Does conclusive really mean conclusive in construction contracts?


21 April 2015

Those with knowledge of the JCT standard form of contract will be aware that it contains provisions for the issue of a final certificate.

Those with knowledge of the JCT standard form of contract will be aware that it contains provisions for the issue of a final certificate. Un-amended, the contract provides that upon the issue of that certificate it becomes conclusive evidence of the matters stated in it, unless challenged within 28 days. This was considered in the recent case of Marc Gilbard 2009 Settlement Trust (trustees of) v. OD Developments and Projects Limited [2015] EWHC 70 (TCC).

The claimant employed the defendant contractor to carry out works to a property in Mayfair. The contract incorporated the JCT Standard Building Contract, Without Quantities, Revision 2 (2009), which included conclusivity provisions:

  • clause 1.9.3 provided that “if any adjudication, arbitration or other proceedings are commenced by either party within 28 days after the final certificate has been issued, the final certificate shall have effect as conclusive evidence as provided in clause 1.9.1 save only in respect of the matters to which those proceedings relate”.
  • clause 1.9.4 then provided that a party to an adjudication decision issued after the final certificate has a further 28 days to bring court proceedings or arbitration proceedings in relation to the matters dealt with in that adjudication.

Here, the contract administrator issued a final certificate on 3 December 2013. On 20 December 2013 (within the 28 day period), the contractor issued proceedings in the TCC disputing the final certificate.

The litigation was slow and instead of trying to progress the proceedings, the contractor referred the matter to adjudication (after the 28 day period in clause 1.9.3). The employer asked the court to determine the correct interpretation of clause 1.9 and to decide whether an adjudication could be commenced after the 28 day period in clause 1.9.3. The judge decided that:

  • clause 1.9 should be interpreted literally. It envisaged one set of proceedings commenced within 28 days after the issue of the final certificate and not an initial set of proceedings placing a foot in the door for other sets to be started outside the 28 day period
  • there was nothing stopping a party commencing an adjudication in the 28 day period and also commencing simultaneous court or arbitration proceedings, provided those proceedings were also commenced in that 28 day period (save where they are being commenced under clause 1.9.4 to have an adjudication dealt with finally by court or arbitration).
  • the conclusivity provisions didn’t offend either party’s right to start an adjudication ‘at any time’. But if outside the 28 day period, then the final certificate would be conclusive evidence on certain matters so there would be little point in doing so.

This case serves as a reminder to parties of the importance of adhering to contractual time periods. Where there are conclusivity provisions (such as in this case), not challenging a final certificate (in whole or in part) within a set period will lead to that certificate becoming conclusive after the expiry of the relevant period. With potentially costly consequences, ensuring time periods are complied with is a must.

For further information on this topic, please contact Ruth Sunaway. This article provides only a general summary and is not intended to be comprehensive. Specific legal advice should be taken in any individual application. Law covered as at April 2015.

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