MY MEDIATION LOG BOOK: ‘CRACKING’ A JOINT VENTURE
Fortunate for the past months, after lifting of the MCO, I had just completed another round of mediation between a contractor and a premise owner whom property has been severely damaged on account’s of the contractor’s work of excavating a huge basement, resulted in heavy soil erosion.
The legal rights of the parties were set aside to explore needs. Through an evaluative nature, my input as an expert-mediator in the construction sectors had negotiated for one party that it is simply a waste of time, repairing the existing structure in view that, one, the land value is more expansive than the structure itself, two, the design of the building has exceeded its relevant and dis-economy of scale... it is more appropriate to actually redevelop the entire premises into multi-storey structure.
On the other party, the negotiation was central upon a collaborative partnership to jointly redevelop the land, with a portion to be given in-kind while the rest as profit sharing. The landowner will contribute its land while the contractor to contribute building the entire structure. As for the consultants, it will naturally to be considered...
The parties agreed on the suggestions and mutually agreed on the terms as in a MOU, pending further deliberation on its details... as you can see mediation leads to future cooperation, not a zero sum games of dispute resolution. Will continue with another story on mediation done, in an ad-hoc basis. At the moment, institutionalize mediation was rather at the back burner due to non incentive given by the respective parties whom aims are litigation and dispute resolutions... this is one area, Architect has an active role to play.
CPC, CFO/CCC, VP CONUNDRUM
CPC, CFO/CCC, VP CONUNDRUM
Back in 2018, a construction lawyer posed to me a question, “how the Architect can certifies certificate of Vacant-Possession (VP) without first issuing the certificate of Practical-Completion (CPC)?” Apparently many people is confuse with the salient differences between these, CPC, Certificate of Fitness for Occupation (CFO), Certificate of Completion and Compliance (CCC) and VP.
Foremost, the lifecycle of project ends ‘contractually’ with a CPC, which is easier to recognise than define, no hard and fast rules; existence of latent (unknown) defects cannot prevent practical completion, defects are d’minimis; in relation to patent defects, there is no difference between uncompleted items of work and an item of defective work that requires to be remedied; 'trifling' patent defects does not preclude practical completion; whether an item is 'trifling' is a matter of fact and degree to be measured against the intended purpose of the works; and mere fact that a defect is irremediable does not mean that works are not practically complete. A CPC is a demarcation of a completion within the construe of a construction contract, as provided by the standard form of contract. Practical-completion and its variant is a termed used also in other international forms.
Second, the lifecycle of project ends ‘statutorily’ with a CFO/CCC, which is objectively done by ‘self-certification’ and issuance of the Borang-F, upon completion of inspection and submission to the relevant authorities. This is a closure of a statutory-undertakings that building has been constructed in accordance to the approved-plans (drawings). Here, the principal submitting person undertakes statutory liability of the entire building for live.
Third, issuance of CFO/CCC is a condition precedent to the issuance of certificate for VP, marking the handing over of vacant possession of housing to purchasers with water and electricity ready for connection. Collectively, these certifications are statutorily required under the law. Other certifications for issuance of Strata Titles and Share-Titles are also warranted, marking that the strata plans are in accordance to the approved-plans/drawings.
So, logically, by order of priority CPC have to be issued first, before the issuance of CFO/CCC and ends with VP. However, there is not statutory requirement for the issuance of CPC prior to issuance of CFO/CCC as these certifications operate under different conditions. Saying thus, there are events that CFO/CCC has been issued before CPC. The legal-question is whether issuance of CFO/CCC actually signify the completion of the said building, i.e. practical-completion? If so, whether CFO/CCC can replace CPC, or deemed CPC to have been issued?
Unfortunately, the short answer is ‘no’. CPC, although, ill-defined, remains the opinion of the Architect. CFO/CCC, on the other hands, is the undertaking of the Architect. The level of liability differs and the implication to the respective legislation also differed. Thus, one cannot equate CPC with CFO/CCC.
Back to our lawyer friend, in the heated debate, his face turned rosy when I say, ‘no’ … and we did finally ‘chilled-out’ in the ‘other-bar’. He remains one of our ardent supporter in PAM as ‘industrial-partner’ and occasionally maintain his construction-law in 2 minutes via youtube.
 Mears v Costplan  EWCA Civ 502
 PAM Form of Building Contract, i.e. PAM1998, 2006, 2018
 JCTSBC2006: Practical Completion; FIDIC: Taking Over Certificate; NEC: Completion
 S.25; 25A, Uniform Building Bylaws 1984 UBBL
 Statute of Limitation or Longstop does not apply
 Third-Schedule G; H Cl.3, Housing Development (Control and Licensing) Act 1966 (HDA)
 S.9(1)(b)(i), Strata Title Act 1985; S.6(3), Strata Management Act 2013
DYA+C is set up by Ar. DAVID YEK TAK WAI to undertake resolution of commercial disputes through ARBITRATION and ADJUDICATION, specializing in CONSTRUCTION PAYMENT DISPUTES.
This is an educational blog. We do not guarantee, confirm nor warrant the accuracy of the information and facts stated therein. Read at your own 'risk'.