O'Rourke Construction Ltd v Healthcare Support (Newcastle) Ltd & Ors

O'Rourke Construction Ltd v Healthcare Support (Newcastle) Ltd & Ors

The Independent Tester is to assess practical completion by reference to the Completion Criteria in Schedule 12, Part 2, and not by reference to every contractual requirement or specification. Only material departures from the specification or Trust’s Construction Requirements that adversely affect the amenity or functional use of the building should prevent certification. The existence of a dispute between the Trust and the Contractor is irrelevant to the Independent Tester’s judgment.

Parties
Claimant: Laing O’Rourke Construction Ltd (formerly Laing O’Rourke Northern Ltd); 1st Defendant: Healthcare Support (Newcastle) Ltd; 2nd Defendant: Newcastle upon Tyne Hospitals NHS Foundation Trust
Jurisdiction
England and Wales
Judgment Date
28 July 2014
Procedural Posture
Part 8 Claim (originating Summons) / Judgment on Application for Declarations
Outcome
Declaration granted in part; application otherwise refused.
Legal Topics
Practical Completion, Certification, Private Finance Initiative (pfi), Interpretation of Construction Contracts, Role of Independent Tester
Construction Law Contract Law Practical Completion Certification Private Finance Initiative (pfi) Interpretation of Construction Contracts Role of Independent Tester

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Parties

Laing O’Rourke Construction Ltd (formerly Laing O’Rourke Northern Ltd)

Claimant

Healthcare Support (Newcastle) Ltd

1st Defendant

Newcastle upon Tyne Hospitals NHS Foundation Trust

2nd Defendant

Procedural Posture

Part 8 Claim (originating Summons) / Judgment on Application for Declarations

Legal Issues

  1. 1 Whether the Independent Tester is required to certify practical completion only by reference to the Completion Criteria in Schedule 12, Part 2, or by reference to all contractual requirements including the Trust’s Construction Requirements and the entire contract.
  2. 2 Whether any breach of contract, however minor, precludes certification of practical completion.
  3. 3 Whether the existence of a dispute between the Trust and the Contractor affects the Independent Tester’s certification role.

Ratio Decidendi

The Independent Tester is to assess practical completion by reference to the Completion Criteria in Schedule 12, Part 2, and not by reference to every contractual requirement or specification. Only material departures from the specification or Trust’s Construction Requirements that adversely affect the amenity or functional use of the building should prevent certification. The existence of a dispute between the Trust and the Contractor is irrelevant to the Independent Tester’s judgment.

Court Disposition

Declaration granted in part; application otherwise refused.

Orders

  • Declaration granted that the Independent Tester should consider completion against the Completion Criteria in Schedule 12, Part 2, without influence from disputes between the Project Company and the Trust.
  • Applications for further declarations refused.