Elements (Europe) Ltd v FK Building Ltd [2023]

In Elements (Europe) Ltd -v- FK Building Ltd [2023] EWHC 726 (TCC), the TCC has provided helpful guidance concerning the proper construction of an important element of a JCT standard form.

The Background to the Case

FK engaged Elements to undertake the remediation of apartment modules as part of a residential scheme in Salford. The sub-contract incorporated the JCT Standard Building Sub-Contract Conditions (SBCSub/C 2016).

Following a payment dispute between the parties, Elements commenced adjudication proceedings in relation to its application 16. The adjudicator awarded Elements c.£3.9m plus interest and costs.

FK failed to pay and Elements asked the TCC to enforce the award. FK brought a related Part 8 claim alleging the relevant payment application had been submitted late and was therefore invalid.

The TCC deemed it appropriate to hand down Judgment notwithstanding the parties had by that time settled their underlying dispute, as it concerned the proper construction of widely-used JCT terms, which had not previously been considered by the courts.

What did the Court Decide?

The Application had been served at 22.07h on 21 October 2022. The Interim Valuation Date was 25 October.

FK alleged firstly that “days” meant 4 clear days. The TCC disagreed. There was an important distinction between the term “clear days”, and the term “days”. As there was no express reference to “clear days” in the sub-contract, the TCC rejected FK’s argument.

FK fell back on its argument that the Application nevertheless needed to be served within “site working hours”. The TCC again disagreed. There was a long line of established authority suggesting courts do not deal “in fractions of a day”. Generally, where a contract specifies a day for performance of an obligation, the party in question has until the end of that day to perform it (i.e. up to 23:59:59hrs on that day). The sub-contract in this instance did not expressly stipulate that payment applications must be received by a particular time of day.

Analysis

If contracting parties intend documents to be issued by a particular time of day and/or by clear days before an event, clear express wording will be required to give effect to that intention.

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For more information contact:

David Spires 

Partner

E-mail: DSpires@hklegal.co.uk

This article contains information of general interest about current legal issues, but does not provide legal advice. It is prepared for the general information of our clients and other interested parties. This article should not be relied upon in any specific situation without appropriate legal advice. If you require legal advice on any of the issues raised in this article, please contact one of our specialist construction lawyers.

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