Case No: No HT-04-317,HT-05-57,HT-05-74

Neutral Citation Number: [2005] EWHC 2810 (TCC)

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISON
TECHNOLOGY AND CONSTRUCTION COURT

Court No 7
St Dunstan's House
133-137 Fetter Lane
London EC4A 1HD

Date: 14th November 2005

Before:
MR JUSTICE JACKSON

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Between:

 

MIDLAND EXPRESSWAY LIMITED

Claimant

 

- and -

 
 

1. CARILLION CONSTRUCTION LIMITED
2. ALFRED MCALPINE CONSTRUCTION LIMITED
3. BALFOUR BEATTY GROUP LIMITED
4. AMEC CAPITAL PROJECTS LIMITED

Defendants

 (No. 1)

- - - - - - - - - - - - - - - - - - - - -

JUDGMENT

(As Approved by the Court)

MR JOHN BLACKBURN QC and MR DARRYL ROYCE appeared on behalf of the Claimant.
MR DAVID STREATFEILD-JAMES QC and MS NERYS JEFFORD appeared on behalf of the Defendants.

 

JUDGMENT

  1. MR JUSTICE JACKSON:  It is now late in the day and counsel have just completed their closing speeches.  I will make a start on giving judgment this afternoon and get as far as time allows.  The remainder of this judgment will be delivered tomorrow.  The judgment will be lengthy and there is no need for the parties or their lawyers to remain in court while I deliver it.
  2. This judgment is in 21 parts, namely:

    Part 1.  Introduction
    Part 2.  The contractual arrangements
    Part 3.  The present proceedings
    Part 4.  MEL's factual evidence
    Part 5.  CAMBBA's factual evidence
    Part 6.  Expert evidence
    Part 7.  The Belfry Agreement
    Part 8.  Provisional sums and aggregate tax
    Part 9.  Chasewater Footbridge
    Part 10.  Dunton Island
    Part 11.  Omission of Sign Gantries
    Part 12.  Mandatory speed limits
    Part 13.  Coin baskets
    Part 14.  Re-use of gantries
    Part 15.  Foul drainage
    Part 16.  Archaeology
    Part 17.  New roads and street works discounts
    Part 18.  Lodge Lane Link
    Part 19.  Vehicle Inspectorate
    Part 20.  Planning fee
    Part 21.  Conclusion.

  3. Part 1.  Introduction

  4. In 43 AD four Roman legions led by Claudius invaded Britain and subdued the indigenous Celtic tribes.  The Roman aggressors brought with them remarkable engineering skills.  During the first century AD the Romans constructed a network of roads across England and Wales.  The first and most important of these roads was Watling Street.  Watling Street ran from Kent through London and St Albans, across the West Midlands and finally into Wales. 
  5. The Romans departed after four hundred years. However, the roads which they constructed remained in use.  Indeed they still leave an imprint on our modern transport system.  The section of Watling Street which passed across the West Midlands will feature in part 16 of this judgment.
  6. In the late 20th century there was another major development in road construction, namely the creation of motorways.  The M1 was the first motorway to be constructed, running northwards from London up to Leeds.  The M6 motorway followed.  This motorway links the M1 to Birmingham and after that it runs northwards to Carlisle.
  7. By the 1980s the volume of traffic on the M6 to the east and north of Birmingham had become excessive.  It was therefore decided to construct a new motorway which would relieve that section of the M6. 
  8. Plans were drawn up for this new motorway to be self financing.  The tolls paid by motorists would, in due course, defray the cost of constructing and operating the motorway.  Although motorways charging tolls are commonplace in continental Europe, this scheme was an innovation in the United Kingdom.  No UK standards existed to regulate the design of toll stations on motorways.  This circumstance, combined with the lack of UK experience, has generated some of the problems in the present case.
  9. The proposed new motorway was originally referred to as the Birmingham Northern Relief Road.  By an agreement dated 28th February 1992 ("The Concession Agreement") the Secretary of State for Transport granted to Midland Expressway Limited ("MEL") the right to design, construct and operate the Birmingham Northern Relief Road.
  10. During 1995 and 1996 a public inquiry was held to determine whether the Birmingham Northern Relief Road should be constructed.  The outcome of that public inquiry was a decision that the project should go ahead. 
  11. Following the successful outcome of the public inquiry, MEL engaged Ove Arup & Partners to prepare a set of drawings which would show the entire length of the proposed motorway. 
  12. These drawings were duly prepared and were entitled "Post Decision Scheme" drawings.  They are generally referred to as "PDS drawings" and I shall use that term.
  13. MEL invited tenders for the design and construction of the new motorway.  The PDS drawings formed part of the tender documents.
  14. The successful tenderers were four well known construction companies, namely Carillion Construction Limited, Alfred McAlpine Construction Limited, Balfour Beatty Group Limited and AMEC Capital Projects Limited.  These four companies have come together in a joint venture to design and construct the new motorway.  The four companies are collectively referred to as "the CAMBBA construction group", which is generally shortened to "CAMBBA".
  15. On 27th September 2000 MEL and CAMBBA entered into a contract ("the D&C Contract") for the design and construction of the Birmingham Northern Relief Road.
  16. At about this time there was a change of terminology, the term "M6 toll road" became generally used instead of "Birmingham Northern Relief Road".
  17. CAMBBA engaged two well known firms of engineers, namely Ove Arup and Atkins to carry out design work on their behalf.  Those two engineering firms or their offshoots came together in a joint venture called "Arup Atkins Joint Venture" which is generally shortened to "AAJV".
  18. CAMBBA, with the assistance of AAJV, duly designed and constructed the M6 toll road.  It was opened to the public in December 2003.  The M6 toll road, it must be said, is a fine motorway.  It branches off the M6 motorway at junction 3A, which is in the vicinity of Birmingham international airport.  The M6 toll road runs northwards and then westwards.  It rejoins the M6 motorway at junction 11A. 
  19. There are two toll stations which actually straddle the M6 toll road.  These are referred to as "main line toll stations".  The Great Wyrley toll station straddles the northwest bound carriageway.  The Weeford Park toll station straddles the southeast bound carriageway.  Motorists who are travelling the entire length of the M6 toll road will pay their tolls at one or other of those two toll stations.
  20. Motorists who join or leave the M6 toll road at some intermediate point must also pay their dues.  There are toll stations for the benefit of these motorists at four junctions on the M6 toll Road.  These junctions are as follows:  Junction T3, otherwise known as the A38 junction or Langley Mill; Junction T4, otherwise known as Weeford Junction;  Junction T5, otherwise known as Shenstone Junction;  Junction T6, otherwise known as Burntwood Junction.  The approaches to toll stations are generally referred to as "toll plazas". 
  21. Although the construction project was completed on time and to the satisfaction of all parties, a number of contractual disputes have arisen.
  22. In order for me to explain what these disputes are about it will first be necessary to set out the contractual arrangements.
  23. Part 2.  The Contractual Arrangements

  24. The Concession Agreement which was made on 28th February 1992 included the following provisions: Clause 4.1:

    "The Secretary of State has appointed the Department's Agent to be his agent during the execution of the Highway Works to exercise the functions outlined in Parts 4, 5 and 6 of Schedule 7 and during execution of the MSA Works to exercise those functions referred to in Clause 19 and during the execution of the Works to exercise such further or other functions as the Secretary of State may exercise under the Concession Agreement in respect of the Works and as he may notify to the Concessionaire in writing from time to time ...."

    Clause 7.2:

    "The Concessionaire warrants and undertakes to the Secretary of State that ..."

    "7.2.5  The design of the Highway Works and each part thereof will meet in all respects the requirements of the Concession Agreement and in particular the Technical Requirements..."

    Clause 8:

    "8.1  The Department's Agent may at any time prior to the issue of the Maintenance Certificate issue a request in writing to the Concessionaire for a Department's Change ..."

    Clause 29:

     "Fossils and Antiquities"

  25. "Fossils and Antiquities as between the Secretary of State and the Concessionaire shall be deemed to be the absolute property of the Secretary of State.  The Concessionaire shall take all reasonable precautions to prevent its workmen or any other persons from removing or damaging any Fossils and Antiquities and shall immediately on discovery thereof and before removal inform the Department's Agent of such discovery and to carry out such instructions as the Department's Agent may give as to the disposal of the same.  No extensions of time will be granted for delays caused by compliance with requests made by the Department's Agent except to the extent that there shall be a material delay to or material increase in the cost of the execution of the Works in which case the Department's Agent shall issue a Department's Change in accordance with Clause 8 [Department's Changes] or the basis to be adopted in accordance with Clause 19.5.1.3 [Motorway Service Areas]."

  26. Schedule 1 to the Concession Agreement contains a number of definitions.  These definitions include the following passages:

    "'Change' means a variation in the design, quality or quantity of the Works and may include additions, substitutions, alterations in design and variations in the Technical Requirements.  A Change shall either be a Concessionaire's Change or a Department's Change as the case may be ..."

    "'Concessionaire' means Midland Expressway Limited, the company which is the second party hereto or any person to whom this Concession Agreement is assigned pursuant to Clauses 35.1.1 to 35.1.3 ..."

    "'Highway Works' means the Highway Permanent Works and the Highway Temporary Works." 

    "'Highway Permanent Works' means that part of the Permanent Works relating to the design, construction and completion of the Project Facilities and all related side roads, drainage, accesses, accommodation works, and communication facilities, but shall not include any Entrusted Works.

    "'Highway Temporary Works' means that part of the Temporary Works relating to the design, construction and completion of the Project Facilities and all related side roads, drainage and communication facilities, but shall not include any Entrusted Works ..."

    "'MSA Works' means the MSA Permanent Works and the MSA Temporary Works." 

    "'MSA Permanent Works' means that part of the Permanent Works relating to the design, construction and completion of the Motorway Service Areas and all related drainage and communication facilities but shall not include any Entrusted Works."

    "'MSA Temporary Works' means that part of the Temporary Works relating to the design, construction and completion of the Motorway Service Areas and all related drainage and communication facilities but shall not include any Entrusted Works. ..."

    "'Technical Requirements' means the Department's Requirements and the Concessionaire's Construction Proposals and the other documents referred to in Parts 1 to 3 of Schedule 7 as may be amended from time to time ..."

  27. Schedule 7, part 4 to the Concession Agreement provides as follows:

    "Department's Agent". 

    "The Secretary of State will appoint Consulting Engineers to act as the Department's Agent in order to receive the assurances he requires as to safety, quality and durability and to carry out the functions referred to in Clauses 5 [Pre-Concession Period] 7 [Design and Construction], 8 [Department's Changes], 10 [Access and Facilities for Department's Agent], 11 [Quality Assurance],  12 [Programme], 13 [Extensions of Time for Completion of the Highway Works], 19 [Motorway Service Areas] and set out in this Schedule 7 and Schedule 8. 

    "The Department's Agent will monitor the design, construction, completion, commissioning and testing of the Works and the completion of outstanding Works and the remedying of any defects during the period of maintenance as defined in the Construction Contract.  The Department's Agent will also audit the Concessionaire's Quality system."

  28. The firm of consulting engineers whom the Secretary of State appointed to act as Department's Agent was Owen Williams Limited.  Mr John Keaney of Owen Williams Limited was the individual who principally performed the functions of Department's Agent.  When I use the term "Department's Agent" or "DA", this will be a reference either to Owen Williams Limited or to Mr Keaney.
  29. On 26th September 2000 the Secretary of State and MEL entered into a further agreement which is known as the Second Supplemental Agreement.  The Second Supplemental Agreement amended the Concession Agreement by providing fresh provisions to stand as Parts 1, 2 and 3 of Schedule 7 to the Concession Agreement.
  30. A Consequence of the Second Supplemental Agreement was that Part 3 of Schedule 7 to the Concession Agreement now contained the following passage:

    "The Concessionaire's route proposals have been subject to change during the Statutory Order-making process, up to the Scheme and Orders being made and coming into force on 12th February 1998.  This Part 3 Schedule 6 describes the route at 20 April 2000 including the changes made to the route up to this date ...

