Sutton Housing Partnership Limited v Rydon Maintenance Limited [2017]

Sutton Housing Partnership Limited v Rydon Maintenance Limited [2017] EWCA Civ 359

There has been yet another judgment, from the Court of Appeal this time, on contract interpretation. As the judge himself put it: “Lawyers are now lucky enough to live in a world overflowing with appellate guidance on how to construe contracts.”

The case concerned whether the parties had in fact agreed Minimum Acceptable Levels of Performance (MAP) in the relevant contact, which was an outsourcing agreement between Sutton Housing Partnership who manage the housing stock of the London Borough of Sutton and Rydon Maintenance Limited, a contractor which specialises in the maintenance and repair of housing.

The issue was fist dealt with in an adjudication, and the adjudicator decided that the parties had failed to agree MAPs. The judge at First Instance in the Technology and Construction Court agreed with that analysis, albeit he did acknowledge that it was a very finely balanced decision. The Court of Appeal overturned the judgment and found that the Parties had, in fact, agreed MAPs.

It is a judgment worth reading as the judges were having to deal with the obvious tension between “literal” and “commercial common sense” to contract interpretation post Arnold v Britton and Rainy Sky SA v Kookmin Bank. Taken literally the contract contained no MAPs but Mr Justice Jackson stated that both parties must have intended to specify MAPs and that indeed any reasonable or even unreasonable person standing in the shoes of either party would have also intended it. So it seems that commercial common sense is, yet again, prevailing!