Contractual and Tort-Related Issues in Quashquell Construction Limited

The scenario involves Quashquell Construction Limited (QQ) and its subsidiaries, including Retro Salvagers Ltd (RSL), Dapar Heating Systems Ltd (DHS), and various employees. QQ's business is declining due to BREXIT fears and it decides to sell its office building in Salford and move to Hull. The company contracts RSL for a £50,000 refurbishment of an old Victorian building in Hull, with a deadline of February 25, 2016. However, the project delays due to RSL's failure to complete on time, causing QQ to incur additional costs. Meanwhile, DHS installs a central heating system, but it malfunctions and explodes, injuring employees Sally and Sean. The scenario raises various contractual and tort-related issues, including breach of contract, damages, negligence, and vicarious liability.

Quashquell Construction Limited (QQ) is a well-known UK registered property
developer in Manchester, which specialises in brownfield development. For the
past ten years, it has successfully developed a number of retail parks across a
number of reclaimed lands in different cities in the United Kingdom. The company
has seen a decline in business during the past year and a half due to fears
associated with the impending BREXIT referendum and its potential implications.
The Board of QQ decided in October 2015 to sell its three-storey office building
situated in Salford and move to Hull, where several of its new projects are
located. It purchased an old Victorian building in Hull to be used as its new
business premises from 1 March 2016. The property needed major
refurbishment; the rooms had to be converted into offices, the ceiling refitted and
the staircase repaired. A central heating system also needed to be installed. QQ
contracted a local construction firm, Retro Salvagers Ltd (RSL), to carry out the
refurbishment costing £50000. Under the agreement, all works were to be
completed by 25 February 2016. This was to enable QQ to honour its contractual
obligations to give vacant possession of the property in Salford to a buyer. It was
further agreed that for each day that the completion is delayed, there will be a
deduction of 4.5% from the contract price.
QQ requested a quote from Dapar Heating Systems Ltd (DHS) for the purchase
and installation of a central heating system. In response to concerns by QQ
regarding energy efficiency of the heating system proposed by DHS, the sale
representative of DHS stated: ‘This system is tried and tested; none other beats it
and it’s even better on energy efficiency. You should recover the installation cost
in two years’. Impressed by this comment, QQ entered into an agreement with
DHS for the system to be installed on or before 25 February 2016, failing which
DHS is to pay a lump sum of £1200 for any delay in completion. There was no
express provision regarding energy efficiency in the actual contract.
RSL failed to complete the refurbishment by the due date. Thus, QQ was unable
to move into the premises as expected. To make the Salford property available to
the buyer, QQ had to move its operations to the conference hall of a nearby hotel
in Hull for ten days pending completion of its new office building, incurring cost of
£4700 in rent for the ten days and about £500 per day in profits. In the
meantime, DHS had its experienced engineers tied up on another job until few
days before the agreed deadline for the installation of the central heating system
and thus were unable to complete the job until a week after QQ’s workers had
moved into the new office. QQ had to hire four mobile heaters at £100 per day as
the new office building was cold and damp. The new heating system
malfunctioned three weeks after it was installed. Once again, QQ had to rely on
the mobile heaters for another working week. DHS officials assured QQ that the
system will ‘stabilise after a while…’ QQ requested an independent expert to
examine/assess the heating system due to its persistent malfunctioning. A day
after physical inspection of the heating system was conducted by the
independent expert, and before the assessment report could be issued, the
heating system exploded causing severe injuries to Sally and Sean, employees of
QQ. Amy, another employee in the room where the explosion occurred,
attempted to escape through the new staircase but slipped and suffered a
dislocated ankle due to the slippery surface of the stairs. The independent
expert’s report on the central heating system reveals faults in its installation.
Moreover, the system installed by DHS was found to be at the lower end of
energy efficiency heating systems. An investigation into the explosion has
disclosed that a gas leak is the likely source of the catastrophe.

Identify and address the various contractual and tort-related issues
raised by the above scenario and advise QQ, Sally, Sean and Amy as to
their potential legal claims.
(NB: You are not expected to calculate the financial cost arising from these transactions – please
focus only on the legal issues. Also remember to consider alternative arguments, where necessary,
before drawing conclusions).