212 / 482
GAZETTE
JULY 1989
decree on the counterclaim could
be set off against the claim on foot
of an Architect's Certificate.
This decision appears to be
diametrically opposed to the
decision of Finlay P. in
Sisk -v-
Lawter.
Murphy J. (who was
considering a contract in the form
of the 1977 edition of the R.I.A.I.
Standard Form) chose not to follow
that case. He accepted that the
principles were correctly set out by
Finlay P. in the passage quoted
above, and said that he would have
been extremely slow to differ from
the conclusion reached by the
President of the High Court were it
not for what he regarded as "an
important distinction" namely, that
the latter half of clause 38 (the
arbitration clause) of the 1977
edition of the R.I.A.I. form provides
that "such reference, e x c ep t . .. on
the question of certificates, shall
not be opened . . ." This it is sub-
mitted, was not an important
distinction at all for t wo reasons.
Firstly, it is submitted that if one
reads the clause in its entirety, the
clause appears to contemplate that
the principal " q u e s t i on
of
certificates"'about which there will
be a dispute or difference is the
withholding of one (the clause
begins . . . " i n case any dispute or
difference shall arise between the
employer and the architect on his
behalf and the c on t r a c t o r . .. as to
the construction of the contract or
as to any matter or thing arising
thereunder or as to the withholding
by the architect of any certificate
. . ."). It is possible to imagine a
dispute arising during the course of
the contract as to the interpretation
of a certificate. Apart from that
however, it is submitted that the
mere use of the words "question of
certificates" in the context of the
arbitration clause does not justify
an inference that the liability to pay
an interim certificate on presen-
tation, is anything other than an
absolute one. Secondly, apart from
one or two minor differences, there
is no distinction between the
wording of the arbitration clause in
the 1966 and 1977 editions of the
R.I.A.I. standard form. Murphy J.
concluded his judgment in the
P. J.
Hegarty
case saying that even if he
had decided it differently, he would
nevertheless have granted a stay of
execution on the judgment on foot
of the certificate to enable the
counterclaim to be prosecuted. As
can be seen, the law in relation to
this area was left in a most unsatis-
factory situation as a result of the
conflict between these two Irish
decisions.
Rohan Construction Ltd. -v-
Antigen
This is the importance of the recent
decision of Costello J. The claim by
Rohan Construction Limited was
for summary judgment on foot of
an Architect's Interim Certificate in
the sum of £191,116 and interest
accruing thereon. The Defendants
brought a Motion seeking to stay
the proceedings pending arbitration
of a claim by them for a sum of
approximately £400,000 damages
in respect of alleged defective
workmanship and materials. It had
been agreed between the parties
that this proposed claim against
the contractors should be referred
to arbitration and final decision of
an agreed arbitrator. However, the
Plaintiffs disputed the Defendants
entitlement to stay their claim on
foot of the Architect's Interim
Certificate pending the outcome of
the arbitration or to seek ultimately
to set off the Defendants' award in
the arbitration (if any) against the
claim on foot of the certificate.
Costello J. held that just like the
1966 ed i t i on of the R.I.A.I.
Standard Form, the relevant terms
of the 1977 ed i t i on were
inconsistent with the exercise of a
right of set off against a claim on
foot of an Architect's Certificate.
He expressly followed the decision
of Finlay P. in
Sisk -v- Lawter
and
declined to follow the decision of
Murphy J. in
P. J. Hegarty -v- Royal
Liver.
Accordingly, he refused to
stay the claim for summa ry
judgment pending arbitration.
However, the Defendants also
raised the additional point of a stay
of
execu t i on
pending
the
determination of the arbitration.
This application was made under
Order 42 Rule 17 of the Rules of the
Superior Courts. Referring to the
unreported decision of Barrington
J. in
Agra Trading -v- The Minister
for Agriculture
(19th May, 1988)
Costello J. refused a stay of
execution on the basis that the
agreement of the parties as
reflected by the terms of the 1977
edition of the R.I.A.I. Standard Form
was that there should be no set off
and accordingly, to grant a stay of
execution would be inconsistent
with the intention of the parties and
in normal circumstances it would
not be proper to grant a stay of
execution. He pointed out that the
Court still had discretion in cases
such as this to grant a stay of
execution but there must be
"special reasons" for overriding the
intention of the parties and in this
case, not only were there no special
reasons for doing so, but there
were reasons of some substance
against granting a stay namely, that
a considerable portion of the
A r c h i t e c t 's
Ce r t i f i ca te
was
earmarked for sub-contractors and
the principal contractors were
effectively trustees of this money
and the sub-contractors ought not
to be prejudiced in this way simply
because the employers raise a
counterclaim against the principal
contractors.
In the light of the decision of
Costello J. in
Rohan Construction
-v- Antigen,
it seems clear that
P. J.
Hegarty -v- Royal Liver Friendly
Society
no longer represents good
law in this j u r i sd i c t i on and
Architect's Interim Certificates
issued under the 1977 edition of
the R.I.A.I. Standard Form cannot
be subject to a set off in respect of
claims for unliquidated damages
nor, in the absence of special
circumstances, can judgments for
sums owing on foot of Architect's
Interim Certificates be subject to a
stay of execution so as to enable
employers to prosecute claims in
respect of defective workmanship
or materials.
•
James Nash
F.S.S. DÍ
P
.
Forensic Document Examiner
and
Handwriting Consultant
38, Monastery Rise,
Clondalkin, Dublin 22.
Telephone: (01) 571323
198