IN A sale-of-land agreement in South Wales my client was a public body (the vendor) who was due final payment of the sale sum from the developer (the purchaser).
The sale agreement contained an ‘abnormal site conditions’ clause, which the developer used to withhold the final payment of approximately £1m. The purchaser assessed the abnormal conditions to have cost him approximately £1.5m.
The argument hinged around whether there was an implied ‘greenfield site’ condition in the contract which, if the case, would mean that the purchaser bought the site without knowledge of the existing site conditions, and that if ‘normal’ conditions were not encountered then the conditions would be ‘abnormal’ and would be deducted in the final account. Prior to the agreement the purchaser had received a ‘sales pack’ from the vendor with site photographs and general information, had undertaken statutory authority enquiries as well as a geoenvironmental desk study and had also visited the site.
The interpretation of the agreement itself was a major discussion point in the proceedings. In the end it was successfully argued by my client’s counsel that the agreement listed certain ‘abnormal’ items which, if encountered, would be justifiable deductions from the final account, and that other conditions could also be considered to be ‘abnormal’ subject to them being reasonably unforeseeable.
The case was dealt with by expert determination (ED) and was addressed in two stages: the engineering issues and quantum.
The purchaser’s case included a schedule of approximately 16 alleged ‘abnormals’, including storm drainage, foul drainage, contaminated soil, rock, clay and trees. As these were all civil engineering issues I recommended to my client that the ED should be conducted by a civil engineer, which was agreed by both parties.
I was appointed as expert for the vendor and two geotechnical engineers were appointed as experts for the purchaser – one dealing with ‘general engineering’ issues and the other dealing with matters relating to ‘rock’. Both of the purchaser's experts were from the same consultancy that had undertaken his site investigations and provided him with his substructure/soil-design solutions.
The ‘greenfield site’ argument was contested by my instructing lawyers but the experts were asked by the ED to provide opinion dealing with both nongreenfield' interpretation.
Issues and arguments
The storm water drainage arguments related to the cost of providing soakaways, which facilitate the percolation of water directly into the ground. Due to the nature of the site, which comprised clays and rock, these underground structures had to be constructed in rock (soakaway drainage structures do not work in clays), which the other experts argued was not anticipated in a greenfield site.
I argued that the site was known from the desk study undertaken by the purchaser’s engineers (the experts’ own company) to be extremely likely to comprise clays and rocks, of which only the rock was likely to be permeable enough to accommodate a soak-away structure.
The foul water drainage arguments related to the purchaser’s interpretation of ‘greenfield’ to mean that the on-site foul water sewers should have been able to outfall without the need for pumping to a public sewer outside the site. The site did not facilitate that arrangement and pumping was required.
I argued that the purchaser had visited the site and had the opportunity to determine the location of the off-site foul sewers prior to purchase, and should therefore have known that a foul water pumping station would be required on that site.
The purchaser’s experts also argued that rock was also ‘abnormal’ for the construction of storm and foul drainage pipe-runs because it was more expensive than clay to excavate, needing rockbreakers rather than digging machines.
I argued that weathered rock was expected and was therefore normal, and in any case the purchaser’s experts’ own company had produced a site investigation report, indicating that the rock had been excavated during the investigation using normal digging machines.
With regard to clay and trees, the purchaser’s experts argued that a ‘greenfield’ site would not require foundations to be deeper than ‘normal’ (which they argued was 900mm maximum depth in clay) and that could not be achieved in the areas of clay due to the presence of trees, which requires foundations to be built deeper to avoid settlement.
I argued that the likely presence of clay was known to the purchaser from his engineer’s desk study and that the presence of trees was known to him from his pre-agreement site visit. The need for deeper foundations in the areas of clay should therefore have been anticipated.
I was also able to point out that the purchaser’s calculations for the quantum of excavated clay due to the presence of trees was grossly incorrect, in that half of the site had rock present at between 300mm and 500mm from the site surface, and that the purchaser’s experts should have known this from their own company’s site investigation report. In the event the purchaser had actually made a saving on his foundation construction due to the widespread presence of rock.
With regard to contaminated soil, the purchaser’s experts argued that a ‘greenfield’ site would have none. I argued that, from the purchaser’s site visit, he (a professional developer) should have noticed the defective oil storage tank bunding and the lack of containment vessel beneath the tank’s connection points.
Conclusion
In essence my argument was that the ‘greenfield’ scenario was un-definable in engineering terms, in that any ground condition could be deemed both 'normal' and ‘abnormal’ in different situations. For example, clays could be considered ‘normal’ for foundations, but only if trees are not present.
Clays would, however, be ‘abnormal’ for soak-aways, and so permeable soil (granular soils and rocks) would then be ‘normal’.
Rock, on the other hand, is ‘normal’ for shallow foundation construction, but not for deep trench or soak-away construction if it is difficult to excavate.
The ED generally concurred with my arguments and the majority of my client’s claim was awarded to him. In my opinion, the purchaser’s experts did themselves little service by accepting a commission to represent their client both as his designer and as his expert and, having been personally involved in the design, were not as independent as experts should be.
• Richard Hill is the head of a structural, civil and geotechnical engineering division of Capita Symonds Ltd, an international multidiscipline consultancy, and a widely experienced chartered structural and civil engineer with over 30 years of experience.
His areas of expertise range from the superlightweight space frame for the world record-breaking Breitling Orbiter 3 (the first manned balloon flight to circumnavigate the globe) to the dynamically sensitive heavy mass of earthquake testing facilities for the University of Bristol.