This paper is written on the assumption that the Superintendent will be working under AS4000-1997.
The Duties of the Superintendent
Clause 20 of AS4000 looks at the Superintendent fulfilling all aspects of the role and functions reasonably and in good faith, but it is not explicit in laying down exactly how that is to be achieved.
Clause 20 of AS4000 requires the Superintendent, in the exercise of his or her functions under the contract to:
- act honestly and fairly;
- act within the time prescribed under the contract or, where no time is prescribed, within a reasonable time; and
- arrive at a reasonable measure or value of work, quantities or time.
Giving Directions
AS4000 allows the Superintendent to give directions orally, except where the contract otherwise provides, but the Superintendent shall confirm this as soon as practicable. This is always good practice in any case, since it puts the direction on record and prevents any dispute about what the direction actually was.
AS4000 goes on to say that if the contractor, in writing, requests the Superintendent to confirm an oral direction, the contractor shall not be bound to comply with the direction until the Superintendent confirms the direction in writing. It is amazing how often contractors fail to take this obvious precaution, probably because they only read the contract as a last resort, after disputes have already arisen.
It is important to note that directions should be issued to the contractor, not to subcontractors or workers. The chain of contractual authority should be observed at all times since, otherwise, confusion may well reign.
The Superintendent does not Supervise
There is an important distinction between exercising the functions of a Superintendent under the contract, on the one hand, and the supervision of the works on the other. It is the job of the contractor and the contractor's representatives on site to supervise the work, plan the progress of the work and ensure the quality control.
There is a common misunderstanding amongst members of the public that the Superintendent must necessarily be to blame if there is any shoddy workmanship or faulty materials. In fact, the role of the Superintendent does not require continuous attendance on site, but only occasional site visits, usually at the time of site meetings. Administering the contract and supervising the works are completely different functions.
Even if a defect were visible at the time of inspections by the Superintendent and could or even should have been picked up by the Superintendent, the Superintendent's failure to do so will not prevent the Principal from holding the contract or irresponsible to repair the defects. Of course, if the contractor seeks a variation in terms of the standard of materials or workmanship and receives an express instruction from the Superintendent approving that variation, this changes the scope of work under the contract and the contractor is entitled to proceed on that basis. The Principal cannot thereafter say that the Superintendent should not have authorised the change.
Superintendents should be wary of giving any instruction to a contractor which requires the contractor to go about his work in a particular manner, rather than what result the contractor should achieve. Superintendents should not give instructions which "method specifications" are not found in the contract documents themselves, since they thereby take responsibility for the effectiveness of the method.
In an arbitration which the writer was involved as Counsel, the Superintendent, instead of giving an instruction to remedy a defect, gave a specific instruction as to exactly how the contractor was to go about fixing the problem, over the protests of the contractor who wanted to adopt a completely different approach. The method favoured by the Superintendent failed and the Superintendent eventually relented, allowing the contractor to use its own method, which proved successful. The Arbitrator awarded the costs of the abortive attempts to fix up the problem using the method preferred by the Superintendent, as being an unreasonable attempt on the part of the Superintendent to usurp the role of the contractor in managing the work.
Even where the contractor is not putting forward its own proposal and asks the Superintendent how to go about the job, it is risky for the Superintendent to officially put forward a solution of the Superintendent's own devising. There is every prospect in that situation that if attempts fail, for whatever reason, the Superintendent's preferred option will get the blame. A contractor should be competent enough to carry out the work and if necessary, the contractor should obtain expert advice elsewhere for which the contractor would be solely responsible.
Agent for Certifier
The Superintendent has a dual role in administering the contract. In some cases, he acts merely as the agent of the Principal, the local government in the case of Superintendents employed by a local government. In so doing, he is only obliged to have regard to the interests of the local government.
For example, the Superintendent has a power to issue variations as, for instance, to omit wall paper to a particular wall and substitute plaster and paint instead. This instruction depends, solely, upon the preference of the Principal and does not require the exercise of any independent discretion.
