Know your (time) limits – the meaning of a month - MY Contracts v Hamilton Terrace

A recent TCC case considered the proper construction of the meaning of “month” when serving a notice under an amended JCT Design and Build Contract, 2016 Edition.

In My Contracts Ltd v 74 Hamilton Terrace Freehold Ltd, a declaration was granted that notification on the day after the last day of a four-month period for submitting costs was outside of the time limit stated by the building contract and so the notice was late. 

This blog will consider the interpretation of the notice wording in this case.

Background

The original façade of a building (which was intended to be retained) collapsed. The parties agreed the contractor was responsible for the collapse and would have to pay the costs incurred by the employer in obtaining and implementing a new planning permission to replace the façade – the Façade Costs.

Article 12 of the building contract set out the detailed position on the Façade Costs, including paragraph 6 (emphasis added) which said:

“The Contractor shall have no liability to the Employer in respect of any monetary amount that is not included in the Notification of Façade Costs or an update of the Notification of Façade Costs received by the Contractor not later than 4 (four) months after the date of this Contract.”

The employer served a Notification of Façade Costs on 3 July 2003. In the proceedings, the parties sought declarations as to the proper construction of the wording of paragraph 6.  

Key Issues

Both parties to the building contract agreed the deadline for the Notification of Façade Costs was Sunday 2 July 2023 but the issues to be considered were:

1. Should the four month period be extended to allow for the four public holidays which fell within the four-month period?
2. Was the notice in fact served within the contractual time limit given that the deadline fell on a Sunday (not a working day)?

Findings

The court held that the Notification of Façade Costs served on Monday 3 July 2003 was out of time.

The parties could have easily provided for the wording of the notice period to exclude public holidays but they did not. The time limit was expressed as months not days and therefore the wording of clause 1.5 of the building contract (which excluded public holidays from a time period expressed in days) did not apply.

The judge indicated that a notice could be received on a Sunday (even if it could not be dealt with then) and the notice received on Monday 3 July 2023 was therefore out of time. The term “Business Day” was not used in paragraph 6 of Article 12, though it was defined by the parties in the building contract and used elsewhere in Article 12.

The judge also emphasised that the court interprets what the parties have agreed, rather than writing contracts for them. 

Conclusion

This case highlights the importance of precise contract drafting which reflects the intentions of the parties. In contractual negotiations, the parties need to think about whether to express time periods using days or months and whether to factor in public holidays and/or working days, remembering that the courts seek to follow what is written in the contract. Notice periods need to be carefully calculated in accordance with the wording of the contract ahead of time and diarised. If in doubt, serve notice a few days early!

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