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John Hollan Construction & Engineering v Majorca - Doyles Arbitration Lawyers
John Hollan Construction & Engineering v Majorca

John Hollan Construction & Engineering v Majorca

JOHN HOLLAND CONSTRUCTION AND ENGINEERING PTY LTD V MAJORCA

PROJECTS PTY LTD & ANOR (1996) 13 BCL 235

Supreme Court of Victoria – 26 July 1996

FACTS

The Majorca building is an Art Deco medium rise commercial building at 258 Flinders Lane, Melbourne. Majorca Projects Pty Ltd (“Majorca”) entered into a JCC contract with John Holland Construction and Engineering Pty Ltd (“John Holland”) to refurbish the building and to convert it into residential apartments with retail tenancies on the ground floor at a price of $2.8 million. Majorca engaged Bruce Henderson (“Henderson”) as Architect to administer the contract. The contract was substantially delayed, a dispute arose and Majorca went into liquidation.

John Holland contended that Henderson owed a duty of care, the content of which was a duty to act fairly and impartially in carrying out its functions as certified under the contract. John Holland contended that, as a consequence, it suffered loss and damage in the amount which might be found to be owing by Majorca to John Holland. That is, because of Henderson’s breaches, Majorca did not pay John Holland the amounts properly owing to it under the contract and that Majorca is now unable to make these payments. In particular, John Holland contended that Henderson acted unfairly and impartially by not giving John  Holland an opportunity to respond to representations from Majorca and by having regard exclusively or  Henderson submitted that it had no responsibility because to assume an obligation to act in the interests of John Holland was not its function.

ISSUE

Whether certifying Architect under the contract owed duty to builder to act fairly and impartially in carrying out its functions as certifier and assessor.

FINDING

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