By contrast, valuing a variation under sub-clause 36.4 does require an exercise of independent judgment on the part of the Superintendent as contemplated by clause 20. This may result in the Superintendent, acting reasonably and fairly, having to make a judgment that the price of the variation is going to be higher than the Principal would really like to pay.
You will sometimes hear people say that they regard the Superintendent as favouring the contractor, where decisions are made adverse to the interests of the Principal. Since their viewpoint is naturally biased towards the interests of their employer, with which they identify, this usually means that the Superintendent is acting honestly and fairly as required by the Contract.
Perini Corporation v Commonwealth (1969) 2 NSWR 530
This case illustrates the divided nature of the duties of an employed Superintendent. In that case, the Superintendent was the Commonwealth Director of Works. Dealing with applications for extension of time, the Director of Works considered he could not grant an extension of time which would be contrary to departmental policy, although that policy was not a term of the contract.
The New South Wales Supreme Court held that although the Director was entitled to consider departmental policy, he was obliged to exercise his discretion according to the rights and obligations of each party to the contract, as set out in the contract, and could not regard his discretion as being controlled by the policy of the Department.
The court distinguished between the powers of the Superintendent which were administrative and supervisory in their character and performed by the Director of Works as the servant and agent of the Commonwealth and his obligations as a Certifier, which required him to consider the contractual rights and duties of the contractor. His discretion as Certifier could not be fettered by the Department which employed him.
Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd (2002) 18 BCL 322
In this case, the leading judgment was given by Hodgson JA. That case involved AS2124-1992 and referred to the power of the Superintendent to grant extensions of time, variations and liquidated damages. Hodgson JA, with whom the other members of the Court agreed, concluded that when exercising certifying functions in respect of which the Superintendent must act honestly and impartially, the Superintendent was not acting as the owner's agent in a strict legal sense.
Where a Superintendent is acting as an agent in the strict legal sense of the word, a local government cannot challenge the Superintendent's action. For example, if the Superintendent issued a variation directing a building to be painted purple rather than white, the local government would not be able to say afterwards that the Council had not been consulted or even that purple was a bad colour to have chosen. Likewise, the contractor cannot assert that purple would not be a good colour to paint the building and they would be better off painting the building blue.
By contrast, a decision by the Superintendent in his capacity as Certifier, eg by the issue of a Payment Certificate, could be challenged by either party.
Safety
While the contractor has the primary responsibility for safety on the site, the Superintendent should not lose sight of the fact that there is a responsibility on his or her part and also, as the representative of the Principal. If blatant breaches of safety are perceived, a Superintendent should not close his or her eyes to that situation but should issue an appropriate instruction.
Similarly, where the work requires a job safety analysis or risk management plan, the role of the Superintendent is first of all to make sure that the contractor has such documentation and then occasionally to check to make sure this has not obviously been breached.
There will be more to say about safety when dealing with the role of the Project Manager, who has a more significant role in regard to safety.
Workmanship and Material
While the Superintendent would normally intervene with a direction to make good if the Superintendent perceives that the workmanship is faulty or materials are defective, the contractor is not excused by reason of any failure on the part of the Superintendent not to pick this up on inspections, even though a reasonably careful Superintendent should be able to do so. If the contractor provides inadequate workmanship or defective materials, the contractor remains responsible to the Principal and cannot complain that the Superintendent should have stopped the contractor or its subcontractors from doing so.
Latent Conditions
Another area where Superintendents can be in some degree of difficulty relates to latent conditions. This refers to conditions on site which could not have been anticipated by a reasonably prudent contractor who made all necessary inspections and enquiries and are not apparent from the documents provided.
These latent conditions are often problems with the subsoil strata but may consist of natural objects such as buried services and the like.
The contractor must bring the problem to the attention of the Superintendent at an early stage. Failure to do so can result in the contractor being unable to recover part or even all of the expenses involved.
