FT Everard & Sons Ltd. v Kent County Council

Where a contract requires works to be commenced by a specified date, commencement requires physical works at the relevant site which are more than de minimis. It does not ordinarily require the contractor to be able, at that date, to complete every element without interruption, or to complete the works without later interruption. Those matters are governed by any separate obligation concerning continuation and completion. A later delay caused by events beyond the party’s reasonable control does not retrospectively invalidate a genuine commencement. The correct comparison for deciding whether works are de minimis is the cost of the contractual improvement, not the cost of a wider project.

The claimant sought repayment of £150,000 and interest paid to the defendant under an agreement concerning highway improvements at a road junction. Clause 16(5) required repayment if the defendant had not commenced the improvements by 31 December 1994. The agreement separately required the defendant to use its best endeavours to continue and complete the works with due diligence.

The defendant determined the improvement scheme in October 1994 and began drainage and earthworks at the junction site in December 1994. The main works were delayed until 1996 because the route and design of a surface-water outfall had to be resolved. The central issues were the proper construction of the commencement obligation and whether the December works satisfied it.

1. Construction of the agreement. The defendant was required to determine the improvement works before 31 December 1994, commence physical works at the junction site before that date, and thereafter use its best endeavours to complete them with due diligence. The commencement obligation and the continuation-and-completion obligation were separate.
2. Meaning of commencement. Commencement required physical improvement works at the junction site which were more than de minimis. It did not require the defendant to be in a position, when the works started, to complete every element without interruption. Nor did it require the works to be completed without interruption. Those additional requirements would improperly add conditions to the commencement obligation and conflict with the separate best-endeavours provision.
3. Application to the facts. The defendant determined the nature and scope of the works on 4 October 1994 by deciding to proceed with Phase 1 of the South Thames Development Route. Drainage and earthworks began at the junction site in December 1994. They were associated with the planned roundabout and were not de minimis. The appropriate comparator was the cost of the roundabout, approximately £449,000, rather than the cost of the wider Phase 1 scheme.
4. Subsequent delay. The later 22-month delay resulted from difficulties concerning the surface-water outfall, including the need for a different route and further planning consents. The delay did not invalidate the earlier commencement and did not breach the agreement. The claimant had not pleaded a breach of the best-endeavours obligation. In any event, the delay was caused by matters beyond the defendant’s reasonable control.
5. The claim for repayment was dismissed. The court also concluded that the defendant would have complied even on the claimant’s alternative construction requiring an ability to complete the works at commencement.