceeding 100% LEL (lower explosive limit) were detected but such conditions are unlikely to occur in any practical application of these devices."

206. The section goes on to consider the flammability of mists and sprays. The Report also reviewed a Paper by Burgoyne in 1963 and a trial by the Ministry of Defence in 1991 where Ondina oil had been used.
207. The description of the process in the Burgoyne Paper is described thus:

"This paper concluded that for droplets (of Ondina oil) below 0.014 mm, (i.e. 14 microns) that due to heat transmission these drops have time to vaporise completely before the flame front reaches them and combustion occurs. Thus they exhibit flammability characteristics essentially the same as the fully vaporised material. As the smoke house concentrations are well below the lower flammable limit, these smoke mixtures should not explode."

208. This paragraph concluded the section with the sentence:

"Both these approaches suggest 'the smoke atmosphere will not present a flammable hazard'."

209. The Report concluded in paragraph 4.8.7 that the smoke hazard had been reviewed and did not appear to be serious. It explained that the flammability hazard was remote because the predicted concentration as appeared in Southwark was 300 times below the lower flammable limit concentration and in the MoD experiment 25 times below the lower flammable limit.
210. Section 5 of the Report contained the Risk Assessment. In paragraph 5.2 Det Norske Veritas set out a risk assessment of various Fire House scenarios. I deal with this in the separate section dealing with risk assessment.
211. On 7 September 2000 Lorne Stewart provided a method statement and a product data sheet for the application of mastic for the purposes of agreeing an acceptable standard with Halcrow. Halcrow responded with queries in a letter dated 26 September 2000.
212. On 13 September 2000 Halcrow pressed Lorne Stewart for information regarding the continuous temperature ratings of the gaskets used between the joints of the ductwork flanges and also the access panels and the ductwork. It is not clear that this information was supplied. They also asked for confirmation that the ductwork complied with the Mechanical Services Specification.
213. On 4 April 2001 P&P confirmed (erroneously) that all gaskets and mastic used within the fire house were fully compliant with the specification.
214. Work was carried out by ICS in installing the ductwork. It would appear from the snagging list of 19 June 2002 that there was some smoke oil leakage in the ductwork insulation and cladding at the south end of the plant room. The work carried out was "clean up spillage and replace damaged/saturated insulation". Mr Tough says that he probably saw this at the time. He did not ask anyone about the effect of oil in the insulation as a result of this discovery.
215. Halcrow clearly had a problem in obtaining the necessary information from Lorne Stewart about the sealants. Mr Baker, their Project Engineer, wrote to Lorne Stewart on 30 September 2002 asking for the manufacturer's data sheet for the seals installed between the flanges on the low temperature ductwork.
216. It was at this time that problems were occurring with the Westemp panels installed on the recommendation of ICS. On 5 November 2002 LFEPA asked how there was any certainty that these problems would not reappear in future even if the panels were replaced. This has remained a constant concern.
217. The Taking Over Certificate of the mechanical works was dated 6 August 2003. This triggered a 90 day period for completing any outstanding work under the contract.
218. It appears that problems relating to the ductwork were brought to Halcrow's attention as a result of an inspection of The Firehouse in October 2003. Mr Cole as Halcrow's resident engineer, wrote to Lorne Stewart on 24 October 2003 in relation to mechanical defects after taking over The Firehouse.

"Following this week's inspection of the low temperature ductwork installation we find that many of the flange joints have either failed or are showing signs of impending failure …

"As a matter of urgency you are requested to provide your proposals and programme to rectify all failed joints and other joints that do not comply with the requirements of the specification."

"This failure makes the supply of all material used in the construction of your low and medium temperature ductwork systems which we have personally requested essential.

We remind you of the urgency to complete all defects as commercial use of The Firehouse is due to commence shortly."

I shall refer to this letter later when I deal with the section relating to the liability of Lorne Stewart.

219. At a meeting on 12 November 2003 between Halcrow and LFEPA including Mr Tovey, Mr Tough and Mr Moge it is recorded under "9. Other Issues" that:

"Halcrow stated that there is a problem with duct work joints and the FH (Firehouse) had experienced leaking of smoke in some rooms. It is believed to be gasket and we don't know if the gaskets are failing due to the heat or the oil ..."

220. On 17 November 2003 Lorne Stewart attached details that it had received from its sub-contractor in relation to the gasket problem and suggested a new sealant which might offer improved performance. The product for which the data sheet was provided was Tecseal 300.
221. In Halcrow's letter to Lorne Stewart dated 3 December 2003 the mechanical consolidated snag list noted in relation to the low temperature ductwork:

"15.2 Failed joint sealant visible on some dropper ducts and in plant room. Insufficient flange clips provided cf manufacturers recommendations."

222. In the letter dated 5 December 2003, Lorne Stewart replied to Halcrow saying that its expertise in the field of ductwork was limited and that it would rely on Halcrow to advise as to the suitability of the products which it proposed to use for repairs to the ductwork. It noted that both products had a temperature rating in excess of that set out in the specification.
223. LFEPA sent an email dated 12 December 2003 which the parties have been unable to find but the response from Halcrow dated 9 January 2004 is relevant. Mr Tough wrote:

"1. Lorne Stewart's ductwork was required to be based on ductwork specification DW/142 which only requires access doors to be provided for access to control dampers. A number of access doors were included in their price for the revised ductwork and these, together with additional instructed access doors have been installed …"

224. The letter went on to note at Point 3 that the use of the ventilation system over the last two years had been minimal compared to its intended use. Halcrow said that it was not aware of any build up of soot within the ductwork but that it would be a simple matter for LFEPA's Facilities Contract Manager to inspect the parts of the ductwork.
225. Mr Tough offered the view that "build up of soot will depend entirely on the intended use of the system and inspections should take place to monitor the internal condition of the ductwork".
226. On 23 January 2004 Halcrow gave Lorne Stewart the following instruction:

"As stated in our letter to you dated 24 October 2003 please rectify all failed joints and other joints that do not comply with the specification ..."

Mr Tough said in oral evidence that he did not think that Lorne Stewart had given all the details of the sealant which had been used.

227. It is clear that there were continuing problems with the ductwork gaskets. On 2 April 2004 Halcrow wrote to Lorne Stewart

"Thank you for your fax of 30 March 2004 enclosing P & P method statement for remedial work to the ductwork gasket joints.

We have the following comments:

In your fax to ourselves of 17 November 2003 you enclosed copy of the facsimile from Fenland Fire Contracts Ltd to P & P of 18 April 2001. This states that the proposed intermescent mastic tape duct gasket material begins to soften and intumesce at 100 degrees C with full intumescent properties at above 150 degrees C. Since the design temperature for the supply ductwork from the riser is 110 degrees C the proposed mastic would be unsuitable. Please find an alternative sealant…

Please confirm that it is proposed to carry out work to all flange joints in the supply ductwork downstream of the heat smoke units and up to the point where the ducts exist in the plant room irrespective of the state of the joint.

"The inside of the existing joints are often characterised by the excess sealant having been squeezed out … would need to be removed …

Is the sealant to be applied as a gasket strip along the joint or by a mastic gum application?"

228. On 27 April 2004 Halcrow expressed concern that they had not received a full method statement or answers to queries to their 2 April 2004 letter. They expressed "dismay at the time taken to resolve the failed ductwork joints which had first been reported to Lorne Stewart in Halcrow's letter dated 24 October 2003."
229. Some of the history is taken from Mr Richards' report to Ms Riddell dated 8 April 2006. In that report Mr Richards noted that training commenced in March 2004 initially to trainee firefighters.
230. The problems over finding an appropriate sealant continued. On 21 May 2004 Mr Cole wrote to Mr Tough that Lorne Stewart (independently of P & P) had searched for a suitable sealant to satisfy the requirements of The Firehouse.

"We have not been able to identify any substance which is designed for this type of application and it appears that The Firehouse is a unique installation."

Mr Cole did propose the use of a mastic silicone sealant currently installed in The Firehouse which appeared to be suitable.

231. Mr Tough responded immediately on 21 May 2004 to say that if the application was suitable he had no objection to using the silicone sealant in the low and medium temperature ductwork systems.
232. Mr Tough reminded Lorne Stewart of its obligation under the contract MF/1 Clause 36.5 to remedy defects within a reasonable time and required Lorne Stewart to provide a new method statement by 1 June 2004.
233. On 31 May 2004 Halcrow wrote to Canadian Commercial Corporation, the parent of ICS, about the Westemp panels:

"The documents include ICS statements that the panels would have a life of at least five years … office room panels are showing signs of deterioration within 6 weeks of being replaced. The ceiling installation is also leaking excessively resulting in heavy smoke staining and soot deposits in the ceiling void. A reasonable ceiling integrity is essential to limit temperatures within the ceiling void … We are more concerned that the lack of performance of the Westemp panels suggests that the panels are not suitable for the application."

234. The whole issue of the Westemp panels is important and will be the subject of separate consideration. It was a serious problem which was continuing alongside the problems to the ductwork.
235. On 2 June 2004 an uncontrolled fire occurred at The Firehouse causing the cladding (thin rigidised sheet material) to melt adjacent to the vertical joint on the bend off the outlet of the H and S unit on the side next to the Zone 9 unit. The plastic sheath on the handle of the air control valve supplying cooling air to the adjacent Zone 4 smoke generator melted and the 12 mm nylon hose at the outlet of the valve was thermally distorted. No-one was hurt and very limited damage was done.
236. Mr Perkins of IFTE produced an independent report on 4 June 2004. His physical examination noted

"2. Through direct access downstream of the joint area – there was evidence of deterioration (possible burning of the jointing compound) in the joint flange emanating from the bottom right hand corner extending upwards and horizontally to the left hand when viewed looking upstream. There was a light oil deposition on the bottom side of the duct.

3. Through the main access panel on the H and S unit -there was no evidence of any high temperature effect looking upward (downstream) to the flow deflection on the bend. Some light oil deposition was evident on the orifice plate around the burner."

237. Significant in relation to the physical examination which Mr Perkins carried out was

"3. There was evidence of oil in the lagging when inserting the thermocouple and also by virtue of smoke emission in the hot test."

238. In the important discussion that followed Mr Perkins noted

"The only combustible material is the oil in the lagging. The source of ignition is difficult to determine but the only obvious source at a high enough temperature is the nozzle of the adjacent smoke machine which could reach a temperature of 390 to 400?C. Given auto-flammability and a source of air via the leakage from the duct flange and a small fire would have occurred, thus damaging the aluminium cladding.

Zones 4 and 9 are the only heat and smoke zone units firing vertically upwards and therefore giving rise to a possible situation of any leaked oil (due to ductwork leakage) being able to travel under gravity to contract with the smoke machine nozzle. All other zones firing vertically downwards would have any leaked oil travelling away from the smoke machine interface."

239. Mr Rollason agreed in his expert report that the more likely cause of the fire was the nozzle of the adjacent smoke machine. He acknowledged that the report identified the leakage of oil from the ductwork into the insulation as the likely source of the fire. He also acknowledged therefore that from June 2004 it was a known risk that oil leaking out of the ductwork into the oil insulation could cause a fire, particularly when in close proximity to the smoke machine.
240. Mr Rollason agreed in oral evidence that this was a potential source of fire throughout The Firehouse and that it was appropriate that real fire training should stop.
241. Halcrow remained concerned that many of the snagging defects in relation to the ductwork had not been remedied. The list of outstanding works on 11 June 2004 included:

"15.2 Lower temperature ductwork and failed joint sealant in plant rooms and insufficient flange clips provided c.f. manufacturers' recommendations."

242. This theme continued in Halcrow's letter to Lorne Stewart dated 13 June 2004.
243. On 14 June 2004 Halcrow wrote to LFEPA enclosing Lorne Stewart's method statement. Halcrow wrote:

"In the light of experience gained so far with the ventilation system we strongly recommend that oil drainage is also installed to the supply air ductwork in the plant rooms for which we are currently producing a design."

This theme in relation to outstanding works was repeated in letters to Lorne Stewart dated 21 July 2004 and 19 August 2004.

244. On 17 June 2004 Halcrow (Mr Cole) wrote to Vosper Thorneycroft saying that:

"It is believed that the fire was external to the zone duct and the medium being condensed smoke oil which had leaked into the duct work insulation through the failed joint …"

245. Mr Cole concluded that the source of the ignition of the fire was:

"3. Oil leaking down onto smoke injection probe which is directly connected to the smoke generator heater block … and is surrounded by thermal insulation … It is therefore possible that oil migrating through the thermal insulation and reaching the outside of the probe could be the cause of the fire."

246. On 21 July 2004 Mr Cole sent an email to LFEPA saying that the duct work was not specified to be hermetically sealed. LFEPA attach some importance to this but it is clear, as Mr Tough commented in cross-examination, that Mr Cole must have overlooked a part of the duct work specification.
247. There was further discussion in relation to the fire. Mr Tough himself said in a letter to Mr Moge dated 15 September 2004 that the ductwork in The Firehouse was not specified or designed to be airtight. However the joint sealing remedial work to be provided by Lorne Stewart would improve the airtightedness and that if it was done effectively the risk of oil leakage within the plant rooms would be significantly reduced. Mr Tough advised that the plant room should be inspected on a weekly basis for any signs of oil leakage and the joints inside the ductwork should be inspected as far as possible six months after the remedial work was completed.
248. The letter noted that drain points in the revised plant room layouts were reintroduced but not picked up by Lorne Stewart. Halcrow decided to review the requirement when the extent of the oil deposits inside the ductwork was known.
249. At a meeting with LFEPA and Vosper Thorneycroft on 16 September 2004 representatives of Halcrow set out their views on the cause of the fire. They again said that the damage was caused by smoke oil laden air leaking from inside the duct and being ignited outside the duct by an unknown source of ignition. From inspection of the inside of the duct it appeared that no combustion took place inside the duct. Halcrow did not think that Lorne Stewart could reasonably be blamed for the fire that had occurred.
250. On 12 October 2004 Halcrow and Lorne Stewart set out a plan with reference to Clause 36.5 of MF/1 2003 to remedy the outstanding works and defects. These included

"15.2 Low temperature ductwork – failed joint sealant and insufficient flange clips provided. Lorne Stewart agreed to replace the failed sealant during the maintenance period. On programme 15 Nov P&P 5 days."

251. There had also been defects in the firefighter location system since October 2003 except for a period of two weeks when Lorne Stewart reported that it was operational.
252. On 30 November 2004 Mr Norris wrote to Mr Tough to place on record that there were leaks in the ductwork repairs which had been carried out by Lorne Stewart through their sub-contractor, P & P. Halcrow proposed to review the leaks to the ductwork during the planned shutdown in January 2005 and at that time to carry out any remedial works that were necessary. Mr Norris expressed concern and asked whether or not, directly or indirectly, the leaks would have a detrimental effect on the training facilities due to be used again on 7 December 2004. Mr Tovey noted in evidence that the repairs were only to the plant room.
253. Mr Tough responded on 10 December 2004 to Mr Moge. He wrote that Halcrow had inspected the remedial work on the supply ductwork after the last day on which mastic could be used during the shutdown period. The remedial works were consistent with the list of defects set out in Halcrow's letter to Lorne Stewart after an inspection on 22 November 2004. (This letter is for some reason dated 17 February 2005.) In his letter to Mr Moge, Mr Tough concluded that some duct runs had not been addressed due to inadequate access. Some joints had been overlooked and some others had been inadequately prepared. Mr Tough said that Lorne Stewart/P & P accepted that there were defects and agreed to assess them during the January shutdown.
254. With regard to use of the training facilities, Mr Tough said in the same letter

"We also attended site and witnessed continuous smoke leakage from the ducts during a smoke test. The leakage is not as bad as it was and consequentially will not have a detrimental effect on training."

255. Use of the training facilities was resumed on 7 December 2004, one month before the anticipated January 2005 shutdown.
256. On 5 January 2005 a fire occurred in the ceiling void above the "office fire room" on the second floor of The Firehouse. The fire itself caused minimal damage and was quickly brought under control. The major concern related to the fire risk which had been manifested in the building.
257. The fire was caused by the auto-ignition of the mineral fibre ductwork insulation that had become contaminated by oil leaking from the ductwork. Since that date LFEPA has stopped all "real fire training" at Southwark. Currently the facility is used only for "cold fire training". Since January 2005 other training has been carried out through facilities provided by the Lancashire and Essex Fire Services.

Experts Opinions

258. The engineering experts have worked hard to narrow the technical issues between the parties. While they were unable to reach agreement they have been able to clarify the issues which remain between LFEPA and Halcrow.
259. As set out in the joint statement of December 2006 it is agreed that the specification did not highlight the fact that the ductwork would be subject to liquid deposits of oil. However, Mr Rollason notes that Halcrow's specification indicated that the ductwork would be subject to oil.
260. Question 4 for the experts raises the first issue on which Mr Evans and Mr Rollason disagree, namely whether Halcrow's specification should have highlighted the fact that the ductwork would be subject to liquid deposits of oil in order to allow the contractors to recognise and provide the appropriate installation. In Mr Evans' opinion the answer is "Yes". Mr Rollason concludes that if the flanges had been installed correctly using appropriate sealant then oil would not have leaked in any event and therefore the answer is "No".
261. It is agreed that Halcrow did not, and was not required, to specify the type of sealants to be used in the fabrication and erection of the ductwork and that in fact they were selected by P & P (Question 6).
262. It is also agreed that Halcrow specified the temperature requirements and indirectly specified that the sealant would be subjected to oil generated smoke (Question 7).
263. There is a clear dispute between the experts over the suitability of Halcrow's specification for the medium temperature supply ductwork standard DW/142. A key point of Mr Evans' evidence is that this standard was not intended to apply to ductwork in these circumstances and should not have been used.
264. Mr Rollason says that DW/142 must be read as a whole.

"It is therefore not surprising that Clause 4.3 has been included within DW/142 in order to prompt consideration of any such special environment prior to the application of DW/142.

Hence the presence of Clause 4.3 does not preclude the application of DW/142 at The Firehouse. It simply draws attention to the need to consider whether and in what circumstances it is appropriate."

