MT Højgaard A/S v E.ON Climate & Renewables UK Robin Rigg East Limited and another

MT Højgaard A/S v E.ON Climate & Renewables UK Robin Rigg East Limited and another

The Supreme Court held that para 3.2.2.2(ii) of the Technical Requirements, incorporated into the contract, imposed a binding obligation on MTH to ensure the foundations were designed for a 20-year life. This obligation was not negated by compliance with J101, as the contract made clear that J101 set minimum...

Source-derived case information.

Parties
Respondent: MT Højgaard A/S; Appellants: E. ON Climate & Renewables UK Robin Rigg East Limited and another
Jurisdiction
England and Wales
Judgment Date
03 August 2017
Procedural Posture
Civil Appeal / Supreme Court Judgment
Outcome
Appeal allowed; order of first instance restored.
Legal Topics
Contractual Interpretation, Design and Build Contracts, Warranties and Fitness for Purpose, Liability for Defective Works
Construction Law Contract Law Contractual Interpretation Design and Build Contracts Warranties and Fitness for Purpose Liability for Defective Works

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Parties

MT Højgaard A/S

Respondent

E. ON Climate & Renewables UK Robin Rigg East Limited and another

Appellants

Procedural Posture

Civil Appeal / Supreme Court Judgment

Legal Issues

  1. 1 Whether the contractor (MTH) was liable for the failure of the foundation structures despite complying with the specified standard (J101) and exercising reasonable skill and care.
  2. 2 Whether para 3.2.2.2(ii) of the Technical Requirements imposed a binding obligation regarding the 20-year design life of the foundations.
  3. 3 How to reconcile potentially inconsistent contractual provisions regarding design standards and performance criteria.

Ratio Decidendi

The Supreme Court held that para 3.2.2.2(ii) of the Technical Requirements, incorporated into the contract, imposed a binding obligation on MTH to ensure the foundations were designed for a 20-year life. This obligation was not negated by compliance with J101, as the contract made clear that J101 set minimum requirements and that MTH was responsible for identifying and meeting any more rigorous requirements necessary to achieve the 20-year design life. MTH was therefore liable for breach of contract when the foundations failed within the design life period.

Court Disposition

Appeal allowed; order of first instance restored.

Orders

  • MTH held liable for breach of contract regarding the design life of the foundations.
  • E. ON entitled to recover the agreed cost of remedial works from MTH.