Let the corporate certifier beware
It is increasingly common for corporate bodies to be engaged to carry out the functions of the certifier, in place of named individuals or small practices. Care should be taken, however, to ensure that there is continuity of personnel so that those involved at the beginning of the project are available to deal with any claims made at the end, and that the job of certifier is given to someone suitably qualified with the experience to discharge their duties without recourse to the employer or his lawyers.
In the recent case of Bernhards Rugby Landscapes Ltd v Stockley Park Consortium Limited, a landscaping contractor (brl) was engaged by a developer (spcl) to help construct a golf course on a large reclaimed landfill site at Stockley Park, west of London. The contract was loosely based on the ice 5th. spcl retained Schal as its construction manager, who had many of the powers usually given to the engineer under the ice conditions. All Schal's operational staff were employees of Tarmac and the functions of the construction manager were carried out by various different people throughout the project.
brl commenced work in September 1985. There were significant delays and brl's works were not completed until 1990. brl claimed extensions of time and the recovery of additional costs. brl's claims were considered by Schal's commercial manager, who had not been involved on site when the works were carried out, nor, it transpired, had any relevant experience of administering such a contract. The judge found that Schal delayed unreasonably in handling brl's claims and ought to have determined an extension of time and final valuation by mid 1992. Instead, the claims remained unresolved when brl commenced court proceedings in 1995. The judge found that Schal's conduct had caused a breakdown of key aspects of the contractual machinery. In particular:
1 Schal had not retained an identifiable employee to act as construction manager and did not ensure that any replacement would be fully briefed and have continuing access to his predecessor.
2 Despite his predecessor accepting early on in the project that brl was entitled to an extension of time, Schal's commercial manager refused to give an extension until the valuation of the measured work had been settled, with the result that the delay time claim was not considered at all between 1989 and 1995. When, after commencement of proceedings, an extension was given, it was based on information which had been available to Schal for years and which was not dependent upon the value of measured work in any event.
3 Schal had relied upon the advice of spcl's solicitors, which the judge found to be wrong, that brl was required to provide evidence of the delaying events relied upon and to demonstrate cause and effect, by way of, for example, a critical path network before any extension or additional expense could be determined. This amount of detail may be required by a court but not by the construction manager who should be familiar with the project.
4 Although it is desirable to agree a final account by negotiation, ultimately the certifier should make a decision on the basis of the information available. By treating brl's material as insufficient without explaining what was missing, or suggesting how the account should be presented, Schal was moving the goalposts.
In short, the judge found that Schal's conduct was calculated to string brl along, was affected by erroneous legal advice and demonstrated a persistent failure to carry out its contractual duties. The judge's findings defeated spcl's attempts to argue that brl's claim was brought prematurely and that the court had no jurisdiction to hear it. The substantive hearing is likely to take place in the autumn.