Construction Bulletin: Martlet Homes Limited -v- Mulalley and Co Limited

Following nine days of evidence and submissions in the Technology and Construction Court, the parties in the case of Martlet Homes Limited v Mulalley & Co Limited [2022] now await judgment from HHJ Stephen Davies in what will be the first substantive claim against a building contractor regarding defective cladding to reach the English High Court since the Grenfell Tower fire in June 2017. Marlet claims damages incurred, as a result of alleged design and workmanship breaches by Mulalley and Co Limited (Mulalley), under a contract to refurbish five tower blocks in Gosport with an external wall insulation system manufactured by the German manufacturer Sto. Mulalley denies all liability for Martlet’s losses. 

Background

As one of the first cladding related disputes to enter the TCC  following the Grenfell Tower fire, this case has the potential to set a lasting precedent. Indeed, in Court of Appeal proceedings late last year regarding the claimant’s successful application to amend its Particulars of Claim, Lord Justice Coulson commented on the case’s wider significance to the construction industry. The parties, and the construction industry as a whole, await the decision of HHJ Stephen Davies. 

This dispute raises fundamental legal questions as to the cause of a claimant’s loss where combustible cladding is replaced in the post-Grenfell context, and whether or not a historically installed cladding systems using expanded polystyrene (EPS) insulation can show compliance with building regulations at the time that the works were carried out. 

Mulalley was engaged in 2005 to re-clad the exterior of the five tower blocks under a JCT building contract. Mulalley selected the Sto Therm Classic K cladding system, comprising EPS insulation and mineral wool fire barriers under a render overcoat, to over-clad the towers. Upon inspection of the towers following the Grenfell Tower fire in June 2017, the cladding system was found to contain a number of defects, including defectively installed fire barriers and fixings, a method of installing of the EPS panels that contravened the cladding manufacturer’s instructions and the current BBA certificate. 

Martlet asserts that as a result of these defects, it decided to remove and replace the cladding system with a non-combustible alternative, and pending replacement it implemented a waking watch patrol to mitigate the safety risks posed by the defects to the residents of the towers. Mulalley argues that Marlet’s decision was taken on the basis of post-Grenfell concern over the presence of combustible insulation within the cladding, rather than because of the defects in Mulalley’s installation. On that basis, Mulalley denies that it has any liability to Martlet for the costs of Marlet’s remedial works and the waking watch.  Marlet disagrees, but argues in the alternative that that the combustible insulation material in the cladding failed to meet the functional requirements of the building regulation at the time it was installed and so is itself a defect justifying replacement. 

Further Information

For further information on this case, please contact Naomi Evans, Communications Officer at The Hyde Group.

Martlet Homes Limited is part of The Hyde Group and is represented by Norton Rose Fulbright LLP with Mr Jonathan Selby QC and Mr Tom Coulson of Keating Chambers. Mulalley is represented by Pinsent Masons LLP and Mr Simon Hughes QC and Mr James Frampton, also of Keating Chambers.

Should you have any questions regarding cladding-related issues, the Norton Rose Fulbright team would be happy to assist. 

This article was written with help from Sarah Gosling and Jake Burke.

Our dedicated construction and engineering team provides a full cradle of legal services to a vast array of clients including institutional investors, project companies, sponsors, developers, contractors and financiers. We combine sector experience with commercial focus to deliver timely and properly reasoned construction law advice to clients in some of the most challenging jurisdictions for construction project delivery globally. The team has experience across every segment of construction from project inception through procurement and construction to operation and maintenance.

Simon Ramsden is a dispute resolution and litigation lawyer based in London. He focuses on dispute resolution in the construction, transport, energy, mining and infrastructure sectors. 

Amy Armitage is a dispute resolution lawyer based in London. Amy's practice encompasses disputes management as well as dispute resolution in the context of construction and engineering disputes in the infrastructure and energy sectors and the built environment.