Cases - Matthew Hall Ortech Ltd v Tarmac Roadstone Ltd

Record details

Name

Matthew Hall Ortech Ltd v Tarmac Roadstone Ltd

Date

[1998]

Citation

87 BLR 96

Keywords

Final certificate - no certificate issued - true construction of clause 38.5 the final certificate was conclusive evidence that all the work had been completed under the terms of the contract

Summary

Tarmac was the purchaser and Matthew Hall was the contractor under an IChemE Red Book 1981 form of contract whereby Matthew Hall agreed to design, erect and commission a complete mineral processing plant. At the end of 1994, Tarmac noticed a defect in the plant which was causing bunkers to wear out at a faster rate than they ought to have done and an arbitration was commenced on the basis of this defect. Although the works had been completed by the commencement of the arbitration, no final certificate had been issued and the question arose at the arbitration as to what, if any, effect the final certificate, or lack thereof, might have.

The arbitrator held that the final certificate ought to have been issued no later than 5 June 1994, a date prior to the defects first being discovered, but that it was not conclusive as to the fact that all works had been executed in accordance with the contract. Rather, the arbitrator held that it was only conclusive of the fact that all defects had been made good pursuant to the terms of the contract and had no application to defects not spotted prior to issue of the certificate. Tarmac appealed this interpretation of the final certificate to the High Court.

The court allowed the appeal holding that under the IChemE Red Book 1981 the final certificate is conclusive evidence that all work has been completed in accordance with the requirements of the contract and therefore prevented most, if not all, claims for breach of contract. In giving his judgment, HHJ Thornton QC emphasised the importance of a rigorous testing procedure to avoid defects first being spotted after issue of the final certificate.