Clerical Medical Investment Group Ltd v Crest Nicholson (South West) Ltd & Ors

Contractual design obligations must be construed objectively from the language used, read with the relevant technical background, surrounding circumstances and contractual purpose. Design criteria must be read in the context of the system provisions to which they relate. A cooling system specified to achieve summer design temperatures is not thereby required to achieve winter design temperatures, particularly where the specification does not say so clearly. A tolerance around a design temperature is not an additional design temperature. A designer may take account of the specified properties of blinds when sizing cooling equipment. However, the court will not grant binding declarations about future standard practice or hypothetical legal consequences without firmly grounded legal rights.

The claimant was constructing a headquarters building at Harbourside, Bristol. It sought declarations against the developer, contractor and services engineers concerning the contractual design of the building’s heating and cooling systems.

The first issue was whether the chilled beams had to be designed to achieve a winter temperature of 22°C, as well as the specified summer temperature of 24°C. The second concerned whether the designer could take account of manually operated blinds when sizing the chilled beams, and whether the court should declare the relevant standard practice.

The court considered the Agreement for Lease, the Building Contract and associated specifications, together with technical guidance and expert evidence.

1. Contractual construction. The court applied the objective approach to construction. The meaning of the contractual words was to be ascertained from the language used by the parties, read in the light of the surrounding circumstances, the contractual purpose and the technical background available to a reasonable person with the relevant mechanical-services knowledge. The project’s sustainability objectives could assist only where competing meanings were finely balanced.
2. Chilled beams. The Category A specification and specifications T20 and T61 distinguished the heating and cooling obligations. The heating system was required to maintain the winter design temperature of 22°C (±2°C). The cooling system, including the chilled beams, was required to maintain the summer design temperature of 24°C (±2°C). No provision required the cooling system to achieve the winter design temperature. The technical control provisions did not alter that design obligation.
3. Tolerance. The reference to ±2°C concerned a fluctuation or control band. It did not permit the designer to select a dry resultant design temperature two degrees above or below the stated figure. Design temperature and control air temperature were distinct concepts.
4. Blinds. The inclusion of blinds in the Category B specification did not restrict the designer to considering them only for glare control. The designer was required to take account of the relevant properties of specified items and could, in principle, take account of the blinds’ solar-control properties when sizing the chilled beams.
5. Declarations. The court declined to make declarations concerning standard practice or the assumptions to be made about future use of blinds. Standard practice was fact-sensitive and concerned fact rather than legal right. The proposed declarations risked becoming advisory opinions or uncertain preludes to future negligence or contractual proceedings. The parties were directed to seek agreement on declarations reflecting the court’s construction conclusions. Declarations based on the proposed items 6.1(a), 6.1(c), 6.1(d) and 6.1(e) were not to be made in their proposed form; item 6.1(b) required rewording.