Octoesse LLP v Trak Special Projects Ltd
The case of Octoesse LLP v Trak Special Projects Ltd. [2016] set an important precedent in ensuring the correct contractual procedures are adhered to when deducting liquidated damages.
Octoesse LLP (the claimant) entered into an amended JCT Intermediate Building Contract with Trak Special Projects Ltd. (the defendant) for the construction of residential units. Practical completion was significantly later than the original completion date, and the defendant submitted a claim for an 18-week extension of time. They were awarded 9.5 weeks by the contract administrator. No further certificate of non completion was issued.
When the defendant issued a final certificate for payment, the claimant issued a pay less notice which deducted liquidated damages. An adjudication was begun by the defendant on the grounds that the pay less notice was invalid.
The case focused on the interpretation of clauses 2.22 and 2.23 which are constructed such that:
'If the Contractor fails to complete the Works or a Section by the relevant Completion Date, the Architect/Contract administrator shall issue a certificate to that effect. If an extension of time is made after the issue of such certificate, the extension shall cancel that certificate and the Architect/Contract Administrator shall where necessary issue a further certificate.'
The defendant argued that it was an express condition of the claimant’s entitlement to deduct liquidated damages that the contract administrator issued a certificate of non completion. Further, the effect of clause 2.22 was that when the extension of time had been given, it had cancelled the certificate of non completion.
Justice Jefford held that the claimant was not entitled to deduct liquidated damages as they had agreed to an extension of time after a certificate of non completion had been issued.
If, on the other hand, the claimant had given notice of their intention to deduct damages, but an extension of time had then been made and a further certificate of non completion issued, then they would not need to give notice of the intention to deduct again.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Listed despite problems with its design.
Zen and the art of cycling exploration.
Design Council Homes Taskforce launched
To support government 1.5 million homes target within UK climate commitments.
The story of this knowledge quarter building.
In ecology, in hydrology, in biology and in architecture.
Creating environments that promote physical, mental, and social well-being.
UK cases of neutral current diversion
Research project looks for example contributions.
Overstocking and macro-economics cause a decline.
The 2024 update of the Common Assessment Standard
Demonstrating organisational capability’ to fulfil roles under the Building Safety Act.
56 recommendations for a better built environment
Published by the CIC ahead of the King’s Speech.
SkillELECTRIC Top 8 Competitors Named
in annual search for the UK’s best student electrician.
CIOB Diversity and Inclusion technical information sheet
Step-by-step guide on implementing D and I practices.
Conservation and the Indian City. Book review.
Reversibility in conservation ethics
Learning from painting conservation.
Where It's AT Podcast launched!
New CIAT Architectural Technology Podcast goes live.