| Date | 9 April 2008 |
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| Judgment | C J Pearce Developments Ltd -v- Oakbridge Street Mellion Building Ltd (TCC) 14 January 2002 |
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| The Issue | A Contractor’s liability for work executed by others. |
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| Implication |
Where the contract documents do not provide a clear indication of the assumption of contractual responsibility for the works of others engaged by the employer, this will point to a narrow meaning of “taken on”, confining the phrase only to work to be undertaken by the contractor, resulting in it having no responsibility for work undertaken by others. |
printDiscussion Contractors occasionally enter into contracts that require the incorporation or completion of work undertaken by other contractors as part of their contract Works. The words “taking on” or “taken on” are commonly used in connection with this state of affairs. Disputes can arise concerning the extent of the contractor’s liability for the defective and / or incomplete performance of other contractors. This matter and the meaning of the phrase “taking on” were dealt with in C J Pearce Developments Ltd -v- Oakbridge Street Mellion Building Ltd, which concerned an appeal on a question of law from the award of an arbitrator. The contract between the parties was the JCT Standard Form of Building Contract, With Contractor’s Design 1981 Edition. Under that contract Pearce was engaged by Oakbridge to undertake the design and construction of twenty detached holiday homes and associated road and infrastructure work. Certain access road work had already been completed by a previous contractor who was insolvent and whose incomplete work was taken on and completed by Pearce. Disputes arose as to Pearce’s entitlement to additional payments and as to who was responsible under the contract for defects in the access road onto the site arising out of work undertaken by the previous contractor. The outline design proposals of the site and the units were provided by Oakbridge and Pearce was required by the tender to provide all necessary designs and detailing to allow the proposals to be constructed. However, the detailed drawings and specification for the access road work was provided by Oakbridge, and these documents were expressly referred to in the Employer’s Requirements. This work was completed by Pearce. During the course of the work, Oakbridge instructed Pearce to undertake certain replacement and reinstatement work to that undertaken by the previous contractor, owing to defects within that work. During the defects liability period, further remedial work was instructed also owing to defects on the part of the previous contractor. In relation to this work, Pearce made claims for additional payment and Oakbridge made a counterclaim for the cost of it having to rectify the defective road construction. The parties’ positions The parties’ positions were as follows. Pearce submitted that the access road work taken on was such work as was needed to complete the work left incomplete by the previous contractor. Oakbridge submitted that Pearce would take on two related but discrete obligations: to accept contractual liability for the previous contractor’s workmanship and to carry out and complete the remaining works. In summary, Pearce submitted that the words taken on added nothing to the obligation to complete the unfinished work whereas Oakbridge submitted that the words added to Pearce’s obligations since they meant that Pearce was additionally taking on responsibility for the part of the work already completed by the previous contractor. The meaning of “taken on” In interpreting the meaning of “taken on” and in seeking to give effect to the rival positions, the judge had regard to the relevant contract provisions. In particular, the judge had regard to the First and Third Recitals, Article 1, clause 29 of the contract (which provides for work not forming part of the contract to be carried out by the employer or by persons engaged by it), and section 1-180 of the Employer’s Requirements which stated: “The following infrastructure works have been commenced and partially completed by the employer. The Contractor is to include for the completion of these as necessary.....Works to be completed in accordance with spec.... a) Site entrance to public highway (partially complete) b) Access road from entrance to the site of the (partially complete)...” The judge also had regard to the Employer’s Requirement for completing this part of the Works and the Contractor’s Proposal responding to it which included the following sentence “The access road being unfinished by others will be taken on and completed by ourselves during the contract period.” The judge noted that it was unclear from the wording of the relevant documents whether Pearce was taking on the whole of the access road including the parts undertaken by the previous contractor, or whether it would only be taking on that part of the access road it was constructing. In reviewing the contract, the judge noted that the conditions provide, in the First Recital, for the design and building of lodges including access drive / road and parking areas. The Third Recital provided that the Contractor’s Proposals are deemed to meet the Employer’s Requirements. Article 1 provides that the contractor will complete the design of the Works and complete their construction; such Works being described in the First Recital, the Employer’s Requirements and Contractor’s Proposal and nothing in either of the latter documents shall override or modify the application or interpretation of the Articles and Conditions. The judge concluded that none of the documents included a clear indication that the scope of the Works included the assumption of contractual responsibility for the work of another contractor directly engaged by the employer, or for any breach of contract by that other contractor arising out of the carrying out of such work. Additionally, the judge noted that this was particularly so when such other work as defined in the Employer’s Requirements was to make it subject to the provisions of clause 29. Accordingly, the judge concluded that the work in question was work carried out by a person for whom Oakbridge was responsible and that Pearce had not taken on any responsibility for the work undertaken by the previous contractor. In the circumstances “taken on” was given a narrow meaning confining it to work only to be undertaken by Pearce under the contract. From this decision it can be seen that reasonably clear express wording is required if a contractor is to take on responsibility for work undertaken by the employer or other contractors, and, in the absence of such words, a contractor is unlikely to be found liable for work undertaken by other contractors.
CJ-0814
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