Who is responsible for outgoing contractor defects?

2016-12-22 06:01

WHEN it comes to construction contracts, it is not uncommon for a contractor to be replaced with an alternative contractor prior to completion of the works.

This is according to Director Adine Abro and Senior Associate Muhammed Somrey from Cliffe Dekker Hofmeyr’s Dispute Resolution Practice, who say should an employer require that the incoming contractor assume responsibility for remedying defects or damages caused by an outgoing contractor, it would be prudent for the employer to ensure that this is expressly stated in the agree-ment.

They say failure to do so, as can be seen from the case of Trencon Construction (Pty) Ltd v South African Airways (Pty) Ltd and another [2015] JOL 33366 (GJ), may result in the employer being left wanting.

Trencon and SAA concluded a Joint Building Contracts Committee (JBCC) Principal Building Agreement for the construction of a departure lounge at OR Tambo International Airport, wherein a principal agent was also appointed. Trencon sought payment in the sum of R552 040.38 from SAA, alternatively, that the principal agent be ordered to issue a final payment certificate in the claimed amount.

SAA and the principal agent contended that there were defects in the works which had to be remedied before a certificate of final completion could be issued, and argued that Trencon was not entitled to payment as it had not complied with its obligations in terms of clause 8.2 of the agreement, which stated that “The contractor shall make good any physical loss and repair damage to the works, including clearing away and removing from site, all debris resulting therefrom, which occurs after the date on which the possession of the site is given and up to the issue of the deemed certificate of final completion and resulting from...”

It was argued that the intention of SAA was to have the works completed, and thus it could not have been intended that, despite the appointment of Trencon to complete the works, that the contractor could receive payment without the works having been completed.

This argument was found not to accord with the intention of the parties as appeared from the unambiguous written terms of the agreement.

It was common cause that the defects were not caused by Trencon, but by the contractor, TL Steward, who had preceded Trencon’s appointment. In addition, there was no contention that the loss or damage occurred after the date on which possession of the site was given to Trencon.

The court held that Trencon was not responsible to make good the loss or repair the damage, there being no other provision in the agreement which rendered the incoming contractor liable to do so.

Further, the court held that as the loss or damage did not occur after the date on which possession of the site was given to Trencon, it was not Trencon’s responsibility to make good the loss or repair the damage in question.

It should be noted that in the latest edition of the JBCC Principal Building Agreement, published in 2014, the phrase ‘which occurs after the date on which the possession of the site is given’, that appears in the 2005 and 2007 editions, has been omitted. – Property24.

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.
NEXT ON NEWS24X

Inside News24

 
Partner Content
How data is changing investments

Technological disruption is rife in many spheres of business and given the quantity of data available, it’s no surprise that the way in which asset managers work is also changing fast.

Behind the sparkle

Alluring, beautiful and timeless - diamonds are some of the most sought after gems in the world and are a true testament of everlasting brilliance. Let us take you behind the sparkle to show you the history behind this coveted jewel.

/News
 

How to get rid of fleas

Before you call in the pricey exterminators, try this DIY approach that promises to get your flea problem under control.

 
 

Paws

12 Cool cat facts
Chocolate can be fatal for dogs
Spider-man star's adorable relationship with his dog
Do you know what you are feeding your dog?
Traffic Alerts
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.