| Date | 11 April 1996 |
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| Judgment | Anthony Callaghan and Thomas Welton (trading as R W Construction) -v- Hewgate Construction Ltd, Court of Appeal 11 April 1995, 75 BLR 11 |
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| The Issue | Main contractor's duty to safeguard subcontractor's plant on site. |
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| Implication |
Main contractor under no duty to safeguard the subcontractor's plant against the actions of third parties under the standard terms of the NFBTE blue form of subcontract. |
printThe insurance and liability provisions of the JCT forms of contract and subcontract continually create difficulties. Last year the case of R W Construction -v- Hewgate Construction examined the provisions of the 1978 NFBTE form of subcontract which are in many respects identical to the DOM/1 form of subcontract in current use. Hewgate were main contractors for the construction of twenty small business units near Welwyn Garden City. They entered into subcontract with R W Construction for groundworks and foundations. The works were to be constructed on a corner site with a frontage of approximately 80 metres to both adjoining roads. At one corner of the site existing fencing had been trampled down, and there was evidence that some persons used the site and the rough ground adjacent as a short cut. The main contractor did not undertake any remedial works to the fencing. R W Construction brought plant and equipment to the site and over a bank holiday weekend vandals entered the site and meddled with the plant. They managed to start the engines and drove a dumper and diggers about the causing damage to them. One of the vehicles was overturned on the site, another was driven off and was later recovered some distance away. Damage was caused to all the construction plant and R W Construction claimed that under the terms of the subcontract Hewgate was liable to indemnify them because it had failed to safeguard the plant. They argued that it was an implied term of the subcontract that Hewgate would ensure that the site was secure from thieves and vandals and that adequate security would be present on site. At the trial of first instance the judge had found that Hewgate, through its site foreman, knew that trespassers were entering the site and that Hewgate's own generators had been stolen or tampered with. He found that it was impractical and too expensive for R W Construction to remove their plant from the site each night and that, had security guards been employed, the damage to R W Construction's plant would have been prevented. He examined clause 7(1) of the subcontract which provided that: "Without prejudice to the obligations under clause 5 of this subcontract, the plant, tools, equipment or other property belonging to or provided by the subcontractor ...... shall be at the sole risk of the subcontractor, ...... except for any loss or damage due to any negligence, omission or default of the contractor." The judge had held that the reference in clause 7(1) to negligence was not simply a reference to a general duty to take reasonable care, but was to be taken to mean a specific duty imposed on the contractor to safeguard the subcontractor's plant. This was perhaps a surprising finding since nowhere else in the subcontract could there be found a specific duty to safeguard or secure the site. Consequently, the matter was taken to the Court of Appeal where an entirely different view of clause 7(1) was found. Lord Justice Beldam considered first of all that the entire scheme of clauses dealing with insurance and risk had to be read as a whole for clause 7(1) to be fully understood. Clause 5(1) provides that the subcontract works and unfixed materials and goods of the subcontractor properly on site are at the sole responsibility of the main contractor as regards 'specified perils'. This risk of the main contractor exists whether or not the damage is caused by negligence of the subcontractor. Clause 5(2) concerns all other risk outside the specified perils and passes the responsibility over to the subcontractor for unfixed goods and materials, until such time as the materials and goods have been fully, finally and properly incorporated into the works. Thereafter the main contractor is responsible for loss or damage, except where such loss or damage is the responsibility of the subcontractor. Lord Justice Beldam did not interpret these provisions as creating or imposing on either party a specific obligation to safeguard the property referred to, but rather as defining which of them is to be responsible for loss or damage to such property should it occur. Lord Justice Peter Gibson was also very clear that there was no provision in the contract that expressly imposed any duty on the contractor to maintain the fence round the site or otherwise to ensure that the site was secure, nor any other duty of care or other relevant obligation imposed expressly by the contract. Accordingly the court allowed the appeal holding that the main contractor was under no obligation to safeguard the site and therefore could not be liable for the subcontractor's losses. Subcontractors will accordingly be wise to recognise that either the specifications should contain a clear obligation upon the main contractor to safeguard the site or, at the very least, their policies of insurance must provide cover for all loss or damage which may be occasioned by vandalism or theft from construction sites.
CJ-9613
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