It happens all the time – a contractor thinks the spec means one thing, the client another. In this case it ended in a judge’s interpretation of the word ‘or’
What do you make of these words in a specification: “Existing rendered brick walls are to be repaired or made good where disturbed”? This is just one part of a refurb job on a nice country house called Chalfont Park in Gerrards Cross, Buckinghamshire. My question is, how do these words affect the price of the bid? What investigating needs be done on the rendering? What is the extent of liability? Say you win the job and all goes well. You make good the rendering, where disturbed by you and then the customer moves in and then the rendering falls off, or rather shows sign of.
By the way, you priced those words at £56,000. The word is that the right price may well have been £1m.
Now let’s fill in some gaps. The developer at Gerrards Cross is Wilson Bowden. The contractor is Birse Construction. The occupier on a full insure and repair lease is the IT company Citrix. The promise by Wilson Bowden to Citrix was that Birse would make a good job of complying with the refurb contract under JCT With Contractor’s Design. Well, says Citrix, since the rendering has begun to fail, and since there is extensive cracking, and since the stucco, ornamentation, cornices and mouldings are breaking off and since the damp is now coming in then the building contract hasn’t been performed properly and it is up to the developer to put it right. No, no says Wilson Bowden, our main contractor has done what the contract intended by the words used. So there’s the dispute.
I bet you builders have no doubt that all Birse had to do was make good where disturbed by installation of windows, door frames and so on: the specification does say “where disturbed”.
The dispute mechanism was binding expert determination. The expert was QS Colin Little. He is experienced in the dispute-deciding business. His job this time was to decide on the intentions of the words used in the contract. Notice I said the intentions of the words. That’s not the same as the intention in the mind of the estimator when he priced the rendering. Instead it is what the words meant taking into account the context or background knowledge at the time of contracting.
Mr Little, began by focusing on the word “repair”. The spec said, “Existing walls are to be repaired or made good”. Repair, he said, means restore to a sound condition. So Birse had to detect which part of the exterior was unsound. Then the second part of the spec was to make good where disturbed. There are two duties here. Defects inherited from early occupiers were to be discovered and resolved. Have a look at the words again. The developer and presumably Birse run the words repair and make good where disturbed all together: repair where disturbed or make good where disturbed. Patch repairs come to mind I guess. Look again; can you divide “repair” from “make good where disturbed”? Hmmm.
Wilson Bowden rejected Mr Little’s expert determination. It came to court saying that his decision was a manifest error and of no effect. So let’s see what a judge makes of the meaning and intention of those words. He focused on the word “or” in the specification, which said repaired or made good. He thought that “or” is apt to describe two different things. First, “repair” and second, “making good where disturbed”. So the rendered wall might require repair of what is out of repair or it might be required to make good what is disturbed, but not both.
He then went on to put the words into context of the contract. To find out what needs repair may well require investigation. It didn’t matter that the word “investigate” didn’t appear because it is obviously implied. Nor was it enough to assume the rendering was in good repair just because a report had said so. Repair means discovering for yourself the extent of what needs repairing and pricing it. Then, of course, you’d have to make good what was disturbed. So the judge backed what the QS dispute decider thought was the meaning of the words in the spec.
What would you have priced? I bet builder folk would back Birse and Wilson Bowden. But the interpretation of a contract between a builder and an IT company might be different, and that’s what counts.
Tony Bingham is a barrister and arbitrator
Repair means discover for yourself the extent of what needs repair and price it. So the judge backed the QS dispute-decider’s interpretation