Wale v Fiulaua [1999] SBHC 155; HCSI-CC 50 of 1999 (29 September 1999)

HIGH COURT OF SOLOMON ISLANDS

Civil Case No. 50 of 1999

ANTHONY WALE AND ROSE WALE

v

JACKSON FIULAUA AND
SOLOMON ISLANDS NATIONAL PROVIDENT FUND

Before: Muria, C.J.

Hearing: 8th July 1999
Judgment: 29th September 1999

A. Radclyffe for the Plaintiffs
A. Nori for First Defendant
A. Rose for Second Defendant

JUDGMENT

Muria CJ:

This is a claim by the plaintiffs for damages in the sum of $47,385.45 arising out of a building contract against the defendants. As against the first defendant, the damages claimed was for breach of contract and as against the second defendant, the damages claimed was for negligence. Naturally the defendants deny these claims.

Brief Background to the Case

The Plaintiffs and the first defendant entered into a building contract on 30/1/97 under which the first defendant was to build the plaintiffs, dwelling house at Lot No:1094, Lengakiki, Honiara. In order for the Plaintiffs to fund the construction of their house, they obtained a housing loan from the second defendant in the sum of $175,000.00. The building inspector with the second defendant, and therefore the second defendant, was the agent of the plaintiffs under the contract.

The work on the construction of the house commenced on or about the beginning of February 1997. The date for practical completion was 1/7/97. However, the house was completed before the date of practical completion.

The certificate of occupation was issued by the HTC on 20/6/97 and the keys to the building were then handed over to the plaintiffs.

The Plaintiffs' Case

It is the plaintiffs' case basically that their house had not been constructed in accordance with the contract and that it had been so done on poor workmanship standard. Following the completion of the house, the plaintiffs discovered defects in the construction work and wrote to the second defendant on 8 July 1997 pointing out the defects. The plaintiffs' letter was copied to the first defendant. It was said that the first defendants failed to construct the house in the standard as expected by the plaintiffs. It was not until after two months that the first defendant sent his boys to fix the defects. When those boys turned up at the plaintiffs' house to fix the defects, the plaintiffs refused to allow them to do anymore work on the house because of the delay in attending to the defects.

Having decided not to engage the first defendant anymore, the plaintiffs sought assistance from another builder by the name of Benjamin Oli who came and assessed the costs of remedying the defects to the amount of $26,912.28. This estimate was communicated to both defendants in a letter dated 23 September 1997 (Exh.7). Prior to that, however, the first defendant also did his own assessment of the costs of remedying the defects. He assessed it to be $4,567.60 (Exh.6).

In January 1998, the plaintiffs asked one Mathew Auna of A M Architectural and Designs Services to carry out further inspection and to prepare a report on the estimated costs of remedying the defects on the house. He did and his estimate was $47,385.45 (Exh.9) - which is the amount now claimed by the plaintiffs. The defects have not been rectified and the plaintiffs now seek that due to the first defendant's poor workmanship there were defects in the construction of their house and that the first defendant must finance the costs of remedying those defects.

The first defendant's case

The first defendant's case is that he did not dispute that there were defects in the construction of the plaintiff's house. However, he said that the costs of remedying those defects was only $4,657.60 and that he was ready and willing to rectify the defects. That was why he sent his boys to the site to remedy the defects. His boys were, however, refused to do any work on the house any more and so they were chased out from the premises. As a result the first defendant could not perform his obligation under the contract which he was willing to carry out.

Also it is the first defendant's case that the defects were discovered during the Maintenance Period and as such no breach of the contract could arise unless the contractor failed to comply with Clause 14 of the Contract. In the present case, it was contended that having discovered the defects during the Maintenance Period, the contractor must carry out the obligations under Clause 14. The contractor can only incur liability if he failed to carry out its obligations under Clause 14.

