Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd & Anor

A formal contract should be given its ordinary meaning where that meaning is coherent in the contractual and factual context. Commercial difficulty does not justify treating clear words as a drafting error. Where a variation omits the fabrication and supply of scheduled items, but expressly retains responsibility for all design and fabrication drawings, the fabrication and supply are removed from the subcontract while the drawings remain part of the retained work. Omitted work does not become cost-reimbursable merely because it is outside a fixed-price lump sum. Temporary steelwork need not, as a matter of legal or commercial necessity, be designed, fabricated and supplied by the same party that erects the permanent steelwork.

Multiplex, the main contractor for the reconstruction of Wembley Stadium, appealed from Jackson J’s second judgment in the Technology and Construction Court. The dispute concerned the allocation of temporary roof steelwork under a Supplemental Agreement with Cleveland Bridge. The judge held that the design, drafting and fabrication of the roof temporary works fell within cost-reimbursable “erection and site works” and within the item “Temp Works – Roof Props”.

The appeal concerned only the roof works. The central questions were whether that item referred only to the toblerone sections or to all temporary roof works, and whether Clauses 3.1 and 3.2 left the fabrication and supply, as well as the design and drawings, within Cleveland Bridge’s cost-reimbursable obligations.

May LJ delivered the leading judgment. Smith LJ and Pill LJ agreed. The appeal was allowed in part.

1. Scope of “Temp Works – Roof Props”. The expression referred to all temporary works for the roof, not merely the previously fabricated toblerone sections. The category 1 schedule did not contain the roof temporary works; the substantial figure associated with the item in the category 2 schedule was inconsistent with a reference only to converting the toblerones. “Roof props” was a convenient shorthand for the roof temporary works.
2. Interaction of Clauses 3.1 and 3.2. Clause 3.1 varied the subcontract works “only” by omitting the fabrication and supply to site of the items specified in Schedule 3 Part A. Clause 3.2 expressly provided that, notwithstanding Clause 3.1, Cleveland Bridge retained responsibility for “all design and fabrication drawings”. The plain effect was that fabrication and supply of all temporary roof steelwork were omitted from the subcontract works, while the related design and fabrication drawings remained Cleveland Bridge’s responsibility.
3. Cost-reimbursable works. The omitted fabrication and supply did not fall within paragraph (c) of Schedule 1 merely because they were outside the £12 million lump sum. “Erection and site works” could not be construed so as to contradict Clauses 3.1 and 3.2. The reasoning in the lower court that the fabrication remained subcontract work payable on a cost-plus basis involved an unsupported leap.
4. Commercial context. Evidence and commercial common sense did not impose an imperative that the person erecting the roof must also design, fabricate or supply its temporary support. Separate allocation of those functions was intrinsically possible. The court applied the ordinary contractual meaning of the formal document, consistent with the approach discussed in Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896.

The fabrication and supply of all temporary roof steelwork were therefore omitted from Cleveland Bridge’s subcontract works. The design and fabrication drawings remained part of its remaining works under paragraph (b) of Schedule 1.

• Court of Appeal (Civil Division): Allowed the appeal in part, holding that fabrication and supply of the temporary roof steelwork were omitted from the subcontract, while responsibility for the related design and fabrication drawings remained with Cleveland Bridge.
• Queen’s Bench Division, Technology and Construction Court: Jackson J’s second judgment, reported at [2007] EWHC 145 (TCC), had held that the design, drafting and fabrication of the roof temporary works fell within the cost-reimbursable “erection and site works” and “Temp Works – Roof Props”.
• Earlier proceedings: The Technology and Construction Court had determined earlier issues in [2006] EWHC 1341 (TCC). Certain grounds of an earlier appeal were dismissed by the Court of Appeal in [2007] EWCA Civ 443.