1947 Present : Keuneman and Canekeratne JJ.

MOHAMED, Appellant, and WIJEYEWARDENE, Respondent.

232-D.C.Colombo, 14,579

Building contract-Provision, for payment of liquidated damages for delay in completion of  building-Completion of building-condition precedent for applicability of such provision.

 In a building contract a provision for payment of liquidated damages for delay in completion of the building applies, unless otherwise expressly provided for, only when the Contractor has in fact completed the building, and has no application where he does not complete the work.

APPEAL from a judgment of the District Court of Colombo.

The plaintiff sued the defendant for damages on an alleged breach of a building contract. He alleged that the defendant, the builder, had without justification stopped the execution of the works and failed to proceed with and complete the same.

The defendant has in fact agreed to complete the buildings ready for occupation by May 21,1942. This was under clause 21. Clause 22 of the agreement ran as follows:-- "22. If the contractor fails to complete the works by the date named in clause 21 or within any extended time to which he may become entitled under these presents and if the architects shall certify in writing on or before the date of issue of their certificate for the last payment to which the contractor may become entitled here under that the works could reasonably have been completed by the said date or within the said extended time, then the contractor shall pay or allow to the employers the sum of Rs.500 per month as agreed and liquidated damages and not by way of penalty of every month beyond the said date or extended time, as the case may be, during which the works shall remain unfinished, and such damages may be deducted from any moneys due or which may become due to the contractor."

It was argued on behalf of the appellant that clause 22 could only operate if the builder or contractor in fact completed the building and had no application where he did not complete the work.

H. V. Perera, K.C. (with him C. Thiagalingam), for the defendant, appellant.

N. Nadarajah, K.C. (with him Ivor Misso), for the plaintiff, respondent.

Cur. adv. vult.

February 26, 1947. KEUNEMAN J.-

This is action for damages on an alleged breach of building contract. The plaintiff alleged that the defendant, the builder, has without justification stopped the execution of the works and failed to proceed with and complete the same. Plaintiff claimed as damages (1) Rs.4,000 from the date of the alleged breach until date of action at the rate of Rs.500 per month, and (2) Rs.2,651.25 being the balance due out of an advance of Rs.6,000 with interest at five percent. Less the sum of Rs.3,723.75 being for work done by the defendant.

The defendant raised various defences to the plaintiff's claim and counterclaimed on various ground in the sum of Rs.2,035.76.

The district judge as regards plaintiff's claim (1) awarded him Rs.3,000 and as regards claim (2) Rs. 1,587.66, making a total of Rs.4,587.66.

The principal matter which was argued before us related to plaintiff's claim (1). The only issue framed regarding damages was issue 5 as amended, viz., "Has defendant become liable under clause 22 of the contract to pay plaintiff as agreed and liquidated damages Rs. 500 per mensem for every month the work remain unfinished after May 21, 1942?". The defendant in fact agreed to complete the buildings ready for occupation by May 21,1942. This was under clause 21.

Clause 22 of the agreement P 1 runs as follows:-

"22. If the contractor fails to complete the works by the date named in clause 21 or within any extended time to which he may become entitled under these presents and if the Architects shall certify in writing on or before the date of issue of their certificate for the last payment to which the contractor may become entitled here date or w