Facts
Andrew Bellis ("Bellis") appointed Sky House Construction Limited ("Sky") to build an extension at his property under a contract based on the JCT Minor Works Building Contract 2016 ("the Contract"). Bellis purported to terminate the Contract in accordance with its provisions. In two sets of subsequent adjudication proceedings the adjudicator held (amongst other things) that by not leaving seven clear days between serving his first "warning" notice to Sky (notifying Sky of specific breaches of contract) and his second notice of termination (actually terminating the Contract) Bellis had terminated the Contract too early. Bellis had committed a repudiatory breach of the Contract which Sky had accepted, and Bellis was therefore not entitled to set off sums allegedly incurred by him in correcting defective work, and was in fact liable to pay Sky over £30,000 plus any VAT and interest.
In April 2022 Bellis brought a Part 8 claim seeking determinations that he had terminated the contract correctly / was not in repudiatory breach and instead Sky had repudiated the contract.
The termination provisions in the Contract were as follows:
"6.4.1 If, before practical completion of the Works, the Contractor:
6.4.1.1 without reasonable cause wholly or substantially suspends the carrying out of the Works; or
6.4.1.2 fails to proceed regularly and diligently with the Works; or
6.4.1.3 fails to comply with clause 3.9,
the Architect/Contract Administrator may give to the Contractor a notice specifying the default or defaults (a 'specified' default or defaults).
6.4.2 If the Contractor continues a specified default for seven days from receipt of the notice under clause 6.4.1, the Employer may on, or within 10 days from, the expiry of that seven day period by a further notice to the Contractor terminate the Contractor's employment under this Contract."
Also relevant was clause 1.4 titled 'Reckoning Periods of days', which provided that "Where under this Contract an act is required to be done within a specified period of days after or from a specified date, the period shall begin immediately after that date. Where the period would include a day which is a Public Holiday that day shall be excluded."
By email on 1 September 2021 at 5.52pm, Bellis gave notice purportedly pursuant to clause 6.4.1 of the Contract warning Sky that the Contract would be terminated unless a number of points listed in the email were addressed. A notice of termination, purportedly pursuant to clause 6.4.2, was then sent by Bellis by email on 8 September 2021 at 7.20am. The Adjudicator found the notice had been served one day too early.
Decision
Dismissing Bellis' claim, Jason Coppel KC held that the adjudicator was correct in determining that Bellis' notice of termination had been served too early and that clause 1.4 of the Contract applied to the seven day period required to elapse between service of the two notices. The judge determined that clause 1.4 "reflects the common approach to the calculation of time periods, namely that periods of days are to be calculated as clear days, to the exclusion of the day on which a relevant event occurs and from which a period of days is to be calculated". He also referred to the similar rule for the calculation of time periods under CPR 2.8(2)-(3). Additionally he found that if for some reason clause 1.4 did not apply to the time period in clause 6.4.2, he would construe the time period specified in that clause also as referring to a period of seven clear days. In arriving at his decision, the judge referenced (amongst other things) the need to interpret the Contract so as not to reduce what is already a short time period for a contractor to remedy breaches and the importance of having certainty where such time period is concerned.
Takeaways
Given the significant consequences associated with wrongful termination of agreements, whilst this case does not necessarily raise new issues of law, any guidance regarding interpretation of termination provisions in standard form contracts is to be welcomed. The judge was clear that the wording of the Contract provided for 'clear' days.
In line with the Court's recent trend to comment on such matters, the judge also made a note of saying that the issue of construction of the contract, which was raised to challenge the adjudicator's finding of wrongful termination, was a short, self-contained issue and well-suited to being determined in Part 8 proceedings.
