John Sisk and Son Limited v Capital & Centric (Rose) Limited

In construing a construction contract, bespoke risk-allocation provisions must be read with the contract as a whole and according to their ordinary and natural meaning. A broad risk allocation may be qualified by a specific clarification without being deprived of all effect.

Pre-contractual negotiations are generally inadmissible to establish the meaning of a concluded written agreement. They may be admitted for recognised purposes, such as identifying an objective background fact or the general object of the transaction, but not to prove an agreed meaning or to show that a prior agreement was not later changed.

On the wording used, an entry stating “Employer Risk” allocated the contractual risk concerning the suitability of existing structures, including their ability to support or facilitate the works, to the employer.

The claimant contractor sought declarations concerning the construction of clause 2.42 of a JCT Design and Build Contract 2016, as amended, and item 2 of the Contract Clarifications. The dispute concerned responsibility for risks associated with existing structures at a redevelopment site.

Clauses 2.42.1 to 2.42.3 placed extensive risks concerning the site and existing structures on the contractor. Clause 2.42.4 made those provisions subject to item 2 of the Clarifications. The defendant relied on a separate tender submission clarifications worksheet and on the parties’ pre-contractual negotiations.

The central issues were whether the tender submission clarifications formed part of the relevant contractual clarification, whether negotiations were admissible, and whether “Employer Risk” transferred the existing structures suitability risk to the defendant.

1. Construction of the Clarifications. The contractual definition of “Clarifications”, read with clause 2.42.4, referred to the worksheet headed “Contract Clarifications”, rather than the whole electronic workbook. Item 2 could sensibly refer only to item 2 of that worksheet.
2. Admissibility of negotiations. The general rule excludes evidence of pre-contractual negotiations when construing a concluded written agreement. Such evidence may establish a fact known to both parties or elucidate the general object of the contract, but it cannot be used to prove an agreed meaning, to show that a prior agreed position remained unchanged, or to establish that a later contractual document had a different agreed meaning. The negotiations did not fall within an established exception. The documents expressly referred to in the tender submission clarifications were admissible as part of the factual matrix, but the wider correspondence was not used for contractual construction.
3. Risk allocation. Clauses 2.42.1 to 2.42.3 imposed a comprehensive allocation of site and existing-structure risks on Sisk. Clause 2.42.4 created a limited carve-out. In context, “Employer Risk” meant that C&C was the contractual risk owner for the suitability of the existing structures, including their ability to support and facilitate the proposed works. The insurance wording primarily allocated responsibility to obtain insurance, while the Arup wording was a shorthand reference to C&C obtaining an express suitability warranty. Neither displaced the ordinary meaning of the concluding risk allocation.
4. The tender submission clarifications were relevant as a contract document but carried less weight than the specific Contract Clarifications. They showed an earlier position concerning insurance and a reluctance to accept a blanket existing-structures risk, but did not establish that the parties had agreed never to revisit the issue.
5. The court held that Sisk succeeded on the construction issue. The proposed declarations were broadly suitable, with their precise terms and consequential matters to be addressed after further submissions.
6. In the postscript, the court accepted an apology for breach of the draft judgment confidentiality embargo and took no further action. The warning concerning possible contempt proceedings in R. (on the application of Counsel General for Wales) v Secretary of State for Business, Energy and Industrial Strategy [2022] EWCA Civ 181 was noted.

The judgment describes an earlier adjudication concerning the same contractual issue, which was temporarily binding pending final determination by the court. This High Court judgment made its own determination and did not treat the adjudicator’s decision as controlling.