Octoesse LLP v Trak Special Projects Limited [2016] EWHC 3180 (TCC)

The Claimant employer entered into a contract based on the JCT Intermediate Building Contract 2011 with the Defendant contractor in respect of a project for the construction of residential and retail units in Long Acre, London. Following a certificate of non-completion issued on 3 October 2014, a partial extension of time was granted. The final certificate was issued on 4 May 2016, and the Claimant issued a pay less notice on 16 May 2016 deducting liquidated damages. The Defendant argued that the pay less notice was invalid on the basis that it was a condition under clause 2.23.1 of the Contract to the right to deduct liquidated damages that the Contract Administrator had issued a further non-completion certificate under clause 2.22. Clause 2.22 provided that “…[i]f an extension of time is made after the issue of such a [non-completion] certificate, the extension shall cancel that certificate and the Architect/ Contract Administrator shall where necessary issue a further certificate.” The Claimant argued that a further non-completion certificate was only required “where necessary” and that here it was not necessary because the Defendant was already aware of its potential liability for liquidated damages. The Court held that Clause 2.22 was a mandatory clause which required the contract administrator to issue a further certificate of non-completion following the extension of time. The Claimant’s construction failed to give effect to the word “shall” which imposed a mandatory obligation. The words “where necessary” related to where the contract administrator had issued a full extension of time which meant that the contractor had no longer failed to complete the works by the completion date, and thus a non-completion certificate was not relevant.