Article

Time restraints for parties to issue notifications under 2016 JCT Contract4 December 2024

In the recent case of My Contracts Ltd v 74 Hamilton Terrace Freehold Ltd [2024] EWHC 2896 (TCC), the TCC dealt with time restraints for parties to issue notifications under the 2016 JCT Design and Build Contract. In construction contracts, it is surprisingly common for parties to get into arguments about the time period for service of important documents. Failure to adhere to the contract can have serious commercial consequences.

The court considered whether a set time period (as stipulated by the contract in months) should be extended to allow for weekends and public holidays that fell within that period. The court also clarified that extensions of time for public holiday days do not apply to periods specified in the contract in months. The court ultimately relied on the interpretation of the contract as it was written and provided a reminder that courts are reluctant to accept attempts to insert words into a clause which the parties did not originally agree or draft.

"The court held that the notification was out of time as it was served on the next business day after the four-month time limit had expired."

Factual Background

The case concerned a dispute between a contractor and a developer regarding the notification of façade costs under a 2016 JCT Design and Build Contract. The court held that the notification was out of time as it was served on the next business day after the four-month time limit had expired.

On 2 March 2023 the claimant, a contractor (My Contracts Ltd) and the defendant, a developer (74 Hamilton Terrace Freehold Ltd) entered into a JCT Design and Build Contract (2016 edition, with extensive bespoke amendments) regarding a project at Hamilton Terrace, London NW8.

The contract included a provision that allowed the developer to claim certain sums, provided the contractor received a notice “not later than 4 (four) months after the date of this Contract“.

On Monday 3 July 2023, a notification was served by the developer, which was out of time according to the contract. The developer presented several arguments which would render their notice within the four-month notification period. In summary, these were:

the four-month period should be measured in accordance with clause 1.5 which provided that “Where … an act is required to be done within a specific period of days … this period shall begin immediately after that date. Where the period would include a day which is a Public Holiday that day shall be excluded”;
notifications should be considered served only on working days; and
a notice issued on a Sunday would not have complied with the contract because notice could only be properly given when the recipient could be expected to deal with it.

In the decision, the court considered the following points.

"The court found that clause 1.5 of the contract, which excludes public holidays, applied only to periods expressed in days, not months."

Corresponding Date Rule

The claimant relied on the corresponding date rule, which dictates that a period specified in months ends on the corresponding calendar date in the final month. The court accepted this rule, establishing that the deadline for notification was therefore 2 July 2023.

Public Holidays

The defendant argued the period should exclude public holidays, extending the deadline. However, the court found that clause 1.5 of the contract, which excludes public holidays, applied only to periods expressed in days, not months. Therefore, public holidays were not excluded from the calculation of the four-month period.

Business Days

The defendant contended that notifications should only be deemed served on business days, allowing a 3 July notification to be timely. The court rejected this, noting that the contract did not incorporate the term “Business Day” into the relevant clause of Article 12.

Receipt of Notifications

The court affirmed that a notification sent on a non-business day, such as Sunday, 2 July 2023, would have been validly received, aligning with existing case law.

Conclusion

The court granted the declaration requested by the claimant regarding the proper construction of the JCT contract and held, that notification of façade costs served on Monday 3 July 2023 was out of time according to the contract’s terms. This ruling emphasises the importance of adhering to specific time limits in JCT contracts and clarifying that extensions for public holiday days do not apply to periods specified in months. The judgment underscores the necessity for precise contract language and adherence to stipulated timelines.

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