Marc Gilbard 2009 Settlement Trust (trustees of) v OD Developments and Projects Ltd

A JCT final certificate may be challenged only in proceedings commenced within the contractual 28-day period, subject to the specific protection for adjudication and subsequent court or arbitration proceedings provided by clause 1.9.4. A timely challenge preserves the disputed matters, but it does not keep the certificate open indefinitely or permit a later second set of proceedings concerning the same matters. The contractual finality mechanism limits the general right to adjudicate at any time without unlawfully abolishing that right. Its purpose is to provide certainty, finality and a limit on post-completion disputes.

The claimant employer sought declarations concerning the effect of a final certificate issued under a JCT Standard Building Contract. The defendant had commenced Part 7 proceedings within 28 days challenging the certificate, but later wished to refer the same matters to adjudication. The claimant argued that the certificate was conclusive in any proceedings commenced outside the 28-day period. The defendant argued that the timely Part 7 proceedings preserved the matters for any later adjudication and that preventing such adjudication would fetter the statutory right to adjudicate at any time.

The central issues were the construction and commercial effect of clause 1.9.3, its relationship with clause 1.9.4, and its compatibility with the Housing Grants (Construction and Regeneration) Act 1996.

1. The court construed clause 1.9.3 as providing, subject to the adjudication qualification in clause 1.9.4, one set of proceedings commenced within 28 days as the vehicle for challenging the final certificate. The saving provision applies only to the matters raised in those timely proceedings. It does not permit a later set of proceedings, commenced months or years afterwards, to challenge the certificate.

2. The so-called “foot in the door” construction was rejected. A timely challenge does not make the final certificate inconclusive for all future proceedings. The contract instead preserves certainty by identifying the particular matters challenged, while treating all other matters as conclusive.

3. The commercial purpose of the clause supported that construction. Final-certificate provisions are intended to provide clarity, certainty and finality after completion, and to avoid the cost and complexity of successive proceedings concerning the same matters. Where adjudication is the initial challenge, protective arbitration or court proceedings may be commenced within the 28-day period, and clause 1.9.4 may permit court or arbitration proceedings within 28 days after the adjudicator’s decision.

4. The general contractual and statutory right to adjudicate at any time was not unlawfully fettered. The defendant could have commenced adjudication within 28 days, but chose court proceedings instead. The Housing Grants (Construction and Regeneration) Act 1996 does not confer an unfettered right to adjudicate regardless of contractual conclusivity provisions. Such provisions impose a useful limit on post-completion disputes, rather than a complete bar to adjudication.

5. The court declined to declare that the claimant was entitled to recover the certified sum or that an adjudicator would necessarily decide in its favour. Any enforcement application could raise triable issues concerning the defendant’s existing challenge and might justify a stay of execution.

6. The final certificate was declared non-conclusive as to the matters raised in the existing Part 7 proceedings, but conclusive in any other proceedings commenced outside the 28-day period.