Background
Workman Properties and Adi Building and Refurbishment entered into a contract (based on an amended JCT D&B) for the design and construction of works to expand existing facilities at Cotteswold Dairy in Gloucestershire.
Differences arose between the parties regarding the scope of ADI's design responsibility under the Contract. Workman argued that ADI was contractually obligated to complete the design to RIBA Stage 4 and that Workman did not warrant the design’s completion to this stage.
Prior to the court proceedings, the parties engaged in two adjudications. In the first adjudication, the Adjudicator found that paragraph 1.4 of the Employer’s Requirements contained a warranty from Workman that the design had reached RIBA Stage 4. The Adjudicator also found that the fact that some of the design was not up to RIBA Stage 4 (thereby requiring additional work from ADI) gave rise to a breach and/or change under the Contract, entitling ADI to additional time, costs, and compensation for completing the design work.
The Part 8 Claim
Workman then brought a claim under Part 8, inviting the court to make grant declarations that ADI was responsible for completing the design to RIBA Stage 4, and that Workman did not grant a warranty to that effect. Essentially these were similar issues as those addressed by the Adjudicator.
ADI contended:
- the case was unsuitable for the Part 8 procedure, because it raised disputed factual issues; and
- in any event, it was inappropriate to make the declarations sought without a full Part 7 process at which all factual and legal issues could be addressed at the same time.
The question for the court's determination was which of the parties, Workman or ADI, was contractually responsible for completing the design of the works to RIBA stage 4 and/or to the equivalent BSRIA stage 4(i).
The case was brought before His Honour Judge Stephen Davies under the Part 8 procedure of the Civil Procedure Rules, which is used for claims unlikely to involve substantial disputes of fact.
Decision
HHJ Stephen Davies rejected ADI’s assertion that the alleged factual disputes rendered the matter unsuitable for the Part 8 procedure, noting that the alleged factual disputes were immaterial to the contract's interpretation. In HHJ Davies' view, the court’s focus should be on the contractual documents and the language used, rather than pre-contractual negotiations or subjective intentions, emphasising that “it is not for the claimant, still less for the court, to scrabble around in the undergrowth of the defendant’s evidence to identify any such particular facts,”
HHJ Davies observed that paragraph 1.4 of the Employer’s Requirements was “nowhere near sufficient to require the other unequivocal contract provisions to be read as so heavily qualified… I am satisfied that the defendant did have the contractual responsibility to satisfy itself that what was in the existing design was sufficient in all respects as, indeed, it appeared to accept by what it stated in its own tender. If it decided simply to accept that the consultants had done what they had said that they had done, then that was at their own risk and, in any event, was something which they were able to protect against by enforcing the novated contracts against those consultants.”
On the merits, HHJ Davies found in favour of Workman. He concluded that the relevant contract terms rendered ADI responsible for completing the design to RIBA Stage 4. The Judge held that paragraph 1.4 of the Employer's Requirements did not amount to a contractual warranty that the design had been completed to this stage. Instead, it was ADI responsibility to ensure the design was sufficient and adequate for construction.
Implications
This case highlights the importance of clear contractual terms, and is a further nail in the coffin for parties seeking to rely on pre-contractual negotiations and evidence of subjective intention as an aid to contractual interpretation. The court’s decision underscores that the express terms of a contract will take precedence over isolated statements or subjective understandings. It very much follows the line of authority set down by the Supreme Court decisions in Arnold v Britton and Wood v Capita to this effect.
Additionally, the case provides guidance on the suitability of the Part 8 procedure for resolving disputes involving contractual interpretation. The court will not hesitate to use this procedure if the alleged factual disputes are deemed irrelevant to the interpretation of the contract.
The decision in Workman Properties Ltd v Adi Building & Refurbishment Ltd serves as a reminder for parties to carefully draft and review contract terms, ensuring that responsibilities and warranties are clearly defined. It also provides a clear restatement of the longstanding position that there is no implied warranty in an employer's documents that the plans, drawings or requirements are accurate.
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