2003 WL 21729349 Page 22003 WL 21729349 (QBD (T&CC)), [2003] EWHC 1487(Publication page references are not available for this document.)4. Messrs. Peter Hing and Jones ("PHJ"), theThird Defendants in Action 07, are a firm ofarchitects. They designed the Store as originallyconstructed.5. In about 2001 <strong>Tesco</strong> decided to have works("the Alteration Works") carried out at the Store.The contractor engaged to design and to undertakethe Alteration Works was the Fourth Defendant inAction 07, Vale (UK) Ltd. ("Vale").6. Part of the Alteration Works involved theconstruction of an extension at the north-easterncorner of the Store. In this judgment I shall call thework of constructing that extension "the ExtensionWorks".7. The Extension Works were sub-contracted byVale to Leonard Burgess Ltd. ("Burgess").Although, nominally, a party to Part 20 Claims inAction 07, Burgess is in liquidation and has takenno part in those proceedings.8. The performance of the Extension Worksincluded the design, manufacture and erection of asteel structure ("the Structure").9. Burgess sub-sub-contracted to a companycalled Benruss the design and manufacture of theStructure. It sub-sub-contracted the erection of theStructure to Whitelight Industries Ltd.("Whitelight"), which is the Fifth Defendant inAction 07. Whitelight went into liquidation afterthe commencement of Action 07 and thereaftertook no part in the action.10. It seems that during the course of the attemptby Whitelight to erect the Structure it becameapparent that some modification of the steel frameof the existing external wall at the north-easterncorner of the Store was necessary. In particular, itbecame apparent that it would be necessary toundertake works involving cutting into the steel ofthe existing frame ("the Cutting Works"). It seemsthat Whitelight was asked by Burgess to, and did,provide a steel fabricator to undertake the CuttingWorks. While the Cutting Works were in progressthe Fire broke out.11. How it was contended in the circumstanceswhich I have summarised Costain and PHJ wereliable to <strong>Tesco</strong> in respect of the consequences ofthe Fire was put in paragraph 3 of the CaseSummary for the present trial in this way:--"As against PHJ and Costain, <strong>Tesco</strong> contendsthat the fire spread, causing very substantialdamage to the Store, was due to the absence ofproper fire stopping measures at the Store. <strong>Tesco</strong>contends that there was no cavity closure at the topof the external wall enabling the fire to escape intothe eaves and then the roof space, and that therewere long lengths of roof space without cavitybarriers."12. A consideration of exactly how the case of<strong>Tesco</strong> was put in the Re- Amended Particulars ofClaim in Action 07 against Costain and PHJ andagainst Costain in the Amended Particulars ofClaim in Action 439 suggested that there were anumber of issues which could conveniently be triedas preliminary issues in advance of the main trial.This judgment is concerned with those issues.Before setting out the issues for determination atthis stage of the litigation, it is necessary to explainhow the particular issues which I ordered to betried arose.The Claims against Costain13. In short it was alleged against Costain onbehalf of <strong>Tesco</strong>, first, that Costain was in breach ofthe contract by which it agreed to design andconstruct the Store in the first place, and negligent,in relation to failing to provide appropriate firestopping and inhibiting measures within the Storeas constructed, and, second, that Costain wasnegligent in relation to the undertaking of aninspection of the Store in about October 1993 toassess the adequacy of the fire stopping andinhibiting measures in place and in reporting on theresults of that inspection. In Action 07 complaintwas made in relation to the report contained in aletter dated 19 October 1993. In Action 439complaint was added in respect of the reportcontained in a letter dated 27 May 1994. In itsAmended Defence in Action 07 Costain denied thatit had concluded any contract with <strong>Tesco</strong> inrelation to the construction of the Store, although itwas admitted that Costain had in fact built it.Costain further denied that it owed to <strong>Tesco</strong> theduties of care in respect of the construction of theStore for which <strong>Tesco</strong> contended. The inspection ofthe Store in October 1993 was admitted, but it wascontended that it had been competently carried outand the results properly reported. Limitationdefences were advanced in respect of all claims.14. The way in which the alleged contractbetween <strong>Tesco</strong> and Costain in relation to theconstruction of the Store was pleaded in the Re-Amended Particulars of Claim in Action 07 wasthis:--"12. By letters, dated 20 and 23 March 1989,<strong>Tesco</strong> instructed Costain to design and build theRedditch store in accordance with <strong>Tesco</strong>'s DesignCopr. © West 2004 No Claim to Orig. Govt. Works
