AN IMPORTANT CASE.

Sun (Christchurch), Volume I, Issue 251, 26 November 1914, Page 10

AN IMPORTANT CASE.

SCOTT BROS. v. CITY COUNCIL. DETAILS OP JUDGMENT. In the case of Scott Bros., Ltd. (Mr A. F. Wright) v. the Christchurch City Council (Mr H. 11. Loughnan), the plaintiff claimed to recover the sum of £385 under a contract for the manufacture and erection of a 250 h.p. gas producer plant and extras, and interest amounting in all .to £479 1/11. The defendants paid into Court £348, and counter-claimed for £2OO, £33 10/- expended on necessary alterations, and £166 10/- as general damages.

In giving judgment, bis Honour Mr Justice Denniston said the contract was of a very special character, of which its subject, a suction gas producer, was a novelty which the plaintiff was anxious to have tried, and the specifications were, in the circumstances, wider and vaguer than would otherwise have been .the case. Difficulties arose during the construction, and complicated technical questions also arose as to whether the plaintiff had carried out the terms of the contract. At the trial it was decided that thqse questions should be referred to an engineering expert to examine and to report to the Court, such report to be accepted by the parties as conclusive on the technical points in issue. The report was in the main in favour of the plaintiff. Other minor points were heard and decided by the Court, and the .only question to be decided was a claim by the' defendant in respect of loss, by the delay of the plaintiff in erecting and delivering the plant. The contract contained the proviso that the whole of the work and plant should be completed, erected, and finished ready for delivery within three months from'the date of the acceptance of the tender, subject to a penalty. The contract was accepted on August 9, 1911, and the time for completion, therefore, expired on November 9, but mo part of the machinery was on the ground earlier than November 22, and the plant was not ready for delivery for several mouths afterwards. The plaintiff met the Claim for penalties on the ground that it was the duty of the defendant to provide- a building in w,hieli to erect the machinery, and no ♦building was provided until after the. expiry of the time at which the contract was completed, and therefore the case did not apply. As a further answer the plaintiff said that extras were ordered during the continuance of the contract without any extra time being allowed by the surveyor and by the contract it was agreed that the City Surveyor should allow such extra time as lie should think adequate for such alterations, deviations, .additions, extra work, or delay, and at the expiration of the time so allowed the deductions or sets-off for .delay""should come into operation. The plaintiffs also submitted that on October 3 an important variation of the contract was agreed to. On the point that extras were ordered without time being allowed his Honour held that the defendants could not deduct or enforce the penalties. The arj chitect or other authorised person could make allowance of time after the exjpiration of the time fixed for completion, land'even if penalties accrued subsequent [ to the orders for extras being put an end to, penalties already incurred could I be deducted. It did not follow that the defendants would necessarily be without redress. The real foundation of the judgment seemed to be that what. were called penalties really amounted to liquidated

damages previously agreed upon as payable, without reference to whether the contractee suffered any damage for the non-completion, or to the extent of such damage. Without, in the absence of argument,- committing himself to any definite conclusion on the point, he might say that he was strongly inclined to think that when the special provision for unliquidated damages was made, by the act of the parties, inoperative, the parties were relegated to their rights as if the condition had never existed.

His Honour continued to say that some time after the hearing lie informed counsel in regard to tlie "general damages" claimed, £166 10/-, that he thought the question was raised of the reasonableness of the delay, and he was disposed to allow evidence to be given as to damages, but would hear the jjarties before deciding. No attempt was made to call such evidence.

There was a more important matter, however, in the agreement of the parties to an important variation of the contract which was made on October 3 in regard to the position of a steam pipe. The nature of the agreement caused' him to come to the conclusion that the alteration was embodied in the contract in substitution for the original and was an indulgence to the contractor, and therefore it would be inequitable to allow this consent to entitle the plaintiffs to treat the time for the completion of the contract as at large. This point was argued before him and he had since reconsidered the matter, coining to the decision that on the grounds submitted by the arbitrator that the producer could not be made to .the specification and that the wording of the specification and the sketch to the contractor was directly opposite, etc., he thought that this amounted to an important variation of the .plans and specifications —which was essential to the successful carrying out of the contract. Ilis Honour therefore concluded by saying that he could see no reason for altering his opinion that the defendant could not deduct penalties for the overtime in completing the contract, and judgment would be for plaintiff for £450 4/-, including the amount paid into Court, with costs on the lowest scale and costs of reference, and £:"> 5/for further argument. The defendant was non-suited on the counter-claim.