Modernisation of local authority housing — Architect engaged — Contractors employed to carry out work — Provision for notice of determination for failure to proceed regularly and diligently with work — Architect held liable in damages for failing to give notice — Notice not dependent upon failure to proceed with works in both respects — Court of Appeal upholding decision — Appeal dismissed
WFA were engaged by the council as the architect in respect of modernisation works and refurbishment to Clements Avenue Housing Estate. Those works were the subject of a contract dated September 16 1987 entered into between the council and William Moss Construction Ltd (“Moss”), as the contractors. The conditions of that contract were set out in “JCT Contract for use by Local Authorities with Quantities 1963 edition (1977 Revision), as amended by the council’s own standard amendments”. Clause 25(1)(b) of the conditions provided for a notice which the architect “… may give … if (the contractor) fails to proceed regularly and diligently with the works”. If put into effect, clause 25 required a two-stage process: first, the architect’s notice and then, entirely at the option of the employer, and provided that the contractor continued or repeated his default, the determination notice. The architect’s notice was thus a necessary precondition of determination.
From October 1987 WFA were complaining that the contractors were making extremely slow progress with their work and that position never improved. The delays and uncertainty had serious effects upon the tenants, whose lives had been disrupted. In the end, following WFA’s continuing refusal to give Moss a clause 25 notice, the council felt that they had no alternative but to procure Moss’s withdrawal from site by negotiated settlement. Agreement was reached on August 23 1988 whereunder Moss were paid £1.26m for measured work and £220,000 for leaving the site voluntarily; the council also agreed to waive their right to claim liquidated damages of £9,715 per week even though Moss were greatly in delay and had not been granted any extension of time. The council then had to employ fresh contractors to complete the work. They claimed to suffer losses totalling £1.5m and the county court held that WFA were liable in damages for breach of duty in failing to give Moss notices under clause 25(1)(b). WFA appealed.
Held The appeal was dismissed.
1. The contractors had to proceed both regularly and diligently with the works. Taken together the obligation upon the contractors was essentially to proceed continuously, industriously and efficiently with appropriate physical resources so as to progress the work steadily towards completion substantially in accordance with the contractual requirements as to time, sequence and quality of work.
2. An architect owed his client a duty of skill and care and the standard to be attained was that of the ordinary competent architect.
3. WFA had taken the view that no notice could be given to the contractors under clause 25(1)(b) unless the contractors were working neither regularly nor diligently; a mere failure in one respect being insufficient.
4. However, that construction was one which no reasonably competent architect could have arrived at. In the light of what they recognised to be an intolerable situation on site, they should have realised that the clause might fall to be construed disjunctively and should have taken legal advice upon the point.
Richard Fernyhough QC and Adrian Williamson (instructed by Alastair Thomson & Partners) appeared for WFA; Bruce Mauleverer QC and Kim Franklin (instructed by Fenwick Elliott) appeared for the council.
