Cases - Scheldebouw BV v St James Homes (Grosvenor Dock) Ltd

Record details

Name
Scheldebouw BV v St James Homes (Grosvenor Dock) Ltd
Date
[2006]
Citation
BLR 113 TCC
Keywords
Construction contracts - certification - replacement of certifier - appointment of certifier - absence of express term - whether employer can appoint itself as certifier in absence of express term
Summary

The issue arose as to whether or not the employer could appoint itself as the replacement construction manager who, under the construction management form of procurement, had 'decision-making' functions on matters where, at least potentially, the contractor and the employer have opposing interests (such as the certification of loss and expense payable, adjustments to the contract sum on account of instructions and in relation to extensions of time). The Court held that it could not. It was considered such an unusual state of affairs for the employer himself to be the certifier and decision-maker that this could only be achieved by an express term. In every authority in which the certifier was a direct employee of the employer, this circumstance was known to the contractor at the outset. The contractor thus went into such a contract with his eyes open.

The court set out 4 general propositions concerning the position and duties of the contract administrator (referred to as 'the decision maker'):

  1. The precise role and duties of the decision maker will be determined by the terms of the contract under which he is required to act.
  2. Generally the decision maker is not and cannot be regarded as independent of the employer.
  3. When performing his decision making functions, the decision maker is required to act in a manner which has variously been described as independent, impartial, fair and honest. These concepts are overlapping but not synonymous. They connote that the decision maker must use his professional skills and his best endeavours to reach the right decision as opposed to a decision which favours the interests of the employer.
  4. The fact that the decision maker acts in conjunction with other professionals when performing his decision making function does not water down his legal duty.