Clark Contracts v Burrell Ltd No 2 [2002] A7038/00

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An Interim Certificate under the JCT forms is not conclusive evidence as to the amount due, but the sum stated as due in it is still a "sum due under the contract" and payment of it is due in accordance with the terms of the JCT contracts

Sherriff James A Taylor

January 2002, Court of Session

B employed C by a contract in relation to the re-development of 8 flats in Glasgow. The contract was governed by SBCC Design Portion with Quantities (September 1997 Revision) Building Contract with Scottish Supplement 1980 (Revised, July 1997) to the conditions of the Standard Form of Building Contract 1980 Edition with Quantities. The architects engaged by B issued Interim Certificate No. 11 in the gross amount of £486,529.42. Net of retention the sum certified by Certificate No. 11, plus VAT, came to £29,408. C relied upon the Certificate as their entitlement to payment.

B argued that by reference to clause 30.1.1.1 of the Contract Conditions, the architect's view was indicative not authoritative. The sum due under the contract was the gross valuation, defined in clause 30.2.1.1, as including the total value of the work "properly executed by the contractor". This must be assessed and valued by reference to the quantity surveyor's Bill of Quantities. B submitted that the architect might get this wrong and therefore his view was not binding. B relied on the comments of Lord Hoffman in Beaufort Developments (NI) Ltd v Gilbert Ash NI Ltd [1998] that the architect's certificate was not conclusive evidence that the works had been carried on in accordance with the contractual standard, as the architect was the agent of the employer and therefore not necessarily independent.

B asserted that it was not necessary for it to have served a withholding notice because the amount in question was not a "sum due under the contract". C had not given B sufficient notice of what works they claimed they were entitled to payment for and had relied only on the Interim Certificate as proof of what they were owed.

C argued that the Beaufort case did not apply as it was decided prior to the enactment of the 1996 Act, and was therefore decided in a different context. C accepted that the architect's Interim Certificate was not conclusive and that in the terms of clause 30.10 of the conditions there was a specific provision to this effect. However clause 30.1.1 gave C entitlement to payment within 14 days of the Interim Certificate and C argued that all they needed to show was that the certificate was issued in accordance with the contractual provisions and that the net amount stated was unpaid.

The Judge preferred C's arguments. An Interim Certificate under the JCT forms is not conclusive evidence as to the amount due, but the sum stated as due in it is still a "sum due under the contract" and payment of it is due in accordance with the terms of the JCT contracts.

This summary was provided by CMS Cameron McKenna LLP.

For more information visit http://www.cms-cmck.com/Construction/Construction-Disputes

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