    2.1 (d):

  31. "Between A460 and Churchbridge the route is in successive cuttings and embankments passing under Saredon Road and Walkmill Lane.  The new A460 and A5 parallel route (Lodge Lane Link) is dual carriageway from the A460 to a roundabout junction with Saredon Road, and wide single carriageway up to a new roundabout at Churchbridge, which combines two existing roundabouts."

  32. I shall use the term "Saredon" to describe the roundabout referred to in this passage at which Saredon Road joins Lodge Lane Link.
  33. Let me now turn to the D&C Contract which was made on 27th September 2000, ie one day after the Second Supplemental Agreement.
  34. The definitions set out in clause 1.1 of the D&C Contract include the following:

    "'Accommodation Works' means the Specified Accommodation Works and/or the Unspecified Accommodation Works, as the context requires;

    "'Adjacent Areas' means the areas which do not form part of the Site nor of the Motorway Service Area but upon which part of the Works are to be carried out;

    "'Aggregate Tax' means any tax or levy imposed by the Government of the United Kingdom on or in connection with sands, gravels, aggregates and the like to be used in or about the Works including without limitation the commercial exploitation and/or import of aggregates (as such terms or similar terms are defined in the implementing legislation);

    "'Change' has the meaning ascribed to it in the Concession Agreement;

    "'Concession Agreement' means the agreement dated 28th February 1992 made between the Secretary of State and the Concessionaire together with Schedules 1 to 15 thereof. 

    "'Concession Road' means the Birmingham Northern Relief Road as outlined in the Employer's Requirements;

    "'Construction Dispute' means a difference or dispute of whatever nature between the Employer and the Contractor arising under, out of or in connection with this Contract and includes, but is not limited to:

    1. any claim, demand or assertion as to contractual entitlement under this Contract made by either Party against the other Party, which is neither agreed nor disputed by such other Party;
    2. any dispute as to any decision, opinion, instruction, direction, certificate or valuation of the Employer, the Employer's Agent or the Certifying Engineer (whether during the progress of the Works or after their completion and whether before or after the determination, abandonment or breach of this Contract);

    "'Contractor's Agent' has the meaning ascribed to it in Clause 13.2" 

    "'Contractor's Change' means a variation or amendment to the Employer's Requirements proposed by the Contractor and implemented in accordance with Clause 39.8"

    "'Department's Agent' means Owen Williams Limited of Edgbaston House, Three Duchess Place, Hagley Road, Edgbaston, Birmingham B16 8NH or such replacement as may be appointed for the time being to represent the Secretary of State during the design and construction process and more particularly, to fulfil the role identified in Parts 4, 5 and 6 of Schedule 7 of the Concession Agreement." 

    "'Department's Change' means a Change as to the Department's standards or any additions, substitution or omission of any item of infrastructure initiated or implemented by the Department's Agent in accordance with Clause 8 of the Concession Agreement;"

    "'Design Input Statement' means a statement which covers all relevant input to the subsequent design activity of a scheme or section of the Works which includes as a minimum:

    1. a brief description of the purpose of the scheme or section of the Works;
    2. a reference to the relevant Construction Documents;
    3. the Contractor's method of approach;
    4. the parameters or co-efficients that are assumed and the standards and computer programmes to be used;
    5. the source of the data and the applicable Statutory Requirements; and
    6. the proposed checks and frequency thereof;"
  35. I interject at this point to say that a design input statement is often referred to as a "DIS".  I now return to the definitions clause:

    "'Design Review Procedure' means the procedure referred to in Part C of Appendix 4;"

    "'Disputes Resolution Procedure' means the procedure referred to in clause 53 (Settlement of Disputes) and set out in Appendix 6 hereto;" 

    "'Effective Date' means the date on which the Employer notifies the Contractor that all the Project Conditions have been satisfied or waived;"

    "'Employer's Change' means a variation to the Employer's Requirements initiated or implemented by the Employer in accordance with clause 39.5 (Employer's Change Procedure);"

    "'Employer's Requirements' means the requirements of the Employer in respect of the Works, as set out in Appendix 2 hereto;"

    "'Future Mining Works' means the design and construction of structures in areas of potential future mining in accordance with Annex 3/7 clause 7 of the Employer's Requirements;"

    "'Highway Permanent Works' means that part of the Permanent Works relating to the design, construction and completion of the Concession Road and all related side roads, drainage, accesses, accommodation works and communication facilities (but for the avoidance of doubt excluding the MMA Works, the Tolling Works, the TCF Works and the Non-core Toll Collection System Works);

    "'Highway Temporary Works' means that part of the Temporary Works relating to the design, construction and completion of the Concession Road and all related side roads, drainage, accesses, accommodation works and communication facilities (but for the avoidance of doubt excluding the MMA Works, the Tolling Works, the TCF Work and the Non-Core Toll Collection System Works);

    "'Highway Works' means the Highway Permanent Works and the Highway Temporary Works;"

    "'MMA Works' means that part of the Works relating to the Motorway Maintenance Areas all as more particularly identified in Sections 5.3 and 5.4 of the Employer's Requirements;"

    "'MSA Works' means that part of the Works relating to the Motorway Service Area all as more particularly identified in Section 4 of the Employer's Requirements;" 

    "'Non-MSA Works' means the Works other than the MSA Works;"

    "'Permit to Use' means the permit to be issued by the Department's Agent in accordance with the Concession Agreement prior to commercial operation of the Project Facilities;"

    "'Price Adjustment' means any sum which is to be added to or deducted from the Contract Price (as specified at the date of this Contract) in accordance with the Contract and any separate payment, in respect of or in any way connected with the subject matter of this Contract which is payable by one Party to the other whether pursuant to any term of this Contract, by way of damages for breach of contract, on the basis of quantum meruit or otherwise;"

    "'Pricing Schedule' means the document contained in Appendix 1 hereto;"

    "'Project Facilities' means the Concession Road, the Motorway Maintenance Areas and the Tolling Control Facilities and includes (for the avoidance of doubt) the Tolling Works;"

    "'Provisional Sum' means a sum included and so identified in the Pricing Schedule for the execution of any part of the Unspecified Accommodation Works or the Future Mining Works or the expenditure of Aggregate Tax up to the maximum provided for in Clause 36.3.3 which sum may be used in whole or in part in accordance with the instruction of the Employer given in accordance with clause 36.3 (Provisional Sums);"

    "'Relevant Authorities means those entities identified in Part A of Appendix 10 hereto whose authority is or may be required for the carrying out of all or part of the Works;" 

    "'Relevant Authorities Works" means any work required by a Relevant Authority to be undertaken as a consequence of or in order to facilitate the carrying out and completion of the Works, including any replacement, re-routing or diversion of utilities or services, whether temporarily or permanently, and any abandonment or stopping of redundant services or general disconnection;"

    "'Schedule of Prices' means the schedule of prices contained in Part A of the Pricing Schedule;"

    "'Schedule of Rates' means the schedule of rates and prices contained in Part B of the Pricing Schedule;" 

    "'Site' means the land, spaces, waterway, roads and any surface required for the Project Facilities, an indication of the general area of which is identified in the drawings numbered SDP-CEH O1-19 inclusive;"

    "'Statutory Discount' means the amount of savings given or credit allowed by a Relevant Authority pursuant to section 85 of the New Roads and Street Works Act 1991 and regulations made thereunder in respect of Relevant Authorities' Work in respect of any allowable cost to be borne by that Relevant Authority in accordance;"

    "'Toll Collection System' means the equipment and systems for the toll collection system for the Concession Road;"

    "'Toll Collection System Proposal' means the Contractor's proposal for a Toll Collection System to meet the requirements of the Toll Collection System Requirements Specification;"

    "'Toll Collection System Sub-Contract' means a contract between the Contractor and the Toll Collection System Sub-contractor for the carrying out of the Toll Collection System Works." 

    "'Toll Collection System Sub-contractor means Ascom Monetel SA or such other person as may be substituted for it from time to time with the prior written consent of the Employer;"

    "'Toll Collection System Requirements Specification' means the specification for the Toll Collection System Works as set out in Section 6 of the Employer's Requirements." 

    "'Toll Collection System Works' means the Core Toll Collection System Works and the Non-Core Toll Collection System Works;" 

    "'Unspecified Accommodation Works' means all accommodation works and licences (other than the Specified Accommodation Works) necessary for the Permanent Works but excluding all accommodation works and licences that are necessary for the design, construction and removal of the Temporary Works and for the purposes of this definition (i) 'accommodation works' means work of any kind whatsoever (including without limitation the modification, improvement or regrading of land, the design and construction of modified, substituted or new structures, services or infrastructure and the supply and/or erection of fences, barriers or other forms of protection) that are required by any Statutory Requirement (or are otherwise necessary) to be provided to any person with an interest in land adjacent to the Site, the Adjacent Areas or Motorway Service Area and (ii) 'licences' means rights in, under or over land adjacent to the Site, the Adjacent Areas or the Motorway Service Area;"

    "'Works" means the Highway Works, the MSA Works, the MMA Works, the Tolling Works, the TCF Works, the Non-core Tool Collection System Works and, where the Advance Works Contract is entered into between the Employer and the Contractor, the Advance Works, together with all other works to be done and services, goods, materials and equipment to be supplied by the Contractor under this Contract including the production of the Detailed Design and the Detailed Drawings;"

  36. Clause 6.1 of the D&C Contract provides:

    "6.1.1  The Related Agreements are:

    1. The Concession Agreement;
    2. The Financing Agreements;
    3. The Licence; and.
    4. The NTL Agreement ...

    6.1.3  Save to the extent the provisions of this Contract expressly require to the contrary but not otherwise, the Contractor shall:

    "(a) Carry out and complete the Works and otherwise perform this Contract so that no act, omission or default by the Contractor in relation thereto shall constitute, cause or contribute to any breach by the Employer of any of its obligations pursuant to or liability under the Related Agreements or otherwise give rise to any other liability on the part of the Employer or diminish any right of the Employer pursuant to any Statutory Requirements.

    "(b) Assume and perform all the obligations and observe and comply with all the conditions of the Concession Agreement on the part of the Employer to be assumed, performed, observed and complied with so far as they relate and apply to the Works or any part thereof."

  37. Clause 8 of the D&C Contract provides:

    "8.1.1.  The Contractor shall design, construct, complete, commission, maintain and test the Works in strict accordance with the Employer's Requirements and the other requirements of this Contract and provide all labour, including supervision thereof, materials, Construction Plant and all other things, whether of a temporary or permanent nature, required in or for such design, construction, completion, commissioning, maintenance and testing, so far as the necessity for providing the same is specified in or is reasonably to be inferred from this Contract.

    8.1.2  The Contractor shall adopt and accept responsibility for the Preliminary Design as though such design had been carried out by the Contractor hereunder.  The Contractor shall be solely liable for any error or defect in the Preliminary Design and shall not be entitled to any Price Adjustment or extension to any Completion Period in respect of any cost or delay incurred as a result of or in connection with any part of or matter concerning the Preliminary Design. 

    8.1.3  The Contractor shall take full responsibility for the adequacy, stability and safety of the design and of all site operations and methods of construction, commissioning, maintenance, testing and making good and shall ensure that its obligations under clause 8.1(Contractor's General Obligations) are, without prejudice to clause 8.1.1, executed in accordance with Good Industry Practice

    8.1.5.  The Contractor's responsibility under this Contract shall not be relieved or absolved or otherwise modified by any examination or review by the Department's Agent, the Employer, the Employer's Agent, the Certifying Engineer or any other person.