As to the damages claimed by the plaintiffs, the first defendant contended that the sum of $47,385.45 was only an estimate. It was not the "cost incurred in connection with employment ...... recoverable from the contractor by the employer as a debt ....." under Clause 14 (3). In other words the estimated figure of $47,385.45 obtained from Mr. Auna's Report produced more than a year after the house was completed.

The second defendant's case

The case for the second defendant is simply that they were not liable to the plaintiffs for any damages as claimed. It is the second defendant's case that its building inspectors had properly inspected the work on the house before certifying for the release of progress payments to the first defendant. It was further contended that the first defendant had been willing to remedy the defects but prevented from doing so by the plaintiffs. The plaintiffs are therefore not entitled to the claims made and should be dismissed.

Issues

There is no dispute here that there were defects found in the construction of the plaintiffs' house. Having accepted that there were defects in the construction of the house, the first defendant made attempts to rectify the defects. However the plaintiffs refused to allow the first defendant to carry out the work. The main issue seems to me to be obvious is whether the first defendants were liable for the defects and if so, at what costs. Central to the resolution of the issue in this case is the proper interpretation of Clause 14.

Clause 14 of the Contract

The starting point in this case is the Contract itself and in particular, Clause 14. The plaintiff's case stands or falls on this Clause of the Contract. It is necessary that I shall set it out here before proceeding further:

"14. MAINTENANCE PERIOD AND DEFECTS LIABILITY

1. Any defect, shrinkage or other fault which appears within the maintenance period and which is due to materials or workmanship not in accordance with this contract shall be specified by or on behalf of the employer in a schedule of defects and the Employer shall deliver or caused to be delivered the said schedule to the contractor not later than fourteen days after the expiration of the said maintenance period.

2. The Contractor shall within a reasonable time after receipt of the schedule of defects make good at his own expense the defects, shrinkages and other faults specified in the said schedule.

3. Where the Contractor fails to make good the defects, shrinkages and other faults as required under sub - clause (2) the employer may employ and pay other persons to make good the defects, shrinkages and other faults and all cost incurred in connection with such employment shall be recoverable from the contractor by the Employer as a debt and may be deducted by or on behalf of the Employer from any monies due to the Contractor under this Contract."

There is one important consideration to be borne in mind under the above Clause 14 and that is, the provision only applied to rectification of defects, shrinkage or other faults which appear within the "maintenance period" which phrase under the contract means "the period of twenty six weeks commencing on the date for practical completion" and which are specified in a schedule of defects. So that the contractor would only be under obligation to remedy any such defects which appear after practical completion and not before the issue of final certificate of practical completion. The defects, however, must be specified in a schedule of defects and delivered to the contractor not later than fourteen after the expiration of the said maintenance period.

In many standard form contracts, provisions are made directing rectification of any material or work which is not in accordance with the contract and that such power is exercisable at "any time" during the progress of the works and prior to practical completion. There appeared to be no specific provisions for rectification of defects at "any time" during the execution of the work and prior to practical completion, although one would infer that the obligation to do so can be implied under the contract, in particular under the obligation stated in Clause 2.

The importance of making a provision under the Contract which empowers the building inspector or an architect to direct or order correction of materials or works which are not in accordance with the contract at any time is that by the time the issue of a final certificate is done, it deems the works to have been completed in accordance with the terms of the contract to the reasonable satisfaction of the architect or building inspector. The "defects liability period" or "maintenance period" which commences on the day of practical completion of the works is really for the contractor to remedy minor omissions or errors that are presently obvious or to remedy defects which appear after the date of practical completion. I think it is unfortunate in the present case, as in many other cases which were dealt with under the similar standard contract, that the parties chose to agree that the obligation to rectify errors and defects had to be specified in a schedule of defects and must commence after the expiration of the maintenance period and not at any time prior to that day. I would respectfully suggest that the standard building contract presently used needs to be reconsidered with a view to including other important provisions as suggested in it.

