Williams Tarr Construction Ltd v Anthony Roylance Ltd & Anor

In construing a written contract, the court must determine the express terms from the words used and their relevant contemporaneous context. Subsequent conduct cannot be used to interpret a written contract. A term is implied only where necessary to give business efficacy or so obvious as to go without saying. An engagement to design a drainage system does not, without more, extend to redesigning an associated retaining wall or warranting that it is fit for purpose.

The claimant construction company brought a claim concerning civil engineering services provided during works involving a defective gabion retaining wall. It alleged that the second defendant had contracted personally to redesign the wall and warrant its fitness for purpose. The defendants contended that the engagement was with the first defendant and was limited to designing a high-level drain.

The court determined the contracting party, construed the written email exchange, considered whether additional terms arose by implication, and decided whether any breach had been established.

1. Contracting party. The engagement was a personal engagement of the second defendant. The objective appearance created by the correspondence, invoices, insurance documentation and letterhead pointed to him personally. The fact that payments were processed through the first defendant did not alter that conclusion because the corporate arrangement had not been disclosed.
2. Construction of the engagement. The operative contract was formed by the second defendant’s email of 18 November 2010, containing his fee proposal, and the claimant’s acceptance of 25 November 2010. The contemporaneous context showed that the engagement concerned the design and production of working drawings for a new high-level surface-water drain behind the retaining wall.
3. Written contracts and subsequent conduct. The court applied the distinction explained in Maggs t/a BM Builders v Marsh [2006] EWCA Civ 1058, [2006] BLR 595. Subsequent conduct may assist in determining the terms of an oral contract, but it cannot be used to interpret a written contract. The written terms were to be construed using their natural meaning and the contemporaneous context, consistent with Wood v Capita [2017] UKSC 24, [2017] AC 1173.
4. Implied terms. Following Marks & Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd & another [2015] UKSC 742, [2016] AC 742, the court first construed the express agreement. A term could then be implied only if necessary to give business efficacy or so obvious as to go without saying. A term requiring redesign of the retaining wall or warranting its fitness for purpose would transform, rather than complete, the agreed engagement and was neither necessary nor obvious.
5. The second defendant therefore owed an obligation to exercise the reasonable care and skill expected of a competent civil engineer in designing the drain. The claimant alleged no breach of that obligation. The claim was dismissed. The court made brief alternative observations on quantum, but no damages were recoverable because liability was not established.