The 2 years’ Defect Liability Period (DLP), commencing from Vacant Possession (VP), is not a warranty? If so, what is a warranty?
 
Law of obligation suggests that whether a contract is held to be a condition, warranty or an innominate term is a fundamentally important distinctions. A breach in warranties, does not warrant the end of the contract, may give rise to right to sue for damages, i.e. loss due to defective work.[1]  Only court could determine the kind of remedy either right to terminate or damages only. [2]  In so doing, the court rely on, any detrimental cause foreseeable? Any delay caused? Value of performance not breach? Cost involved in conforming to the contract? Opportunity enjoyed by the defaulting party? Any consequences of prior-breach? Whether victim has been adequately compensated?

In essence, Malaysian court held that the law do not deprive the right of the owner to claim the developers for their right for having premises in the good and workmanlike manner.[3] It implies that the warranty does not stop at DLP. It is relatively easier to claim for damages under DLP, i.e. a defect form is filled up and the contractor shall rectify the defect in the time stipulated in the Sale and Purchase Agreement (SPA), as it is contractual. Above that, it has to proof negligence under Tort.[4]

Such proof of negligence is under the purview of the Limitation (Amendment) Act 2018 (Act) from its predecessor[5], actions in contract and tort shall be time-barred after the expiration of six years from the date on which the cause of action accrued; 6-year limitation period applies notwithstanding when the plaintiff discovers the damages.[6] This approach were heavily criticised being unjust where latent defects (non-visible), not immediately detectable upon inspection are discovered after the six-year limitation period.[7]

The amendment of the Act, introduces s.6A, with the 6-year time-barred remains when criteria are, action brought after the expiration period; due to negligence not involving personal injury; and action be brought within three years from the "starting date" and subject to a longstop of 15 years. The amended Act provided a ‘long-stop’ to any act of negligence not amounting to personal injury for the Developer and Contractor but not the Architect.
 
There is a catch. The amended Act defines "starting date" as “the earliest date on which the plaintiff or any person in whom the cause of action was vested before him first had both the knowledge required … and a right to bring such action.”[8] ; Commencement depends on the person’s first knowledge; deemed to have the requisite knowledge when he knows of the damage for which it is claimed; and other facts relevant to the action, […][9]; implied with external expert’s advice; i.e. the "discoverability rule". So, there is in-reality, no end to be found.
 
DLP remains a warranty period under the contract provision but not tort liability, of just, fair and reasonable.[10] There is yet to be a finality to the issue of ‘long-stop’. Mirrored the English courts, there have not restricted application in UK's Limitation Act.[11] That is to say, for the Architects, Engineers and the allied professionals, alike, the liability under Street, Drainage and Building Act 1974 is for perpetuity and the ‘long-stop’ does not apply.[12]

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[1] Bettini v Gye(1876)1QBD183
[2] Hong Kong Fir Shipping v Kawasaki Kisen[1962]2QB26
[3] The Ara Joint Management Body v Mammoth Land & Development Sdn Bhd [2017] MLJU 631; Fong Wan Reality v PJ Condominium S/B [2010]10 CLJ 112
[4] Donoghue v Stevenson[1932]AC562; Hedley Byrne v Heller[1964]AC465; and Junior Books v Veitchi[1983]1AC520
[5] Limitation Act 1953 (Limitation Act)
[6] AmBank (M) Bhd v Abdul Aziz Hassan & Ors [2010] 3 MLJ 784
[7] Sharikat Ying Mui Sdn Bhd v Hoh Kiang Po [2015] MLJU 621
[8] S.6A(4)(a)
[9] S.6A(4)(b)
[10] Caparo Industries v Dickman[1990] 1AC.605
[11] s.14A, UK's Limitation Act 1980: Haward and others v Fawcetts (a firm) [2006] 3 All ER 497; and Blakemores LDP (in administration) v Scott and others [2015] EWCA Civ 999
[12] Bellefield Computer Services v E. Turner & Sons Ltd (No. 2) [2002] EWCA Civ 1823

Roles of Architects as Construction Mediators in Post MCO[1] Recovery in Malaysia

This paper attempt to answer why the Architect should be the best of position as the mediator? If so, what extend, the current Covid-19 pandemic situation, impacted the building industry and brought about the opportunity of mediation as a measure of recovery?  In what role, the Architect has to play? What has the Bill provided? How was it related to mediation? If so, what else is cover under this provision of s.9 of this Act? What can PAM, as an institution do to promote ‘construction mediation’? Why s.9 needs to ‘reinvent the wheel’ on mediation when there is already a Mediation Act 2012?

Why should the Architect be the best of position as the mediator? Foremost, he is the ‘man on the ground’, equipped with technical ‘know-how’ and constantly in the forefront of events happened on site. Second, in being a mediator, its role is significantly elevated in terms of his impartiality, of which he is already ‘statutory bound’ as certifier. [2] Thirdly, he is at the position to amass ‘technical advices’ from various affiliated consultants within the project team, fortifying him, an ‘expert mediator’ in the field of construction. [3] Fourthly, the Architect is a profession that is highly regulated and there is very little need to ‘reinvent the wheel’ to create additional law in governing such area. [4] 

On such account, what extend, Covid-19 pandemic, impacted the building industry and brought about the opportunity of mediation as a measure of recovery?  In what role, the Architect has to play? The pandemic has bought about a ‘massive kneejerk’ reactions to the industry at large, placing the economy on ‘standstill’. Contractors are morbidly ‘counting losses’ confronting uncertainties and future disputes.[5] Prolonged MCO leading to CMCO[6], witnessed the government put in place SOP[7] to ‘kick-start’ the construction industry. The industry succumbed to further fear of lockdowns and potential liabilities arising from delays in completion and handing over ‘vacant-possession’.[8] No one has ‘an answer’ to this unprecedented event.[9] Lawyers are suggesting repudiation under ‘frustration’ and remedies under force majeure. Virtually ‘no one’ would consider, putting aside one’s legal rights and negotiate a win-win solution, which is mediation. Came RMCO[10], although a little ‘delay’[11] compared to the Singapore’s Covid-19 Bill, the government of Malaysia has finally passed the Temporary Measures for Reducing the Impact of Covid-19 Bill 2020[12] TMRIC.

