The latest instalment of the ongoing litigation concerning the Liberty Stadium in Swansea considered whether or not the certificate of making good was conclusive evidence that identified defects were rectified.
Swansea Stadium Management Company’s previous claim against Interserve (because of defects in the design and construction of the works) failed because the claim had been sought after the 12 year limitation period post-practical completion had expired. SSMC instead raised a claim in that Interserve failed to identify and rectify defects within the defect liability period pursuant to its amended JCT contract.
The judge, Mr Justice Pepperall, held that despite SSMC having a good claim for breach of contract, the issuing of the Notice of Completion of Making Good Defects meant the claim could no longer be pursed or simply whether in fact there were defects that had not be rectified, the issuing of the Notice of Completion of Making Good was conclusive evidence that they had been.
A second claim against the council was also sought in which SSMC alleged that the council was in breach of its obligations to take all reasonable steps to enforce its own rights under the building contract in respect of the flooring and paintwork defects.
This claim against the Council failed also because SSMC failed to prove that the Council did not take all reasonable steps to enforce its rights under the building contract or that the settlement agreement it reached with Interserve was unreasonable.
Case highlights include:
- The risk of certifying Practical Completion when there are still a number of outstanding works to be completed/defects to be dealt with. Where clients are likely to take practical completion for the sake of commercial needs, accepting that there are a number of defects that may take year to complete, they need to be aware that the limitation period arises when they accept PC and they could risk finding themselves too late to bring a claim.
- The importance of ensuring that all defects notified to the contractor before or during the defects liability period have actually been remedied before issuing the Notice of Making Good.
- The importance of ensuring that before amendments to a standard form of contact are made, their full impact is fully understood by the parties.