Tesco v Constain - Thomson Reuters

2003 WL 21729349 Page 352003 WL 21729349 (QBD (T&CC)), [2003] EWHC 1487(Publication page references are not available for this document.)effect of the Costain Agreement, so far as wasrelevant to any claim made against Costain inAction 07 or Action 439, was simply to imposeupon the Other Costain Company an obligation toindemnify Costain in respect of such claim.The preliminary issues -- categorisation142. It is convenient to consider the preliminaryissues with which this judgment is concerned innine categories, namely:--(i) issues 1 to 6 inclusive ("the Costain ContractIssues"), each of which poses a question in relationto what the contractual position, if any, as betweenCostain and Tesco was concerning the originalconstruction of the Store, or, if there was in fact nocontract, whether Costain is estopped now from soasserting;(ii) issues 7 and 8 ("the Costain 1989-1990Tortious Duties Issues"), which relate to the allegedduties of Costain in tort owed to Tesco in respect ofthe original construction of the Store;(iii) issues 9 and 10 ("the Costain 1993-1994Tortious Duties Issues"), which concern the allegedduties of Costain in tort owed to Tesco in respect ofthe inspection of the Store in 1993 and the reportsmade thereafter;(iv) issues 11 to 13 inclusive ("the CostainAccrual of Cause of Action Issues"), which focuson the question whether the date upon which acause of action in respect of various allegedbreaches of duties of care owed by Costain toTesco accrued was 4 August 2001;(v) issue 14 ("the Other Costain CompanyIssue"), which raised the matter of the liability ofthe Other Costain Company in respect of anydefaults on the part of Costain in performing itsobligations towards Tesco, but which no longerrequires formal decision;(vi) issues 15 to 18 inclusive ("the PHJ ContractIssues"), which relate to the contractual position asbetween PHJ and Tesco;(vii) issues 19 and 20 ("the PHJ Accrual ofCause of Action Issues"), which concern thequestion of the date upon which a cause of actionon the part of Tesco against PHJ accrued;(viii) issue 21 ("the Inspection Issue"), whichraises the question whether Costain or PHJ orneither inspected the Store in 1993;(ix) issues 22 and 23 ("the PHJ 1993-1994Tortious Duties Issues"), which are concerned withthe question whether PHJ owed any duty of care toTesco or Costain in relation to the inspection of theStore in 1993.The Costain Contract Issues143. It was a feature of the trial of preliminaryissues that, although some issues were of directinterest only to Tesco and Costain, or only to Tescoand PHJ, each of Costain and PHJ sought, where ithad no adverse implications for its own position todo so, to support the case of Tesco against theother. Nowhere was this more apparent than inrelation to the Costain Contract Issues. While itseemed to me that the general nature of the caseadvanced on behalf of Costain by Mr. Taverner andMr. Hargreaves was tolerably clear, namely thatCostain only ever carried out work in connectionwith the Store pursuant to the terms of the lettersdated, respectively 20 and 23 March 1989, thematerial parts of which I have set out earlier in thisjudgment, which were characterised as letters ofintent, there seemed to be a considerable amount offorensic mystification expressed both on behalf ofTesco by Mr. Roger Stewart Q.C. and Mr. GrahamChapman, and on behalf of PHJ by Mr. PeterCoulson Q.C. and Mr. Derek Holwill as to whetherCostain could possibly be contending that it hadnot entered into any contract at all with Tesco inrelation to the Store. The position of each of Tescoand PHJ on this question seemed to be that it wasso obvious that there was a contract that thecontrary could not be advanced by someone incontrol of his facial muscles.144. Mr. Stewart and Mr. Chapman at paragraph46 of their written opening in relation to issue 1said:--"The answer is "yes". The nature of Costain'scase as to the formation of a contract is far fromclear. It is not entirely apparent whether Costaindenies the existence of any contract at all (whichwould be very surprising) or merely that it was notconcluded on Tesco's standard terms. In support ofits contention that a contract (and a contract on itsstandard terms) was concluded between the partiesTesco relies on the following:a. Costain in fact designed and constructedthe store. It would be a nonsense to suggest that nocontract at all was concluded between the parties;b. The relevant letter of intent of 20thMarch 1989 ... was itself, a contractual documentand was signed and acknowledged by Costain'sManaging Director Mr. W. Sperry and returned byCostain's Senior Quantity Surveyor Mr. McNally ...In particular it(i) Referred to the Tesco standarddocumentation for use with Design and Buildcontracts issue 7 and the first stage tenderdocumentation;(ii) Used contractual language ("Inconsideration of the issuance of this letter") whichrequired Costain to be part of the design team andCopr. © West 2004 No Claim to Orig. Govt. Works