BUSINESS AND PROPERTY COURTS
OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Strand, London, WC2A 2LL
B e f o r e :
| (1) COLAS LIMITED
(2) VOLKERHIGHWAYS LIMITED
(3) AECOM INFRASTRUCTURE & ENVIRONMENT UK LIMITED
(formerly URS Infrastructure & Environment UK Limited)
(together acting as an unincorporated joint venture "CVU")
- and -
|TRANSPORT FOR LONDON
Adrian Williamson QC (instructed by by Eversheds Sutherland (International) LLP) for the Defendant
Hearing dates: 5th & 6th December 2017
Crown Copyright ©
Mrs Justice O'Farrell :
i) On a proper interpretation of the Call Off Contract, restrictions to the working window periods set out in clause 138AR of Volume 2 of the Service Information arising from the operation of LoPS are not included or deemed to be included for by CVU in the rates entered by CVU in the Schedule of Rates and in CVU's tendered Uplifts in the Schedule of Percentage Adjustments.
ii) In the event that TfL issues a Task Request that is subject to time restrictions in excess of the restrictions provided for in the Service Information (Common) then CVU is not bound to submit prices with its Task Response in accordance with the Schedule of Rates and may submit prices on the basis that no item, rates or lump sums in the price list corresponds to the work or services for the proposed task.
iii) Insofar as the foregoing matters were decided by the Adjudicator contrary to the foregoing then the parties are no longer bound by the Adjudicator's decision of 26 September 2014.
The agreed facts
i) CVU raises a permit application for consideration by TfL, as Permit Authority. The application includes CVU's proposed permit conditions (based on either discussions with TfL and other stakeholders as to what will be granted and/or, in an effort to mitigate delays in the process, based on what has traditionally been granted by TfL), including intended days of work and start and finish times.
ii) TfL, as the Permit Authority, then assesses the permit application. As Permit Authority, TfL carries out an impact assessment to consider the effect of the works on traffic flow and will ensure effective coordination with other activities. TfL, as Permit Authority, then grants the permit, requests CVU to make a modification to the permit application or refuses the permit application.
iii) The responses that TfL acting as Permit Authority may issue to any permit application under LoPS are limited to a number of specific codes and reasons. CVU has an opportunity to challenge if a permit is refused or if TfL requires modifications to a Permit Application. As Permit Authority, TfL may reject the challenge (and insist on the modification) or accept the challenge. This is usually resolved by escalating to senior management of the works promoter to agree a way forward to balance delivery of the works with compliance with LoPS.
i) Several months in advance of the works commencing, CVU submits a Traffic Management Act Notification ("TMAN") to TfL as Permit Authority in respect of the works for approval in accordance with LoPS. As part of the TMAN process, CVU must consult with various stakeholders including TfL – the restrictions that are likely to be placed on CVU are included within this TMAN. At the end of this process provisional dates and times for the works are agreed.
ii) Three months in advance of the works commencing, in line with the previously submitted TMAN, CVU submits a provisional advanced authorisation ("PAA") to TfL as Permit Authority for approval in accordance with LoPS. If successful, this effectively reserves the road space for the works.
i) For scheme works, several months in advance of the works commencing, TfL's LCMT issues a 'P' Task Order to cover preliminary tasks such as trial holes, exploratory works, feasibility studies or preliminary designs.
ii) If, following completion of any preliminary tasks, TfL wishes to proceed to detailed design stage, TfL's LCMT issues a 'D' Task Order instructing CVU to carry out detailed design.
iii) At this point, CVU liaises with TfL, as Permitting Authority, to seek permission to access the network for the build works.
iv) CVU draws up a design, traffic management plans and phasing diagrams which will inform the permit application process. A stakeholder meeting (or several meetings) may be arranged and attended by all relevant stakeholders to consider CVU's proposals.
v) CVU submits to TfL's LCMT a Task Response including a task price.
vi) TfL's LCMT issues a 'B' (Build) Task Order, based on the agreed task price, requiring CVU to carry out the site works.
The Framework Agreement
"2.1.1 provide a mechanism whereby an Employer and the Contractor may enter into a Call-Off Contract;
2.1.2 provide the framework to administer each Call-Off Contract; and
2.1.3 allow for common monitoring of Call-Off Contracts."
i) TfL identifies the services it wishes to let under the terms of the Framework Agreement and issues a Call Off Request Form to CVU.
ii) CVU provides a Call Off Response, including a Price List that must be submitted in accordance with clause 6.5 of the Framework Agreement. The Price List is agreed to be the Schedule of Rates (adjusted for inflation).
iii) Clause 6.5 of the Framework Agreement allows CVU to submit rates and prices that are lower than the contractual Schedule of Rates but does not allow CVU to submit rates that are higher than the Schedule of Rates.
iv) Where a Call Off Request Form requires CVU to submit a rate or lump sum price for work, services or any other activity for which there is no rate in the Schedule of Rates, the relevant rate or lump sum prices are calculated by reference to rates in the Schedule of Rates for work, services or activities of a similar character and executed under similar conditions.
v) Where a Call Off Request Form requires CVU to submit a rate or lump sum price for work, services or any other activity for which there is no rate in the Schedule of Rates, and there are no rates in the Schedule of Rates for work, services or activities of a similar character and executed under similar conditions, the relevant rates or lump sum prices are calculated by reference to the Shorter Schedule of Cost Components plus the Fee.