What has the Bill provided? How was it related to mediation? In a nutshell, as its name suggests, it is a ‘temporary measure’ to protect party that is unable to perform its contractual obligation during the MCO and refraining the other party to exercise its right under the terms of the contract, during the relief period[13] against the defaulting party.[14] The Bill impacted the construction industry on a wide array of matters, among them relevant point, is mediation[15], covering contracts for construction and consultancy contract; supply of materials, plants and manpower in the construction industry; and professional services, whereupon, “any dispute[…]specified in the Schedule[…]may be settled by way of mediation”.[16]

If so, what else is cover under this provision of s.9? Foremost, mediation as prescribed is a ‘voluntary’ act in the operative word, ‘may’ instead of ‘shall’, so much so, the Bill does not provide sufficient ‘statutory bite’.[17] Only upon settlement, the parties ought to agree via a ‘settlement agreement’ that is binding although not without its risk of being breached.[18] Thirdly, the mediator is ‘somebody’ to be appointed by the Minister, thus who is this ‘appointing body’? Since the matter of construction is best dealt with by the construction professionals, institution like PAM[19] and having the PAM Form[20] as the most widely employed in Malaysia, in collaboration with CIArb(Malaysia)[21] shall ‘naturally’ be granted the privilege as the appointing party. Moreover, PAM has been, a stakeholders of the construction industry.

What can PAM do to promote ‘construction mediation’? Foremost, PAM has been running its ‘panel of arbitrators’ since 1969 and the service of ADR[22] has since grew.[23] PAM is capable in providing ‘state of the art’ facilities for ADR proceedings at reasonable costs. PAM has a comprehensive Rules and Professional Ethics governing ADR. PAM has constantly, in collaboration with CIArb(Malaysia) to organize courses in area of ADR for its members and allied professions, and last but not least, PAM has its publication, media appearances and network to promote ADR in a seamless platform for growths.

One may again ask, why s.9 TMRIC needs to ‘reinvent the wheel’ on mediation when there is already a Mediation Act 2012?[24] Party autonomy has always been the core value prescribed in the 2012Act[25], but in view of the specific nature of expertise centralize on the ‘construction industry’, no appointing body provided in the 2012Act by default in such area of emphasis.  2012Act suggests technique employed to be the ‘facilitative mediation’ approach centralize more on the participants’[26] discoveries of ‘win-win solutions’ to move ahead without any ‘suggestions’ provided by the mediator, it is of paramount important for an ‘expert mediator’ to ‘prompt’ and probe participants on feasible choices that goes beyond just ‘costs and time’[27] and its ‘reality testing’ within the sphere of multiple contracting parties and collateral interests.[28] Someone from ‘ground-zero’ of the construction industry is required to ‘feel’ such pulses, and is none other than the ‘expert mediator’, himself. Thus, an evaluative meditation may just fit the mold. 
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Concluding, there is already professional on ground such as the Architect to take up the challenge as the ‘expert mediator’ to mediate construction dispute beyond just to achieve a resolution, but an avoidance to costly legal battles, besides juggling its role as an impartial certifier. In this given ‘ecosystem’ of the pandemic resilient measures and the existing facilities and network so provided by PAM, the Architect is the better choice, as a mediator for construction disputes.

 
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[1] The Movement Control Order MCO, is a ‘cordon sanitaire’ implemented as a measure by the Malaysian government in response to the COVID-19 pandemic on 18 March 2020, known commonly as a lockdown or partial lockdown.

[2] Perform ‘dual functions’ as agent to the employer and impartial certifier to the contractor.

[3] Acting as superintendence on site i.e. Superintendent Officer SO, mainly for ordering variation and issuing certificates, instructions and drawings.

[4] The first line of dispute avoidance is and has always been vested upon the shoulder of the ‘contract administrator’, by default such as so provided in the PAM form of building contract, the architect, http://www.davidyek.com/adr/dispute-avoidance-during-mco-what-architect-can-or-cannot-do, accessed 5 October 2020.

[5] […] eventually bring about the repercussion of ‘loss and expenses’ claim by the contractor. <http://www.davidyek.com/adr/dispute-avoidance-during-mco-what-architect-can-or-cannot-do>, accessed 5 October 2020.

[6] Conditional Movement Control Order.

[7] Standard Operating Procedure: put together by the Ministry of Health MOH and the Ministry of International Trade and Industry MITI, requiring the contractor who wish to restart work to put in place additional preventive measures and protocols, possible without reimbursement from the employer arising from the ‘neutral event’.

[8]  It is important for architects to understand the liabilities annexed to these undertakings while keeping ‘your finger crossed that nothing bad actually happened while in operation’. <http://www.davidyek.com/adr/mco-03-go-to-work-mr-arcitect>, accessed 5 October 2020.

[9] Having gone through the 3 phases (of MCO) everybody in the construction industries are looking at the ‘crystal ball’ to see ‘when it is going to end’, what is the ‘exit plan’ and more importantly, how to face the ‘new normal’. <http://www.davidyek.com/adr/mco-04-new-normality-bites>, accessed 5 October 2020.

[10] Recovery Movement Control Order.

[11] <https://www.freemalaysiatoday.com/category/nation/2020/08/25/govt-explains-delay-in-tabling-covid-19-bill/>, accessed 3 October 2020.

[12] The Bill has not been gazetted in the time of writing this paper.

[13] 18 March 2020 – 31 December 2020

[14] S.7 TMRIC

[15] Protection from inability to perform contractual obligation; Mediation; Extension of Limiting Period; and Impact on Housing Developer’s Act HDA.

[16] S.9 TMRIC

[17] The stronger party or party which has more resources will still resort to the normal dispute resolution process, such as going to the courts even after this Bill becomes law. <https://www.thestar.com.my/opinion/columnists/with-all-due-respect/2020/08/16/is-our-covid-19-bill-the-panacea>, accessed 3 October 2020.

[18] If mediation is chosen, then what happens if parties fail or refuse to reach a settlement or perform the settlement agreement? <https://www.thestar.com.my/opinion/columnists/with-all-due-respect/2020/08/16/is-our-covid-19-bill-the-panacea>, accessed 3 October 2020

[19] Malaysian Institute of Architects PAM

[20] Pertubuhan Arkitek Malaysia PAM Standard Form of Building Contract

[21] PAM has entered into a Memorandum of Understanding MOU with Chartered Institute of Arbitrators CIArb Malaysia Branch, to collaborate in the area of ADR.

[22] Alternative Dispute Resolution.

[23] To include expert determination, adjudication and mediation, coincides with its amendment to the PAM2018.

[24] […] parties can always opt for mediation and follow the provisions of the Mediation Act, 2012 (Act 749), <https://www.thestar.com.my/opinion/columnists/with-all-due-respect/2020/08/16/is-our-covid-19-bill-the-panacea>, accessed 3 October 2020

[25] https://www.mylawyer.com.my/mediation-act-2012/

[26] Participant is the term referred to, in lieu of, party in a dispute that has a slightly negative connotation for collaboration.

[27] The sole subject of dispute, generally applied to most construction related dispute.

[28] S.2(1)(b)Act2012 excluded any mediation conducted by a judge, magistrate or officer of the court pursuant to any civil action that has been filed in court.

Short answer is - in earlier case, certifier has immunity[1] only to be overturned later, that certifier has no immunity[2] as he holds a duty of care both as the agent to the employer and an impartial certifier to the contractor. Immunity only applies where there was dispute which called for a judicial decision such as adjudication[3] and arbitration. Good Luck, Architect!

