黑洞社区

I have never been to Stockport; or if I have, I missed it on my way to Manchester. And if I don鈥檛 go soon, it will have disappeared by way of a 拢1bn transformation of the town centre and oodles more millions on thousands of new homes all around. It is 130 acres of development. It needs folk such as John Sisk & Son (Sisk) to cope with the odds.

Capital & Centric (Rose) Ltd (Capital) is developing 拢60m-worth at the Weir Mill district of the town with Sisk as the main contractor. Some of the buildings being converted go back to the 1700s, and Sisk spotted a snag. Mind you, so did Capital. This led to an adjudication, then the High Court. Not good for public relations.

Weir Mill is all about age-old satanic mills. Some decrepit. The idea in this part of the resurrection of Stockport is to restore the mill buildings and erect two new-build blocks to give 250 鈥渄esign-led鈥� apartments. Sisk is ideal for this sort of adventure.

The dispute, in short, is who is contractually responsible for the risks associated with the existing structures on the site, including their ability to support or facilitate the proposed works. Capital pointed at Sisk. Sisk pointed at Capital. The answer was buried in the JCT Design & Build Contract 2016, beaten to smithereens by amendments galore. Oh dear, oh dear 鈥� when will our industry learn not to tamper with standard forms? The adjudicator decided against Sisk. The High Court then decided in favour of Sisk. Sisk wins, up to now.

The answer was buried in the JCT Design & Build Contract 2016, beaten to smithereens by amendments galore. when will our industry learn not to tamper with standard forms?

Now, come with me to the estimating department, where the tender invitation and oodles of paperwork loom menacingly at the estimator. Those JCT clauses are subjected to a raft of amendments doubtless put together by canny lawyers who are instructed to shift the risk from the employer/developer onto the contractor. True, true, the result of the amendments and risk shift is to put up the bid price and, of course, the price paid by folk trying to buy a new home.

The amendments to the JCT asked the bidders to price for being contractually responsible for all risks to the existing site and condition of those ancient structures. It went on to tell the bidders that the employer gave no warranty as to the condition of the existing structures or adjoining property. It said as well that the Sisks of this world are deemed to have examined the site and surroundings and ground conditions (probably including to the River Mersey), and it went on and on. I suspect that all this was in big red writing with a big red finger pointing the adjudicator to this convincing reason to find that Sisk took the risk.

Ah, but it didn鈥檛 stop there. These amendments to the JCT form had a follow-on clause, which must have escaped the adjudicator. It said the clauses were subject to the 鈥渃larifications schedule鈥�. It included a 鈥淪isk clarification鈥�, which said: 鈥淭he employer is to insure the existing buildings/works. Employer also to obtain a warranty from Arup with regard to the suitability of the proposed works and be an employer鈥檚 risk鈥�. Somewhere in the subsequent documents Capital said, 鈥淲e will categorically not accept a blanket exclusion in existing structures.鈥�

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At best, negotiations were afoot 鈥� but there are strict rules about detailing those negotiations as evidence in front of the tribunal. Suffice it to say that the High Court judge refused admissibility. Yes, it鈥檚 complicated, isn鈥檛 it?

In the event, the judge looked for contractual documents only, then asked what they intended. The insurance feature was plainly down to Capital. As to the 鈥渙btaining of a warranty from Arup鈥�, that is less straightforward. As I see it, the wording narrowed down or carved out part of the broad wording about risks in the existing structures. The endeavours of Arup about suitability of proposed works were or remained with Capital, and saved Sisk from risk.

The judge said none of this was straightforward to understand. I dare say that if Sisk鈥檚 estimating department brought into its bid all the question marks around the ability of the existing buildings to accommodate the new building work, then the scale of the uncertainties around this would mean the estimator adding their granny鈥檚 age and more to the bid price. Or said 鈥渘o, thanks鈥� to Capital and 拢60m-worth of works.

I can鈥檛 leave this case without mentioning a narrow escape. It鈥檚 about contempt of court. The judge handed down a draft judgment to the lawyers. A draft is made only to allow the parties to make suggestions for the correction of errors; there is then an embargo on sharing the results until formal issue.

However, the outcome was informed to some of the outside consultants or agents. In other words, it became known who won! The mere fact of breach of embargo can be grounds for committal for contempt of court.

The court received a full explanation and 鈥渁 very full apology from the solicitor concerned, as well as apologies from within the party who breached the embargo鈥�. The judge took a lenient course. Phew!

Tony Bingham is a barrister and arbitrator at 3 Paper 黑洞社区s, Temple