The Meaning of "Day" – TCC Judgment in Elements (Europe) Ltd v FK Building Ltd 2023

On 21 March 2023, the Technology and Construction Court ("TCC") handed down its judgment in the case of Elements (Europe) Ltd v FK Building Ltd.

The judgment focuses on the validity of a payment application and provides clarity as to what is meant by a "calendar day".

It is worth highlighting that the parties in dispute had settled the matter after the TCC had issued its draft judgment.

However, Constable J of the TCC thought it appropriate to proceed in handing down the judgment as the dispute concerned "an important element of a JCT standard form widely used in the construction industry".

Elements emailed a copy of PA16 to FK's representatives at 10:07 pm on 21 October 2022. It claimed £3,950,190.53.

FK failed to respond to the payment application and failed to serve a pay-less notice.

The sum claimed was not paid by FK; thus, Elements served a notice of intention to suspend the Sub-Contract works if the payment was not received within seven days.

Elements subsequently referred the dispute to adjudication.

FK raised Part 8 court proceedings to challenge the validity of PA16.

They argued that for the payment application to be valid, it needed to have been received on or before the end of the site working hours on 20 October 2022 on the basis that if the application had been received some time on 21 October 2022, this would not be four days before 25 October 2022 but would instead be between three and four days.

In the alternative, FK argued that PA16 should have been received on or before the end of the site working hours on 21 October 2022.

Per the Sub-Contract specification, the site was to be open until 6 pm Monday-Friday and until 1 pm on Saturdays.

At the same time, Elements issued Part 7 proceedings to enforce the adjudicator's decision and apply for summary judgment against FK.

They also served evidence in response to the FK's Part 8 claim, which argued that Clause 4.6.3 of the Sub-Contract does not specify whether the notice needs to be served in 4 "clear" days or 4 "full" days.

They relied on the rule in English law that when interpreting contracts, a day is to be treated as an indivisible whole, and fractions of a day are ignored and that Sub-Contract did not specify any restrictions as to the time of day by which an application would be deemed validly served.

Elements also relied on the fact that previous applications had been received after working hours and that it was typical for members of the Quantity Surveying team and senior management to work long hours, including evenings and weekends, and receive emails during those times.

Whilst the judgement is somewhat expected, it serves to remind parties that should they wish to set timescales for notices by reference to clear days or that notices should only be deemed validly served during business hours, for example, they must expressly set out these provisions within their construction contracts.

Whilst the facts of this case centre around timescales for payment applications under the JCT Standard Building Sub-Contract Conditions (SBCsub/C) 2016, the Court's reasoning is largely based on common law principles, meaning that it could be applied more widely.

It, therefore, seems likely that if any contractual provision specifies for a notice to be issued or received within a certain number of "days", a Court is unlikely to accept that "days" means "clear days" or that there is any restriction on the time of the day in which the notice is deemed validly served.

Finally, this judgment demonstrates the importance of issuing pay less notices, where the sum claimed within the payment application is not accepted.