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[1] Chambers v Goldthorpe[1901]KB624
[2] Sutcliffe v Thackrah[1974]AC727
[3] S.108(4)HGCRA

A question was mooted to fellows QS, “Having to consider that the contractor has now gave notice of Loss and/or Expenses L&E on the ‘prolongation costs’, how would you verify the value of Preliminaries granted in favor of the contractor?”, [Silence…]

[A moment later], one came back to say, “There are 3 parts to the Preliminaries. The first, the initial costs apply to payment such as obtaining permits and so forth, the second, the recurrent costs, such as cost of ‘maintenance of the site office’ and so forth and lastly, the final costs, inclusive of site clearance and so forth.” He furthered explained that, “While the first and last part of the Preliminaries were to be paid out in the commencement and completion of the said work, we will evaluate, as the case maybe, on the ‘prolongation costs’ by ‘dividing the number of months of EOT granted’ against the remaining of the recurrence costs and that is their entitlement.”

Wait a minute, is there something amiss? You may wonder, ‘where is the prolongation costs’? ‘Prolongation costs’ is defined as ‘extra Preliminaries’ which are actually a part of the L&E arising from the EOT granted by the Architect. One may rely on an old English case of Hadley v Baxendale [1854][1] for recovering of losses based on the principle of the reasonable man’s objective and subjective test that “Where […] a contract which one of them has broken, the damages which the other party ought to receive […] may fairly and reasonably be considered either arising naturally, […]or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract,[…]”, and saying such, the extra Preliminaries had to be ‘actual costs’ incurred.
 
Such ‘complete particulars’ are required under cl.24.1(b)PAM2006/18 for L&E purposes but such was never warranted for the purpose of monthly interim claim on Preliminaries. “Dividing the number of months of EOT granted against the remaining of the recurrence costs”, is a sheer ‘breach of duty of care’ on the part of the Architect, under the advice of the QS. It hinders the contractor to collect the amount rightfully due to him, notwithstanding the fact that the principle role of the QS is to ‘evaluate’ and having said that, ‘evaluation’ derived from the core word – to ‘value’ as one may opined “[…] appointed to make a valuation, in such manner […] he may, […] decide solely by the use of his eyes, his knowledge and his skill, he is not acting judicially: he is using the skill of a valuer, not of a judge. […]”[2]. In the same vein, the Architect, having to be a ‘quasi-arbitrator’ is not a ‘valuer’ but a ‘certifier’. Would you not think he should be ‘liable in tort’ for hindering the contractor to collect the amount rightfully due to him?  
 
Contractor should be rightfully be paid the recurrence Preliminaries on a ‘pro-rata’ against the ‘contract duration’ stated in the contract, i.e. the ‘original contract period’ not the ‘amended contract duration’ arising out of any EOT. In the event of EOT, the contractor has the right to claim L&E and that include the ‘prolongation costs’ or extra Preliminaries that for the purpose of avoidance of doubt, shall be negotiated and agreed upon before acceptance of the contract.
 
This essay is strictly for educational use only and it does not constitute ‘legal advice’ and should not be relied upon to advice clients on legal matters.

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[1] EWHC J70

[2] Clay & Dennys (Ed),Hudson’s Building and Engineering Contracts [2019 Sweet & Maxwell], 14th.Ed.p.1602.

It is common to find standard forms of building contract, i.e. the PAM2006/18 come with the version of with and without Quantities. The general contents of these forms may have been similar but the salient difference of the form with Quantities are such that the tender has been called based upon the Quantities drawn up by the respective Quantity Surveyor QS named in the contract and shall be used as the basis for valuation and variation purposes as far as quantities are concerned, but not qualitative such as the ‘standard of quality’ compliance to the ‘approved building plans’ and as such which shall conformed to the drawings, to the ‘satisfaction of the architect’[1].

It came as a surprised when in most of the ‘educational and public talks’ either for the purpose of training future professional architects or otherwise, practitioner speakers whom are deemed to be ‘experts’ on the fields of ‘contract administration’ often echoed the following statement, “In the event of a discrepancy between the drawings and the Bills of Quantities BQ, in the ‘with Quantities’, BQ takes precedent over Drawings, while the ‘without Quantities’, Drawings take precedent and the Bills or the Schedule of Rates are to be treated as reference only”.

I had the privileged of discussing these matters with some ‘living fossils’ of practicing architects and their views as far as the ‘intend and purpose’ of the PAM forms are concerned, are as the followings:
​

1. The original ‘intend and purpose’ of the PAM Forms, since the ‘RIBA – JCT days’, had been to enable the ‘architectural design intent’ as per the architectural drawings to be built by the builder.
2. In the early days, QS were employed by the contractors to translate the architectural drawings into BQ to enable suppliers and other contractors to quote. The basis of any BQ has and always been the ‘drawings’.
3. As the ‘interpretation of the drawings’ and the further ‘translation of the drawings’ into BQ had been executed by the QS, meant different versions of BQs may be produced by various contractors thus making evaluation of the tender price, difficult as it is no longer ‘apple to apple’ comparison.
4. As a result, QS has taken a ‘consultative role’ to produce a standardized BQ for the contractor to price. The elevation of the QS from an ‘employed role’ in the contractor’s office to a ‘professional consultant’ has since been taken placed and the production of the standard forms of building contract i.e. the PAM Form with Quantities and in the 2006/18 version with the ‘QS named in the contract’ has sealed its roles and obligations.
5. With the inclusion of the Quantities in the standard form, the issue of ‘translation of drawings’ into BQ has not been entirely resolved. The issue here is, when a discrepancy is found between the drawings and the BQ, which item is to be taken as precedent? The drawings or the Quantities?
6. The original ‘intend and purpose’ of the PAM forms, had been to enable the architectural drawings to be built by the builder has ‘never been displaced’ or compromised. The sole purpose of a contract is to enable the contractor to deliver its work in accordance to the drawings, the ‘approved drawings’ to be more précised.
7. The BQ, as in the ‘with Quantities’ form, or the ‘schedule of rates’, as it is termed in the ‘without Quantities’ form, had always been referred to for the ‘evaluation of Quantities and pricing purposes’, not the ‘qualitative aspect of the work’.
8. Therefore, regardless of the nature of the form be it with or without Quantities, the drawings [always] take precedent. In the event, in both forms, should a discrepancy arise, the drawings shall take precedent over the BQ or the ‘schedule of rate’. The contractor still has the obligation to ‘construct based on the drawings’, simply because, the drawings take precedent.
9. However, in ‘with Quantities’, any omission on the Quantities that was ‘failed to be picked up’ from the drawings were deemed to be a ‘variation’ as far as the Bill is concerned and the contractor shall be duly compensated for a reason that the contract was priced based on the ‘Bills’.
10. Whereas in the ‘without Quantities’ form, any omission in the contractor’s Quantities that was ‘failed to be picked up’ from the drawings were deemed solely the contractor’s own fault not constituting a variation and he shall not be compensated unless is proven, otherwise, for a reason that the contract was priced based on the ‘Drawings’.