265. In Mr Rollason's opinion, by choosing from the range of options within DW/142, it was possible to fabricate an appropriate ductwork system at The Firehouse.
266. This leads on to the dispute as to what specification would have been suitable. Mr Evans concludes that his scheme of fully welded ductwork is the only option. Mr Rollason concludes that Mr Evans' specification was suitable but unnecessary. I shall investigate this in detail when considering the various remedial schemes. However Mr Rollason underlines that in his opinion "Provided that liquid oil is contained within the ductwork it is not necessary to achieve zero leakage".
267. In relation to Question 12, the experts agree that there is currently no visual evidence of oil leakage from the longitudinal ductwork. Mr Rollason says that there is evidence of leakage of oil from the flanges between the ductwork sections. There is no evidence of leakage through the slide on joints where the flanges slide onto the ductwork.
268. Mr Evans says in summary that the primary reason for oil to leak through the ductwork is faulty design. He says that DW/142 permits a level of oil leakage. Mr Rollason says that oil leaked because Lorne Stewart used a sealant that was unsuitable.
269. Mr Rollason's view is supported by Mr Evans in relation to the sealant used in the area where on inspection they conclude that leakage occurred, i.e. between the faces of the flanged joints (Question 15).
270. The experts conclude

"Visual inspection indicated degradation and/or flow of sealant from some of these joints and these joints are leaking."

The experts therefore conclude that the sealants were not suitable for exposure to the conditions inside the ductwork.

7. The allegations of negligence against Halcrow. Discussion and conclusions

a) Introduction

271. LFEPA's claim against Halcrow on liability is that Halcrow was negligent in the respects set out in paragraph 35 of the Re-Re-Re-Amended Particulars of Claim dated 1 March 2007.
272. I set out the issues of liability after reading LFEPA's closing submissions. This is an expanded Summary of the issues which I have set out at Paragraph 17 above.
273. Halcrow prepared/implemented and continued with an unsuitable design for the medium temperature ductwork which was not fit for purpose:

274. (a) Halcrow failed in the formulation of the design to consider what happened to mineral oil when it cools and/or impinges on the inside of the ductwork and therefore designed a system which failed to ensure that mineral oil could not leak and cause uncontrolled fires.

274. (b) Halcrow designed the flanges and the joints in the ductwork to an inappropriate standard, namely in accordance with DW/142 which permitted the ductwork to have a number of potential air and oil leakage paths when it ought to have designed the flanges and joints to a standard which required it to be airtight and oiltight. In this context DW/142 was an inappropriate standard because it specifically excluded ductwork which was polluted or was otherwise exceptional in respect of temperature or humidity.
275. (c) Halcrow failed to appreciate the effect of smoke oil on the sealants and gaskets and therefore to specify in the design that the gaskets or sealants for the joints should be oil resistant. LFEPA claims that even if I accept that Halcrow made the initial assumption that there would be a thin film of smoke on the inner faces of the ductwork, it should have made proper provision in the specification for the sealants/gaskets that would come into contact with smoke oil to be oil resistant.
276. (d) Halcrow failed to conduct an independent risk assessment before the design was completed.
277. (e) Halcrow failed to review and correct the design

(i) when it instructed Lorne Stewart to omit the condensate drains from the ductwork on 26 November 1998 and the requirement that the ductwork be laid to falls;

(ii) when Lorne Stewart failed to provide Halcrow with details of the sealant for the ductwork in March 1999;

(iii) after reading paragraph 3.12 of the Hark Report (for which see paragraphs 191 – 203 above).

278. (f) Halcrow failed to review and correct the design after the fire in June 2004.
279. I deal with these allegations in turn.

(b) Failure to consider initially the effect of smoke oil in the ductwork

280. The claim is made that Halcrow failed in the formulation of the design to give due consideration to the effect of smoke oil in the ductwork. It is said that as the smoke oil travelled through the ductwork, where it struck the sides of the ductwork or where it lost velocity, it would coalesce on the inner faces of the ductwork. The smoke oil deposited on the inner faces of the ductwork was in liquid droplet form. The effect of the design was to permit leakage. In addition to the leakage of the aerosol suspension of smoke oil, the design permitted leakage of any liquid oil deposits at the cross joints. It is claimed that even if the smoke oil was present in a small film, it would build up to present a real and foreseeable risk that it could leak through the joints.
281. LFEPA submits that given the innovative nature of the design and the fact that there would be some smoke oil deposits in the ductwork but no information as to the amount of smoke oil deposits that could have been expected, a reasonably competent and prudent consulting engineer would have carried out and recorded

(i) investigations to ascertain the amount of smoke oil deposits to be expected;

(ii) assessments or assumptions made for the purpose of ductwork design;

(iii) the assessment of risk associated with such assumptions.

282. LFEPA notes that in Clause 1.61 of the specification there is no specific reference to a requirement that all the equipment provided as part of the contract was capable of withstanding smoke oil.
283. Mr Rollason's answer to that is that the specification identifies that the ductwork contains smoke oil and it must have been obvious that any materials within the ductwork system were going to be in contact with smoke oil and therefore the specification should ensure that they were suitable for it.
284. Halcrow points out more generally that there is no expert evidence before the court as to what Halcrow should have done when it produced its original design which it failed to do, and if it had done it, what difference it would have made to the design. None is relied on in LFEPA's closing submissions.
285. Mr Evans claims in paragraphs 5.11.9, and 5.11.10 of his first Report that the problems with the ductwork stem from a failure by Halcrow at the outset to consider what happens to mineral oil when it cools and/or impinges on the inside of the ductwork. He said that it was incumbent on Halcrow to ensure that mineral oil could not leak from the ductwork system leading to ignition resulting from uncontrolled fires.
286. This has within it a number of questions which need to be considered:

1. Did Halcrow consider what happens to mineral oil when it cools and/or impinges on the inside of the ductwork?

2. If Halcrow did so, was its conclusion one which it was reasonable for it to reach?

3. What action (if any) should it have taken as a consequence? Did it fail to take action or take precautions which it should have taken or made?

4. Was the result of Halcrow's reasonable considerations such that it was incumbent on Halcrow to ensure that mineral oil could not leak from the ductwork system?

5. Was it reasonably foreseeable that if oil did leak from the ductwork it would (or might) lead to ignition resulting in uncontrolled fire?

287. These questions should be asked and answered from the viewpoint of a reasonably qualified engineer with the level of expertise to engage in a project of this nature at the time when the question would have been posed, ie at the design stage.
288. Mr Tovey's evidence, which I accept, was clear. He said in answer to Ms O'Farrell QC that he did consider the first question at that stage.

"Our expectation was that there would be a very fine film, that if you actually put your hand on it and rubbed it, you would be able to feel it but you would not be able to see it.

Q. So that fine film would be formed from liquid smoke oil, would it not?

A. Yes."

289. Mr Tough said in his witness statement that Halcrow expected that small amounts of condensation may form in the ducts. He did not expect such condensation to contain oil as the suspension of oil mist particles was not so temperature dependent.
290. Apparently, so I was told, there was and is no literature to contradict Mr Tovey and Mr Tough's original conclusions. None was relied on by Mr Evans. None was cited to me. In addition, this was not identified as a hazard in the various risk assessments carried out before 2002. I am satisfied that it would have been if it had been recognised as a known hazard.
291. I reject Mr Evans' conclusions that Halcrow failed to consider what happens to mineral oil when it cools and/or impinges on the inside of the ductwork. On the contrary, I conclude that Halcrow did consider what happens and on the evidence reached the reasonable (albeit mistaken) conclusion that a fine film would be formed from the liquid smoke oil. Neither of the two very experienced Halcrow engineers, Mr Tovey or Mr Tough, would have expected drops of liquid oil to coalesce on the inside of the ductwork as the smoke travelled through the ductwork.
292. This also provides the answers to questions 4 and 5. Since Halcrow reasonably did not appreciate that there was a risk of oil leaking through the ductwork leading to ignition and fire, it was not incumbent on Halcrow to ensure that mineral oil could not leak from the ductwork. To make it entirely clear, in reaching those conclusions they did not fall in any way below the standard to be expected of them as professional engineers.
293. I accept Mr Rollason's evidence at paragraph 10.3.2 of his first Report that:

"At the time of preparing his specification for the ductwork I would expect HGa to have recognised that a film of liquid oil would be deposited on the inside of the ductwork caused by the oil based smoke passing over the ductwork surface. By a 'film' I mean a light surface coating of oil such that a finger run over the inside surface of the ductwork would feel oily. I would not expect HGa to have predicted that liquid oil deposits would be in excess of a film nor that the quantity of oil would be sufficient for the oil to flow, because it is not self evident that such quantities of oil will be deposited."

294. Insofar as it is necessary for me to do so, I reject Mr Evans' evidence on this point. He said it would have been incumbent on Halcrow to have ensured that no mineral oil could leak from the ductwork system. This requirement could only be to counter known risks. There is no evidence at the time of specification, and indeed for years after, that potentially dangerous liquid oil would be deposited on the inside of the ductwork. There was no requirement therefore to guard against a non-existent risk.
295. Further, I accept Mr Tovey's evidence that the question of the effect of smoke oil was considered by Halcrow and I accept the evidence that it would amount to a film of liquid oil as he described in oral evidence.
296. For completeness I comment on Question 3 that there is no expert evidence before me as to what Halcrow should have done. Mr Evans does not say how Halcrow should have designed the facility so as to ensure that mineral oil could not leak from the ductwork or if the answer was his remedial scheme 3, what the effect on the project would have been.
297. Finally I note that despite Mr Tovey and Mr Tough's opinion, the design specified in any event that the joints in the duct work should be sealed so as to be airtight – see the discussion in the next section of the judgment.

(c) DW/142

298. HVCA specification DW/142 is an industry-wide standard specification for sheet metal ductwork in low, medium and high pressure/velocity air systems. It provides guidance on the construction, fabrication, installation and testing of ductwork. There is no dispute that, applied strictly on its own, it permits some leakage. Indeed, DW/142 specifies permitted levels of leakage.
299. The Particulars of Claim, based no doubt on Mr Evans' expert advice, alleged that instead of using DW/142 as the standard, Halcrow should have used another industry specification, DW/171. This specification was intended for kitchen installations and did not in any event exist in 1998 at the time when Halcrow was preparing the specification. It was published in 1999. Wisely, LFEPA has abandoned this contention in its Amended Reply. It has not suggested any other industry-wide specification which should have been adopted by Halcrow as a guide.
300. Clause 4.3 of the standard DW/142 provides:

"This specification is not intended to apply to ductwork handling air which is polluted or is otherwise exceptional in respect of temperature or humidity (including saturated air) nor is it suitable for ductwork exposed to a hostile environment, e.g. contaminated air, off-shore oil rigs etc. The design, construction, installation, supports and finishes in such cases should be given special consideration in relation to the circumstances of each case. This specification is also not intended to apply to domestic warm air installations."

301. It is agreed that DW/142 does not apply strictly on its own because the ductwork in The Firehouse is required to handle air which is polluted in terms of smoke and/or oil and may have to withstand temperatures in excess of those specified in DW/142. It is also agreed that the warning in Clause 4.3 of the standard applies. Halcrow contends that it provided no more than the basis for its specification and that Lorne Stewart was required to follow Halcrow's specification rather than DW/142 to the letter, as indeed Clause 4.3 of the standard suggests that it should.
302. I have already set out the specific Clauses 2.5.8.1, 2.5.8.4, 2.5.8.5 and 2.5.8.10 in the detailed specification which Halcrow produced relating to ductwork. The clauses refer specifically to airtight seals (2.5.8.1), connections that shall be completely airtight (2.5.8.4), joints for metalwork other than flanged joints to be rendered airtight with suitable sealants (2.5.8.5) and access openings shall be provided with airtight covers and access panels in galvanised sheet steel with an approved sealing gasket fixed around the edge with suitable adhesive to form an airtight seating against the duct frame (2.5.8.10).
303. As is correctly set out in Mr Rollason's first Report, Halcrow used DW/142 to specify

(a) the material to be used for the fabrication of the ductwork, namely galvanised steel;"

(b) the method of jointing adjacent sections of the ductwork, i.e. flanged joints;

(c) the pressure class, i.e. high pressure: this restricted the choice of longitudinal seams and flanged joints, determined the spacing of flanged joints and stiffness, determined the thickness of the sheet metal and determined the test pressure and leakage rate;

(d) the temperature rating (minus 4 degrees C to 110 degrees C); and

(e) the presence of smoke based oil in the ductwork.

304. Mr Rollason said that it would be normal practice for an engineer to specify the size of each section of ductwork, whether the pressure was low, medium or high and the material to be used. Thereafter it was for the ductwork contractor to fabricate the ductwork in line with the options which were permitted in DW/142 but only in accordance with the specific requirements of the engineer's specification.
305. Mr Rollason says that he himself has used DW/142 as the base specification for specifying ventilation systems on many occasions, including those in contaminated and polluted environments. In these circumstances Mr Rollason is of the opinion that to produce a specification by reference to DW/142 was appropriate. Mr Evans said initially that there should have been no reference to DW/142 and he has maintained this opinion but he does not go on to say whether to do so in his opinion falls below the standard industry practice.
306. At paragraph 170 above I have set out the contractual provisions relating to testing. DW/142 sets out in Clause 6 the permitted air leakage for each pressure class and provides standards for the testing of air leakage (6.4). Appendix A relates to air leakage from the duct work.
307. Paragraph A 2.4 provides for special cases and notes that the percentages specified in A 2.3 apply to normal ratios of duct area overflow. It cautions that it may be necessary for the designer to specify a higher standard of airtightedness in order to keep the actual leakage within an acceptable limit.
308. Thus even the Standard envisages circumstances where the designer's requirements will override the requirements set out in the Standard. The testing sequence B9 requires the tester to ensure that the measured leakage is within the permitted rate.
309. In this case the designer has specified that there should be no permitted leakage. Only the method of testing is to be in accordance with the DW/142 and Guide DW/143. Clause 2.5.8.12 of the contract specifies that "any leakage must at once be made good before proceeding with tests on the next section of the duct work."
310. I note that, despite his criticism, in his own scheme Mr Evans used the same approach as in the specification, namely using DW/144, which was an update of DW/142. By the end of his evidence he had in effect conceded that Halcrow's approach was not wrong and that the use of DW/142 in the specification could not properly be criticised.
311. I find that the use of DW/142 in the specification cannot properly be criticised.

(d) The gaskets and sealants should have been specified to be oil resistant

312. LFEPA contend that if Halcrow was aware that there would be at least a thin film of smoke oil on the inner face of the ductwork, it should have made, but failed to make, proper provision in the specification for the sealants/gaskets that would come into contact with such oil to be oil resistant.
313. Mr Evans accepted in his evidence that he was in fact no expert on gaskets and sealants. He agreed that there were and are oil resistant sealants on the market.
314. The experts agreed that at Appendix 8 of its mechanical services specification, Halcrow provided the Health and Safety data relating to the properties of smoke oil. Halcrow did not specify that the material should be oil resistant and left the selection of the material to Lorne Stewart as the specialist contractor. There is no suggestion that Lorne Stewart did not know that the sealant had to be oil resistant.
315. As Mr Rollason put it in answers in cross-examination:

"The specification identifies that the ductwork contains oil smoke and it is obvious on the face of it that any materials within the ductwork system are going to be in contact with the smoke-oil and therefore should be suitable for it."

316. Although Mr Rollason made it clear that (perhaps with hindsight) he would have specified that the sealant must be suitable for oil, he is dealing here with a specialist sub-contractor who on its own evidence was well aware that the sealant needed to be suitable for oil. I cannot conclude that failure to specify in terms that the sealant and gaskets must be oil resistant was negligent.
317. Had I come to a different conclusion, namely that Halcrow was negligent in failing to specify that the gasket and sealants should be oil resistant, I would have been forced to conclude that no damage resulted from this, since Lorne Stewart has made it entirely clear that it was well aware that the gaskets and the sealants should be oil resistant.
318. I also conclude that before October 2003 Halcrow reasonably reached the conclusion that the problem with the gaskets was caused by defective manufacture of the gaskets and not that they permitted leakage of oil that might be potentially dangerous.

(e) Risk Assessments – Issues (d) and (e)

319. The initial allegation is that Halcrow was negligent in failing to carry out a risk assessment before the design was completed. It is also alleged that Halcrow failed to and should have reviewed its design in November 1998 and/or in March 1999 and/or at the time of the Hark Report.
320. These issues were raised by Mr Evans in the course of the trial. They have not been pleaded and have not been the subject of discussion by the experts. I only include this section because it might be thought to be unfair not to deal with the allegation.
321. In the course of Halcrow's involvement with the project, a number of risk assessments were in fact carried out.

1. On 5 September 1997 International Code Services (ICS) produced a detailed Design Risk Assessment. Items 25 to 29 of the Appendix deal with the assessment of the risk of smoke oil. Mr Rollason in his oral evidence described ICS as the world leaders in this area.

2. On 29 September 1997 Halcrow produced a draft training risk register. Item A5.8.2 of Appendix A dealt with the following identified hazard:

"Emergency ventilation system initiated due to a person OR fire in duct."

3. In March 1999 Halcrow produced an Interim Risk Management Report. This updated the previous assessment in item A5.8.2 of Appendix A.

4. In October 2000, DNV Consulting produced its Southwark Firehouse Safety System Study. Section 4.8.4 is entitled "Smoke Generation Oil – Concept Engineering Ltd".

5. Also in the period 1998 to 2000 Mr Hark produced two reports consolidated into one report to which I have already made extensive reference.

322. The ICS risk assessment was a comprehensive and detailed document. It did not list smoke oil deposits as a risk which needed to be identified and evaluated.
323. Under "Emergency Procedures" Appendix A of Halcrow's 1997 Training Risk Register did identify "emergency ventilation system initiated due to a person or fire" as a risk but it noted that "Duct fire damage expected to be limited with little consequential damage. Hold fire blanket or similar in fire rooms or very close by or have safety number hold blanket". In 1999 Halcrow Risk Assessment Report repeats the 1997 entry and adds under "Soft safeguards", "clean ducts regularly". Emergency procedure/trainee monitoring, "Use water to spray person or duct".
324. Det Norske Veritas ("DNV") produced its initial report on 2 June 2000 and its final report incorporating the ICS Design Specification Revision 4 on 6 October 2000. I have already made some reference to this Report but should deal with it in more detail.
325. The introduction makes it clear that it was compiled not only from design detail supplied by Halcrow but from detailed discussions with LFEPA and several site visits.
326. The Management Summary concluded that

"The Firehouse is built to good standard, and the operations can be run safely. Several preventative mitigation measures are necessary but most of these are procedural or where technical should not prove expensive."