    8.2  Contractor's warranties. 

    The Contractor warrants and undertakes to the Employer that:

    8.2.1  it will comply with the Employer's Requirements as they may be interpreted by the Department's Agent or the Employer or in the event of a dispute regarding such an interpretation by the Adjudicator;

    8.2.4  the Contractor will at all times comply with the reasonable requirements of any of the Relevant Authorities and comply with any Statutory Requirement in carrying out the Works and where design, workmanship, methods of construction, materials, Plant, commissioning, testing or maintenance are to be reviewed by the Employer, the Department's Agent or Relevant Authorities, timeous notice will be given so as to enable such a review to be carried out;

    8.2.5.  the design of the Works and each part thereof will meet in all respects the requirements of this Contract and the Employer's Requirements and in particular:

    1. In the case of the Department's standards those appearing in Annex 1/2 of the Employer's Requirements;
    2. In the case of British Standards, codes of practice and other relevant international standards in so far as they relate to design, those standards in force and in effect as at the date of this Contract;
    3. In all other cases, the standards applying at the date of the execution of the construction works;

    8.2.6.  the completed Works shall be fit for the purpose(s) expressly stated in the Employer's Requirements and shall, as at the expiry of the Maintenance Period, be free from Defects other than Excluded Latent Defects; 

    8.2.7.  it has been provided with sufficient information to ascertain the scope and nature of the Works, the obligations being assumed and the resources necessary for it to discharge its obligations under and in accordance with this Contract; and

    8.2.8.  it has reviewed and satisfied itself of the accuracy and buildability of the Employer's Requirements and the correctness and completeness of the Employer's Requirements to achieve the objectives set out in this Contract."

  38. Clause 9.1.4 of the D&C Contract provides:

    "Nothing in this clause 9 (Design and Checking) shall relieve the Contractor from any liability or obligation under this Contract and the Contractor shall be responsible for the acts, defaults and neglects of the Designer and the Checker and their respective agents, Sub-contractors or employees as fully as if they were the acts, defaults or neglects of the Contractor."

  39. Clause 9.3 of the D & C contract provides:

    "9.3  Toll Collection System. 

    9.3.1  The Contractor is responsible for executing the Toll Collection System Works in accordance with this Contract. 

    9.3.2  The Toll Collection System Proposal has been prepared by the Contractor in conjunction with the Toll Collection System Sub-contractor and the Contractor warrants that the Toll Collection System Proposal satisfies the Toll Collection System Requirements Specification. 

    9.3.3  The Contractor shall engage the Toll Collection System Sub-contractor to carry out the Toll Collection System Works under its direction and control.  Notwithstanding the foregoing, the Contractor shall remain fully and completely responsible for the execution and performance of the Toll Collection System Works.

    9.3.5  The Employer shall be entitled to require the Contractor and the Toll Collection System Sub-contractor to undertake Design Development.  Within 90 days of the Effective Date the Employer may notify the Contractor of the process and programme for Design Development and the Contractor will, and will procure that the Toll Collection System Sub-contractor shall, co-operate fully with the Employer and use their respective best efforts to undertake the Design Development in accordance with the Employer's reasonable requirements to the satisfaction of the Employer. 

    9.3.6  Subject to clause 9.3.10, the Employer may not require any further variation to the Toll Collection System Works under the process of Design Development after the Freeze Date. 

    9.3.7  Notwithstanding any Design Development, the Contractor will remain fully responsible for (i) ensuring that the Toll Collection System is fit for the purpose specified in the Toll Collection System Requirements Specifications and (ii) for the proper and timely performance of the Tolling Works, in each case as they may have been varied by the Design Development ... 

    9.3.10  Nothing in this Clause 9.3 (Toll Collection System) shall prevent the Employer from requiring a variation to the Toll Collection System Works after the Freeze Date and the provisions of clauses 39.2 (Employer's Change) and 39.7 (Payment for Change) will apply."

  40. Clause 12 of the D&C Contract provides:

    "12.1.1  Without prejudice to clauses 39 (Changes) and  40 (Compensation Events), the Contractor shall forthwith comply with all instructions issued to it by the Employer in regard to any matter in respect of this Contract. 

    12.1.2  Without prejudice to clause 12.1.1, the Employer is empowered to issue any instruction which is issued by the Employer as a consequence of any obligation of the Employer under any Related Agreement or the exercise of any right or entitlement by the Secretary of State or any other party to a Related Agreement in relation to the Works. 

    12.1.3  All instructions by the Employer shall be issued in writing.  The Employer may in cases of emergency (stating that to be the case) give an instruction orally and the Contractor shall comply with such instruction.  Provided that the Employer must confirm such oral instruction in writing as soon as reasonably practicable. 

    12.2  "Employer's Agent."

    12.2.1  The Employer may from time to time by notice in writing to the Contractor appoint a person as Employer's Agent who shall be entitled to exercise such  powers and perform such duties of the Employer under this Contract as the Employer may specify in the notice including those power and duties of the Certifying Engineer who may be appointed by the Employer in accordance with clause 12.4.1.  The appointment shall not take effect until a signed copy of the Employer's notice is delivered to the Contractor ."

  41. Clause 13.2 of the D&C Contract provides:

    "Contractor's Agent." 

    The Contractor or a competent or authorised agent or representative approved in writing by the Employer ("Contractor's Agent") is to be constantly on the Works and shall give his whole time to the superintendence of the same.  The Contractor's Agent shall be in full charge of the Works and shall receive on behalf of the Contractor directions and instructions from the Employer.  The Contractor's Agent shall be responsible for the safety of all operations.  Within 7 days of the Effective Date the Contractor shall notify the Employer of the identity of its proposed Contractor's Agent."

  42. Clause 17 of the D&C Contract provides:

    "17.1  Relevant Authorities' Works and Requirements

    The Contractor shall:

    17.1.1  comply with the requirements (whether future or existing) of any Relevant Authority who has jurisdiction over the Works or whose system or assets may be affected by the construction of the Works;

    17.1.2  be solely responsible for liaising and undertaking all discussions and negotiations with the Relevant Authorities in respect of all matters associated with the carrying out of the Relevant Authorities' Works to the satisfaction of the Relevant Authorities, including but not limited to:

    1. Determining the scope of the Relevant Authorities' Works;
    2. The design of and the methodology for the carrying out of such Relevant Authorities' Works;
    3. All necessary planning permissions and consents; and
    4. The person that shall undertake such Works; and

    17.1.3  where requested by the Relevant Authority carry out and complete the Relevant Authorities' Works in which case, but without prejudice to clauses 17.1.1 and 17.1.2, and save where the Relevant Authorities' Works are to be carried out under an agreement made between the Contractor and such Relevant Authority directly, such Relevant Authorities' Works shall be deemed to form part of the Works and the provisions of this Contract shall apply accordingly.

    17.3.1.  The Contractor shall be solely responsible for all costs associated with the carrying out and completion of the Relevant Authorities' Works in accordance with the provisions of this Contract ...

    17.3.4  Without prejudice to clause 17.3.1, where in respect of Relevant Authorities' Works, either;

    1. An agreement is in place as at the date when such works are carried out pursuant to which the Relevant Authority acknowledges the Employer's right to a Statutory Discount in respect of such works; or
    2. The Employer subsequently reaches an agreement with a Relevant Authority for a Statutory Discount in respect of the Relevant Authorities' Works, 

    And the Employer in either case accordingly instructs the Contractor to make an advance payment in respect of such works in accordance with the Street Works (Sharing of Costs of Works) Regulations 1992 and a Statutory Discount is given by that Relevant Authority or would have been given had the Contractor made payment as aforesaid, the Contract Price shall be reduced by a sum equal to 50% of the amount of such Statutory Discount.  The Employer shall receive the benefit of such reduction by way of a corresponding reduction in the amount payable under clause 37.1 (Payment of Items in the Schedule of Prices) in respect of item 16.0 thereof following the date on which such Relevant Authorities' Works are completed.

    17.5  The Contractor shall not be entitled to any Price Adjustment or any extension of any of the Completion Periods as a result of compliance with its obligations under clause 17.1 (Relevant Authorities' Works and Requirements) and 17.2 (Contractor's Responsibility in respect of the Relevant Authorities' Works) or otherwise in connection with the carrying out of any Relevant Authorities' Works."

  43. Clause 21 of the D&C Contract provides:

    "21.1.1  The Employer shall grant to the Contractor Vacant Possession of such part or parts of the Site, the Adjacent Areas and the Motorway Service Area (together with Ancillary Rights relating thereto) as soon as the Secretary of State delivers the same to the Employer in accordance with clause 6.2.2 of the Concession Agreement..."

  44. Clause 25 of the D&C Contract provides:

    "25.1.1  Save as provided in clause 25.1.2 and subject to any rights which the Contractor may have under clause 7 (Contractor's Rights) in respect of a Project Relevant Event and clause 40 (Compensation Events), the Contractor shall at its own costs:

    1. Ensure that all of its obligations under this Contract are carried out in compliance with all applicable Statutory Requirements;
    2. Obtain all permits, approvals and/or licenses from the Relevant Authorities and other governmental authorities having jurisdiction over the Works and/or the Contractor which are necessary for the performance of this Contract; and
    3. Comply with the rules and regulations of all Relevant Authorities and other public bodies and companies whose property or rights are affected or may be affected in any way by the Works .

    25.4  The Contractor shall give all notices and pay all fees required to be given or paid by any authority (including any Relevant Authority) or Statutory Requirements in relation to the execution of the Works or by the rules and regulations of any public bodies and companies whose property or rights are or may be affected in any way by the Works."

  45. Clause 27 of the D&C Contract provides:

    "Fossils and Antiquities." 

    27.1.1  The Contractor acknowledges that all Fossils and Antiquities shall be that deemed to be the absolutely property of the Secretary of State.  The Contractor shall take all reasonable precautions to prevent its workmen or any other persons from removing or damaging any Fossils and Antiquities and shall immediately on discovery thereof and before removal inform the Department's Agent and the Employer of such discovery and carry out such instruction as the Department's Agent may give to the Employer under Clause 29 of the Concession Agreement (and the Employer shall forthwith provide a copy of such instruction to the Contractor) as to the disposal of the same. 

    27.1.2  No extensions of time will be granted for delays caused by compliance with requests made by the Department's Agent except to the extent that there shall be a material delay to or material increase in the cost of the execution of the Works in which case the Employer shall issue a Department's Change or an Employer's Change in accordance with clause 39 (Changes)."

  46. Clause 32 of the D&C Contract provides for the Contractor to be granted an extension of time in respect of Delay Events, including Department Changes or Employer's Changes.
  47. Clause 33 of the D&C Contract sets out various requirements for completion of the Works.  These include a requirement that a Permit To Use ("PTU") should be issued. 
  48. Clause 36 of the D&C Contract provides:

    "CONTRACT PRICE. 

    36.1  Price for the Works. 

    The Contract Price is £485,500,000, subject to adjustment in accordance with the express provisions of this Contract. 

    36.2  Adjustment of Contract Price 

    "The Contract Price is a fixed price lump sum and shall not be subject to remeasurement or any other adjustment save in accordance with the express provisions of this Contract. 

    36.3  Provisional Sums. 

    36.3.1  The Employer shall be entitled to instruct the Contractor to expend or execute in whole or in part any work in respect of which a Provisional Sum is stated in the Pricing Schedule (as the case may be).  If the Employer issues such an instruction such expenditure shall, subject to clause 36.3.3, be added to the Contract Price and such work shall form part of the Works (as the case may be) and the Contractor shall be entitled to a Price Adjustment on the basis referred to in clause 39.6.1 (a)

    36.3.2  Without prejudice to clause 15.4 (Sufficiency of Contract Price), the Contractor shall be deemed to have allowed the necessary time and resources to enable the work relating to the Provisional Sum to be executed and satisfied itself as to all risks and matters associated with such execution, provided that any instruction for the expenditure of the Provisional Sum is given by the Employer within a reasonable time of the Effective Date, and the Contractor is not accordingly entitled to any extension of any Completion Period for the execution of work instructed in accordance with clause 36.3.1. 

