Protect Yourself

Tuesday, 22 January 2008

Protecting your work can be VERY EXPENSIVE if you don't do it.

A builder is entitled to set-off the cost of defects from a payment claim.  It is common, in a competitive bid environment to pay little attention to 'protection' clauses in a specification.  

It is also very common for builders to pay no regard to the proper sequence of construction to avoid damage to completed work.  How often do you see tradesmen crunching across completed floor tiling?  The name of the game is to start everything at the earliest opportunity and fix the damage later.

It is a dangerous cocktail, since the subcontractor may still be liable to protect its work, and rectify defects, until completion of the job, regardless of how or who caused the damage.

It is illustrated in Hennessey Glass & Aluminium v Eagle Star Trustees, where the judge found that the subcontractor was required to supply glass that was free from scratches and other defects and it was required to protect it after installation until final handover.  Whether the glass was supplied scratched or was later damaged made no difference.  The subcontractor was liable.  The decision was upheld in the Qld Court of Appeal.

It gets worse.  If the damage was was found to be the result of defective workmanship (i.e., lack of protection), the loss may excluded from an insurance recovery claim under the defective workmanship exclusion found in contractor's insurances.
[Adapted from Carter Newell Constructive Notes]

LESSON: If you are responsible under your contract for protecting your own work until completion of the job, take it seriously.  Add sufficient to your tender to cover the cost of protecting your work, or make it clear in your tender that protection is excluded from your offer.  If you are requested to start work before the job is at a reasonable point to commence, obtain a waiver from the builder with  respect to damage by following trades, or, at least give notice in writing that you will not be responsible for damage from following trades. (not perfect, but everything helps).  Follow up on your work to see that protection has not been removed or damaged.

See also Editorial on Identifying Defects.