problems and
the new relationships which are developing, find appro- priate legal expression for them, new moulds as it were, into which they may be poured.
I do not for one moment wish to set myself up as an expert in the building industry, but the best law- yers come to discover that the law itself cannot be properly understood or applied without some knowledge of the things and the relationships with which it is attempting to deal.
I conceive my task to-night as em- bracing two somewhat different things:
First, to examine problems re- lating to forms of building contract in general:
Second, to deal with particular problems which have been causing
concern.
Perhaps I might add a third head, namely, a brief examination of the way in which persons engaged in the building industry might be educated or re-educated to a better understand- ing of the legal problems involved in building contracts.
ARBITRAL FUNCTION OF ARCHITECT
The architect or supervising en- gineer of building or engineering work is not always merely an agent of the owner. Very frequently, under the common forms of contract, he is also given duties of a kind described as quasi-arbitral or quasi-judicial. Such for example are his duties under Clauses 1(e), 9, 12, 13(a), 17, 18 and 25 of the common form of lump sum contract adopted by the Royal Aus- tralian Institute of Architects and the Master Builders' Federation of Aus- tralia. In exercising these functions the architect is not an arbitrator within the meaning of the Arbitration Act, or the general law relating to arbitrators.
He is more in the nature of a "certifier" or "valuer". As such he is required to act not as agent for the owner, but impartially and in a dis- terested manner. He has been describ- ed as a "preventer of disputes" in con- tradistinction to an arbitrator, whose powers only become operative when a dispute has arisen. His duty, it has been said, is to give the certificate of valuation (or whatever it may be) according to what he conceives to be the right and truth as to the work "according to his own conscience and according to what he conceives to be the right and truth as to the work done."
ARBITRATION OR LITIGATION
A common view amongst lawyers in New South Wales is that there is
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virtue in arbitration, which is more costly than litigation, and seems to offer no compensating ad- vantages. But from a builder's point of view there are valid and tangible reasons for preferring arbitration.
For one thing, an arbitrator's award can usually be obtained much more quickly than a judgment of the court, in these days of congested court lists and the delays traditional- ly attendant upon the ordinary processes of law, which even Hamlet in his famous soliloquy enumerated as one of life's greater evils. If the builder is in the position of plaintiff, and the amount claimed is large, this time factor can be of vital importance,
Secondly, and equally importantly, the builder can expect to find in the arbitrators a tribunal with special knowledge of building and engineer- ing, and no reluctance to embark upon a hearing of building and engineering disputes, which tends perhaps also to be more sympathetic to his claims and his difficulties than an ordinary judicial tribunal unfami- liar with his problems. In these circumstances, builders and contrac- tors will not swerve from their allegiance to arbitration unless and until they are better served with judicial tribunals which will hear claims promptly, readily and with an understanding of building and en- gineering techniques sufficient to enable the evidence to be easily followed.
An incidental disadvantage of the arbitration procedure which is not often adverted to is the lack of any provision for the hearing of third- party claims, similar to that which now exists in courts of law. For example, if the builder proceeds against the owner, and the latter wishes to claim over against his architect or engineer, he must do so in separate proceedings, with the attendant duplication of time, trouble and expense. Alternatively, if the owner sues the builder, and he should wish to claim over against a sub-contractor, he will find himself in like case.
ARBITRATION ACT
Arbitration proceedings (not to be confused with industrial arbitration of disputes between employers and employees) are regulated to some extent by the provisions of the Arbitration Act, 1902. If the arbitra- tion agreement takes the form of what we call a Scott v. Avery clause
THE HONG KONG & FAR EAST BUILDER-VOLUME 19, NUMBER 2
(as it does in the common form), whereby the making of an award is to be a condition precedent to the bringing of an action, the court in New South Wales, and formerly in England, had no option but to regard the clause as a complete bar to action. In England, however, since 1934 the court has had discretionary power to order that such a clause shall cease to have effect. In my opinion such a provision is highly desirable to be included in our local Act and is indeed long overdue. Most lawyers will have had experience of cases where the arbitration clause was capable of working great injustice.
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sure
The arbitration procedure is utilis- ed in New South Wales perhaps more by the building industry than any other. In these circumstances, the building industry might well take the initiative in pressing for appro- priate reforms of our law relating to this subject, which has long been due for overhaul. Some comparative study of the provisions of the Acts. relating to arbitration in force in other commor. law jurisdictions such as the United Kingdom, other States of the Commonwealth, and the United States of America, would I reveal many provisions which could well be imitated here, in addition to that which I have already mentioned above, which itself alone is of great importance. It might even be possible to secure legislative pro- vision, for example, that third-party claims could, at the discretion of the court, in appropriate circumstances, be ordered to be dealt with in arbitra- tion proceedings; the court in such case would need to be given wide powers to mike further provision. e.g., by the appointment of an addi- tional arbitrator, to ensure a suitable tribunal to deal with the claim against the third-party as well as the original claim.
BILLS OF QUANTITIES
All of us know that bills of quan- tities may or may not form part of the contract, depending upon the agreement of the parties, and if schedule of rates contracts become more common here, as may appear probable, we shall probably become more familiar with some of the pitfalls associated with contracts of which the bills of quantities form part.
There has beer agitation in some quarters to Ensure that the bills should always form part of the contract. But whether or not the bills form part of the contract, it may be that the liability of a quantity sur- veyor may be found to have been
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