What happens if parties have created a contract as a result of an exchange of emails, but they have polar opposite views concerning the scope of works?
In a perfect world, construction contracts and professional appointments would be negotiated and concluded clearly reflecting what the parties to them have agreed for the works or services required.
But what happens if the parties have created a contract as a result of an exchange of emails, but they have polar opposite views concerning the scope of works and/or services, the identity of the entity who carries them out and even about the standard of care to be used in doing so? How might a court unravel the extent of the obligations if they are in dispute and is the parties’ conduct after the contract is concluded likely to be taken into account?
This very scenario arose recently in Williams Tarr Construction Limited v Anthony Roylance Limited and Anthony Roylance. The background to the dispute was a “rushed job” agreement to supply engineering services for a housing development on a tricky site involving sloping land, retaining walls and flowing water.
The High Court was asked to decide if a chartered civil engineer was appointed by the claimant construction company in his personal or corporate capacity and also if the appointment terms were to provide a fit for purpose solution to problems with a defective retaining wall, or if the engineer was appointed to use reasonable skill and care to design a drain to alleviate water inflow.
During the course of the hearing the judge was obliged to sift through through contemporaneous exchanges of emails as well as oral evidence from representatives of the parties, around eight years after discussions first took place. The judge viewed the oral evidence with caution because of the effects of the passage of time and the oral witnesses’ contradictory viewpoints when recalling their versions of events. Not surprisingly, the judge preferred the contemporaneous written emails as the more accurate version of what happened.
So far, so good. If there is a written agreement in some form, it is unlikely to be wrong to consider that the contemporaneous documents are likely to be more accurate than subjective recollections given in oral evidence considerably after the contested events took place.
In Williams Tarr, the judge relied on the written evidence to find that the engineer had been appointed in his personal capacity - construction professionals beware. There then remained the question of whether the engineer was engaged to design a drain, or if he was engaged to deal with the retaining wall itself. The answer to this question would settle another difficult point: whether the engineer was obliged to use reasonable skill and care, or if there was an implied warranty as to the fitness for purpose of the retaining wall.
The contractor alleged that the parties’ conduct after the appointment was concluded was relevant to determining its scope. This was roundly rejected by the judge who stated that while the parties’ early dealings prior to entering the contract could provide context and be relevant to interpreting the wording of certain documents, subsequent conduct is only helpful to assist in the assessment of evidence relating to the formation and terms of oral, not written contracts.
The judge applied the principles of a Supreme Court case from 2017 and stated that he intended to “seek to ascertain the meaning of terms agreed… by considering the natural meaning of the words used together with their context which will include the dealings leading up to and at the time of their agreement”. On that basis, he found that the engineer had only been engaged to design the drain and therefore there was no scope for implying a fit for purpose obligation.
So what does this case tell us? It is certainly an interesting read for construction professionals who might choose ambiguous letterhead because (as in Williams Tarr) they feel that it looks more professional not to make reference to a limited company. It demonstrates the necessity of agreeing upfront written terms of engagement which leave no doubt as to the scope of the works or services and the correct identities of the parties involved. No matter how urgent it is to get onto site, it really is worth taking the time to bottom out some of these issues to avoid nasty surprises down the line.