The Trustees of the school complained that the contractors had been very slow in completing construction of new accomodation, causing them losses. The formal legal contract was only completed after the works, but it excluded any entitlement to damage for delay. The claimant sought damages from the defendants who had supervised the works, claiming negligence.
Held: ‘(1) TTPM owed to the Trust a duty to exercise reasonable care and skill for the purpose of procuring from Kier an executed building contract.
(2) TTPM was in breach of that duty, in that it failed to exercise sufficient focus on the matters holding up execution of the contract or to exert sufficient pressure on Kier to finalise the contract.
(3) That breach of duty caused the Trust loss, because if TTPM had not been in breach of duty:
(a) the Trust would have taken sufficient steps to ensure that, so far as lay within its power, it procured a contract;
(b) there would have been a real and substantial chance of Kier executing a contract that contained a provision for liquidated damages;
(c) the existence of such a contract would have been a material benefit to the Trust in its dispute with Kier when completion of the H5 works was delayed.
(4) Regarding the quantum of the Trust’s loss:
(a) the probability is that, if there had been a contract in existence, the Trust and Kier would have negotiated a reasonable settlement of their dispute. The value of such a settlement to the Trust, over and above the settlement it negotiated in the absence of a contract, would have been andpound;340,000, taking into account the probable price that the Trust would have had to pay to achieve the execution of the contract.
(b) the Trust is entitled to recover two-thirds of that amount, having regard to the size of the chance that Kier would indeed have signed the contract.
(c) Although the terms of TTPM’s contract with the Trust included a limitation clause, TTPM is not entitled to rely on that clause to limit its liability for damages to the Trust.
(d) Therefore the quantum of damages is andpound;226,603
(5) TTPM is entitled to recover andpound;37,167 for additional fees on its counterclaim.’
Keyser QC HHJ
[2012] EWHC 2137 (TCC), 144 Con LR 115, [2012] TCLR 8
Bailii
England and Wales
Construction, Professional Negligence
Updated: 13 December 2021; Ref: scu.463653