Documentation
Contractors are notoriously weak on documentation. Many of them seem to have a policy of reading the contract only after a dispute arises. However, Superintendents should never fall into such slack ways.
The most commonly encountered difficulty with documentation is inconsistency between suites of supporting documents forming part of the contract. Often the drawings and specifications are found to be in conflict, particularly where there are a number of consultants issuing detailed specifications for particular parts of the work and batches of drawings relating to that work.
It is remarkable how often contractors will try to resolve those difficulties by puzzling over orders of precedence in the contract documents, instead of simply picking up the telephone or a technical query to the Superintendent.
It is not unknown for sub-contractors to simply ignore the specifications in particular areas of work because of the way they call for the work to be done is not how they usually proceed. Provision by the contractor will fail to pick this up and indeed the contractor may even connive at that course, but the Superintendent will bear that possibility in mind.
Traps for the Unwary Superintendent
Sometimes Superintendents can place too much faith in contractors. The Superintendent who issues an instruction to remedy faulty work and simply assumes that the contractor will have complied with it and may be living in a fool's paradise, which will be rudely interrupted when the work in question later fails.
Another trap into which a Superintendent can fall is to attend a meeting at which critical issues are discussed, but not to record this at the time either by Minutes taken of the meeting or by correspondence from the Superintendent to the Contractor setting out the Superintendent's understanding of the discussion. If it comes to a dispute, a contemporary written record will always be preferred to unaided recollection.
It is surprising how often project records fail to address critical issues. The writer well recalls a site diary dealing with a day in late December at which vital events occurred, but in which the only event recorded was the arrival of a substantial quantity of beer!
Site Meeting Minutes are also often defective, in that they may fail to go into discussions on key issues while recording in detail relatively mundane items. This may be because neither the party taking the Minutes nor the other party to the discussions wants to put in writing a public record of matters causing significant concern both to the Superintendent and to the Contractor.
Superintendents should diarise key date driven requirements. For example, under sub-clause 34.5 of AS4000-1997, the Superintendent must give a decision in writing within 28 days. If he fails to do so, there is a deemed assessment and direction for an extension of time as claimed.
Similarly, under sub-clause 37.2 of AS4000-1997, if the Superintendent does not issue a Progress Certificate within 14 days of receiving a progress claim, the progress claim itself is deemed to be the relevant Progress Certificate. Nothing reflects more poorly on a Superintendent than failing to give decisions in a timely fashion.
There are times when Superintendents complain that they have to take a lot of time considering and weighing up the various issues in order to arrive at an extremely careful and perfectly calculated assessment. It is better in such a situation to give a decision as best you can within the relevant timeframe and then review that decision at leisure, with a view to correcting it at a later date and bearing in mind that Payment Certificates are always provisional.
Further Information
Under AS2124 Contracts, it has been held that the Superintendent can extend time within which to issue a progress certificate by requesting further information in support of the claim. The Court in Brewarrina SC v. Beckhaus Civil Pty Ltd (2003) NSWCA 4 held that the period of time from the Superintendent's receipt of the claim to the issue of the certificate was suspended if the Superintendent asked for further information, until that further information is supplied. The Trial Judge and one of the Judges of the Court of Appeal considered that the time continued to run and that the payment claim was therefore deemed to be a certificate, the two other Judges of the Court of Appeal held otherwise and considered that the failure to supply the information reasonably required by implication prevented the time running so far as the Superintendent was concerned.
It is doubtful whether a similar outcome would occur under AS4000-1997 and indeed academic opinion is that the majority decision in Breworrina was incorrect. The better course in the writer's opinion and that of the learned authors of Dorter & Sharkey on "Building and Construction Contracts in Australia" is that the Superintendent should make the best estimate he can, on the basis of such information as was supplied and, if that is not possible, to issue a nil certificate, bearing in mind that a further certificate can be issued at a later stage when better information comes in.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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