When work appears to deviate from the plans

The case of Norwest Holst Construction -v- Co-operative Wholesale Society decided in the Official Referee's court earlier this year, provides an opportunity to re-examine a number of interesting points.

One of these is the basis upon which the re-measurement of electrical and mechanical services should be carried out where the subcontract incorporates drawings which show only schematic layouts for the services.

Norwest Holst were main contractors for the construction of a library at the John Moores University in Liverpool. CWS was appointed subcontractor for the supply of labour, plant, materials and consumables for the installation of the mechanical and electrical services. The subcontract was broadly in accordance with the familiar DOM/1 form for use with the JCT main contract form.

extensive

The claims put forward by CWS were both large and extensive. These covered most aspects of the work, both as to its proper valuation and as to the time that the works should have taken to be completed. In all, a sum of nearly £900,000 was claimed, against which an arbitrator had awarded CWS approaching £300,000 excluding interest.

Norwest sought to challenge this award and applied to the court to have certain parts of the award set aside and other parts to be remitted to the arbitrator, or for the arbitrator to give further reasons. These applications were dismissed by the Judge in December 1997. There remained a series of questions of law to be tried on appeal in front of his Honour Judge Thornton QC, one of which concerned re-measurement of the works.

It was a startling feature of this dispute that neither party had appeared to realise that the work was not to be re-measured until after it had been completed. By that time, re-measurement on site was impracticable as buildings were in occupation.

Here the drafters of the subcontract form are partly to blame. DOM/1 provides a hopelessly confusing regime whereby at article 2 the parties may elect, subject to the provisions of the main contract, that the subcontract is to be lump sum or re-measured. If re-measurement is selected then clause 17 gives the detailed provisions for the measurement and valuation of the work.

The provisions of clause 17 are complex, and unfortunately the quantity surveying experts appointed by both parties had difficulty in agreeing how these provisions were to work. The informal intervention of the arbitrator in expert's meetings failed to resolve these difficulties, and thus when the matter came before the arbitrator he was presented with widely opposing views as to how the subcontract was intended to operate.

The essence of the dispute was that the full extent, location and layout of the pipework and cabling to be installed by CWS was not shown on the tender drawings. What was shown was a schematic representation of this work, consisting of straight line runs.

When work was carried out by the subcontractor, self-evidently these were replaced by runs with bends and other deviations in the layout needed to accommodate the layout of the building and its contents.

The expert acting for Norwest took the rather bizarre position that work in connection with bends and deviations and the like amounted to "uninstructed work" and should therefore be ignored in the re-measure. According to Norwest the subcontractor was responsible for coordinating the mechanical and electrical work.

interpret

It had to interpret and price the work depicted on the schematics and it should take the risk of costing the schematics accurately. This was roundly dismissed by the arbitrator as nonsense. He quoted clause 17(1) to the effect that "all work executed by the subcontractor in accordance with the subcontract documents and the directions of the contractor, including any directions requiring a variation, shall be valued."

The fact that the works were being re-measured off as-fitted drawings rather than as the works progressed, made no difference to this analysis.

The work that the subcontractor had contracted to do was not only that work depicted on the schematic drawings, but was embraced by all the subcontract documents. This included the contract drawings, the contract specification and all other contract documents or any directions requiring a variation thereto.

His Honour Judge Thornton QC agreed that the arbitrator was entirely right in this interpretation. "Thus it is only if the coordination, interpretation and pricing undertaken by CWS yielded work not required or envisaged by any and all of the contract documents that it was varied work, which subject to any direction by the main contractor, was not to be re-measured."

Furthermore, insofar as the arbitrator had determined that any particular run of conduit or duct work was within the scope of the works, although not clearly depicted on the schematics, the arbitrator had made a finding of fact. Such findings were not capable of being the subject of an appeal. Accordingly the appeal was dismissed with costs to be taxed and paid by the main contractor.