Architect’s breach in carelessly issuing Completion Certificate

The appellant, SKK, awarded the respondent contractor, GMTS, a contract for the construction of two houses. SKK appointed an architect, Mr. Chan Sau Yan, Sonny, who issued 26 interim certificates. SKK paid the first 24 of these. The architect extended the date to 17 April 2013, and issued the completion certificate on 15 May 2013 under clause 24 of the SIA Conditions which certified contract completion on 17 April 2013. Two weeks before the issue of the completion certificate, the buildings had failed the first inspection by the Building and Construction Authority (“the BCA”) for the issue of the Temporary Occupation Permit (“the TOP”). The inspection was carried out on 30 April 2013. Despite this, the architect issued the completion certificate dated 15 May 2013, stating:

“I hereby certify that on 17 April 2013, the Works appear to have been completed and to comply with the Contract in all respects (save and except for the minor outstanding works listed in Part 1 of the Schedule to this Certificate).

 “I further certify that since the Contractor has undertaken in writing to complete the minor outstanding works set out in Part 1 of the Schedule to this Certificate by the dates and in accordance with the arrangements set out in Part 2 of the Schedule, an agreed sum of (to be advised by the [Quantity Surveyor]) is to be retained by the Employer and subsequently released to the Contractor upon completion of these outstanding works.

 “The Maintenance Period of the Works shall commence on 18 April 2013 and will end on 17 April 2014.”

SKK alleged that the architect had been fraudulent as evinced by a clear pattern of reckless conduct on the architect’s part, so that his certificates should be set aside.

Examining the architect’s conduct, either he had either failed to notice these important non-compliant defects, or, he had only realised these defects when the buildings had failed the first TOP inspection and the BCA inspectors had pointed out and recorded these non-compliant items as the basis for refusing to grant the TOP. If it were the latter, the Court could not understand how the architect could label this as “minor outstanding works” when they had been anything but. When the architect had issued the completion certificate, he had already known from the TOP inspection that there was an important defect in unlevelled steps and unequal risers in all staircases. These staircases had clearly not been safe for use by occupants of the buildings when the architect had issued his completion certificate.

On 30 April 2013, some 15 days before the architect had issued his completion certificate, the Commissioner of Building Control, had written to both GMTS and the architect stating that the buildings had failed the first TOP inspection. A site inspection had itemised a number of non-compliances.

The Court was satisfied that the completion certificate had clearly not been issued properly under the terms and conditions and had been an invalid exercise of the architect’s powers and duties under the contract. It was clear that the architect had issued the completion certificate at least without belief in its truth and/or recklessly without caring whether it had been true or false. The architect’s affidavit and his contradictory and shifting statements only served to underline the serious irregularity in his certification and certification process.

On the face of the Interim Valuations, works were still being valued well after the purported ‘completion’ under clause 24(4) and Item 72. If so, then the works could not have been ‘complete’ under clause 24(4) and Item 72 as of 17 April 2013, or, if they had indeed been ‘complete’ and complied in all respects with the contract, then the architect had not explained why these sums for work done came to be certified so many months after contract ‘completion’. GMTS’ explanation for these figures was inconsistent with the evidence presented. The architect had also ignored delays and liquidated damages. The architect had also been partly responsible for the buildings failing the TOP inspections. Normally, there would have been an instruction from the architect to GMTS to carry out additional works, with the associated extension of time and payment for variations in order to obtain TOP.

The architect had clearly been in breach of clause 31(13) when he had issued IC 25 and 26 as they had not been  not issued strictly in accordance with the terms of the contract, and he could not have had any belief in their truth when he had issued the certificates. The certificates had lost their temporary finality.