How final is your Final Statement?

The Technology and Construction Court (TCC) recently considered in Oakland Wantage Care Home Ltd v Stepnell Ltd [2026] EWHC 1530 (TCC) when the Final Statement is final for the purpose of the JCT Design and Build Contract.

Background

Oakland Wantage Care Home Ltd (Oakland) engaged Stepnell Ltd (Stepnell) under an amended JCT Design and Build Contract 2016 to design and construct a 65-bed care home. Following practical completion, which was certified on 26 April 2021, the usual discussions took place regarding Stepnell’s final account and valuation of the works.

In February 2022, Stepnell submitted a document containing its account position. Importantly, this document was described as a draft, and the figures therein were described as forecasted. In March 2022, Oakland’s agent responded disputing the valuation and setting out its own assessment. Negotiations continued for a considerable period.

In February 2024, Stepnell issued a further document described by the parties as “the February 2024 statement”. The amount specified as due was not paid and, in the absence of a final payment notice or a payless notice, Stepnell commenced adjudication proceedings seeking payment.

The adjudicator decided that the February 2024 statement was the relevant statement for the purposes of clause 4.24.6 of the contract (which is set out below) and awarded Stepnell the amount claimed.

Oakland then commenced Part 8 proceedings seeking declaratory relief on the proper interpretation and effect of the contractual final account provisions.

The issues

The court was required to determine two issues:

1. whether the February 2022 document constituted the contractual “Final Statement”
2. if the February 2024 document was the Final Statement, whether correspondence sent before its issue could nevertheless amount to a notice disputing matters contained within it for the purposes of clause 4.24.6.

Decision

As to the first issue, applying an objective approach, the TCC concluded that a reasonable recipient would have not understood the February 2022 document to be the contractual Final Statement. Central to the court’s decision was the fact that the document described itself as “draft” and it contained forecast information, described as “draft/budget/estimate” and “promised further information”. As such, it lacked the characteristics of a definitive Final Statement under clause 4.24.

As to the second issue, the TCC considered clause 4.24.6:

“Except to the extent prior to the due date for the final payment, the Employer gives notice to the Contractor disputing anything in the Final Statement or the Contractor gives notice to the Employer disputing anything in the Employer’s Final Statement, and subject to clause 1.8.2 the relevant statement shall upon the due date become conclusive as to the sum due under clause 4.24.2 …”

Oakland contended that various items of correspondence issued before February 2024 demonstrated that it had already disputed Stepnell’s account and should therefore be treated as notices under clause 4.24.6.

The TCC held that Oakland’s view was inconsistent with the wording of the clause. A notice disputing matters contained “in” a Final Statement presupposes the existence of that Final Statement. A party cannot dispute the contents of a document that has not yet been issued. Consequently, the pre-existing correspondence could not satisfy the contractual requirement and only a notice served after the relevant Final Statement existed could operate under clause 4.24.6.

Oakland therefore failed on both issues.

The Birketts view

It is not uncommon to see an interim application for payment being re-branded as the final statement without the substance of the document being sufficiently adjusted to constitute a contractual final statement. It is also not unusual for documents to be misnamed or misreferred to in email correspondence, and it is unsurprising that disputes routinely arise as a result of these issues. 

This case offers a timely reminder of two important points. 

1. Labels matter but are not conclusive: a document will not necessarily be treated as a Final Statement merely because it contains a final account valuation. Courts will examine how a reasonable recipient would understand the document in its commercial context.  
2. Contractual notice requirements will be interpreted strictly: if the contract requires a notice disputing a Final Statement, the Final Statement must first exist.  

A key takeaway for any employer is to ensure that there are robust contract management procedures in place and that documents that appear to be final statements are not ignored. If the contractual mechanism allows for any statements to be disputed, this must be completed within the required timescale.