327. The Report described the smoke and heat and fire rooms and noted that cosmetic smoke would be generated using an edible oil (Ondina). At paragraph 4.8.6 the Report set out its conclusion on the smoke oil system as follows:

"Concept Engineering submitted to Halcrow project representative (Dr R A Cox) data supporting the general safety of their smoke-oil system. The data-pack contained several technical summaries which addressed the use of flammability and toxicity. This included a review by the HSE Research and Laboratory Services Division by Dr J J Smeed in 1982. With respect to flammability their assessment concluded:

'The experimental results indicate that when smoke generators are properly maintained and used in the prescribed manner under the conditions prevailing during the course of these trials, there is little risk of the formation of a flammable atmosphere except possibly in the immediate vicinity of the nozzle. When a smoke generator similar in type to those used in the trials was run for long periods in a small enclosure in a laboratory experiment, concentrations exceeding 100 per cent LEL (lower explosion limit) were detected but such conditions are unlikely to occur in any practical application of these devices'."

328. Problems with the smoke delivery system in the smoke room were identified as a hazard. The Report identified the risks as:

1. Detector failure due to oil globules from the smoke.

2. Contamination of personal protective equipment without.

3. Slippery floors and walls.

329. Under "Outcomes" the Report lists:

1. Potential personal injury.

2. Long term exposure to oil.

3. Potential fire hazard in ductwork.

330. In order to safeguard the hazard the Report recommends

1. Visual checks should determine if oil size is correct

2. Low nitrogen pressure alarm

3. Ductwork cleared once per year

These safeguards were included.

331. Mr Evans and Mr Rollason were asked about this assessment. Mr Evans had to agree that none of the detailed reports including, in addition to those referred to above, the January 1995 report dealing with propane and Mr Hark's Report dealing with ductwork fires, identified the hazard which caused either of the fires. Mr Evans thought that nevertheless DNV ought to have identified that the ductwork would be likely to leak oil through the joints and that this constituted a fire hazard. In his view any reasonably competent engineer ought to have identified this risk. Mr Rollason did not agree.
332. LFEPA also concentrates on the Hark Report. It relies on the passage in the 1998 Report to which I have already referred that

"Ductwork in both supply and exhaust system will routinely carry the simulated 'smoke' which consists of aerosol suspension of a mineral oil. Over a period it has to be expected that this oil will condense and collect on the internal surface of the ductwork. This may pose a risk of duct fires which does not appear to have been addressed."

333. However any criticism in the Hark Report has to be considered against the fact that (a) it says that criticisms made in 1998 had been rectified by the final review in Autumn 1999; (b) previous assessments and in particular the ICS Design Risk Assessment; and (c) the Report of DNV in October 2000.
334. Mr Tovey said, and I accept his answer, that there was considerable discussion at the time about this risk. These discussions included discussions with specialists ICS and Concept Oil Ltd, the manufacturers of the smoke machines, and the fact that this was used in America extensively, and the answer was a thin film. He went on

"So therefore we looked at the possibility of a duct fire due to the presence of the heaters in the supply ducts which is something that no other fire place – fire training installation – at that time had and came to the conclusion that there was not a fire risk at this point."

335. A specific complaint by LFEPA relates to a failure to carry out a risk assessment in relation to the omission of falls with drains on the specification because Lorne Stewart had been unable to fit the ductwork into the available space and Halcrow agreed to reconfigure the same and did so. The result was Instruction EIM003 issued by Halcrow on 26 November 1998 to omit the condensate drains from the ductwork and the requirement for the ductwork to be laid to falls.
336. Halcrow later issued drawings to Lorne Stewart showing drain points fitted into the ductwork below heat/smoke and smoke units.
337. Halcrow did consider the implications before agreeing to the change. Mr Tovey said that he only expected a light film to form which would not be of a capacity to drain away, falls or not. Therefore he concluded that the omission of the falls would make no difference. I note that in Paragraph 93 of her final submissions Ms O'Farrell QC acknowledges that the provision of falls would not have prevented the leakage of oil that occurred.
338. I also reject the claim that Halcrow should have reviewed their design in March 1999 when Lorne Stewart failed to provide Halcrow with details of the sealant. I have found that Lorne Stewart provided details in May 1999. This would be in time for the second Hark Report and the DNV Report both of which were required to assess risks associated with the firehouse as currently built. Halcrow was entitled to rely on these reviews.
339. The problem was that Lorne Stewart did not use the oil resistant sealant that had been specified, not that Halcrow's design was faulty in this respect.
340. Finally, I must deal with LFEPA's allegation that none of the formal risk assessments addressed the ductwork design and the behaviour of smoke oil in the ductwork and therefore could not be expected to identify the risk even if it was present. I do not accept this. These were detailed and comprehensive reports. If the risk had been clear to those carrying out the various reviews there is no reason to believe that it would not have been identified. Again, insofar as it is necessary to do so, I reject Mr Evans' contrary conclusion and I accept the evidence of Mr Rollason.

(f) Risk Assessment after discovery of defective sealants

341. The first indication that oil was leaking through the ductwork occurred in the Autumn of 2003. Until that time Halcrow had reasonably believed that at worst a harmless film might form.
342. Halcrow issued its Taking Over Certificate on 22 August 2003 subject to a list of outstanding works and defects.
343. As I have already set out, Halcrow on 24 October 2003 wrote a sharp letter to Lorne Stewart to say that following that week's inspection of the low and medium ductwork installations many flange joints had either failed or were showing signs of impending failure. Lorne Stewart was asked as a matter of urgency to provide its proposals for rectifying all flange joints and other joints that did not comply with the requirements of the specification.
344. This matter was raised again on 12 November 2003. Mr Tovey said in oral evidence that by this stage he knew that oil was leaking through the ductwork. He agreed that he did not know whether the joints were failing through oil or heat. He said he thought the problem was gasket failure.
345. The work was not carried out before the June 2004 fire but remedial works to the sealant were carried out by Lorne Stewart before the shutdown period in November 2004, although on inspection they were not regarded by Halcrow as being complete.
346. Halcrow has been criticised by LFEPA for not "going back to the drawing board to see whether there was anything in their design that was causing the joints to fail before the June 2004 fire". That seems to me to be an unreasonable criticism. At that stage it was reasonable for Halcrow to go to Lorne Stewart and to press them to provide proposals for rectifying failed joints.

Review after the fire in 2004

347. The allegation is made that Halcrow should have reviewed the design on the basis of knowledge after the fire in 2004 and that if it had done so it would have followed Mr Evans' current recommendations and have ensured that Lorne Stewart installed fully flanged and welded ductwork.
348. Mr Perkins of IFTE when he produced his report after the fire in the plant room in June 2004 indicated that in his opinion oil was leaking from the joints and into the ductwork insulation. He had not been able to identify the cause of the ignition with any certainty.
349. Halcrow admits that it was under a duty to review the design after the June 2004 fire and did not do so. It did take certain steps which it regarded as reasonable but, as Mr Tovey put it in oral evidence, with hindsight he could have carried out a more general inspection. He felt that cutting back the insulation until it was dry would deal with the oil which had leaked. He acknowledged that it would not deal with future leakages. He said that he hoped that repairing the ductwork would do that.
350. Mr Tovey did not review the whole design and did not believe even with hindsight that he should have done so, because he said there was only a very small amount of oil and therefore cutting back the insulation was sufficient to solve the immediate problem.
351. Mr Tovey admitted that Halcrow had not carried out a general inspection of the ductwork in The Firehouse but only in the plant room. He agreed that there had not even been an inspection in the Zone 4 ductwork. Mr Tovey said that he had considered that the problem was not one of design but of gasket failure.
352. Mr Tovey and Mr Tough both agreed that after June 2004 there was a known risk of oil leakage through the joints and into the insulation but concluded that the amounts would be so small that more frequent inspection would be sufficient to avoid any risk of a similar problem recurring. On this basis Halcrow thought that the problem had been solved and that it would be safe for LFEPA to resume fire training.
353. Mr Rollason accepted that Halcrow should in the period after the June 2004 have carried out a thorough investigation into the cause of the fire and the sources of ignition and should have advised LFEPA to stop real fire training until the investigation had been completed.
354. Mr Rollason did not think it would have been appropriate to have a fundamental review of the design after the June 2004 fire largely because he concluded that there were serious defects in workmanship which needed to be remedied. In oral evidence he referred to the fact that there were defective joints because the sealant was failing in the joints. In his view it was self evident that the sealant was unsuitable. The sealant used was Arborseal, which was only rated to be effective to a heat of 50°C. This was not the sealant that Halcrow had been informed by Lorne Stewart would be used.
355. Mr Rollason went on to explain in oral evidence what investigations should in his view have been carried out after the June 2004 fire. He said that Halcrow should have reviewed with LFEPA and Vosper Thorneycroft the potential sources of ignition and then addressed the question of whether this posed a risk.
356. Mr Rollason went on to say

"I think they would have identified … that the primary candidate shall we say was the proximity of heat/smoke units to where the fire took place and … the units where the heat/smoke units fire upwards are in Zones 4 and 9. So I would anticipate that perhaps remedial works would be done to these two units. Perhaps the configuration should be changed. I believe that Halcrow did suggest that the situation be monitored to verify whether or not there was leakage into the insulation at those places. In terms of fire sources, sources of ignition elsewhere in The Firehouse, whether those were considered important would depend upon the analysis that was carried out, so you might say: well, there might be a risk of flames licking up through the ceiling of the fire rooms if you felt the Westemp panels were going to be damaged. I would say that would be the prime fire source that I would identify."

357. Mr Rollason said that he suspected that, if that exercise had been carried out, the second fire would have been prevented because the cause of the fire was found to be flames or hot gasses passing through a defective Westemp panel. If in 2004 Halcrow had identified that as a hazard, perhaps the maintenance regime would have increased, perhaps some additional protection would have been put above the fire places and that could have prevented the fire in 2005.
358. He went on to say that this did not alter his opinion as to the extent of the remedial works that needed to be carried out.
359. I accept Mr Rollason's evidence. The passage that I have just quoted seems to me to be precisely the type of action that Halcrow should have taken.
360. At paragraph 197 of Halcrow's final written submissions it suggests that "with hindsight given the further fire Halcrow was wrong but it does not follow that it was negligent". Halcrow says that "its approach was reasonable if ultimately wrong".
361. On this point I do not agree. The pleaded allegation is that Halcrow should have reviewed its design. I have no doubt that there should have been precisely the type of process which is set out by Mr Rollason, namely a thorough investigation into the cause of the fire and the source of ignition. This is not a view dictated by hindsight. There was a fire which needed to be investigated until it was explained. This was a very serious matter, since firefighters were undertaking real fire training and the fire in June 2004 demonstrated that there was a serious problem to be addressed until a conclusion could properly be reached as to the cause of the fire and whether the problem was a fundamental problem or not.
362. The question that follows is whether this would then have involved a fundamental review of Halcrow's design. I accept Mr Rollason's evidence that the review would have concentrated on the suitability of Westemp panels and the quality of the sealant and perhaps design in the limited sense of the reconfiguration of zones 4 and 9. I find that Halcrow was negligent in failing to carry out this limited review.

The allegations against Lorne Stewart – Discussion and Conclusion

363. It is now convenient to deal with the issues of liability against Lorne Stewart.
364. In October 1998 LFEPA executed an agreement with Lorne Stewart. Insofar as is relevant to this dispute the contract documents are:

(1) The General Conditions of Contract, MF/1 Rev 3 1988 Edition

(2) Annex 2 (incorporated documents)

(3) The special conditions which included MF/3

365. The issues between LFEPA and Lorne Stewart are within a narrow compass since Lorne Stewart has made admissions in its defence that it was in breach of its obligations under Clause 13.1 of the contract.
366. Lorne Stewart admits that under the contract:

(a) It was responsible for design in the sense that it was responsible for the selection of materials including sealants and flanges.

(b) It was also responsible for the selection of sealants and for ensuring that such sealants were suitable for the temperature conditions which were specified and that the sealants were able to withstand attack by the presence of oil which was identified in the specification at Volume 6 Appendix 8.

(c) It was also responsible for providing flanges with intermediate clamps at 400 mm maximum spacings on ductwork slides over 400 mm and a cleat or clamp installed within 50 mm of the corner of the fixings and that fixings should not exceed 400 mm centres.

367. By paragraphs 32 and 34 of its defence Lorne Stewart also admits that the fire on 5 January 2005 caused minimal and localised damage and was caused by leakage of oil from a faulty point as a result of the failure of the sealant and/or clips.
368. The threshold question as to the extent of their potential liability is governed by a regime set out in clauses 36 and 44 of the Conditions of Contract.
369. The following clauses are material. Clause 36.2 of the Contract provides

"The Contractor shall be responsible for making good by repair or replacement with all possible speed at his expense any defect in or damage to any part of the works which may appear or occur during the defects period and which arises either

(a) from any defective workmanship or design

(b) from any act or omission of the Contractor done or omitted during the same period."

370. The second paragraph of Clause 36.2 starting 'The Contractor's obligations' was deleted by the Special Conditions.
371. Clause 36.1 of the contract as amended specifies the defects liability period as being either:

"(a) 12 months calculated from the date of taking over the Works under Clause 29 (Taking Over), or

(b) 12 months calculated from the date of replacement or rectification to the Engineer's satisfaction of the defect in that section or part of the Works whichever is the later. …"

372. Clause 29.2 provides for the Engineer to issue a Taking Over Certificate certifying the date on which the works passed the Tests on Completion.
373. Clause 36.3, as amended, provides the method of giving notice of defects

"If any such defect shall appear or damage occur the Purchaser or the Engineer shall forthwith inform the Contractor thereof stating in writing the nature of the defect or damage. The provisions of this Clause shall apply to all repairs or replacements carried out by the Contractor to remedy defects and damage as if the said repairs or replacements had been taken over on the date they were completed."

374. Clause 36.4 provides for circumstances in which the Defects Liability Period can be extended:

"The Defects Liability Period shall be extended by a period equal to the period during which the works (or that part thereof in which the defect or damage to which this Clause applies has appeared or occurred) cannot be used by reason of that defect or damage."

375. Clause 36.5 deals with the circumstance that the defect is not remedied within a reasonable time. This clause is highly contentious between the parties. The Clause reads as follows:

"If any such defect or damage be not remedied within a reasonable time the Purchaser may proceed to do the work at the Contractor's risk and expense provided that he does so in a reasonable manner and notifies the Contractor of his intention to do so. The cost reasonably incurred by the Purchaser shall be deducted from the Contract Price or be paid by the Contractor to the Purchaser."

376. Clause 36.9 seeks to provide that the Contractor's liability under Clause 36 shall be in lieu of any other liability for defects:

"The Contractor's liability under this Clause shall be in lieu of any contract term implied by law as to the quality or fitness for any purpose or the workmanship of any part of the Works taken over under Clause 29 (Taking Over) and save as expressed in this Clause 36 neither the Contractor nor his sub-contractors, their respective servants or agents shall be liable whether in contract, in tort, (including but not limited to negligence) or by reason of breach of statutory duty or otherwise, in respect of defects in or damage to such part or for any damage or loss of whatsoever kind attributable to such defects or damage or any work done or service or advice rendered in connection therewith."

377. Clause 36.9 goes on to deal with the position of sub-contractors under the contract:

"For the purpose of this sub-Clause the Contractor contracts on his own behalf and on behalf of and as trustee for his sub-contractors, servants or agents. Nothing in this Clause 36 shall affect the liability of the Contractor under the Conditions in respect of any part of the works not taken over …."

378. Clause 36.10 refers to latent defects which appear within three years of the date of taking over that part of the works. It provides that the same shall be made good or replaced by the Contractor at the Contractor's option provided that the defect was caused by the gross misconduct of the Contractor. No such claim is pleaded here.
379. Clause 44.1 provides that:

"In all cases the party establishing or alleging a breach of contract or a right to be indemnified in accordance with the contract shall be under a duty to take all necessary measures to mitigate the loss which has occurred provided that he can do so without unreasonable inconvenience or cost."

380. Clause 44.2 provides that:

"… Neither the Contractor nor the Purchaser shall be liable to the other by way of indemnity or by reason of any breach of contract or of statutory duty (including negligence for any loss of profit, loss of use, loss of production, loss of contracts or for any financial or economic loss or for any indirect or consequential damage whatsoever that may be suffered by the other."

381. Clause 44.4 provides that

"the Purchaser and the Contractor intend their respective rights and obligations and liabilities as provided for in the Conditions to be exhaustive of the rights, obligations and liabilities of each of them to the other arising out of under or in connection with the Contract and the works."

382. The Clause continues

"Accordingly except as expressly provided for in the Conditions neither party shall be obligated or liable to the other in respect of any damages or losses suffered by that other which arises out of under or in connection with the contract or works whether by reason or in consequence of any breach of contract or of statutory duty or tortious or negligent act or omission."

383. I will address the detailed arguments of each side in a moment but as a background, LFEPA contends that although the Contract excludes liability for indirect or consequential damage, it does not exclude direct losses flowing from Lorne Stewart's breach of contract. These are said to include the cost of replacement or repair of the ductwork, the cost of investigating the fire and the cost of alternative training pending completion of the remedial work.
384. Lorne Stewart contends that the category of recoverable loss is limited to the replacement or repair of the ductwork.
385. In support of its case LFEPA refers to two authorities, Saint Line v Richardsons [1940] 2 KB 99 and British Sugar v NEIE Power Projects Ltd [1997] 87 BLR 42.
386. In Saint Line v Richardsons, Atkinson J had to construe the following clause

"Should any defect in the material or workmanship be discovered during construction or within twelve months of the trial trip and unconnected with wear and tear or inefficiency, carelessness, neglect or default of engineers, such parts in which the defects are discovered will be replaced … but their liability does not extend to any loss or damage, direct or indirect caused by the failure of such defective parts … but only to the actual cost or remedy of the part; and on and after the expiry of such twelve months all claims upon and all liability of the engine builders … shall be absolutely unenforceable and at an end nor shall their liability ever or in any case either before during or subsequent to the expiry of the said period of twelve months extend to any indirect or consequential damages or claims whatsoever."

387. Atkinson J held that on a proper construction of the Contract (a) loss of profit during the time they were deprived of the use of the vessel, (b) expenses of wages, stores etc and (c) fees paid to experts were recoverable as being direct and immediate rather than indirect and consequential.
388. Atkinson J said:

"What does one mean by 'direct damage'. Direct damage is that which flows naturally from the breach without intervening causes and independently of special circumstances while indirect damage does not so flow. The breach has brought it about but only because of some supervening event or some special circumstances unknown to the seller. In my judgment the words 'indirect' or 'inconsequential' do not exclude liability from that which is prima facie recoverable: that is do not exclude liability for damages which are the direct and natural result of breaches complained of."

