Tesco Stores Ltd. v Costain Construction Ltd & Ors

Tesco Stores Ltd. v Costain Construction Ltd & Ors

No contract was concluded between Tesco and Costain on Tesco’s standard terms or under seal; only a simple contract to commence construction existed, with no design responsibility or extended limitation period. Estoppel by convention cannot create a contract or extend limitation. Costain owed a duty of care in tort only for its own construction work, not for design by others, and not for economic loss absent a contract. PHJ’s contract was not a specialty, but clause 9.1 operated as a contractual agreement to a 12-year limitation period. Causes of action in tort accrued when Tesco first suffered economic loss, not at the time of the fire. Costain alone inspected the store in 1993; PHJ owed...

Parties
Claimant: Tesco Stores Limited; First Defendant: Costain Construction Limited; Second Defendant: Costain Limited; Third Defendant: Peter Hing and Jones (A Firm); Fourth Defendant: Vale (UK) Limited; Fifth Defendant: Whitelight Industries Limited
Jurisdiction
England and Wales
Judgment Date
02 July 2003
Procedural Posture
Judgment on Preliminary Issues (high Court, Technology and Construction Court, England and Wales) / Determination of Preliminary Issues Prior to Main Trial
Outcome
Preliminary issues determined; contract found only on limited terms; most claims against Costain and PHJ time-barred or not established; estoppel arguments rejected; PHJ’s limitation period extended by contract; further factual issues reserved for main trial.
Legal Topics
Formation of Contract, Implied Terms, Estoppel by Convention, Concurrent Liability in Contract and Tort, Limitation Periods, Duty of Care in Construction, Economic Loss, Professional Negligence, Novation, Inspection and Reporting Duties
Construction Law Contract Law Tort Law Limitation Law Formation of Contract Implied Terms Estoppel by Convention Concurrent Liability in Contract and Tort +6 more

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Parties

Tesco Stores Limited

Claimant

Costain Construction Limited

First Defendant

Costain Limited

Second Defendant

Peter Hing and Jones (A Firm)

Third Defendant

Vale (UK) Limited

Fourth Defendant

Whitelight Industries Limited

Fifth Defendant

Procedural Posture

Judgment on Preliminary Issues (high Court, Technology and Construction Court, England and Wales) / Determination of Preliminary Issues Prior to Main Trial

Legal Issues

  1. 1 Whether a binding contract existed between Tesco and Costain for the design and construction of the Redditch store and on what terms
  2. 2 Whether Costain owed Tesco a duty of care in tort in relation to the construction and inspection of the store
  3. 3 Whether Costain or PHJ owed duties of care in respect of inspections and reports in 1993/1994

Ratio Decidendi

No contract was concluded between Tesco and Costain on Tesco’s standard terms or under seal; only a simple contract to commence construction existed, with no design responsibility or extended limitation period. Estoppel by convention cannot create a contract or extend limitation. Costain owed a duty of care in tort only for its own construction work, not for design by others, and not for economic loss absent a contract. PHJ’s contract was not a specialty, but clause 9.1 operated as a contractual agreement to a 12-year limitation period. Causes of action in tort accrued when Tesco first suffered economic loss, not at the time of the fire. Costain alone inspected the store in 1993; PHJ owed...

Court Disposition

Preliminary issues determined; contract found only on limited terms; most claims against Costain and PHJ time-barred or not established; estoppel arguments rejected; PHJ’s limitation period extended by contract; further factual issues reserved for main trial.

Orders

  • Tesco and Costain made a simple contract to commence construction only; no contract on Tesco’s standard terms or under seal.
  • No estoppel by convention found; Costain not estopped from denying contract or limitation period.