    36.3.3  The Price Adjustment to which the Contractor is entitled for the expenditure of the Provisional Sum in respect of Aggregate Tax shall not:

    1. In the case of imported materials incorporated by the Contractor in the Works, exceed the sum equal to the amount of Aggregate Tax levied on 1,800,000 tonnes of such materials; and
    2. In the case of in-situ materials on the Site which the Contractor excavates or quarries and are incorporated in the Works, exceed the sum equal to the amount of Aggregate Tax levied on 3,000,000 tonnes of such materials."
  49. Clause 37 of the D&C Contract provides terms of payment: 

    "37.1  Payment of Items in the Schedule of Prices

    Subject to the terms of this clause 37 (Terms of Payment) and clause 38 (Method of Payment) the Contractor shall be entitled to payment of the amounts set out in the Schedule of Prices as follows: .....

    18.0  Unspecified Accommodation Works.  Pro rata to percentage of completion. 

    19.0  Aggregate Tax.  Monthly in arrears as levied. 

    20.0  Future Mining Works.  Pro rata percentage of completion. 

    37.2  Payment of the Contract Price. 

    "Subject as provided in clause 37.3 (Limit on Payments), each month the Contractor shall be entitled to be paid:

    37.2.1  the amount calculated in accordance with clause 37.1 (Payment of Items in the Schedule of Prices) and clause 38.2 (Monthly Measurement); and

    37.2.2  all such other amounts to which the Contractor has become entitled during that month in accordance with the express terms of the Contract."

  50. Clause 38 of the D&C Contract sets out a procedure for interim applications and interim payments during the course of the Works.  The first part of clause 38 provides:

    "38.1  Measurement of Quantities

    The Employer and the Contractor shall within 28 days of the Effective Date agree a procedure and basis for assessing the measurement and the progress of the Works for the purposes of clause 37.2.1 and the Schedule of Prices.  Failing agreement as aforesaid the Employer and the Contractor shall adopt such procedure and basis as the Employer in its absolute discretion shall reasonably decide."

  51. Clause 39 of the D&C Contract provides:

    "CHANGES

    39.1  Department's Change. 

    "The Employer may at any time prior to the issue of the Maintenance Certificate issue a request in writing to the Contractor for a Department's Change. 

    39.2  Employer's Change. 

    The Employer may at any time prior to the issue of the Maintenance Certificate issue a request in writing to the Contractor for an Employer's Change in respect of the Works."

  52. Detailed provisions follow setting out the procedures for Department's Changes and Employer's Changes and for the valuation of those changes. 
  53. Clause 39.8 of the D&C Contract provides:

    "Contractor's Change. 

    39.8.1  If in the opinion of the Contractor it is necessary or desirable to vary or amend the Employer's Requirements such proposal together with all supporting Design Data and an explanation of the reasons therefor, including, if appropriate, the Designer's comments, shall be submitted under cover of a submission document by or through the Contractor as a proposed Contractor's Change in accordance with the Employer's Review Procedure. 

    39.8.2  The Employer shall be entitled, in its absolute discretion, to:

    1. Reject the proposed Contractor's Change; or
    2. Approve the Contractor's Change and, where the same relates to the Technical Requirements, submit a proposed Concessionaire's Change in accordance with clause 7.7 of the Concession Agreement 

    39.8.6  No Contractor's Change implemented in accordance with clause 39.8 (Contractor's Change) shall in any way vitiate or invalidate the Contract and where such Contractor's Change shall result in increased costs or any delay such consequences shall be borne entirely by the Contractor who shall also have the benefit of any savings which occur."

  54. Clause 40 deals with Compensation Events.  Clause 40 includes the following provisions:

    "40.1.1  Save in respect of Department's Changes and Employer's Changes, where a specific provision is made in this Contract for the payment of compensation or other monies upon the occurrence of specified events, matters or circumstances, such specific provision together with this clause 40 (Compensation Events) shall apply and shall govern the rights and remedies of the Parties to the exclusion of any other rights or remedies relating to such payment which might otherwise be available pursuant to this Contract or otherwise howsoever.

    40.1.2  The Contractor shall have no further entitlement whether by way of a Price Adjustment or an extension of time or otherwise or any relief of its obligations under this Contract in respect of a Compensation Event other than that set out expressly in this Contract, subject always to the provisions of clause 7 (Contractor's Rights) and clause 40.3 (Claims Procedure) .

    40.3  Claims Procedure. 

    40.3.1  The provisions of this clause 40.3 (Claims Procedure) shall govern the procedure for any claim which the Contractor may wish to make for a Price Adjustment, other than a Department's Change or an Employer's Change in respect of which the provisions at clause 39 (Changes) shall apply. 

    40.3.2  If the Contractor considers that it may have grounds to claim any Price Adjustment it shall give written notice (including such particulars of the event and the basis of the claim as are available at that time) to the Employer within 21 days after the event giving rise to the claim has first arisen or should reasonably have come to the knowledge of the Contractor, whichever is later .

    40.3.5  Notwithstanding any other provision of this Contract, it shall be a condition precedent to the Contractor's right to any Price Adjustment that:

    1. The Contractor shall have complied fully with the provisions of clauses 40.3.2, 40.3.3 and 40.3.4; and
    2. The Contractor shall have used all reasonable endeavours and shall have taken all such steps as may reasonably be required from time to time to mitigate and minimise the amount of any additional payment to which it may be entitled by virtue of this Contract and any cost or loss it may incur or suffer in connection with the circumstances giving rise to the Contractor's right to that Price Adjustment."
  55. Clause 50 of the D&C Contract includes the following provisions:

    "50.2  Consent, Approval etc.

    Save to the extent provided for expressly in this Contract, the Contractor's liability under the Contract shall not be affected by:

    "50.2.1  any comment, review, audit, rejection, approval, acquiescence or acceptance of any matter or thing nor any failure to comment, review, audit, reject, approve, acquiesce or accept the same;

    50.2.2  any test, inspection, supervision or failure to test, inspect or supervise;

    50.2.3  the issue of any certificate;

    50.2.4  the making of any payment;

    50.2.5  the provision of any information, whether contained in this Contract or otherwise; or

    50.2.6  any failure or delay by the Employer to enforce any provision of this Contract or to require performance thereof. 

    50.3 Entire Agreement. 

    Each party agrees and acknowledges that;

    50.3.1  it has had or, as the case may be, is deemed to have had, full opportunity to include in this Contract any representation or warranty (if any) made to it by the other Party leading up to this Contract;

    50.3.2  this Contract embodies the entire and only agreement between the Parties as to the subject matter hereof.

    50.4  Amendments.

    No amendment to this Contract shall be binding on the Parties unless in writing and signed by the duly authorised representatives of the Employer and the Contractor. 

    50.5  No Waiver. 

    The rights of any Party shall not be prejudiced or restricted by any indulgence or forbearance extended to the other Party. 

    50.5.2  No waiver by either Party of any default or variation by the other in the performance of any of the provisions of this Contract shall operate or be construed as a waiver of any other or further default or variation whether of a like or a different character, or shall be effective, unless in writing duly executed by an authorised representative of such Party."

  56. Appendix 1 to the D&C Contract comprises three parts.  Part A is a Schedule of Prices.  Part B is a Schedule of Rates.  Part C is a list of Cumulative Payment Limits.
  57. Part A of Schedule 1 includes the following provisions:

    "(ii) The pricing information provided under this Part 1 of the Pricing Schedule will only be used for the purposes of submission and approval of interim progress payments under clause 38.3 (Monthly Application for Payment) and 38.4 (Interim Payment Certificate) .

    18.0  Provisional Sum for Unspecified Accommodation Works

    To be expended under instruction by the Employer for work agreed by the District Valuer and the Contractor as referred to in clause 36.3 of the Conditions of Contract. 

    19.0  Provisional Sum for Aggregate Tax. 

    To be expended under instruction of the Employer in respect of Aggregate Tax levied on the Contractor, subject in aggregate to the relevant maximum amounts provided for in clause 36.3.3 of the Conditions of Contract. 

    20.0  Provisional Sum for Future Mining Works. 

    To be expended under instruction of the Employer for extra cost of undertaking Future Mining Works as referred to in clause 36.3 of the Conditions Contract."

  58. After the prose section of Part A there follows a schedule.  This schedule includes the following items:

    "Item 1.1.4.  Archaeology.  Sum:  £2,453,227.00 

    Evaluation Method: By percentage complete at Defined Dates...

    Item 7.9  Sign Gantries.

    Sum: £3,436,237.00  Evaluation Method: By percentage complete.

    Item £ 10.00  Signage.

    Sum: £1,514,239.00 

    Evaluation Method.  By percentage complete against agreed sums for sections identified by chainages. 

    Works Included.  All associated trenchwork, concrete foundations, the fixings, Roadside and Gantry Signage.  Road markings. 

    Item 18.00  Provisional Sum for Unspecified Accommodation Works.  Amount £1,900,000.00  Evaluation Method.  By percentage complete of expenditure under Employers Instructions. 

    Works Included:  All Advanced work required and not scheduled within the Employer's Requirements. 

    Item 19.00  Provisional Sum for Aggregate Tax.  Amount: £50,000.00 

    Evaluation Method.  As levied subject to the limits in clause 36.3.3 of the Conditions of Contract. 

    Item 20.0  Provisional Sum for Future Mining Works.  Sum:  £50,000.00 

    Evaluation Method.  By percentage complete. 

    Item 21.0  CONTRACT SUM (£) 485,500,000.00

    Value of Non-MSA Works: 484,507,354  Including Provisional Sum items, 18.0, 19.0 & 20."

  59. Appendix 2 to the D&C Contract is entitled "Employer's Requirements"
  60. I must set out substantial parts of the Employer's Requirements.  Section 1 of the Employer's Requirements is the introduction.

    This section includes the following provisions:

    "1.1  Preamble.

    1.1.3  Except where otherwise directed, all materials, workmanship, design and construction shall comply with:

    1. Standards, including Advice Notes and other documents listed in Annex 6-1, and Annex 1/2 as modified and extended by Annex 1/16 ...
    2. Undertakings given at the Public Inquiry and undertakings arising from the Secretary of State's Decision Letter of 23rd July 1997.

    1.1.4  The Works comprise all works necessary for the completion and opening of the Concession Road including obtaining all outstanding consents, approvals and permissions, provision of all facilities necessary for opening the road to the public as a toll road and the completion of all associated works necessary to comply with current practice and legislation .

    1.2.  Statutory Orders and Availability of Site .

    1.2.3  The Site boundaries are shown on the SDP series of drawings as listed in Annex 1/5.

    1.2.4  Notwithstanding the site boundaries as defined above, the Contractor shall be responsible for those locations remote from the site where permanent or temporary works may be necessary (as required in the Contract for remote traffic signing or forming parts of temporary diversions proposed by the Contractor) ...

    1.3.  Design Data

    1.3.1  Traffic figures to be used for Detailed Design are supplied by the Employer in Annex 1/4 ...

    1.3.5  Technical Approval Authority. 

    Prior to any Design Data being submitted under the Design Process, the TAA shall review the relevant Design Input Statement.  This may take the form of a statement outlining the basic parameters to be used for the Detailed Design or, for structures, an AIP.  The Design Input Statement shall be signed by the Designer and the Contractor.  The procedure for reviewing the Design Input Statement shall be as Section 3.4 of the Employer's Requirements for Structures except that the time period for review under the Design Process shall be 28 days .

    1.4.  Definitions ...

    'AIP' means an Approval in Principle Form or Form A: Approval in Principle Form shown in Annex 3/4 or Annex 3/9 respectively ...."

    "TAA means the Technical Approval Authority appointed in accordance with Schedule 7, Part 1, Section 1 paragraph 2.6 of the Concession Agreement save that in respect of the Rail Line Underbridges it shall mean Railtrack PLC ...

    1.5  Employer's Drawings

    1.5.1  Employer's Drawings are listed at Annexes 1/5 and 3/5 to the Employer's Requirements.  The status of each series of drawings is indicated in the following table as defined by one of the categories below:

    "Mandatory Requirements: these drawings cover essential elements of the Works which must be incorporated into the Contractor's proposals. 

