Andrew Bellis v Sky House Construction Ltd
[2023] EWHC 1473 (TCC)
Providence Building Services Limited v Hexagon Housing Association Limited
15 August 2024
[2024] EWCA Civ 962
Court of Appeal
A builder and a housing association had a contract. The association didn't pay on time, twice. The builder tried to quit the job. A court said the builder could quit even though a specific time period to quit hadn't expired in the first instance. The decision was based on the exact wording of the contract. The judge said both sides had reasons for their view, but the wording made the builder's interpretation correct.
Key Facts
- •Providence Building Services Ltd (Providence) and Hexagon Housing Association Ltd (Hexagon) entered into a JCT Design and Build Contract 2016.
- •Hexagon repeatedly failed to make timely payments to Providence.
- •Providence served a notice of specified default under clause 8.9.1, but Hexagon paid before the 28-day period for further notice under clause 8.9.3 expired.
- •Hexagon later failed to pay again, and Providence terminated the contract under clause 8.9.4, citing repetition of the specified default.
- •The High Court held that clause 8.9.4 required a prior accrued right to serve a notice under clause 8.9.3 before termination was possible.
- •Providence appealed.
Legal Principles
Contractual termination clauses are to be strictly construed and strictly complied with.
Lamesa Investments Limited v Cynergy Bank Limited [2020] EWCA Civ 821 at [18]
Interpretation of standard form contracts focuses intensely on the words used, and is unlikely to be affected by the context in which the parties concluded their contract.
Lamesa Investments Limited v Cynergy Bank Limited [2020] EWCA Civ 821 at [19]
Prior versions of standard forms are admissible as aids to construction only where the reason for a particular amendment can be identified with confidence.
Seadrill Management Services Ltd v OAO Gazprom [2010] EWCA Civ 691
It is generally discouraged to look at previous versions of standard terms and drafting committee commentaries as aids to construction, unless necessary to resolve ambiguity.
The Rewa [2012] EWCA Civ 153
Outcomes
The Court of Appeal allowed Providence's appeal.
The Court interpreted clause 8.9.4 as applying even where the right to give notice under clause 8.9.3 had not accrued, focusing on the plain meaning of the words 'does not give' and the congruence of wording in clauses 8.4.3 and 8.9.4. The court found the 'for any reason' clause particularly significant. The court considered the commercial implications of both interpretations but found neither compelling enough to override the textual interpretation.
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