Wiltshier faces Darlington action

The Appeal Court has paved the way for Darlington Borough Council to sue Wiltshier for œ2 million in damages over the Dolphin Leisure Centre dispute.

The late Judge Newey's earlier decision that Darlington could claim only nominal damages has been up-ended by a unanimous ruling this week.

Wiltshier is meeting legal advisers in the next few days to discuss the setback, and is already predicting that it will appeal to the House of Lords. 'Obviously we're disappointed. But we believe there are important points of law at stake, and we think it is worth fighting for,' said chief executive John Watts.

This latest phase in the legal wrangle centres around the issue of privity of contract. Because of the Council's need to circumvent restrictions on local authority spending, project financier Morgan Grenfell was named as client in the contract.

But when the alleged defects to the centre emerged, Darlington obtained a Deed of Assignment from Morgan Grenfell purporting to pass on all rights and causes of action which Morgan Grenfell might have had against Wiltshier. It was these rights under the assignment that were challenged by Wiltshier.

But the Appeal Court has said Darlington is entitled to sue Wiltshier for damages as if Darlington had been the employer under the original building contract.

Wiltshier, though it is shortly to publish accounts showing a loss, has taken provisions against the contract sometime ago.