The main role during the execution of the agreement as "Engineer" (under the GCC) or "Principle Agent" (under the JBCC) calls for regular decisions and judgements relating to the activities on location. This function is also often underestimated and may attract considerable liabilities.
Specialists in the development as well as engineering sector will often be employed as Engineer or Principle Agent. It is required of the professional completing this essential function to be au fait not only with the contract terms, but the execution thereof.
Consider some of the ramifications of inadequate decision making by the Engineer or Principle Agent under these types of building contracts? One instance where 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 decision not only sets the present benchmark in this regard, but additionally sounds an alert to Engineers and Principle Agents to act in a justifiable manner while conducting themselves as the Employer's representative on site.
In cases like this, like in various other instances in the building and engineering industry, the Employer (Enviroserve Waste Management) concluded an oral agreement with the Engineer. The Engineer was appointed to watch over and administer a number of contract works.
The Employer then signed a written agreement with a Service provider to complete digging on top of a particular location. The written contract between the Employer and the Contractor incorporated the General Conditions of Contract for Works of Civil Engineering Construction - 6th edition.
The service provider mentioned a disagreement in connection with a "notification" of likely claims conveyed to the Engineer inside a letter. The Engineer did however not regard the letter as appropriate notification. The consequence of the Engineer's judgement was a deadlock involving the Employer as well as the Service provider that had to be sorted out by an Arbitrator. The Arbitrator ruled that the letter was without a doubt proper notice and that the builder was eligible to claim as advised therein.
As a result of the Arbitrator's ruling, the Employer needed to pay the Contractor's claim, but then claimed damages for violation of agreement from the Engineer in the High Court. The Employer based its claim on an allegation that the Engineer breached the agreement by failing to construe the Contractor's letter as an appropriate notice of the plan to claim payment for additional work as contemplated in clause 50(1) of the GCC.
The primary court established that no break of agreement had occurred as the Contractor's letter did not constitute adequate notice as contemplated in clause 50(1) within the GCC.
In spite of this, it was held by the Supreme Court of Appeal that:
"...there was absolutely no reason why the notice considered in GCC 50(1) couldn't be in the form of a letter given the letter was so framed as to convey unquestionably to the addressee that the writer was invoking, or depending upon, the conditions of the agreement which provided for the offering of notice. It could do so expressly or by implication. In the current case, the contents of the very last paragraph of the Contractor's letter were so closely connected with the substance of clause 50(1) that it completely satisfied that standard. The letter furnished information needed by clause 50(1) (a) and (b)."
The Contractor's letter did comply with all the conditions of the contract because it contained the information which was necessary to represent a notice as required by clause 50(1) of the GCC. The technical strategy adopted by the Engineer in working with the "notification" by the Contractor weren't regarded as justifiable by the Court of Appeal. On the flip side, the Court found that the Engineer's behavior in this regard hadn't been appropriate as assessed against the recognized standard of the "reasonable engineer".
The letter hence constituted a notice that any sensible professional would've interpreted as such. The Engineer's inability to do this therefore constituted a violation of the Engineer's obligation of care and, consequently the contract with the Employer. The Engineer was found liable to the Employer in the amount owed and payable to the Contractor under the award of the Arbitrator in the initial mediation between the Employer and the Contractor.
Specialists in the development as well as engineering sector will often be employed as Engineer or Principle Agent. It is required of the professional completing this essential function to be au fait not only with the contract terms, but the execution thereof.
Consider some of the ramifications of inadequate decision making by the Engineer or Principle Agent under these types of building contracts? One instance where 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 decision not only sets the present benchmark in this regard, but additionally sounds an alert to Engineers and Principle Agents to act in a justifiable manner while conducting themselves as the Employer's representative on site.
In cases like this, like in various other instances in the building and engineering industry, the Employer (Enviroserve Waste Management) concluded an oral agreement with the Engineer. The Engineer was appointed to watch over and administer a number of contract works.
The Employer then signed a written agreement with a Service provider to complete digging on top of a particular location. The written contract between the Employer and the Contractor incorporated the General Conditions of Contract for Works of Civil Engineering Construction - 6th edition.
The service provider mentioned a disagreement in connection with a "notification" of likely claims conveyed to the Engineer inside a letter. The Engineer did however not regard the letter as appropriate notification. The consequence of the Engineer's judgement was a deadlock involving the Employer as well as the Service provider that had to be sorted out by an Arbitrator. The Arbitrator ruled that the letter was without a doubt proper notice and that the builder was eligible to claim as advised therein.
As a result of the Arbitrator's ruling, the Employer needed to pay the Contractor's claim, but then claimed damages for violation of agreement from the Engineer in the High Court. The Employer based its claim on an allegation that the Engineer breached the agreement by failing to construe the Contractor's letter as an appropriate notice of the plan to claim payment for additional work as contemplated in clause 50(1) of the GCC.
The primary court established that no break of agreement had occurred as the Contractor's letter did not constitute adequate notice as contemplated in clause 50(1) within the GCC.
In spite of this, it was held by the Supreme Court of Appeal that:
"...there was absolutely no reason why the notice considered in GCC 50(1) couldn't be in the form of a letter given the letter was so framed as to convey unquestionably to the addressee that the writer was invoking, or depending upon, the conditions of the agreement which provided for the offering of notice. It could do so expressly or by implication. In the current case, the contents of the very last paragraph of the Contractor's letter were so closely connected with the substance of clause 50(1) that it completely satisfied that standard. The letter furnished information needed by clause 50(1) (a) and (b)."
The Contractor's letter did comply with all the conditions of the contract because it contained the information which was necessary to represent a notice as required by clause 50(1) of the GCC. The technical strategy adopted by the Engineer in working with the "notification" by the Contractor weren't regarded as justifiable by the Court of Appeal. On the flip side, the Court found that the Engineer's behavior in this regard hadn't been appropriate as assessed against the recognized standard of the "reasonable engineer".
The letter hence constituted a notice that any sensible professional would've interpreted as such. The Engineer's inability to do this therefore constituted a violation of the Engineer's obligation of care and, consequently the contract with the Employer. The Engineer was found liable to the Employer in the amount owed and payable to the Contractor under the award of the Arbitrator in the initial mediation between the 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.
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