Tesco Stores Ltd v Costain Construction Ltd and Others

JurisdictionEngland & Wales
JudgeH.H. Judge Richard Seymour Q. C.
Judgment Date02 July 2003
Neutral Citation[2003] EWHC 1487 (TCC)
Docket NumberCase No: HT-0207
CourtQueen's Bench Division (Technology and Construction Court)
Date02 July 2003
Tesco Stores Limited
(1) Costain Construction Limited
(2) Costain Limited
(3) Peter Hing And Jones (a Firm)
(4) Vale (uk) Limited
(5) Whitelight Industries Limited

[2003] EWHC 1487 (TCC)


His Honour Judge Richard Seymour Q.c.

Case No: HT-0207

Case No: HT-02439




St. Dunstan's House,

133-137, Fetter Lane,

London, EC4A 1HD

Roger Stewart Q.C. and Graham Chapman (instructed by Reynolds Porter Chamberlain for the Claimant in both actions)

Marcus Taverner Q.C. and Simon Hargreaves (instructed by Osborne Clarke for the First and Second Defendants, Costain Construction Ltd. and Costain Ltd., in both actions)

Peter Coulson Q.C. and Derek Holwill (instructed by Henmans for the Third Defendants, Peter Hing and Jones, in Action HT-02–07)

The Fourth and Fifth Defendants in Action HT-02–07, Vale (UK) Ltd. and Whitelight Industries Ltd., did not appear and were not represented.


H.H. Judge Richard Seymour Q. C.



These two related actions, numbered, respectively HT-02–07 ("Action 07") and HT-02–439 ("Action 439"), arise out of a fire ("the Fire") which occurred on 4 August 2001 at a superstore ("the Store") at Coldfield Drive, Oakenshaw Wood, Redditch in Worcestershire belonging to the Claimant in each action, Tesco Stores Ltd. ("Tesco"). In the Fire the Store was seriously damaged. Instead of rebuilding it as it had been before the Fire Tesco chose, no doubt for sound commercial reasons, to have constructed a larger store, some 10,000 square feet larger than the Store. The detailed implications of that decision, if they need to be considered at all, are for a second round of the present litigation.


The Store was originally constructed for Tesco between about April 1989 and about March 1990 by Costain Construction Ltd. ("Costain"). Costain is the First Defendant in each of Action 07 and Action 439. Costain is, and has been at all times material to Action 07 and Action 439, a member of a group of companies ("the Costain Group"). Another company in the Costain Group is Costain Ltd. ("the Other Costain Company"). The Other Costain Company was, until notice of discontinuance of the claims against it was given during the course of the present trial, the Second Defendant in each of Action 07 and Action 439. There were no other defendants in Action 439. Action 07 was commenced by a claim form issued on 9 January 200I shall come to consider the nature of the claims made in Action 07, but after that action was commenced it was decided on behalf of Tesco that it wished to make additional claims against both Costain and the Other Costain Company. As I shall explain, questions of limitation are relevant to the claims which Tesco seeks to pursue against Costain and it was considered appropriate in the first instance for the claims which it was desired to pursue against Costain and, at that time, the Other Costain Company in addition to those made in Action 07 to be made in a new action so that any question of limitation which arose in relation to the new claims could be dealt with on its merits, and not be prejudiced by seeking to add the new claims by amendment in Action 07. Action 439 was commenced by a claim form issued on 13 November 2002.


For practical purposes the Other Costain Company really only ever had a "walk on" role both in Action 07 and in Action 439. What that role was alleged to be was set out at paragraph 66 of the Re-Re-Amended Particulars of Claim in Action 07 and at paragraph 54 of the Amended Particulars of Claim in Action 439, which were in identical terms, namely: -

"Costain's Financial Statements, for the year ended 31 December 2000, state that the company sold its business and assets and liabilities to Costain Limited [that is, the Other Costain Company] with effect from 1 January 1999. Pending proper particulars thereof, Tesco contends that consequently Costain Limited is also liable in respect of Costain's liabilities to Tesco."

It is not immediately clear what justification there might have been thought to be in law for the assertion contained in that paragraph.


Messrs. Peter Hing and Jones ("PHJ"), the Third Defendants in Action 07, are a firm of architects. They designed the Store as originally constructed.


In about 2001 Tesco decided to have works ("the Alteration Works") carried out at the Store. The contractor engaged to design and to undertake the Alteration Works was the Fourth Defendant in Action 07, Vale (UK) Ltd. ("Vale").


