Sutcliffe v Thackrah
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE EDMUND DAVIES,LORD JUSTICE MEGAW,SIR SEYMOUR KARMINSKI |
| Judgment Date | 13 April 1973 |
| Judgment citation (vLex) | [1973] EWCA Civ J0413-3 |
| Date | 13 April 1973 |
| Court | Court of Appeal (Civil Division) |
[1973] EWCA Civ J0413-3
In The Supreme Court of Judicature
Court of Appeal
(On, Appeal from Judgment of His Honour Judge William Stabb, Official Referee, without a Jury, 11th January, 1972.)
Lord Justice Edmund Davies,
Lord Justice Megaw and
Sir Seymour Karminski.
MR B. NIELL, Q.C. and MR J. PREVITE, (instructed by Messrs. Ward, Bowie & Co., Agents for Messrs. Willey, Hargrave & Co. of Leeds) appeared on behalf of the Appellants (Defendants).
MR M.R. HICKMAN, (instructed by Messrs. Garrett & Co., Agents for Messrs. Bridge, Sanderson & Co. of Doncaster) appeared on behalf of the Respondent (Plaintiff).
The question posed by this appeal may be thus stated: Is an architect liable in damages for breach of his contract with a building employer If he negligently, but honestly, issues interim certificates in relation to work done under an R.I.B.A. contract, as a result of which he over-certifies the sums due to the building contractor. It arises by way of a defendants' appeal from the judgment of His Honour William Stabb, Q.C. of January 11th, 1972, awarding the plaintiff £588, with costs, against the 1st and 2nd defendants. The plaintiff cross-appeals for an order that the damages be increased but we are relieved from the necessity of dealing with that matter; as the parties have agreed that, in the event of his retaining his judgment on the issue of liability, the plaintiff's damages should be increased to £2,000.
The defendants are a firm of architects practising under the style of "Chippindale & Edmondson". In 1962 the plaintiff engaged them in connection with the designing and building of a dwelling-house on a site in Pontefract owned by him. No documentary evidence is available regarding the terms of the defendants' engagement. By their re-amended defence they admitted only that there was an implied term in the oral contract of employment that they would perform their instructions "in a competent and efficient manner", but they denied being under any duty to the plaintiff to use reasonable care in issuing certificates in respect of work done by any contractor during the course of construction of the house.
Thereafter, on October 1st, 1963, the plaintiff entered into a contract with David A. Walbank (Builders) Ltd. to build the house for the sum of £22,368 in accordance with the drawings and bills of quantities prepared by the defendants (who were appointedfor the purpose both architects and quantity surveyors). The contract was in the form of the R.I.B.A. 1963 Edition, and the contractor undertook to complete the works upon and subject to the Conditions annexed thereto. The builders had already begun work on the site before their contract was signed, and the date of completion was fixed as January 31st, 1964. But the work went badly and by the end of June, 1964, the plaintiff turned the builders off the site - justifiably, as the Official Referee held. Other builders then completed the works, but for a larger sum than originally contracted for. The plaintiff sued the original builders, but they went into liquidation.
In March, 1968 the plaintiff issued a Writ "for negligence and breach of duty by the defendants as architects employed by the plaintiff in supervising the building of a dwelling-house … and in certifying for work not done or improperly done by the builders". For present purposes, it is sufficient to say that in the ensuing prolonged trial during 1971 and 1972 the plaintiff complained of (1) negligent supervision throughout, and (2) negligence by the defendants in issuing the last two interim certificates. The Official Referee found in the defendants' favour in relation to the complaint of lack of proper supervision. The second complaint related to certificate No. 9 for £2,620 issued by the defendants on May 25th, 1964, and No. 10 for £1,837 issued on July 1st, 1964. As to these, the Official Referee found that there had been over-certifying to the extent of £3,090. While disputing the correctness of that figure, defendants' counsel accepts that, assuming that a duty of care was owed by the defendants, they must pay the plaintiff £2,000 In respect of the consequential damage sustained by him. But by this appeal they challenge the Official Referee's finding that any such duty exists.