Having said that, it is important to note what the provisions of Clause 14 require. In sub - clause (1) it is the first requirement for rectification of defects that the defects be specified in a schedule of defects by the employer or someone on his behalf. The employer must deliver that schedule to the contractor not less than 14 days after the expiration of the maintenance period. In other words, the Schedule of defects to be delivered to the contractor under Clause 14 (1) must also be delivered at the end of the liability period and it must be so delivered within 14 days after the liability period ends. After receiving the schedule of defects under sub - clause (1), the contractor is required under sub - clause (2) to rectify the defects at his own expenses within a reasonable time. Sub - clause (3) then provides that if the contractor fails to rectify the defects, shrinkages and other faults as required by sub - clause (2) then the employer can employ some other persons to make good the defects, shrinkages and faults and the costs occasioned in doing so, shall be recoverable from the Contractor as a debt.

Thus upon reading the whole of Clause 14, the obligation to rectify defects, shrinkages or other faults appearing in a schedule only arises at the end of the "maintenance period" or "defects liability period". In other words, the power to require the contractor to make good any defect, shrinkage or other fault due to materials or workmanship which is not in accordance with the contract can only be exercised at the end of the defects liability period and only in respect of scheduled defects. This may seem to be very unsatisfactory as far as the employer is concerned but that is the effect of Clause 14 of the present contract. For the contractor's obligation under Clause 14 of the present contract had not arisen until the end of the defects liability period or maintenance period. In this regard, I would agree with the contention by Mr. Nori of Counsel for the first defendant, that the plaintiffs' Claim in this case stands or fails on the proper construction of Clause 14 of the Contract. I shall return to this aspect of the matter later but for now I feel I should consider one other aspect of the case concerning the position of the "agent" of the plaintiffs.

The Agent of the Plaintiffs

Under the contract, the second defendant, by virtue of its building inspector's role in the contract, is the agent of the plaintiffs. As agent, the second defendant occupies a special relationship to the plaintiffs in this case. It is clear from the contract that the building inspector's role was very essential in the proper execution of the contract between the contractor and the plaintiffs. It was essential since the issue of a certificate of practical completion of the works depended on the opinion of the agent (building inspector) or the architect. The obligation placed upon the agent in the present case thus demanded that he must, on behalf of the plaintiffs, supervise the construction work and ensure that the work was carried out in the terms of the contract.

In addition, the building inspector in carrying out his obligation, must do so with reasonable competence as an experienced building inspector. Such a reasonably high level standard could properly be implied from Clause 13 of the contract which states:

"13. PRACTICAL COMPLETION

"When in the opinion of the Employer's agent or architect the works shall be deemed for all purposes of this contract to have taken place on the day named in the certificate."

The opinion of a building inspector or an architect in such a situation could only be properly reached through professional competence together with reasonable skill and experience. In this sense, the test of the agent's performance of his duties under the contract in this case must be one of a competent and experienced building inspector with reasonable skill and ability in such a calling.

I shall return to the agent's position in this present contract later. I feel it is worth now examining the defects themselves.

Actual defects.

As mentioned earlier, the first defendant did not dispute the defects in this case. But to ascertain what those actual defects were, I shall set them out there (Exh. 4):

"1. Please, refer to Page One (1) of the Approved Working Drawing for details.

(a) Folding Doors were not constructed in the,

Kitchen

Store Room

Linen

(b) Main Shower Room

No Shelves were constructed according to the Working Drawing

(c) Store Room

Shelves were wrongly constructed

(d) Kitchen

Space for the Refrigerator is inadequate - (too small)

(e) Master Bedroom

Extended Walls into the Room were not constructed and so as the shelves (see details)

(f) Shelves in ALL the Rooms

Shelves constructed were not according to the Working Drawing. They are shorter than the approved sizes.

(g) Doors (Main & Kitchen)

These doors are not constructed properly causing the bottoms to scratch the floor. The doors were not hung properly.

2. On Page Five (5) of the same Approved Working Drawing referred to above the following can be noted:

(a) Two (2) Double Power Points (G.P.O.) were not installed according to the approved drawing.