Part of the Alteration Works involved the construction of an extension at the north-eastern corner of the Store. In this judgment I shall call the work of constructing that extension "the Extension Works".


The Extension Works were sub-contracted by Vale to Leonard Burgess Ltd. ("Burgess"). Although, nominally, a party to Part 20 Claims in Action 07, Burgess is in liquidation and has taken no part in those proceedings.


The performance of the Extension Works included the design, manufacture and erection of a steel structure ("the Structure").


Burgess sub-sub-contracted to a company called Benruss the design and manufacture of the Structure. It sub-sub-contracted the erection of the Structure to Whitelight Industries Ltd. ("Whitelight"), which is the Fifth Defendant in Action 07. Whitelight went into liquidation after the commencement of Action 07 and thereafter took no part in the action.


It seems that during the course of the attempt by Whitelight to erect the Structure it became apparent that some modification of the steel frame of the existing external wall at the north-eastern corner of the Store was necessary. In particular, it became apparent that it would be necessary to undertake works involving cutting into the steel of the existing frame ("the Cutting Works"). It seems that Whitelight was asked by Burgess to, and did, provide a steel fabricator to undertake the Cutting Works. While the Cutting Works were in progress the Fire broke out.


How it was contended in the circumstances which I have summarised Costain and PHJ were liable to Tesco in respect of the consequences of the Fire was put in paragraph 3 of the Case Summary for the present trial in this way: -

"As against PHJ and Costain, Tesco contends that the fire spread, causing very substantial damage to the Store, was due to the absence of proper fire stopping measures at the Store. Tesco contends that there was no cavity closure at the top of the external wall enabling the fire to escape into the eaves and then the roof space, and that there were long lengths of roof space without cavity barriers."


A consideration of exactly how the case of Tesco was put in the Re-Amended Particulars of Claim in Action 07 against Costain and PHJ and against Costain in the Amended Particulars of Claim in Action 439 suggested that there were a number of issues which could conveniently be tried as preliminary issues in advance of the main trial. This judgment is concerned with those issues. Before setting out the issues for determination at this stage of the litigation, it is necessary to explain how the particular issues which I ordered to be tried arose.

The Claims against Costain


In short it was alleged against Costain on behalf of Tesco, first, that Costain was in breach of the contract by which it agreed to design and construct the Store in the first place, and negligent, in relation to failing to provide appropriate fire stopping and inhibiting measures within the Store as constructed, and, second, that Costain was negligent in relation to the undertaking of an inspection of the Store in about October 1993 to assess the adequacy of the fire stopping and inhibiting measures in place and in reporting on the results of that inspection. In Action 07 complaint was made in relation to the report contained in a letter dated 19 October 1993. In Action 439 complaint was added in respect of the report contained in a letter dated 27 May 1994. In its Amended Defence in Action 07 Costain denied that it had concluded any contract with Tesco in relation to the construction of the Store, although it was admitted that Costain had in fact built it. Costain further denied that it owed to Tesco the duties of care in respect of the construction of the Store for which Tesco contended. The inspection of the Store in October 1993 was admitted, but it was contended that it had been competently carried out and the results properly reported. Limitation defences were advanced in respect of all claims.


The way in which the alleged contract between Tesco and Costain in relation to the construction of the Store was pleaded in the Re-Amended Particulars of Claim in Action 07 was this: -

"12. By letters, dated 20 and 23 March 1989, Tesco instructed Costain to design and build the Redditch store in accordance with Tesco's Design and Construct Contract Issue No.7 ("Tesco Contract Issue No. 7"). By letter to Tesco, dated 30 March 1989, Costain accepted such instruction. Consequently, and in any event Costain accepted such instruction by commencing work on site on 3 April 1989.

13. It was agreed between Tesco and Costain that they would execute, under seal, Tesco's Design and Construct Contract Issue No. 7. It was agreed by Costain that such Tesco Contract Issue No. 7 would regulate the contractual relationship between the parties. Further, as the parties accepted that the agreement would be executed under seal it was understood and agreed that there would be a twelve year limitation period in respect of any breaches of that contract. Such agreement is evidenced by the following,

a) As confirmed by Costain's internal memorandum, dated 8 March 1989, it was agreed, at Tesco's offices at Cheshunt, on 7 March 1989, that...

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