CAN A PRINCIPAL AGENT OR ARCHITECT CONDEMN LARGE AREAS OF WORK AT THE TIME OF FINAL INSPECTION, HAVING VISITED THE SITE REGULARLY AND HAVING INCLUDED PAYMENT FOR THE WORK IN EARLIER CERTIFICATES?
It is not uncommon for Principal Agents or Architects to regularly inspect work, certify same for payment and at a later date condemn large areas of work. This often leaves Contractors in a difficult position particularly when they have passed on payment for the work to Sub-contractors which in many instances cannot be recovered.
The Principal Agent is appointed to protect the interests of the Employer. The courts take the view in the absence of wording to the contrary that a contract has been entered into under which the Contractor undertakes to carry out and complete the work in accordance with the terms of the contract. This is paramount and no action on the part of the Principal Agent should water down this obligation.
In this respect Hudsons Building and Engineering Contracts has this to say at page 379:
"Even though a building owner may have accepted the work so that a liability to pay the price of it arises, that will not (in the absence of a provision in the contract making acceptance binding on the Employer) prevent the building owner from showing that the work is incomplete or badly done; he may either counterclaim or set off damages in an action by the builder, or he may pay or suffer judgement to be obtained against him for the full price and later bring a separate action for his damages......."and again at page 583:
"Equally, it should not be forgotten that waiver of a breach, or a renunciation of the right to damages, or a liability to pay for the work, will not, in general, and in the absence of express provision, be implied from acceptance of the work by the building owner or his Architect, even in the case of patently defective work."
The English Court of Appeal having previously held that the Architects' obligation to inspect the Works was an obligation to be exercised from time to time, in East Ham Borough Council v Bernard Sunley & Sons Ltd 1965 (3) all ER619, the House of Lords reversed the decision of the Court of Appeal and held that examination at the end of the defects liability period was reasonable.
It is submitted that this is the position that would be followed by South African Courts in interpreting the provisions of similar contracts.
However, it is suggested that in the JBCC Principal Building Agreement the precise wording of clause 24.1 creates an entirely different situation and provides an excellent example of where a contractual term has been drafted to place the onus on the Principal Agent to inspect regularly, as follows:
"The Principal Agent shall from time to time inspect the Works to give the Contractor interpretations and guidance on the building standards and state of completion of the works the Contractor will be required to achieve for practical completion."
Finsen in "The New Building Contract" comments at page 83:
He (the Principal Agent) is required to inspect the works from time to time, and in the course of such inspections he must acquaint the Contractor with the standard of workmanship that he will require as well as the extent of completion before he will be prepared to certify practical completion. The Contractor must know in good time what will be acceptable and what will not."
It is suggested that the express wording of clause 24.1 of the JBCC Principal Agreement placed an entirely new onus on the Principal Agent and his failure to comply would be a breach of contract which could, in certain circumstances, lead to the Contractor having a claim for loss and expense.
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