TFW Printers Ltd (“TFW”) engaged Interserve Project Services Ltd to carry out certain building works. The building contract was the JCT Agreement for Minor Works. The works included the replacement of a pressed steel valley gutter to part of one of the roofs of the building.

In carrying out these works the downpipe situated at the western end of the gutter had been removed by Interserve but had not been replaced. Following practical completion of the works but prior to the expiry of the defects liability period part of the building was flooded because of the lack of such downpipe.

TFW alleged that the flood was caused by Interserve’s beach of contract and/or negligence and sought to recover its consequent losses.

The issue was whether TFW’s contractual obligation to insure in the parties’ joint names against the loss or damage that had now been sustained ceased upon practical completion or whether it continued until the expiry of the defects liability period.

Interserve argued that the relevant obligation, contained at clause 6.3B of the building contract, placed an obligation on TFW to insure against the loss and damage in the joint names of Interserve and TFW and that this obligation to insure continued until the expiry of the defects liability period. Accordingly, Interserve claimed that TFW’s claim for recovery of its losses against Interserve was barred.