    Provisional Drawings: These drawings show the Preliminary Design and are provided for guidance.  The Contractor may adopt or modify these designs to suit his own proposals, provided that in either event he can demonstrate that the proposals meet the Employer's Requirements and are in full compliance with the Made Statutory Orders. 

    Informatory Drawings: These drawings are issued for information only."

  61. Then there follows a schedule with columns.  The first two entries read as follows:

    "Post Decision Scheme Site Definition Plans.  Status:  Mandatory Requirements.  Comment: These drawings define the boundaries of the site to be provided by the Employer. 

    "Post Decision Scheme Road Works Plan/Profiles.  Status: Provisional Drawings.  Comment: The Highway alignments shown on these drawings may be modified by agreement with the relevant highway authorities but only to the extent that they remain within the Made Statutory Orders ..."

  62. Section 2 of the Employer's Requirements deals with highways.  Section 2 includes the following provisions.  Paragraph 2.10:

    "Traffic Signs, Traffic Signals and Road Markings ...

    2.10.2  The Contractor shall design and provide all signs (excluding tourist signing), signals and road markings required for the satisfactory operation of the BNRR tolling system and shall obtain all necessary agreements and approvals for his proposals from the relevant Highway Authorities.

    2.10.3  Traffic signs and signals shall be designed in accordance with Traffic Signs Manual and the appropriate standards listed in Annex 1/2.  The likely operating speeds and the mandatory speed limit shall be as described in Numbered Appendix 12/1.

    2.10.4  The Contractor shall be responsible for the detailed design, supply and installation of all signing necessary for opening and operating the road as a toll road including:

    • signing required for the operation of the tolling system.
    • modified or new signing on the M6 and M42 motorway approaches to the BNRR
    • direction and route confirmatory signs for non-trunk roads consistent with the signing policy of the relevant Highway Authority
    • all necessary warning, regulatory, informatory and directional signs required by new or revised side roads or junctions on all approaches, including temporary or permanent modifications to existing signing, as agreed with the relevant Highway Authorities.  Such signs may be sited at locations remote from the site and beyond the extent of highway works indicated on Side Roads Orders on land described in the Contract as Adjacent Areas, but exclude remote signing required solely as a result of BNRR being added to the highway network.

    2.10.5  Variable direction signs and message matrix signs shall be provided at the diverges between the BNRR and M6 and M42 Motorways and at other locations all to the satisfaction of the relevant Highway Authority.  Variable message signs shall be designed in accordance with the relevant standards listed in Annex 1/2.  Variable message signs will be required on the approach to tolling booths ."

    "2.12.16.  Variable message signs shall be provided in the most suitable form for their purpose.  The variable message signs on BNRR shall be designed for ...

    "• tolling information purposes, advising road users on the current toll price and status of toll booths ...

    2.14  Archaeological Works. 

    2.14.1  Previous archaeological investigations have been carried out on the site in order to identify any sites or areas of potential archaeological interest and evaluate their importance.  The 'BNRR Public Inquiry Archaeological Report' (1994) and the 'BNRR Archaeological Addendum to 1994 Archaeological Desktop' (2000) contain details of the Cultural Heritage of the Site and the surrounding area.  The 'BNRR Archaeological Project Design: General Strategy and Methodology' (2000; referred to below as the General Project Design) sets out the nature of the archaeological works to be undertaken in respect of each identified archaeological site and of the Site as a whole, together with standard methodologies to be applied in executing the archaeological works.  The BNRR Aerial Photograph Assessment: Archaeology: Rectified Mapping Report (August 2000) identifies and gives details of features visible on aerial photographs.  The requirements for Site No 7 in Table 2.7.3 of the General Project Design are extended.  Black Country SMR 10350 records cropmarks of a multiple ditch system in this area, of local significance.  The Contractor shall determine from the Rectified Mapping Report whether it suggests that the site is of more than local interest and is substantially affected by the BNRR works.  If so, more detailed treatment, including geophysical survey, trenching and excavation will need to be carried out.  In addition, the AP plotting indicates three possible extra sites, not listed in the General Project Design and as listed below, for which the Contractor shall assess the extent and impact of necessary investigation.  The Contractor shall also determine whether the AP plotting has revealed other sites requiring investigation.

    SK11960499 Crop marked ditch enclosure and linear ditches indicative of a former enclosure.  Aligned contrary to the modern fields, suggesting that they are more than former boundaries.

    SK12480443 Crop marked linear ditch and perpendicular linear ditch with possible rounded corner.  Could be a Roman camp, but this interpretation is very tenuous.  Also pit alignment of unknown date and function.

    SK12940449 Pit alignment, crop marked.

    2.14.2  The Contractor shall employ an Archaeologist who shall be a Member of the Institute of Field Archaeologists with at least 10 years' relevant archaeological experience since graduating.  The Archaeologist shall prepare Design Input Statements in respect of each archaeological site and in respect of scheme-wide advance works and scheme-wide works during construction, in accordance with the requirements of the General Project Design, and in accordance with Annex 1/3 part 5.

    2.14.3.  The Contractor should be aware of the possibility of uncovering archaeological features during the removal of topsoil or other soils within the Site.  In the event of a feature of possible interest being discovered and unless otherwise agreed with the Employer, the relevant Local Authority Archaeologists and English Heritage (as appropriate), the Contractor shall:

    1. cease the stripping of topsoil and other soils and materials in the vicinity of the feature of possible interest;
    2. immediately inform the Employer that a feature of possible archaeological interest has been uncovered.  After consulting with the Department's Agent, the Employer will decide whether English Heritage and/or the relevant Local Authority Archaeologist should be contacted and should this prove necessary the Contractor shall erect temporary fencing around the area/feature of possible archaeological interest and shall allow representatives of English Heritage and/or the relevant Local Authority Archaeologist access to the Site provided it is deemed safe to do so.

    2.14.4  In the event of a significant discovery being made the Employer, in consultation with English Heritage and/or the relevant Local Authority Archaeologist, will decide on an appropriate course of action and duly inform the Contractor in writing of that action.  Should it prove necessary for representatives of English Heritage and/or the relevant Local Authority Archaeologist to visit the Site the Contractor shall allow them access to the Site ..."

  63. Section 3 of the Employer's Requirements is headed "Structures".  This includes the following provisions:

    "3.1  New Structures.

    3.1.1  A list of the new Structures is given in Annex 3/1.  The Employer's Mandatory Requirements for Structures are given in Annex 3/7.  Employer's drawings illustrating the Preliminary Design and, where provided, CAMBBA's drawings which supersede the Preliminary Design are listed at Annex 3/5.  The drawings will be used to develop the Approvals in Principle.  However, where the CAMBBA drawings conflict with the Employer's Requirements the Employer's Requirements will be used as the benchmark....

    3.1.3  the following is the estimated numbers of new Structures.  The actual number of new Structures shall be determined by the Contractor in accordance with the Detailed Design."

    There then follows a schedule of structures which includes the entry "New Structure type, Gantries, Number 68 ...

    3.2  Existing Structures.

    3.2.1  An indication of the existing Structures forming part of the Works and requiring initial maintenance, alteration, demolition, strengthening or reconstruction are listed in Annex 3/2."

  64. I interject at this point to observe that Annex 3/2 does not include any gantries.
  65. Let me now return to the provisions of section 3 of the Employer's Requirements:

    "3.3  Structure Design.

    3.3.1  The preliminary Structure layouts were prepared to satisfy the route alignment and were used in submissions to both the RFAC and Public Inquiry.  The CAMBBA designs of the Structures representing the Preliminary Design are listed in Annex 3/5...

    3.4  Technical Appraisal and Certification Procedures.

    3.4.1  All proposals concerning the design of new Structures or work that involves existing Structures shall be subject to technical appraisal by a TAA.  The appraisal entails submission to the Employer and review of the proposals under the Design Process within the framework of the AIP contained in Annex 3/4, or for a Rail Line Underbridge a Form A: Approval in Principle in Annex 3/9 or a Design Input Statement.  A separate form shall be prepared for each Structure.

    3.4.2  The design of Highway Structures incorporated in the Works shall comply with Standards in Annex 2/1 ..."

  66. Section 5 of the Employer's Requirements deals with Motorway Maintenance Areas and the Operations Management Centre.  Section 5 includes the following provisions:

    "5.2.8  The Contractor shall be responsible for obtaining all necessary consents, approvals and agreements from the relevant planning authorities for the construction of the buildings and from the appropriate utility providers for the provision of services...

    5.3.7  The contractor shall be responsible for obtaining all necessary consents, approvals and agreements from the relevant planning authorities for the construction of the buildings and from the appropriate utility providers for the provision of services...

    5.5  Building Specification.

    5.5.1  An outline building specification to be used in detail design of the Operations Management Centre, the Maintenance Personnel Building and the Police Security Building is contained in Annex 5/1."

  67. Section 6 of the Employer's Requirements deals with Tolling Facilities.  This section includes the following provisions:

    "6.3.3  The buildings shall be fully serviced with electricity, gas (where practicable), hot and cold water supplies, drainage, heating, lighting, ventilation and in the case of rooms housing electronic control equipment, air conditioning, to a standard and specification to the satisfaction of the Employer."

  68. Section 9 of the Employer's Requirements is entitled "Safety Audits".  This provides as follows:

    "9.1  General

    9.1.1.  The scheme shall be subject to road safety audits in accordance with the Standard HD 19/94 and HA 42/94 except that the procedure shall be amended as given below. 

    9.1.12  The Stage 1 Safety Audit Report for the scheme is available for inspection at the office of the Employer.

    9.2  Stages of Audit

    Two further stages of audit shall apply:

    9.2.1  Stage 2 Audit: for any item or stage of the Detailed Design, a Stage 2 Safety Audit shall be carried out prior to the start of construction of that item or stage.

    9.2.2  Stage 3 Audit: immediately prior to occupation or use by the Employer of any part of the Permanent Works; any remedial works so identified shall be completed before opening of the road to public use except where otherwise agreed by the Department. 

    Depending upon the programme for the Works, it is anticipated that individual Stage 3 Safety Audits will be required for each side road and interchange.

    9.2.3  The Contractor should be aware that the Department may require Stage 3 Safety Audits to be undertaken for the traffic management works proposed for motorways and trunk roads.

    9.3  Method of Audit.

    9.3.1  The Safety Auditor shall be appointed by the Designer and shall be independent of the design team.  Communication between Auditor and the Designer shall be via the Employer.

    9.3.2  The audit brief prepared in accordance with Clause 2.20 of HD 19/94 shall exclude reference to Standards that are not included in the Technical Requirements.

    9.3.3  The Contractor shall implement at its own cost all recommendations of the Auditor except where otherwise approved by the Department.

    9.3.4  The Designer shall supply to the Employer reports and certificates at each stage of the audit to certify that the audit has been carried out and that except where otherwise approved the recommendations of the audit team have been incorporated into the Works."

  69. I interject at this point to say that Mr Richard Thomas of Ove Arup, who is based in Ove Arup's Cardiff office, was the road safety auditor appointed pursuant to section 9 of the Employer's Requirements. 
  70. Annex 1/3 to the Employer's Requirements deals with anticipated additional survey requirements.
  71. Section 5 of Annex 1/3 is headed "Pre-construction Archaeological Surveys" and it reads as follows:

    "The Contractor shall be responsible for designing, agreeing, organising and arranging the archaeological works to be undertaken both before the start of and during construction in accordance with Paragraph 2.14 of the Employer's Requirements. 

    "The Contractor shall procure that all Archaeological Works are designed and carried out in accordance with the Code of Conduct of the Institute of Field Archaeologists, the relevant Standard and Guidance documents issued by the Institute of Field Archaeologists, and the relevant guidance documents issued by English Heritage. 

