Lendlease Construction (Europe) Limited v Aecom Limited
[2023] EWHC 2620 (TCC)
Sheffield Teaching Hospital Foundation Trust v Hadfield Healthcare Partnerships Limited & Ors
22 March 2023
[2023] EWHC 644 (TCC)
High Court
A hospital sued a company that built a ward. That company sued the builders and the maintenance company. The court said there were good arguments to let the case go to trial, but the company suing the builders and maintenance company needed to show it could pay their legal bills if they lost, or else their lawsuits would be stopped until they proved they could pay.
Key Facts
- •Sheffield Teaching Hospital Foundation Trust (the Trust) sued Hadfield Healthcare Partnerships Limited (Hadfield) for £13 million due to design and construction defects in a new ward block (Hadfield Wing).
- •Hadfield brought Part 20 claims against Kajima Construction Europe (UK) Limited (Kajima), the design and construct contractor, and Veolia Energy & Utility Services UK PLC (Veolia), the facilities management provider.
- •Kajima applied for summary judgment/strike-out of parts of Hadfield's claim, arguing they lacked merit and were time-barred.
- •Veolia applied for security for costs against Hadfield due to concerns about Hadfield's ability to pay costs.
- •The Hadfield Wing's practical completion was certified on 26 March 2007. Defects were identified in 2017/2018 relating to fire safety.
- •Several standstill agreements were in place between the parties, impacting limitation periods.
Legal Principles
Summary Judgment Test (CPR 24.2): Claimant has no real prospect of succeeding, and no other compelling reason for trial.
CPR 24.2
Strike-out Test (CPR 3.4(2)(a)): Statement of case discloses no reasonable grounds for bringing the claim.
CPR 3.4(2)(a)
Contractual Interpretation: Ascertain the intentions of the parties by reference to what a reasonable person would understand.
Arnold v Britton [2015] UKSC 36
Concurrent Duty of Care: A concurrent duty of care in tort may arise alongside a contractual duty, but the contractual terms may preclude it.
Robinson v PE Jones (Contractors) Ltd [2012] QB 44
Security for Costs (CPR 25.12, 25.13): Court may order security if claimant is a company and there's reason to believe it can't pay costs; and it's just to do so.
CPR 25.12, 25.13
Outcomes
Kajima's application for summary judgment/strike-out dismissed.
Hadfield's arguments regarding the standstill agreement and concurrent duty of care were arguable, preventing summary judgment. The court needed to consider the full factual matrix and evidence.
Hadfield ordered to provide security for costs to Veolia (£2,603,743).
Hadfield, as an SPV in a precarious financial position, was unlikely to pay Veolia's costs if its claim failed. Hadfield's evidence to show security would stifle its claim was insufficient.
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