(b) The Main Switch Board (MSB) was wrongly placed.

(

c) One (1) Single Power Point (G.P.O.) in the Master Bedroom and one

(1) in the living room were wrongly placed

3. Down Stairs

(a) Office

The height is less than the minimum standard. It is only 7ft 2 in. This will cause compact ventilation and it will be a health hazard.

(b) Laundry

The laundry is incomplete. It needs another layer of brick or a frame to block the above space.

(c) Bearers

The reinforce wires from the columns were not threaded and bolted to the bearers. There were no 'U' bolts made in the columns. These reinforce wires were simply bent over the bearers. This is now not recommended by the Town Council Regulations. Therefore this is seen to be violating this piece of regulation.

(d) Verandahs (Decking)

In the Working Drawing on Page 3, you will find that the verandahs should be lower than the main flooring, but this is not so, the verandahs have bear [sic] the same height as the main flooring. This is seen to be done deliberately to save money for the Contractor.

(e) Architraves

These architraves should be 50 x 12, but you will find that they bear 100 x 20 to replace the approved size. I think this is done to cover the poor joints constructed.

(f) Louvres

You will find 3 pieces of louvres not sitting tight in their frames due to wrong sizes been fitted is (too short)

4. General

(a) Paint

All the doors and window battens needs a final coat of gloss white. It looks like only one heavy coat was applied to these batterns and architraves.

(b) Cracks

Nobody has ever lived in the house yet, but you can already notice cracks between the battens and ceiling, and battens and walls. Fillers have been used as a remedy to cover all the poor joint fittings. Even the ceiling is not levelled.

(c) Site

There are empty tin paints still lying around the house. The contractor had not made any effort to remove them, but neighbours have some purposes for them so the tins have been carried away. Only a few is left on the site.

(d) It was noted with regret that the following materials were not used on the house

(i) Reinforce M12 rod - Lgth 58

(ii) Sliding Door 2040 - 1

(iii) 1.800 mm Top Tract/Roller - 1

(iv) Two (2) Gang Wall Switches -

(v) 36" Ceiling Fan Set - 2

As mentioned earlier in this judgment, the above defects have not been disputed by the first defendant contractor. What then should be the position of the defendants in law in the light of the undisputed existence of the defects? Again, the answer to that question turns upon the proper construction of the contract.

The Contract

The contract between the parties in this case is for the first defendant to erect, build and complete the plaintiffs dwelling house at the cost of $175,000.00 which was payable in instalments through progress payment at the completion of each stage. The work was completed, with a certificate of occupation issued by the Honiara Town Council on 20 June 1997. The first defendant had been paid in full including retention money. The plaintiffs took delivery of the house on 24 June 1997 with the keys to the house handed over to them by the first defendant.

Although the contract here was for the construction of the plaintiffs' house for the total cost of $175,000.00 this was a divisible contract whereby the contractor had an enforceable right to instalment payments before the entire completion of the contract: See Clause 23 of the contract. That had been fulfilled in this case. The first defendant contractor had been paid at the end of each stage of the construction. The certification for those progress payments was done by the building inspector. In other words, the entire performance was, under the present contract not a condition precedent to the progress payments. However, it is a condition precedent to payment of the retention money. This was pointed out by Denning L.J. in Hoening -v- Isaacs [1952] EWCA Civ 6; [1952] 2 All ER 176, 181 where be said:

"It is, of course, always open to the parties by express words to make performance a condition precedent. A familiar instance is when the contract provides for progress payments to be made as the work proceeds, but for retention money, but not, of course, to the progress payments. The contractor is entitled to payment pro rata as the work proceeds, less a deduction for retention money. But he is not entitled to the retention money until the work is entirely finished, without defects or omissions."

As noted in that case, for the retention money to be paid to a contractor, the work must be entirely completed without defects or omissions. It is implicit therefore that between the date of practical completion and the end of the maintenance period all defects, errors or omissions in the construction work must be rectified. If by the end of that period there were still defects, errors or omissions in the work done, then the contractor would not be entitled to the retention money.

