In his article in this edition of Construction Law, John Kittow discusses the importance of good contract management, including the giving of the notices required by the contract. But do such notices really matter as a matter of law?
When lawyers discuss this issue, they usually analyse it by considering whether the giving of the particular notice in question is a condition precedent – a condition that must be satisfied first, before the relevant claim can be made. For a subject that is so important and that raises so much debate, there are remarkably few cases on the point. We now have another one to add to that short list: WW Gear Construction Limited v McGee Group Limited in which judgement was given in June this year.
Gear engaged McGee, under a JCT Trade Contract, to carry out on ground works in connection with a hotel project in London. In due course, McGee submitted a claim for extensions of time and loss and expense. The issue on the meaning and proper application of the contract clauses relating to such claims was in dispute. Gear referred those issues to adjudication. Gear did not like the answers it got in the adjudicator's decision, so it went to court to get declarations on the issues from the judge.
The decision focuses on the JCT notice provisions relating to loss and expense. The relevant clause in the JCT Trade Contract is clause 4.21. It had been amended in this case to 'beef up' the notice requirements but those amendments were, in the view of the judge, 'superfluous'. He analysed the meaning of the clause section by section. The opening wording of the clause has a familiar look to it:
'If the Trade Contractor makes a written application to the Construction Manager stating that he has incurred or is likely to incur direct loss and/or expense (of which the Trade Contractor may give his quantification) in the execution of this Trade Contract'
The judge took the view that the wording was clear enough - if you want loss and expense, you have to ask for it. There is nothing in the clause to suggest that the construction manager has to ascertain loss and expense if you don't ask.
As to the timing of the notice, the clause again has a familiar look:
'provided always that: the Trade Contractor's application shall be made as soon as [and in any event not later than two months] after it has become or should reasonable have become apparent to him that the regular progress of the Works or any part thereof has been or was likely to be affected as aforesaid'
The words in square brackets were an amendment to the standard form but they do not affect the key issue of the basic meaning of the clause. The judge considered that the words 'provided always that' are 'often the strongest sign that the parties intend there to be a condition precedent' What if the delay becomes apparent to the contractor later that it should have? It seems that the contractor can meet the requirements of the clause by giving the notice within a reasonable time of the later date. The judge held that, subject to that latitude permitted by the clause, the giving of notice on time is a condition precedent to claiming loss and expense.
So, it is clear from this decision that delay notices do matter, at least so far as the JCT requirements for loss and expense are concerned. The JCT forms preserve common law rights so it would still be possible to make a claim for damages if the event causing delay was a breach of contract by the employer. So much for notices for loss and expense. What about extensions of time? This case does not address them but others do.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