    The Contractor shall submit archaeological drawings and Design Input Statements to the Employer in accordance with the Design Process, and shall copy them to English Heritage and the relevant Local Authority Archaeologist (as appropriate).  The archaeological Design Input Statements shall be Written Schemes of Investigation as required in accordance with the 'BNRR Archaeological Project Design: General Strategy and Methodology' (referred to below as the General Project Design). 

    Where more than one stage of archaeological works are required in accordance with the 'BNRR Archaeological Project Design: General Strategy and Methodology' (referred to below as the General Project Design), updated archaeological drawings and Design Input Statements shall be submitted in advance of each stage of archaeological works. 

    The Contractor shall, prior to submitting any archaeological drawings and Design Input Statements, agree liaison procedures with each of English Heritage and the relevant Local Authority Archaeologists. 

    The Employer may comment on an archaeological drawing or Design Input Statement on the grounds that the relevant archaeological drawing or Design Input Statement:

    1. is not in accordance with the General Project Design;
    2. does not take into account any relevant archaeological information in respect of the relevant archaeological site;
    3. does not comply with the Code of Conduct of the Institute of Field Archaeologists, the relevant Standard and Guidance documents issued by the Institute of Field Archaeologists, or the relevance guidance documents issued by English Heritage;
    4. does not comply with the Employer's Requirements;
    5. does not comply with Good Industry Practice.

    In reviewing any archaeological drawings or Design Input Statements, the Employer will take into account any views expressed by the English Heritage or the relevant Local Authority Archaeologist. 

    The Contractor shall not carry out any Works within any part of the Site or Adjacent Areas which are subject to any archaeological works until the archaeological drawings and Design Input Statements submitted under Review Procedure have been returned marked received."

  72. Annex 1/4 to the Employer's Requirements deals with Traffic Figures for Detailed Design.  In the section headed "Geometric Design" there appears the following passage:

    "Where the requirements of TD 16/93, as amended by Annex 1/16, cannot be achieved with regard to RFC values, then the geometric design of junctions shall be optimised to provide the greatest capacity available (up to the Design Year flows) within the available landtake and taking into account notified future highway improvement schemes.  Such optimisation shall not rely on new structures or the need for significant elements of service and utility diversions, such as relocation of electricity transmission towers, sub-stations or major valve chambers, which would otherwise not be included in the Project."

  73. Annex 1/5 to the Employer's Requirements is a list of Employer's Drawings.  The first section of this list is entitled "Site Definition Plans (Post Decision Scheme)".  This list of drawings includes drawing SDP-CEH-16.  That is a Site Definition Plan and the location covered by that site definition plan is indicated in Annex 1/5. 
  74. Annex 3/1 to the Employer's Requirements sets out details in new bridges to be constructed.  Bridge number 204 is shown in this annex as being Chasewater Footbridge.
  75. Annex 3/7 to the Employer's Requirements is entitled "Employer's Mandatory Requirements for Structures".  This annex includes the following provision:

    "9.3  The following Structures shall be constructed in accordance with the provisions set against it below ...

    5.  Gantries.

    "5.1.  General

    "Gantries shall be used to mount Advance Direction Signs, tolling signs and signals in accordance with paragraph 2.10 and 2.12 of the Employer's Requirements.

    5.2.  Loading

    "All gantries shall be designed to the full loading requirements of BD 51/98 including provision for signalling, and including impact loading as a result of Department's Change No 1.

    5.3  Provision for Signalling

    "Sign only gantries shall be designed such that any additional structural metal work can be added to accommodate the signalling without redesign of the gantry structure itself ...

    5.6  Re-use of gantries 

    Existing gantries may be re-used providing they comply at a minimum with the following requirements.

    1. a satisfactory structural assessment to BD 51/98. 
    2. the gantry must satisfy clauses 5.2 and 5.3 above. 
    3. the minimum sign area shall be 5m high and extend the full width of the gantry ...."
  76. Annex 5/1 to the Employer's Requirements is an Outline Building Specification. This includes the following passage at the very end of the last page.

    "Drainage.  Underground drains will be provided to collect both foul and surface wall."

  77. Annex 6/1 to the Employer's Requirements is the specification setting out the requirements for the Toll Collection System (TCS).
  78. Section 1 of Annex 6/1 is headed "Scope" and it includes the following provisions:

    "1.1  Purpose of this document

    This document contains the Requirements Specification of the Employer for the Toll Collection System (TCS) for the Birmingham Northern Relief Road (BNRR).  This document is referred to in the Conditions of Contract and the Employer's Requirements as the "Toll Collection System Requirements Specification". 

    This Toll Collection System Requirement Specification outlines the general requirements and parameters for the Toll Collection System and is not an exhaustive statement of the requirements for the Toll Collection System Works ...

    1.3  System Overview. 

    The Toll Collection System is a system that is installed as part of the Works.  The mission of the TCS is to allow the efficient, error-free processing of toll collection at the BNRR. 

    The Toll Collection System is based on the concept of a so called "open toll system", which implies that the Customer is required to pay toll fees at only one charging point, the Toll Station.  Each Toll Station consists of a number of Lanes, closed with a barrier to prevent the passage of non-paying Customers. 

    The Toll Collection System comprises the complete system required to charge fees at the Toll Stations and to support the Employer in operating the system ..."

  79. Paragraph 4 is headed "Document Overview".  This is a lengthy paragraph and it includes the following provision:

    "An option is a feature of the system that shall be included in the tender of the Toll Collection System.  However, the Employer will decide at a later stage if the option shall be implemented in the delivered system."

  80. Section 3.2 of this specification is headed "Characteristics".  This section sets out the characteristics which the Toll Collection System must possess.  This section includes the following provisions:

    "3.2.1.1.2[15] As an option the TCS shall inform the Road User:

    -- using variable message signs in front of the Toll Station over the carriageways showing only the actually applicable toll fees for all vehicle classes..."

    "3.2.1.1.3[47] The TCS shall not cause unnecessary delay to the passage of vehicles specified in Chapter 13.2(a), (b), (c) of the [NRSWA] (police vehicles, ambulances and fire engines) by giving away to the vehicle as soon as the Cashier or Supervisor have indicated that these vehicles are exempted from paying toll.

    [48] The processing time of the TCS for the Fee Charging process shall be equal to or lower than the times specified in the following table."

  81. There then follows a table showing very rapid response times.
  82. "3.7.3.2[250] Semi-Automatic Toll Lane Equipment for payment using coins shall be provided with a basket or hopper for easy coin insertion."
  83. Appendix 1/17 to the Employer's Requirements deals with "Traffic Safety and Management-Motorways and Trunk Roads".  This includes the following provisions:

    "2.  Responsibilities.

    2.1.  The Contractor shall be responsible for the design, construction and maintenance, at each location, of the traffic safety and management system and associated work as described in Clause 117 of the Specification and this Appendix including complying with the requirements and advice in the following publications."

  84. There then follows a list of standards and publications.
  85. "2.2  The Contractor shall appoint a Traffic Safety and Control Officer at the commencement of the Traffic Management Operation.

    2.3  The Contractor shall participate in regular traffic management meetings with the Employer, the Highways Agency and their maintaining agents, other relevant Highway Authorities, Police and other parties as may be specified by the Employer, throughout the traffic management period, to liaise on all matters relating to traffic management including inter alia:

    • layout of traffic management schemes ... "

    2.8  The Contractor shall be responsible for obtaining all necessary approvals, authorisations and/or agreements in relation to his proposed Traffic Safety and Management System from the relevant highway authorities and the Police, in advance of its implementation.  The Contractor shall agree with the authorities concerned the period of prior notice required to obtain such approvals, authorisations and/or agreements."

  86. Appendix 12.1 to the Employer's Requirements is entitled "Traffic Signs: General" and this includes the following provisions:

    "1.  The likely operating speeds (design speeds) and mandatory speed limits shall be as follows:

    BNRR-main route. 

    Design speed: 120 kilometres per hour. 

    "Mandatory Speed Limit: 70 miles per hour ... "

    "Before using these figures for design of traffic signs, the Contractor shall satisfy himself as to the proposed design speed and/or prevailing mandatory speed limit at the particular locations being considered.  Reference should also be made to the side road design standards given in Annex 1/2.

    "2.  The installation of mandatory signs shall be complete before new roads are opened to traffic."

  87. That completes my reading of the Employer's Requirements, which constitute Appendix 2 to the D&C Contract.  Let me now move on to Appendix 4 to the D&C Contract.
  88. Appendix 4 deals with the design and review procedure.  Part C of Appendix 4 reads as follows:

    "1. All Design Data shall be prepared by or under the supervision of the Designer.  The Contractor shall submit all Detailed Drawings to be used for Construction to the Employer who shall selectively review and audit the same.  In addition to the Detailed Drawings the Contractor shall provide as much Design Data as the Employer may request for carrying out review and audit.

    2.  All Detailed Drawings submitted shall be the subject of a Design Review Certificate stating that the design has been prepared in accordance with and complies in all respects with the Employer's Requirements and the Design Input Statement.  Where appropriate, the Design Review Certificate shall be accompanied with a Check Certificate.

    3.  All Design Review Certificates, Check Certificates and Detailed Drawings together with additional requested Design Data, shall be submitted to the Employer in triplicate free of charge by the Contractor.

    4.  The Employer shall, as soon as practicable, and in any event within 28 days, return one copy of the relevant document covering the submission endorsed "received",  "received with comments" or "comments" as appropriate.  Where a submission is endorsed "received" the Contractor may proceed without further reference except as expressly provided for under the Design and Checking Procedure.  Where the submission is endorsed 'received with comments' provided the material, the subject matter of the submission, is amended by the Contractor in accordance with those comments, then except as expressly provided for in the Design and Checking Procedure the Contractor may proceed without further reference.  Where the submission is endorsed 'comments' then, unless the matter is referred to the Disputes Resolution Procedure, it shall be revised by the Contractor and re-submitted to the Employer."

  89. Appendix 6 to the D&C Contract sets out the Dispute Resolution Procedure.  In the first instance all disputes are referred to an adjudicator.  Paragraph 9 of Appendix 6 is entitled "Referral to the Courts".  It provides:

    "9.1  The decision of the Adjudicator shall be final and binding on the parties until the Dispute is finally determined by:

    "9.1.1  the agreement by the parties; or

    "9.1.2  legal proceedings in accordance with paragraph 9.2. 

    Prior to such final determination the decision of the Adjudicator shall be implemented without delay and the parties shall be entitled to such reliefs and remedies as are set out in the Adjudicator's decision (and shall be entitled to summary enforcement thereof) regardless of whether such decision is or is to be the subject of any challenge or review."

    9.2  Subject to paragraph 9.5, a party may, within 60 days after receipt of the determination of the Adjudicator, refer any matter comprised in the Construction Dispute to the Court for determination, and the Court shall have jurisdiction to determine the rights of the parties in respect of such matters.  The Court shall have full power to open up, review and revise any endorsement, decision, opinion, instruction, notice, statement of objection, finding, determination, requirement or certificate of the Department's Agent, the Department's Representative, the Employer, the Employer's Agent or the Certifying Engineer related to the Construction Dispute and any determination of the Adjudicator ..."

  90. Appendix 10 to the D&C Contract sets out a List of Relevant Authorities.  The list in Appendix 10 includes, under the heading "Government Departments", the Department of the Environment, Transport and the Regions, the Highways Agency and also the Police.  Under the heading "Local Authorities" there is included the Lichfield District Council.
  91. A number of Statutory Undertakers and utilities are listed in section 3 of Part A of Appendix 10, and a number of other bodies are listed in section 4 of Part A of Appendix 10.
  92. One police organisation which falls under the rubric of Appendix 10 is the Central Motorway Police Group ("CMPG"). 
  93. Having identified the relevant contractual provisions, I should now give some supplementary information.
  94. The firm of engineers whom MEL appointed as TAA were Jacobs Babtie, to whom I shall refer as "Babtie".  Babtie also performed certain other functions under the contract to which I shall revert later.
  95. The statutory provisions referred to in clause 1.1 and clause 17.3.4 of the D&C contract are as follows.
  96. Section 85 of the New Roads and Street Works Act 1991 ("the 1991 Act") provides:

    "(1)  Where an undertaker's apparatus in a street is affected by major highway works ... the allowable costs of the measures needing to be taken in relation to the apparatus in consequence of the works ... shall be borne by the highway ... authority concerned and the undertaker in such manner as may be prescribed. 

