Civil Engineering Reference
In-Depth Information
of instalment payments. The engineer is required to certify the amount which on the basis of
Boot's monthly statement in his opinion is due 'on account of clause 60(1)(a) and (d)'. Clause
60(1)(a) requires the monthly statement to show the 'estimated contract value of the Permanent
Works'. Clause 60(1Xd) requires the statement 'to show the estimated amounts to which the
Contractor considers himself entitled in connection with all other matters . . . ' (i.e. other
claims). The engineer is, therefore, required to decide, on the basis of estimates, what in his
opinion is due as a payment 'on account'. The contract does not state what supporting docu-
mentation
if any
Boot must put forward in support of its estimates. Boot is not even obliged
to claim the full estimated values or amounts, because the whole of cl 60(1) is subject to the
qualification: 'unless in the opinion of the Contractor such values and amounts together will
not justify the issue of an interim certificate'. These words may do no more than reflect the
language of cl 60(3). More importantly, the engineer is not required to carry out a detailed
and accurate valuation each month. His obligation is no more than to certify the amount
which in his opinion is due
on account
of cl 60(1)(a) and (d). This is of particular relevance
in relation to claims for extra expense pursuant to various clauses of the contract, where the
calculation of Boot's true entitlement can be very complicated and time-consuming, and
where it is often impossible to form an accurate view at the interim stage of the extra expense
that will finally be payable.
In my view, the nature of the exercise required by the contract to be performed by Boot
and the engineer at the interim stage is so different from that required at the final account
stage that it cannot be said that a failure by the engineer to perform his obligations in accord-
ance with cl 60(2) can start time running in relation to a cause of action based on the failure
by the engineer to perform his obligations in accordance with cl 60(4). It seems to me that
the submissions of Mr ter Haar fail to take account of the fundamental differences between
what the engineer is required to do at the interim stage and what he is required to do at the
final stage. The position would be otherwise if this were, say, a contract for a fixed sum of £1m
whose only payment provision was that the price was to be paid by ten equal monthly instal-
ments of £100,000. In such a case, the right to claim the first instalment would accrue at the
end of the first month, and the right to sue for that instalment would become statute-barred
six years after the end of the first month. This is because the right to payment of £100,000 at
the end of the first month would be the cause of action in respect of the work done in that
month. The right to payment of £100,000 for that work would be unaffected by any other
provisions of the contract. It would not be reviewed or recalculated at the end of the contract.
But this kind of contractual arrangement is quite different from that provided by the contract
in this case, where there is a single contract price and one set of elaborate provisions for dealing
with instalment payments on account and a very different set of elaborate provisions for
ascertaining the contract price finally payable in the light of the work actually done and the
events that occur during the carrying out of the works.
There is no requirement that the architect should observe the rules of natural justice before
issuing a certificate, unless the express terms of the contract so require.
London Borough of Hounslow v. Twickenham Garden
Developments Ltd
CHANCERY DIVISION
(1970) 7 BLR 81
For the facts, see p. 383.
