When does a third party have liability for negligence?

Sainsbury's Supermarket v Condek Holdings Limited [2014] Building Law Reports Plus page 35 TCC, Stuart-Smith J

Facts

Sainsbury's paid Condek for the design and construction of a new car park at its supermarket in North Cheam. The works were defective and Condek went into liquidation.  Sainsbury's sued the proprietor of Condek, Mr Pashouros, Managing Director of Condek and inventor of its proprietary car park system, for negligence.  It also sued Condek's domestic sub-contract design consultant, NRM.

There were no relevant collateral warranties in place.

Held

1. Mr Pashouros did not owe a duty of care to Sainsbury's.  As a matter of fact there was no evidence of him assuming any special responsibility towards Sainsbury's.  Also as a director and shareholder of Condek he was protected by the "veil of incorporation".
2. Although NRM had attended meetings with Sainsbury's and their client they did so as the domestic sub-consultant.  There was no evidence to show any special acceptance of responsibility by NRM for Sainsbury's project.  Their duty was to their employer.  They had not been asked to give a collateral warranty to Sainsbury's.
3. Accordingly the claims against both were dismissed as being without foundation.

Comment

This case shows the importance of obtaining collateral warranties if a developer wants to take action against parties who did not actually enter into direct contracts with it.  It is difficult to bring a claim for the tort of negligence unless it can be shown that the alleged defendant made a special assumption of responsibility.  Also the claimant must prove that he relied upon the third party's advice or actions, and that it was reasonable of him to do so.  So if Sainsbury's had been able to show that Mr Pashouros or NRM had given them direct advice over and above their specific roles at mutual meetings, it might be theoretically possible to make out a claim – but not on these facts.

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