Applying the principles of law to the present case.

In the case now before the Court, for the plaintiffs to succeed, they would have to show that the defendants were in breach of their obligations under the contract. This, they must do on the evidence before the Court.

Earlier on, I have stated that under the present state of the contract, the obligation to rectify defects does not arise until after the expiration of the maintenance period, unlike in many standard building contracts where provisions have been included obliging the contractor to make - good defects within the defect liability period or maintenance period. Be that as it may, it is clearly established in this case that even by the end of the maintenance period, the defects complained of by plaintiffs had not yet been rectified. The defendants knew about the defects two weeks after the Honiara Town Council issued the certificate of occupancy which was on 20 June 1997. The only reason that could be gleaned from the evidence for not rectifying the defects was the dispute as to the costs of rectification. The first defendants was willing to rectify the defects for the cost of $4,567.60 while the plaintiffs had insisted that it would cost more than that to properly rectify the defects.

The plaintiffs were not satisfied with the first defendant's assessment and so they engaged another builder by the name of Benjamin Oli to "cross check" the first defendant's estimation. Mr. Oli assessed the cost of rectifying the defects to $26,912.28 which amount was communicated to the defendants. Subsequently the plaintiffs engaged a building inspector, Mr. Mathew Auna, who inspected the house on 14 January 1998 and assessed the cost of rectifying the defects to $47,385.45. Both assessments were made following details inspection and costing of the work required. I have considered the three assessments mentioned and I come to the firm conclusion that it would take more than $4,567.60 to make good the undisputed defects set out in plaintiffs' letter 8 July 1997 (Exh.4). One clearly sees that only to fix the walling which was full of fillers cost the plaintiffs $3,080.00. It would be reasonable to conclude therefore that the first defendant's assessment was unrealistic and must be rejected.

In such a case as this, the proper assessment of the amount necessary to rectify the defects reflects the amount of damages to be paid by the defaulting party. The object of such assessment is to put the party not in breach in the same position he would have been but for the breach by the other party and the measure of damages is the amount which the work is worth less by reason of the defects and omissions, and is normally calculated by the costs of making them good. Hoening -v- Isaacs. This is sometime referred to as the cost of returning the works to the condition contracted or sometime also referred to as the cost of reinstatement. See Bellgrave -v- Eldridge (1953 - [1954] HCA 36; 1954) 90 CLR 613 and also East Ham Corporation -v- Bernard Sunley & Sons Ltd [1966] AC 406. This latter case also laid down the principle that the appropriate date to assess damages in such a case is the date upon which the repairs are actually effected, although in Clark -v- Woor [1965] 1 WLR 65, the Court said that the cost of repair should be at or within a reasonable time of the discovery of the breach.

In Dodd Properties (Kent) Ltd -v- Canterbury City Council [1979] EWCA Civ 4; [1980] 1 All ER 928, the English Court of Appeal held that the costs of repairs was to be assessed at the earliest date when having regard to all the circumstances, they could reasonably have been undertaken. However in that case the claim was not for breach of contract but in tort.

In another case, Jones -v- Barton (Queensland Supreme Court, 3 April 1978), it was there considered that the correct date upon which to assess damage was the date upon which the repairs were actually effected or if not yet effected, the date of judgment. In that case the Court held that damages should be assessed at the date of judgement. Hoare J held that it was not reasonable to expect the plaintiffs to have borrowed large amounts necessary for rectification nor should they have sold the property unrepaired. In the circumstances they had brought and prosecuted their action as promptly as possible and were entitled to damages assessed at 1978 values rather than at the earlier time.

