Matthew Hall Ortech Ltd v. Tarmac Roadstone Ltd [1997] EWHC Technology 352 (11th December, 1997)

Matthew Hall Ortech Ltd v. Tarmac Roadstone Ltd [1997] EWHC Technology 352 (11th December, 1997)

On the proper construction of clause 38.5 of the Red Book, the Final Certificate, once issued, is conclusive evidence that the contractor has completed the works and made good all defects in accordance with the contract. The definition of 'the Works' is broad and includes all services and obligations under the contract, not just physical construction. The Final Certificate thus provides a contractual cut-off for the contractor's liability, barring further claims by the purchaser for defects, except in cases of fraudulent misrepresentation. The arbitrator erred in limiting the effect of the Final Certificate to only notified defects and in distinguishing between latent and patent defects,...

Citation
[1997] EWHC Technology 352
Parties
Appellant/respondent in Arbitration: Matthew Hall Ortech Ltd.; Respondent/appellant in Arbitration: Tarmac Roadstone Ltd.
Jurisdiction
England and Wales
Procedural Posture
Arbitration Appeal / Appeal From Interim Arbitral Award to High Court
Outcome
Appeal allowed
Legal Topics
Final Certificate in Construction Contracts, Conclusive Evidence Clauses, Contractual Interpretation, Arbitration Procedure
Construction Law Contract Law Arbitration Final Certificate in Construction Contracts Conclusive Evidence Clauses Contractual Interpretation Arbitration Procedure

Case Brief

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Parties

Matthew Hall Ortech Ltd.

Appellant/respondent in Arbitration

Tarmac Roadstone Ltd.

Respondent/appellant in Arbitration

Procedural Posture

Arbitration Appeal / Appeal From Interim Arbitral Award to High Court

Legal Issues

  1. 1 What is the proper construction of the Final Certificate clause (clause 38.5) in the Red Book contract?
  2. 2 Does the Final Certificate bar Tarmac from bringing claims in contract or tort for defects discovered after its issue?
  3. 3 Does Tarmac's failure to issue a Final Certificate preclude it from pursuing its claim against Matthew Hall?

Ratio Decidendi

On the proper construction of clause 38.5 of the Red Book, the Final Certificate, once issued, is conclusive evidence that the contractor has completed the works and made good all defects in accordance with the contract. The definition of 'the Works' is broad and includes all services and obligations under the contract, not just physical construction. The Final Certificate thus provides a contractual cut-off for the contractor's liability, barring further claims by the purchaser for defects, except in cases of fraudulent misrepresentation. The arbitrator erred in limiting the effect of the Final Certificate to only notified defects and in distinguishing between latent and patent defects,...

Court Disposition

Appeal allowed

Orders

  • The appeal is allowed on the first question of law concerning the construction of the Final Certificate clause.
  • The matter is remitted for further proceedings consistent with this judgment.