389. In British Sugar v NEIE Power Projects [1997] 87 BLR 42 the claimants engaged the defendants to design, supply, deliver, test and commission electrical equipment. The Court of Appeal had to construe the following term in the contract:

"(iv) The Seller will be liable for any loss damage costs or expense incurred by the Purchaser arising from the supply by the Seller of any such faulty goods or materials or any goods or materials not being suitable for the purpose for which they are required save that the Seller's liability for consequential loss is limited to the value of the contract."

390. The Court of Appeal held that 'consequential' was the equivalent to the second limb of Hadley v Baxendale (1854) 9 Ex 341 which is not damage such as would flow directly and naturally from the breach (limb 1) but damage which in the reasonable contemplation of both parties at the time of making the contract would have had a substantial degree of probability.
391. In relation to Clause 44.2 Lorne Stewart contends that when it is properly construed it excludes training costs. Lorne Stewart refers to Strachan & Henshaw v Stein Industries [1997] 87 BLR 52. This is also a Court of Appeal case heard by a different court two months after British Sugar. The case considered the MF/1 conditions in an identical form, in particular Condition 44.4. The Vice Chancellor (Sir Richard Scott) said at page 71:

"I do not see why the clear meaning and effect of condition 44.4 should be cut down. If parties want to limit their potential liability to one another in the manner provided by condition 44.4 there is no reason why the law should stand in their way and prevent them from doing so."

392. At page 72 the Vice Chancellor went on to say that he could see no reason why the language of Condition 44.4 should not be given its natural meaning even if Conditions 44.2 and 44.3 were otiose.
393. Lorne Stewart also relies on the reasoning in Deepak v ICI and in particular by reference to Clause 6.8 of that contract, where the court held that the parties at arms length had allocated the risk and a clause excluding loss of profit was upheld.
394. LFEPA argues the following. On a proper construction Clause 36.2 establishes the liability of the contractor for any defect or damage to any part of the works notified to him during the defects period of which he has been informed in writing (Clause 36.3).
395. Clause 36.5 is permissive. The Purchaser may proceed to do the work if the contractor fails to do so within a reasonable time (against the yardstick of 'all possible speed' in clause 36.2) but he is not required to do so. LFEPA is, as an alternative, entitled to sue for damages and it has done so. On a proper construction of Clause 36.5, the carrying out of the works is not the sole remedy.
396. LFEPA contends that Clause 36.9 does not limit it to the cost of remedying the defects. LFEPA contends that the words of Clauses 36 and 44 are not sufficient to exclude or limit claims which would fall within the first limb of Hadley v Baxendale, i.e. liability for that which is prima facie recoverable, i.e. damages which are the direct and natural result of breaches complained of. Clause 44.2 must be construed strictly. The claim for alternative fire training does not constitute loss of use of The Firehouse but damage directly flowing from Lorne Stewart's breach.
397. Lorne Stewart contends that Clause 36.9 is effective in providing that the Contractor's liability under Clause 36 is in lieu of any other liability for defects. Clause 36.2 creates the obligation on the part of the Contractor to make good defects which are notified to it in accordance with the terms of the Contract.
398. If the Contractor fails to do the work, Lorne Stewart contends that Clause 36.5 applies and the Purchaser must do the work before any obligation arises on the part of the Contractor to pay for it. Lorne Stewart contends that the work has not been carried out so it has no obligation to pay.
399. Further, it claims that LFEPA's claims against it are limited by Clause 44.2 which explicitly excludes damages resulting from loss of use of the building which within its natural meaning must encompass alternative training. It claims that the purpose of this section of the contract is to allocate risk and to obviate the need to be concerned with issues of consequential loss.
400. I reach the following conclusions on the proper construction of the contract:

1. Clause 44.4 is effective in reflecting the agreement of the parties to limit their rights, obligations and liabilities to those set out in Clauses 36 and 44 of the Conditions as amended by special conditions.

401. 2. Clause 36.1 specifies the defects liability period. This clause is not in issue in this case. See Strachan & Henshaw v Stein Industries. Nor is there a dispute that the Taking Over Certificate was issued on 6 August 2003.
402. 3. Under Clause 36.3, notice of any defects must be given in writing, stating the nature of the defect to be remedied.
403. 4. Under Clause 36.2, on receipt of a written notice the Contractor must remedy at his own expense any defect of which he is notified with all possible speed which arises either from defective workmanship or design or any act or omission of the Contractor.
404. 5. Under Clause 36.5, if a defect or damage is not remedied within a reasonable period of time the Purchaser may proceed to do the work and charge the Contractor for the cost reasonably incurred.
405. 6. Clause 36.9 provides that the Clause 36 regime provides the sole contractual basis for the Contractor's liability.
406. 7. Clause 44.2 provides explicitly that neither the Contractor nor the Purchaser shall be liable to the other for any loss of profit, loss of use etc. claim or for any financial or economic loss or for any indirect or consequential damage.
407. Clauses 36 and 44 are therefore successful in limiting the rights and remedies to those set out in Clause 36 of the Contract.
408. In order to establish a claim under Clause 36.5 the following conditions need to be applied: (1) there needs to have been a written claim within the defects liability period specifying the defect or damage to have been remedied; (2) that defect has not been remedied with all possible speed (Clause 36.2) and taking the need for speed into account, within a reasonable time; (3) the Purchaser gives notice to the Contractor of his intention to carry out the works; and (4) the Purchaser carries out the works.
409. The Purchaser is then entitled either to deduct the cost from the contract price or to demand payment. I should add that the word 'may' is included because the Purchaser may decide to require the Contractor to carry out the work notwithstanding the delay or decide that, for example, the work which would be carried out can be omitted. It does not operate to enable the Purchaser to sue for damages. Such an interpretation would prevent the last sentence achieving its natural meaning, namely that the right of the Purchaser if the conditions are met is to claim the cost reasonably incurred.
410. I should deal with the proper construction of Clause 44.2. In my view this clause is subsidiary to Clause 36 in that it is Clause 36 which sets out the affirmative rights and obligations of the parties. For completeness I should add that Clause 44.1 confirms the ordinary duty of a party to mitigate its loss if it can do so without unreasonable inconvenience or cost.
411. Clause 44.2 must be construed disjunctively, not conjunctively. It is not intended to include loss of profit etc. as examples of indirect or consequential loss. It is intended to specify categories of loss which are to be excluded. Although I have no evidence about it, it is reasonable to suppose that this clause was drafted by lawyers who were mindful of earlier decided cases, one of which I have cited. This construction is consistent with Clause 44.3 Limitation of contractor's liability and Clause 44.4 headed "Exclusive Remedies" considered in Strachan v Stein (para 392 above).
412. I now refer to the facts bearing in mind that Lorne Stewart has made admissions on the pleadings. The Taking Over Certificate was dated 6 October 2003. The normal defects period under Clause 36 would be one year from that date.
413. On 24 October 2003 Mr Cole wrote to Lorne Stewart giving notice that in the low and medium temperature ductwork many flange joints had failed or were showing signs of impending failure. The letter required Lorne Stewart to provide its proposals and programme to rectify all defective joints.
414. Halcrow's letter to Lorne Stewart dated 3 December 2003 enclosed the consolidated mechanical snagging list.
415. On 5 December 2003, Lorne Stewart wrote to Halcrow saying that its expertise in the field of ductwork was limited and it would rely on Halcrow to advise on the suitability of products which it proposed to use for the rectification works.
416. On 23 January 2004, Halcrow followed up its letter of 24 October 2003 with the following instruction:

"Please rectify all failed joints and other joints that do not comply with the specification…"

417. On 21 May 2004, Lorne Stewart wrote to say that they had not been able to find a suitable sealant because "the firehouse is a unique installation".
418. Also on 21 May 2004, in his response, Mr Tough reminded Lorne Stewart of its obligation under Clause 36.5 and required Lorne Stewart to produce a method statement by 1 June 2004. On 2 June 2004 the first fire took place.
419. The list of outstanding works was repeated by Halcrow in letters to Lorne Stewart dated 13 June 2004, 21 July 2004 and 19 August 2004.
420. On 12 October 2004, Halcrow and Lorne Stewart agreed a plan to remedy the outstanding works and defects. It appears from Mr Cole's email to Mr Quinn on 19 November 2004 (copied to LFEPA) that even at that stage Halcrow was criticising P&P's efforts in carrying out the plan.
421. Some remedial work had been carried out by the time LFEPA resumed fire training in December 2004. Mr Tough wrote to Mr Moge to say that he had inspected the remedial work to the supply ductwork. It is consistent with the list of defects sent by Halcrow to Lorne Stewart on 22 November 2004, although the letter is dated 17 February 2005. Mr Tough found that some duct runs had not been addressed due to inadequate access. Some joints had been overlooked and some others had been inadequately prepared.
422. In the letter to Mr Moge, Mr Tough said that Lorne Stewart/P & P accepted that there were defects and that these would be addressed during the January 2005 shutdown.
423. The second fire then intervened.
424. By a letter dated 17 February 2005, Halcrow instructed Lorne Stewart to carry out the outstanding works. Lorne Stewart replied by letter dated 1 April 2005 saying that it wished to await the outcome of the investigation into the fire.
425. On 5 May 2005, Halcrow wrote again to Lorne Stewart instructing it, as a matter of urgency, to carry out the remedial works to the ductwork in accordance with Clause 36.5 of its contract MF/1 and saying that LFEPA would provide access for the work to be carried out. LFEPA contends that this was a clear instruction and countermanded any previous instruction to 'wait and see'. I agree.
426. By a letter dated 6 June 2005, Lorne Stewart gave notice that it refused to carry out the remedial work. The letter said

"Following our discussions and expert advice we can confirm that it is now apparent that oil leakage is brought about by an inappropriate specification for the supply and extract of the oil laden smoke. It is therefore not feasible to carry out any further works in this respect unless and until the specification is suitably amended."

Conclusions

427. I find that within the defects period, widespread defects to the flange joints in the supply ductwork were found by Halcrow and notified to Lorne Stewart in accordance with Clause 36 of the Contract. I also find that (subject to any issue of mitigation under Clause 44.1) Lorne Stewart was under a contractual obligation to rectify those defects. The question of faulty design, even if it was a relevant issue between LFEPA and Halcrow, was not a relevant issue between LFEPA and Lorne Stewart unless (which was not the case) Lorne Stewart had been arguing that its work was not defective.
428. I find that LFEPA, as a consequence of Lorne Stewart's failure to remedy the defects within a reasonable time, would have been entitled in principle to give notice to Lorne Stewart under Clause 36.5 that it intended to carry out the works and then to have the remedial works carried out on its behalf. In that event Lorne Stewart would have been liable to pay LFEPA the costs that LFEPA had reasonably incurred in carrying out the works. However, the remedial works have not so far been carried out by LFEPA and the liability under the Contract has therefore not been triggered. It may well be that it will not be triggered. In these circumstances I have no alternative but to find for Lorne Stewart.
429. I should add that I will consider later whether or not Lorne Stewart would be liable to pay LFEPA. This would depend on whether, assuming that LFEPA carried out the works, those works could properly be described as necessary remedial works related to remedying Lorne Stewart's defective work. If not, under the contract LFEPA is required by Clause 44.1 to mitigate its loss. This must include not doing unnecessary work.

8. The History after 5 January 2005

430. This forms the important background to the consideration of two issues, (a) what is the most appropriate remedial scheme? and (b) whether LFEPA has any intention to carry out the work of reinstatement and whether it would be reasonable for it to do so?
431. The fire took place on 5 January 2005 at about 17.30 p.m. in the second floor suspended ceiling over the Office fire room.
432. Mr Tovey wrote to Mr Moge on 10 January 2005 but Halcrow's initial finding was that there was no structural damage and the area of spalled concrete could be simply repaired. Mr Tovey agreed that the remaining damage to the system required a more detailed examination and asked that when LFEPA's fire investigation team had completed its work there should be a meeting between Halcrow and LFEPA to discuss the best way forward.
433. A letter by Firehouse Management Ltd to the manager of The Firehouse dated 26 January 2005 noted that:

"Our inspection revealed that considerable amounts of oil were evident in Zone 3 bedroom, lagging of supply air ducts within the plant room and in rockwool insulation which had been used around ducting and services where they penetrated through the plant room walls at high levels."

434. The letter expressed the very reasonable concern that what happened in the Office void could be repeated in other areas.
435. An investigation into the cause of the fire was undertaken by the London Fire Brigade and Casella Stanger (by now called Beau Veritas). In its report dated 17 March 2005 it concluded that:

"The most likely source of the oil contamination on the rockwool insulation was leakage of oil (either as a vapour or a liquid) through the joints in the ducts used to carry the oil vapour. This theory was supported by the observation that oil contamination was usually heavier on the upper layer of the rockwool insulation and was also heavier in the vicinity of ducts. In some areas there may have been a contribution from natural condensation of the smoke oil on metal surfaces (as observed on the Durasteel panelling). However this would have been unlikely to have caused the saturation of the insulation observed in some area."

436. The London Fire Brigade Investigation Report published in May 2005 concluded that:

"4.1 The most likely cause of the fire above the ceiling of the Office scenario room of The Firehouse at Southwark Training Centre appeared to be the initiation of thermal oxidation in the oil contaminated rockwool insulation above the Westemp panels."

437. On 22 March 2005 Mr Evans was appointed to act on behalf of LFEPA. The letter of appointment was written by Mr Sergeant a partner in Winward Fearon, LFEPA's solicitors. The letter enclosed the "Statement of the Duties of an Expert Witness acting in connection with court proceedings under the Civil Procedure Rules 1998".
438. Under the heading "Instructions" the letter went on:

"Your assistance will be required primarily in relation to the variations, delay and defects claims. In the first instance, however, you will be required to assist in advising the Authority on remedial works and possible re-design in relation of [to?] problems it has become aware of following the fire at The Firehouse on 5 January 2005."

439. The letter could be construed as giving potentially conflicting instructions in the sense that in the first instance Mr Evans would be employed by LFEPA to give it advice on remedial works which could be expected to lead to further employment for him. Thereafter he would be retained as an expert in relation to the remedial works on which he was already advising.
440. It may be that this distinction is being charitable to Mr Evans. In any event he has conceived it as his duty to act as a protagonist for LFEPA rather than an independent expert. As I have already made clear, this has tainted his evidence.
441. On 30 March 2005 Halcrow produced its report and on 1 April 2005 Mr Tovey and Mr Tough met with Mr Moge and Mr Norris.
442. Item 3 of the minute of the meeting is important:

"Halcrow stated that oil leaking from the ducts and ignited by soot 'sparks' was in their opinion the cause of the fire … Halcrow recommended, as well as carrying out the remedial work to seal the ducts, improvement could also be carried out to the Westemp design and the installation workmanship in order to minimise the soot 'sparks' passing through the Westemp panels although this would be an enhancement to the original specification."

443. Item 4 of the minute said:

"Halcrow reconfirmed that the remedial work required to the ducts was a contract defect which was already on the defect list and is work which Lorne Stewart is required to complete."

444. The meeting note also recorded that LFEPA stated the need to get the Fire House back into operation as soon as possible and asked Halcrow to produce a timetable for all the outstanding activities.
445. It is clear that Lorne Stewart was contending that the fire was caused by a design problem which was Halcrow's responsibility. Lorne Stewart's letter to Halcrow dated 1 April 2005 said

"We would rather wait for the outcome of these [forensic] investigations before we carry out any further remedial works to a ductwork system which has an inherent design problem."

446. This contention was followed up in a further letter to Halcrow dated 6 June 2005 where Lorne Stewart said that:

"Following our discussions and expert advice, we confirm that it is now apparent that oil leakage is brought about by an inappropriate specification for the supply and extract of the oil-laden smoke. It is therefore not feasible to carry out any further work in this respect unless and until the specification is suitably amended."

447. Mr Hood of Lorne Stewart said in oral evidence that in his opinion the problem was the fact that the air had oil in it. This decomposed the joints and leaked out.
448. A meeting on 6 May 2005 was attended by the acting head of Legal Services of LFEPA, various experts including Mr Evans, and Mr Moge and Mr Norris and LFEPA's solicitors. The following conclusions set out in the note are relevant:

"(1) RE (Mr Evans) summarised the options for repair are to replace all supply ductwork with either welded lightweight stainless steel and use existing smoke oil system or discard use of supply ducts and add local smoke generators in each fire room or find an acceptable method to reseal existing ducts (Halcrow's proposal to seal ducts and use of chemical smoke were concluded as unacceptable.

(4) RE is to invite a competent contractor asap to view the installation and advise on resealing the existing ducts and also installing new stainless steel ducts."

449. This is similar to Remedial Scheme 3 which I must consider later. I note Mr Evans' reference to local smoke generators at this early stage of his participation.
450. On 12 May 2005 Mr Norris raised a more fundamental concern in an email to Mr Tough:

"Rob,

When determining the remedial work necessary to put the fire places back on the run we should consider the problem the Training Team raised before Christmas that the cosmetic smoke injected into the fire rooms did not give realistic conditions, due to the heat the smoke hung at low level, allowing trainees to see over the top."

This makes it clear that the issue of stratification was raised before the January 2005 fire.

451. Halcrow say that this raises clearly the issue that LFEPA would not have continued with hot training in the fire rooms because of the problems of stratification.
452. Mr Norris wrote to his colleague, Mr Rigby, Group Manager Breathing Apparatus and Real Fire Training Team, on 13 May 2005 making the same point:

"From discussion with you last autumn (i.e. 2004) we were aware that generated smoke did not give realistic conditions and hung at low level, allowing trainees to see over the top. This concern was conveyed to the consultant at the time and with the fire has faded from the discussions. I have emailed the consultant to bring back into discussions as modifications may be necessary within the work we will be required to carry out as a consequence of the fire. I am not aware whether this will be a minor or major change to the generation of smoke. Can you please put on paper what exactly is and is not happening, as I expect a response from the consultant to my email below (to Mr Tough)."

453. Mr Rigby responded also on 13 May 2005 in an email copied to Ms Bernadette Hadley in Legal Services which clearly sets out the problem with this type of fire training:

"In any fire situation smoke builds from the ceiling or highest point in any structure as there is a build up of unburned gas and products of combustion, the smoke thickens and the visible space between the base of the smoke to the ground (this is referred to as the neutral plane) gets lower to the ground reducing the neutral plane.

The fire-fighting tactics are to pulse spray small quantities of water into this cloud to cool any unburned gas so as to prevent it from igniting. This is done beneath this cloud with the Firefighter crawling in the clear space of the neutral plane.

