Summary
The case dealt with the claim by the landlord for breach of the tenant’s covenants and conditions following the expiry of the tenant’s lease on an office building in Dartford. Two of the experts in the case were disadvantaged by having to form their opinions on the basis of access to limited information and another by instructions which meant that his analysis was entirely premised on his clients’ case
Learning points
Learning points for instructing parties
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Make sure that you provide your expert witnesses with the information they need to perform their task. In particular, ensure that they have access to the same information as the opposing expert.
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Do not assume the facts which the court will determine when deciding which evidence to adduce.
Learning points for experts
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Comply with the case management orders relating to your expert evidence. For example, if the case management orders require a joint statement, do not instead provide the court with a separate document from each expert.
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If new evidence is provided to you after you have already prepared your report, make sure you consider the new evidence carefully, assess its impact on your opinion, and integrate it properly into your revised report.
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Take care with evidence which has been obtained through limited instructions, such as instructions to provide advice on only one of the possible options.
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If your instructions limit your ability to consider the range of possible options, raise this with your instructing party.
The case
The case dealt with the claim by the landlord for breach of the tenant’s covenants and conditions following the expiry of the tenant’s lease on an office building in Dartford. The main issues in dispute at the time of trial were:
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the extent to which the heating, ventilation and air-conditioning (“HVAC”) system was out of repair;
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the existence and relevance of any intention on the part of the claimants to replace the entire HVAC system regardless of whether it was strictly in a state of disrepair;
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the extent, if any, to which the statutory cap on damages limits the claim.
The experts
Both sides instructed experts in chartered surveying, building services engineering, and valuation.
Chartered surveying experts
The claimants instructed Mr B, and the defendants Mr S, as charted surveyor experts. Mr B inspected the premises, although not until the claimants’ works had been completed. Mr S wanted to inspect the premises but was told by his instructing party that it was not possible. Mr S was also provided with less information that Mr B. When he prepared his report, he only had a copy of the bundle prepared for a mediation, which did not include the parties’ witness statements or disclosure. Mr B shared some photos with Mr S at the joint memorandum stage, which allowed some points of agreement to be resolved.
Building services engineering experts
The main issue between the parties was whether the claimant was entitled to a new HVAC system or whether the existing system could be repaired to work substantially as well as it did originally. Both sides instructed building services engineers, Mr P for the claimants and Mr K for the defendants. They both produced a report. However, instead of producing a joint statement as the case management orders required, they produced two documents, each containing a commentary by one expert on the others report, and responses by the author of the report. The judge noted that this was not at all helpful.
More broadly, the judge did not find the evidence of either expert to be very satisfactory. It did not help that neither of them had had the opportunity to inspect the HVAC system and they had to form their opinions on the basis of third-party materials.
Problems with the primary sources
The primary sources for the building services engineers were:
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A mechanical and electrical dilapidation report, commissioned by the claimants, from BWB Consulting;
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that the mechanical validation and condition survey report, commissioned by the defendant from Aventus Commissioning;
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Mr Singleton, a project manager for Design and Mechanical Service Limited, who carried out an inspection of the HVAC system and prepared a witness statement and a report for the claimants.
The judge found these primary sources to be problematic. Mr Singleton’s evidence was not instructed on the basis that repair rather than replacement was an option which the claimants were genuinely considering. This was highly relevant to an assessment of his view on the existing system. The report Mr Singleton produced was also written to appear contemporaneous with the earlier date that it bore when it was at best a reconstruction of what he might have written at the time had he been asked to do so.
The Aventus report, though the most detailed and technical, lacked grading results, was limited by inability to test all parts of the system, and did not address necessary works. The BWB report lacked the technical input found in the Aventus report and was not a dilapidations report in the traditional sense. It also lacked analysis of the compatibility, in particular, of a new chiller system with the existing Building Management System.
Mr P
The judge found that Mr P had a tendency to rely on what was unknown (such as such as functionality of untested components, or compatibility of new and old components, or availability of replacement components) as demonstrating that repair was not feasible. This had a tendency to reverse the burden of proof.
He also criticised Mr P’s treatment of the three main sources of information. Mr P disparaged the BWB report as being less detailed and less technical than the Aventus report, without acknowledging that it was a serious report and the one primary source that addressed the practical issue of the availability of remedial works. Mr P considered that the Aventus report was of limited value and accuracy because of the absence of gradings of components. Instead, Mr P preferred the evidence of Mr Singleton whom he regarded as the primary system of reliable information about the reliability of the HVAC system without acknowledging the problems with Mr Singleton’s evidence discussed above.
Mr K
The judge found that Mr K laboured under the disadvantage that his conclusions were formed on the basis of access to limited information. When Mr K originally wrote his report, he had only seen the BWB report, as neither the Aventus report or Mr Singleton’s witness statement or report had been provided to him. By the time of the disclosed, revised report, he had seen the Aventus report, which the judge noted had been “rather clumsily inserted into the text”, but not Mr Singleton’s material. The judge was also unimpressed by Mr K’s treatment, in both this report, and then in cross-examination, of the question what would be required for a system to be regarded as failed system.
Mr K said that, in his experience, a landlord’s dilapidations claim relating to the condition, operation and functionality of a HVAC system would be based, as a minimum, on validation reports. These had not been obtained which Mr K took as one indication that the claimants never had any real intention to consider repair of the existing system. His conclusion, based primarily on the BWB report, was that the HVAC system required only minor remedial repair and replacement of the chiller to restore functionality. He set out the works and their cost accordingly.
The judge’s conclusion on the HVAC system
The judge noted that an absence of desired evidence must be assessed in the context of the evidence that there is, and it can not be turned against the defendants. The most reliable evidence on the condition of the HVAC system at the end of the lease was from the BWB report which, while favouring replacement, itemised and costed remedial works to the existing system.
The claimants had not shown that remedial works were not a viable option because they never intended to carry out such works and did not give them serious consideration. As they had not adduced evidence of the cost of repair rather than replacement, the available figures were those provided by Mr K.
Valuation experts
The parties adduced evidence on valuation matters in respect to the statutory cap on damages from Mr R, for the claimants, and Mr D for the defendants.
The judge found Mr R to be an impressive witness. The main problem with his evidence was that it was entirely premised on the claimants’ case as to the necessary remedial works. He confirmed in cross-examination that he had not been asked to assess the valuation on the alternative basis of the position advanced by the defendants’ building pathology experts. In light of the judge’s conclusion on the HVAC system, this created significant difficulty, because Mr R did not provide the court with a figure for that scenario. Unlike Mr R, Mr S provided the court with a valuation on the alternative bases of the opinions of the parties’ respective experts.