Octoesse LLP v Trak Special Projects Ltd

A certificate of non-completion under a construction contract is cancelled when an extension of time is granted, including where the extension is granted after practical completion. A further certificate must be issued where the contractor remains in default against the extended completion date. Without that certificate, a contractual condition for deducting liquidated damages is not satisfied.

On adjudication enforcement costs, claims consultants’ costs incurred by a litigant in person will usually be recoverable as disbursements where the consultants acted in the adjudication and their assistance would ordinarily have been sought by solicitors in the enforcement proceedings. Recovery remains subject to reasonableness and item-by-item assessment.

The claimant employer and defendant contractor entered into a JCT Intermediate Building Contract for construction works. After practical completion, the contract administrator granted the contractor an extension of time but issued no further certificate of non-completion. The employer later deducted liquidated damages from the final payment.

The adjudicator held that the deduction was invalid because the contractual condition requiring a certificate under clause 2.22 had not been met. The employer commenced Part 8 proceedings seeking declarations that the deduction was valid and that the adjudicator’s award was unenforceable. The contractor counterclaimed for payment of the adjudicated sums. The court also had to determine the recoverability of claims consultants’ costs incurred by the contractor in the enforcement proceedings.

1. Liquidated damages. Clause 2.22 imposed mandatory obligations on the contract administrator. Where the contractor failed to complete by the original or an extended completion date, a certificate of non-completion had to be issued. An extension of time cancelled an existing certificate, and the words “where necessary” did not remove the need for a further certificate where the contractor remained in default.
2. The cancellation applied even where the extension was granted after practical completion. Clause 2.19.3 expressly contemplated an extension being granted after practical completion. Clause 2.23.3 preserved an employer’s prior notification of an intention to deduct liquidated damages, but did not preserve the cancelled certificate. The condition in clause 2.23.1.1 was therefore unsatisfied, and the employer was not entitled to deduct liquidated damages.
3. The declarations sought by the employer were refused. Judgment was given for the contractor for the sums awarded by the adjudicator.
4. Costs. Under CPR Part 46.5(3), the relevant question was whether the consultants’ costs would have been recoverable as a solicitor’s disbursement. The inquiry was fact-sensitive. Specialist assistance could be recoverable even where the work, broadly described, might ordinarily be regarded as solicitors’ work.
5. Adjudication enforcement proceedings have distinctive features, including accelerated procedures and the need for familiarity with the adjudication. Claims consultants who represented a party in the adjudication will therefore usually provide recoverable assistance to a litigant in person in enforcement proceedings, subject to reasonable necessity and amount. Costs for court liaison and preparation of the costs schedule were excluded; other claimed items were reduced on assessment. The defendant’s costs were summarily assessed at £10,866.98 excluding VAT.