1 Cur Adv Vult

2 By an agreement in writing dated 14 July 1988 (the agreement), the plaintiffs, who are building contractors, agreed with the defendant, the owner of a single-storey detached house on lot 116-97 mk 22 known as No 3 Rosyth Ave, to construct and complete an additional storey thereon (the works) for a lump sum payment of $118,800. The agreement incorporated the Singapore Institute of Architects Conditions of Contract, 1979 Edition (the conditions).

3 The schedule to the agreement provided for the site to be delivered into the possession of the plaintiffs on 1 August 1988 and for the completion of the works by 28 February 1989. The schedule to the agreement further provided by reference to cl 30(1 ) of the conditions for certificates of interim payments to be presented to the defendant at monthly intervals which were required to be paid by the defendant within 14 days of presentation.

4 An interim certificate of payment No 4 dated 29 December 1988 for $34,134 issued by the architect was duly presented to the defendant for payment. Part payment thereon was made by the defendant on 20 January 1989 in the sum of $20,134 leaving a balan ce of $14,000.

5 Another certificate of payment intituled ` penultimate certificate` , which i s but an interim certificate, dated 22 February 1989 for $15,975.75 issued by the architect was duly presented to the defendant for payment. No payment was made thereon by the defendant.

6 By a letter dated 3 February 1989, the architect certified practical completion of the works under cl 15(1) of the conditions to have been effected on 31 January 1989. The effect of this is that the period for making good defects commences from the d ate so certified. The period provided in the schedule to the agreeme nt for making good defects was six months. Accordingly the defects liability period would end on 31 July 1989. The architect, also, at the same time as issuing the certificate of completion issued a list of defects which the plaintiffs were required to mak e good at their own cost. This they were required to do by 15 March 1989. The architect` s letter dated 3 February 1989 enclosing the certificate of practical completion and the list of defects, inter alia, reads as follows: ` This certificate is issued under the condition that you rectify the list of defects attached herewith by 15 March 1989.` This date was later extended to 31 March 1989.

7 The defendant, however, had other notions as to what the defects were and compiled his own list which he forwarded to the architect on 13 February 1989. There were other contentions between the defendant and his architect as well, as can be seen from the defendant` s letter to the architect dated 16 June 1989 and the architect` s reply dated 26 June 1989 both of which I set out below, although the defendant` s letter was marked ` without prejudice` which he himself disclosed in his affidavit filed in these proceedings on 22 October 1990.

8 The defendant` s letter dated 16 June 1989 is as follows:

9 The architect` s reply dated 26 June 1989 is as follows:

10 Notwithstanding the exchange of the two above letters the architect issued his final certificate pursuant to cl 30(6) of the conditions on 12 June 1989. It provided as follows:

11 It should be noted that the amount authorized for payment to date includes the amounts certified for payment by the interim certificate of payment No 4 and the penultimate certificate.

12 No written request to concur in the appointment of an arbitrator was given by the defendant before the issue of the final certificate vide cl 30(7) of the conditions. No further payments since the payment on 22 February 1989 above referred to were made by the defendant. Thus the plaintiffs commenced proceedings in the subor dinate courts on 12 April 1990 claiming payment of the balance due under the interim certificate of payment No 4, and the amounts due under the penultimate certificate and the final certificate totalling $37,157.50.

13 On 2 May 1990, the plaintiffs app lied for summary judgment which was listed for hearing on 14 June 1990. The defendant applied on 8 May 1990 for a stay pursuant to s 7 of the Arbitration Act (Cap 10) but since the subordinate courts have no jurisdiction to hear such an application the def endant then applied by originating summons to the High Court for a stay. The High Court refused a stay. The defendant did not appeal against the High Court` s refusal of a stay.

14 Ultimately the plaintiffs` application for summary judgment was heard by the deputy registrar of the subordinate courts who gave the plaintiffs judgment for $11,342.13 and allowed $25,615.37 to proceed to trial. The plaintiffs now appeal to set aside the order giving the defendant unconditional leave to defend the action for t he balance sum of their claim of $25,615.37 and the defendant appeals to set aside the order granting judgment to the plaintiffs of the sum of $11,342.13.

15 The plaintiffs` counsel relies on what is now settled authority in so far as the conditions, t hat is to say the 1979 edition, are concerned as to the conclusiveness of the final certificate where the employer (the defendant) has not made a written request to concur in the appointment of an arbitrator before its issue. There are three exceptions to the conclusiveness of the final certificate provided in cl 30(7) of the conditions. The defendant has not sought to bring himself within any one of the three exceptions. It must follow that there can be no defence to the claim.

16 The defendant` s couns el does not dispute this but contends firstly that no valid final certificate was issued by the architect as it was issued prematurely before the end of the defects liability period. It will be noted that the final certificate was issued on 12 June 1989. T he defects liability period, having regard to the practical completion of the works having been certified as effected on 31 January 1989, would have ended on 31 July 1989.

17 The basis of this submission is a passage in the dissenting speech of Lord Diplock in the House of Lords decision of P & M Kaye Ltd v Hosier & Dickinson Ltd [1972] 1 All ER 121 at p 140 where he said:

18 Counsel relied on and emphasized the phrase ` It cannot be issued until after the defects liability period has expired` from the above quoted dissenting speech of Lord Diplock.

