Standard form building contract – Contractor required to resite clocking-in and tea-break cabins – Increased walking time resulting in increased cost to contractor – Whether requirement to relocate cabins a variation under contract giving rise to claim – Whether contract excluding claim for damages for breach
The plaintiffs were contractors carrying out work for the defendants at Little Barford, St. Neots, Cambridgeshire, in connection with the construction of a combined cycle gas turbine power station in respect of which National Power was the employer. The defendants employed the plaintiffs in respect of the erection services and commissioning support in respect of heat recovery system generators (HRSGs). During the course of the works a “walking time” claim arose from an instruction from the defendants that the plaintiff’s tea-break and clocking-in cabins should be removed from their situation close to the HRSGs and be repositioned half a mile away. The effect of this instruction was to cause the plaintiffs to incur additional cost in excess of £1.6m by having to pay their labour for the unproductive time spent walking back and forth six times per day. It was common ground that the plaintiff was entitled under the contract to have its cabins at the work place. The contract was in the standard Model Form of General Conditions of Contract MF/1 (recommended by the Institutes of Mechanical Engineers and Electrical Engineers and the Association of Consulting Engineers) clause 4.1, which provided that the conditions as amended by special conditions were to prevail over any other documents. A particular order of precedence was agreed. The plaintiffs presented a claim to arbitration and appealed under the provisions of the Arbitration Act 1979 from the arbitrator’s award to an Official Referee in respect of two points of law, namely (1) was the instruction given to the plaintiff to remove its cabins from next to the work face a variation within clause 27 (of the contract); and (2) did clause 44 (of the contract) exclude claims for damages based, inter alia, upon breaches of contract. The Official Referee found that the instruction to remove the cabins was a variation within clause 27, and therefore the plaintiff was entitled to claim damages, and that clause 44 did not barr such a claim. The defendants appealed to the Court of Appeal.
Held The appeal was allowed.
1. The judge had erred in confusing the construction contract and the contract of employment between the plaintiff as employer and his employees for the execution of the works. The increased walking time did not alter the work which was to be done and, accordingly, the instructions to remove the cabins was not any alteration of the works which constituted a variation under clause 27.
2. However clause 44.4 declared that neither party was liable to the other for a claim arising in connection with the contract. There was no reason for the court to interfere in circumstances where, having agreed an order in which the documents were to prevail, the parties had agreed to bar all other remedies and the conditions conferred upon the plaintiff a number of specific remedies: see Ashville Investments Ltd v Elmer Contractors Ltd [1988] 2 All ER 577.
Patrick Twigg QC and Darryl Royce (instructed by Pinsent Curtis, of Birmingham) appeared for the appellants;
Stephen Furst QC and Martin Bowdery (instructed by Hammond Suddards, of Leeds) appeared for the respondent.
