Midland Expressway Ltd v Carillion Construction Ltd & Ors

In a complex construction contract, a provisional sum is deducted when the corresponding work or expenditure is valued and added to the contract price. Contractual payment procedures cannot override substantive entitlement created by the contract, including entitlement to interim reimbursement of aggregate tax.

A contractor remains responsible for complying with its design and safety obligations despite review or approval by the employer or its agents. The court construed obligations concerning site boundaries, sign gantries, archaeological risk, drainage, statutory discounts and planning obligations according to the contractual allocation of risk and responsibility.

Midland Expressway Ltd and the CAMBBA construction group entered into a design and construction contract for the M6 toll road. Three consolidated actions followed unsuccessful adjudications concerning contractual payment, design, changes, statutory discounts, archaeological works, drainage, planning obligations and related matters.

The court determined the parties’ rights on the construction of the contract and associated Concession Agreement. The principal issues included the legal effect of the Belfry Statement of Intent, the operation of provisional sums, the scope of design and safety obligations, and whether various instructed or completed works constituted Employer’s Changes.

1. Outcome. The court granted declarations in favour of Midland Expressway Ltd concerning mandatory speed limits and coin baskets. CAMBBA succeeded concerning statutory discounts and, limited to gantry GEX2, re-use of gantries. Each party succeeded on one of the linked provisional-sum issues. All other claims were dismissed.
2. The Belfry Statement of Intent was binding in honour only. It was not a legally binding agreement and did not prevent either party pursuing an otherwise valid contractual claim.
3. The three provisional sums were to be deducted from the contract price when the relevant work or expenditure was valued and added. If no work was instructed or executed, the relevant provisional sum was wholly deductible. Aggregate tax, however, was payable by interim payments up to the contractual limit of £2.88 million. The later measurement procedure could not override the substantive contract.
4. The police were not a Relevant Authority for Chasewater Footbridge and had not required enclosure. Midland Expressway therefore bore the enclosure cost. Permanent highway works outside the defined Site at Dunton Island required an Employer’s Change.
5. The contract did not require gantries at the five disputed sign locations. CAMBBA nevertheless had to design safe toll-plaza approaches with 50 mph and 30 mph mandatory limits. Earlier review did not relieve that responsibility. The original coin-basket height breached the contract, so lowering the baskets was compliance work, not an Employer’s Change.
6. “Re-use” of a gantry included removing its sign and fixing a new sign, but not merely altering wording on an existing sign. Gantries G1–G5 and GEX1 were re-used; GEX2 was not.
7. Archaeological works, including consequential post-excavation work, fell within the contractual risk allocated to CAMBBA. Cesspools at continuously manned toll stations did not satisfy the contractual requirement. Statutory discounts were not shareable because the contractual conditions were unmet. The £30,000 section 106 contribution was MEL’s responsibility absent an Employer’s Change.