Supreme Court
Action No. 120 of 1999
Shanks, J.
13th April 2000

Mr. Elrington for the Plaintiffs.
Mr. Welch for the First Defendant.
Mr. Sooknandan for the Second Defendant.

Engineering and construction agreement for an apartment building -
Building collapsing before completion - Apportionment of liability -
Assessment of damages.

J U D G M E N T

This is a claim against the designer and builder of a two storey concrete apartment building in San Pedro. The building was started in late 1998. In March 1999 when it was nearly complete and paid for it suffered a major structural collapse while construction was still going on. Neither the builder or the designer has taken any steps to rectify the damage to the building.

The relationship between the Plaintiffs and the two Defendants is governed by two agreements. The first is between the Plaintiffs and the first Defendant, Darrell Cloud. It is an agreement dated 30th July, 1998. Under this agreement Mr. Cloud is described as the "project engineer" and is to do among other things the following:

• Design an apartment building with three rental units on the ground floor and a residential apartment for the Nunez family on the second floor.

• Be the project engineer to supervise the entire project from start to finish.

• Make a construction contract with the contractor to sign.

• The project engineer shall have full responsibility and control of the project and shall work closely with owners and the contractor. He shall be fully accountable to the owners and make regular and frequent reports to them on the progress of the project. For this work the project engineer is to be paid a design fee if 2% of the total cost of the project and a fee for supervision of 8% of the total cost of the project.

The relationship with the second Defendant, Cosme Lopez, who was the builder, is governed by a construction agreement dated the 21st October, 1998, which was produced for the Plaintiffs by the first Defendant. That provides that the Plaintiffs hired the second Defendant to "build the building which is being designed for them by Architectural Designer and Engineering Service of San Pedro who is also being retained as project engineer for this project." The agreement continues:

• "The building is two storeys with three apartments on the ground floor and one owner's apartment on the second level as shown on the set of plans which have been approved by the San Pedro Planning Board and a part of this agreement.

• The building will be constructed according to the set of blue prints which have been furnished to the contractor. No changes will be made on the designer's materials without first securing permission from the project engineer and of the owner.

• An agenda sheet will then be made and deductions or additions will be made to the labor cost differential which is reflected by the change. The total labor cost for the construction of this project is $56,090.00 Belizean dollars and the construction time to complete this project is approximately six months. An attempt will be made to complete it in four months …." The agreement is signed by the Plaintiffs and the second Defendant. It will be apparent from my description of those two agreements that the first Defendant's role was central throughout the entire process of design and building.

The first Defendant prepared for the Plaintiffs a bill of quantities in respect to the whole project which shows a total cost of $211,882.00 which includes $23,434.00 for furniture and fixtures for the three apartments. The Plaintiff took out a loan to raise this money at a rate of interest of 17%. He had spent a total of $171,371.00 when the collapse happened. There was therefore a further $17,077.00 left to pay for the building excluding furniture and fixtures. In the immediate aftermath of the accident the first Defendant told the Plaintiff that the collapse had taken place because of an air pocket below the foundations. The Plaintiff hired Dwayne Thurton to investigate the cause of the collapse and to say who was responsible in his view.

Mr. Thurton prepared a clear and concise report in May, 1999. He also gave evidence which, in spite of his relative youth, was careful and impressive. He made some excavations and could find nothing wrong with the rock below the building or any evidence that the piles had sunk. He made a careful study of the contract documents and of the evidence on site. His conclusion as to the cause of the collapse was as follows:

"Based on the information gathered, the most probable point of failure initiation is the ground beam on grid (A) as a result of shear overloading. This failure subsequently caused redistribution of stress throughout the building and, thus, 'knock-on' failures. These included major structural limit state failures in columns, beams and slabs, serviceability failure in walls and other elements and the rotation of the entire building structure. The overloading of the beam was primarily due to the fact that column 2x (A) was some 3 feet out of alignment and was supported directly by the ground beam rather than a pile as originally designed.

If the changes from the original design with respect to the moving of at least four
columns off alignment, particularly column 2x (A) were made or endorsed by the project engineer, then the responsibility is clearly his.

In construction arrangement as the one utilized for this project, a contractor would not normally be expected to verify structural changes or designs made by the designer.

If, however, the moving the columns were, in fact, construction error, then the responsibility should be shared between the project engineer and the contractor."

He had also concluded in the second part of his report as follows:

"The core of the problem rests on the fact that there were changes made to the designs that were reflected in the construction. The changes introduce significantly higher load intensities in certain areas, particularly in Beam A. The changes apparently were not accompanied by new structural details. Note that similar changes were made in several other locations in the building. The potential for future failure may, therefore, still exist". There is then reference to various photographs which he says shows inclined cracks that span across the depths of Beam A, up and a way from its support. "These are characteristics of shear cracks. For shear reinforcements to be effective, they must be spaced close enough to each other so as to intercept these cracks which are generally about 45 degrees from the horizontal. In the cases of both the constructed and the detailed beams, the reinforcements are not close enough to play a significant role as cracks are able to be formed between them."

The first and second Defendants gave evidence. The first Defendant told me that there had been no changes from the design and that he had designed the building with pillars out of alignment but that the beams were designed in accordance with the appropriate codes and that the plans had been approved by the local authority. Unfortunately, he did not bring his design plans to court to make good this case. He also told me that he supervised the construction on a day to day basis and that the building was built in accordance with his instructions which evidence was not surprisingly confirmed by the second Defendant. The first Defendant's theory remains that some of the piles had been driven into an unstable area but he recognized that he had had no independent expert to verify this or to report on the matter. Further, Mr. Thurton had not been asked about the particular columns which he said had sunk during his evidence.

Faced with that evidence I really have no choice but to accept the views of Mr. Thurton. Whether or not the building as built was in accordance with first Defendant's plans, the beam which failed was clearly inadequately designed. This must be the responsibility of the first Defendant and he must be liable for the damage which resulted from it. On the basis of his and the second Defendant's evidence and Mr. Thurton's views, the second Defendant will not be liable.

I should say that even if I accepted the first Defendant's views that the only cause of the collapse was that the piles were driven into an unstable area, I suspect that he would have still been found liable. He was fully responsible for the project under his agreement. I would have thought such responsibility must extend to checking by whatever means necessary that the building was going to be built on firm ground.

I turn to damages. Mr. Thurton expressed the view that the building was now in a "horrible state", a view confirmed by the photographs. He said that there were so many uncertainties about its stability that the best way to proceed would be to demolish it and to start again. I accept that view. He said clearing the site would cost $15,000.00 and the first Defendant did not quarrel with that figure. He said to build the building now would cost at least $225,000.00, a view I accept. If the work starts now it is likely to take at least another six months which means the Plaintiff will get his building at least 18 months late. I accept his evidence that he would have been able to rent the three apartments for $1,000.00 per month each and the upstairs flat for $1,500.00 per month before moving into it with his family. He has therefore lost rental of $4,500.00 a month for 18 months which totals $81,000.00. He must give credit for the amount he still had to pay under the contract with the first and second Defendants namely $17,077.00.

He is therefore entitled to damages of $303,923.00, which is $15,000.00 + $225,000.00 + $81,000.00 - $17,077.00. I do not award him interest since the cost or rebuilding is prospective and the interest on the bank loan was to have been paid off from the rental income which is a head of damage itself. The $10,000.00 spent on Mr. Thurton's report ought be recoverable as part of the costs in the action since that report really deals only with the assignment of responsibility for the failure.

There shall therefore be judgment for the plaintiff against the first defendant for $303,923.00 and the claim against the second Defendant shall be dismissed.