"the schedule of rates and other prices tendered by the Contractor and set out at Schedule 1."
"this Framework Agreement and all documents referred to in this Framework Agreement, contain all of the terms which the Framework Parties have agreed relating to the subject matter of this Framework Agreement and such documents supersede and extinguish any prior drafts, agreements, undertakings, representations, warranties and arrangements of any nature whatsoever, whether or not in writing."
The Call Off Contract
"The Contractor provides the Service in accordance with the Service Information, each instructed Task Order and Statutory Requirements, and the Contractor ensures that the Service satisfies any requirement in the Service Information, (where relevant) each instructed Task Order and this Contract."
- "the Prices are built up from the rates and lump sums in the Price List in accordance with the Schedule of Rates Supplementary Information
- the Contractor may use rates and lump sums that are less than those in the Price List but does not use any rates and lump sums which exceed those in the Price List
- where there is no item in the Price List that corresponds to an item of work or services for the proposed Task, the relevant prices are calculated by reference to the rates and lump sums in the Price List for works or services of a similar character and executed under similar conditions
- where there is no item in the Price List that corresponds to an item of work or services for a proposed Task and there are no rates or lump sums in the Price List for works or services of a similar character and executed under similar conditions, the relevant prices are calculated by reference to the Shorter Schedule of Cost Components …"
"Site Extent and Limitations on Use
1. Existing traffic and pedestrian flows are to be maintained at all times except where allowed for in the contact or agreed with the Employer. The Contractor shall comply with the noticing and permitting requirements as set out in Clause 155AR.
2. Normal permissible working hours are set out in Clause 138AR, however these do not remove the obligations on the Contractor to comply with the noticing and permitting requirements as set out in Clause 155AR. The granting of a permit is deemed to take precedence over the normal permissible working hours."
2. The Employer shall have the right to instruct the Contractor to cease using any items of plant insufficiently silenced or generating noise levels in excess of those specified. In such circumstances, the Contractor shall change the method of performing the works at his own cost and shall have no claim against the Employer in this matter.
7. Whenever possible, quieter techniques or machinery shall be used…
10. Acoustic screens or barriers shall be used to shield noisy operations wherever possible …
11. Good relations with people living and working in the vicinity of the works are important. No breakers shall be used between 2230 hrs and 0800 hrs…
12. Where the works are located in noise sensitive areas, such as close to residential properties, hospitals, schools or offices, then the Contractor shall supply the following information to the Employer…
Where it is not possible for the works to be complete by midnight, the Contractor shall provide acoustic screens or barriers …
14. The installation of sheet piling with a diesel or air driven impact or drop hammer in noise sensitive areas shall be avoided …"
"The Contractor shall be responsible for obtaining all permits, consents, licences, agreements, wayleaves and the like necessary for the efficient and effective undertaking of the works…"
"1. Normal working hours shall be Monday to Saturday between 0800 hrs and 1800 hrs, with no working on Sunday or Public Holidays.
2. The Contractor shall not work outside these normal working hours except in an emergency, when directed by the Employer, or with the written permission of the Employer...
3. On Strategic Routes and other traffic sensitive roads, any works which require any reduction in carriageway width will not be allowed between 0630 hrs and 1000 hrs and between 1600 hrs and 1930 hrs Monday to Saturday, unless otherwise stated in the Employer's Service Information.
4. Unless otherwise agreed or instructed by the Employer, no traffic management measures shall be allowed on the carriageway of a Strategic Route or other traffic sensitive road, or on a Prestige Walking Zone from 12 noon on the Friday prior to a Bank Holiday to 12 noon on the Tuesday following.
5. Further restrictions to working times for particular streets or activities might be imposed by the Police, local Environmental Health Departments, or the Employer through the issuing of permits."
"1. The Contractor shall comply with the following:
Traffic Management Act 2004 …
The Transport for London Lane Rental Scheme.