For my part, in the present case before the Court, I am inclined to the view in Jones -v- Barton for I share the view that it was not reasonable to expect the plaintiffs to have to borrow large sums of money again to rectify defects caused by the defendant builder. I would therefore feel that the amount claimed by the plaintiffs of $47,385.45 less $10,000.00 would be reasonable amount needed to rectify the defects in this case. I say less $10,000.00 which is the amount included in Mr. Auna's assessment as compensation. I do not see any basis for the claim of $10,000.00 as compensation in this case. The amount of damages as the cost of rectifying the defects in this case is therefore $37,385.45.

Should the amount assessed be paid by the defendants.

Mr. Nori's contention is that the contractor could not be in breach of contract based wholly on defects discovered during the maintenance period. Further, Counsel submitted that even if the contractor failed to remedy the defects, the only amount claimed should be that which was actually incurred and not an estimation such as that claimed by the plaintiffs in this case.

I take first the latter argument. The case of Jones -v- Barton would provide some answer to that contention. Had the defendants agreed to the assessment and effected rectification then, the amount would be that which the Court has found, that is, $37,385.45. That had not been agreed upon and so the rectification had not been effected yet. That led to the plaintiffs bringing this action claiming the amount of $47,385.45 needed to rectify the defects. It will be the same amount (less $10,000.00) which they would need at the date of judgement if they succeed to rectify the defects. The contention that only a quantified debt for costs actually incurred can be claimed cannot be sustained.

As to the argument that there cannot be any claim for breach of contract for defects discovered during the maintenance period, I feel that this would depend on the true construction of Clause 14 and the contract as a whole. As I had already pointed out earlier in this judgment, the obligation to rectify defects under Clause 14 of the contract only arises following the schedule of the defects being delivered to the contractor not later than 14 days after the expiration of the said maintenance period. It is after the receipt of that schedule of defects that the contractor shall within reasonable time make good the defects specified in the schedule. Thus Clause 14 provides obligation to make good defects which are contained in a schedule of the defects at the end of the maintenance period which period was said to have ended on 20 December 1997. That is not the position here. The plaintiffs here did not wait for the maintenance period to lapse before complaining about the defects. Strictly Clause 14 would not assist the defendants here.

Having said that, does Clause 14 prevent the plaintiffs from claiming against the defendants for breach of contract? It has been held that the contractor's liability for breach of contract is not removed by the existence of a defects clause unless clear words were used in the contract to that effect: Hancock -v- Brazier (Anerley) Ltd [1966] 1 WLR 1317. Thus despite the strong argument by Mr. Nori on the application of Clause 14 with regard to the contractor's obligation to rectify the defects, it still remains true that the Clause does not operate to exclude the contractor's liability for breach of contract.

The case for the plaintiffs is simply that the defendants had breached the contract by building their dwelling house defectively. The defects discovered immediately after they took possession of the house showed that the house was not properly built. The defendants have not disputed that the defects were genuine. They simply said that they were willing to remedy them but a very low cost. I have already found that the amount assessed by the defendants to remedy defects was unreasonable and unrealistic. I am not at all surprised that the plaintiffs refused to allow the first defendant to rectify the defects at such an unrealistically low cost. I think the plaintiffs were justified in insisting on the high figure so that the work on their house could be properly done and as such they were justified in refusing the first defendant to do the work unless he agreed to do the work at the cost as assessed by either Mr. W or Mr. Auna.

Lord Diplock had this to say at page 1325 in Hancock -v- Brazier on this aspect of the matter:

"It seems to me that when a vendor undertakes to erect, build and complete a dwelling house in a proper and workmanlike manner, he does not fulfil that obligation if, at the contractual time, he hands over a house which is not built, erected and completed in proper and workmanlike manner".

The defendant company in that case was a building contractor and house vendor. The same can also be said of the present case. The obligation of the contractor was by virtue of Clause 2 "to carry out and complete the works shown upon or described in the contract documents and in every respect to the reasonable satisfaction of the Employer" who are plaintiffs. Clause 7 of the contract provides for materials, goods and workmanship to conform to description testing and inspection standards. Regrettably, in my judgment, the construction of the plaintiffs dwelling house in this case was not done in a proper and workmanlike manner. The list of defects produced by the plaintiffs in this Court demonstrates that the work on their dwelling house was done not in accordance with the standard expected of the builder and he cannot be excused from liability. As Lord Denning MR, said at. 1334 in Hancock -v- Brazier:

"And I must say I think that if a builder has done his work badly, and defects afterwards appear, he is not to be excused from liability except by clear words."