2003 WL 21729349 Page 32003 WL 21729349 (QBD (T&CC)), [2003] EWHC 1487(Publication page references are not available for this document.)and Construct Contract Issue No.7 ("<strong>Tesco</strong>Contract Issue No. 7"). By letter to <strong>Tesco</strong>, dated 30March 1989, Costain accepted such instruction.Consequently, and in any event Costain acceptedsuch instruction by commencing work on site on 3April 1989.13. It was agreed between <strong>Tesco</strong> and Costainthat they would execute, under seal, <strong>Tesco</strong>'s Designand Construct Contract Issue No. 7. It was agreedby Costain that such <strong>Tesco</strong> Contract Issue No. 7would regulate the contractual relationship betweenthe parties. Further, as the parties accepted that theagreement would be executed under seal it wasunderstood and agreed that there would be a twelveyear limitation period in respect of any breaches ofthat contract. Such agreement is evidenced by thefollowing,a) As confirmed by Costain's internalmemorandum, dated 8 March 1989, it was agreed,at <strong>Tesco</strong>'s offices at Cheshunt, on 7 March 1989,that <strong>Tesco</strong> intended to award Costain the contractto design and build the Redditch store;b) By a further Costain internalmemorandum, dated 10 March 1989, to Mr. Franksof Costain's legal department, Mr. Joyce stated thatCostain had been confirmed by <strong>Tesco</strong> as thecontractor for the Redditch Store with theapplicable contract to be <strong>Tesco</strong> Contract Issue No.7; Mr. Franks was invited to comment on <strong>Tesco</strong>Contract Issue No. 7; Costain has not disclosed anyresponse by Mr. Franks to such memorandum; inthe circumstances, it is to be inferred that Mr.Franks agreed the application of Contract Issue No.7, particularly (a) as his earlier memorandum, dated5 October 1988, commenting generally on ContractIssue No. 7 (as a generic document) raised norelevant concerns and (b) in view of thecorrespondence below;c) By its correspondence with BucknallAustin, Costain consistently confirmed itsagreement and intention to execute <strong>Tesco</strong> ContractIssue No. 7; <strong>Tesco</strong> will rely on the following lettersfrom Costain to Bucknall Austin in which Costainsought to complete the contractual documentation,namely those dated 16 January 1990, 1 March1990, 26 March 1990, 12 April 1990, 25 May1990, 7 August 1990 (which expressly invited theContract Documents to be submitted for executionby Costain), 24 October 1990, 2 November 1990,12 February 1991, 16 August 1991, 6 January 1992and 24 June 1992;d) Additionally, by its internalmemorandum, dated 8 February 1991, Costain'sMr. Basil recorded the agreement and intention thatthe outstanding contractual documentation shouldbe completed.14. In the event, so far as <strong>Tesco</strong> is presentlyaware, Costain, despite signing and returningcertain Novation Agreements as provided for bythe <strong>Tesco</strong> Contract Issue No. 7 by letter toBucknall Austin, dated 16 August 1991, neverexecuted the contract itself.15. By reason of <strong>Tesco</strong> Contract Issue No. 7and/or the agreement reached between the partiesthat such contract would apply, there were thefollowing express terms of Costain's retainer by<strong>Tesco</strong>,a. Costain would upon, and subject to theconditions set out in <strong>Tesco</strong> Contract Issue No. 7,carry out and complete the Works (namely, thedesign and construction of the Redditch store) in agood and workmanlike manner and to thesatisfaction of the Employer's Representative sothat the completed Works were reasonably fit fortheir intended use (clause 1 (1));b. Costain warranted to <strong>Tesco</strong> thatCostain's design and/or the design of those personsemployed or engaged by Costain (including designwork carried out prior to such employment orengagement) would be such that the completedWorks shall be reasonably fit for their intended use(clause 2 (1));c. Costain warranted that the materialsused in the Works shall be reasonably fit for theirintended use; such warranty extending to anysubstitution or variation in the design and/orconstruction of the Works (clause 2 (1)).16. Further, there were the following impliedterms of Costain's retainer, each of which wasimplied by operation of law to give businessefficacy to the retainer and/or to reflect thecommon intention of the parties,a. Costain would, so far as it was able,design (alternatively, be responsible for the designof) the Redditch store so that,i. Its drawings demonstrated compliancewith the relevant statutory requirements, includingBuilding Regulations;ii. The Redditch store would be fit for itspurpose;b. Costain would ensure that the Redditchstore was,i. Constructed in a good and workmanlikemanner and in accordance with good buildingpractice;ii. Constructed in accordance with therelevant statutory requirements, including BuildingRegulations, and so that it would be fit for itspurpose."It is somewhat remarkable that what seemed to berelied upon as evidence of the contract alleged werenot exchanges between <strong>Tesco</strong> itself and Costain,but rather internal documents of Costain and lettersfrom Costain to Bucknall Austin Plc ("Bucknalls").Bucknalls carried on business as quantity surveyorsand construction cost consultants, and I shall returnto their role in the construction of the Store. It isalso notable, given that there were also claimsCopr. © West 2004 No Claim to Orig. Govt. Works
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