Wakilii

British East Africa Corporation Limited v Kanji and Another (Civil Appeal No. 16 of 1939)

East African Court of Appeal · [1939] EACA 62 · 1939 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from decision of H.M. Supreme Court of Kenya
Decision
Appeal allowed. Architect's certificate held to be final and binding under the contract. Cross objection on quantum of goods supplied partly succeeded, reducing defendants' claim by Sh. 4,747.

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that an objection for non-joinder of an essential party must be taken at the earliest opportunity and was therefore overruled on appeal. Held further that under the terms of the contract, where the parties agreed that all disputes should be assessed solely by the architect acting as sole arbiter, his certificate given after proper consideration of both sides was final and binding. A technical submission and formal arbitration reference were not necessary under the contract. The architect's assessment and certificate, having been given after the application of his professional knowledge and due consideration of the disputed matters, constituted a sufficient and conclusive award. Appeal allowed.

Outcome

Appeal allowed. Architect's certificate held to be final and binding under the contract. Cross objection on quantum of goods supplied partly succeeded, reducing defendants' claim by Sh. 4,747.

Facts

Respondents contracted to build three houses in Mombasa for appellants in 1925. The contract followed the Royal Institute of British Architects standard form but cancelled the formal arbitration clause and substituted clause 17, which appointed the architect as sole arbiter to assess and settle all disputes. The architect issued interim certificates which were paid. Respondents then submitted a claim for extras and variations totalling Sh. 53,333. The architect met respondents on site, went through the items, and prepared an assessment substantially cutting down the claim to Sh. 31,786. Respondents rejected this assessment and brought suit in 1927. Appellants paid Sh. 26,936 into court (the amount due on the architect's certificate after deduction for goods supplied) and resisted the balance on the ground that the architect's certificate was final and binding. The lower courts held that the certificate was not conclusive because it was given after a dispute had arisen between the parties and gave judgment substantially for the plaintiffs.

Issues

  1. Whether a preliminary objection on the ground of non-joinder of an essential party can be raised on appeal when it was not pressed at trial.
  2. Whether the architect's certificate is final and binding on the parties where clause 17 appoints the architect as sole arbiter to assess and settle all disputes.
  3. Whether a formal submission, reference, and award are necessary for the architect's decision to constitute a binding arbitral award under the contract.
  4. Whether the architect properly assessed the disputes relating to extras and variations, including stone work, teak screens, and the schedule of prices.
  5. Whether the amount to be deducted for goods supplied by the defendants to the contractors was correctly assessed.

Orders

  • Appeal allowed.
  • Preliminary objection on the ground of non-joinder overruled.
  • Cross objection in respect of Sh. 4,747 for goods supplied allowed.
  • Plaintiff entitled to interest at 9% on Sh. 26,936/33 from 3 March 1927 to date of payment into court.
  • Plaintiff entitled to interest at 9% on Sh. 4,747 from 3 March 1927 to 29 December 1928 and from 21 September 1936 to date of judgment, thereafter at 6% until final adjustment.
  • Plaintiff entitled to costs of the suit on Sh. 31,683/33 up to date of payment into court.
  • Plaintiff allowed Sh. 500 costs in respect of the Sh. 4,747 underpaid.
  • Defendants entitled to three-quarters of their costs of the suit subsequent to date of payment in.
  • Defendants entitled to costs of the appeal.
  • Plaintiff entitled to costs of the cross objection to the extent of Sh. 4,747.

Rules and key headnotes

Civil Procedure — Parties — Preliminary Objection for Non-Joinder — Time for Raising Objection
An objection on the ground of non-joinder of an essential party must be taken at the earliest possible opportunity and in any event before the first hearing. Where an objection was raised at the first hearing but not pressed, and was not raised before subsequent judges, it cannot be successfully raised on appeal after a lapse of ten years.
Contract Law — Building Contracts — Architect as Sole Arbiter — Finality of Certificate
Where parties to a building contract agree by special clause that all disputes shall be assessed solely by the architect acting as sole arbiter and that all parties shall accept his award as final and binding, the court must give effect to that intention. The architect's certificate issued after due consideration of both sides of disputed matters is final and conclusive, subject only to challenge on grounds of fraud or collusion.
Arbitration — Architect as Arbiter Distinguished from Formal Arbitration — Submission and Award
Where parties deliberately cancel a formal arbitration clause and substitute a provision appointing the architect as sole arbiter, a technical submission of differences and a regular formal reference and decision as an arbitrator's award are not necessary. The architect's position differs from that of a formal arbitrator in that the object is to have his practical professional knowledge applied, and his assessment and certificate constitute a sufficient award under the contract.
Contract Law — Building Contracts — Architect's Function — Exercise of Professional Judgment
An architect appointed as sole arbiter under a building contract is not like an arbitrator dealing with evidence or a judge dealing with a law suit. The object of leaving matters to the architect is that his practical knowledge is to be applied so that he, acting as an independent person, may determine what is proper in the circumstances. If a dispute arises, the architect in his capacity as arbiter must consider both sides of the questions submitted to him, and having done so his decision is conclusive and unassailable except on grounds of fraud or collusion.
Contract Law — Building Contracts — Extras and Variations — Authority Required
A contractor cannot obtain payment for extras or variations unless the work has been authorized in writing by the architect as required by the contract. Where the contractor encounters unexpectedly difficult ground but agrees to a variation without extra cost, he is not entitled to payment for additional materials used unless the variation was authorized in writing as an extra. The contractor remains bound by the contract price even where unexpected difficulties involve additional expense.
Statutory Interpretation — Construction of Contracts — Intention of the Parties
The court must look to the particular contract in order to discover the intention of the parties. Where parties have deliberately cancelled a standard form arbitration clause and substituted their own provision for settlement of disputes, the court must give effect to that expressed intention and interpret the substitute clause according to its terms, not by reference to the cancelled standard provision.

Legislation cited (2)

  • Civil Procedure Code, 1882 s.34
  • Indian Contract Act s.45

Cases cited (11)

  • Sheehan v Great Eastern Railway Company (16 Ch. 59)
  • Sharpe v San Paulo Railway Co (1873 Ch App 609)
  • Laidlaw v Hastings Pier Co (1874)
  • Stevenson v Watson (1879) 4 CPD 148
  • Lloyd Brothers v. Milward, reported in Hudson on Building Contracts, 2nd Edition, at pages 454
  • Clemence v. Clark, reported in Hudson on Building Contracts, 2nd Edition, at page 207
  • Richards v May (1883) 10 QBD 400
  • Goodyear v Weymouth (35 LJCP 12)
  • Rain Sebuk v Ramlall Koondoo (6 Calcutta 815)
  • Batterbury v Vyse (2 H & C 42)
  • Ludbrook v Barrett (36 LT 616)

Full judgment

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British East Africa Corporation Limited v Kanji and Another (Civil Appeal No. 16 of 1939) [1939] EACA 62 (1 January 1939)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.