Sheffield Teaching Hospital Foundation Trust v Hadfield Healthcare Partnerships Limited & Ors
[2023] EWHC 644 (TCC)
Lendlease Construction (Europe) Limited v Aecom Limited
1 November 2023
[2023] EWHC 2620 (TCC)
High Court
Lendlease sued Aecom for building mistakes. The court said Lendlease waited too long to sue (the deadline had passed) and that most of the problems were already known to Lendlease. Because of this, Lendlease lost the case.
Key Facts
- •Lendlease Construction (Europe) Limited (Claimant) sued AECOM Limited (Defendant) for breaches of contract under a consultancy agreement for the construction of a new Oncology Centre.
- •The Project Agreement was a Private Finance Initiative (PFI) project.
- •Disputes arose concerning Plant Room 2's fire safety and other MEP design defects.
- •Prior proceedings between Project Co and Lendlease resulted in Lendlease's liability for £5,048,534.39 and a separate £2.9m settlement with Project Co and Engie.
- •Lendlease sought indemnification from Aecom for its liabilities.
- •The Consultancy Agreement's interpretation, limitation period (6 or 12 years), and the effect of a 2012 Settlement Agreement were key issues.
- •The court examined Aecom's design responsibilities, its duty to review/warn, and the causation of the defects.
Legal Principles
A company is bound by the acts of persons who take upon themselves, with the knowledge of the directors, to act for the company, provided such persons act within the limits of their apparent authority.
Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
Construction professionals can discharge their duty to take reasonable care by relying on the advice or design of a specialist provided that they act reasonably in doing so.
Cooperative Group Ltd v John Allen Associates [2010] EWHC 2300 (TCC)
For C to be liable to A in respect of A’s liability to B which was the subject of a settlement, A must show that the specified eventuality (in the case of an indemnity given by C to A) or the breach of contract (in the case of a breach of contract between C and A) has caused the loss incurred in satisfying the settlement.
Siemens Building Technologies FE Ltd v Supershield Ltd [2009] EWHC 927 (TCC)
A judgment obtained by A against B ought not to be evidence against C unless the amount of damages awarded in the first proceedings would be an incontrovertible fact in the second proceedings.
Ward & others v Savill [2021] EWCA Civ 1378; Hollington v Hewthorn [1943] KB 587
The Consultancy Agreement's limitation period was 12 years because the court found it to be a deed, despite improper execution by non-statutory directors.
Companies Act 1985, sections 36A and 36AA; Law of Property (Miscellaneous Provisions) Act 1989, section 1(2)
Outcomes
Claim dismissed.
The claim was primarily statute-barred due to the 12-year limitation period from the accrual of the causes of action (mostly before May 30, 2007). The court also found that many defects were known or should have been known by Lendlease before the 2012 Settlement Agreement, and that Aecom did not breach its contract in relation to the remaining issues.
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