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A recent decision by the English High Court, John Sisk & Son Ltd v Capital & Centric (Rose) Ltd [2025] EWHC 594 (TCC), considered the interpretation of a risk allocation provision under a bespoke JCT Design and Build Contract. The judgment also provided commentary on the interpretive weight of pre-contractual negotiations, and reaffirmed the courts’ consistent reluctance to give regard to negotiations that are not incorporated into the final contract.
Background
Capital & Centric (Rose) Ltd (C&C), as Principal, and John Sisk & Son Ltd (Sisk), as Contractor, entered into a bespoke JCT Design and Build Contract (Contract) for a major redevelopment project at Weir Mill, in Stockport, England. The project involved complex works to both new and existing structures, including the integration of two historic mill buildings into the new development.
A key contractual issue emerged relating to who was responsible for the risks associated with the existing structures on site, particularly whether those buildings could support the proposed new works. The Contract included a broad bespoke clause at 2.42, which provided that C&C gave no warranty or representation as to the condition of the site and existing structures, and that Sisk was deemed to have inspected and satisfied itself as to the site conditions and existing structures.
Clause 2.42 was stated to be subject to “item 2 of the Clarifications”, which was embedded within the Contract documents. This line was at the centre of the dispute. Item 2 of the Clarifications stated:
|
Sisk Clarification |
Comments / Risk Owner |
|
Existing Structures Risk including ability to support / facilitate proposed works |
The Employer is to insure the Existing buildings/ works. Employer also to obtain warranty from Arup with regard to the suitability of the proposed works. Employer Risk |
Sisk argued that Item 2 meant the Principal retained the risk for the suitability of the existing structures. C&C disagreed, arguing that this item had no contractual effect or did not override the broader allocation of risk in clause 2.42.
The dispute first proceeded to adjudication, where the adjudicator found in favour of C&C on the basis that clause 2.42 placed the structural risk on Sisk and that Item 2 of the Contract Clarifications did not displace this. Sisk disagreed with the adjudicator’s reasoning and sought a declaration in the High Court regarding the correct interpretation of the relevant Contract terms.
High Court Decision
The Court found in favour of Sisk, concluding that the contractual documents, properly interpreted, placed the risk associated with the suitability of existing structures on the Principal and not the Contractor. This outcome turned on the effect of item 2 in the Contract Clarifications, which referred to “Employer Risk” in relation to the relevant structural matters.
The Judge held that bespoke provisions like the Contract Clarifications must be given full effect, even when they appear to modify or qualify standard form clauses such as 2.42. It was concluded that the language used in the Clarifications was clear and that it effectively excluded the Contractor from liability for the structural suitability of the existing buildings.
The Court also considered the weight of the pre-contractual negotiations and their effect on the interpretation of the risk allocation provisions. C&C sought to rely on its earlier purported refusal to accept responsibility for the existing structures. C&C argued that this refusal reflected an agreement on risk allocation that should guide the interpretation of the final contract. This argument was rejected by the Court, which maintained the status quo that such negotiations are generally inadmissible in construing the meaning of a written contract.
Key Takeaways
This judgment confirms the significance of precise drafting and clear risk allocation. It serves as an important reminder to have consistency between contractual documents, including the contract itself and any other technical or commercial documents that are appended to the contract.
A central lesson from this case is the limited interpretive weight given to pre-contractual negotiations and tender clarifications. The Court reiterated the principle that construction contracts must be interpreted objectively based on the final, agreed documents, and not on negotiation history or subjective intentions.
Relevance and Application in New Zealand
Although this case was decided under a UK JCT standard form contract, it has clear relevance for New Zealand construction law, especially in the context of NZS 3910. Risk allocation under NZS 3910 is often amended by way of special conditions or schedules, and disputes can arise when those amendments conflict with general provisions of the standard form.
This decision highlights that if parties intend to shift risk, they must do so clearly and expressly. It is not enough to rely on pre-contract exchanges or informal understandings. Courts in New Zealand, like their English counterparts, will focus on the final terms as recorded in the signed contract and will be slow to rely on negotiation history unless very specific legal doctrines apply.
If you have any questions about construction contracts, please get in touch with our Construction Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