The Firehouse failed to recreate those conditions as the neutral plane is between the top of the smoke and the ceiling. This is because the temperatures at ceiling height are greater than the temperature of the smoke. It forces people to want to stand up and look over the smoke, this reinforces negative learning, would be a dangerous practice if carried out at a real incident or carbonaceous facility and it does not simulate realistic conditions of how a fire would develop in a confined space."

454. Mr Moge said in oral evidence that he was aware of the problem of stratification of smoke in The Firehouse before January 2005.
455. Mr Moge also said in oral evidence that Mr Watson had lived with the problems of the design and construction of The Firehouse but had retired. He had been followed by Mr Pragnell and then Mr Norris, neither of whom were mechanical or electrical engineers. He suggested that the problem of stratification in the fire rooms would have been brought to his attention by someone in the training department and he would have asked Halcrow about it. He thought he might have heard about it first from Mr Richards or Mr Rigby. He assumed that it would have been raised verbally.
456. Mr Richards is still employed by LFEPA. Mr Taverner QC raised the question of stratification on Day 2 of the hearings. There was no attempt by LFEPA even at that stage to seek to call either Mr Norris or Mr Richards as witnesses to explain the significance or otherwise of stratification in relation to hot fire training at Southwark, even though the issue was clearly raised at that very early stage of the trial.
457. There is one reference in a meeting at which Mr Norris and Mr Tough were present on 25 January 2005 (see note of 3 February 2005) where it is recorded at Minute 19:

"LFEPA to advise on smoke performance acceptability but nothing can be done about burn-down of oil mist in fire rooms although it is less when rooms run cooler."

458. Mr Tough re-emphasised the problem in a letter to Mr Moge dated 19 May 2005 which referred to the problem of burn-down of oil mist within the fire rooms referred to in the note of 3 February 2005.
459. In the 19 May 2005 letter Mr Tough explained

"There is nothing to be done about this. The 'burn-down' of the oil mist was accepted by Derek Watson at the start of the project as the best that technology could provide at the time. We have checked recently and the oil mist used in the Firehouse is still state of the art. The 'burn-down' of Ondina oil will start at 200 degrees Centigrade which is a higher temperature than all the alternatives that we have found. To avoid the clear air at high level, operate the fire rooms at a cooler temperature."

460. I note that Mr Norris deleted many of his emails later in 2005. I am not clear to what precise dates they were deleted. It may well be that these emails would have added significantly to the evidence before me.
461. On 18 June 2005 Mr Evans prepared a brief for the remedial works and upgrades to the smoke supply ductwork and extract ductwork systems within The Firehouse. He specified the remedial works as follows:

"'Remedial Works'

In order that The Firehouse can be retained to the full range of training activities, it is deemed necessary to replace the supply smoke ductwork with a fully welded and flanged system compliant with HVCA/DW/171 tested to zero leakage and with adequate provisions for oil drainage. It will also be necessary to clean, re-seal with an oil-proof sealant and add drains to the Durasteel extract ductwork, replace the fire damaged wiring, IT, control and communications cabling above the fire room 4. It will also be necessary to inspect, replace and re-seal the 'Westemp' panel suspended ceilings throughout the building, add heat shields above all of the propane burners and re-commission all of the systems."

I have already noted that Mr Evans no longer relies on standard DW/171.

462. On 21 October 2005 LFEPA sent out an invitation to tender document for remedial works based on Mr Evans' preferred remedial scheme. The document makes it clear that Mr Evans has been having meetings with Mr Rollason.
463. In an email to Arup (potential tenderers) dated 22 November 2005, LFEPA said that although it was not entirely inflexible on the point, having worked with a highly eminent expert in the field, Mr Evans, it was reluctant to move away from the scheme. Also it was concerned about the possibility of losing valuable time in considering other options which would be unlikely to be preferable to the option currently proposed. This was showing a degree of urgency to carry out remedial works which did not continue.
464. Jacobs Engineering UK Ltd were appointed as consultants for the Project and on 3 January 2006 sent a letter which indicated that the Project Concept Stage and Development of Project Brief would need to be completed by the end of March 2006. The letter annexed a list of additional enhancement works that it proposed should be carried out. These included upgrading the firefighters' location system to provide quicker response times because the system previously installed as the state of the art technology had become out of date.
465. In the early part of 2006 Mr Norris was increasingly active in promoting a discussion as to what facilities LFEPA should realistically make available at The Firehouse at Southwark. He wrote the following email to Mr Livesey of Jacobs before the 10 February meeting which considered Jabobs' preliminary report.
466. In his email dated 6 February 2006, Mr Norris wrote:

"As we discussed today, all options are for discussion and as you are aware we are at present successfully using temporary chemical smoke without environmental concerns and exhausting this smoke through the existing extract ducts and precipitator/equipment and any problems can be discussed with VT (Vosper Thorneycroft). Also consider the option to remove oil smoke entirely and the use of local chemical generators. This approach will reduce the concern to future fires and will also reduce the on-site work to the existing ducts and ceiling. We are aware that all the insulation will require to be removed and as discussed it may not be necessary to replace all insulation including re-insulating the supply ducting as the supply duct will then for the future be used for heat only.

467. In his following email to the parties on the 10 February 2006 Mr Norris wrote that those present should be prepared to discuss both the reinstatement of Halcrow's design and cheaper alternative solutions. He said that

"In this context LFEPA would consider use of local oil smoke generation or use of chemical smoke if appropriate whether locally or centrally distributed."

468. The Jacobs preliminary report, considered at the 10 February 2006 meeting, made proposals for various investigations which would lead to a more in depth study. It proposed to undertake an initial feasibility study of alternative options for remediation of The Firehouse facility. It raised the possibility that it may be possible to modify the existing building and provide the required facility with an alternative approach at a lower cost.
469. There were two meetings on 10 February 2006. One involved the user groups that might be involved in what is described as "the forthcoming Firehouse refit". The second meeting was that of the Project Board.
470. It is interesting to note that under "scope" the record of the meeting of the user group sets out that "Peter Livesey explained the scope of the works had not yet been finalised and that it could range from a simple strip out of the contaminated and damaged material and the subsequent use of local smoke generation in future to a full strip out and replacement of all the component parts of the ductwork to the original specification."
471. The Authority meeting (at which Mr Evans was present) instructed Jacobs to finalise the programme for Mr Evans' preferred option, namely replacing the supply ducting with welded ducting and also to evaluate the alternative options with Training including costs. Those options were to include localised oil smoke generators. This evaluation seems then to have been undertaken without Mr Evans' participation or knowledge. It was foreshadowed by a draft proposed email from Mr Norris to Mr Dobson of 3 March 2003, three days after Mr Dobson had taken up his appointment, which concluded that the present method of smoke generation was determined by the original design brief interests "of many years ago" and needed to be reassessed for the performance that it had achieved in meeting the intended training requirements and in meeting present and future needs.
472. Mr Norris' report concluded that it would not be practicable to locate local smoke generators in the fire rooms but it would be possible to locate them outside the fire rooms and direct the smoke into the fire rooms or retain the existing smoke generators and carry out work to the supply ductwork located in the ceiling voids which served the fire rooms, which would appear to be the lowest cost option.
473. I was told that no minutes of the Project Board Meeting on 10 February 2006 have been disclosed. There is, however, a note of a Committee Meeting on 10 February 2006 to discuss the impact of a Firehouse refit on Training's plans. Mr Richards was not present. The purpose of the meeting was not to discuss training needs but the impact of the proposed works on Training's existing commitments.
474. Interestingly Mr Evans was kept away from these problems. Mr Moge in his oral evidence agreed that the speculation might well be that Mr Richards took the view that repairing the ductwork would be a waste of time.
475. Jacobs required LFEPA to appoint Concept Engineering Ltd to provide specialist advice on the existing system of generating smoke and the feasibility of the alternative proposals for the provision of smoke through the building. The objective set out in Mr Livesey's email to Mr Norris of 9 March 2006 is to identify options for returning the fire house service such that it will meet the current LFEPA training requirements.
476. The appointment of Concept Engineering Ltd was made in a letter from Mr Moge to Mr Dunnington of Concept Engineering Ltd dated 10 March 2006. Mr Evans said in oral evidence that he was not aware of the letter or the appointment.
477. On the same day JP Construction was asked to advise on alternatives to the Westemp panels and BRE Testing was asked to advise on alternative wall and ceiling panelling systems to achieve the performance specification required by BRE or Jacobs.
478. On 13 March 2006 Mr Norris wrote a background note to Mr Townsend, a senior architect at Jacobs. In it he noted that the smoke had never been of a satisfactory type (stratification and reverse) and that there was concern over the firefighters' location system and other matters. He noted that many years had passed since the initial brief and that technology had developed. The nature and scope of the training had been altered. New training had been added. Mr Norris noted that litigation against Halcrow was based on reinstatement but "I understand that there will be an opportunity … to offer alternatives which will benefit all parties …"
479. The meeting took place on 13 March 2006. The purpose of the meeting was to "review Training's future requirements for artificial smoke". Mr Dobson, as head of Training and Development, and Mr Richards, his deputy, were present with Mr Townsend from Jacobs and Mr Norris representing LFEPA.
480. The note of the recommendations coming from the meeting is very important because the Authority, acting rationally, must base any work at The Firehouse on current and future training needs. Among the conclusions were:

1. Achievement of future training objectives was critical. Review of the original design was unnecessary as the present concern was to ensure that Training's future smoke requirements were provided.

2. The four existing fire rooms no longer required smoke generation as it was not possible successfully to produce smoke without stratification. Training considered that stratified smoke, whether from the existing oil smoke system or a chemical alternative, would provide smoke in a way which was detrimental to creating real fire training experience.

3. The existing heated areas were to remain heated as originally intended and some areas would require combined heat and smoke training facilities.

4. Jacobs should research the use of mobile smoke generators which could be located, as required, to suit training needs.

5. Jacobs should also research the possibility of installing exterior oil smoke generators. The mobile smoke generators must be able to provide realistic and sustainable smoke for training purposes.

6. Jacobs was also asked to research the use of a sacrificial layer in reinstating the fire room ceilings. Training would be available to advise.

7. Training considered the reaction of water on fire would produce steam which would provide real smoke training which was preferable to artificial smoke options.

481. In his draft email to Mr Livesey, Mr Townsend commented that as a result of the problem of stratification, the original design was "severely lacking and extremely dangerous". He noted that Mr Dobson was present at the meeting and was "very philosophical about failures in The Firehouse – not convinced that heat and smoke work elsewhere in UK".
482. Mr Townsend's note to Mr Norris commenting on his Minutes gives an indication of Mr Richards' very strong views which were not otherwise apparent in the presentation of LFEPA's evidence. "Steve Richards was absolutely convinced that oil smoke was not suitable for training because the stratification does not represent a real fire situation and in fact represents a danger to trainees who are advised not to stand up within smoke and to be low to seek out the heat source".
483. Mr Townsend's reaction was that Jacobs should eliminate oil smoke from the agenda. "If we were to continue with oil smoke we would advise removing all insulation from floors containing burners and this would have a fundamental knock-on effect which would involve removing all ductwork and replacing with a suitable alternative, together with sacrificial heat shields."
484. Also on 15 March 2006 Mr Moge sent Mr Townsend an email saying that he had impressed upon Mr Norris the need to agree "users'" requirements for any change in design.
485. A meeting on 16 March 2006 between Mr Norris, Mr Richards and Jacobs representatives reviewed the conclusions reached on 13 March 2006. Mr Richards, Mr Townsend and Mr Norris attended.
486. The conclusions included:

1. Smoke will not be provided in the four fire rooms and should it be required during cold training, mobile smoke generators will be used.

2. Smoke will be required in some heat and smoke zones. This smoke is anticipated to be oil based smoke as temperature of the heated areas is 80?C maximum.

3. Both Training and Jacobs will review Mr Evans' option of local smoke generators which was submitted to Mr Hood in 2005 and approved. The locations of local smoke generators in the heated areas are to be reviewed by Training "and the smoke generators indicated in the firerooms will be considered deleted".

4. Jacobs to research the practicalities of installing exterior smoke generators to produce smoke to the heated areas.

5. Jacobs should research the use of mobile smoke generators.

6. Jacobs should, in researching their engineering solutions, consider the possibility of deleting some existing ceilings which are not required by Training.

Copies of the note were sent to Mr Dobson, Mr Livesey and Mr Moge but not to Mr Evans.

487. In an email to Mr Norris on 16 March 2006, Mr Richards said that Mr Evans' proposals for local smoke generators were unacceptable because the supply ductwork was to be used for local smoke distribution.
488. Mr Norris wrote to Mr Townsend commenting on his email of 15 March 2006 on the following day. He said that "without wanting to overstate the situation relating to oil smoke you will recall that Steve Richards was absolutely convinced that oil smoke was not suitable for training because stratification does not represent a real fire situation and in fact presents a danger to trainees …"
489. Mr Norris sent a very short email on 17 March 2006 to Mr Dobson describing LFEPA's user requirements for smoke generation:

" 1. No smoke is required in the four fire rooms.

2. Local smoke generators are to be provided to the heat and smoke zones as indicated on the drawings prepared by Training March 06 (Mr Richards)."

490. Again, Mr Evans said in oral evidence that he was not aware of these conclusions at the time.
491. On 18 March 2006 Mr Norris produced a User Design Brief for future smoke generation. Mr Moge said that it was a discussion document and did not necessarily represent Training's final position.
492. The brief was to be distributed to Ms Riddell, Mr Dobson, Mr Richards, Mr Livesey and Mr Moge. It included the following:

"2. Oil based smoke is acceptable as understood to be the only known method available that will maintain smoke at the temperatures required in the heat zones. See anticipated stratification resulting from the use of smoke oil is accepted by Training.

3. Smoke to the heat zones will be from local smoke generators and the consultant (Jacobs) is to investigate the options of locating within the heat zones or externally outside The Firehouse.

4. Training no longer require smoke to be provided in the four fire rooms and consider that the steam created from water action on hot burners produces sufficient realism of smoke for fire training.

5. Training in the event of requiring smoke in the four fire rooms during cold training will used water based smoke generator mobiles."

493. A draft from LFEPA dated 24 March 2006 from Training and Development prepared by Mr Norris identifies clearly the change in philosophy. Headed "Reason for Change" it explains:

"Following from the fire within The Firehouse Jan 05 opportunity resulted to correct any unacceptable facilities which had been provided as part of the original design and for this work to be carried out as part of the fire repair works. The smoke generation was reviewed with Training and Development."

494. The section headed "Background" emphasized the problems and dangers of stratification. The paper therefore proposed that

"During hot training in the four fire rooms a more realistic smoke resulted from the reaction of water from hoses on the hot burners which produces steam which does not stratify, is white and more realistic for training. As a consequence for the future T and D (Training and Development) do not require smoke to be provided to the fire rooms for hot training. Also in the fire rooms during cold training it is preferable to T and D to use artificial chemical smoke from mobiles which can be located to training needs and is a successful industry method which T and D are familiar with for providing smoke at low temperature."

"Also in the heat zones T and D will require smoke and have accepted continuing use of oil generated smoke. For convenience of future more suitable smoke generating methods becoming available and to contain cost, local smoke generators will be used. This arrangement will also benefit maintenance of The Firehouse with not using the ducting for distributing the oil smoke which resulted with the January 05 fire and with lower operating cost resulting from the reduction in used oil."

"PSD will be able to combine this work with the repair works to be carried out to get The Firehouse back into full operation. Also as this work is a reduction on the original design, costs should be less than the cost for reinstatement of the original system proposed to be carried out as part of the repair works and without any additional cost for update to T and D current requirements."

495. Mr Moge attempted in oral evidence to suggest that this note was produced on behalf of Training but had not been approved by Training. He had to concede in cross-examination that Mr Norris must have obtained the opinions from Training and also that Training did not seek subsequently to change or update the document.
496. On 27 March 2006 a meeting took place, chaired by Ms Riddell, to review Training and Development's current smoke requirements. It was attended by Mr Dobson, Mr Richards, Mr Moge and Mr Norris, together with Mr Livesey from Jacobs and Ms Laurence from Legal. I note that Mr Evans is not listed as being present.
497. The note of the meeting reported that Jacobs was reviewing Mr Evans' recommendation and investigating options which would reduce the cost of reinstating the original smoke generator programme. It was expected that LFEPA would review and select the appropriate option with the minimum delay to permit Jacobs to have sufficient time to carry out the high level design and costing for the Committee.
498. Point 4 of the minute noted that at the same time the Westemp panels would be reviewed by BRE.
499. Point 5 set out again Training and Development's views:

"T & D confirmed that smoke will not be required in the four fire rooms and presented drawings indicating the heated zones and non-heated which will require smoke. It is accepted that appropriate smoke to be provided in the heated areas is likely to be oil based as the maximum temperature requirement is 80?C. In the non-heated areas Jacobs will determine if the smoke will be oil or chemical based. Jacobs are instructed to proceed with the development of T & D's current requirements for review at 24/25 April meetings, and to consider T & D's current requirements as part of an alternative option study."

500. Point 6 of the minute noted that Training and Development were to prepare a report providing the reasons for change from the initial smoke generation design.
501. On 29 March 2006 Concept and Jacobs visited The Firehouse. Mr Norris's email to Mr Moge gave him a report on the visits.
502. Concept said that the smoke generators installed at The Firehouse were a "one off special design to ICS requirements". There was considerable flexibility in positioning local smoke generators because Concept's oil smoke units were small and unlikely to obstruct or interfere with room layouts. Concept also said that the stratification problem could be "designed out" but the designing out was complex and required detailed engineering and maintenance.
503. On 29 March 2006 Mr Richards produced a sketch plan for a system using local smoke generators. In his oral evidence Mr Dobson said that local smoke generators were used quite commonly for training purposes.
504. It is clear that LFEPA was very conscious of this litigation throughout this period. On 7 April 2006 Mr Sergeant, of Winward Fearon, sent an email to Mr Norris urging the Authority to prepare an update prior to the Case Management Conference on 5 May. The email noted that a final decision on how to proceed was expected to be taken at a meeting of the Authority in June 2006 based on the Jacobs Report which had a deadline of 19 May 2006.
505. Before this it was expected that a very important meeting with Ms Riddell would take place on 3 May 2006. This meeting was fixed (or more accurately re-fixed) on 5 April 2006.
506. Before that, a workshop meeting was fixed for 24 April 2006. According to Mr Norris's email to Mr Moge dated 7 April 2006, this would review "Jacobs' engineering solutions" for the DSSR (Evans) recommendation of replacing the ductwork, the options to reduce cost including the reduced user requirement option".
507. The same email noted that

"Also in discussions with P Livesey there is a major technical issue to resolve and that is how to reduce the risks of future fires in the ceiling voids. This is a resolution required for whichever option Jacobs is instructed to proceed with."

