Firm pays out to settle a 拢9.9m High Court dispute over alleged failings on an abandoned tower project in Manchester
Faithful+Gould has paid out 拢3.35m to the Bank of Ireland to settle a 拢9.9m High Court dispute over the consultant鈥檚 alleged failings on an abandoned tower project in Manchester.
The Bank of Ireland sued Faithful+Gould (F+G) in 2012, claiming the firm failed in its duties as the bank鈥檚 quantity surveyor on Issa Developments鈥� 拢25.6m 24-storey Sarah Tower.
Work halted on the 24-storey tower in 2008 after contractor BS Construction fell into administration. Bashar Issa - the owner of Issa Developments and BS Construction - was declared bankrupt a year later.
The Bank of Ireland - which provided the majority of funding for the development and approved a 拢15m loan facility for Issa Developments - claimed that F+G failed to effectively appraise project risks and the capabilities and financial strength of contractors, and did not effectively monitor progress.
In its defence F+G said it gave the Bank of Ireland sufficient warning of the risks before and during the process.
Details of the 拢3.35m settlement, paid by F+G to the bank in January, emerged this month in a High Court judgment on a subsequent Part 20 claim by F+G against property agent CBRE in an attempt to recover some of its losses on the job.
Mr Justice Edwards-Stewart ruled F+G had 鈥渇ailed to prove鈥� CBRE鈥檚 actions caused any of the bank鈥檚 losses, but found that CBRE had made 鈥済ross errors鈥� in its preparation of a development appraisal for the bank for Sarah Tower.
The judge ruled CBRE over-valued the gross development value and site valuation of the Sarah Tower project by 20% and 39% respectively.
In the event of a successful F+G appeal against the Part 20 liability ruling, CBRE should pay F+G 拢1.73m to cover 55% of its settlement costs to the bank, the judge ruled.
The judge said 鈥渋t reflects the facts that F+G had a liability to the bank鈥�, but said the bank was also 鈥済uilty of a substantial degree of contributory negligence鈥�, adding 鈥淚 have no hesitation in saying that the bank acted incompetently鈥�.
He ruled F+G鈥檚 拢3.35m settlement 鈥渨as a little below its true liability鈥�, which he calculated as 拢3.6m.
Work was abandoned on Sarah Tower shortly after steel frame erection began on site. The site was subsequently bought by Property Alliance Group and a 12-storey Premier Inn has been built on it.
A spokesperson for F+G said: 鈥淲e are disappointed with the outcome of the case but do not have the legal grounds to appeal the court鈥檚 decision.
鈥淲e are pleased to see this issue reach a conclusion.鈥�
A CBRE spokesperson said: 鈥淲e have always maintained that the claim by [F+G] was misguided and are pleased that the court has also reached this conclusion.鈥�
The Bank of Ireland declined to comment.
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