RWS Npower Renewables Ltd v J N Bentley Ltd (2014) EWCA Civ 1679 (CA) (Interpretation)
Facts
Bentley was contracted during 2010 to RWS to execute civil engineering works on the Black Rock hydro-electricity generating plant in Scotland.
The contract (unusually for an NEC3 contract) contained an interpretation clause stating that the various documents forming the contract should be read and construed in a prescribed order of precedence.
It was agreed that the penstock pipeline (a sectional completion date defined by secondary option X5) was not completed until 25 October 2012.
In a dispute concerning completion of the section, the adjudicator decided that such section had been completed on 21 February 2012. His reasoning was that there was an inconsistency between the contract data (which contained a general description of the section) and clause 6.2 of the works information (which contained a more detailed description) and that the contract data took precedence. On his interpretation the provisions of option X5 were to be interpreted as requiring completion of the penstock pipeline only to the extent necessary to enable the hydro plant
RWS, dissatisfied with the decision, sought a declaratory order that Bentley’s obligation was defined by clause 6.2 of the works information, and that all work described therein as forming part of the section had to be completed before that section could be deemed complete. On this version, the intake, penstock pipeline and tailrace all had to have been completed and tested before the section could be viewed as complete.
The TCC held that the contract should be read as a whole and construed as far as possible to avoid inconsistencies between the different parts on the assumption that the parties had intended to express their intentions in a consistent and coherent way. The court’s view was that there was no significant inconsistency between option X5 and the works information and that they were capable of being read together without undue difficulty.
Judgment
The court of appeal started from the same position as the TCC, namely that the contract documents should as mutually explanatory of one another.
Option X5 was worded in more general terms than clause 6.2, which identified in greater detail the work comprised in each section.
Despite differences in detail, the court held that one would expect the two provisions to complement each other and that only in the case of a clear and irreconcilable discrepancy would it be necessary to resort to the contractual order of precedence to resolve it.
Both clauses referred to the completion and testing of the penstock pipeline, which suggested completion of the entire pipeline.
Moore-Bick LJ stated that it did not matter for the purposes of the agreement whether the reference was to “installing” the hydro plant (X5) or to “testing and commissioning” it (works information), because none of that formed part of Bentley’s work. Moore-Bick LJ continued: “Moreover, insofar as there is any uncertainty in Option X5 about the scope of section 2, the right way to resolve it, in my view, is by obtaining such assistance as one can from other parts of the contract. For that purpose clause 6.2 with its more detailed provisions is the obvious place at which to start. I agree with the judge, therefore, that the two clauses can and should be read in harmony with each other. The result is that Bentley’s obligation was to complete the pipelines by 27th May 2011.”
Moore-Bick LJ therefore held that the judge was correct to hold that section 2 of the works had not been completed until the whole of the penstock pipeline had been completed and tested.
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