It’s been a busy season and it looks as if it is going to get busier!  There is doom and gloom all around about recession and I wonder why.  I believe firmly that we can talk ourselves into recession and is harder to get out!  Successful people are the people that will go forward.  Recently I have been looking at various law cases and there are matters still floating about that require further discussion.  One such issue is “Practical Completion”.  It is a hoary old chestnut!  It is used as a sledge hammer to crack a nut at times; it’s used as bargaining tool for payment; it is used to delay and so on it goes.  It is often said that Practical Completion is a term of art which is easier to recognise that actually apply or describe.  In the Court of Final Appeal in Hong Kong, a case was heard called “Marner International Hotels Ltd .v. Atlas Ltd (2007) HK CFA 5; FACV 000003/2006”.

It has been deliberated and Hong Kong being so strongly influenced by the English Law Jurisdiction has examined in detail previous English Law Authorities and precedence.  They have indicated as I have already said that Practical Completion is a legal term of art, it is well understood to mean a state of affairs in which works have been completed free from patent defects other than ones to be ignored as trifling.  Now there’s an interesting word - trifling!  Other than what is meant by Law, I think a common man would say that they are of such insignificance that they will not impede the use of the work.  Minor patent defects can be ignored in respect of the use of the building.  The law doesn’t wish to concern itself with small matters such as this.  They have no significance in the running of the works and we would see them as snagging.  

Snagging is not a reason why Practical Completion is not issued.  Before this there were two positions stated the House of Lords one being Jarvis & Son Ltd v Westminster Corporation (1970) 1 WLR 637 and another case called Kave v Hosier Dickinson (1972) 1 WLR 146.  Also, two further cases which are cases of decisions at first instance, H W Neville (Sunblest) Ltd v William Press & Son Ltd (1981) 20 BLR 78 and Emson Eastern Ltd v EME Development Ltd (1991) 55 BLR.  These are the significant cases that guide certifiers in respect of Practical Completion.  The obligation of course as ever is under Project Manager, Engineer and/or Architect to decide in his/her mind what is trifling? Or in the words of the Law, de minimis i.e. of no consequence or extremely small.  It would be entirely abject to the decisions and wrong if one was to certify Practical Completion when major patent defects are in existence, that would be negligence!  Wisdom is used like Solomon, the first test would be very simple with the retention monies still being held i.e. the remaining half moiety of paying for the remedial works should the Contractor default.  

Furthermore dependant upon which form of contract is in use an undertaking can be given by the Contractor to the Employer that they will carry out certain snagging upon receiving Practical Completion Certificate.  It is common within JCT and other forms that this will happen in any event, it is a contractual obligation.  There are a number of people entering bespoke contracts which do not have the form that we commonly know as JCT, ICE, GC Works and NEC etc.  They will not have the contractual position stated within them, they may not even have Practical Completion stated or indeed release of retentions and/or when Practical Completion occurs and what events follow.  However we have occupation as a seal that the building is completed and the date and time that that occurs.  It doesn’t say its free from defects but what it does say is under a term of art, Practica