2. In addition to and notwithstanding the above, when undertaking works or services within an area in which the highway authority operates a permit scheme, the Contractor shall comply with the requirements of the London Permit Scheme for Road Works and Street Works …
4. The responsibility for raising and issuing … Permit Applications … rests with the Contractor in accordance with the London Permit Scheme, Traffic Management Act 2004 and the New Roads and Street Works Act 1991 …
5. The Contractor shall adhere to all notice/permit requirements and conditions.
6. The responsibility for sending all Traffic Management Plans, Works Activity Footprints, TMAN Notifications, and EToN Notifications … to the relevant highway authority rests with the Contractor."
"the Price List is the Framework Agreement Schedule of Rates (Volume 4) and the TfL Specific Rates and Lump Sum prices (attached)."
"a) The Schedule of Rates – each individual item shall have a rate entered against it, expressed to 2 decimal places. These rates shall relate to the following conditions:
i) Task Orders carried out during Normal Working Hours (Clause 138AR);"
ii) Task Orders not affecting the carriageway of a Strategic Route or other traffic sensitive street;
iii) Task Orders not affecting a Prestige Walking Zone or a Primary Walking Zone;"
iv) Task Orders not affecting the carriageway of a road with a speed limit of 40 mph or more;
v) Employer not requiring a physical response at the worksite within 28 days;
vi) for Scheme Task Orders whose value does not exceed £50,000; and
vii) for Scheme Task Orders, programs or packages of work where programme dates have been agreed and Purchase Orders have been issued after 31 March for works to take place during that financial year
viii) Task Orders in a non-TfL Lane Rental Area.
For all conditions other than the above, the Contractor's tendered percentage adjustments shall be applied to the Schedule of Rates."
b) The Employer specific rates and lump sum prices – the Contractor provides an annual lump sum price to match those activities selected by the Employer…
Contractors are required to provide a breakdown of each of their lump sum prices into the constituent items as set out in the pricing document."
"The sub-headings and item descriptors in the Schedule of Rates identify the work covered by the respective items and should be read in conjunction with the matters listed against the relevant headings in "Item Coverage" in this document."
"The Employer specific rates and lump sum prices and the rates entered in the Schedule of Rates shall be deemed to be the full inclusive value of the work including the following, unless expressly stated otherwise:
"i) Labour, supervision and all associated costs in connection therewith."
ii) The supply of materials, goods, storage and costs in connection therewith …
iii) Procurement, hire, delivery, storage…
iv) Fixing, erecting and installing or placing of materials and goods in position.
v) Temporary works…
vi) The effect on the phasing of the works or any element of the works to the extent set forth or reasonably implied in the documents on which the tender is based.
vii) Statutory and general obligations…
viii) Establishment charges, overheads and profits.
xvi) Awaiting approvals and consents.
xviii) All series 100 preliminary items except those specified in clauses 101, 106, 108, 117, 120, 125, 165, 169, 172, and 180, for which item rates are listed in the Series 100 Schedule of Rates.
xx) Compliance with the Traffic Management Act 2004 and any associated permits, consents, etc and the payment of all associated charges, fees, rates and penalties.
xxi) Compliance with the special requirements of statutory bodies and other third-party organisations and obtaining and payment for any necessary permits, consents, licences, agreements, way leaves, easements, etc …
xxvi) Normal Working Hours, being Monday to Saturday 0800 hrs to 1800 hrs (Clause 138 AR). However, the Contractor may specify percentage uplifts (pricing document 1) to be applied to Task Order Schedule of Rates items instructed to be carried out on a Sunday or Bank Holiday, and another percentage uplift to be applied for tasks instructed to be carried out between 1800 hrs and 0800 hrs. Other restrictions on working will apply on certain routes (clause 138 AR) and, for environmental and traffic related reasons, certain activities will not be permitted during some Normal Working Hours which shall be deemed to be included for, within the rates.
xlii) Complying with any limitations and constraints on the use of a work location. However, the Contractor may specify percentage up lifts (Pricing Document 1) to be applied to Task Order Schedule of Rate items affecting the carriageway of a Strategic Route or other traffic sensitive Street, or affecting a Prestige or Primary Walking Zone, in recognition of the restrictions likely to be imposed by the Employer.
xlviii) All Contractor-owned risks.
xlix) Any item that is not a Compensation Event."
"Any information, details or prices not completed by the Contractor in either the Schedule of Rates or Employer specific rates and lump sum prices at the time of tender shall be deemed to be included in those prices which are provided by him."
