Chapter 5 Liability of a superintendent
Liability as agent to the principal
The scope of the superintendent’s liability as agent of the principal will depend on the terms of the particular employment, consultancy or services agreement in place between the principal and the superintendent. The superintendent also owes a tortious duty to take reasonable care and, if this is breached, will be liable to the principal in negligence. A superintendent can limit liability for negligence by including an exclusion clause which modifies or excludes liability in defined circumstances.
Liability to the contractor
Generally the contractor and superintendent are not in a contractual relationship and therefore the superintendent has no contractual liability to the contractor. As a general rule, a superintendent will not owe a duty of care to the contractor in administering the contractor’s work under the contract. That is because the contractor can ordinarily sue the principal for any loss suffered consequent upon the acts of the superintendent.
The courts are reluctant to find that a superintendent owes a duty of care to the contractor. The courts will consider the terms of the contract to decide whether the superintendent does owe a duty of care to the contractor, as seen in Pacific Associates Ltd v Baxter Co [1989] 2 All ER 159. If the parties have agreed to a chain of contract obligations, it is difficult to find that the parties have, in addition to the contract, relied on the superintendent owing a duty of care (see Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] 2 All ER 575). The courts also, as a matter of policy, are hesitant to disturb a careful allocation of risk set out in contractual arrangements between commercial parties.
Liability as a certifier
A superintendent can owe a duty of care to the principal for negligent certification, as seen in Sutcliffe v Thackrah [1974] 1 All ER 859 or [1974] AC 727. A similar duty of care has been found between a superintendent and a contractor in circumstances of a close relationship between the parties, where the contractor is clearly relying on the advice or actions of the superintendent.
When determining whether a duty of care exists, the courts will look at factors such as reliance, assumption of responsibility and public policy considerations as shown in the following case study.
CASE STUDY
John Holland Construction & Engineering v Majorca Projects Pty Ltd and Bruce Henderson Pty Ltd [1996] VicSC 334
Facts
- The principal went into liquidation.
- The contractor sued the superintendent for negligence in assessing liquidated damages.
- Did the superintendent owe a tortious duty of care to the contractor?
Results
- A duty of care can exist between a superintendent and a contractor, if the contractor relies and depends upon the careful and impartial performance of the superintendent.
- The court looked closely at whether there was any reliance by the contractor or a relationship of proximity between the parties.
- In this case there was no reliance and in the context of the contract which gave the contractor a right to dispute decisions of the superintendent, there was no intention to impose a tortious obligation upon the superintendent.
- This case was considered in Northbuild Construction Pty Ltd v Napier Blakely Pty Ltd [2006] QSC 133 where a duty of care was found to be at least arguable.