    "(2)  The regulations may make provision as to the costs allowable for this purpose

    (4)  The regulations shall provide for the allowable costs to be borne by the authority and the undertaker in such proportions as may be prescribed."

  97. The Street Works (Sharing of Costs of Works) Regulations 1992 were made pursuant to section 85 of the 1991 Act.  These regulations include the following provisions:

    "3.  Save as provided in regulations 7 and 9 in cases where works are initiated by an authority and an undertaker executes measures which need to be taken in respect of his apparatus because of those works, the authority shall pay to the undertaker a sum equal to the allowable costs incurred by the undertaker in taking those measures, provided that the authority shall pay only 82 per cent of the said allowable costs if the authority pays to the undertaker a sum equal to 75 per cent of the estimate of the said 82 per cent pursuant to paragraph (a) of regulation 9 ...

    9.  Allowable costs under any of the provisions of these Regulations shall be payable as follows:-

    "(a) in the case of any payment due from an authority pursuant to regulations 3 and 6, the authority may pay to the undertaker a sum equal to 75 per cent of the estimate of 82 per cent of the allowable costs in a single lump sum before the works begin or, if the authority and the undertaker so agree in the case of works of an estimated duration of more than 3 months, by instalments of such amounts payable at such times during the execution of the works as the authority and undertaker agree;

    (b) after the works have been completed the person to whom the allowable costs are due (the creditor) shall issue to the person from whom they are due (the debtor) an account of the allowable costs and within 35 days of that account having been issued the debtor shall pay to the creditor a sum equal to the allowable costs ..."

  98. The Street Works (Sharing of Costs of Works) Regulations came into force on 15th January 2001.  These new regulations replaced the 1992 regulations.  So far as the issues in this case are concerned, the 2001 regulations are in substantially the same terms as the 1992 regulations.
  99. Let me now turn to the TCS requirements specification which, it will be recalled, is set out at Annex 6/1 to the Employer's Requirements.  This specification was developed in accordance with clause 9.3 of the D&C Contract.  The final version of this specification was dated 6th February 2002.  Insofar as it is necessary to refer to changes between Annex 6/1 and the final version of the TCS requirements specification, I shall do so later in this judgment.
  100. The subcontractor who designed and supplied the toll collection equipment to CAMBBA was Ascom Monetel SA ("Ascom").
  101. A number of disputes have arisen between the parties concerning the application of the above contractual provisions to events which have occurred on site.  The disputes were referred to adjudication.  In respect of 14 of these disputes, the unsuccessful party did not accept the adjudicator's decision.  Accordingly, in order to obtain the Court's decision on these matters, the unsuccessful party gave notice in accordance with paragraph 9.2 of Appendix 6 to the D&C Contract.  Thereafter the parties commenced the present proceedings.
  102. Part 3.  The Present Proceedings

  103. By a claim form issued in the Technology and Construction Court in London on 22nd October 2004, MEL sought relief in respect of the following six disputes in relation to which it had been unsuccessful before an adjudicator:

    1. A dispute as to whether in calculating the sums payable for Provisional Sum items the Provisional Sums shown in the contract should be deducted.
    2. A dispute as to whether MEL are entitled to recover from CAMBBA the costs which MEL has incurred in employing another contractor to enclose Chasewater Footbridge.
    3. A dispute as to whether CAMBBA are entitled to be paid extra for work done outside the Site boundary at Dunton Island.
    4. A dispute as to whether MEL is entitled to a reduction of the Contract Price because certain toll station signs were post-mounted rather than gantry-mounted.
    5. A dispute as to whether CAMBBA are entitled to be paid extra for establishing signs to impose speed limits on the approaches to mainline toll stations.
    6. A dispute as to who should pay the sum of £30,000 required by the Lichfield District Council as a condition for the grant of planning permission for the erection of certain buildings at Weeford.
  104. CAMBBA by their counterclaim in this action sought relief in respect of another dispute about Provisional Sums.  This dispute concerned how interim payments in respect of Aggregate Tax should be calculated.
  105. These proceedings are generally referred to as "the London action". 
  106. By a claim form issued in the Technology and Construction Court in Birmingham on 22nd October 2004, CAMBBA applied for relief in respect of the following six disputes in relation to which they had been unsuccessful before an adjudicator:

    1. A dispute as to whether MEL is entitled to a price reduction because CAMBBA have failed to upgrade certain existing gantries on which they placed new signs.
    2. A dispute as to whether CAMBBA are entitled to be paid extra for installing package treatment plants as opposed to cesspools at four locations.
    3. A dispute as to whether CAMBBA are entitled to be paid extra in respect of certain archaeological works.
    4. A dispute as to whether MEL is entitled to a share of the discounts received pursuant to section 85 of the 1991 Act.
    5. A dispute as to whether CAMBBA are entitled to extra payment for constructing part of the Lodge Lane Link to a width of 10 metres as opposed to 7.3 metres.
    6. A dispute as to whether CAMBBA are entitled to extra payment in respect of certain works done at the premises of the Vehicle Inspectorate.
  107. These proceedings are generally referred to as "the Birmingham action". 
  108. CAMBBA did originally advance two further claims in the Birmingham action but these claims are not pursued and I say no more about them. 
  109. There is one other issue which arises in the Birmingham action.  This is the question whether certain claims are shut out by the so-called Belfry Agreement.  The Belfry Agreement is the name given to a document signed by representatives of the parties in March 2002.  The document is given this name because it is the culmination of discussions which started four months previously at a meeting held in the Belfry Golf Club.  That meeting is variously referred to as "the Belfry meeting" or "the Belfry workshop". 
  110. By a claim form issued in the Technology and Construction Court in London on 4th March 2005, MEL sought relief in respect of a further dispute in relation to which it had been unsuccessful in adjudication.  This dispute concerns whether CAMBBA are entitled to extra payment for reducing the height of certain coin baskets at toll booths.  These proceedings are generally referred to as "the coin baskets action". 
  111. On 21st March 2005 Her Honour Judge Kirkham, sitting at the Technology and Construction Court in Birmingham, ordered that the Birmingham action be transferred to London.  In due course an order was made that the three actions should be tried together. 
  112. The trial of the three actions commenced on 17th October 2005.  Mr John Blackburn QC and Mr Darryl Royce represent MEL.  Mr David Streatfeild-James QC and Ms Nerys Jefford represent CAMBBA.  The first day of the trial was taken up with opening speeches.  On the second day of the trial there was a Site view.  After that evidence was called in the following order:

    MEL's factual evidence.

    CAMBBA's factual evidence.

    The expert evidence.

  113. After the evidence had been called the trial was adjourned for a period to enable counsel on each side to prepare written closing submissions and then oral closing speeches.  Whilst counsel were engaged in that task I had the opportunity to study the evidence as well as the parties' written closing submissions.  Oral closing speeches were delivered yesterday, which was Monday 14th November.
  114. Having outlined the course of these proceedings, my next task will be to outline the evidence which was adduced at trial.  After that I shall deal with the issues concerning the Belfry Agreement because these issues impact on a number of individual disputes between the parties.  Having dealt with the Belfry Agreement, I shall then turn individually to each of the disputes which have been referred to this court for determination.
  115. As indicated just now, however, my next and immediate task will be to outline the evidence.
  116. Part 4.  MEL's Factual Evidence

  117. In this part of the judgment I shall summarise the evidence given by MEL's factual witnesses.  In doing so, I shall weave together the gist of each witness's written statement and oral evidence.
  118. JONATHAN LANGHAM

  119. Mr Langham is a chartered civil engineer who has been involved in the construction of roads since 1968.  Mr Langham has been construction director of MEL since February 2000.  He dealt with the preparation of tender documents for the design and build contract for the M6 toll road.  He dealt with the award of the contract to CAMBBA.  During the construction period Mr Langham has carried out the functions of employer's agent.
  120. Mr Langham has prepared a witness statement which sets out the narrative history of events and summarises the relevant correspondence.  Much of this statement is uncontroversial.  Although it is extremely helpful as a reference document, it does not all need to be reiterated in this judgment.
  121. Chasewater Footbridge

  122. Chasewater Footbridge is a footpath over the M6 toll road.  On one side of the bridge there is a recreational lake and a public open space.  On the other side of the bridge the footpath leads to a nearby housing estate.  The footbridge was constructed in 2002 with a parapet height of 1.15 metres. 
  123. On 11th November 2002, PC Turner wrote to Mr Langham expressing the police's concern that this bridge may become a congregation point for youths and that objects may be thrown from the bridge onto the motorway. 
  124. In cross-examination Mr Langham was asked about this letter.  He said that MEL recognised the letter as setting out a concern raised by the police.  MEL did not regard the letter as setting out a requirement of Chasewater Footbridge being closed or indeed as setting out any requirement that had to be complied with.  Mr Langham did not even reply to that letter.
  125. On 1st April 2003 the police reported an incident when youths were throwing missiles from the bridge.  Mr Langham took the view that this was a public order matter to be dealt with by the police.
  126. At the end of April there was another incident.  This time a brick was thrown from Chasewater Footbridge and it went through the window of a passing CAMBBA tractor.  Terry Lewis, MEL's construction manager, expressed the view that the footbridge should be enclosed.  This incident was a source of concern to Mr Langham and triggered his action thereafter.
  127. On 2nd May Mr Langham wrote to Mr Neal reporting the problem and requesting his proposals for making the Highway Works safe for the public.  It was MEL who raised this matter.  Mr Langham was not passing on a requirement of the police.  During May Mr Langham made a note in his diary analysing the problem from all angles.  He set out the possible remedial measures that may be taken and the relevant considerations.  This was not a document which he sent to any other party.
  128. The stance adopted by CAMBBA in May 2003 was that the problem of youths throwing objects from the bridge was a public order matter for which CAMBBA were not responsible.  If MEL or the Highways Authority wanted security measures to be taken, MEL would have to issue an instruction and CAMBBA would be entitled to payment for the work involved. 
  129. There was an argument in correspondence about this matter.  Mr Langham relied on departmental standard BD 29-87.  He did not argue that enclosure of the bridge was a police requirement because it was not his view that this was a police requirement.  It can be seen from the bundle that during June AAJV were working on a design solution to the problem, but Mr Langham was not aware of this at the time.  Mr Langham did not attend the meeting between PC Turner and CAMBBA.
  130. On 23rd July Mr Langham received PC Turner's letter dated 18th July.  Mr Langham knew from his discussions with Mr Neal that this letter was coming.  Mr Langham subsequently discussed this letter with PC Turner, when she called into MEL's office.  At MEL's commercial review meeting on 1st August 2003 the problem of Chasewater Footbridge was discussed.  MEL decided to consult the TAA.
  131. After further discussions with the police, MEL came to the conclusion that it was necessary to enclose the footbridge.  Mr Langham does not recall that this was a specific requirement of the police. 
  132. Some time before 12th September 2003 MEL commissioned Babtie to design an enclosure for the footbridge.  On 19th September Babtie submitted their detailed design for the enclosure.  This design had to take into account wind loading and the effect of ice in winter.  Mr Langham is confident that Babtie did this although Mr Langham did not personally check the calculations. 
  133. The actual enclosure work was carried out by other contractors, because Mr Langham understood that CAMBBA would not do this work unless they received an Employer's Change.  The work was done in two stages.  Initially the bridge over the motorway was enclosed.  MEL considered, however, that this was insufficient.  So the enclosure was then extended for the full length of the footbridge on either side of the motorway.
  134. In November 2003 Mr Langham had discussions with PC Atkin of the CMPG.  He understood from those discussions that the police would object to the issue of a PTU, unless Chasewater Footbridge was either closed to the public or enclosed.  Accordingly, MEL arranged for the bridge to be closed to the public until the enclosure was erected.
  135. Dunton Island