Having considered such, the statement that “In the event of a discrepancy between the drawings and the Bills of Quantities BQ, in the ‘with Quantities’ contract, BQ takes precedent over Drawings, while the ‘without Quantities’, Drawings take precedent and the Bills or the Schedule of Rates are to be treated as reference only” is quite ‘misleading’.

It should be said that, “In the event of a discrepancy between the drawings and the Bills of Quantities BQ, in both forms, the Drawings take precedent over the Bills/Rates. In the case of ‘with Quantities’, any omission in the Bills shall be deemed a variation while in the case of ‘without Quantities’, any omission in the contractor’s Bill shall be of its own default not constituting a variation, unless proven, otherwise.”
​
It is noted that the contractor is not responsible to ‘check on the consultant’s drawings’ for error reflected as in cl.1.4 PAM2006, “[…] If contractor finds discrepancy […]”, the onus is for the architect to decide accordingly via its instruction. Cl.3.1 PAM2006 further clarified that, “[…] in the event of any conflict or inconsistencies [referring to discrepancy][…] the priority in the interpretation of such documents shall be in the following descending order […]” and cl.3.1(d) the Contract Drawings was prioritized above cl.3.1(e) the Contract Bills. Rather strange that both PAM Forms with/without Quantities have the ‘Bills’ included.

This essay is strictly for educational use only and it does not constitute ‘legal advice’ and should not be relied upon to advice clients on legal matters.

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[1] This term has been rendered as ‘a farrago of obscurities’ by expert liked the late Prof. Vincent Powell Smith but in this context it shall mean in compliance to the ‘approved drawings’.

Welcome to MCO 04 from 28.04.2020 to 12.05.2020. Having gone through the 3 phases everybody in the construction industries are looking at the ‘crystal ball’ to see ‘when it is going to end’, what is the ‘exit plan’ and more importantly, how to face the ‘new normal’. While some is in ‘consolidation’, ‘downsizing’, ‘closing shops and claim frustration’ or ‘forge ahead’, it is no longer a question of ‘extension of time’, but who is going to pay for the ‘extra costs’ of ‘moving ahead’, while some contract provided the provision of ‘mitigation of delay’ vested upon the contractor to ‘forge ahead’, at whose costs? That is a question…

The PAM Form 2006 provided at least 4 routes to go about, or it could be more, but let’s look at this 4 possible ways to maneuver the delirium of post-MCO ‘new normal’…

Foremost, the force majeure exit plan. Everyone is chanting force majeure, from the President of PAM to our minister. What is this force majeure? Unlike other standard forms of contract, the PAM2006 has been very explicitly defined force majeure to include epidemic[1]. A question may arise, what is the different between an epidemic and a pandemic. Covid-19 was declared a pandemic. Does it automatically qualify as a force majeure? If the minister says so, where is the ‘gazette’? Sorry, forgot, the parliament too is in ‘lock down’. So, it remains a theoretical question at the moment. Having said that, based on an advisory from the President of PAM to the Architect to render and only to ‘recognize’ any EOT application under this force majeure while omitting the rest of the ‘other possibilities’ in the absent of a ‘national gazette’ automatically classifying the MCO as a force majeure, regardless of how the ‘contract is formed’, would any rational mind construe such as being ‘just’? Notwithstanding that the next, possible event to take place is to instruct the contractor to ‘mitigate delay’ by applying to MITI to resume work during MCO. The next logical question is, who is going to pay for the extra-costs and expenses incurred to fulfill MITI’s ‘strict conditions’, having to note that a force majeure is a ‘neutral event’ not due to anyone’s fault yet, the contractor may have to absorbed all costs and risk arising from its action of ‘mitigating delay’ to work during MCO, for all purpose that the contractor is still liable to indemnify against the employer for any breach[2].

Second, the ‘changes to the law’ exit plan. There are possibility to rely on a change in the ‘law governing the construction industry’ as an exit plan to forge ahead with a view to be compensated[3] for loss and or expenses arising from this ‘changes to the law’.[4] Reminded by the fact that MCO was invoked under two existing legislation namely the Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967, where is the ‘changes to the law’? The respective Local Authorities PBT is still relying on the power and jurisdiction under the Street Drainage and Building Act 1974 for administration of the MCO. Unless otherwise via an Act of Parliament such as those mirrored against our neighboring Singapore’s the COVID-19 Act 2020, such can be construed as ‘changes to the law’ exit plan with a view to be compensated for loss and or expenses besides EOT.

Third, the ‘Stop Work Order’ Architect’s Instruction AI exit plan. This is a ‘novel idea’ that some Architect friends actually say, “[…] you need a ‘spine’ or alternatively, a ‘steel ball’ to issue such an AI for such, you may not get another project from your Client, post-MCO” Acknowledging the fact that by virtue of this simple AI, it has placed upon the shoulder of the Architect that arising from this act, alone, he has caused the contractor to ‘stop work’[5], ‘discontinue work’ or ‘temporary halt work’ on site, for reasons only best known to the architects, thus the notion of the ‘satisfaction of the architect’. Under such circumstances, the PAM2006 form allows the contractor to be compensated[6] with loss and or expenses together with the relevant EOT, subject otherwise to any ‘mitigation of delay’ required by the contractor. At least such appear to be ‘fair’ to both parties and the most ‘noble act’ to have been performed by the Architect, without ‘fear and favor’, avoiding dispute in any manner foreseeable. Sorry, how many Architects actually do so?  

Finally, the ‘Government’s Stop Work Order’ exit plan. Having to ‘toe the line’ some Architects may be ‘smart enough’ to circumvent the ‘conundrum’ by issuing a rather ‘vague’ AI such as “You are herewith instructed to comply with the Government of Malaysia’s Order for MCO” In other words, the Architect has instructed the contractor to ‘follow government’s instruction’ not its ‘instruction to stop work’, brilliant! For obvious reasons, now the contractor has been placed in a ‘doubtful situation’ as can such AI be construed as a ‘stop work order’ enabling them to claim EOT and ultimately, loss and or expenses? It appears to be that the contractor is ‘statutory bound’ to comply with the government’s instruction and thus entirely and mandatory ‘self voluntarily’ that has nothing whatsoever to do with the ‘employer or its agent’. Another facet is to look at arising from the MCO, the contractor cannot carry out its work and not the force majeure arising from the pandemic as the MCO is the causa causans to the course of the ‘damages’ in the entire ‘matrix of causation’. However, it is interesting to note that the PAM2006 allows for loss and or expenses arising from a delay due to a ‘stop work order’ from the government, subject otherwise that such is due to the ‘omission by the employer or its agent’[7]. Having said that, the ‘burden of proof’ falls squarely upon the shoulder of the contractor and the ‘sufficient of proof’ is on balance that the Architect has ‘failed to discharge’ its duty, thus the omission. Voila! Under the ‘strict liability rule’ and having a ‘close proximity’ in terms of reasonable ‘duty of care’ for the Architect towards the contractor, it is easily for the contractor just to mount a claim that the architect ought to have issue an AI for ‘stop work’ but it didn’t thus the omission of a reasonable ‘duty of care’ that has violated their rights under the contract.       

