A Building Dispute

Progress, Volume XII, Issue 4, 1 December 1916, Page 809

A Building Dispute

A Supreme Court Judgment

A judgment of interest to builders was delivered by Mr. Justice Hosking, says the Auckland "Star" of November 23. The case was stated by arbitrators for the opinion of the Court on certain questions arising out of a building contract for the erection of an apartment house in Lower Symonds Street by Frederick Joseph Herring Ellisdon (Dr. Bamford) for Rachael Basten (Mr. McVeagh). A penalty clause was attached to the contract, providing for the payment by the contractor of £lO per week for every week the contract remained uncompleted beyond the time specified or within any extended time which may have been allowed by the architect. The contract provided that the contractor should be allowed an extension of time in all cases where the completion of the work was delayed by inclement weather, strikes, or authorized extra additions or alterations known as extras. The extension of time to be allowed was to be. agreed upon by the contractor and architect. The question to be decided was whether the authorization of a number of extra works in connection with a contract set at large or waived the penalty clause for the non-completion of the works in the period specified in the contract. When the contractor forwarded his account to Mrs. Basten for the recovery of the balance of the contract money, Mrs. Basten lodged a claim for a sum of £llO damages for non-completion of the contract within the time specified. In the dispute before the arbitrators, the contractor argued that by virtue of the fact that extras had been ordered, an extension should have been allowed. As no extension of time was granted, he submitted that the penalty clause should be waived or set aside. His Honor, in the course of his judgment, said he was of the opinion that the provision for the penalty clause was applicable, notwithstanding the fact that no extension of time Avas fixed when the order for the extras was given. An incidental question asked in relation to the case was what is the meaning of the expression in clause 22" the work;- shown in the plans and specifications?" The suggestion was that this clause was not applicable if there were extras, because if (here were, the works whose non-completion was to bring the clause into operation, were not the works I'own on the plans and specifications. His Honor said he did not think this suggestion could be upheld, otherwise the provision for extension in the case of extras would become migratory. The confactor agreed to execute the contract, subject to the general conditions of contract, the works shown on the drawings and described in the specifications, but Clause 11. of those conditions gave power to vary the contract by ordering extras, so that the works shown on the plans and specifications were subject to this power of variation. Had there been no provision for extension, then, according to the decisions these variations, if they caused delay, would, although they were authorized by the contract, set

aside the penalty clause. Here, however, provision for extension had been made as indicated. Therefore it did not appear to his Honor that the expression in question precluded the application of Clause 22, although extras had been ordered. It should be carefully noted, he said, that it was not because extras were ordered that an extension was to be allowed. That was only to happen if the extras were such as to cause delay in the completion of the works.