Andrew Bellis -v- Sky House Construction Ltd [2023] EWHC 1473 (TCC) – This case concerned a Part 8 claim (i.e one generally suitable to be heard based on ‘short and self-contained’ points, requiring no oral evidence) pursuant to construction adjudication, on the validity of termination of a Contractor.
When reading the case of Bellis -v- Sky House, I was reminded of my uni days and of being in a bar in Belfast, when a man entered with a large black sports bag full of CDs for sale. I’m not certain that he was from HMV, but he did a good trade that evening. One of the lads I was with bought, among other things, Craig David’s “Born To Do It” which featured the genre-shifting “7 Days“. Mr David, even in his younger years, certainly knew his way around what a week meant….
Paragraph 1 of the judgement in Bellis(handed down by Jason Coppel) informs us that this issue centred on a dispute which concerned the Claimant’s termination of a contract for the construction of “an extension to his property” in Surrey, England.
The keener-eyed reader will note that the overarching piece of statute governing construction law in England (the HGCRA if you needed to be reminded) precludes residential occupiers from commencing statutory adjudication, at section 108.
A quick Google Maps search was able to convince me that this was a residential property. I could be wrong, as my wife reminds me that I often am…
So, spidey senses tingling from the off, however, para 16 confirms that the contract took the form of the JCT Minor Works Building Contract 2016 edition, so it was NOT an adjudication commenced under the HGCRA.
Paragraph 2 of the TCC judgement tells us that the adjudicator (Frank Rayner) found, in short, that the Claimant, Mr Andrew Bellis, had wrongfully terminated the contract, as a result of:
(a) issuing a notice of termination before the time when that could lawfully be done; and
(b) in circumstances where the Defendant had not previously repudiated the contract.
Somewhat aggrieved, Mr Bellis chose to take the dispute before the TCC, seeking a declaration that the adjudicator was wrong to decide in the first adjudication; and requested the TCC determine:
(a) that he had terminated the contract correctly, and did not repudiate the contract; and
(b) that the Defendant did repudiate the contract.
Repudiation: not suitable for Part 8 proceedings
Mr Bellis accepted that Part 8 proceedings were not suitable to determine whether repudiation occurred (as such a discussion would turn on detailed submissions regarding the quality of the Works). This meant that proceedings focussed on whether the adjudicator got it wrong in deciding that Bellis terminated improperly, “as a result of serving a notice of termination before that could lawfully be done”.
Unlawful Termination: Reason #1
On the wrongful termination matter (which was argued was due to serving a notice of termination, prematurely), Coppel stated that this case “did not fit neatly into the more common categories of” Part 8 type cases (i.e self-contained points of construction) because the decision (i) did not award money either direction and (ii) Sky House did not try to enforce it [Coppel noted at para 12 that Sky House did seek to enforce #2, but this at the time this case was heard, that had not happened]. However, Coppel held that the issue around the adjudicator’s finding of wrongful termination is short, self-contained and was “well-suited” to being determined in Part 8 proceedings.
Coppel did note that some other issues raised in the Part 8 claim were not, however, appropriate for determination, including an allegation of breach of natural justice: which needed to be considered in the enforcement proceedings.
Clause 6.4
Clause 6.4 of the contract permitted termination by the Employer on account of default by the Contractor, if before practical completion:
“the Contractor:
· “without reasonable cause wholly or substantially suspends the carrying out of the Works; or
· fails to proceed regularly and diligently with the Works; or
· fails to comply with clause 3.9,
then the Architect/Contract Administrator may give to the Contractor a notice specifying the default or defaults (a ‘specified’ default or defaults).
If the Contractor continues a specified default for seven days from receipt of the notice under clause 6.4.1, the Employer may on, or within 10 days from, the expiry of that seven-day period by a further notice to the Contractor terminate the Contractor’s employment under this Contract.”
Clause 6.2
In addition, clause 6.2.3 stipulated that the giving of notices:
“shall be delivered by hand or sent by Recorded Signed for or Special Delivery post.”
