Cantrell & Anor v Wright & Fuller Ltd

Under the JCT 1980 conditions, a Final Certificate must satisfy the contractual requirements of form, substance and intent. Contractual time limits for certification are mandatory, but may be relaxed to the minimum extent necessary to make the contract workable. A late certificate must be issued reasonably, after reasonable notice of the intended issue and proposed contents, and after all conditions precedent linked to its substance and effect have been fulfilled.

The Final Certificate is invalid where it is issued before completion of the adjustment of the Contract Sum, before required certificates concerning delay and extensions of time, or before the required 28-day period following a relevant clause 30.7 interim certificate. An ambiguous payment certificate, issued in a form resembling an interim certificate and unsupported by incorporated explanatory material, will not acquire conclusive effect merely because a covering letter describes it as final.

The claimants, employers, appealed under section 69 of the Arbitration Act 1996 from an arbitrator’s award concerning a certificate issued by the respondent’s architect under a building contract incorporating the JCT Standard Form of Contract, 1980 edition.

The parties had agreed preliminary questions concerning whether the certificate dated 29 March 1999 was validly issued under clause 30.8 and was the Final Certificate for the purposes of clause 30.9. The arbitrator answered both questions affirmatively, principally treating the clause 30.8 timetable as directory and relying on the architect’s covering letter. The central issue on appeal was whether the certificate was, in form, substance and intent, the contractual Final Certificate.

1. Scope of appeal. The appeal under section 69 of the Arbitration Act 1996 required the court to determine the two questions of law itself. The agreed issues had not been narrowed to the lateness of the clause 30.6.1.2.2 statement or to the certificate’s wording alone.
2. Applicable principles. The Final Certificate must be construed with the contract as a whole and against the relevant factual background. It must clearly express the architect’s own contractual opinion and comply with the requirements of form, substance and intent. The court applied the principles stated in Minter Trust Ltd v Traps Tractors Ltd, Token Construction v Charlton Estates and Emson Contractors Ltd v Protea Estates Ltd.
3. Timing. The clause 30.8 timetable was mandatory, subject to a limited implied relaxation. A late certificate could be issued only as soon as reasonably practicable, consistently with any agreement or waiver, after reasonable notice of the intended issue and proposed contents. The arbitrator erred by treating the timetable as wholly directory.
4. Conditions precedent. The clause 30.6.1.2.2 statement was not itself a condition precedent, following Penwith District Council v VP Developments Ltd. However, completion of the adjustment of the Contract Sum was essential. Certificates under clauses 24.1 and 25.3, and, on the facts, the clause 30.7 interim certificate followed by 28 days, were also conditions precedent.
5. Application. The certificate was issued before those requirements had been satisfied. It was materially ambiguous, resembled an interim certificate, required payment within 14 rather than 28 days, and did not clearly certify the adjusted Contract Sum. The covering letter was not incorporated, was not sent to the contractor, and could not cure the ambiguity. The certificate also did not sufficiently express the architect’s own opinion.
6. Disposition. The arbitrator’s answers were wrong. The appeal was allowed and the award varied by inserting “not” into each answer: the certificate was not validly issued under clause 30.8 and was not the Final Certificate for clause 30.9. No remittal was required.

High Court (Technology and Construction Court): appeal under section 69 of the Arbitration Act 1996 allowed. The arbitrator’s award was varied so that the certificate was held not to be validly issued under clause 30.8 and not to be the Final Certificate under clause 30.9.