| Date | 9 May 2007 |
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| Judgment | The Board of Trustees of the Tate Gallery v Duffy Construction Ltd & another, TCC 15 February 2007 |
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| The Issue | When does a pipe burst, and is what results automatically a flood? |
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| Implication |
The case gives helpful guidance for interpreting standard insurance provisions. Not all leaks from pipes are necessarily bursts, and not all accumulations of water are necessarily floods. |
printLeakage of water from pipes does not necessarily result from a burst, nor does the water automatically amount to a flood. The 1998 edition of the JCT standard form of contract contains an obligation for one party, either the employer or the contractor, to insure against damage caused by Specified Perils. This is a defined term which includes as a peril “flood” and “bursting or overflowing of water tanks, apparatus or pipes”. Additionally, delay caused by any such matters is a Relevant Event, entitling the contractor to an extension of time. It can therefore be very important to recognise whether something is actually a Specified Peril or not. For example, would a leak discovered when testing pipework count as bursting or would water damage caused by a leaky roof constitute a flood? Whilst, to someone who is not a connoisseur of such matters, the meaning of these words may seem clear, for someone who faces a large bill depending upon the precise meaning of the terms, there is always scope for debate. One such debate arose in connection with a major construction project for the Tate Gallery in London, where extensive works were being undertaken as a part of a new development to mark the centenary of the gallery. The project was undertaken on a construction management basis and Duffy Construction was engaged by the gallery as a trade contractor for the execution of hard landscaping works. In early 2000 the temporary water main that supplied water to the construction site was damaged and Duffy was instructed to undertake its repair. One part of this operation involved connecting a new plastic pipe to the existing cast iron water main and this was achieved by a variety of components including a ‘Viking Johnson’ coupling. Having undertaken the necessary works all was well for a couple of months until, over the Easter 2000 shutdown, the connection came apart and large quantities of water escaped, causing substantial damage. The escape of water must have continued undetected for a substantial period because the basement of the gallery was filled to a depth of 1.4 meters which, as the judge in this case observed, “was more than sufficient depth to swim in”. Although the case also considered questions of contractual responsibility, as regards the question of whether the damage was caused by a Specified Peril, two main issues were addressed. The first was whether the cause of the leakage, which was assumed for the purposes of the case to be due to the slippage of the coupling between the new pipe and the existing pipe, could be described as a “bursting”. One of the analogies explored was with the bursting of a balloon, which was permanently damaged as a consequence. Having referred to various authorities the judge concluded that the relevant considerations were whether the incident occurred because of internal pressure or external intervention (for example, if the pipe had been struck by a falling object), whether the integrity of the pipe was broken and whether the incident was sudden and violent. In this instance it was considered that the two pipes joined by a coupling constituted a single pipe and that, when the coupling slipped, it was due to the internal pressure of the water in the pipe. Whilst all of this may have occurred gradually, and although the original components were not damaged and could all be reconnected (unlike the burst balloon), it was still sufficient to constitute a burst. The second point for consideration was whether the consequences of the burst constituted a flood. It was accepted that not every burst of water pipes generates a flood and previous cases also suggested that some form of distinction had to be drawn between natural seepage (such as might occur in a basement due to ground water) and a violent and abnormal influx of water. To help reach his decision the judge thought it was relevant to consider whether the source of the water was natural, whether that source was internal or external, the quantity of water, the manner of its arrival and whether the arrival of the water was an abnormal event. In this case, the judge was quite satisfied that what had occurred constituted a flood. He observed that the water had come from an external source and had accumulated both internally and externally in very large quantities and to significant depths. Whilst it was true that the water did not come from a natural source, there was no doubt that what had occurred constituted a flood. To bring the story up to date, the 2005 edition of the JCT standard form of building contract continues to refer to Specified Perils, although the definition has now been altered slightly such that whilst it continues to refer to “flood” it now refers to “escape of water from any water tank, apparatus or pipes”. Whilst it must be assumed that “escape” is intended to convey a different meaning from “bursting or overflowing”, just how different that concept will be in practice can only be tested in the courts.
CJ-0718
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