Tesco v Constain - Thomson Reuters

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 ("TescoContract Issue No. 7"). By letter to Tesco, 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 Tesco and Costainthat they would execute, under seal, Tesco's Designand Construct Contract Issue No. 7. It was agreedby Costain that such Tesco 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 Tesco's offices at Cheshunt, on 7 March 1989,that Tesco 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 Tesco as thecontractor for the Redditch Store with theapplicable contract to be Tesco Contract Issue No.7; Mr. Franks was invited to comment on TescoContract 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 Tesco ContractIssue No. 7; Tesco 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 Tesco is presentlyaware, Costain, despite signing and returningcertain Novation Agreements as provided for bythe Tesco Contract Issue No. 7 by letter toBucknall Austin, dated 16 August 1991, neverexecuted the contract itself.15. By reason of Tesco Contract Issue No. 7and/or the agreement reached between the partiesthat such contract would apply, there were thefollowing express terms of Costain's retainer byTesco,a. Costain would upon, and subject to theconditions set out in Tesco 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 Tesco 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 Tesco 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