When the dust settles, we are able to see more clearly and rationally the entire spectrum of the effects of the MCO towards the continuity of work in the ‘new normal’ society. The legal construct of the ‘standard forms’ may have been ‘blinded’ by so many possibilities that has not been taken into consideration when the parties sealed the contract. The best possible way is a call to the government, instead of reliance on the obscure version of force majeure that only the ‘Frenchman’ knows what it truly meant, to pass an Act of Parliament mirrored  the Singapore’s COVID-19 Act 2020 and ‘ctr-alt-del’ any ‘contractual omissions’ for a ‘level playing field’ for a ‘new normal’ future.
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Having wrote these as a personal reflection or opinion, not as a ‘lawyer’ or a legal counsel, as disclaimer, never take this writing of mine, to be your ‘legal advice’. You should seek appropriate ‘legal advice’ for your own situation. I am not liable for the accuracy of facts and representation on this writing.        

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[1] Art7(ad)PAM2006

[2] Cl.18.PAM2006

[3] Cl.4.3PAM2006

[4] Cl.4.1.PAM2006

[5] Cl.21.4.PAM2006

[6] Cl.24.3(c)PAM2006, “Compliance to a written AI in regard to the postponement […] to be executed under Cl21.4”

[7] Cl.24.3(n)PAM2006, “[…] provided always the same is due to negligence or omission on part of the employer […]”

Having to term with the 3rd installments of the extended[i] MCO[ii] with certain services sectors such as the “professional services related to the construction industry including architects […]” allowed to conditionally operate, under a statutory-undertakings to “comply strictly to all requirements from MITI[iii], KKM[iv], MKN[v] and relevant agencies and applicable laws and regulations in this nationwide MCO and Covid19 public health and safety crisis period” In other words, it is important for architects to understand the liabilities annexed to these undertakings while keeping ‘your finger crossed that nothing bad actually happened while in operation’. When such ‘undertakings’ are required, it simply means to say, ‘you are on your own and whatever you do in the contrary will be against the public policy’ as in the advisory, “ACPs are cautioned that should any of the staff gets infected by Covid-19 during work, MITI shall require for the whole office operations to be shut down immediately. The company will be responsible to bear all costs related to addressing the infection. It may involve the costs of testing and to quarantine the staff in contact with the infected person as directed by KKM, and other relevant government authorities.” The same is applied to the contractor, while the developer is ‘off the hook’, due to the ‘indemnity clause’ in most Building Contract, notably the PAM Form[vi].  

The recent issuance of PAM advisories[vii] are interesting on twofold. Foremost, “PAM would advise that individual Architectural Consultancy Practices (ACP) shall carefully make their own decision to consider the urgency and readiness of their practice to re-commence work”, the question most ACP would have asked, since when did PAM given a ‘statutory might’, unlike the Board of Architects LAM, to sanction ACP when to commence, halt and re-commence work? The onus is for PAM to collectively obtain a ‘blanket permit’ from MITI for its member to re-commence work. Whether the respective ACP would actually do so are entirely their choices, since a majority of the ACP are ‘small fries’ sole proprietors[viii] that do not employ a huge battalion of workers. Second, “PAM Council wishes to reiterate and emphasize our advice to continue to ‘Work From Home’ as far as possible if there is no urgent and/or essential work that are needed to be performed in the office and/or site”, in contrast to the first advisory, a ‘firm stand’ by saying, ‘no thank you, Mr. PM’, should have been taken, not to say that ‘Work From Home’ is a choice, rather a necessity.

Assuming that the choice of ‘readiness of their practice to re-commence work’ has been made by reasons of ‘pressures’ from ‘whosoever with vested interest’, the recommended guidelines from PAM are rather ‘interesting’ with significant impact to the building construction contract with particular, the PAM Form with regard to additional cost, loss and expenses L&E, regardless if the “Construction works below the value of RM500,000 whereby the main contractors are G1-G2 as certified by CIDB”. The contractor has to remodel the entire construction site with ‘Clean’ and ‘Unclean’ zones. ‘Disinfection Bay’ would have to be considered. Such remodeling of the entire site is no easy task.

Another interesting aspect of the advisory is “PAM reiterates that unless absolutely necessary, the Architect or Principal Submitting Person PSP, Resident Architect and Clerk-of-Work should monitor the project site remotely as much as possible”, application of CCTV and drone for supervision have to be in place and to be provided by the contractor, at whose cost, since these were not reflected in the preliminaries nor the contract? Remember, it was also PAM’s advisory for architects to consider such MCO as force majeure in the evaluation of EOT, having it as ‘neutral event’ that does not entitle the contractor to L&E. Wonder what happened if the area has no or weak WiFi coverage? Wonder if ‘remote supervision’ correspond to the purpose or intention of the UBBL 1984[ix] or s.70(21) SBDA 1974[x] such as “supervise the erection of the building to ensure that the erection is in conformity with the approved plans and the requirements of the provisions of this Act or any by-laws made thereunder”? How is such ‘remote supervision’ works out in terms of ‘professional negligence’ and ‘indemnity insurance coverage’ have yet to be ascertained? Remember, architects can be sued for many reasons.

Assuming that all the additional SOP[xi] is in place and the site has been remodeled with clean/unclean zones with disinfection bays in placed and all workers had to be placed in site with proper designated workers quarters, how are these workers going to don the PPE[xii] against ‘bio hazard’ with PPE against ‘construction hazard’, having to work under the ‘most unforgiving’ environment of the construction site and at the same time, observing the ‘social distancing’? What happen if the cause of the accident is the use of the PPE itself?

While most of the ACP would be having trouble logging into MITI’s webpage[xiii] to apply for the permit, in the absent of CIDB[xiv] clear guidelines and architect’s busy giving ‘instruction’ via ‘social media’, an obvious observations are these ‘written messages’ can be construed as ‘instruction[xv]’ in the eye of the law and any ‘well informed’ contractor will just have to ‘write back[xvi]’ to confirm such instruction.
While considering PAM’s advisory to be worthy, a note of thank had to be accorded to the PAM’s President’s Advisory[xvii], namely “[…] Like our civil servants […] working late into the night and through weekends to address this Covid-19 public health crisis and imminent economic challenges, PAM is also working hard to help our Architects to prevail through these difficult times”.
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Having wrote these as a personal reflection or opinion, not as a ‘lawyer’ or a legal counsel, as disclaimer, never take this writing of mine, to be your ‘legal advice’. You should seek appropriate ‘legal advice’ for your own situation. I am not liable for the accuracy of facts and representation on this writing.  

