BHC Ltd v Galliford Try Infrastructure Ltd (t/a Morrison Construction) [2018] EWHC 368 (TCC)

27th Feb 2018

Stephanie Barwise QC successfully appeared in Part 8 proceedings for the claimant sub-contractor BHC Ltd (“BHC”) on the development of a gas processing plant in the Laggan Tormore gas fields off the Shetland Isles: one of the biggest UK construction projects.

BHC sought part 8 declaratory relief as to the meaning of certain variations issued under the contract.

Total E&P Limited had engaged Petrofac Facilities Management Limited to carry out the construction of a gas processing plant in Shetland, for the processing of hydrocarbon from the Laggan and Tormore gas condensate fields off the coast of the Shetland Isles. Petrofac engaged the defendant (“Morrison”) as a sub-contractor to carry out civil engineering and building works as part of the construction of the plant and Morrison had engaged the claimant BHC to carry out structural steelwork (including associated design works), roof and wall cladding, and precast concrete flooring works for buildings to be constructed as part of the project (“the Contract”).

The original Contract provided for only three buildings to be constructed, namely, the administrative building, the gatehouse and a workshop, but it was anticipated by the parties that additional buildings would be required to provide shelter for items of plant. During the project, 33 additional shelter buildings were instructed by change order instructions (“COIs”) issued under the Contract. A dispute had arisen between the parties as to the basis on which the works carried out pursuant to the COIs should be valued or measured.

The principal issue was whether these variations, properly construed, provided for re-measurement of the entire works contained in the change order, or alternatively whether the starting point for measurement was to take the lump sum quote and to make additions to and omissions from that quote, a process known as ad-measurement.

The Judge, Mrs Justice Finolla O’Farrell, held that the proper construction of the variations to the Contract effected by the COIs was that they provided for complete re-measurement of the entire works as opposed to ad-measurement.

Stephanie Barwise QC (instructed by Shulmans LLP) for the Claimant.

To view the full judgment click here.

27 February 2018

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