Opat Decorating Service (Aust) Pty Ltd v Hansen Yuncken (SA) Pty Ltd No. 4252 Judgment No. SCGRG 93/595 Number of Pages 4 Contracts

[1993] SASC 4252

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA MOHR J

CWDS
Contracts- Interpretation - Appeal against an award made by an arbitrator pursuant to certain clauses of a contract - Clause 31(b) provided that a sub-contractor could in certain circumstances gain an extension of time to complete work if notice of the claim was made in writing within a specified time period - Clause 47 provided that a contractor would not be liable to any claim by a sub-contractor unless specific procedures for the making of the claim were adopted - the appellant being the subcontractor failed to give the necessary notice or adopt the procedure as set out by the clauses - held that compliance with the sections was a prerequisite to the sub-contractor being granted an extension of time. Wormald Engineering Pty Ltd v Resources Conservation Co. International (1989) 8 BCL 158 and Jennings Construction Ltd v Q.H. and M. Birt Pty Ltd (1986) 3 BCL 189, discussed.

HRNG ADELAIDE, 14 October 1993 #DATE 12:11:1993
Counsel for appellant:     Mr. C. Goodall
Solicitors for appellant:    Thomsons
Counsel for respondent:     Mr M Rice
Solicitors for respondent: Phillips Fox

ORDER
Appeal dismissed.

JUDGE1 MOHR J This is an appeal, by leave, against an award made by an arbitrator, duly appointed, concerning the interpretation of a contract in standard form and in particular clauses 31(b) and 47 of that contract. Clause 31(b) reads:-
    "Where the Sub-Contractor is delayed in the execution of the
    Works by any cause arising out of any breach of the provisions of
    this Contract or out of any other act or omission on the part of
    the Contractor his employees or agents or by any act or omission
    on the part of the Principal, the Superintendent or the
    employees, professional consultants or agents of the Principal or
    by any other cause (except a cause arising out of any breach of
    the provisions of this Contract or any other act or omission on
    his own part or on the part of his employees, agents or
    sub-contractors or their employees or agents) and that delay
    might reasonably be expected to result in a delay in the
    execution of the Work under the Contract, the Sub-Contractor
    shall if he desires to claim an extension of time for completion
    of the Works give to the Contractor not later than fourteen (14)
    days after the cause of delay arose notice in writing of his
    claim for an extension of time for completion of the Works
    together with a statement of the facts which he bases his claim." and Clause 47 reads:-
    "The Contractor shall not be liable upon any claim by the
    Sub-Contractor in respect of any matter arising out of this
    Contract unless the claim, together with full particulars
    thereof, is lodged in writing with the Contractor not later than
    fourteen (14) days after the date of the occurrence of events or
    circumstances on which the claim is based, or written notice of
    intention to make the claim specifying the nature of the claim is
    lodged with the Contractor with that time and the claim, together
    with full particulars thereof, is lodged in writing with the
    Contractor not later than fourteen (14) days before the issue of
    the Final Certificate under the Head Contract." 2. So far as the facts of the matter are concerned it is common ground that the appellant - the sub contractor - gave no notice under either clause at any time before the final certificate was issued. 3. After considering the submissions made to him the arbitrator held:- "On the basis of the evidence before me and the foregoing I agree with the contractor's contention that the sub-contractor pursuant to Clause 31(b) of the Sub Contract is barred by its failure to make a claim for such extension of time within the limits therein as set forth in clauses 31(b), 31(g) or 47 of the sub contract. It is therefore a mandatory requirement for the sub contractor to comply with terms 31(b) and Clause 47 reminds the sub contractor of its obligation, and Clause 47 reminds the sub contractor providing it has complied with Clause 31(b) to lodge all outstanding claims to be made within 14 days before the issue of the final certificate under the Head Contract." 4. I turn to consider whether compliance with Clause 31(b) is a necessary step to the grant of any extension of time. Mention should be made of Clauses 31(e) and (31g), which read:-
    "31(e) Notwithstanding that the Sub-Contractor has not
    given notice of a claim for an extension of time for completion
    of the Works pursuant to this clause, the Contractor may, at any
    time and from time to time and for any reason he thinks
    sufficient, by notice addressed to the Sub-Contractor extend the
    time for completion of the Works by nominating a date specified
    in the notice as the date for the completion of the Works and the
    date so specified in the notice shall, for the purpose of this
    Contract, be deemed to be the date for the completion of the
    Works.
     ...
     31(g) Any extension or extensions of time granted or allowed by
    the Contractor pursuant to the provisions hereof may be granted
    or allowed at any time before the issue of the Final Certificate
    under the Head Contract." 5. In my opinion these claims have no bearing on whether non compliance with clause 31(b) is a bar to the Sub Contractor being granted an extension of time. Clause 31(e) appears to be aimed at allowing the Contractor, for reasons it deems proper, to grant a blanket extension of time without the necessity of any Sub-Contractor applying for such. For instance if the main work under the Contract was held up or delayed for some reason the contractor may well see fit to grant such an overall extension of time. 6. So far as Clause 31(g) is concerned the fact is that no such extension of time has been granted. The Contractor relies on its submission that compliance with Clause 31(b) is mandatory. 7. I turn to the case of Wormald Engineering Pty Ltd v. Resources Conservations Co. International (1989) 8 BCL 158. Although that case dealt with different clauses in a different contract the point in issue was the non compliance with the requirements of giving notice. At page 161 Rogers CJ Comm D had this to say-
    "The real question is the role and effect of the last three
    paragraphs of the subclause. In answering that question, it is
    necessary to have regard to the contract as a whole. The
    contract provides a carefully regulated regime. As the
    arbitrator pointed out, the principal feature is that the
    contract calls for the payment of a lump sum for the carrying out
    of the works. It is to be varied only in accordance with
    carefully constructed machinery steps. A programme of works is
    prepared and supervised by the superintendent. The contract lays
    down detailed procedures for situations which may involve a
    disruption of the programme, .... The controlling mechanism is
    the giving of notices by the contractor to the superintendent at
    the earliest possible time to alert him to the fact that a change
    may be required ...." 8. At pages 162, 163 the learned Judge held:- "In my opinion the arbitrator was correct in rejecting this submission of the appellant and in holding that failure to give notice was destructive of the appellant's entitlement to recover under this clause." Smart J in Jennings Construction Ltd v Q H and M Birt Pty Ltd (1986) 3 BCL 189 at p.193 in discussing the purpose of a notice under clause 47 said this:- "The purpose of cl.47 is to ensure that notice is given at an early stage so that the contractor can inspect and investigate promptly the events or circumstances and consider his position." 9. Those words apply with equal force to the giving of notice under clause 31(b). 10. His Honour in that case described clause 47 as a "residual clause" and that is true in a sense. It may also apply to a sub-contractor seeking an extension of time. Such a sub-contractor may not be in a position to give full particulars and it seems that clause 47 gives him the right to give what is in effect a preliminary notice and delay giving particulars until a time prior to 14 days from the issuing of the final certificate. Such a notice would give the contractor an opportunity of reviewing the progress of the whole contract at the time of the notice so that when full particulars are given it would be in a position to review the whole question. 11. In my opinion the giving of the required notice and particulars under Clause 31(b) or adopting the procedure set out in Clause 47, neither of which the sub-contractor did, are pre-requisites for the granting of extension of time except in the circumstance of Clause 31(e) and (g) and the arbitrator was correct in so holding. 12. The appeal is dismissed.