In the third article of this series, we break down the popular AS4902 standard form design and construct contract in accordance with the role a superintendent plays and how this is regulated under your contract and by law.
For a look at how superintendents work under a variety of contracts (and not just an AS4902), see our previous article here.
What is a superintendent?
As a starting point, clause one of the AS4902 defines the superintendent as the person appointed under Item 5 (as included in Part A), or another person appointed in writing by the principal (and notified in writing to the contractor).
However, what a superintendent actually does under a contract is specific to its terms. As a general rule (and as per the AS4902), a superintendent will exercise various assessment and certification functions under a contract as an (in theory) independent party. We will go into this independence and the associated obligations in further detail below.
The general rule in Queensland is, if your contract is for 'building work', as defined by the Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act), the appointed superintendent will be required to hold a licence to carry out that role. That said, the scope and type of licence required will depend on the specific work performed by the superintendent. If you have any concerns about the type of licence required, you should seek independent legal advice.
Contractual obligations of the superintendent
Clause 20 of the AS4902 states that the principal shall ensure there is a superintendent at all times, and that the superintendent acts reasonably and in good faith when exercising their role. Importantly, this clause does not provide that the superintendent acts independently, but neither does it state they are able to act in the interests of a particular party, or as an agent (generally for the principal).
Clause 21 of the contract allows the superintendent to appoint a superintendent's representative, who will be delegated certain functions from the superintendent. However, this does not prevent a superintendent from exercising its functions. A contractor can also object to the appointment, after which the superintendent must terminate it.
Despite their role, a superintendent is not a party to the contract and is merely a person appointed under the contract to carry out specific functions.
What are the common functions of a superintendent?
A superintendent generally undertakes an assessment and certification function. They will also provide directions under the contract where there are issues of ambiguity or discrepancy. Some of the superintendent's functions in that regard include, but are not limited to:
- pricing provisional sums under clause 3
- directing separable portions under clause 4
- directing the proper interpretation of a discrepancy under clause 8.1
- directing a suspension of the works under clause 33.1, or approving suspension of works under clause 33.2
- assessing an extension of time claim made by the contractor under clause 34.3 and 34.4
- certifying liquidated damages under clause 34.7, or delay damages under clause 34.9
- directing, assessing and certifying variations under clause 36
- assessing a payment claim and issuing a payment schedule under clause 37.
A superintendent is also restricted to the powers it is given under the relevant contract. The superintendent has no other rights than those expressly set out in the contract.
It is common for construction contracts to include conflicting obligations for superintendents (though the unamended AS4902 does not). For example, the recent decision of V601 Developments Pty Ltd v Probuild Construction (Aust) Pty Ltd  VSC 849 (V601 v Probuild) discussed this conflict in the context of a project manager (acting, in effect, as a superintendent but also as an agent for the principal). We note this did involve an amended AS4902.
In V601 v Probuild, the project manager acting as an agent was obliged to act honestly, but was not required to act independently. However, when the project manager acted as an assessor and certifier, they were required to act independently and reasonably. One of the issues in dispute was that the project manager, even whilst carrying out those assessment and certification functions, still appeared to be acting exclusively in the principal's favour and denying Probuild's claims. The decision is lengthy, but the court relevantly determined that there was sufficient collusion between the project manager and the principal (when the certification and assessment functions were being performed) to conclude both parties had breached the contract. Accordingly, Probuild was entitled to significant damages.
Those acting as, or with, superintendents need to keep these conflicting obligations in mind.
Appointing an independent third party rather than an employee of the principal is one way to keep an appropriate separation. However, as the principal usually foots the bill for the engagement of a superintendent, unconscious bias may come into play and must be kept in mind when communicating and dealing with a superintendent.
A superintendent needs to be particularly cautious of their obligations under the contract. If a superintendent gets it wrong, there can be unintended consequences. Some of those can be:
- if a superintendent makes an error with a payment certificate (which is also often a payment schedule for the purposes of the relevant security of payment legislation), if an adjudication application is brought, the response available to the principal may be limited
- variation claims that are improperly assessed could later put the parties in dispute and end up costing the principal a significant sum or leave the contractor unfairly out of pocket.
The above is only a brief look at some of the issues relevant to superintendents. If you have any concerns about acting as a superintendent or the superintendent on your project, please send in your enquiry here.
You can also revisit our previous instalments of this series where we discuss how to negotiate the contract sum and issues relevant to the 'security' clause and its effects in AS4902 contracts.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.