Background view
In the construction contract disputes, there are often many legal relationships involved, the facts of the case are relatively complex, the trial period is relatively long, and some cases still have the interweaving of the lawsuit and counterclaims, and the need to start the appraisal procedure, etc., for the employer or the contractor, it is possible that the need to claim a preliminary judgment on a more urgent legal relationship may arise based on its vital interests. Therefore, in construction contract disputes, it is particularly necessary to promote the implementation of the advance judgment system in order to effectively resolve the dispute and prevent the losses of all parties from expanding due to the delay of litigation.
System**
Article 153 of the Civil Procedure Law of the People's Republic of China stipulates: "When a people's court hears a case, a part of the facts is already clear, and it may make a judgment on that part in advance. ”
Court Views
Supreme People's Court
Opinions of the 41st Judges' Conference of the Fifth Circuit Court of the Supreme People's Court in 2019:
10.The application of the prior judgment in the dispute over the construction contract of the construction project The people's court shall, on the basis of the actual circumstances of the case, determine whether to apply Article 153 of the Civil Procedure Law, and in the case that the application submitted by the parties in the litigation is unclear or in conflict with the provisions of the law, the people's court shall inquire about the application submitted by the party, and explain the corresponding legal effect after clarifying its true meaning, so as to avoid making a judgment on the basis of vague literal meaning. There are situations where the judgment result is inconsistent with the parties' expression of intent to dispose of their rights.
Henan Provincial High People's Court
Article 1 of the "Work Guidelines on Strengthening the Substantive Resolution of Disputes in the Construction Field" issued by the Henan Provincial High People's Court on August 27, 2021 prominently emphasizes:
Courts at all levels shall actively implement the provisions of article 153 of the "Civil Procedure Law of the People's Republic of China", and shall promptly make a judgment in advance where there are no objections from all parties and other conditions for an advance judgment are met; Where it is necessary to remand for new trial, the entire case should also be remanded with caution.
When to apply
After searching the judgment documents of the Supreme People's Court in recent years, it is found that in the construction contract disputes, the advance judgment system can be applied mainly in the following situations:
1. A judgment may be made in advance on the undisputed part of the project payment
The project price is the main point of dispute between the employer and the contractor in the construction contract dispute, especially the final settlement price of the project. The project cost appraisal takes a long time because of its professionalism and rigor. If a judgment is made on the whole of the litigation case after the completion of the cost appraisal procedure, it will cause an obvious imbalance in the interests of the contractor, especially the contractor may be burdened by the debt litigation of materials, machinery suppliers, labor subcontractors, and migrant workers due to financial pressure. Therefore, it is conducive to resolving the conflict and resolving the dispute by making a judgment that the employer bears the obligation to pay the project price within the scope of the cost that is not disputed by the employer, and the trial and judgment of other claims and legal relations are made after the completion of the cost appraisal.
In the case of Anyang Zhongguangfa Huicheng Real Estate *** v. Hangzhou Construction Engineering Group Co., Ltd. [(2019) Zui Gao Fa Min Zhong No. 275], the contractor sued and requested: 1. Termination of the supplementary contract for the construction of the project; 2. The employer is ordered to pay 9608 for the project90,000 yuan, liquidated damages of 8 million yuan, and capital occupation fee of 2,331430,000 yuan; 3. Order the employer to compensate for the loss of work stoppage 9442.39 million yuan and the loss of expected benefits caused by the termination of the contract was 102603.85 million yuan; 4. Confirm that the contractor has the priority right to be compensated for the auction price of the construction project.
After trial, the court of first instance held that since the appraisal of the project price involved in the case had not yet been completed, the court of first instance determined that the employer owed 5585 the project price based on some of the facts that had been ascertained650,000 yuan (19777.)650,000 yuan, 141.92 million yuan). Other disputed matters in this case (including the capital occupation fee to be paid by the employer) and the burden of litigation costs will be adjudicated separately after the appraisal opinion is made.
The court of second instance held that in this case, the amount of the undisputed payment and the amount of the undisputed amount payable had been ascertained, and the former adopted the amount approved by the contractor, while the latter adopted the amount shown in the evidence adduced by the employer. On the basis of the determination of the above two amounts, the facts of the amount of the project money that the employer should pay to the contractor are clear before the judicial appraisal organ entrusted by the people's court makes an appraisal opinion. Therefore, the court of first instance made a preliminary judgment on the basis that some of the facts of the case were already clear, which was in accordance with the law.
In the case of Nanchang No. 1 Construction Engineering Co., Ltd. v. Shangrao Maolin Real Estate Development *** Construction Contract Dispute [(2018) Gao Gao Fa Min Zhong No. 332], the contractor sued and requested: 1 The employer to pay the arrears of the project 10247876007 yuan and interest and liquidated damages of 100 million yuan; 2. Auction and sell the project in accordance with the law and claim the priority right of compensation; 3. The employer shall pay a total of RMB 5 million in cooperation fees and liquidated damages for the defaulted subcontracted project.