This is a reference to the problems with the Westemp panels.

508. On 8 April 2006, Mr Richards sent a Report on the history of The Firehouse to Ms Riddell. It sets out briefly the history and notes how the training has developed. It notes that Real Fire Training Strategy was being delivered at Lancashire and Essex training centres. It was also planned that the strategy would be given effect from June 2006 using a Mobile Fire Training Unit "and when The Firehouse is available for hot fire training".
509. The Report sets out the practicalities of providing training in The Firehouse. It notes at paragraph 3.1 that "During the period that The Firehouse was fully operational many lessons were learned by the Team with regard to practical issues associated with the various functions used in the selected training scenarios". This is what is to be expected of a novel and innovative initiative.
510. Experience had led Mr Richards and his Team to note in paragraph 3.1 that

(a) dedicated smoke generators take time to reach the necessary heat level to produce smoke

(b) the variations of levels of smoke are difficult to control. Smoke levels could be either light, enabling students to move around or very heavy, making the Safety Officers' observations difficult.

(c) (i) As the temperatures in fire rooms rose above 80°C the oil based smoke started to stratify and disburse. This produced an unrealistic scenario for firefighters.

(ii) The problem of stratification is the complete opposite of fire behaviour in real situations.

"Because of this the team were unable to reinforce a critical message to students which is to stay low in fire involved compartments in order to maintain better vision, location of potential casualties and reduce the impact of physiological effects for firefighters working in these environments."

511. The Report recorded in paragraph 4 "Dynamic Changes" that the following adjustments needed to be made to Firehouse training scenarios:

(a) It was decided that it would be appropriate to stop using smoke in the fire rooms. Following this action it also became evident that the application of water to the fires during firefighting procedures produced large volumes of steam which acted in place of the smoke obscuring vision and forcing students to stay low.

(b) As smoke density levels were either light or heavy the team agreed on the alteration of scenarios in various areas of The Firehouse. Although less than ideal, reasonably realistic scenarios could be maintained.

512. Crucially, the Report concluded in relation to the adjustments at (a) and (b):

"(c) None of the above adjustments affected the overall objectives and outcomes required for each training scenario."

513. Paragraph 5 entitled "Suggested Changes" should be quoted in full:

"5.1 Remove hot smoke making ability in all fire rooms as it is not possible to recreate realistic neutral plane conditions in fire compartments. There would be greater benefits for students if no smoke is present on arrival at fire rooms. This would enable the training team to concentrate on students' firefighting techniques, an essential part of RFT (Real Fire Training) strategy. Those applied techniques would determine how much steam is generated and the subsequent worsening of conditions to fire fighters without measured water application methods. The removal of hot smoke in these areas will also speed up the daily start process for The Firehouse.

5.2 Use of portable or fixed local cold smoke generators for fire rooms that can be used in the absence of fires. Occasionally crews are required to work in or travel through these areas en route to scene of operations. The ability to create smoke in these areas at these times would be beneficial.

5.3 Use of portable or fixed local cold smoke generators in selected areas of Firehouse. This will speed up the daily start process for The Firehouse."

514. The conclusion in relation to training objectives and outcomes is:

"6.1 With much of the training outcomes being reinforced during knowledge input, the above suggested changes will have no effect on achieving the desired training objectives and outcomes."

515. This assessment would appear to be clear and authoritative and I find that (a) it has not been contradicted; (b) it would form a part of the basis of any consideration of the future of the Firehouse; and (c) LFEPA would be bound to reject any scheme which Training had rejected.
516. On 20 April 2006, BRE delivered an early draft of its site inspection report to LFEPA. This followed five visits to The Firehouse.
517. The Executive Summary reached the following conclusion:

"The steel ductwork had gaps at some transverse joints and around access panels. It is not clear if these existed before the fire but we suspect that there was some leakage in these areas. The longitudinal joint method may not be suitable for ducts required to contain fumes laden with mineral oil.

We have concluded that although the systems were generally suitable to resist the fire conditions, the Westemp wall and ceiling systems and the steel ductwork were not adequately smoke tight in fire conditions. This has resulted in a build up of mineral oil on all internal and external surfaces of the ductwork and on the framework of the wall and ceiling systems. The rock mineral wool also appeared to have oil deposits. In our opinion the fire within the ceiling void was started by the mineral oil igniting at one or more hot-spots on the upper surface of the ceiling. The hot-spot(s) may have been caused by the Westemp cover strips being too thin or cracked or by gaps between the ceiling panels and the cover strips.

In our opinion it would not be possible to carry out remedial work on the existing Westemp and steel ductwork systems to prevent a similar fire starting in the future, particularly in those areas around the fire source. It may be possible to develop a suitable system based on a continuous steel skin protected by insulating boards such as the Westemp panels and ceramic blanket, but we are not aware of any access panel system that would remain smoke tight after repeated exposure to temperatures much greater than 100?C. In the heat and smoke room areas we are of the opinion that the Durasteel-based system is suitable, possibly with steel cover strips bedded on a suitable mastic or gasket over all joints. The design of any access panel would have to incorporate a suitable heat-resisting compressible seal."

518. Preparations went ahead for the Review Meeting on 3 May 2006. Jacobs produced Presentation Notes for the meeting. They were indecisive because Jacobs had not been able to carry out its work in sufficient detail to be able to make recommendations.
519. Jacob's brief is contained in the first draft of their Report. The primary objective is described as "to establish a means to bring the Firehouse back into operation which will require a testing of the viability of the suggested design solution of DSSR and the suggestion of alternative solutions to achieve this should the DSSR proposals not be feasible". In other words it was not to consider cost but only the feasibility of DSSR (Mr Evans) scheme.
520. The Presentation Notes listed what it described as "Residual Issues". These were:

1. Future smoke contamination of voids leading to potential fire hazard. The Westemp system does not provide a barrier to the passage of smoke and gasses into the voids.

2. Stratification of smoke in Fire rooms which they understood to have inherent problems associated with the base design of the facility and no immediate solution had been identified.

3. Oil residue in ductwork which represents a potential fire hazard. The Report noted that if an acceptable maximum level of oil residue could be determined then a routine cleaning regime could be implemented provided sufficient access could be provided throughout the ductwork systems.

4. Defective extract ductwork to heat/smoke rooms.

5. Smoke contamination of the loft work fabric. A practical cleaning methodology would need to be developed. Given the difficult geometry of this construction it was thought that this might prove difficult to achieve.

6. Water based smoke may be considered to have occupational exposure limits which LFEPA would not find acceptable in a long term training facility such as The Firehouse.

7. Water based smoke systems have higher operating costs than oil based systems.

8. Residual oil contamination in heat/smoke rooms.

521. Jacobs considered five options for feasibility. Its Option 1A is based on retention of the original functionality throughout the Firehouse. It is Mr Evans' replacement scheme and includes replacing all the supply ductwork with welded DW/172 ductwork. It also includes resealing Westemp panels which Jacobs says is an impossibility.
522. Jacobs alternative 1B goes further and includes replacing defective extract ductwork to Heat/Smoke rooms and upgrading the Westemp panels.
523. Jacobs Option 2 is based on deletion of smoke from the Fire Rooms and provision of oil based smoke to the Heat/Smoke rooms via local smoke generators. This option, like those following except Option 5, involves replacing all supply ductwork and defective extract ductwork to Heat/Smoke rooms but it also includes as an integral part of the option, the upgrade of the Westemp panel system.
524. Jacobs Option 3 is based on deletion of smoke throughout the facility on the assumption that visors could be used to restrict visibility through the training. It involves cleaning the building.
525. Jacobs Option 4 is based on deletion of smoke from Fire Rooms and provision of water based smoke to the Heat/Smoke rooms through local smoke generators.
526. Jacobs Option 5 is based on carrying out relatively limited remedial works only.
527. Options 3, 4 and 5 all include upgrading the Westemp panel system.
528. I note that all these scenarios involved much more extensive work than the options which are currently before me and incorporated as far as possible Mr Evans' very expensive scheme.
529. Jabobs' estimated costings were (inclusive of fees and VAT) £12.7m for Option 1A; £13.0m for Option 1; £13.3m for Option 2; £12.5m for Option 3; £13.0m for Option 4 and £5.2m for Option 5. These figures were expressed to include a provisional allowance for renewal of the Westemp panels and a 30% contingency. It is, perhaps, not surprising that LFEPA was rather daunted by these figures.
530. On 3 May 2006 the lawyers met with Ms Riddell, Mr Moge and Mr Norris and Mr Moncrief, Ms McNally and Mr Livesey from Jacobs. Mr Evans was also present at the meeting.
531. There was considerable discussion and dispute about the extent of the notes of the meeting which should be disclosed. I do not propose to deal with this issue directly but simply to refer to the notes which I did see.
532. Ms Hadley's redacted note separates the discussions at the meeting into non-litigation discussions at the start of the meeting followed by a lengthy discussion in respect of which privilege has been claimed. The purpose of the meeting is expressed to be for Jacobs to present the options to Ms Riddell.
533. Mr Norris' note of the meeting indicates that discussions of the options for reinstating The Firehouse were intermixed with legal considerations. The note does not make full sense without reference to other documents. For example, although the note refers to a review of Jacobs' options, the actions refer to "Option A i.e. litigation requirements", Option B "barristers' requirements for LFEPA to demonstrate that they have investigated other ways to meet the training needs in a more cost effective manner than full remediation of The Firehouse" and Option C, "LFEPA to undertake a study into current training requirements and the necessary operational and logistical considerations."
534. A further clue as to what went on at the meeting appears from Mr Livesey's email to Mr Norris of 4 May 2006. It appears that at the meeting Jacobs presented its options. Jacobs explained that remediation of the existing ductwork was not advisable except possibly for the Durasteel extract ductwork to the Fire Rooms. Jacobs explained that in its opinion the works required extensive dismantling of the wall/ceiling panels, supporting structure and service installations. In addition to ductwork replacement "a full reinstatement of the building will require the existing oil contamination from the insulation and surfaces of the walls/ceiling voids to be removed which involves a similar level of access work".
535. A further pointer appears from the Executive Summary of Jacobs Report on Activities to June 2006, where it says that "We recommended that LFEPA engage the services of a Firehouse Design Expert and a Fire Risk assessment expert to give LFEPA the assurance that they did not face unacceptable levels of risk should the remedial scheme be implemented".
536. Ms Hadley's redacted note of the meeting says that Jacobs would not recommend Option 5 as there were significant health and safety implications associated with it and there would be a very significant operating cost.
537. In Mr Livesey's email to Mr Norris of 4 May 2006 under "Action" it indicates that it was agreed that Jacobs would liaise with LFEPA's experts and ascertain what information they required for litigation purposes (Option A). Under Option C, LFEPA's study into current training requirements, LFEPA would consider what they may do subject to quantum of a litigation award.
538. It would appear from this note that LFEPA's approach was to seek an award of damages based on total reinstatement or rebuilding of the Unit (Option A) and then to see how much if anything needed to be done to fit in with Training's current needs. One might have expected the approach to have been the other way round, i.e. investigate Training's current needs and in the light of experience in operating the Firehouse decide what remedial works and other works were needed in order to achieve those needs.
539. On 12 May 2006 Mr Norris sent an email to Mr Moge to report on the Legal Department's insistence that they write or review the Minutes of future meetings and also Jacobs' formal report.
540. In the same email Mr Norris reported that Mr Livesey had viewed a firehouse at Bristol and said that it was in keeping with the trailer which they now had a Southwark. Mr Livesey was reported as being certain that the existing system could be adapted to a simple firehouse.
541. On 18 May 2006, Jacobs produced what is described as an alternative refit study. They had visited the Bristol firehouse facility operated by Vosper Thorneycroft and viewed the mobile fire trainer which had been delivered to Southwark and which comprised a 12 m ISO shipping container fitted out to provide two fireplaces and a flash over simulation. The study emphasised that the viability of any options could not be reliably assessed without carrying out a thorough feasibility study and that no costing work had been carried out on any such scheme.
542. Concept produced its Report on 26 May 2006. Mr Dobson said in oral evidence that he had not seen it until early 2007. Mr Moge said he did not see it until October 2006. It is an important Report and it is very surprising that both of them did not see it immediately.
543. It concluded that it was not viable to replace the existing system (para 4.1). Its recommendations were as follows:

"4.3 Siting of Smoke Generators - Recommendations

Heat and Smoke Areas

The siting of smoke systems locally within Training Rooms or Training Zones (combination of Rooms) would be a practical solution in the heat and smoke areas where a compartment temperature of 80?C is expected. Smoke systems could be mounted discreetly on the compartment walls, offered environmental protection from the high compartment temperature and be individually controlled from the control room …

Fire Rooms

For the Fire Rooms we would recommend if smoke were required, that it be introduced into the Fire Rooms via dedicated smoke ducting (75-100 mm id) into which smoke would be introduced via a centrifugal fan. This smoke could then be concentrated between the entry door(s) and the fireplace, giving the smoke the greatest chance to establish itself and form an effective training tool. It would not be practical to site the smoke generators locally within the Fire Rooms themselves."

544. In relation to the existing insulation around the supply ducts and exhaust ducts, the Report recommends (5.4) that a risk assessment should be carried out to see whether the ducting could be left in situ or needed to be removed or replaced. Much more concern was shown about the Supply duct insulation than the Exhaust ducts since the exhaust ducting would be working under negative pressure and air would be drawn into the exhaust rather than forcing smoke out. The cost of the new smoke system was estimated to be £48,374 excluding the Fire Rooms and £74,231 including the Fire Rooms.
545. BRE's Assessment Report went through a number of drafts. The second draft was completed on 31 May 2006 and the third draft on 5 June 2006.
546. Its conclusion followed the earlier Report using firmer language:

"Based on a number of site inspections at the London Firehouse, Southwark, we have concluded that the Westemp ceiling and wall systems installed were not suitable for use with the type of oil based smoke used. In our opinion remedial work on the existing system would not be successful and it would be difficult to develop a suitable system that could remain smoke and fume tight at such temperatures. In our opinion the most likely type of steam to be successful would be based on a sealed steel liner protected on the fire side by a combination of ceramic blanket and calcium silicate board. Any new system would require further development work and testing in co-operation with the manufacturer.

"In those areas where the temperatures are about 450?C or lower the Durasteel based systems would be suitable in our opinion with some modifications to ensure joints are adequately sealed, including those around the perimeter of the wall and ceiling linings.

"An improved access panel also needs to be developed and cavity barriers should be added within the wall and ceiling voids."

547. I have already referred to the fact that Jacobs produced its Report on activities to June 2006. It is clear from Section 4 that Mr Evans' proposed remedial scheme was not subjected to a critical review but only to a discussion as to whether it was feasible to carry it out.
548. The Executive Summary of the Report noted that:

"LFEPA have not instructed the appointment of a Firehouse design expert or a fire risk assessment expert as Jacobs had recommended and on the instructions of LFEPA Jacobs had stopped work on the project. Jacobs had already expressed its reservations about progressing the Project because of its concerns regarding the underlying design."

549. It is clear that the legal department was fully involved in the discussions of how LFEPA should proceed. Ms Hadley's attendance note dated 30 May 2006 makes it clear that no June 2006 monthly report was to be produced. Mr Norris explained his problem relating to emails. Ms Hadley said, rightly, that deleted emails must be reinstated and, if appropriate, disclosed.
550. As to the future of The Firehouse, I note that an email to Ms Riddell on 25 July 2006 said that it would never be used as a Real Fire Training Centre until LFEPA spent a further £10m on top of the £30m already spent.
551. There matters have rested. There was a suggestion in an email on 18 September 2006 to Mr Moge and Mr Norris that a Report would be produced on the way forward, including proposals on what needed to be done to bring The Firehouse back into a fully functional training facility but this, as far as I am aware, has not been done.
552. I have seen emails during the autumn of 2006 which might seem to suggest that it was expected that some refurbishment would be undertaken. On 10 October 2006 Mr Richards was writing:

"Can we re-instate all Fire Rooms in The Firehouse except Office for all types of cold training which will include use of cosmetic smoke and water?

I envisaged the majority of use would be dry and smoke training. However if crews are moving through these areas with firefighting media there is always the chance that accidental water application will take place."

553. On 18 November 2006 Mr Richards is writing that smoke training in the Fire Rooms could prove costly and "I am not sure that it will be good value as we have managed without the rooms up to now".
554. The policy of LFEPA at this time was clear and was expressed in an email from Mr Dobson to Mr Moge of 20 November 2006:

"I thought that all recommissioning work was on hold until we have a clearer view of the results of the mediation/litigation."

555. It was in this context that the project remained in capital programme for LFEPA for 2007.
556. There was a query from the Finance Department on 7 December 2007:

"GLA are asking about The Firehouse for their draft Capital plan because it is in our budget report's Capital programme as 'To be determined' – Can I ask them to take it out altogether?"

557. Mr Moge replied:

"We'll discuss with Barbara (Riddell) tomorrow. It is NOT recommended to remove this project from the Capital programme. I am sure that Fiona (Laurence) will also confirm this recommendation."

558. I have the impression that the reference to Ms Laurence meant that legal considerations, i.e. connected with this litigation, were an important factor in this decision.

10. The Remedial Schemes

(a) The Schemes

559. The expert evidence summarised above forms the background to consideration of the remedial schemes.
560. Scheme 1 In this Scheme, proposed by Mr Rollason, the existing supply ductwork would be retained and the flange joints between each section would be re-made. Drains would be fitted to low pipes piped to accessible locations. The full details of the scheme are set out in Mr Rollason's expert report dated 14 July 2006.
561. Scheme 2 This Scheme, also proposed by Mr Rollason in his 14 July 2006 expert report, involves replacing the existing supply ductwork and removing the extract ductwork where necessary, replacing the supply ductwork in a material fabricated from galvanised steel in accordance with DW/144. The flanges are to be rolled steel with welded corners as in DW/144. The flanges would be bolted together with a 3 mm thick PTFE gasket. Access hatches are to be installed on the side of the ductwork with adjacent services re-positioned where necessary to provide access. Seals of access doors are to be sealed with a 3 mm thick PTFE tape or alternatively sealant rated at at least 110?C. Drains would be fitted to low points piped to accessible locations. The ductwork would be tested according to DW/144 to zero/minimal leakage at high pressure class C. The ductwork would be insulated to Halcrow's original specification.
562. Scheme 3 This is Mr Evans' preferred scheme of July 2006. This was referred to as the "fully welded scheme". The supply ductwork should be replaced with ductwork capable of retaining and draining oil deposited within it and the extract ductwork should be provided with increased access openings, cleaned and provided with drain points.
563. The medium temperature supply ductwork serving the heat/smoke rooms should be removed and replaced with ductwork conforming with the outline specification which was then set out.
564. A key feature was:

"2. The flanges should be full faced stainless steel flanges welded to the ductwork, bolted and sealed with oil resistant gaskets with a temperature rating of not less than 100?C.