The circumstances in the present case clearly point to one conclusion only, and that is, that the first defendant was in breach of his contract and he is liable to the damages claimed in this action.

As against the second defendant

The claim against the second defendant is mainly in tort. The plaintiffs claimed that the second defendant failed to exercise its duty of care to ensure proper inspection of the building and construction work and secondly, that it failed to consult with plaintiffs or properly inspect building before authorising release of progress payments.

I have already mentioned earlier some of the duties and obligations of the building inspector as an agent of the plaintiffs. It only remains for me to say that had the building inspector carried out his responsibility under the contract properly, this case would have been avoided. Part of that responsibility is to consult with the employer, report to employer on the quality of the work undertaken by the contractor and on proper amount to be paid to the contractor after inspecting the work. He was to supervise and ensure the work on the house was properly done. He must then certify in the true sense that the work had been carried out under the contract in accordance with the drawing, specifications and material list. The observation by Palmer J in M. Meone & T. Meone -v- SINPF and Elison Tealoa CC195/92 regarding the duty of NPF building inspector must be taken to confine to the circumstances as presented before his Lordship in that case.

The defects discovered by the plaintiffs upon taking possession of the house left much to be desired of the work carried out by the building inspector in overseeing the work on the plaintiffs' house.

In my judgment the building inspector had failed in his duty as agent of the plaintiffs to ensure proper inspection and monitoring of the first defendant's work on the plaintiffs' house. He had failed in a number of respects namely, to issue a Certificate of practical completion under Clause 13. The Certificate of Occupation issued by Honiara Town Council was not what Clause 13 stipulates the Employer's agent should do. It may well be that the Honiara Town Council should issue Certificate of Occupation to occupy the house but the Certificate to show that the work had practically been completed must be issued by the Employer's agent or architect. That had not been done here.

Further, the Employer's agent knew of the existence of the defects. Before a retention money could be released there must be a certification to show that those defects had been remedied. Without such a certification, no retention money should be released to the contractor because the defects were still existing and while those defects remained not rectified the contractor is not entitled to the retention money. Even if there were no defects at the end of the maintenance period, the building inspector or the architect must issue a Certificate to that effect. It is upon receipt of such certificate that the contractor is entitled to claim the retention money. These had not been done in this case.

Although it is not specifically provided in the contract that the agent should consult the employer, the agent as he is acting on behalf of the employer was under general obligation to consult the employer especially in the areas which I have already mentioned earlier.

In the circumstances of this case I am satisfied on balance that the building inspector as agent of the plaintiffs in this case had fallen below the standard required of him in his relationship and duties towards the plaintiffs in this case. That is negligence.

Conclusion and Order

In the light of what I have said and in the circumstances of this case I am satisfied on the balance of probability that the first defendant was in breach of contract and the second defendant had breached its duty to act with due care towards the plaintiffs. Both defendants are liable to the plaintiffs for those breaches. There will be judgment for the plaintiffs in damages against defendants in the sum of $37,385 - 45 together with costs and interest.

I consider that in the circumstances of this case and bearing in mind that it was the contractor/builder's function to carry out his own building operations as he thought best, it would be reasonable to apportion each of the defendant's responsibility to pay the judgment sum. Accordingly I assess that the first defendant must shoulder the greater part of the responsibility and he ought to pay 60% while the second defendant shoulders 40% of the damages.

Order

Judgment for the plaintiffs in damages in the sum of $37,385.45 with costs and interest against both defendants payable as assessed on 60:40 basis.

(G.J.B. Muria)
CHIEF JUSTICE