Morrisons Associated Companies Ltd. V. James Rome & Sons Ltd

This clause has been a standard clause in building contracts in Scotland for many years and I am not aware of it ever having been construed to involve so heavy an obligation on the contractor. A closer scrutiny of the language of the condition in my opinion demonstrates the unsoundness of the construction contended for. The important words are in accordance with the drawings, specifications, schedules quantities.The phrase merely requires the contractor to do everything which according to good practice in the trade is required to be done.
1. What are the key facts of Morrisons Associated Companies Ltd. v. James Rome & Sons Ltd?
2. What is the general legal significance of this case?
3. In Morrison the Lord President refers to a clause (from the General Conditions of Contract for Building Works in Scotland 1954) as having been a standard clause in building contracts in Scotland for many yearsâ€Â. What are the key provisions of the clause in question?
4. What might a contractor have to do if it were placed under an obligation to do everything which is necessary in an absolute sense for the due and proper completion of construction works?

1. What are the key facts of Morrison’s Associated Companies Ltd. v. James Rome & Sons Ltd?

The general defense against liabilities in a construction case is demonstrating that everything was carried out as what a reasonable man could have done. An example of such a situation was the case of Morrisons Associated Companies Ltd v. James Rome & Son Ltd (1964) (SLT). The court found the builder not liable for the collapse of the building since he had acted reasonably in preventing the collapse. This paper will in study in deep the various details of the case.

The dispute arose from a construction contract between Morrison’s Associated Companies Ltd and James Rome & Sons Ltd. The contract required the defendant to clear the existing frontage and elect a new one. The defendant was then required to provide a temporary space as they erect a new frontage. Shortly after providing a temporary space, the portion collapsed forcing the demolition of the entire building.

The claimant brought an action against the builder. The claimant was relying on a general condition for construction contracts. The condition required the defendant to do everything necessary for the sound execution of the contract. Some of the terms under this condition were to provide adequate shoring and preventing over-jacking. The claimant averred that the defendant had breached these terms. The claimant also claimed that the defendant acted negligently in failing to act reasonably in shoring and jacking ‎Techniques.

The court listened to both sides, but it found the defendant not guilty of any of the claims. The court found that it was true that the building collapsed in the hand of the builder. It also collapsed during the execution of the contract. The builders had also transferred the weight of the entire building into a temporary support. In the examination of all these processes, the court found that the builders had provided sufficient support, and nothing proved that the defendants had failed to do according to their professional requirements. Further, the court did not find the defendant negligent as they had provided their skills in compliance with the standard practice in the building and construction trade. However, the court rejected the defendant's submissions that their position in law was similar to that of Hunter v. Hartley. The court concluded that a case of negligence requires the claimant to demonstrate that the defendant acted unreasonably while exercising care.

This case is a solution for questions regarding owner's remedies in case of a violation of the terms when the construction is in progress.  In this case, the court did not find the builder liable for negligently causing the collapse of the building after supporting it in accordance with the standard practice of the trade at that time. In other words, the builder had acted as a reasonable man. This ruling can be supported by the case of, P & M Kaye v Hosier and Dickinson (1972). The court cannot hold a contractor liable for defective work if the construction is still in progress. It is assumed that the contractor can still correct the defects. The concept of ‘temporary disconformity.’ As a general principle, condition 1 implies an ‘absolute obligation’ upon the contractors. This absolute obligation holds a contractor liable for breach without necessarily proving how the breach happened. It is an obligation requiring a contract to do everything possible to execute a contract reasonably.

2. What is the general legal significance of this case?

There is one main provision from the clause. The provision requires the contractor to do what it takes in reaching the results which are a proper completion.  He should comply with all signed drawings, specifications, schedules of quantities, and these conditions’ The clause also imposes liabilities for breach of the contractor fails to perform as required by the contract. However, the Lord President gave this clause more profound interpretation. He interpreted the clause as requiring the contractor only to rely on the drawings, specifications, and schedule of quantities. Lord President stated that the timely and proper completion of the work’ does not require any absolute or quasi-absolute obligation. It only requires the contractor to work within the recognized standards and practice in the trade. The contractor should act reasonably as what a reasonable person in his position would do.

In such a situation, the law will take an objective approach in identifying the defects. Where they reasonably arise from the negligent of the contractor, liabilities for breach would be assigned. Defects in most of the constructions arise from the failure of the contractor to work in a 'good and workmanlike manner.' The same may result from three causes. For one, the failure to work within the good standard practice of the trade. Failure to comply with the agreed design, specifications or materials. Where a contract requires an absolute sense of obligation, the Contractor must do everything reasonable and necessary for the timely and sound completion of the construction. Any defects reasonably resulting from the contractor would attract liabilities.

5. The case of Surrey Heath Borough Council v. Lovell Construction Ltd. and Another (1988) B.L.R 25 has significance in the context of the decision in the Morrison case. Discuss.

The case concerns a contract where Surrey Heath Borough Council engaged Lovell Construction Ltd in a design and construct contract. The defendant was to build a council chamber office building. Another contemplation was that the personnel were to move to the new office after its completion. The Contactor subcontracted another domestic firm for electrical, plumbing and heating installation in a JCT Standard Form of Building Contract.  

The sub-Contractor started with the welding in the roof loft using an oxyacetylene torch. The welding started the fire that destroyed the entire roof plus other extensive damages to the top floor. The ingress of water and other burning materials also caused additional damages. After the fire, the construction proceeded until the completion which delayed with 18 months. It was after completion when the claimant commenced suit for the breach of contract. He also claimed indemnity under clause 20.2 of the contract and damages resulting from the subcontractor's negligence. The damages included direct loss, liquidated damages for delayed completion and economic loss. The court came up with various recommendations.

(a) The claimant could only recover losses contemplated under clause 20.2 of the contract except for the losses covered by the insurance under clause 22(a). 

(b) The extension of time allowed by the claimant waivered liquidated damages for delayed completion;

(c) The court found the contractor for acting negligently and allowed the claimant to recover the damages suffered due to contractor’s negligence. 

(d) The claimant could not recover pure economic loss as there was no proximity in the relationship between the claimant and the sub-Contractor as found in Junior Books Ltd v Veitchi Co Ltd.

(e) In case the insurer failed to compensate the claimant, the sub-contractor was to compensate the claimant to safeguard his contractual rights against the contractor.

Again, the defendant raised the principles in ‘diplock temporary disconformity’ as a defense. The principles state that there is no breach of a contract as far as the completed construction complies with the required design, specification, and the required standard, there can be no claim for breaches which happened before completion. However, the judge rebutted the claim and said that such principles would not apply to cases of fire destructions when approaching completion.

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Junior Books Ltd v Veitchi Co Ltd [1983] 1 A.C. 520

Hunter v Hanley [1955] SC 200