6. The ductwork should be pressure tested in accordance with DW/144 to 0/minimal leakage at high pressure class C."

565. Mr Evans noted that

"From the limited amount of medium temperature extract ductwork available from inspection, it is not possible to ascertain whether the joints are failing but from inspection there is evidence of oil contamination within the ductwork. For this reason the costs include for replacing the ductwork but subsequent surveys after the ceilings are removed may indicate that some of the ductwork can be retained."

566. Originally it involved replacement of the communications system and the ductwork fabricated in stainless steel but this claim was withdrawn when Mr Walsh withdrew that part of his evidence.
567. Scheme 4 There is no scheme 4 for me to consider.
568. Scheme 5 Scheme 5 is set out in Mr Rollason's report dated 9 February 2007. This is only a short summary of the detailed scheme. The Authority has taken the position that it is not sufficiently worked out for me to be able to consider it as a viable alternative. The concept is to use local smoke generators (LSGs) to a design prepared by Concept which would meet the training requirements of LFEPA.
569. Scheme 5 takes into account

(i) the need for both hot and cold training;

(ii) different requirements for fire rooms and other heat/smoke areas;

(iii) minimising obstruction in the training areas;

(iv) ease of installation; and

(v) ease of maintenance.

570. The LSGs would be mounted within risers or other accommodation adjacent to the spaces served or within the spaces served. Where they were located within heat/smoke rooms it would be necessary to provide a fan-assisted 100 mm diameter fresh air to each LSG enclosure. Where LSGs are located in adjacent spaces which do not have access to fresh air (most cases) it would be necessary to provide a fan-assisted 10 mm diameter fresh air duct to each LSG/enclosure. In each case it would be necessary to provide 100 mm fan-assisted smoke distribution.
571. The scheme makes provision for the fire rooms. This will not be required if only heat/smoke rooms are served by LSGs. There is also an alternative scheme for fire rooms.
572. There are various ancillary works which Mr Rollason has set out in detail.
573. LFEPA's case in support of Scheme 3 relies on the evidence of Mr Evans and Mr Walsh. They claim that they are entitled to recover the cost of replacement. The detailed specification and works are set out in the first report of Mr Walsh. LFEPA rejects the alternative schemes.
574. LFEPA contends that Scheme 1 would repair the ductwork joints to the original design thereby allowing smoke oil deposits again to collect on the inside faces of the ductwork and leak through the joints.
575. LFEPA contends that Scheme 2 would replace the defective ductwork but to the original design and the use of the standard DW/144 would not achieve a sufficient degree of airtightedness for the joints.
576. LFEPA contends that Scheme 5 was presented late and in Mr Evans' view would be a departure from the operation of the facility which Halcrow designed. Mr Evans thinks that it requires more investigation and is likely to be more expensive than Scheme 3. The reason for this is that the use of local smoke generators should be combined with replacement of the supply ductwork as in Scheme 3. The extract ductwork should, in Mr Evans' opinion, also be replaced as in Scheme 3.
577. Halcrow and Lorne Stewart note that Scheme 1 would remedy the unsuitable sealant applied by Lorne Stewart in the medium temperature supply ductwork. There is, they contend, no evidence that the medium temperature extract ductwork is defective or requires to be remedied. They say that if LFEPA intend to carry out any remedial works to make the supply ductwork suitable to carry smoke oil, this would be the appropriate solution.
578. Halcrow notes that Scheme 2 is slightly more expensive than Scheme 1 and is an alternative to which their observations on Scheme 1 applies.
579. With regard to Mr Evans' Scheme 3, the defendants have the following observations:

1. The scheme has changed radically since the Authority's expert, Mr Walsh, was forced to concede that the communications system did not need to be taken out and replaced in its entirety.

2. There is no need for the ductwork to be in stainless steel. This is now conceded by LFEPA.

3. There is no evidence that the sealant in the medium temperature extract ductwork is either defective or needs replacing. Nevertheless, LFEPA contends that the remedial scheme should take in the entirety of the medium temperature extract ductwork.

4. If the medium temperature extract ductwork is excluded the quantum dispute between the parties (on figures only) are limited.

5. If the Authority is entitled to replace the entire ductwork system, Mr Smith says that the work should take 42 weeks, whereas Mr Wort says that it will take 46 weeks.

580. With regard to Scheme 5, the Defendants have the following observations:

1. Most importantly, if any scheme is to be implemented, the professionals at the Authority favour the use of local smoke generators. Although unfortunately Mr Richards was not called to give evidence, it is clear that this is the scheme which he would favour. Mr Dobson has no objection to it.

2. The assertion by Mr Evans on which the pleaded case is based was made in ignorance of what had occurred and of the Concept Report.

3. There is no technical objection to the scheme.

581. The defendants contend that the Authority will not undertake real fire training within the fire rooms because problems of stratification make it positively dangerous.
582. I now consider the rival contentions on the cost of the schemes.
583. Scheme 1 Mr Wort's valuation is £830,578. Mr Smith's valuation is £795,578. The differences relate to design fees, £25,000 (Mr Wort) against £10,000 (Mr Smith) and contingency £50,000 (Mr Wort) against £30,000 Mr Smith). In relation to both issues I have to consider the assessments of the experts bearing in mind the assessment of time in the case of design and their assessment of the appropriate level of contingency. I prefer the evidence of Mr Smith in both cases. Scheme 1 is therefore valued at £795,578.
584. Scheme 2 Mr Wort's valuation is £854,905. Mr Smith's valuation is £809,905. Here the difference is £40,000 against £15,000 for design and £50,000 against £30,000 for contingency. Again, I prefer the evidence of Mr Smith. I value scheme 2 at £809,905.
585. Scheme 3 This is valued by Mr Wort at £1,243,645 to £2,082,904 and by Mr Smith at £918,242 to £1,828,544. The first figure relates to scheme 3 in its entirety, the second figure relates to carrying out the work but omitting the extract ductwork.
586. The issues are (1) Enabling works, (2) Extract ductwork, (3) M & E repairs, (4) Reinstatement works, (5) Design and (6) Contingency.

(1) Enabling works Mr Smith has costed on the basis that the extract ductwork is not being replaced and that as a result the cost of enabling work should be reduced from £71,514 to £43,254, i.e. a reduction of £28,260.

(2) Extract ductwork When considering the scheme without ductwork Mr Smith has deleted the cost which is included in the scenario with ductwork, i.e. £76,274. Mr Wort has not.

(3) M &E repairs The agreed cost of M & E repairs if the extract ductwork is included is £184,809. Mr Smith concludes that the sum should be reduced to £153,421 if the extract ductwork is excluded, making a reduction of £31,388.

(4) Reinstatement works Again, Mr Smith has taken the agreed figure of £130,261 and reduced it to £85,281 as a consequence of the exclusion of the extract ductwork, a difference of £44,980.

(5) Design For the full scheme Mr Wort's estimate is £237,000 and Mr Smith's figure is £100,000. Mr Wort's figure of 15 per cent is acknowledged by the Authority in closing to be at the top end of the range. Mr Smith's figure of 5 to 6 per cent is said to be at the bottom end of the range. The difference without the stainless steel and without the extract ductwork is £137,000 (Mr Wort) against £67,500 (Mr Smith), a difference of £69,500.

(6) Contingency For the full scheme Mr Smith has used a figure of £75,000, or about 4.7 per cent, Mr Wort has given a figure of 10 per cent or £158,000, a difference of £83,000. For the scheme without the extract ductwork and the stainless steel the figures are £120,000 (Mr Wort) against £45,000 (Mr Smith), a difference also of £75,000.

587. Time related preliminaries If the entire extract ductwork is to be replaced as the Authority contends, the experts are agreed that the work would take 26 weeks, the same as scheme 2.
588. If the Authority is entitled to replace the whole ductwork system Mr Wort considers that it would take 46 weeks, whereas Mr Smith estimates it at 42 weeks. This means that for time-related preliminaries the cost estimated by Mr Wort is £403,458 and by Mr Smith, £369,068, a difference of £34,360.
589. Mr Wort's original estimate was 52 weeks. This included replacement of the communications system which is no longer required. Mr Wort said he discussed the matter with Mr Walsh, who said that the deduction in the absence of the communication system should be "a month or so" or three to four weeks. Mr Wort said that he took three weeks and doubled it. This does not appear to have been a very scientifically based opinion.
590. Mr Smith took the original 52 weeks and after careful consideration which he explained in oral evidence arrived at a deduction of 10 weeks, making 42 weeks in all. I prefer Mr Smith's evidence.
591. Equally, I prefer Mr Smith's evidence on the stage 2 dispute, which provides a reduction of two weeks over Mr Wort's estimate.
592. I also prefer Mr Smith's evidence in relation to the OJEU (Official Journal of the European Union) tendering process. Both gave oral evidence about this. I have no hesitation in accepting Mr Smith's evidence that the time is 8 weeks or 56 days. I accept Mr Smith's evidence relating to the procedure of advertising in the Official Journal of the European Union based on his own experience, which would mean that this work would be characterised as urgent. Mr Evans has no experience of this process.
593. Scheme 5 Mr Smith has priced Mr Rollason's specification for Scheme 5 in his report dated 22 February 2007. The total figure is £619,309 including a substantial sum for remedying the supply ducting to the fire rooms, professional fees and contingency. If smoke oil is not required for the fire rooms the sum is reduced to £519,711. Mr Smith used a contingency of about 10 per cent to reflect some uncertainty in the amount of work.
594. Initially Mr Wort declined to price this scheme. In due course Mr Evans advised that it would be a departure from the facility which Halcrow had designed. If it was to be implemented, the supply ductwork should be replaced as for Scheme 3 and the extract ductwork would continue to carry smoke oil and should be replaced as for Scheme 3. It is suggested that there is a real risk of fire from the existing ductwork, permitting the leakage of smoke oil and the scheme that is implemented must eliminate that risk. In relation to the supply ductwork to the heat and smoke zones it is said that it has been identified by Halcrow as defective and not in accordance with the specification and LFEPA is entitled to have it rectified. LFEPA also claims that Halcrow has not produced any evidence to show that the leakage of the existing supply ductwork would be within the limits necessary to ensure effective ventilation. Mr Wort values the work in Scheme 5 at £2,218,000. However it would appear that taking Mr Smith's figures on their own Mr Wort does not disagree with them. It is simply that he is pricing the very substantial additional work which is recommended by Mr Evans.

10.(b) The Experts

595. On 9 February 2007 Mr Evans and Mr Rollason produced a helpful joint statement having considered a number of issues relating to the feasibility or necessity of carrying out the work. The following is a summary of their conclusions:

1. Is there any technical reason precluding the use of local smoke generators for the heat/smoke rooms in order that the existing medium temperature supply ductwork can be retained and used only for ventilation? The experts are agreed that there is no technical reason why local smoke generators cannot be used. The local smoke generators could either be mounted within risers or other accommodation adjacent to the spaces served or within the spaces served.

596. 2. The next question they considered is "Is there any technical reason precluding the use of local smoke generators for the four fire rooms in order that the existing supply ductwork can be retained and only used for ventilation?". The agreed statement is that it would not be technically practicable to locate local smoke generators within the fire rooms but it would be possible to locate local smoke generators in adjacent spaces and to duct the smoke to the fire rooms or, to retain the existing duct mounted smoke generators and carry out work to the supply ductwork located in the ceiling voids which serve the fire rooms. In the case of the alternative option, Mr Evans said that the supply ductwork should be replaced by continuously welded steel ductwork laid to falls and drained. Mr Rollason's opinion was that continuously welded steel ductwork was not necessary.
597. The experts agreed that it would be necessary to supply piped oil and nitrogen connections to the smoke generators together with a power supply and control/monitoring wiring circuit.
598. In relation to the remedial work for the medium temperature supply ductwork serving the heat/smoke rooms if local smoke generation was adopted (issue 4), the experts were in disagreement.
599. Mr Evans said that the insulation would need to be removed and discarded. All the ductwork joints would need to be broken and re-made with new sealant of the appropriate temperature rating.
600. Mr Rollason agreed that where the ductwork passed above the fire rooms, the insulation would need to be removed and discarded. The ductwork would then need to be cleaned and re-insulated to Halcrow's specification. Mr Rollason explained that Mr Evans' proposal that the joints should be broken and re-made was unnecessary because the ductwork would not carry smoked air and the possible degree of leakage would not have any detrimental effect upon the operation of the rooms.
601. Question 5 asks what remedial works would need to be carried out to the medium temperature extract ductwork serving the heat/smoke rooms.
602. Mr Evans contends that the medium temperature extract ductwork would require to be replaced with continuously welded steel ductwork with full face flanges laid to falls and drained.
603. Mr Rollason contends that there is no evidence of oil leakage from the medium temperature extract ductwork (except perhaps one isolated instance) and nothing will need to be done.
604. In relation to the supply ductwork in the ceiling voids serving the fire rooms (Issue 6) Mr Evans concludes that it should be replaced with steel continuously welded ductwork with full face flanges laid to falls and drained. Mr Rollason's comment is the same as for the medium temperature supply ductwork serving the heat/smoke rooms.
605. Finally, in relation to the high temperature extract ductwork, Mr Evans concludes that the ductwork should be provided with additional side mounted access points for cleaning and drain connections added to any low points. Mr Rollason concludes that nothing needs to be done.
606. In her closing reply, it was conceded by Ms O'Farrell QC on behalf of LFEPA that galvanised steel was an appropriate and commonly used metal and that stainless steel, which was vastly more costly, could not reasonably be required.
607. The experts agree on the ancillary/enabling works that will be required. These include removing and replacing existing Westemp and Durasteel ceiling and wall panels to facilitate the installation of local smoke generators. The removing of the Westemp and Durasteel ceiling and wall panels do not form part of the remedial works covered by this litigation.

11. Extract Ductwork

608. A key issue between the parties' experts is whether or not the extract ductwork needs to be replaced.
609. Mr Evans was instructed by LFEPA on 22 March 2005, just over two months after the fire. He visited the site and inspected the ductwork. He said in oral evidence that by October 2005 he had looked at the ductwork very carefully and had concluded that there had been no leakage of smoke oil and there was no need to carry out any remedial works. It is noteworthy that Mr Evans did not cause any tests to be carried out, although they were carried out on the high temperature ductwork (which showed no defects).
610. By July 2006, eighteen months after the fire, Mr Walsh prepared a document which suggested that some work should be done on the extract ductwork. Presumably this was Mr Evans' idea. In any event it was endorsed by him. Mr Evans said that "the extract ductwork should be provided with increased access openings, cleaned and provided with drain pipes".
611. The specification went on to say that

"From the limited amount of medium temperature extract ductwork available for inspection, it is not possible to ascertain whether the joints are failing but from inspection there is evidence of oil contamination within the ductwork. For this reason the costs include for replacing this ductwork but subsequent surveys after the ceilings are removed may indicate that some of the ductwork can be retained".

612. In oral evidence Mr Evans confirmed that the sort of film said to have been seen on inspection of the extract ductwork did not cause any problems but, if it had, it could be cleaned on an intermittent basis.
613. Despite Mr Evans' change of view in July 2006 that some work might be necessary on the extract ductwork, he made no effort to investigate the question further. His Report dated 13 December 2006 (paragraph 3.61(9)) said

"From the limited amount of medium temperature extract ductwork available for inspection, the joints do not appear to be leaking. When the ceilings are removed all the ductwork should be inspected to ascertain if any remedial work is necessary".

614. On 19 March 2007, in the course of his oral evidence, Mr Evans said that he had not seen any evidence of leakage in this ductwork. He was forced to concede that if there were no leaks there was no need to do the remedial work.
615. In Mr Evans' Report dated 15 January 2007, he said that

"It would be prudent to replace the extract ductwork when refurbishing because it would be a proportionately low cost item."

616. In the joint statement dated 9 February 2007 at item 5, this had been elevated to a statement that the extract ductwork would need replacing.
617. In her final submission, Ms O'Farrell QC said at paragraph 193, "There is evidence of leakage and oil from the extract ductwork". This was based on an answer given in re-examination which did not arise out of cross-examination and was derived from documents which were not put to either Mr Tovey or Mr Tough.
618. In answer, Mr Rollason suggested that in the first case the leak probably came from the supply ductwork and not from the extract ductwork.
619. The second document put to Mr Rollason on the same basis (it had not been put to Mr Tovey or Mr Tough) was a Halcrow report in March 2005. Mr Rollason was asked to comment on a statement in that report that "extract ductwork leaked through the joints" and that "all remedial actions would apply to all medium temperature ductwork".
620. Mr Rollason commented in oral evidence that he did not know who wrote the report and whether or not the person was mistaken.
621. I remind myself that this report was written in March 2005. Its contents were not put to Mr Tovey or Mr Tough when they gave evidence. This trial has taken place two years later. During that time Mr Evans, Jacobs, Concept and Vosper Thorneycroft had the opportunity to establish that the extract ductwork was leaking and did not need to be replaced. LFEPA failed to provide any cogent evidence that this was the case. There is no proper basis on which it would be reasonable to require the extract ductwork to be replaced.
622. I reach the following conclusions in relation to the schemes which I have been considering.

1. I prefer the evidence of Mr Rollason to that of Mr Evans.

2. In general I prefer the evidence of Mr Smith to Mr Wort.

3. Scheme 3 is unnecessarily expensive and I exclude it from my considerations.

4. I accept Mr Rollason's evidence that Schemes 1 and 2 would be viable remedial schemes but are not favoured by Mr Richards and Training.

5. There is no need to do any remedial work on the medium extract ductwork.

6. With regard to Scheme 5, this is a viable scheme but represents a departure from the Scheme which Halcrow devised. It arises out of a development of LFEPA's requirements.

7. Scheme 1 is valued at £795,578. Scheme 2 is valued at £809,905. Scheme 5 is valued at £519,711 if smoke is not required for the fire rooms and £619,309 if it is required.

