Riva Properties Ltd & Ors v Foster + Partners Ltd

Riva Properties Ltd & Ors v Foster + Partners Ltd

Fosters breached its contractual and professional duties by failing to identify and design to the claimants' budget and by negligently advising that the scheme could be value engineered to £100 million. The claimants are entitled to recover as damages the abortive professional fees and expenses incurred, measured on the expectation basis, but not loss of profits, as the inability to build the hotel was caused by the financial crisis and lack of funding, not Fosters' breaches. Losses incurred by non-contracting claimants are recoverable by the contracting party. No contributory negligence was established.

Parties
Claimant: Riva Properties Limited; Claimant: Riva Bowl LLP; Claimant: Riva Bowl Limited; Claimant: Wellstone Management Limited; Defendant: Foster + Partners Limited
Jurisdiction
England and Wales
Judgment Date
18 October 2017
Procedural Posture
Civil Professional Negligence / Judgment After Full Trial
Outcome
Claim allowed in part. Judgment for the First Claimant for expectation loss; loss of profits claim dismissed.
Legal Topics
Architects' Duties, Damages for Breach of Contract, Causation, Loss of Profits, Contributory Negligence, Third Party Loss (panatown Principle)
Professional Negligence Contract Law Architects' Duties Damages for Breach of Contract Causation Loss of Profits Contributory Negligence Third Party Loss (panatown Principle)

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Parties

Riva Properties Limited

Claimant

Riva Bowl LLP

Claimant

Riva Bowl Limited

Claimant

Wellstone Management Limited

Claimant

Foster + Partners Limited

Defendant

Procedural Posture

Civil Professional Negligence / Judgment After Full Trial

Legal Issues

  1. 1 Whether Fosters breached its contractual and professional duties to design within the communicated budget and to advise on value engineering.
  2. 2 Whether Fosters owed a duty of care in tort to non-contracting claimant companies.
  3. 3 Whether losses incurred by non-contracting claimants are recoverable by the contracting party.

Ratio Decidendi

Fosters breached its contractual and professional duties by failing to identify and design to the claimants' budget and by negligently advising that the scheme could be value engineered to £100 million. The claimants are entitled to recover as damages the abortive professional fees and expenses incurred, measured on the expectation basis, but not loss of profits, as the inability to build the hotel was caused by the financial crisis and lack of funding, not Fosters' breaches. Losses incurred by non-contracting claimants are recoverable by the contracting party. No contributory negligence was established.

Court Disposition

Claim allowed in part. Judgment for the First Claimant for expectation loss; loss of profits claim dismissed.

Orders

  • Fosters to pay the First Claimant £3,604,694.36 as damages for abortive professional fees and expenses.
  • All other claims dismissed.