August 2017
If change of circumstances is a purely objective fact, this does not give rise to the issue that the principle of change of circumstances does not apply to a party when such fact is attributable to such party(Taiwan)
Luke Hung
The Supreme Court rendered the 105-Tai-Shang-189 Civil Decision of January 28, 2016 (hereinafter, the "Decision"), holding that if change of circumstances is a purely objective fact, this does not give rise to the issue that the principle of change of circumstances does not apply to a party when such fact is attributable to such party.
According to the facts underlying this Decision, the Appellant in this matter asserted as follows. The Appellee was retained by Taipower Co., the Intervenor in this matter, and entered into the agreement at issue to contract the project at issue. During the construction, the construction period was affected by force majeure such as rain, the competent authority's delayed issuance of the construction permit, obstacles such as waste piles, traffic control by right of way authorities during the Chinese New Year. Although the Appellee agreed to extend the construction period by 560 days, still the above factors were not foreseeable by the Appellant at the time of contracting. Therefore, the Appellant requested payment of indirect construction cost so increased (including general construction insurance premiums, monitoring system fees, profit-seeking income taxes on contractors and management fees) pursuant to the principle of change of circumstances under Article 227-2, Paragraph 2 of the Civil Code.
According to the Decision, change of circumstances pertains to purely objective facts and does not give rise to the issue that the principle of change of circumstances should not apply if the such facts are attributable to the party. Therefore, the original trial court was already questionable in concluding that the principle of change of circumstances did not apply to the construction delay of the project issue due to the finding that the delay in obtaining the construction permit was caused by the competent authority's multiple rejection of applications because the application documents were not in order, and that the Appellant could have prevented such circumstances.
It was further held in this Decision that the design change of the project at issue impacted the critical path of the construction, and the construction delay was caused by the blocking of the jacking path by waste piles which did not fall within the original scope of construction. Since the location of the waste piles did not fall within the original scope of the Appellant's construction, the possibility that such waste piles would undermine construction was not foreseeable to the Appellant when the agreement at issue was executed. Therefore, the original decision which directly held that such claim could not be asserted was obviously erroneous. Therefore, the original decision was reversed and remanded.
The Supreme Court rendered the 105-Tai-Shang-189 Civil Decision of January 28, 2016 (hereinafter, the "Decision"), holding that if change of circumstances is a purely objective fact, this does not give rise to the issue that the principle of change of circumstances does not apply to a party when such fact is attributable to such party.
According to the facts underlying this Decision, the Appellant in this matter asserted as follows. The Appellee was retained by Taipower Co., the Intervenor in this matter, and entered into the agreement at issue to contract the project at issue. During the construction, the construction period was affected by force majeure such as rain, the competent authority's delayed issuance of the construction permit, obstacles such as waste piles, traffic control by right of way authorities during the Chinese New Year. Although the Appellee agreed to extend the construction period by 560 days, still the above factors were not foreseeable by the Appellant at the time of contracting. Therefore, the Appellant requested payment of indirect construction cost so increased (including general construction insurance premiums, monitoring system fees, profit-seeking income taxes on contractors and management fees) pursuant to the principle of change of circumstances under Article 227-2, Paragraph 2 of the Civil Code.
According to the Decision, change of circumstances pertains to purely objective facts and does not give rise to the issue that the principle of change of circumstances should not apply if the such facts are attributable to the party. Therefore, the original trial court was already questionable in concluding that the principle of change of circumstances did not apply to the construction delay of the project issue due to the finding that the delay in obtaining the construction permit was caused by the competent authority's multiple rejection of applications because the application documents were not in order, and that the Appellant could have prevented such circumstances.
It was further held in this Decision that the design change of the project at issue impacted the critical path of the construction, and the construction delay was caused by the blocking of the jacking path by waste piles which did not fall within the original scope of construction. Since the location of the waste piles did not fall within the original scope of the Appellant's construction, the possibility that such waste piles would undermine construction was not foreseeable to the Appellant when the agreement at issue was executed. Therefore, the original decision which directly held that such claim could not be asserted was obviously erroneous. Therefore, the original decision was reversed and remanded.
