Practical Law

Towards the end of 2009, I wrote a post on the tension between notice provisions and extensions of time. This elicited some very interesting comments, but, most interestingly of all, no-one said “Oh come off it – how many cases are there where the notice provision is strictly enforced?”.

If courts or tribunals decline to enforce notice provisions, much of the tension alluded to within my last piece would fall away.

Some might say that courts or tribunals decline to enforce notice provisions because of that tension. But most commentators struggle to point to a decision where a contractor was deprived of his ability to claim an extension of time solely on the basis of non-compliance with a notice provision. Looked at in this light, the debate may become an academic one.

Good news for academics?

The good news for academics is that this struggle is now partially over. In the Scottish case of Education 4 Ayrshire Limited v South Ayrshire Council, a contractor tried to claim an extension of time due to the discovery of asbestos. Using the language of my earlier piece, this was a “neutral event”, outside the control of the parties, but one which entitled the contractor to bring a claim.

The court “was minded to dismiss” a claim by a contractor who got into a bit of a contractual and semantic muddle with its notices. (Instead of being actually dismissed, the case was “put out By Order”, a Scottish procedure whereby the case is “returned” to the parties for further consideration in light of the court’s decision.)

The contractual muddle arose in that the contractor gave notice under clause 17.1 of the relevant contract, when it should perhaps have given notice under clause 17.6.1 as well. In terms of semantics, the contractor said “we will submit our full claim in accordance with clause 17.6 of the project agreement”, instead of saying something along the lines of “we hereby give notice of our claim”.

Bad news for contractors?

It was accepted by both parties that compliance with the notice requirements was a condition precedent to the right to bring a claim.

The bad news for contractors is that the judge held this condition precedent had not been complied with, despite the clear intention of the contractor’s letter.

The usual mutterings about notices

Most pieces on notices conclude with the usual mutterings about getting notices right. This piece is no exception. In Education 4 Ayrshire the parties accepted that the employer was fully aware of the position regarding the asbestos. He was sent a survey report and attended a meeting to discuss its implications. The employer was also aware that the sub-contractor had claimed an extension of time against the contractor as a result of the same event. Yet the judge still held the contractor to a very exacting standard regarding the provision of notices.

This was despite the fact that the basic commercial intention of the notice provisions had been satisfied. The employer suffered no prejudice as result of any muddle which the contractor may have got into, semantic or otherwise. However, that did not change the outcome of the case.

Just how bad is the news for contractors?

As mentioned above, this case concerned a “neutral event”. Had a court reached the same decision following a delay caused by an employer breach or act of prevention, the news for contractors would be worse.

It would certainly be very bad news for contractors if decisions like this were handed down by those courts or tribunals who deal regularly with construction matters.

But that would never happen.

Or would it?