The primary role during the execution of the contract as "Engineer" (within the GCC) or "Principle Agent" (under the JBCC) necessitates frequent decisions and rulings relating to the activities on site. This function may also be often overlooked and will attract considerable liabilities.
Experts in the construction and engineering sector will often be employed as the Engineer or Principle Agent. It is required of the professional completing this important function to be au fait not just with the terms of the contract, but also the execution thereof.
Consider some of the implications of bad decision making by the Engineer or Principle Agent under these construction contracts? One particular occasion in which the courts discussed the yardstick with which the Engineer or Principle Agent is to be assessed is inside the case of Hawkins & Osborn (South) (Pty) Ltd vs Enviroserve Waste Management. The decision not only sets the present standard in this regard, but also sounds a reminder to Engineers and Principle Agents to act in a acceptable way when conducting themselves as the Employer's spokesperson on-site.
In this case, like in many other scenarios in the building and engineering sector, the Employer (Enviroserve Waste Management) concluded a verbal agreement with the Engineer. The Engineer was employed to monitor and administer certain agreement functions.
The Employer then signed a written agreement with a Builder to complete excavations on top of a particular location. The written agreement between the Employer as well as the Builder contained the General Conditions of Contract for Works of Civil Engineering Construction - 6th edition.
The contractor raised a disagreement in connection with a "notification" of likely claims communicated to the Engineer in a letter. The Engineer did however not value the letter as proper notice. The results of the Engineer's decision would be a deadlock between the Employer and the Service provider that had to be resolved by an Arbitrator. The Arbitrator ruled that the letter was indeed adequate notification and that the service provider was allowed to claim as notified therein.
Because of the Arbitrator's decision, the Employer needed to pay the Contractor's claim, but then claimed damages for violation of contract from the Engineer in the High Court. The Employer structured its claim on an accusation that the Engineer broke the agreement by failing to construe the Contractor's letter as an applicable notice of the plan to claim payment for extra work as considered in clause 50(1) within the GCC.
The primary court established that no breach of agreement had transpired as the Contractor's letter failed to constitute suitable notice as considered in clause 50(1) within the GCC.
In spite of this, it had been held by the Supreme Court of Appeal that:
"...there were no reason why the notice considered in GCC 50(1) cannot be in the form of a letter granted the letter was so framed as to convey unequivocally to the addressee that the writer was invoking, or counting upon, the conditions of the contract which provided for the offering of notice. It could do so expressly or by implication. In the current case, the contents of the last passage of the Contractor's letter were so closely related to the substance of clause 50(1) that it satisfied that standard. The letter furnished the information required by clause 50(1) (a) and (b)."
The Contractor's letter did comply with the conditions of the agreement because it included all the information which was required to represent a notice as needed by clause 50(1) of the GCC. The technical approach used by the Engineer in working with the "notification" by the Contractor was not thought to be sensible by the Court of Appeal. On the other hand, the Court discovered that the Engineer's behavior in connection with this was not acceptable as measured against the standard of the "reasonable engineer".
The letter as a result constituted a notice that any reasonable professional might have interpreted as such. The Engineer's failure to do this 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 first mediation between Employer and the Service provider.
Experts in the construction and engineering sector will often be employed as the Engineer or Principle Agent. It is required of the professional completing this important function to be au fait not just with the terms of the contract, but also the execution thereof.
Consider some of the implications of bad decision making by the Engineer or Principle Agent under these construction contracts? One particular occasion in which the courts discussed the yardstick with which the Engineer or Principle Agent is to be assessed is inside the case of Hawkins & Osborn (South) (Pty) Ltd vs Enviroserve Waste Management. The decision not only sets the present standard in this regard, but also sounds a reminder to Engineers and Principle Agents to act in a acceptable way when conducting themselves as the Employer's spokesperson on-site.
In this case, like in many other scenarios in the building and engineering sector, the Employer (Enviroserve Waste Management) concluded a verbal agreement with the Engineer. The Engineer was employed to monitor and administer certain agreement functions.
The Employer then signed a written agreement with a Builder to complete excavations on top of a particular location. The written agreement between the Employer as well as the Builder contained the General Conditions of Contract for Works of Civil Engineering Construction - 6th edition.
The contractor raised a disagreement in connection with a "notification" of likely claims communicated to the Engineer in a letter. The Engineer did however not value the letter as proper notice. The results of the Engineer's decision would be a deadlock between the Employer and the Service provider that had to be resolved by an Arbitrator. The Arbitrator ruled that the letter was indeed adequate notification and that the service provider was allowed to claim as notified therein.
Because of the Arbitrator's decision, the Employer needed to pay the Contractor's claim, but then claimed damages for violation of contract from the Engineer in the High Court. The Employer structured its claim on an accusation that the Engineer broke the agreement by failing to construe the Contractor's letter as an applicable notice of the plan to claim payment for extra work as considered in clause 50(1) within the GCC.
The primary court established that no breach of agreement had transpired as the Contractor's letter failed to constitute suitable notice as considered in clause 50(1) within the GCC.
In spite of this, it had been held by the Supreme Court of Appeal that:
"...there were no reason why the notice considered in GCC 50(1) cannot be in the form of a letter granted the letter was so framed as to convey unequivocally to the addressee that the writer was invoking, or counting upon, the conditions of the contract which provided for the offering of notice. It could do so expressly or by implication. In the current case, the contents of the last passage of the Contractor's letter were so closely related to the substance of clause 50(1) that it satisfied that standard. The letter furnished the information required by clause 50(1) (a) and (b)."
The Contractor's letter did comply with the conditions of the agreement because it included all the information which was required to represent a notice as needed by clause 50(1) of the GCC. The technical approach used by the Engineer in working with the "notification" by the Contractor was not thought to be sensible by the Court of Appeal. On the other hand, the Court discovered that the Engineer's behavior in connection with this was not acceptable as measured against the standard of the "reasonable engineer".
The letter as a result constituted a notice that any reasonable professional might have interpreted as such. The Engineer's failure to do this 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 first mediation between Employer and the Service provider.
About the Author:
Focussing exclusively on certain 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.
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