The primary job in the execution of the contract as "Engineer" (under the GCC) or "Principle Agent" (within the JBCC) necessitates regular decisions and judgements relating to the actions on-site. This function may also be often overlooked and may draw in significant liabilities.
Experts in the construction and engineering industry are usually appointed as the Engineer or Principle Agent. It is required of the specialist accomplishing this essential function to be au fait not only with all the contract terms, but the execution thereof.
Consider some of the ramifications of poor decision making by the Engineer or Principle Agent under these types of construction agreements? One example in which the courts discussed the yardstick with which the Engineer or Principle Agent is to be measured is in the case of Hawkins & Osborn (South) (Pty) Ltd vs Enviroserve Waste Management. The final decision not only sets the present standard in this regard, but in addition sounds a warning to Engineers and Principle Agents to act in a acceptable manner while conducting themselves as the Employer's agent on site.
In cases like this, like in a number of other scenarios in the construction and engineering industry, the Employer (Enviroserve Waste Management) concluded a verbal contract with the Engineer. The Engineer was employed to watch over and administer certain agreement works.
The Employer then entered into a written agreement with a Service provider to complete excavations on a specific site. The written contract involving the Employer and the Service provider incorporated the General Conditions of Contract for Works of Civil Engineering Construction - 6th edition.
The contractor mentioned a disagreement with regards to a "notification" of likely claims conveyed to the Engineer within a letter. The Engineer did however not value the letter as sufficient notification. The consequence of the Engineer's judgement would be a deadlock between the Employer and the Service provider that had to get resolved by an Arbitrator. The Arbitrator ruled that the letter was indeed appropriate notification and that the contractor was eligible to claim as informed therein.
Resulting from the Arbitrator's verdict, the Employer was required to pay for the Contractor's claim, but then claimed damages for violation of contract from the Engineer in the High Court. The Employer founded its claim on an allegation that the Engineer breached the agreement by neglecting to construe the Contractor's letter as an acceptable notice of the plan to get payment for additional work as considered in clause 50(1) of the GCC.
The initial court decided that no breach of contract had happened as the Contractor's letter failed to constitute appropriate notice as considered in clause 50(1) within the GCC.
However, it had been held by the Supreme Court of Appeal that:
"...there were absolutely no reason why the notice considered in GCC 50(1) could not be in the form of a letter given the letter was framed as to convey unquestionably to the addressee that the author was invoking, or counting upon, the conditions of the agreement which provided for the giving of notice. It could do so expressly or by insinuation. In the current case, the contents of the last passage of the Contractor's letter were so closely associated with the substance of clause 50(1) that it completely satisfied that standard. The letter furnished the info needed by clause 50(1) (a) and (b)."
The Contractor's letter did comply with all the requirements of the contract for the reason that it included all the info that was needed to represent a notification as required by clause 50(1) of the GCC. The technical strategy used by the Engineer in working with the "notification" by the Contractor wasn't viewed as reasonable by the Court of Appeal. To the contrary, the Court found that the Engineer's conduct in this regard was not appropriate as assessed against the norm of the "reasonable engineer".
The letter hence constituted a notice which any reasonable engineer would have interpreted as such. The Engineer's failure to take action therefore constituted a violation of the Engineer's obligation of care and, consequently the agreement with the Employer. The Engineer was found liable to the Employer for the amount owed and payable to the Contractor under the award of the Arbitrator in the preliminary arbitration between Employer and the Contractor.
Experts in the construction and engineering industry are usually appointed as the Engineer or Principle Agent. It is required of the specialist accomplishing this essential function to be au fait not only with all the contract terms, but the execution thereof.
Consider some of the ramifications of poor decision making by the Engineer or Principle Agent under these types of construction agreements? One example in which the courts discussed the yardstick with which the Engineer or Principle Agent is to be measured is in the case of Hawkins & Osborn (South) (Pty) Ltd vs Enviroserve Waste Management. The final decision not only sets the present standard in this regard, but in addition sounds a warning to Engineers and Principle Agents to act in a acceptable manner while conducting themselves as the Employer's agent on site.
In cases like this, like in a number of other scenarios in the construction and engineering industry, the Employer (Enviroserve Waste Management) concluded a verbal contract with the Engineer. The Engineer was employed to watch over and administer certain agreement works.
The Employer then entered into a written agreement with a Service provider to complete excavations on a specific site. The written contract involving the Employer and the Service provider incorporated the General Conditions of Contract for Works of Civil Engineering Construction - 6th edition.
The contractor mentioned a disagreement with regards to a "notification" of likely claims conveyed to the Engineer within a letter. The Engineer did however not value the letter as sufficient notification. The consequence of the Engineer's judgement would be a deadlock between the Employer and the Service provider that had to get resolved by an Arbitrator. The Arbitrator ruled that the letter was indeed appropriate notification and that the contractor was eligible to claim as informed therein.
Resulting from the Arbitrator's verdict, the Employer was required to pay for the Contractor's claim, but then claimed damages for violation of contract from the Engineer in the High Court. The Employer founded its claim on an allegation that the Engineer breached the agreement by neglecting to construe the Contractor's letter as an acceptable notice of the plan to get payment for additional work as considered in clause 50(1) of the GCC.
The initial court decided that no breach of contract had happened as the Contractor's letter failed to constitute appropriate notice as considered in clause 50(1) within the GCC.
However, it had been held by the Supreme Court of Appeal that:
"...there were absolutely no reason why the notice considered in GCC 50(1) could not be in the form of a letter given the letter was framed as to convey unquestionably to the addressee that the author was invoking, or counting upon, the conditions of the agreement which provided for the giving of notice. It could do so expressly or by insinuation. In the current case, the contents of the last passage of the Contractor's letter were so closely associated with the substance of clause 50(1) that it completely satisfied that standard. The letter furnished the info needed by clause 50(1) (a) and (b)."
The Contractor's letter did comply with all the requirements of the contract for the reason that it included all the info that was needed to represent a notification as required by clause 50(1) of the GCC. The technical strategy used by the Engineer in working with the "notification" by the Contractor wasn't viewed as reasonable by the Court of Appeal. To the contrary, the Court found that the Engineer's conduct in this regard was not appropriate as assessed against the norm of the "reasonable engineer".
The letter hence constituted a notice which any reasonable engineer would have interpreted as such. The Engineer's failure to take action therefore constituted a violation of the Engineer's obligation of care and, consequently the agreement with the Employer. The Engineer was found liable to the Employer for the amount owed and payable to the Contractor under the award of the Arbitrator in the preliminary arbitration between Employer and the Contractor.
About the Author:
Focussing exclusively on particular legal fields, Dirk is able to make early and accurate assessment of merits and manage legal disputes effectively. His specialist practice areas include construction law and engineering law, insurance law, property law, medical law and product liability law.