Practical Completion

Summary: There was no requirement that any breach of the specification however technical or minor must prevent the Phase Certificate of Practical Completion from being issued.

O'Rourke Construction Ltd v Healthcare Support (Newcastle) Ltd and others

There was no requirement that any breach of the specification however technical or minor must prevent the Phase Certificate of Practical Completion from being issued.

Background

The proceedings arose out of the construction of facilities at two hospitals in Newcastle for an NHS Foundation Trust (the "Trust"). The project was undertaken under a Private Finance Initiative scheme. O'Rourke Construction Ltd ("O") entered into an agreement dated 4 May 2005 with Healthcare Support (Newcastle) Ltd ("HSN") to design and build the facilities (the "Construction Contract"). HSN entered into an agreement with the Trust on the same day by which it agreed to design, build and finance the redevelopment of the facilities and to provide other related services (the "Project Agreement"). The works under the Construction Contract were to be carried out in nine phases. Phase 8 concerned two Clinical Office Blocks. O contended that Phase 8 was completed in mid-2012. However, the Phase Certificate of Practical Completion was not issued by the independent tester ("Independent Tester"). The Claimant sought a declaration in relation to the manner in which the Independent Tester was to act when deciding whether or not to issue a Phase Certificate of Practical Completion. The Trust asserted that any breach of contract relating to the quality or conformity of the works required the Independent Tester to withhold the completion certificate, whereas O contended that all that was required was compliance with the completion criteria ("Completion Criteria") set out in the Project Agreement and repeated in the Construction Contract in materially the same terms.

Decision

Edwards-Stuart J sitting in the Technology and Construction Court granted the declaration sought by O in part. He held that if the Independent Tester reasonably considered that a departure from the specification had not had and would not have any material adverse...