In the latest instalment of the ongoing litigation between Swansea Stadium Management Company Ltd (SSMC), the City and County of Swansea (Council) and Interserve Construction Ltd the effect of the Notice of Completion of Making Good Defects has been considered.
Whilst the judgment applied established principals it's an important reminder to construction practitioners of its effect. The case also highlights the danger for limitation purposes of certifying Practical Completion when there are a large number of outstanding defects.
In addition it poses some interesting questions for tenants who should be cautious about taking on a lease with repairing obligations when there are a number of outstanding defects at Practical Completion.
The court concluded that the effect of the notice "was to deem 'for all the purposes' of the building contract that the parties had reached completion of the discrete and more limited obligation to make good defects in accordance with the contractual machinery". While this does not bar a claim for a failure to make good defects, such claim does, however, have to be brought pursuant to the core obligations in the building contract. However, in this case, it left SSMC without a remedy because its original construction claim was statute-barred.
Please find below a link to the judgment:
"Clause 17 imposes a liability and gives a right to make good defects. It does not exclude a claim for damages in respect of those breaches. It is no more than a simple mechanism for dealing with such breaches, but it is not to be construed as depriving the injured party of his other rights."