Oakland Wantage Care Home Ltd v Stepnell Ltd

Under a contractual final-account conclusivity regime, the relevant statement must first be identified objectively, by reference to the document’s wording, contractual context and purpose. A document headed as a draft, containing forecasts, provisional figures or estimates, and promising further information may not constitute the contractor’s Final Statement, even if the contractor intended it to be final. Once the relevant Final Statement has been issued, notice disputing anything in it must be given before the contractual due date. Earlier correspondence concerning negotiations or disputed items is insufficient because it precedes the statement itself.

The claimant employer engaged the defendant contractor under a JCT Design and Build Contract 2016 with bespoke amendments for the construction of a care home. The works achieved practical completion in April 2021. The parties subsequently exchanged documents concerning the final account, including statements sent in February 2022 and February 2024.

An adjudicator had treated the February 2024 Statement as the relevant statement under clause 4.24. The employer brought a Part 8 claim seeking declarations that the February 2022 Statement was the relevant statement, or alternatively that earlier correspondence prevented the February 2024 Statement from becoming conclusive. The issues were whether either document was the relevant statement and whether the contractual conclusivity provisions were engaged.

1. The claim was dismissed and the declarations sought were refused. The court found that the February 2024 Statement was the relevant statement under clause 4.24.
2. The construction of an alleged contractual notice is objective. The court asks how a reasonable recipient, aware of the contract and the relevant contextual scene, would understand it. The notice’s purpose is relevant, and the court should adopt a commonsense approach rather than an artificial or overly technical analysis. Subjective intention and the understanding of an adjudicator are not the relevant tests.
3. Although the February 2022 material referred to the final account and set out a substantial valuation, its objective character was not that of a Final Statement. It was headed “Draft”, included forecast information, contained draft, budget and estimated figures, and identified matters requiring further particulars or assessment. A reasonable recipient would therefore understand that further information and finalised figures were still to come.
4. Clause 4.24.6 required notice disputing anything “in” the Final Statement. The wording made prior issuance of the Final Statement a precondition to an effective notice. Accordingly, correspondence exchanged before the February 2024 Statement could not constitute notice for the purposes of clause 4.24.6, even if the contractor was already aware of the underlying disputes.
5. Because the February 2022 document was not the Final Statement, it was unnecessary to determine whether any notice concerning it was given in time. The court also recorded that declarations sought by the defendant could not be made without a pleading or application notice conferring jurisdiction. The parties were invited to agree an order and costs.