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[i] Announcement by YAB Prime Minister Tan Sri Muhyiddin Yassin on Friday 10 April 2020 to extend the MCO to 28 April 2020.

[ii] Movement Control Order MCO

[iii] Ministry of International Trade and Industry MITI

[iv] Ministry of Health KKM

[v] National Security Council MKN

[vi] Cl.7.1 PAM 2006

[vii] < https://mcusercontent.com/0f61e9c943c635f9ec3649f2a/files/c1507238-7e9f-4084-a23f-2b923b1d5a2e/PAM_Advisory_for_ACPs_on_operating_permit_to_resume_work_FINAL.pdf>

[viii] <https://drive.google.com/file/d/1M-eizVAmjNmWhgx8L4Xf7YF_GTBnEE4v/view?ts=5e853341>

[ix] Uniform Building ByLaws 1984

[x] Street Building and Drainage Act 1974

[xi] Standard Operating Procedure SOP

[xii] Personal Protection Equipment PPE

[xiii] <www.miti.gov.my>

[xiv] Construction Industry Development Board CIDB

[xv] Cl.2.0 PAM 2006

[xvi] Art.7(0) CAI, Cl2.2(a) PAM2006

[xvii] < https://mcusercontent.com/0f61e9c943c635f9ec3649f2a/files/12cdc8a9-c336-4315-ac54-137ac3c33402/PAM_Advisory_cover_ltr_PAM_President_14Apr2020.pdf>

The first line of dispute avoidance is and has always been vested upon the shoulder of the ‘contract administrator’, by default such as so provided in the PAM form of building contract, the architect. The Movement Control Order MCO, announced by the government, now entered the 2nd extended weeks had been very challenging to architects. Issuing too much instructions to the contractor may either denying or allowing them to claim for unnecessary ‘loss and expenses’ with regards to having work ‘in remote’. Issuing too little instruction, may eventually deemed to be ‘not administering the contract’ with the duty of care expected from a contract administrator. So, the question is ‘how much’ instruction suffice for this instances of the MCO?

The first instruction is ‘necessary’ to put everyone in the project to ‘unambiguously’ recognize that the work on site has been ‘halted’. This instruction is meant to be a ‘stop work order’, as some architect may consciously wanted to avoid using this term that will eventually bring about the repercussion of ‘loss and expenses’ claim by the contractor and not looking too ‘impressive’ by the employer, who in the first instance, commissioned the architect. Yet, the architect has a ‘fiduciary duty’ to discharge impartially to the parties in the construction contract and ‘being ambiguous’ may not appear to be just in accordance to its ‘quasi-arbitral’ role, risked being sued by the parties in the contract. It is very common for architect to be sued these days for whatever reasons…

In the same instruction, it is ‘highly recommended’ for the architect to instruct the contractor to put in ‘mitigation effort’ foremost, to secure the site. How about ‘avoiding delay’? How do you wish the contractor to avoid delay, when it is foremost not his fault for this MCO? ‘Mitigating delay’ in such instances may come with a ‘cost’ and ‘unsuspecting’ architect may eventually issue the second instruction ordering ‘virtual-site meeting’ as though, ‘work carried on as usual’. In the said virtual meeting, other instructions may set in such as ‘issuance of further detailing’, request for ‘mock up’ approval, materials approval and all sort of things warranted the contractor’s ‘extra effort and equipment’ to provide and to facilitate. When reality sets in after the MCO, with the contractor issuing its ‘loss and expenses’ claim, the architect will further instruct the QS to evaluate and the very common answer as expected, ‘… it is not in the contract, the contractor cannot claim’. As it is, there appear to be a ‘dispute’ arising from an ‘instruction to avoid delay’, the pertinent question is, at whose fault? Employer or the architect? Mitigation of delay now becomes ‘mitigation to accelerate’?

In some contract, a provision maybe allowed for the architect to instruct for a ‘revise work programme’ taking into account the foreseeable delay arising from the MCO. Is it sufficed for the architect to immediately issue a 14 days Extension of Time EOT and reject the contractor’s application for EOT beyond the ‘gazetted’ MCO? Just wonder, if the construction work is like any other manufacturing work where one can have a ‘start button’ to press and everything works like clockwork after a ‘stop work’, therefore the 14 days Extension of Time EOT is sufficient? You may be looking for another ‘dispute’ on this matter. Having said that, with the MCO extended, will the architect has the obligation to issue the second instruction for ‘stop work order’?

It is interesting to note, if the architect would be at liberty to pronounce that the MCO is indeed a ‘force majeure’, so provided in the contract, if any and the contractor has no other means to request for EOT, other than relying on this ‘contributing event of delay’. Looking from the ‘factual matrix’, the situation of Covid19 has warranted the government to declare a MCO, under the Prevention and Control of Infectious Diseases Act 1988 and the Police Act 1967. Arising from such MCO, construction industries were not listed as ‘essential’ thus work on site is deemed to have been ‘delayed’ due to the ‘order’, as in the MCO, or the ‘force majeure’ event, or Covid19? Which ‘contributing event’ is to be considered the ‘causa causans’ to the ‘damages’ incurred? Having said that, do you think the contractor has ‘no right’ to claim for ‘loss and expenses’ due to a ‘neutral event’?

‘Force majeure’, having its root in the ‘civil law’ jurisdiction has not been given a clear definition in the ‘common law’. Chitty on Contracts suggested “it is trite that a party relying upon a force majeure clause must prove the facts bringing the case within the clause. He must therefore prove the occurrence of one of the events referred to in the clause and that he has been prevented, hindered or delayed, as that case may be from performing the contract by reason of the event. He must further prove that his nonperformance was due to circumstances beyond his control and that there were no reasonable steps that he could have taken to avoid or mitigate the event or its consequence”[i] (emphasis added).

Although it is not a statutory right in Malaysia, the PAM 2006 form, in its attempt to clarify, has provided that “any circumstances beyond the control of the contractor caused by terrorist acts, governmental or regulatory action, epidemics or natural disasters” [ii]. The question, now is, relying on both the provision in the PAM form and the pronouncement by the President of PAM via its advisory[iii], do the contractor required to proof to be excused of its obligation under the contract so provided as in Intan Payong Sdn Bhd V. Goh Saw Chan Sdn Bhd [2004][iv]?  If so, can the contractor claimed for ‘loss and expenses’, failing which the contractor has the right to seek compensation in the court of law, outside the construe of the ‘neutral event’ so provided in the contract?

