It would seem obvious that for any contract to appoint a consultant it should be clear from its terms who the contract is between and what services are to be provided.
Surprisingly (or perhaps not), the appointment of a civil engineer considered by the Technology and Construction Court in a recent English case, Williams Tarr Construction Ltd v Anthony Roylance Ltd and Another, was ambiguous in both these respects
Background to the case
The claimant, Williams Tarr Construction (WTC), was the main contractor for a housing development on an old mill site which required the construction of retaining walls to resolve difficulties with ground levels. WTC appointed a sub-contractor, Construction Site Services (UK) Ltd (CSS), and Anthony Roylance provided civil engineering services in respect of the site.
Ground conditions encountered during construction prompted a redesign of one of the retaining walls and Mr Roylance was appointed by WTC to provide civil engineering input into the solution.
The construction of the redesigned retaining wall by CSS turned out to be defective and it required extensive piling to stabilise it. WTC won an adjudication against CSS for the cost of this remedial work but was unable to recover any funds because CSS became insolvent. WTC therefore commenced a claim against both Mr Roylance and his limited company, averring that one or other of them had been appointed to redesign the retaining wall system to address the water flow problem encountered and that the appointment included a warranty that the redesigned wall would be fit for purpose. WTC's position evolved over time to be that Mr Roylance acted at all times as an individual, not through Anthony Roylance Ltd.
Mr Roylance argued that he had contracted through his limited company, not as an individual, and that the scope of service was simply to design an additional drain to remedy the water flow, not to redesign the retaining wall itself and certainly not to warrant the fitness for purpose of a wall supplied and installed by others.
The court's decision
The decision ultimately turned on the facts of the case. The parties to the contract were determined by an objective assessment of the written exchanges and conduct of the parties. Much was made of Mr Roylance's letterhead paper, used for correspondence and invoices, which made no reference to a limited company and gave an address that was not the company's registered office. Payment was stated to be "by cheque to Anthony Roylance" and email correspondence was all from email@example.com, rather than from a company specific domain. The judge accepted that Mr Roylance believed that he was proceeding via the limited company but, at the time the appointment was entered into, there was no evidence to suggest that WTC was aware of the existence of the limited company and it was not, therefore, the contracting party.
As regards the scope of service, the judge considered the natural meaning of the words used in the written agreement, together with their context. Judge Eyre QC pieced together the various correspondence and held that the contractual scope of work was limited to designing a new drain to be installed behind the retaining wall. The scope did not extend, either expressly or impliedly, to designing or re-designing the retaining wall; nor did it include a warranty that the wall would be fit for its purpose following the drainage works.
This case is a classic illustration of the dangers of failing to properly document a consultant's appointment. It is unlikely that either party intended for the contract to be with the engineer in his personal capacity, yet that was the consequence of a proper legal interpretation of the appointment documents. Had liability been found to attach to Mr Roylance, this finding would have had a significant impact on his exposure and on the range of remedies available to WTC.
A robust formal appointment document will set out the correct designation of the parties, specify the services that the consultant is obliged to fulfil and will also identify any exclusions. The precise scope of service should be clear to both parties before the project gets underway so that there can be no misunderstanding arising as a result of ambiguous exchanges of informal correspondence.
Importantly, in this case the judge placed little weight on evidence about what a civil engineer would ordinarily be responsible for; he was interested in Mr Roylance's specific duties in relation to the retaining wall on this project. It is therefore not sufficient to rely on "usual practice" to supplement an imprecise or incomplete contractual scope of service and it is worth taking professional advice to draft a comprehensive description of the scope, bearing in mind that this may well differ on a project-to-project basis.
A well drafted appointment document will also provide a mechanism for instructing additional services in the event that circumstances arise during the currency of a project that require additional work to be instructed and paid for outwith the scope of the original engagement. If that situation occurs, the agreement for the scope and cost of the additional services merits as much care and attention as the original agreement.
WTC conceded in evidence that the civil engineer's appointment in this case was “a bit of a rushed job” because the problems with the retaining wall were holding up work on the site generally. No doubt with the benefit of hindsight, and having suffered the costs of protracted legal proceedings, WTC would have taken a different approach to documenting this appointment. Their experience in this case serves as a warning to all those involved in construction contracts that to contract in haste is to repent at leisure.
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If you require advice and assistance on the terms of your consultant appointment or other contract documents please contact our Michael Conroy.