The Supreme Court rendered the 106-Tai-Shang-1607 Civil Decision of March 14, 2018 (hereinafter, the “Decision”), holding that in case of obvious unfairness due to any drastic change not foreseeable in the beginning for reasons not attributable to the parties after the legal relationship has occurred, it is only then that a court may render a fair adjudication based on the principle of change of circumstances.
According to the facts underlying this Decision, the Plaintiff filed a complaint alleging that it had served as a contractor for the Defendant’s project at issue. Later, damage occurred due to the Defendant’s improper instructions concerning the design thickness of the caisson bottom boards (hereinafter, the “Incident at Issue”), causing the caissons to be filled with sand and water and to be tilted with damage to the existing foundation improvements of the access road (hereinafter, the “Foundation Improvement at Issue”). Therefore, a ground freezing method was used to repair the caissons and foundation improvements with necessary expenses incurred, and construction payment for such portion was claimed according to the principle of change of circumstances. In the original decision, the Plaintiff partially prevailed, and both parties were dissatisfied and separately appealed
According to the Decision, in case of obvious unfairness as a result of realizing the original legal effect after the legal relationship has occurred even though the basis or environment is drastically and unforeseeably changed for reasons not attributable to the parties, it is only then that a court may render a fair adjudication based on the principle of change of circumstances by adding or reducing payment or changing other original effects.
It was further pointed out in this Decision that the parties disputed as to the applicability of the principle of change of circumstances. In particular, the Defendant also contended that the project at issue had adopted a system of construction accountability, and that the principle of change of circumstances did not apply since the Plaintiff’s failure to request clarification in writing regarding items in the project at issue showed that the Plaintiff was very clearly aware of the details about the project and potential performance risks and had assessed the risks. The original trial court did not ascertain facts associated with the change of circumstances in this matter, the acceptability of Chung-lu Construction’s assertion of the above change of circumstances, and any obvious unfairness as a result of performance based on the original contractual effect in case of any drastic change not foreseeable to the parties and not attributable to the parties after the contract was executed to an extent that the repair cost at issue was incurred and directly concluded that the Plaintiff could claim relevant construction payment according to the principle of change of circumstances. Since the original decision was found to be erroneous in the application of laws, it was reversed and remanded.