The Federal Court held that “the court is not empowered to improve upon the instrument which it is called upon to construct. Further, it is an established principle of law that a party relying upon a force majeure clause must prove the facts bringing the case within the clause”, as in CIMB Bank Bhd v Anthony Lawrence Bourke & Anor [2019][v]. Apparently, PAM may construed to have taken the role of the court or the party of the contract, to proclaim ‘force majeure’ and guided by the ruling of Intan Payong, the contractor may very well unlikely to be successful to claim ‘loss and expenses’ under ‘force majeure’.

By limiting the party in the contract to mount a claim under the proclamation of ‘force majeure’ due to its effect of ‘neutral event’, so provided by the advisory, the architect may choose to advise the party to adopt such advice with discretion and caution as a mean of avoiding dispute. Having said that, it is unadvisable for the architect to issue instruction with ‘force majeure’ prescribed, without a proper understanding of such term and its repercussion that may be brought against the parties.    

As to the question of termination under ‘frustration’ arising from the non-performance due to ‘force majeure’, the general accepted legal principle was that if a provision has been allowed in the contract for ‘determination of the contractor’s employment’ due to ‘force majeure’ reason, the contractor has to invoke such provision to determine its contract, otherwise the s.57(2) CA 1950 may be relied upon for termination and s.15 – 16 Civil Law Act 1956 CLA, provided the parties with compensation given for the purposes of the performance or partial performance of the contract.

Authorities as in Pacific Forest Industries Sdn Bhd v Lin Wen-Chih [2009][vi], provided that a contract cannot simply be ‘frustrated’, ‘merely because it becomes difficult to perform’. The Malaysian position as per Guan Aik Moh (KL) Sdn Bhd & Anor v Selangor Properties Bhd [2007][vii] provided the test of ‘termination of contract’ due to frustration but since PAM form has provided for ‘determination of the contractor’s employment’, contractor may not ‘simply’ rely on frustration to terminate under his common law provision.

Care has to be taken with regard to the MCO has resulted in the contractual obligation being made ‘radically different’ from what has been undertaken, and that it would be ‘commercially unjustifiable’ to enforce it. What is such ‘radically different’ that it would be ‘commercially unjustifiable’ to enforce it by the contractor warrant a termination? One month plus of ‘loss and expenses’ not being recognized by the architect or arising from the instruction of the architect, the contractor suffered further ‘unrecognizable loss and expenses’?

The situation here in the construction industries cannot rely upon the classical case as in Krell v Henry [1903][viii] where “an agreement for rental of a flat for two days for the purpose of watching the coronation procession was frustrated in purpose due to the postponement of the coronation”. 

Even the HongKong case as in Li Ching Wing v Xuan Yi Xiong [2004][ix] where 10 days isolation order due to the SARS outbreak was construed as ‘insignificant a period’ mirrored against the overall 2 years fixed term period of the tenancy. The 1 month plus of ‘loss and expenses’ due to MCO, in this context, may rolled into a ‘huge quantum’ in ‘unrecognizable loss and expenses’.

Even in the recent UK case of Canary Wharf v. EMA [2019][x], whether a lease held by the European Medicine Agency EMA on a premise in London used as the headquarters is likely to be frustrated as a result of Brexit? The court held that since the effect of frustration is to ‘kill the contract’, the doctrine must not be lightly invoked and must be kept within very narrow limits. It will be very unlikely for the contractor to be successful to ‘kill the contract’ due to the MCO. Such we shall witness in the Malaysian court this very near future.

As the stakeholders in the construction industries generally held on the ‘acceptable common approach’ pertaining to the legal aspect of ‘force majeure’ and ‘frustration’, the Malaysian courts may provide totally ‘unexpected’ judgement, given every contractual scenarios may differed from one another. Therefore, care has to be given by the architect to avoid any dispute from arising between the parties as any ‘unconsidered’ instruction given may, not only increased the risks between the parties, but also subject the architect to be sued for misconduct and non-impartial. Surprised that until today there is no ‘advisory’ issued by the Board of Architect Malaysia LAM, the ‘statutory body’ that is rightly to be seen issuing advisories to the architect in practice in Malaysia.

Having wrote these as a personal reflection or opinion, not as a ‘lawyer’ or a legal counsel, as disclaimer, never take this writing of mine, to be your ‘legal advice’. You should seek appropriate ‘legal advice’ for your own situation. I am not liable for the accuracy of facts and representation on this writing.  

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[i] Bale H.G. (ed) Chitty on Contracts (28th Ed. Sweet & Maxwell Ltd 1999) vol.1, p.273 – 274.

[ii] Art.7

[iii]<http://pam.org.my/images/announcements/2020/PAM_Advisory_Note_Covid 19_MCO_18.3.2020.pdf>

[iv] 1 LNS 537

[v] 2 MLJ 1

[vi] 6 MLJ 293

[vii] 3 CLJ 695

[viii] 2 KB 740

[ix] 1 HKC 353

[x] EWHC 335

As we have moved into the extended weeks of the Movement Control Order MCO, sanctioned by the Government of Malaysia, reality checks revealed that some of the industries are at the brink of collapse, one for example the construction related consultancies, i.e. architecture, see the research by Ezumi[i], forewarning the potential massive loss of jobs and revenues. This is only the tip of the iceberg.

Some friends from the legal fraternity have been asking, during this ‘lockdown’ what is the role of architect issuing payment certificate, inspection and valuation? I am duty bound by the advisory[ii] from the PAM’s president to explain that the first thing for an architect to do is to issue an instruction for ‘shutting down’ (construed as ‘stop work order’?) owing to the fact that the construction industry does not fall within the category of ‘essential industries’[iii] during this challenging time and it is a ‘blanket order’ by the government to cease all unessential work during MCO. In the words of the advisory, it states, “During this restricted period when construction works are suspended, the Contractor shall need to take all necessary measures to maintain and secure the site premises and the in-progress building works on site and ensure the construction site including all temporary works and any authorized workers’ housing on site, complies to the above Order[iv] and to all applicable building authorities regulations and do not pose any risk to health and safety.”

Whether such is to be construed as ‘force majeure’[v] has been well prescribed in most of the webinars and articles found in both FB and Linkedin, but the architect shall wisely leave such determination[vi]  to the parties of the contract as aptly pointed out that a ‘force majeure’ event does not entitle the contractor to claim for L&E[vii] under some standard form of contract, i.e. the PAM 2006/2018 Form due to ‘neutral event’.

Care has to be taken by the architects, as liked anyone else, the contractor has to continue to bear the cost of up-keeping the site, securities, utilities and maintenance of its worker quarters and machineries. These were equitable costs as real as those fees and payments that the consultants failed to collect. The architect must at all time, not only acted impartial, but must also be seen to be impartial as a contract administrator, taking the guidance from Lord Hewart’s famous statement that ‘justice should not only be done, but be seen to be done’, as in R v Sussex Justices Ex p McCarthy [1924][viii], by default, deemed to also act as a quasi-arbitrator. Failing which, the aggrieved party has every rights to claim under any court of competent jurisdiction. That is why it is not only a ‘challenging time’ but a very ‘interesting time’  also for dispute resolutions.

