If language is not correct, then what is said is not what is meant; If what is said is not what is meant, then what ought to be done remains undone.” Confucius.
Charles Edwards, high performing Construction Barrister reviews the Technology and Construction Court case of John Sisk and Son Ltd v Capital & Centric (Rose) Ltd [2025] EWHC 594 (TCC). The dispute between the parties involved amongst other things, Part 8 proceedings, the interpretation of the risk allocation provisions in construction contract based on a heavily amended JCT Design and Build Contract 2016 with bespoke provisions where the electronic version of the contract differed to the paper version.
Key issues to be considered by the Technology and Construction Court in this dispute was the interpretation of the contract between the Claimant and the Defendant due to the fact that the electronic version of the contract between the parties had two clarifications documents, one being a worksheet headed “contract clarifications” and the other being a worksheet headed “tender submission clarifications”. The paper version of the contract had only one clarification document, which is a printed and initialled copy of the “contract clarifications” worksheet. The relevance of this to the dispute was whether or not the tender submission clarifications falls within the contract definition of the Clarifications. The Contractor submits that it is only the former document which contains the “contract clarifications”, whereas the Employer submits that it is both documents which do so.
The Claimant, John Sisk and Son Ltd (the “Contractor”), entered into a construction contract based on a heavily amended JCT Design and Build Contract 2016, with bespoke provisions with the Defendant, Capital & Centric (Rose) Ltd (the “Employer”), for the design and construction of residential and refurbishment works at Weir Mill, Stockport. The dispute between the Contractor and the Employer concerned who was contractually responsible for the risks associated with the existing structures on the site, including their ability to support and/or facilitate the proposed works. The relevant provisions to be construed by the Technology and Construction Court (TCC) included the interpretation of clause 2.42 and related contract clarifications: specifically, which party bore the contractual risk for the suitability of existing structures on the site.
The Contractor sought declaratory relief through Part 8 proceedings after losing a prior adjudication on the same issue. The Contractor had been the unsuccessful party in a referral to an adjudicator, who had found in the Employer’s favour on the same point. The declaration made by the adjudicator was that:
Adjudication Decision (paragraphs 6 of the judgment)
“On a proper interpretation of the Contract and in particular clause 2.42 of the Contract and items 1 and 2 of the Contracts Clarifications schedule, the responsibility for ground conditions including the identification of the basements, structures, voids, compressed structural elements and obstructions under the existing West Mill was solely Sisk’s risk”
The adjudicator’s decision is binding on a temporary basis until the matter is finally determined in court. The Contractor now seeks the Technology and Construction Court’s view on correct interpretation of the contract to finally determine the dispute.
Technology and Construction Court Judgment (summary)
The TCC decided the opposite of what the adjudicator’s decided and held that:
“… on a proper interpretation of the design and build contract and, in particular clause 2.42 and item two of the contract clarifications, the risk of the unsuitability of the existing structures (as defined in the contract), including their ability to support and/or facilitate the proposed works, lies solely with C&C” [the Employer].
Key provisions for consideration by the Court included
Clause 2.42.1 of the Contract provided that:
“The Employer gives no warranty or representation as to the condition of the Site, any existing buildings or structures on the Siteor any adjoining property or any services in or under the Site or as to the accuracy, reliability or sufficiency of any soils or survey data, asbestos reports, condition surveys or other data contained in any document made available to the Contractor by the Employer or as to any recommendations or conclusions made or reached in any such document.” [Emphasis added]
Clause 2.42.2 of the Contract provided that:
“The Contractor shall be deemed to have inspected and examined the Site and its surroundings and to have satisfied himself before the date of the Contract as to the nature of the ground, the sub-surface conditions and sub-soil (any information in connection therewith which may have been provided by or on behalf of the Employer being provided by way of information only without any warranty or representation as to its accuracy, reliability or completeness) the form and nature of the Site, existing buildings, services, utilities or structures on, in and under the Site, the extent, nature and difficulty of the work and materials necessary for the completion of the Works, the means of communication with and the restrictions of access to the Site, the accommodation he may require, and in general to have obtained for himself all necessary information as to risks, contingencies and all other circumstances influencing or affecting the Works or the occupation and intended use of the Site. The Contractor shall not be entitled to any extension of time or to any additional payment on the grounds of any misunderstanding or any such matter nor shall the Contractor be released from any of the risks accepted or obligations undertaken by him under this Contract on the ground that he did not or could not have foreseen any matter which might affect or have affected the carrying out and completion of the Works.” [Emphasis added]
Clause 2.42.3 of the Contract provided that:
“The Contractor has had the opportunity of inspecting the physical conditions and other conditions of the Site and structures upon it and acknowledges that it shall be solely responsible for ensuring that the ground, the Site and any existing structures to be retained under or upon or adjacent to the Site are (or will upon completion of the Works) be suitable for the development and intended occupation and use of the Site to which the Works relate and the Contractor shall be responsible for dealing with any other matters required to be dealt with in order to complete the Works. Nothing referred to in this clause 2.42.3 shall give rise to an increase in or addition to the Contract Sum, nor to an extension of time, nor give rise to any right on the part of the Contractor to determine its employment on the grounds of any misunderstanding or any such matter nor shall the Contractor be released from any of the risks accepted or obligations undertaken by him under the Contract on the ground that he did not or could not have foreseen any matter which might affect or have affected the execution of the Works.” [Emphasis added]
Clause 2.42.4 of the Contract provided that:
“This clause 2.42 shall be subject to item 2 of the Clarifications”. [Emphasis added]
Clarifications included:
Item 2, the Contractor’s Clarification stated: “Existing Structures Risk including ability to support / facilitate proposed works”
Item 2, the Employer’s comments stated:
“The Employer is to insure the Existing buildings/ works. Employer also to obtain warranty from Arup with regard to the suitability of the proposed works. Employer Risk”
The electronic version of the contract between the parties had two clarifications documents, one being a worksheet headed “contract clarifications” and the other being a worksheet headed “tender submission clarifications”. The paper version of the contract had only one clarification document, which is a printed and initialled copy of the “contract clarifications” worksheet. The relevance of this to the dispute was to whether or not the tender submission clarifications falls within the contract definition of the Clarifications. The Contractor submits that it is only the former document which contains the “contract clarifications”, whereas the Employer submits that it is both documents which do so.