  136. Dunton Island is a roundabout at junction 9 of the M42.  It also enables traffic to access the M6 toll road.  The southbound entry slip road leading onto the M42 required to be widened in order to accommodate anticipated future traffic flows.  At the top of the slip road the widening works would extend onto land beyond the Site boundary as defined in the D&C Contract.  This land, although outside the site, belonged to the Department of Transport.
  137. There was an argument in correspondence about whether or not the works on this land fell within the contract.  In order to progress matters, Mr Langham asked Mr Faulkner, CAMBBA's commercial manager, for an estimate of the cost of the disputed works.  In an e-mail dated 17th October 2002 Mr Faulkner gave an estimate in the order of £25,000.  Subsequently CAMBBA said that the works had been carried out and gave a lump sum quotation of £180,000 for those works.  Mr Langham maintained in correspondence that CAMBBA were not entitled to an Employer's Change, a Department's Change or any additional payment in respect of those works.
  138. Mandatory Speed Limits

  139. The first occasion on which MEL raised a concern about the speed of vehicles approaching mainline toll stations was the "walk through" meeting of 12th August 2002.  This concern was voiced by Mr Moretti, who had been seconded to MEL because of his experience of Italian Autostrada.  Tony Ball of MEL shared this concern.
  140. Over the next few months there was correspondence between MEL and CAMBBA on this matter.  CAMBBA's position, which was summarised in a letter dated 4th December 2002, was that mandatory speed limit signs at mainline toll stations were unnecessary and confusing. 
  141. Mr Langham also approached the road safety auditor, Mr Thomas, on this matter.  In a letter dated 17th December 2002 Mr Thomas expressed his view that mandatory speed limits were probably unnecessary but that the CMPG should be consulted. 
  142. On 17th January 2003 there was a meeting between MEL, CAMBBA and others about toll plaza safety, but Mr Langham did not attend.  According to the various notes of that meeting, Mr Rooker of CMPG advised that there should be a mandatory speed limit of 50 miles per hour on the approach to mainline toll plazas.  AAJV expressed a similar view to the road safety auditor.
  143. On 27th January CAMBBA wrote to MEL stating that they could not promote mandatory or advisory speed limit signs.  This letter did not put Mr Langham's mind at rest, because he believed that the police (like MEL) favoured mandatory speed limit signs.
  144. On 31st January MEL commissioned Babtie to prepare a report on the matter.  On 13th February there was a meeting between MEL, CAMBBA and others at which various safety measures were agreed to be taken, including 50 mile per hour speed limits.  Steve Warren represented MEL at this meeting. 
  145. On 24th February Babtie produced their report which had been commissioned on 31st January.  Babtie recommended a mandatory 50 mile per hour speed limit on the approach to mainline toll plazas.  On 26th March Mr Langham sent a letter to CAMBBA which seems unduly harsh, but Mr Langham explained in cross-examination that this was because he had not then seen any minutes of the 13th February meeting.  Mr Langham's letter crossed in the post with a letter from CAMBBA setting out what they had agreed to do at the February meeting.
  146. On 1st April Mr Ball of MEL wrote to the DA stating that in the view of MEL and CMPG there should be mandatory speed limits of 50 miles per hour and then 30 miles per hour on the approaches to mainline toll stations.  At this time MEL and CMPG were having very frequent meetings and it was Mr Rooker of CMPG who had suggested a step down from 50 to 30 miles per hour.
  147. On 2nd April the DA replied that the initial view of the Department of Transport was that this was not necessary.  Furthermore, this measure would necessitate a change to the draft M6 toll regulations.  The DA added that in order to obtain Department of Transport approval, MEL would need to get the backing of the CMPG for their proposals. 
  148. It was really CAMBBA's responsibility to deal with these matters.  However, MEL stepped in because, in Mr Langham's view, CAMBBA were failing to deal with these matters satisfactorily.
  149. On 2nd May 2003 Mr Langham and his colleagues attended a meeting with the DA, CAMBBA and AAJV.  It was agreed that AAJV would revise their drawings in accordance with the February meeting and re-submit these through the review and safety audit process.  There were further meetings during May.
  150. In a letter to MEL dated 17th June and a letter to the Highways Agency ("HA") dated 1st July, CMPG set out their view that there should be speed limits of 50 miles per hour and then 30 miles per hour on the approaches to mainline toll stations.  It was the function of the CMPG to give advice rather than instructions on these matters.  Mr Langham had asked CMPG to set out their advice in writing.  This advice was confirmed in a later letter from Mr Rooker and Mr Atkin of CMPG.
  151. In due course the HA secured a traffic regulation order imposing a 50 mile per hour speed limit followed by a 30 mile per hour speed limit on the approaches to mainline toll stations.  By a letter dated 5th September MEL required CAMBBA to incorporate these speed limits and consequential matters into their design. 
  152. CAMBBA duly did so, but there was a dispute in correspondence as to whether the introduction of mandatory speed limits constituted an Employer's Change.
  153. The Belfry Agreement

  154. MEL and CAMBBA attended a workshop on 29th to 30th January 2001.  The objective was to promote openness, to resolve the parties' differences and to direct everyone's energies to completing the project.
  155. Unfortunately more disputes and claims between the parties arose during the period between January and November 2001.  In order to address these matters, a board level workshop was held on 15th November 2001 at the Belfry Golf Club.
  156. Mr Langham made a presentation.  He proposed that both MEL and CAMBBA should drop all claims against each other.  In part of Mr Langham's handout he used the graphic phrase "putting the contract in the drawer".  However, CAMBBA did not want that.  CAMBBA made it clear on 15th November that they wanted to work in accordance with the contract. 
  157. During the meeting Mr Langham said that if CAMBBA made unjustified claims then MEL would implement "devices" in order to reduce the Contract Price.  By this Mr Langham meant that he would construct Employer's Changes which would reduce the Contract Price.  In other words, MEL would make tit for tat counterclaims against CAMBBA.  CAMBBA were concerned at this suggestion. 
  158. As at November 2001, Mr Langham considered that CAMBBA were making unjustified claims.  Relations had reached a pretty low level.  Accordingly, Mr Langham proposed that the letters of claim sent by each side in correspondence should be "parked".  It was agreed that a list of those letters would be drawn up.
  159. By the word "parked" (which features in several MEL documents of this period) MEL meant that neither side would pursue the various letters of claim which it had sent.  However, the word "parked" indicates a temporary rather than a permanent state of affairs.  It does not mean that those claims were abandoned forever.
  160. The directors of MEL and CAMBBA met again on 16th January 2002 but the list of relevant letters had not yet been drawn up.
  161. By 28th January a list of relevant letters sent by each side had been drawn up and Mr Langham sent a draft agreement to Mr Neal for signature.  At a meeting on 31st January, Mr Neal said that the document should be more a statement of intent rather than something in place of the D&C Contract.
  162. On 21st February Mr Neal sent a letter to Mr Langham in which he declined to sign the document MEL had prepared.  He continued:

    "This is on account of the fact that the letter constitutes a change to the Conditions of Contract, which neither of us are empowered to agree to.  As discussed we agreed to draft out a "Statement of Intent" which adequately reflects the agreements and discussions that have taken place between ourselves."

  163. Mr Neal attached to his letter a document headed "Statement of Intent" setting out his proposed wording.
  164. During March 2002 both Mr Langham and Mr Neal signed the document, which Mr Neal had produced on 21st February.  That document reads as follows:

    "Statement of Intent".

    "Both MEL and CAMBBA will work together to achieve the timely and successful opening of the Project by the end of September 2003.  Annex 1 contains a list of letters itemising certain issues which it is agreed CAMBBA will not pursue in respect of claims for extension of time and/or Price Adjustment against MEL.  Both parties agree that they will work together to achieve a final account price of £485.5 million with pricing adjustments only applying in respect to increases or decreases in the Scope of Works, Provisional Sums, claims against the Highways Agency and any other Third Party or Relevant Authority and other unforeseen events or circumstances as provided for in the Contract. 

    "Where departures from Standards are technically acceptable, MEL will not seek any price reductions as a condition of acceptance unless in doing so MEL would suffer loss, damage or diminution in value.  This applies to Departures that have already been accepted technically and those which are being or may be proposed."

  165. Annex 1 to this document was headed "Schedule of CAMBBA and MEL letters that have no contractual or commercial effect".  It took the following form.  Letters are identified by their date and reference number.  There is then a summary of the subject matter of the letter.  There is then a column for comments.
  166. The first page of Annex 1 lists letters sent by CAMBBA.  The second page of Annex 1 lists letters sent by MEL.
  167. It was made clear in the third column of Annex 1 that CAMBBA were only dropping claims against MEL and claims for an Employer's Change.  CAMBBA were not dropping any claims which they might have against HA or for a Department's Change.
  168. This document is referred to by the shorthand "the Belfry Agreement", because its origins lay in the convivial meeting at the Belfry Golf Club in November 2001.
  169. In Mr Langham's view the purpose of the Belfry Agreement went beyond the mere dropping of claims.  The idea was that both parties would pull together and would concentrate their efforts on achieving early completion of the motorway.  Mr Langham accepted Mr Neal's statement to the effect that Mr Langham and Mr Neal were not empowered to make a formal contract.  Mr Langham also accepted that both men would keep their word.  Mr Langham regarded the Belfry Agreement as a "commercial" agreement rather than a "contractual" agreement.
  170. Omission of Gantries

  171. Annex 6/1 to the Employer's Requirements sets out the requirements for the Toll Collection System ("TCS") 
  172. Mr Langham considered that the phrase in paragraph 3.2.1.1.2[15] "over the carriageways" meant that the signs had to be gantry-mounted.

  173. Pursuant to paragraph 1.4[1] of Annex 6/1 an option is a feature of the TCS which must be included in the tender price but which the employer may later omit.
  174. Representatives of MEL and CAMBBA held numerous meetings to deal specifically with the TCS.  The lane functional design was developed at a TCS meeting on 16th February 2001, which Mr Langham did not attend.  There is nothing in the minutes of this meeting about the variable message signs being overhead.
  175. On 17th May 2001 there was a mainline signing forum meeting between MEL and CAMBBA.  The minutes of this meeting include the following paragraph:

    "Gantries for Toll Plazas". 

    "It was agreed that two gantries on the approach to mainline toll plazas would be sufficient,  the 1 mile signs could be post mounted.  It was also agreed that gantries would not be required on approaches, slip road toll plazas if a safe system of post mounted signage could be designed.  Babtie to confirm basis of Atkins Odlin design at tender stage."

  176. In the meantime MEL, CAMBBA and Ascom were continuing to develop the specification for the TCS.  This had to be finalised by the design freeze date, 19th September 2001.
  177. On 10th September 2001 MEL sent to CAMBBA version 2 of the TCS requirements specification.  Paragraph 3.2.1.1.3 of this document provided:

    "The TCS shall inform the road user using variable message signs in front of the toll station over the carriageways showing only the actual applicable toll fees for cash or card payment for all vehicle classes.  These signs are the same as those referred to in the final sentence of clause 2.10.5 of the Employer's Requirements.  The vehicle classes referred to in this requirement are the classes according to the initial configuration specified in [18], see also figure 7."

  178. This provision re-appeared, albeit with a different paragraph number, in the third and final version of the TCS requirements specification, which was reviewed and formally issued on 6th February 2002.
  179. It can be seen from this sequence of events that in practice MEL exercised its option to have the variable message signs mounted on gantries on 10th September 2001.  This is because the words "as an option" which appear in paragraph 3.2.1.1.2[15] are omitted from version 2.
  180. On 3rd December 2002 Mr Langham wrote to CAMBBA in the following terms:

    "Employer's Change No 13, Relaxation of Requirement for signing of the 1 mile approach to