i) "For Task Orders affecting the carriageway of any road with a speed limit of 40mph
ii) For Task Orders affecting the carriageway of any road with a speed limit greater than 40mph
iii) For Task Orders affecting the carriageway of a Strategic Route
iv) For Task Orders affecting the carriageway of any other traffic-sensitive street
v) For Task Orders affecting a Prestige Walking Zone or Prestige Cycle Route located on the footway
vi) For Task Orders affecting a Primary Walking Zone or Primary / Secondary Cycle Route located on the footway
vii) For Task Orders instructed by the Employer to be carried out between the hours of 1800 and 0800
viii) For Task Orders instructed by the Employer to be carried out on a Sunday or Bank Holiday
ix) For Task Orders requiring a response on Site within 7 calendar days or less
x) For Task Orders requiring a response on Site within 28 calendar days or less
xi) For Scheme Task Orders whose value exceeds £50,000 …"
"For the purpose of items 1 to 6 above, "affecting" shall mean:
- For items 1 and 2, "affecting" shall mean a physical narrowing of the carriageway for either operational or safety reasons and the deployment of traffic management measures in accordance with Clause 117SR of the Service Information (Common),
- For items 3 to 6, "affecting" shall mean any works or services, the timing of whose implementation within Normal Working Hours has been restricted by the Employer beyond those restrictions set out in Specification Clause 138AR.3 of the Service Information (Common)."
Impact of the permit conditions
"10. The court's task is to ascertain the objective meaning of the language which the parties have chosen to express their agreement. It has long been accepted that this is not a literalist exercise focused solely on a parsing of the wording of the particular clause but that the court must consider the contract as a whole and, depending on the nature, formality and quality of drafting of the contract, give more or less weight to elements of the wider context in reaching its view as to that objective meaning. In Prenn v Simmonds  1 WLR 1381 (1383H-1385D) and in Reardon Smith Line Ltd v Yngvar Hansen-Tangen  1 WLR 989 (997), Lord Wilberforce affirmed the potential relevance to the task of interpreting the parties' contract of the factual background known to the parties at or before the date of the contract, excluding evidence of the prior negotiations. When in his celebrated judgment in Investors Compensation Scheme Ltd v West Bromwich Building Society  1 WLR 896 Lord Hoffmann (pp 912-913) reformulated the principles of contractual interpretation, some saw his second principle, which allowed consideration of the whole relevant factual background available to the parties at the time of the contract, as signalling a break with the past. But Lord Bingham in an extra-judicial writing, A new thing under the sun? The interpretation of contracts and the ICS decision Edin LR Vol 12, 374-390, persuasively demonstrated that the idea of the court putting itself in the shoes of the contracting parties had a long pedigree.
"11. Lord Clarke elegantly summarised the approach to construction in Rainy Sky at para 21f. In Arnold all of the judgments confirmed the approach in Rainy Sky (Lord Neuberger paras 13-14; Lord Hodge para 76; and Lord Carnwath para 108). Interpretation is, as Lord Clarke stated in Rainy Sky (para 21), a unitary exercise; where there are rival meanings, the court can give weight to the implications of rival constructions by reaching a view as to which construction is more consistent with business common sense. But, in striking a balance between the indications given by the language and the implications of the competing constructions the court must consider the quality of drafting of the clause (Rainy Sky para 26, citing Mance LJ in Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2)  2 All ER (Comm) 299 paras 13 and 16); and it must also be alive to the possibility that one side may have agreed to something which with hindsight did not serve his interest: Arnold (paras 20 and 77). Similarly, the court must not lose sight of the possibility that a provision may be a negotiated compromise or that the negotiators were not able to agree more precise terms.
"12. This unitary exercise involves an iterative process by which each suggested interpretation is checked against the provisions of the contract and its commercial consequences are investigated: Arnold para 77 citing In re Sigma Finance Corpn  1 All ER 571, para 10 per Lord Mance. To my mind once one has read the language in dispute and the relevant parts of the contract that provide its context, it does not matter whether the more detailed analysis commences with the factual background and the implications of rival constructions or a close examination of the relevant language in the contract, so long as the court balances the indications given by each.
"13. Textualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual interpretation. Rather, the lawyer and the judge, when interpreting any contract, can use them as tools to ascertain the objective meaning of the language which the parties have chosen to express their agreement. The extent to which each tool will assist the court in its task will vary according to the circumstances of the particular agreement or agreements. Some agreements may be successfully interpreted principally by textual analysis, for example because of their sophistication and complexity and because they have been negotiated and prepared with the assistance of skilled professionals. The correct interpretation of other contracts may be achieved by a greater emphasis on the factual matrix, for example because of their informality, brevity or the absence of skilled professional assistance. But negotiators of complex formal contracts may often not achieve a logical and coherent text because of, for example, the conflicting aims of the parties, failures of communication, differing drafting practices, or deadlines which require the parties to compromise in order to reach agreement. There may often therefore be provisions in a detailed professionally drawn contract which lack clarity and the lawyer or judge in interpreting such provisions may be particularly helped by considering the factual matrix and the purpose of similar provisions in contracts of the same type. The iterative process, of which Lord Mance spoke in Sigma Finance Corpn (above), assists the lawyer or judge to ascertain the objective meaning of disputed provisions."
Analysis and conclusion