Was the Termination Notice Invalid Reason #1
In terms of notice, Bellis first issued an email to Sky House stating that a notice of termination would be sent:
“if [certain] points are not addressed by Wednesday 8 September 2021”
Seven days later (to the day) Bellis then issued a further notice of termination, again by email.
At his stage, it won’t take Colombo or even a seasoned lawyer to have predicted that Sky House argued that email was an invalid means of issuing a termination notice. However, it is worth noting that Bellis told the adjudicator that each email had been put into letter format and taken to the Defendant’s offices on the day that it was sent. Coppel, like the adjudicator accepted this.
Was the Termination Notice Invalid Reason #2
Sky House also argued that the termination notice was invalid because it had been sent too early, as the Claimant was required to wait for seven “clear days” after the date of the warning notice, and that this had not happened, citing clause 1.4 in support of this, which stated:
“Where under this Contract an act is required to be done within a specified period of days after or from a specified date, the period shall begin immediately after that date.”
The adjudicator accepted that the second notice was served a day early, and the termination was “not effective”.
In his judgement, Coppel reminds us that a similar rule applies under the CPR, which also states that “clear days” excludes the day on which the relevant period ends [CPR 2.8(2)-(3)].
Bellis submitted that clause 1.4 did not apply to the calculation of the period allowed by clause 6.4.2 because the date of giving the warning notice was not a “specified date” under the contract. Coppel did not agree, noting that “specified dates” are perfectly capable of being interpreted as including the date of an event which is specified in the contract “whatever that date turns out to be”.
Interestingly, Coppel noted that Bellis’ position would mean that the Contractor would have “less than seven days” (6 days and 13.5 hours was his precise guesstimate) to address defects set out in the first notice:
“It is not clear at precisely what time the termination notice was delivered to the Defendant’s office, but it is reasonable to assume – having regard, in particular, to correspondence later that day – that this was during business hours, and so less than seven days after the warning notice had been delivered… accepted during argument, on his case, a warning notice could have been served at 11.59pm on 1 September, and a termination notice lawfully served at 12.01am on 8 September, giving the Defendant a fraction over six days to comply with the warning notice”
Well put, I say.
Drum roll, please…
Rectifying Defects within seven days
As it pans out, Coppel made his decision that Bellis’ termination was premature and invalid turning on the fact that any less than seven clear days is not sufficient to remedy defects “so as not to reduce the already short period” of seven days as proscribed under the contract and given the defects notified “may be extensive”. Fair enough.
So as a wrap-up, I would suggest that parties to disputes, particularly when it comes to notices would do well to remember the lyrics of Craig David’s ground-breaking anthem “7 Days”:
“I’m not a man to play around … there’s no need to chat, for there’ll be plenty time for that: make sure you adhere to notice requirements, babe”
I may have paraphrased his genius a little inaccurately there, but I’m sure you follow.
An interesting footnote was that Sky House would have been not permitted to rely upon certain witness statements, nor would the witnesses be permitted to participate in proceedings, because it did not file and serve an Acknowledgement of Service within 14 days of the service of the Claim Form.
In this case, Mr Coppel (a decent soul it would seem) did permit Shy House to rely upon this evidence (if witness statements can be called evidence) because in “all the circumstances of the case” the default did not affect matters, because the witness statements had been sent to, and responded to, by Bellis. Coppel noted that barring them from proceedings would have been “overly technical, and harsh”. He sounds like my kind of man. He followed this with the comment:
“As matters turned out, there was very little in the evidence which was of assistance in determining the issue of construction of the contract”
So, perhaps for me, the key takeaway is that Defendants ought to take note of this point, and the Denton v White criteria, which, in this case, Mr Coppel noted as “an error on the part of solicitors”. Not the wrap on the knuckle Eddie Quigg would appreciate from a judge, if we were to do the same here at QG…
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Published 20 February 2024
