For the purposes of this write-up, the concept of practical completion in generality as used in the JBCC will be elaborated upon, since this is the most commonly used contract.

Practical completion is defined in the JBCC 6.1 PBA contract as: “The stage of completion as certified by the principal agent where the works or a section thereof has been completed free of patent defects other than minor defects identified in the list for completion and can be used for the intended purpose [CD]”

The JBCC 4.1 PBA defines it slightly differently as: “means the stage of completion where, in the opinion of the principal agent, completion of the works has substantially been reached and can effectively be used for the purposes intended.”

Practical completion in all versions of the JBCC is certified by the Principal Agent, who is appointed by the Employer and has full authority and obligation to act in terms of the agreement. It is imperative to work towards the date of practical completion which is defined in the Contract Data. Failure to meet this date will, according to the contract, result in penalties (unless agreed otherwise). The date for practical completion is often revised either through additional works or claims for delays as the case may be.

The steps to achieving practical completion are usually:

• The Contractor, in advance of the date for practical completion, confirm the standard and state of the works required for practical completion and inspect the works;
• Notify the principal agent in advance of the date of practical completion and give timeous notice to the principal agent of the inspection for practical completion to meet the date of practical completion (which in some instances may have been revised).
• The principal agent inspects the works and either issues a certificate of practical completion or issues a list of work to be attended to in order to achieve practical completion. If a list is for practical completion is issued, the process of notifying for inspection commences again.
• The principal agent usually has a time limit of 5 days within which to issue a list for practical completion from the date of the inspection. Should the principal agent fail to do this, the contractor is to provide a notice to the principal agent to provide the list for completion within 5 days (or period as defined in the contract).
• Copies of the list for practical completion are copied to the Employer.
• Should the principal agent fail to issue the certificate of practical completion within the period of 5 days (or period as defined in the contract), after notice from the contractor to do so, then practical completion shall be deemed to be achieved on the date for practical completion or such revised date.
• Failure to comply with this process, or failure to complete with the works by the date of practical completion opens the risk to penalties, which is also addressed in the Contract Data in terms of quantum.

There is a common misconception that in earlier versions of the JBCC Agreement, where works are occupied by the Employer, practical completion has been achieved. Strictly in terms of the contract, practical completion is achieved through a defined process. There may well be instances where the contractor may feel aggrieved that the principal agent has not certified practical completion by acting erroneously, but the onus is on the Contractor to act in terms of the agreement to notify of practical completion and have regard to the contract.

In terms of the common law, the Principal Agent owes the Contractor no duty to point out deficiencies in the works as they occur and is only obligated to do so when the contractor invites them for an inspection when the contractor is ready for practical completion (Strydom Park Extension 6 (Pty) Ltd v Abcon (Pty) Ltd 1998 (4) SA 844 (SCA)).

There may well be scenarios where the contractor would want to challenge the principal agent or the employer on incorrectly, erroneously or acting in bad faith have not certified practical completion, but it is the responsibility of the contractor to comply with the contract in providing notice for inspection and any other relevant and required notices. There are some instances where there are no sectional completion dates and the Contractor has agreed with the employer that works will be done in a staged process where one building is occupied whilst works progresses to the next. It is advisable in these instances to agree sectional completion dates to avoid a situation of works in the occupied building being the  section of the work completed. The reason for this and having a properly defined contractual arrangement around the completion dates, is that according to the parole evidence rule, aside for claims for rectification of a contract, no evidence may be given to alter the clear and unambiguous meaning of a contract. While there may be evidence that may be available to establish the factual and contextual matrix of a contract, this is used sparingly.

The JBCC 6.1 differed from the previous versions of the JBCC contract in that it introduced an additional scenario to deemed practical completion where the Employer takes possession of the works or a section thereof by agreement with the Contractor, practical completion is deemed (Clause 19.6, JBCC 6.1). The earlier versions of the JBCC agreement, do not have a similar deeming provision with regards to possession.

Bilaal Dawood | Bilaal Dawood Attorneys