The Contractor argued amongst other things that the “contract clarifications” document governed risk allocation between the parties and the existing structures risk was an “Employer Risk”. This meant that that the Employer bore the risk if the existing structures proved unsuitable. Further, the electronic “tender submission clarifications” were not contractually binding and merely reflected earlier stages of negotiation.
The Employer argued amongst other things that, firstly the tender submission clarifications were part of the contract documents, secondly the entries showed that the Contractor’s attempts to shift the existing structures risk had been expressly rejected by the Employer, thirdly there was no agreement that changed this position and fourthly this is consistent with the terms of clause 2.42 of the contact as amended.
In light of the above, the TCC had to determine how clause 2.42 should be constructed with the clarifications in the contract, the admissibility of pre-contractual negotiations and whether pre-contractual discussions could be considered in interpreting the final agreement and the status of the tender submission clarifications and whether it formed part of the contract and whether it should influence the court’s interpretation of the contract. In reaching a view, the TCC considered the principles of contract interpretation, including reference to The Interpretation of Contracts by Sir Kim Lewison (8th edition) (Lewison), section 9 and made it clear that it is important, that in this case any admissible evidence is directed either to a particular known fact or to the general object of the contract:
“Evidence of pre-contractual negotiations is not generally admissible to interpret the concluded written agreement. But evidence of pre-contractual negotiations is admissible to establish that a fact was known to both parties; … to determine which party put forward a particular term7; and to elucidate the general object of the contract. Evidence that parties negotiated on the basis of an agreed meaning is only admissible in support of a claim of estoppel or rectification.”
The TCC stated, there was no proper basis in this case for the court to have regard to the pre-contractual negotiations as admissible. That would be to depart from the clear guidance in the textbooks and the authorities referred to the court. The TCC further stated at paragraph 69 that:
“…
- What C&C [the Employer] cannot do, in my judgment, is to seek to buttress that argument by referring, additionally, to the pre-contractual negotiations to show that: (i) the parties had agreed that the agreement recorded in the tender submission clarifications meant what C&C says it was intended to mean; (ii) there was no explicit change of position thereafter under which the parties expressly agreed a change to this agreed intended meaning; and, thus, that (iii) the agreement recorded in the contract clarifications should also be construed as meaning what the agreement recorded in the tender submission clarifications was agreed as being intended to mean. Such an argument plainly offends against the restriction of admission of pre-contractual negotiations.”
Conclusion
- In conclusion, the court granted the declaratory relief sought by the Contractor, confirming that the Employer bore the risk for the suitability of existing structures.
- This case reinforces the primacy of express contract terms and limiting the role of extrinsic evidence in the interpretation of contracts. Even when tender documents or pre-contract negotiations suggest otherwise, the executed and incorporated contract terms govern risk allocation and it is important for the parties to a construction contract to be clear what terms are incorporated or not incorporated into their contract. In this instance, despite the prior adjudication finding in favour of the Employer, the Court found in favour of the Contractor.
- Special care should be taken by those drafting and compiling construction contracts to ensure consistency between electronic versions and the paper versions to prevent inconsistencies and arguments as to what terms are incorporated or not into a construction contract.
- This case also shows how organisations in the construction industry need to be very careful in the drafting and compilation of contract documents and how this can affect the allocation of risk between the parties compared to what was perceived by each party in respect of risk when the construction contract was executed.
The above is for general information only and to encourage discussion and does not constitute legal advice. The author does not assume any responsibility for the accuracy of any statements made and appropriate legal advice should be taken in each instance and relied upon before taking or omitting to take any action in respect of any specific matter.
Charles Edwin Edwards MSt(Cantab) MSc(Lond) MCIArb MRICS FCInstCES Barrister
New Temple Chambers
30 St Mary Axe
London EC3A 8BF
Tel: +44(0)203 289 8000
7th April 2025
For further information with regard to the resolution of any construction, engineering or infrastructure dispute and issues as set out above, please do not hesitate to contact, Charles Edwards, high performing Construction Barrister and Head of Chambers at New Temple Chambers on:
charles.edwards@newtemplechambers.com to see how chambers can assist you or your organisation.
