Gort-Barten & Anor v M A Cherrington Ltd

In a design and build contract, the contractor’s obligation to complete the works ordinarily includes the detailed design needed to particularise and complete the contractual plans and specifications. An employer’s design responsibility will not be implied merely because the contract leaves choices such as manufacturer, colour, size or finish unparticularised.

Any implication must satisfy the requirements in BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings. It must be reasonable, necessary, obvious, capable of clear expression and consistent with the express contract. Where the contract contains approval, instruction or variation mechanisms, those provisions may define the employer’s involvement without implying a separate design obligation.

The claimants engaged the respondent contractor under a design and build contract for extensive works to a bespoke dwelling. The parties later disputed repudiation, and an arbitrator was asked as a preliminary issue whether the contract contained an implied agreement or implied terms placing responsibility on the claimants for detailed design choices and related co-operation and information.

The arbitrator implied such obligations. The claimants obtained leave to appeal under section 69 of the Arbitration Act 1996. The issue before the court was whether the contract implied any term requiring the claimants to undertake or agree elements of the detailed design.

1. Appeal allowed. There was no implied agreement and no implied term imposing a design obligation on the claimants. There was no order as to the costs of the appeal.
2. The contract was a design and build contract. Under clause 3.1, the contractor was obliged to carry out and complete the building works. That obligation included the structural and other design necessary to complete them. The identification of the contractor’s architect, structural engineer and other consultants reinforced that conclusion.
3. The same principle applied to unparticularised aspects of the plans and specifications, including choices of manufacturer, preference, design, finish, colour or component size. Such choices were part of the design process and did not become employer obligations merely because they had not been specified in detail.
4. The proposed implied term was uncertain because it contemplated the contractor offering a choice or the employer making a reasonable proposal, without clearly allocating the obligation if neither occurred. A pure agreement to agree would also be too uncertain, applying the reasoning in Okta Crude Oil Refinery AD v Mamidoil-Jetoil [2001] 2 LLR 76.
5. Applying the principles in BP Refinery (Westernport) Pty Ltd v President, Councillors and Ratepayers of the Shire of Hastings (1978) 52 ALJR 20, implication was unreasonable, unnecessary, unobvious, incapable of clear expression and inconsistent with the express design obligation. The contract already gave the claimants significant involvement through approval provisions, instructions and the power to seek amendments under clause 6.
6. The usual co-operation, prevention and information obligations did not themselves impose design obligations. Their scope depended on an underlying contractual obligation owed by the employer. The traditional-contract principle discussed in Neodox Limited v The Mayor Alderman & Burgesses of the Borough of Swinton and Pendlebury (1958) 5 BLR did not apply to this design and build allocation.
7. The agreement that each party would bear its own legal and professional costs in the arbitration was relevant to the court’s discretion concerning the appeal costs. Accordingly, each party was to bear its own costs.

1. Arbitration: The arbitrator held that terms concerning detailed design, co-operation and information were implied in the contract.
2. High Court (Technology and Construction Court): Leave to appeal was granted and the appeal was allowed. The arbitrator’s conclusions on implied design obligations were rejected.