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

Whose risk is it?

Construction contracts invariably include a number of technical and commercial contract documents in addition to the legal contract terms and conditions. But what happens when a potential conflict arises? This was considered in the recent case of John Sisk and Son Limited v Capital & Centric (Rose) Limited [2025] EWHC 594 (TCC) where the terms of an amended JCT D&B contract and two appended "clarifications" documents did not align. A dispute arose as to whether the risk of the existing structures (and their unsuitability) rested with the employer or the contractor.

Background

• On 20 May 2022 Capital & Centric (Rose) Limited (C&C) entered into a JCT D&B 2016 contract with John Sisk and Son Limited (Sisk) for the design and construction of substantial works at Weir Mill, Chestergate. The contract contained substantial amendments and included various other ‘contract documents’ appended to the JCT form.
• During the works, issues arose in connection with the suitability of the existing structure for which Sisk claimed extensions of time and additional costs. The parties disagreed over who was responsible for the risks associated with the existing structures on the site, including their ability to support and/or facilitate the proposed works.
• The dispute was referred to an adjudicator who found that “…the responsibility for ground conditions including the identification of the basements, structures, voids, compressed structural elements and obstructions under the existing West Mill was solely Sisk's risk". The upshot of this decision was that Sisk was unable to claim an extension of time and/or any additional costs it incurred as a result of this risk.
• Sisk subsequently brought proceedings in the TCC by way of a Part 8 claim for declaratory relief as to the proper construction of a clarification regarding the risk of the potential unsuitability of the existing structures at the site.

The contract

The contract included bespoke amendments at clauses 2.42.1 to 2.42.4, of a type which are commonly made to JCT D&B contracts. In summary, clauses 2.42.1 to 2.42.3 set out that:

• C&C gave no representation as to the condition of the site or existing structures, or the accuracy of any data or information it provided to Sisk;
• Sisk had the opportunity of inspecting the physical conditions of the site (including existing structures) and was deemed to have inspected and examined the site and satisfied itself as to risks or other circumstances affecting the works; and
• Sisk would not be entitled to any extension of time and/or additional payment for risks it did not or could not have foreseen which affected the works.

Therefore, according to these clauses, it seemed that Sisk would be responsible for all risks in relation to the site, including risks in the existing structures and any information provided by C&C being wrong. However, clause 2.42.4 stated that “this Clause 2.42 shall be subject to item 2 of the Clarifications”.

The Clarifications were defined in the contract as the document titled "contract clarifications" and included in the Employer’s Requirements. In a hard copy of the contract there was one such document included in the contract documents. However, the electronic version of the contract (which included a number of additional documents which were considered too large to be printed and included in the hard copy contract) included an additional document titled ‘tender submission clarifications”.

Item 2 of the clarifications document set out a clarification request from Sisk for “existing structures risk including ability to support/facilitate proposed works” to which the response was “The Employer is to insure the existing buildings/works. Employer also to obtain a warranty from Arup with regard to the suitability of the proposed works. Employer Risk.”

The tender submissions clarifications document included a clarification request from Sisk as follows: "Existing Structures Risk sits with the Employer including insurance"; Sisk's additional comments reads: "Employer to warrant that the structural condition of the existing fabric is suitable to facilitate the new works"; Sisk's pricing confirmation is ticked "Unable to price". C&C's comments under F, concealed unless opened as explained above, reads: "Not accepted. PCSA[5] period has been for Sisk to satisfy themselves on exactly these issues. We will categorically not accept a blanket exclusion on existing structures". The entry under "Position Agreed/Discussed in Meeting on 22.03.2022" reads: "Confirmed in the meeting that this is to clarify the employer is to insure the buildings in line with JCT option C".

The arguments

In summary, Sisk argued that:

1. The meaning of the clarifications document was that C&C took the risk of any unsuitability of the existing structures and Sisk was entitled to claim extensions of time and/or additional costs which arose as a result of that risk; and
2. The tender submissions clarifications “merely records the initial qualification and some history of negotiations” but did not set out the final contract position which was included in the clarifications document.

C&C argued that the tender submissions clarifications was a contract document and the position recorded in the tender submissions clarification was agreed, did not change and was consistent with the terms of clause 2.42. C&C also provided evidence of the pre-contractual negotiations to support its position that it was agreed that Sisk was to take the risk of the existing structures.

What did the court decide?

The court decided that on a proper interpretation of the contract, the risk in the unsuitability of the existing structures rested solely with C&C, as the employer.

Reasons for the court’s decision included the following:

• The contract was clear that clause 2.42, while expressly making Sisk liable for risk in the existing buildings, was subject to item 2 of the clarifications document. The clarifications document stated that the "existing structures risk" was an "Employer Risk".
• In the absence of contractual definitions, "Employer Risk" and "existing structures risk" were to have their ordinary meanings, and in particular, the court found that the inclusion of the words "Employer Risk" in the relevant answer to the clarification query from Sisk meant that C&C was expressly agreeing to take the risk associated with the suitability of the existing structures.
• The pre-contract negotiations were inadmissible and did not fall within any exception to the rule against admitting such evidence. The court also noted that the contract included an "entire agreement" clause.
• The tender submissions clarifications document was a valid contract document. But it only recorded that specific agreement had been reached in relation to insurance (which was consistent with the rest of the contract). It did not record that Sisk had accepted the existing structures risk.

Key takeaways

This case is a stark reminder to parties to check that they are happy with all of the contract documents, not just the legal terms and conditions. It is also a warning to resist the temptation to append to the contract all documents and correspondence that may have passed between the parties, particularly at an early stage of the negotiations.

• Parties should check for any inconsistencies between contract documents, including between the contract terms and any other technical or commercial documents to be appended to the contract.
• Be wary of including tender submission documents or minutes of meetings as part of the contract documents, particularly where contract negotiations have continued after that date.
• Pre-contract negotiations are unlikely to be admissible in interpreting the contract and/or as evidence of the parties’ intentions, except in very limited circumstances.

In short, parties should make sure that the final contract accurately reflects what has been agreed, not just in the terms and conditions, but across all contract documents. And don’t be tempted to append other ancillary documents "just in case"…