A High Court damages claim, made by Lewisham Council against former civil engineering contractors, Shepherd Hill Civil Engineering Ltd, over a contract for improvements to the town centre, has failed.
The Court was told that Shepherd’s tender for the project – known as “Lewisham 2000” – was accepted by the council in February 1993.
The contract made provision for completion of the work in sections, and for the payment, by Shepherd, of damages in the event of any section not being completed by the due date. It also provided for time extensions in certain circumstances.
Disputes arose between the parties, which were referred to an arbitrator who ruled that Shepherd was potentially exposed to a liability to pay the council liquidated damages of £552,440. However, he also found that Lewisham had led the contractors to believe that damages would not be applied for, and that Shepherd had relied upon that representation. In those circumstances, he held that Shepherd was under no obligation to pay the sums claimed by the council.
Backing that ruling, Judge Richard Seymour QC dismissed the councils appeal against the arbitrators decision. He said that the arbitrator was entitled to come to the conclusion he had reached in respect of the question of the reliance placed by Shepherd upon the representations made by the council.
London Borough of Lewisham v Shepherd Hill Civil Engineering Ltd Technology and Construction Court (Judge Richard Seymour QC) 30 July 2001.
PLS News 11/9/01