After investigation, the court of first instance held that the "Project Final Account Report" unilaterally produced by the contractor stated that the overall cost of the project involved in the case was 10564820625 yuan, the employer through the unilateral entrustment audit appraisal, self-admitted that the overall cost of the project involved in the case is 7524919696 yuan, the difference in cost between the two is about 30 million yuan, and there is a dispute between the two sides on the calculation of the actual cost of the project. The overall cost of the project involved in the case shall be appraised by an appraisal agency to confirm the actual cost of the project involved in the case, and then the amount of the project payment paid by the employer shall be determined, and the amount of the project payment owed by the contractor shall be calculated. Due to the long time required for the entrusted appraisal, in order to ensure that the creditor's claim is realized as soon as possible, the court may, in accordance with the law, make a judgment in advance on some of the facts of the case that have been ascertained and are not disputed by the parties. In the lawsuit, the employer admitted that the total cost of the project involved in the case was 7524919696 yuan, claiming that 14 project payments totaling 49526930 yuan had been paid to the contractor. Although the contractor has objections to the total project cost and the amount of the project price paid claimed by the employer, and the total project cost involved in the case and the actual amount of the project paid by the employer need to be determined by the court on the basis of appraisal opinions and other evidence, the employer still pays at least 25722266 to the contractor according to the total project cost and the amount of the project price paid according to its self-admitted total project cost and the amount of the project price paid96 yuan (75249196.)96 yuan-49526930 yuan). Therefore, the court ruled that the employer should pay the contractor 25722266 for the project96 yuan. Other facts to which the parties have objections are to be determined in subsequent judgments.
2. A judgment may be made in advance on the part of the lawsuit that is not in dispute
In addition to the project price, the construction period and the quality of the project are also the two most important points of dispute between the employer and the contractor in the construction contract dispute. Generally speaking, when the contractor files a claim for project price, the employer will file a counterclaim for breach of contract and project quality, especially for project quality issues, which will often involve appraisal procedures, which will lead to slow progress in litigation. Therefore, in order to balance the rights and interests of the two parties, the court can also apply the prior judgment system to the undisputed part of the project price in this lawsuit.
In the case of Guizhou Construction Engineering Group No. 1 Construction Engineering Co., Ltd. v. Songyuan Jintanyuan Real Estate Development *** Construction Project Construction Contract Dispute [(2017) Gao Gao Fa Min Zhong No. 225], Guizhou No. 1 Construction sued: Order the employer to pay a total of 50.82 million yuan in compensation for the project and the compensation for the nest workers (subject to the audit conclusion of the project cost) and interest; In this case, the employer filed a counterclaim due to the quality of the project.
The court of first instance determines the total amount of the project settlement money by entrusting an appraisal agency to appraise the project cost, and if it ascertains that the employer has already paid, it may determine the amount of the project money owed by the contractor to the contractor. Although the employer filed a quality appraisal, a quality maintenance plan and an appraisal of the repair costs, due to the long appraisal time, in order to avoid causing litigation to the parties and expanding losses, it first made a judgment on the part of the contractor in the present lawsuit, and made a judgment on the counterclaim part after the facts were ascertained.
3. The contractor may make a judgment in advance if it cooperates with the completion acceptance filing
Of course, in addition to the construction period and project quality issues, there are also cases in which the employer counterclaims the contractor against the contractor, and the contractor is also required to cooperate in handling the completion and acceptance case. In this regard, the court also held that a judgment could be made on the basis of ascertaining whether the contractor had fulfilled its obligations.
In the case of Zhejiang Kunlun Construction Group Co., Ltd. v. Anhui Wenyue Investment Real Estate *** Anhui Provincial Department of Culture Construction Project Construction Contract Dispute [(2015) Min Yi Zhong Zi No. 269], the contractor sued for payment of the project price and compensation for the delay in the construction period; The employer counterclaimed that the contractor should compensate for the loss of construction delay and interest, cooperate with the comprehensive acceptance of the completion of the project and handle the filing of the completion acceptance of the project, and requested the court of first instance to make a judgment on the counterclaim for the completion acceptance record.
The contractor raised a defense against the employer's counterclaim: the employer maliciously failed to pay the project price and did not meet the requirements for completion acceptance, and the contractor had the right to refuse to cooperate with the acceptance procedures.
After trial, the court held that in this case, the completion acceptance and filing procedures could not be handled in a timely manner, which had affected the buyer's right to apply for the property right certificate. Weighing the interests of all parties, the court should make a judgment in advance; If the employer has a breach of contract of late payment of the project price, it can be resolved in this lawsuit. In summary, the court ruled in advance that the contractor should cooperate with the employer in handling the relevant formalities for the comprehensive acceptance of completion and the filing of completion acceptance in accordance with Article 60, Paragraph 2 of the Contract Law, Article 16, Paragraph 1 and Article 49, Paragraph 1 of the Regulations on the Quality Management of Construction Projects.
Conclusion
The application of the prior judgment in the construction contract dispute will be conducive to resolving the dispute, ensuring the realization of the parties' claims for the project payment, alleviating the financial pressure of the contractor, and preventing the problem of migrant workers' wage arrears from the source. At the same time, it will also reduce the obstacles to the completion and acceptance of the employer, and avoid the social inefficiency caused by the delay in the judicial process. This time, the work guidelines issued by the Henan Provincial High People's Court have positive guiding significance for the parties or lawyers in construction contract dispute cases. In the process of handling construction contract disputes in the future, more attention should be paid to the application of the advance judgment system to safeguard their legitimate rights and interests.
*: Lawyer Wang Dazhuang.