19 In my view however sub-cl (6) does not impose by express words a prohibition on the architect that he shall not issue a final certificate before the end of the periods (whichever is the latest) therein limited. Nor can it be implied. It simply sets o ut the latest period by which the architect must issue his final certificate. The words of this subclause I think bear me out.

20 Clause 30(6) of the conditions reads as follows:

21 So soon as is practicable but before the expiration of three months from the end of the defects liability period stated in the appendix to these conditions or from completion of making good defects under cl 15 of these conditions or from receipt by the architect of the documents referred to in para (b) of sub-cl (5) of this condition, whichever is the latest, the architect shall issue the final certificate ... [Emphasis added.]

22 Accordingly this date is 31 October 1989 in the instant case.

23 In my view, Lord Diplock in the passage of his speech quoted above was directing his attention to defects which had arisen during the defects liability period as had happened in the case under review by the House of Lords. Further it will be noted th at the other Law Lords did not feel it necessary to base their decision on a reading of sub-cl (6) which they reserved. It will also be noted that immediately preceding the phrase relied on by the defendant` s counsel Lord Diplock acknowledges the architect` s duty ` to issue the final certificate not later than three months after certain conditions are fulfilled` (emphasis added). What I think Lord Diplock meant was that the architect would not or should not issue the final certificate until after the end of the defects liability period because once the final cer tificate is issued before the end of the defects liability period and defects occur during the defects liability period the architect will hav e to assume the risk on account of the conclusiveness of the final certificate both as to completion and as to the quality of the workmanship.

24 In the instant case it will be noted that when issuing his certificate of practical completion the architect had fixed 15 March 1989 which he later extended to 31 March 1989 to make good the defects he had listed. In my view it was open to the architect to issue his final certificate at any time after 31 March 1989 and before 31 October 1989, provided that he was satisfied the defects he had listed had been made good by the plaintiffs to his satisfaction. The fact that he did evidences that the architect was satisfied that the defects he had listed had been made good to his satisfaction. He did not have to wait until 31 July 1989.

25 I therefore hold that the final certificate issued by the architect on 12 June 1989 was perfectly valid. Its conclusiveness cannot be impugned. If the defendant contends, as he does, that the architect had not listed all the defects which he ought to have listed or that the listed defects were not satisfactorily done, then the defendant` s redress is against the architect. He cannot, as the authorities now stand, withhold payment to the plaintiffs.

26 Ancillary to the above argument, the defendant` s counsel submitted that since the architect in his letter to the defendant dated 26 June 1989 (already set out above) which was written after the issue of the final certificate stated, ` We do not deny the fact that there are defects which are not rectified by the contractor` the architect never intended the final certificate to be a final certificate. I cannot accept this argument. Clearly this inference cannot be drawn from the architect` s letter of 26 June 1989. If an inference can be drawn from that letter it is that the architect had cl 30(6) and (7) of the conditions in mind when he issued the final certificate and therefore intended it to be a final certificate.

27 A further point taken by the defendant` s counsel was that the defendant` s claims were for damages for defective work and claims in the nature of consequential losses. Accordingly it was argued that these claims were not covered by the conclusiveness of the final certificate and thus the defendant should at least be given leave to defend the plaintiffs` claim to the extent of $25,615 which the defendant claimed he was entitled to set off against the plaintiffs` claim.

28 Again the defendant` s counsel relied on the dissenting speech of Lord Diplock in the case already referred to above. At p 142 of the report he said:

29 Even if the above is taken to be a correct statement of the law and it must be said that the majority of the Law Lords refused to express a view on this point, the defendant` s claim for $25,615 when broken down to its component parts cannot in my view be said to be a claim for damages for defective work or consequential losses. It was claimed that the defendant himself had spent $17,445 in rectifying some defects. A sum of $4,270 was claimed as the estimated cost of rectifying works undone and $3,900 as three months` rent of alternative premises the defendant had to rent before he could reoccupy No 3 Rosyth Ave caused by the plaintiffs` delay in rectifying defects.

30 It will be remembered that the defendant had his own list of defects and the sums of $17,445 and $4,270 must have related to them and not to the list of defects compiled by the architect. The defendant was already in contention with the architect on this question soon after practical completion. In my view, these two sums do not constitute damages for defective work by the plaintiffs, which in any case cannot be maintained in view of the conclusiveness of the final certificate. Quite clearly they constituted payments for work outside the contract and are not claimable by the defendant.

31 The three months` rental of $3,900 was claimed as liquidated damages. (See the defendant` s letter to the architect dated 16 June 1989 set out above.) Liquidated damages are payable by the plaintiffs under cl 22 of the conditions for delay in completing the works by the date of completion stated in the appendix to the conditions. They have to be certified by the architect in writing. In this case the works were completed as certified by the architect on 31 January 1989. The date of completion stated in the appendix is 28 February 1989. Furthermore the architect has not certified in writing that liquidated damages are payable by the plaintiffs. In my view, this sum is also not claimable by the defendant.

32 I would accordingly allow the plaintiffs` appeal and enter judgment for the plaintiffs in the sum of $37,157.50 together with interest thereon at the rate of 6% pa from the date of the writ of summons, namely, 12 April 1990, the costs of this appeal and the costs in the district court. The defendant` s appeal will be dismissed with costs.

33 Appeal allowed.