Andrew Bellis v Sky House Construction Ltd

A Part 8 claim may exceptionally determine a short, self-contained issue of contractual construction arising from an adjudication. The court is not confined to correcting only an obviously erroneous adjudicator’s decision. Contractual termination provisions must be construed to preserve the contractor’s full stipulated period to remedy a specified default. A termination notice served before expiry of that period is premature and invalid.

The claimant challenged findings in an adjudication concerning termination of a building contract. A later adjudication had relied on the earlier finding that the claimant’s termination was wrongful. The claimant accepted that disputed allegations about the defendant’s performance could not be determined on a Part 8 claim, but pursued the construction issue concerning the timing of the termination notice.

The court also considered the defendant’s application for relief from sanctions after it failed to file an acknowledgment of service. The central substantive issue was whether the contractual seven-day period had expired when the termination notice was served.

1. Relief from sanctions. Relief was granted. Although the default was serious and had no good reason, its practical effect was minimal. The claimant knew that the defendant intended to defend the claim, had answered its evidence, and suffered no prejudice.
2. Part 8 jurisdiction. The claim was suitable for Part 8 determination because the contractual construction issue was short, self-contained and required no oral evidence. The court could determine the true contractual position despite the issue having already been decided by an adjudicator. It was not required to apply an additional threshold that the adjudicator’s error be obvious.
3. Construction of the termination provisions. Clause 6.4.2 of the JCT Minor Works Building Contract 2016 edition gave the contractor seven days to continue addressing a specified default before the employer could terminate. Clause 1.4 applied to the calculation of that period, so the period began immediately after the date of the warning notice. A warning notice served on 1 September 2021 therefore permitted termination only from 9 September 2021. In any event, the provision should be construed as requiring seven clear days.
4. The termination notice served on 8 September 2021 was premature. The purported termination was invalid and unlawful. The ruling was confined to timing and did not determine whether there were sufficient substantive grounds for either notice.
5. Disposition. The claim was dismissed.