Tesco v Constain - Thomson Reuters

2003 WL 21729349 Page 202003 WL 21729349 (QBD (T&CC)), [2003] EWHC 1487(Publication page references are not available for this document.)first stage tender in the sum of £7,602,781 subjectto satisfactory negotiation.We confirm we shall work with the design teamand put in hand all works in accordance with theinstructions of the Employers Representative.We enclose as requested a copy of your letterdated 20th March 1989 signed by our ManagingDirector, Mr. W. Sperry, in acknowledgement ofthe terms and conditions contained therein."61. Before Costain replied to Mr. Fletcher's letterdated 20 March 1989 he had in fact written again,this time in a letter dated 23 March 1989. Thematerial part of that letter read:--"I refer to the negotiations between Messrs.Bucknall Austin PLC and yourselves in respect ofthe above Development.I am pleased to advise you that you areauthorised to commence the main contract workson Monday 3rd April, 1989 generally inaccordance with the tender documents already inyour possession with a contract period of 46 weeksand in the budget contract sum of £8,320,000(Eight million, three hundred and twenty thousandpounds).You are aware that the above contract sum is yetto be subject to the reduction agreed between Mr.Bassil and Mr. Blackburn and, of course, is subjectto the completion of the 2nd stage tendernegotiations ....I look forward to a satisfactory outcome to thisproject and would be grateful for youracknowledgment [sic] of the contents of this letter."62. Costain responded to Mr. Fletcher's letterdated 23 March 1989 in a letter dated 31 March1989 as follows:--"We acknowledge receipt of and thank you foryour letter dated 23rd March 1989 giving usauthority to commence the main contract works onthe 3rd April 1989 generally in accordance with thetender documents, with a contract completion dateof 19th February 1990.We note the budget contract sum of £8,320,000as stated in your letter which we understand is stillsubject to negotiation."63. Costain then proceeded with the work ofconstruction of the Store.64. Under cover of a letter dated 8 June 1989Costain sent to Bucknalls calculations indicatingthat its second stage tender for the Store amountedto a total of £8,352,834.56. Bucknalls replied in aletter dated 28 June 1989 that a figure of£8,251,454 had by that time been agreed betweenBucknalls and Costain. In a letter dated 7 July 1989to Tesco Bucknalls recommended acceptance of acontract sum of £8,251,454. Tesco apparentlyaccepted that recommendation, although on theevidence put before me it was unclear exactly whenor how.65. On or about 29 June 1989 Bucknalls sent toCostain revised Employer's Requirements inrelation to the construction of the Store.66. After it commenced the construction of theStore Costain included within the sums of which itclaimed payment from time to time sums claimedby PHJ in respect of its own fees. It appears thatPHJ submitted invoices in respect of its fees toCostain following receipt of a letter dated 4 May1989 written by Mr. Pleass. The letter was copiedto Costain. In his letter Mr. Pleass wrote:--"Unfortunately now that the Main Contractor hasbeen appointed for this Project, all Fee Accountsneed to be passed through Messrs. CostainConstruction.Would you kindly re-submit this account inaccordance with the Conditions in your Letter ofAppointment, and you should note that your feescan now be based on the agreed Tender Figurefrom Messrs. Costain Construction.I am returning herewith your letter and invoicedated 21st April, 1989."In a letter to Costain dated 8 May 1989 Mr. PeterLyons of PHJ wrote that:--"On the direction of our client, I herewithenclose an interim fee account in respect of theabove. I trust you will find this in order forpayment, which I should appreciate receiving assoon as possible, since I was advised to re-directthis to yourselves following its earlier submissionto Tesco Stores Limited."67. Sums which were included in payments madeby Tesco to Costain in respect of the fees of PHJwere passed on by Costain to PHJ under cover ofletters following a standard pattern andincorporating a final paragraph in identical form.The letters were dated, respectively, 26 June 1989,30 August 1989, 5 October 1989, 9 November1989, 19 December 1989, 15 January 1990, 7February 1990, 9 March 1990, 29 March 1990, 18May 1990 and 15 November 1992. Each washeaded "Without Prejudice". The terms of the letterdated 26 June 1989 may be treated as typical of thepattern of all of the letters. The text of that letterwas:--"Following the inclusion of professional fees inthe Quantity Surveyor's, Bucknall Austin'sCertificate Valuation No. 3, we are pleased toadvise that the sum of £98,000.00 (excluding VAT)was certified on your behalf.We therefore confirm that you have received ourcheque in the sum of £ 112700.00 being thesummation of the above mentioned value ofCopr. © West 2004 No Claim to Orig. Govt. Works