When the architect and its fellow teammates had issues going to work and coming to site, what is there for site valuation, certification and inspection especially so when work comes to a stall? Via drone or Zoom, Whatsapp, Skype or Wechat, work still can continue? Again, the better question an architect must ask, would the architect continue to issue AI for construction detail issuance, knowing that the site office has been ‘lockdown’? For the contractor, such an AI would have been an omen of ‘welcome’ for some reasons over the other.

Saying such, the real ‘repercussion’ is yet to unfold, especially the idea of ‘frustration’ has been given various renditions by various parties as some may look at it as a ‘ctrl-alt-del’ button to reset everything during this unprecedented ‘golden opportunity’ while others may see opportunity for general damages beyond the hold of the contract, notwithstanding the fact that ‘force majeure’ may be in operative in a given contract. The most ‘look forward’ to be tested in court, were those agreements that has been mutilated beyond its ‘original standard form’ with L&E excluded entirely, to the ‘whim and fancy’ of the employer at the advice of the ‘contract consultants’. Indeed, a very ‘exciting time’, as well.

Having said that arising from the MCO, works on site has been halted, the meaning of ‘working days’[ix] in some contract provision or statutory provision has to be given a broader definition not just excluding weekends and gazetted holidays, especially with regard to the issuance of adjudication decision under the CIPAA 2012[x] regime, within the 45 working days mark from the time of the receipt of the reply or the response, when a reply is not served within a stipulated time frame.

Notwithstanding that AIAC has been discreet[xi] on this matter, it is of the general interest of the disputing parties in the construction industry to know this and appreciate if friends from the legal fraternity may shade some lights on this matter as well. The situation is very real as it is difficult for parties and adjudicator to compile and bundle documents or decisions let alone, serving them to the respective party 'on time', with all the ‘road blocks’ in placed. It is indeed a very ‘challenging and interesting’ time we are all living to witness, in ‘blessing’ while having to say, the future for some industry like ‘architecture’ is very ‘bleak’, the dispute resolution ‘arena’ on the other hand, would be of the opposite.

Having wrote these as a personal reflection or opinion, not as a ‘lawyer’ or a legal counsel, as disclaimer, never take this writing of mine, to be your ‘legal advice’. You should seek appropriate ‘legal advice’ for your own situation. I am not liable for the accuracy of facts and representation on this writing.
 
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[i]https://drive.google.com/file/d/1M-eizVAmjNmWhgx8L4Xf7YF_GTBnEE4v/view?ts=5e853341

[ii]http://pam.org.my/images/announcements/2020/PAM_Advisory_Note_Covid-19_MCO_18.3.2020.pdf

[iii] https://drive.google.com/file/d/19caBk9M4F5kbf-55UqYW-XfIvG6P_-ok/view

[iv] Cl23.8(w) PAM 2006

[v] Cl23.8(a) PAM 2006

[vi]http://pam.org.my/images/announcements/2020/COVID-19-Movement_Control_Order_-_PAM_Advisory_Note-03doc2.pdf

[vii] Cl24.3(n) PAM 2006

[viii] 1 KB 256 at 259

[ix] https://www.linkedin.com/pulse/how-calculate-working-day-pursuant-cipaa-2012-sr-jaspal-singh/?trackingId=4mskWYFrNUxHFeE9MUnR6g%3D%3D

[x] https://www.aiac.world/wp-content/adjudication/PDF.pdf

[xi] https://www.aiac.world/news/292/Extension-of-the-Movement-Control-Order-and-Its-Impact-on-the-AIAC

Clause 23.1(a) of the said form stated that the giving of such notice shall be condition precedent to an entitlement of EOT. In contract law, a condition precedent is an event which must occur, unless its non-occurrence is excused, before performance under a contract becomes due. Sundra and Harban (2010) opined that the contractor shall on his own volition make such a notification as part of his implied obligation under the contract… citing NJ Carnell’s Causation and Delay in Construction Disputes as an early warning system to alert the parties to some occurrence of a potential EOT and to include such notice shall be a condition precedent, would mean that the employer is circumventing the effects of the ‘prevention principle’ as it benefitted its own breach, relying mostly on London Borough v Stanley Hugh Leach (1985) and Cabinets v Hili Morden Electronics Pty Ltd (1984). Undoubtedly, failure to serve a notice would result in the loss of rights by the contractor for EOT. Such position has been the original intent by the PAM Contract Drafting Committee (2010) citing Hudson’s Ed 4.132.

Reading in tandem with Clause 23.5(b), in assessing EOT the Architect may take into account and any other Relevant Events which in the Architect’s opinion will have an effect on the Contractor’s entitlement to an EOT, apparently this clause empowered the architect to make an opinion taking into account any other Relevant Events which may effect the contractor’s entitlement of EOT. Again, the opinion of the architect is limited to the provision set forth in Clause 23.8 with emphasise on Clause 23.8(x), any other ground of EOT expressly stated in the Contract. The PAM Contract Drafting Committee (2010) stated that the architect may consider any other relevant event which the contractor has not applied as a basis for his EOT. Sundra and Harban (2010) opined that the architect must nevertheless act reasonably and that the relevant event must be those stipulated in Clause 23.8 and no more, citing two Austrialian cases of Peninsular Balmain v Abigroup Contractors (2002) and Graymark Investment v Walter Construction (1999). Apparently, Clause 23.5(b) has been drafted to excuse the compliance of a notice as a condition precedent at the liberty of the architect, upholding the prevention principle that the defaulting party cannot benefits from its own breach.  

Reading in tandem with Clause 23.10, the Architect may … after CPC review and fix a completion date later than that previously fixed … upon reviewing a previous decision or otherwise and whether or not a Relevant Event has been specifically notified by the Contractor. The PAM Contract Drafting Committee (2010) view of this clause, the architect is empowered to review EOT previously granted after CPC, taking into consideration all relevant events that may have affected the completion date irrespective of whether or not the relevant event has been considered previously or has been notified by the contractor.
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In conclusion, the architect has the power to unilaterally grant EOT to the contractor without any notice in accordance to PAM Form 2006, relying on Clause 23.5(b), to enable the architect, to uphold his opinion that the defaulting party cannot benefits from its own breach and Clause 23.10, to allow the architect a chance to make the non-obligatory final review of his own opinion with regard to the EOT previously granted. With these two clauses in placed, it would also mean that the specific performance of giving of such notice shall be condition precedent to an entitlement of EOT shall only be binding to the contractor as a procedural condition in his application for EOT to give early warning to the architect of the impending delay and not necessarily result in the loss of his rights for EOT and by extension, claims for loss and/or expense.