Is a conditional certificate of practical completion valid?

In H & M Constructions (NSW) Pty Ltd v Golden Rain Development Pty Ltd (No 4) [2023] NSWSC 925, the Supreme Court of NSW had to consider circumstances where:

  1. Clause 34.7(b) of the contract provided that once the contractor gave the superintendent a request to issue a certificate of practical completion, the superintendent had a choice. Either it could issue a “Certificate of Practical Completion evidencing the Date of Practical Completion” or it could give “written reasons as to why Practical Completion has not been achieved”.
  2. The superintendent issued a conditional certificate of practical completion, conditionally upon “completion” of the 10 identified issues.

Ball J held that the contract did not authorise the issue of a conditional certificate of practical completion. Nor did the conditional certificate comprise a document “evidencing the Date of Practical Completion”. In order to be such a document, the conditional certificate would have had to specify what, as at the date of its issue, was the actual date of practical completion; not what date would be the date of practical completion if all of the specified “issues” were completed.

His Honour said that if a conditional certificate was taken to be a certificate of practical completion, it would leave the parties in a state of uncertainty, as the date of practical completion would depend on if, and when, the specified “issues” were completed.

This was the same conclusion to which Rees J came in Parkview Constructions Pty Ltd v Futuroscop Enterprises Pty Ltd [2023] NSWSC 178 in relation to a contract with indistinguishable wording.

The Conditional Certificate was thus a document for which there was no authority in the Contract and thus had no contractual effect.

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Stephen Pyman – Director


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