What You Should Consider Before Paying for Site Material

8/13/2019 What You Should Consider Before Paying for Site Material

1/15

{

What you should

consider before payingfor Site Material?

Presented by Mazuan Lin


2/15

DefinitionBuilding Contract Dictionary by Chappell, Marshall, Powell-Smith andCavender


3/15

Contract Clauses

Brief Description of RelevantContract Clauses

Contract Clauses

PAM

1998

PAM

2006

PWD

203A

KLCC

2012Material delivered shall not beremoved from site

14.1 14.1

20.0 46.4

Contractor shall be responsiblefor loss or damage to materialsand goods

14.2 &14.4

14.3

When material paid it shall become a property of theclient/government

14.2 &14.3

14.2

Warranty of title of goods andmaterials

- 14.4 - -

Value of Materials and Good(Default)

100% 100% 90% ClientDiscretion


4/15

a) Delivered to the Site;

b) Intended for incorporation into the permanent works;

c) Reasonably, properly and not prematurely brought to theSite;

d) Adequately protected against weather and other casualties.

In practice, i add up some more...

e) The materials has been approved by relevant consultant (ifany);

f) Attached with Payment Voucher, Receipt, Purchase Order(PO) and Delivery Order (DO);

g) Verified by the resident architect/engineer or clerk of work.

Criteria for Payment


5/15

Clause 14.2 & 14.3 (PAM1998)Clause 14.2 (PAM 2006)Clause 20.0 (PWD 203A)

All the above clause stated that when the materials paidunder Materials on Site, it shall be a property of theEmployer/Government.

Question: Does those clauses bound the third party??i.e Supplier

Reference made to a Legal MaximNEMODAT NON QUAD HABET

A MAN CANNOT GIVE WHAT HE HAS NOT

Who is the Owner???


6/15

DAWBER WILLIAMSON V HUMBERSIDE COUNTYCOUNCIL

Plaintif supplied slates to the site. The Main Contractorthen claimed it as an Unfixed Material. PP hasevaluated and included the Slate into IPC whichsubsequently being paid.

Later on, the Main Contractor was declared bankruptand unable to made payment to the Plaintif.

Plaintif came to site and claimed for the material butwas not allowed by the client.

Court has then decided that the Plaintif have his rightsfor the slates as no payment received by him from theMain Contractor.

Court Cases


7/15

LIM CHUI LAI V ZENO

Zeno is a supplier for concrete culvert to a contractornamed Ahmad.

Later on Ahmads contract was terminated by MPPJ.

Zeno contacted MPPJ saying that the payment has yetto be made by Ahmad. As such, the materials are still

owned by Zeno.

When Zeno went to site, it was found that Ahmad hadsold the materials to Lim.

Court has decided that Ahmad has no right to sell thematerial to anyone. Ahmad is only a BAILEE underthe law as long as the payment has yet to be made toZeno. In that case, Zeno still hold the rights against thematerials.

Court Cases


8/15

Contractor needs to supply the material at siteor adjacent to the site. The contractor also need

to be responsible on the suitableness of thematerial including damage and loss as well.

TEST VALLEY BOROUGH COUNCIL VGREATER LONDON COUNCIL The court

has decided that the contractor will providegood and proper materials. The material will beFIT FOR THE PURPOSE so far as that has beenmade known to the contractor.

Court Cases


9/15

In Young and Martin Ltd - v - MacManus Child Ltd(1969), the Contractor supplied defective roof tiles to

the Employer under a house building contract. The brand and manufacturer for the tiles had beenspecified, but the Contractor had been allowed tomake his own contractual arrangements for supplyof the tiles from a sub-contractor. The House ofLords held that in the absence of any reliance therewas no room for the implication of a term as toreasonable fitness for purpose. However, theabsence of reliance did not displace the implicationof the term for satisfactory quality.

Court Cases


10/15

Contractor is required not to supply the material prematurelyfrom site activity. What is the meaning of prematurely?

Refer case of STANLEY HUGH LEACH Court decided that theactual activity duration to become a basis and not according to

contractors work program.

This is crucial as to avoid any damage risk, early payment andshall be in accordance with SALES OF GOODS ACT.

Court Cases


11/15

What if we wereasked to payMaterial OFF

Site????


12/15

1. Check whether there is provision in CoC forMaterials off Site.

2. Materials must be in BONDED store / fullyinsured

3. Materials must be properly placed in store - awayfrom other materials/equipment

4. Materials must be properly identified for thatparticular project/client

5. The supplier/contractor/subcon must show provethat the ownership have been transferred to themfrom the manufacturers or whoever they boughtthose materials from.

6. Consider asking for a parent company guaranteeor a performance bond in return for payment.

Before you pay Materials offSite


13/15

What iswrong with

this MOS?


14/15

1. Pay for MOS without looking at it.2. They just simply take the rates from BQ as a

basis.3. Using Current Market Price instead of

Market Price during tender.4. Payment made for premature items.5. Temporary works included.6. Never ask for Transfer of Ownership Proof.

Dosa-dosa Seorang QS


15/15

With knowledge, certify Material On Site without fear......

Treat contractor as partner to complete.... Not an enemy tocompete.

Thank You!

Documents

What You Should Consider Before Paying for Site Material