This appeal raised a point of interpretation of a standard JCT form of contract on which there appears to be no previous authority. The point turned on the relationship between clauses 24 (damages for non-completion), 25 (extension of time), 28 (determination by the contractor) and 30 (certificates and payment).

The subject contract was between L Brown & Sons as contractor in these proceedings and Reinwood Ltd as employer. The contract was for the construction of 59 partments in Manchester and was in the form of a JCT Standard form of Contract, 1998 Edition, With Quantities incorporating Amendments 1 of 1999, 2 of 2000 and 3 of 2001.

There were considerable delays on the on the project and on 14 December 2005 the contract architect issued a certificate of non-completion under clause 24.1. On 11 January 2006, the architect issued interim certificate number 29 showing the net amount for payment as £187,988, with a final date for payment of 25 January 2006.

On 17 January 2006, Reinwood issued two notices: one stated that Reinwood had the “intention to deduct from monies due to you under Interim Certificates issued after 14 December 2005 liquidated and ascertained damages…” and the second confirmed Reinwood’s intention to withhold £61,629 LADs from monies due under interim certificate 29.

Reinwood made no further payment before 26 January 2006, when Brown gave notice of specified default under clause The next day, Reinwood advised Brown that it would pay the sum of £49,303 by 2 February and accordingly did so.

Then, on 8 June 2006, Reinwood was due to pay £39,981 pursuant to interim certificate 34. That sum was not paid and on 4 July 2006, Brown served a termination notice relying on, among other things, the 26 January notice as specifying the previous default. Brown stopped work and left site. Reinwood then wrote to Brown on 6 July and advised that it considered Brown’s actions in leaving the site and refusing to return amounted to a breach of contract. Reinwood confirmed its acceptance of that breach of contract and contended that Brown had no right to terminate the contract.

The trail judge found that Brown’s termination of the contract was valid. On appeal, Reinwood sought declarations that Brown unlawfully terminated the contract and was in repudiatory breach. Brown on the other hand sought declarations that it lawfully determined its employment under the contract.

On the basis that it was common ground that as at 17 January 2006, the 3 conditions for deduction from interim certificate 29 of the LADs specified were satisfied, the court considered that only one issue arose on this appeal: whether the cancellation of the certificate of non-completion under clause 34.1 by the grant of an extension of time meant that the subsequent grant of an extension of time should defeat the right to deduct the amount of LADs specified in a valid notice.