The NSW Court of Appeal recently considered an expert determination clause in a GC21 Contract between a builder and the NSW Department of Education, to determine whether an expert determination made under the Contract was final and binding.
At issue was the proper interpretation of the subject clause, and an exclusion clause which provided that the expert determination was not final and binding where the determination amount exceeded $500K.
The builder commenced Court proceedings concerning matters the subject of the determination on the basis the threshold value was exceeded and the determination not final and binding.
The Department then applied for summary dismissal of that proceeding on the basis the threshold amount was not exceeded after set-off of amounts paid to the builder under the SOP Act. The Department succeeded at first instance.
However on appeal, the NSW Court of Appeal applied a literal reading of the clause and determined payments to the builder under SOP Act are properly disregarded from calculation of the determination amount and held the threshold amount was exceeded and the determination was not final and binding, and matters the subject of the determination could be litigated.
The alternative interpretation given to the dispute clause by the primary judge was held by the Court of Appeal to be improper and uncommercial.
Dispute clauses are critical elements to any construction contract. Express exclusions to the operation of the dispute mechanism must be clear and express, leaving no room for uncertainty when it comes to consideration of whether a particular process is final and binding or other options for recovery apply. Troy legal offers specialst legal advice on dispute clauses for construction contracts that provide certainty.
The NSW Court of Appeal recently considered an expert determination clause in a GC21 Contract between a builder and the NSW Department of Education, to determine whether an expert determination made under the Contract was final and binding.
At issue was the proper interpretation of the subject clause, and an exclusion clause which provided that the expert determination was not final and binding where the determination amount exceeded $500K.
The builder commenced Court proceedings concerning matters the subject of the determination on the basis the threshold value was exceeded and the determination not final and binding.
The Department then applied for summary dismissal of that proceeding on the basis the threshold amount was not exceeded after set-off of amounts paid to the builder under the SOP Act. The Department succeeded at first instance.
However on appeal, the NSW Court of Appeal applied a literal reading of the clause and determined payments to the builder under SOP Act are properly disregarded from calculation of the determination amount and held the threshold amount was exceeded and the determination was not final and binding, and matters the subject of the determination could be litigated.
The alternative interpretation given to the dispute clause by the primary judge was held by the Court of Appeal to be improper and uncommercial.
Dispute clauses are critical elements to any construction contract. Express exclusions to the operation of the dispute mechanism must be clear and express, leaving no room for uncertainty when it comes to consideration of whether a particular process is final and binding or other options for recovery apply. Troy legal offers specialst legal advice on dispute clauses for construction contracts that provide certainty.
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