12. LFEPA's Intentions

623. The defendants have put squarely in issue LFEPA's intention to carry out any remedial work on The Firehouse as a consequence of any loss or damage incurred in relation to the original work. To this issue I have added that on the basis of the judgment of Clarke LJ in Southampton Containers the question arises as to whether it would be reasonable to reinstate The Firehouse in the circumstances which now apply.
624. LFEPA says that the intention is to carry out remedial works in Scheme 3 and that they will probably have to carry out additional works which do not form part of the claim. The problems with the Westemp panels which are not designed to prevent the penetration of smoke oil in the ceiling void will have to be addressed by carrying out the additional measures in Mr Nimmo's report. I shall deal with this as a separate topic.
625. The Authority agrees that the scope of the remedial works has not yet been determined but say that that is because it does not know what sum it will recover in this litigation. It says that any remedial scheme would need to take into account LFEPA's requirement for smoke in the fire rooms.
626. LFEPA's case relies heavily on Mr Moge's evidence. In his first witness statement Mr Moge sought to explain why it has not formulated and implemented detailed plans.
627. He said at paragraph 95:

"Having agonised over the issues raised by Jacobs' advice and having reviewed our revised quantum advice in the scheme from Mr Wort and having had numerous discussions within the Authority, we took the decision that we should at this stage simply press on with the litigation in order to see what we are able to obtain by way of compensation. Once we know what we have recovered and how much we have to spend we can then review the options open to us and take a view as to what remedial scheme should be implemented."

628. It is significant that no record of any such discussions have been put before the court so that I have an opportunity to evaluate them. We do not know between whom such discussions took place or at what level. I am not able to draw any inferences but take the statement at its face value. I observe that about eighteen months had elapsed since the fire before any such discussion was taken.
629. LFEPA contends that evidential support for its contention is to be derived from the Authority's Firehouse Annual Plan indicating that works will be carried out in The Firehouse in 2007/8 and Mr Moge's email dated 7 December 2006 stating that the capital budget item in the Greater London Capital Plan should remain in the Plan.
630. During his cross-examination, it was put to Mr Moge that LFEPA did not have any intention of carrying out remedial works to the ductwork. He said "We do have the intention to carry out the remedial works". It was clear however that this was not his decision and he could not point to any firm evidence from those who would be party to the decision (who could have been called to give evidence). I also have to note that he is the Property Manager and has no direct expertise on the issue.
631. LFEPA emphasises that they have a statutory obligation to provide safe and effective training for the firefighters and if it is not provided at Southwark it will have to continue to provide it by using outside facilities and mobile training units. The best evidence that I have on this is Mr Richards' Report of 8 April 2006 which emphasises that as of that date the existing training objectives were being met. It has not been suggested by Mr Dobson that the position has changed.
632. Halcrow contend that notwithstanding the considerable additional cost which they are incurring, LFEPA have taken no steps since the fire more than two years ago to implement a remedial scheme. Since June 2006 they have stood down their advisor, Jacobs. They have not even sought tenders or even drawn up specifications for carrying out remedial works.
633. There is none of the documentary evidence which you would expect to see. Ms Riddell was not called to give evidence. The general approach of the Authority suggests, so the defendants say, a lack of frankness with the court. Mr Moge did his best. He said that he was waiting for a decision from Training and sensibly was prepared to comprehend a possibility that the initial decision would depend on what Training wanted. This is all very vague.
634. I expressed my concern at LFEPA's attitude towards remedial works in the first two days of the trial. I suggested that if LFEPA was really waiting for a decision in the litigation before deciding how to proceed, I would be prepared to consider dealing with issues of liability and then adjourning so that LFEPA could make a decision as to how they would proceed. This suggestion, which might well have been opposed by the defendants, was not taken up by LFEPA. No explanation has been given.
635. The defendants say that this is an important demonstration that LFEPA has no real intention of carrying out any remedial scheme. They say that by its conduct I should draw the inference that LFEPA are not being frank with the court and are endeavouring the hide their real intentions.
636. The defendants also contend that LFEPA's professed intentions should be measured against the following considerations:

1. Independent of any problems with the ductwork LFEPA had stopped hot fire training before January 2005 because of the stratification problem.

2. After the fire, in addition to the stratification problem, there were problems with the Westemp panels in the ceilings and walls which were such that extensive and unspecified additional works would need to be carried out, the cost of which would not be recovered in the present action.

3. If any smoke was required for training, such smoke would only be required in the smoke/heat zones and could and should be provided by LSGs. The only way of overcoming the stratification problem would be to make alternative provision for training.

4. I should take into account that the Westemp panels were not fit for purpose and any scheme which would require extensive work on them (not covered by this litigation) would be unlikely to be implemented because of the cost to the Authority.

637. Mr Moge in an exchange with me on Day 3 of the hearings said frankly that his understanding was that any decision would be taken by the members of the Fire Authority. Mr Moge asserted that it was his understanding that the Corporate Management Board was committed to bringing The Firehouse back into operation. He said that the Authority would make a rational choice based on advice that it received. He argued that The Firehouse would not be used for any purpose for which safety could not be guaranteed.
638. Mr Moge had to admit that as far as training needs are concerned, he would not have the necessary expertise and would not overrule Mr Dobson's decision.
639. The evidence before me, which I have already set out in detail, is wholly at variance with LFEPA's case that they would carry out Scheme 3. They have persisted in pursuing this case despite the documentary evidence that such a scheme is not wanted by Mr Richards. The recommendation in the internal memorandum from Mr Norris dated 24 March 2006 is that the installation is unsuitable for hot real fire training because of the problem of stratification. Further documents dated 27 March 2006 and 7 April 2006 confirm that smoke would not be required in the four fire rooms. The note of 7 April 2006 put it succinctly:

"For health and safety reasons it is thought that smoke production in these rooms is inadvisable."

640. Mr Moge was asked in oral evidence whether there were any documents in existence which suggested that Training now required smoke to be provided in the four fire rooms. He said he did not know of any such document and agreed with Mr Taverner QC that if there had been such a review it would have been minuted. He agreed with me that there would be no point in him making a recommendation that the facility should be provided when it was not wanted by those who would use it.
641. The position on the evidence is therefore the following:
642. A. Training were concerned before January 2005 that because of the problems of stratification, real fire training in the four fire rooms was dangerous because it was not realistic. Indeed, it was positively harmful. The problem encouraged the firefighters to do the reverse of what they should do in a real fire.
643. B. Training stopped using smoke in the fire rooms.
644. C. The problem over stratification was recognised by Training and Mr Norris alerted management to the problem.
645. D. Steam was used but I accept Mr Dobson's evidence that it was not a satisfactory alternative to real fire training.
646. E. The only Scheme which finds any favour with Training is Scheme 5 without smoke oil in the Fireroom. This Scheme would cost £519,711.

13. Westemp Panels

647. Before reaching my final conclusions as to whether LFEPA has any intention of reinstating The Firehouse by remedying the defective ductwork and whether it would be reasonable for it to do so I must first consider the position of the Westemp panels.
648. Halcrow contends that the Westemp insulating panels used for lining the walls and ceilings of The Firehouse were and are not adequate for the purpose and represent another serious and costly problem to be overcome before The Firehouse could safely be used for real fire training.
649. This issue is not part of this claim, because it is not within the issues excluded from the previous settlement agreement between LFEPA and Halcrow. It was included in paragraph 20 of the Amended Particulars of Claim dated 24 June 2005 and is therefore within the settlement agreement between the parties.
650. Paragraph 270 reads as follows:

"2. Westemp insulating panels have been used for lining the walls and ceilings; these were not adequate for the purpose and as a result have cracked and/or now show other damage. Alternatively the panels were damaged in the course of installation;

"5. Halcrow failed to design the ceiling adequately or alternatively failed to supervise the work of the contractors in relation to the ceilings such that smoke and propane can access the ceiling voids (in particular above the garage flashover)."

651. The London Fire Brigade Investigation Report published in May 2005 raised the following real problem in relation to the Westemp panels:

"3.18 If the temperature of the Westemp panel was to reach for example 400 to 500 degrees C due to its proximity to a burner the temperatures within the lower levels of the insulation above the panel could reach 200 to 300 degrees C (or higher). The temperature would be more than sufficient to initiate an oxidation reaction in oil soaked insulation and lead to a fire several hours later.

3.21 … high concentrations of oil in an area above the Westemp panel where the temperature was high enough may have undergone thermal oxidation leading to ignition. This progressive process could have taken a considerable period of time and in my opinion had probably started when The Firehouse was first commissioned and put into full operation.

4.1 The most likely cause of the fire above the ceiling of the Office scenario room of The Firehouse at Southwark Training Centre appeared to be initiation of thermal oxidation in the oil-contaminated rockwool insulation above the Westemp panels."

652. The London Fire Brigade Investigation Group made the same point when it said at paragraph 8.38:

"8.38 It is therefore most likely that the process of thermal oxidation was initiated when sufficient radiated heat has passed through the Westemp panel to start an oxidation reaction in the oil-soaked installation which led to the fire several hours after The Firehouse had last been used."

653. Jacobs also regarded the Westemp panels as a problem. In their memo for the meeting on 3 May 2006 they wrote:

"Future smoke contamination avoids leading to a potential fire hazard as described in Technical Consideration Constraints Table, page 2 of 4. The Westemp system does not provide a barrier to the passage of smoke and gases into the voids. Proprietary systems that meet the overall performance specification required for this application are not readily available and a customised solution would need to be developed and tested to prove its suitability for the purpose. It is not certain that a practical and technically viable viability system could be developed within acceptable timescale and cost."

654. Jacobs identified a serious problem of contamination in the loft room:

"Oil contamination of the base wood through long term use of oil-based smoke in this area represents a potential fire hazard. The existing condition of the loft room fabric would need to be assessed by a suitably qualified and experienced expert and a scheme for the treatment of the fabric developed. An acceptable maximum level of surface oil contamination for ongoing operations would need to be determined. A practical cleaning methodology would need to be developed. Given the difficult geometry of the construction, this may prove difficult to achieve. "

655. I can only say that, having been shown round The Firehouse, I fully understand the point which the Jacobs Report is making.
656. Mr Evans said in oral evidence that he was aware of a problem with the Westemp panels but he was not instructed to advise on it.
657. LFEPA was advised by Jacobs to instruct a fire expert and an expert in risk management. It has not done so. It is very significant that LFEPA claims that it will need to spend substantial sums in addition to those recovered in this litigation if The Firehouse is to be used again for hot fire training. Is there any evidence that they will do it?

14. CONCLUSIONS

658. On the basis of the evidence before me I cannot conclude that LFEPA will carry out any of the remedial schemes or that it would be reasonable for it to do so.
659. First there is no reliable evidence before me of the Authority's intention. Mr Moge is simply not in a position to know what it is. There are no documents to support LFEPA's case that it would carry out Scheme 3 or any Scheme apart from Training's reports which suggest that Training might consider Scheme 5. This scheme can hardly be described as a remedial scheme. It is a product of the knowledge and experience gained since Halcrow designed the original scheme.
660. The schemes which might properly be described as remedial schemes are Schemes 1 and 2. It is clear that LFEPA will not in any circumstances implement these because they regard them as fatally flawed. Ms Riddell has not given evidence as to the current intentions of LFEPA. Mr Richards has not given any evidence to support the Scheme. Indeed the documents which he has written make it clear that he would be highly unlikely to support Scheme 3 or any hot fire training.
661. LFEPA is in the position of putting forward Schemes as its primary case which is not supported by the Firefighters for whose benefit any works must be carried out.
662. There are two problems not related to the ductwork which make it unlikely that any reinstatement scheme will be carried out. The first is the problem of stratification. This problem was known by LFEPA and accepted by them at the time when Halcrow's initial design for the Firehouse was accepted. As Mr Richards made clear in his 8 April 2006 Report, the problem turned out to be crucial in that experience derived from the use of The Firehouse made it clear that the hot fire training was in fact detrimental to the training of the firefighters. The problem of stratification was identified before the 2005 fire. This meant that alternative training would have had to have been found in any event.
663. This view is reinforced by Jacobs' 3 May 2006 option paper in which they say that there was no known solution and in the Concept Report paragraph 5.1.
664. The second problem relates to the Westemp panels which would need to be replaced if any scheme was implemented which meant that they were a fire risk or a potential fire risk. The evidence before me on this is not conclusive but is sufficient for me to reach the conclusion on the balance of probabilities that to replace the panels would involve a very substantial additional cost.
665. This last consideration impacts on the question of whether it would be reasonable for LFEPA to carry out any of the remedial schemes or whether it would (acting reasonably) continue its current training.
666. The Authority at present provides real fire training using mobile smoke generators. The first was bought on lease purchase on 10 March 2006. Mr Dobson gave oral evidence that a second unit was to be bought on lease purchase in April 2007.
667. It would appear likely that for the foreseeable future LFEPA will continue to use this method of providing fire training. Mr Richards' Report of 8 April 2006 made it clear that many lessons had been learnt by his team as was to be expected of "a novel and innovative initiative". The Report makes it clear that the current training regime will have no adverse effect on achieving the desired training objectives and outcomes.
668. I have considered the evidence that LFEPA's Firehouse Annual Plan which indicates that unspecified works will be carried out in 2007-8 and Mr Moge's email dated 7 December 2006. The reference to Ms Laurence in Mr Moge's email indicates the relevance of considerations relating to this litigation. If there had been no reference in the draft Capital programme this would, no doubt, have been thought to imply that no Capital works would be carried out. If Capital works were to be carried out in 2007-8 I should have expected a fully costed programme to have been drawn up by now, or at least a draft outline programme with appropriate figures indicating what scheme was likely to be brought into existence.
669. I also note that, even allowing for the time needed for tendering, LFEPA proceeded to develop its alternative strategy in a way which did not indicate any urgent intention to carry out remedial works on The Firehouse. It may well be that the firefighters were well aware that the problems of stratification and the defective Westcamp panels represented an insuperable hurdle to the effective reinstatement of The Firehouse.
670. I must deal with this case on the available evidence. The Authority was warned at a very early stage in the trial that I was concerned that no-one in a position of real authority was giving evidence and that two years after the fire there were still no concrete plans to carry out remedial works. I offered to consider postponing the trial on quantum for six months to enable the Authority to put plans in place. They declined the offer but instead decided to rely on Mr Evans' expert evidence and Mr Moge's evidence.
671. For the reasons which I have given, I am not satisfied either that it would be reasonable for LFEPA to carry out the remedial works (for which damages are claimed) or that they have any intention to do so. In the course of final oral submissions I put to Ms O'Farrell QC that no authoritative view was offered from a person who was going to take the decision. Ms O'Farrell QC for the Authority had to answer, "No, I don't have any explanation for that".
672. For the reasons which I have set out I can also only conclude on the evidence before me that there is no need for LFEPA to reinstate the facility and it would not be reasonable for LFEPA to do so.
673. I also conclude that Lorne Stewart are not liable in any event to carry out remedial works since they would be remedial works to Schemes 1 and 2. If I am wrong in concluding that one scheme would be carried out the evidence only provides some support for Scheme 5 and rejection for Schemes 1 and 2.
674. I must consider now whether or not the cost of alternative fire training would have been incurred but for the fire in January 2005. By then the problem of stratification had been raised. It was an insuperable problem and even if the fire had not occurred, the training would have been reviewed and alternative training of the nature which LFEPA in fact provided, using the facilities of Essex and Lancashire Fire Services would have been used in any event.
675. I return to the issues which I set out at paragraph 95 of this judgment and conclude as follows.
676. In the case of Halcrow:

i) Halcrow was negligent in failing to carry out the limited review of its design identified by Mr Rollason after the fire in June 2004. It was not negligent in the other respects alleged. I note in this context that this was a unique and innovative project.

ii) If Hacrow had done so it would have had to conclude on the basis of the experience gained in the operation of the Firehouse that it was not possible to reinstate the building to the existing design to provide effective hot fire training for the fire-fighters because of the problems of stratification and those associated with the Westemp panels.

iii) Halcrow would have had to formulate a fundamentally new design in order to eliminate these problems.

iv) The consequence of the review would therefore have been to identify the problems with the innovative design which, had they carried out the review then they would have identified a few months earlier.

v) The actual fire damage of the 2005 fire was minimal.

vi) LFEPA must establish on the balance of probabilities that it was reasonable for it to recover the or any cost of reinstating the Firehouse and if so what cost. On the facts as I have found them I cannot be so satisfied.

a) LFEPA two years after the fire has not taken any scheme for reinstatement to the stage of even outline agreement within the Authority let alone detailed costing;

b) Scheme 3 for which LFEPA contends is not supported by its own fire-fighters;

c) Any scheme, apart from perhaps Scheme 5, would require the Authorities to spend substantial sums to replace the Westemp panels, sums which could not be recovered from Halcrow in any event;

d) All schemes except Scheme 5 have the problem of stratification. Unless that problem is overcome the fire-fighters will not regard the scheme as fit for purpose. In this context the fire-fighters will not regard schemes other than Scheme 5 as fit for purpose.

e) The actual works of reinstatement, ie, repair of damage caused by the 2005 fire are minimal.

f) The major concern relates to damage which had manifested itself and was a result of a design for which Halcrow has not been found to be negligent.

g) The reinstatement which is being considered goes to the consequences of the original design and not the 2005 fire.

h) It is doubtful whether Scheme 5, which is the only scheme which has found any support from the fire-fighters themselves, can properly be described as reinstatement. It is, in effect, a new scheme which is derived from the knowledge and experience gained since Halcrow's design.

i) The current method of providing training is satisfactory and there is no need to spend additional money on the Firehouse.

677. With regard to Lorne Stewart, I have concluded that under its contract LFEPA's only claim would be for the cost of carrying out the reinstatement work. Only work relating to Schemes 1 and 2 are capable of amounting to reinstatement work. LFEPA would not therefore under the contract be entitled to insist that Lorne Stewart carry out unnecessary work in relation to a scheme which they have rejected or themselves be compensated if they carried out that work.
678. In respect of Halcrow, I have not addressed the cost of repair of damage caused by the 2005 fire. My understanding is that it is minimal. The cost of the investigation associated with investigating the cost of repair work directly referable to the 2005 fire will also be minimal. The major cost of investigating the viability of using the Firehouse for hot fire training was not a consequence of the failure to carry out the review advocated by Mr Rollason after the 2004 fire. That wider Review, on the future use of the Firehouse would have had to have taken place in any event.
679. I reject LFEPA's claims against Halcrow for the cost of ductwork replacement and the cost of alternative fire training.
680. I have already rejected LFEPAs claims against Lorne Stewart.