The Silo Hotel will require R30.6 million in repairs, but the owners of V&A Waterfront insist that “no further works are believed to be necessary to correct any defect.”
Additional corrective work was needed at the Silo Hotel in Cape Town’s V&A Waterfront after screeding on the hotel’s solid floor slabs failed; this work is anticipated to cost R30.6 million in present value.
Any losses incurred as a result of the building being unusable while the work was being done are included in this price.
While this temporary work was being done, the hotel had to be closed for five months. Remedial work at a reported cost of about R6 million has already been carried out there.
Additional work is anticipated in order to address the floor problem permanently.
This was stated in a judgment rendered by Judge Ashley Binns-Ward of the Cape Town High Court on Tuesday regarding an appeal brought by structural engineers GR Sutherland and Associates against an arbitration award.
GR Sutherland and Associates are the only parties being sued in the arbitration proceedings at this time, according to Binns-Ward of V&A Waterfront Holdings.
V&A Waterfront Holdings appointed GR Sutherland and Associates as the consulting structural engineer for the construction project in 2014.
In the V&A Waterfront neighbourhood of Cape Town’s harbour, the project involved modifying, adapting, and converting an old grain silo into a structure that would, among other things, house a deluxe boutique hotel.
Several people responded
The principal building contractor, WBHO; the executive architects on the project, Van der Merwe Miszewski Architects, Jacobs Parker Architects, CC, and Rick Brown & Associates; Greenlee Concrete, a subcontractor to WBHO that has been liquidated; and The Silo Hotel, which is leasing the hotel from V&A Waterfront Holdings, were all listed as respondents.
The appeal flows from a dispute that arose between V&A Waterfront Holdings and the consultants.
GR Sutherland and Associates has applied for an order setting aside the arbitration agreement or, alternatively, that the arbitration agreement ceases to have effect with reference to the dispute relating to the failure of the screed flooring at the Silo Hotel.
Floor levels
Binns-Ward said the arbitration dispute between GR Sutherland and Associates and V&A Waterfront Holdings arose from part of the work done to the silo building, which required the floor levels in the section of the structure that houses the boutique hotel to be raised above the level of the solid floor slabs using a special type of lightweight screed.
He said the screeding work was done by Greenlite Concrete under a subcontract with WBHO, but the screed did not function satisfactorily, with the result that the floors of the hotel became uneven.
Binns-Ward said the causes of the problem were investigated by Professor Vernon Collis, an engineer and architect, who held that the consultants, WBHO and Greenlite Concrete, were each, in several respects, at fault for the unsatisfactory work.
V&A gave notice to each of the parties with whom it had an arbitration agreement of its intention to proceed against them while also issuing an invitation to those parties to agree to proceedings in which the issues could be addressed and determined on a consolidated basis between everyone involved.
Binns-Ward said GR Sutherland and Associates declined the invitation, and V&A Waterfront Holdings has reportedly concluded a settlement with WBHO and is remodeling.
‘Another clause’ influencing liability
He said it will be for the arbitrator to determine the effect of the clause on the pleaded claim, but it is relevant for present purposes to observe that another clause appears to have the effect of materially limiting the possibility of concurrent liability by any of the consultants to V&A for damages because of a breach of their contracts by any of them.
The Silo Hotel waived its right to sue V&A under its lease agreement for any latent flaws in the rebuilt silo and filed a claim in a separate case in the High Court of Cape Town.
This relates to their worries about the income they claim they have lost and will continue to lose as a result of being unable to use the hotel rooms while corrective work is being done.
However, Binns-Ward expressed scepticism that the hotel’s case will ever reach trial and stated that even if it did, its subject matter is fundamentally distinct from V&A’s claim against GR Sutherland and Associates.
According to him, there is no direct contractual connection between GR Sutherland and Associates and the other consultants or the building contractor, and any obligation owed in the contract to V&A as the employer by any of those parties to refrain from acting negligently is a duty owed to V&A.
The only basis for GR Sutherland and Associates to make a claim against the other consultants or the building contractor to lessen the impact of a decision or judgment against it on V&A’s claim against it would be in delict, he continued.
A delict is a legal infraction.
Binns-Ward said he is very doubtful about the viability of any such claim and that all the other bases for the other proceedings that GR Sutherland and Associates contend should be taken into account to show there is good cause to grant its application are tenuous.
“Accordingly, as a matter of probability, the postulate that if the relief is not granted, Sutherland will become embroiled in multiple proceedings involving the same evidence, unnecessarily incur duplicated costs, be exposed to prejudicial procedural jockeying, and possibly conflicting decisions, seems to me unlikely to materialize.
“In the result, the case the applicant has made out is not a compelling one,” he said.
Defect ‘fully repaired’
V&A Waterfront spokesperson Donald Kau said the defect in the screed flooring of the hotel was discovered over the low trading period during the COVID-19 pandemic.
He said the hotel was closed for five months, during which time the defect was fully repaired.
“We do not think any additional work is required to fix any defect,” However, given the duration of contracts, it is necessary to comprehend a distant future liability.
He stated, “No additional hotel closure is anticipated.”
According to Kau, the V&A filed an application to have the arbitration transferred to the high court after starting arbitration proceedings against GR Sutherland and Associates to determine liability.
He claimed that Sutherland’s application had now been rejected by the Cape High Court and that arbitration was still ongoing.
According to Kau, the V&A claimed in the arbitration proceedings that Sutherland’s breach cost R43,978,491.25 in damages.
The following is a fabrication:
For loss of rental recovery from The Silo Hotel, R7.117 million;
R6 million was spent on carrying out the repair work; and
Utilizing the corrective works will cost R185,491.25 in electricity and water costs.
In the unlikely event that the defect reappears, he explained, “the R30.6 million [in the judgment] would be an estimate of a more thorough rectification.”