Before turning to the legal authorities, I must say something about the Conditions annexed to the building contract. While the defendants were not, of course, parties thereto, some of these contemplated their acting solely as the agents of the employers, others as involving them in a wider role. Examples of the former are Condition 2 (Architect's Instructions), 5 (Levels and Setting out of the Works), and 17 (Assignment or subletting). Mr. Neill points to others as involving the architects playing a role independent both of employer and contractor and holding the scales evenly between them. These include Condition 11(5) relating to the issuing of interim certificates, 15 (1) as to a certificate of practical completion, 22 (Damages for non-completion), 23 (Extension of time) and 30 (Certificates and Payments).
Condition 30 (1) and (2) related to interim certificates, which were required to be issued at monthly intervals, and it is in these terms. "(1) At the Period of Interim Certificates named in the appendix to these Conditions the Architect shall issue a certificate stating the amount due to the Contractor from the Employer, and the Contractor shall, on presenting any such certificate to the Employer, be entitled to payment therefor within the Period for honouring Certificates named in the appendix to these Conditions. Interim valuations shall be made whenever the Architect considers them to be necessary for the purpose of ascertaining the amount to be stated as due in an Interim Certificate. (2) The amount stated as due in an Interim Certificate shall, subject to any agreement between the parties as to stage payments, be the total value of the work properly executed and of the materials and goods delivered to or adjacent to the Works for use thereon up to and including a date not more than seven daysbefore the date of the said certificate less any amount which may be retained by the Employer (as provided in sub-clause (3) of this Condition) and less any instalments previously paid under this Condition."
Condition 30 (6) and (7) dealt with the final certificate in this way; "(6) So soon as is practicable but before the expiration of 3 months from the end of the Defects Liability Period stated in the appendix to these Conditions or from completion of making good defects under clause 15 of these Conditions or from receipt by the Architect of the documents referred to in paragraph (b) of sub-clause (5) of this Condition, whichever is the latest, the Architect shall issue the Final Certificate. The Final Certificate shall state:-
(a) The sum of the amount paid to the Contractor under Interim Certificates and the amount named in the said appendix as Limit of Retention Fund, and
(b) The Contract sum adjusted as necessary in accordance with the terms of these conditions,
and the difference (if any) between the two sums shall be expressed in the said certificate as a balance due to the Contractor from the Employer or to the Employer from the Contractor as the case may be. Subject to any deductions authorised by these Conditions, the said balance as from the fourteenth day after presentation of the Final Certificate by the Contractor to the Employer shall be a debt payable by the Employer to the Contractor or as the case may be as from the fourteenth day after issue of the Final Certificate shall be a debt payable by the Contractor to the Employer.
(7) Unless a written request to concur in the appointment of an arbitrator shall have been given under clause 35 of theseConditions by either party before the Pinal Certificate has been issued or by the Contractor within 14 days after such issue, the said certificate shall be conclusive evidence in any proceedings arising out of this Contract (whether by arbitration under clause 35 of these Conditions or otherwise) that the Works have been properly carried out and completed in accordance with the terms of this Contract and that any necessary effect has been given to all the terms of this Contract which require an adjustment to be made to the Contract Sum, except and in so far as any sum mentioned in the said certificate is erroneous by reason of:-
(a) Fraud, dishonesty or fraudulent concealment relating to the Works, or any part thereof, or to any matter dealt with in the said certificate; or
(b) Any defect (including any omission) in the Works, or any part thereof which reasonable inspection or examination at any reasonable time during the carrying out of the Works or before the issue of the said certificate would not have disclosed; or
(c) Any accidental inclusion or exclusion of any work, materials, goods or figure in any computation or any arithmetical error in any computation."
Condition 30 (8) provided that 2 "Save as aforesaid no certificate of the Architect shall of itself be conclusive evidence that any works materials or goods to which it relates are in accordance with this Contract."
I should finally refer to Condition 35 (Arbitration), paragraph (1) of which Is in these terms? "Provided always that in case any dispute or difference shall arise between the Employer or the Architect on his behalf and the Contractor, either during the progress or after the completion or abandonment of theWorks, as to the construction of this Contract or as so any matter or thing of whatsoever nature arising thereunder or in connection therewith (including any matter or thing left by this Contract to the discretion of the Architect or the withholding by the...
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