A decision last month by His Honour Judge Humphrey Lloyd has far- reaching implications for architects and the construction industry.
Oxford University Fixed Assets, engaged the plaintiff, Wimpey Construction, under the 1980 jct standard form of contract (private with quantities) to build a £9 million combined pharmacology and neurapharmacology centre. A very nice job indeed !
In the action the plaintiff alleged that blockwork partitions built during 1990 'were abnormally and unacceptably wet . . . so that when they dried out widespread cracking was caused, particularly to the plasterwork which had been applied to the blockwork'. Who hasn't faced this problem, but read on . . .
Practical completion was certified by Architects Design Partnership (the defendant) in July 1991. In August 1992 Wimpey received lists of defects, including the cracked plaster which it duly repaired, though evidently unsuccessfully - the architect issued a further list of 'cracking' defects in November 1993.
Following yet more remedial work in early 1994 the architect eventually issued a Certificate of Making Good of Defects, followed by a Final Certificate.
Sadly, all appears to have been far from well because in July 1997 the university issued a writ claiming damages for negligence and breach of the contractual duty of care owed by the architect.
The allegations included failure to ensure that the 'blockwork was not wet', failure to ensure that faulty work was rectified, negligent issue of Practical Completion, Making Good Defects, and Final Certificates, failure to investigate the cause of the cracking, and failure to recommend enforcement of the contract. Stiff stuff.
But for the issue of the Final Certificate the plaintiff would have held Wimpey liable. The claim really boiled down to loss of that opportunity.
So, to the judgement: Lloyd had to decide whether the Final Certificate provided conclusive evidence that the quality of materials and the standard of workmanship were to the reasonable satisfaction of the architect: if so, whether the contractor had discharged his duty under contract, and if he had, whether the third party claim against Wimpey must fail.
Mr Taverner (for Wimpey) agreed, rather optimistically, that the Final Certificate provided conclusive evidence that the work was not defective at the time of its issue, saying that the work was either never defective, or, if it had once been defective, the defects had been put right.
The judge assumed that the defects in the blockwork constituted damage which occurred prior to the issue of the Final Certificate (ie it was not a latent defect) and he went on to conclude that while Wimpey might have carried out remedial works to the satisfaction of the architect, they had not done them in accordance with its obligations under contract.
Nevertheless, Lloyd decided that 'the effect of the Final Certificate was not that Wimpey had no liability, but that Wimpey ceased to be liable'. Pointing out that neither party to the contract had challenged the Final Certificate within the 28-day period allotted, the judge concluded that the issue of the certificate by the architect was 'tantamount to a decision discharging the liability of the contractor'.
Third-party proceedings against Wimpey were dismissed with costs. This ruling over what is, after all, a relatively simple issue, shows just how onerous contract administration can be. Such risks should surely be reflected by reward.