LEGAL
WHEN THE BRICK
HITS THE FAN The forecast impending downturn in residential development places stress on all participants in the construction industry as the good times may not continue forever. Quantity Surveyors are well advised to revisit the scope and breadth of their responsibilities in the preparation of progress certificates, particularly as it is anticipated that greater reliance will be placed on their expertise when “the brick hits the fan”. We have reviewed three cases which provide valuable guidance to Quantity Surveyors in carrying out their duties.
THE DUTY OF CARE In the case of a Quantity Surveying firm v Cosmarnan Constructions P/L & 3 Ors [2003] NSWCA 66 revised, the New South Wales Court of Appeal dismissed an appeal by a bank-appointed Quantity Surveyor against a trial court ruling awarding $665,025 in damages against the Quantity Surveyor. In that case, the Quantity Surveyor was appointed by a joint venture to certify the correctness of progress claims submitted by the builder carrying out the joint venture’s residential development project.
14 - SEPTEMBER 2018 - THE BUILDING ECONOMIST
The Quantity Surveyor’s appointment was contained in the loan facility obtained by the joint venture partners and worded in this manner: “Bank approved Quantity Surveyor is to confirm contract price, time frame and approve all drawdowns of the facility. Quantity Surveyor is also to confirm that minimum of $750,000 in equity has been applied to the development prior to the initial drawdown of the facility. A list of bank approved Quantity Surveyors is attached for your information.” It appears that the project experienced unexpected delays and ultimately the
