Kirsch v H P Brady Pty Ltd - [1937] HCA 20

H. P. BRADY PTY. LTD.

ON APPEAL FROM THE SUPREME COURT OF Contract-Building contract-Construction-Payments dependent on architect's cer-

tificates-Form of certificates.

The conditions of a building contract contained provisions as a result MELBOURNE,

which payment to the builders was to be made, first, by payments of eighty Mar. 2, 3.

per cent of the value of the work shown to be done by progress certificates SYDNEY,

by the architect until £2,000 was retained by the building owner; secondly, May 6.

upon a certificate that the building was practically completed, by a payment making up ninety-nine per cent of the full certified value of the work done; thirdly, upon a certificate that the building had been completed to the entire satisfaction of the architect, by payment of the remaining one per cent. The

58 CLR 37

builders were required to deliver up possession as well as to obtain a certificate of final completion before they became entitled to payment of the ninety-nine per cent, and the remaining one per cent was not payable until six months after the date of the certificate of practical completion. The architect gave progress certificates entitling the builders to eighty per cent of the value of the work done, and, without obtaining any certificate of practical completion, the builders delivered up possession. The architect then gave the builders a certifi- cate simply stating that the builders were entitled to a named sum and that it was a final certificate and showing the amount of previous certificates.

Held that (1) the builders could not recover either the whole or ninety-nine per cent of the total certified, because this document amounted neither to a certificate of practical completion nor to a certificate of entire satisfaction, and because, further, even if it could be treated as the former, six months had not elapsed from its date before the writ was issued, and, if it could be treated as the latter, there was no certificate of practical completion and, according to the contract, the final amount was payable only at the end of six months from the date of such a certificate (2) the necessity for this purpose of a certificate of practical completion was not a matter which the builders could waive as being a term of the contract entirely for their benefit (3) as there was neither a regular certificate nor an award under the arbitration clause, the condition precedent to the owner's liability in respect of the final balance had not been

Decision of the Supreme Court of Victoria (Lowe J.) reversed.

APPEAL from the Supreme Court of Victoria.

In an action brought in the Supreme Court of Victoria by H. P. Brady Pty. Ltd. against Rupert Vincent Kirsch for the amount shown in an architect's certificate, which the plaintiff alleged had been given pursuant to a building contract made between it and the defendant and which it alleged was by that contract made con- clusive evidence between the parties that the amount was…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kirsch v H P Brady Pty Ltd

Details

AGLC: Kirsch v H P Brady Pty Ltd [1937] HCA 20
Case: [1937] HCA 20
Decision Date: 6 May 1937

CaseChat Overview and Summary

This case involved an appeal from the Supreme Court of Victoria concerning a building contract dispute between H. P. Brady Pty. Ltd. (the builder) and Rupert Vincent Kirsch (the building owner). The builder sought payment of £2,050 14s. 10d. based on a document issued by the architect, which the builder contended was a final certificate and thus conclusive evidence of the amount due. The building owner disputed the validity and conclusiveness of this certificate and, in turn, counterclaimed for damages.

The legal issues before the court were whether the architect's document dated 8 August 1935 constituted a valid certificate under clause 40 of the building contract, whether it served as conclusive evidence of the works' completion and the builder's entitlement to payment, and whether it precluded the building owner from pursuing claims for damages or asserting that the works were not completed to the architect's satisfaction. Specifically, the court had to determine if the certificate met the contractual requirements for a final payment, particularly in light of the absence of a prior 99% completion certificate and the elapsed time since practical completion.

The High Court held that the document issued by the architect was neither a certificate of practical completion nor a certificate of entire satisfaction as required by clause 40 of the contract. Consequently, it did not amount to a valid final certificate. The court reasoned that the contract stipulated a specific sequence of certificates, including a 99% completion certificate, before a final payment certificate could be issued. Furthermore, even if the document could be construed as a certificate of practical completion, the contractual six-month waiting period after such a certificate had not elapsed before the writ was issued. The court also determined that the builder could not waive the requirement for a practical completion certificate, as it was a term of the contract not solely for their benefit. As no valid certificate or arbitration award had been issued, the condition precedent for the owner's liability for the final balance had not been met.

The appeal was allowed, and the decision of the Supreme Court of Victoria was reversed.

Orders