NIHE v Dixons (2019)
Neutral citation: Northern Ireland Housing Executive v Dixons Contractors Ltd [2019] NIQB 19
NEC contract topics: inconsistencies or ambiguities, clause 17.1
Form of contract: NEC 3 Term Service Short Contract
Main areas of law: review of an adjudicator's decision, errors in fact, interpretation of contracts, entire contract.
Background and the Dispute
The Northern Ireland Housing Executive and Dixons Contractors entered into a contract in May 2016 for the purpose of replacing windows with double-glazed units in NIHE properties located in the southern region of Northern Ireland. The form used was the NEC3 Term Service Short Contract (April 2013) with amendments. The contract, titled “Lot 1 – South – Low Rise Double-Glazing 2016 CTO20”, included a number of documents referred to collectively as the Service Information.
The dispute arose concerning the obligation to provide finishing trims for the windows. The Code of Practice specified that finishing trims should be cellular extruded PVC-UE trims. However, the relevant Drawings did not depict or expressly require these trims. Dixons contended that this gave rise to an inconsistency or ambiguity. On 28 August 2018, Dixons issued a Notice of Intention to Refer to Adjudication, seeking a declaration on the issue.
The adjudicator appointed by the RICS issued a decision on 5 October 2018, finding that there was an ambiguity or inconsistency between the Code of Practice and the Drawings. The adjudicator did not address the wider contractual context, including the Price List and other documents, limiting the decision to a comparison between the Code and the Drawings. The NIHE issued a Notice of Dissatisfaction under clause 93.3(8) of the contract and referred the matter to the High Court.
Legal Issues
The central legal issue was whether the adjudicator erred in law by finding that there was an ambiguity or inconsistency solely between the Code of Practice and the Drawings, without considering the entire contract. The court had to determine if, as a matter of contractual interpretation, the requirement to provide trims formed part of the contractor’s obligations despite their absence in the Drawings.
The NIHE contended that there was no such ambiguity or inconsistency when the contract was read as a whole. Dixons argued that the adjudicator had been right to confine his analysis to the Code of Practice and Drawings and that an ambiguity existed within that limited scope.
Judgment
Horner J held that while there was a difference between the Code of Practice and the Drawings, this did not amount to an ambiguity or inconsistency when the contract was interpreted in its entirety. The judge made clear that:
“The issue of whether there is an ambiguity or inconsistency can only be determined in the context of the contract between the NIHE and the defendant because both documents are part of that contract and it is this contract which regulates their relationship.”
The judge found that the adjudicator had erred by adopting a narrow view of the dispute and failing to consider the wider contractual framework. The Code of Practice and Drawings formed only part of the contractual documents. The Specifications, Price List, Service Description and tender documents clearly indicated that trims were included in the scope of works.
The judgment cited relevant principles from authorities such as McGeown v Direct Travel Insurance (2004) and Wood v Capita Insurance Services (2017), emphasising the need to consider the contract as a whole and to give effect to its commercial purpose. Horner J accepted that there was a textual difference between the Code and Drawings. However, the Price List and Specifications made it clear that trims were part of the contractor’s obligations. He stated:
“Any reasonable reading of the Drawings and the Codes of Practice in the context of this Contract must be on the basis that the fitting of windows required trims where the circumstances set out in the Codes of Practice demand them.”
The court concluded that there was no ambiguity or inconsistency and held that the adjudicator had erred in law. The judge invited submissions on the appropriate relief and costs.
NEC contract learning points and implications for the construction industry
This case highlights the importance of interpreting NEC contracts by reference to the contract as a whole. The judgment reinforces that individual documents should not be read in isolation. In the NEC framework, the Service Information and other contract components such as the price list, description of service and specifications must be harmonised. A discrepancy between any two parts will not, without more, give rise to an ambiguity or inconsistency if the wider contract resolves the issue.
The case confirms that adjudicators must apply correct legal principles and consider the entirety of the contract where legal interpretation is involved. A limited approach confined to only part of the contract can result in error and the potential for decisions to be set aside.
Contractors and employers alike should ensure that their tender documents are coherent and clearly structured. In NEC contracts, particular attention should be paid to the hierarchy of documents and the implications of the Service Information. Contractors should not assume that omissions in one document will exclude obligations that are clearly expressed elsewhere within the contract.