In the recently decided Technology and Construction Court case, Elements (Europe) Ltd v FK Building Ltd  EWHC 726 (TCC), the court considered the meaning of ‘day’ in the JCT Standard Building Sub-Contract. The issue before the court was whether four days means four ‘clear’, ‘full’ days.
The winning party in the adjudication, Elements (Europe) Ltd (“Elements”), made an application to the court to enforce the adjudicator’s decision to award Elements nearly £4m plus interest and costs in respect of its application for payment.
FK Building Ltd (“FK”), via a Part 8 application, sought to challenge the validity of Elements’ payment application based on which the adjudicator’s decision was made. FK argued that the application was late and therefore invalid.
Despite the fact that the dispute between the parties was settled after a draft of the judgment was circulated, the judge proceeded to hand down the judgment as the issue before the court concerned the “proper construction of an important element of a JCT standard form” which has not been considered by the courts before.
Why did FK challenge the validity of Elements’ application?
Elements’ payment application was issued by email on 21 October 2022 at 22:07 to several recipients at FK. FK contended that this application was late and invalid and made the following arguments:
- The application should have been received by FK on or before the end of site working hours on 20 October 2022 or alternatively, 21 October 2022
- Being able to submit a document at 11:59pm is commercially unworkable and unbusinesslike
- The Application was sent on 21 October 2022 at 22:07 and therefore outside of the site working hours
- The application was late and therefore invalid so the adjudicator should not have made the award.
How did Elements argue that their application was valid?
Elements’ arguments in response to FK’s submissions were as follows:
- The contract between Elements and FK did not require the application to be served four ‘clear’ or ‘full’ days before the interim valuation date. Elements relied on the rule in English law that fractions of a day are ignored when interpreting contracts
- Site hours defined in the contract did not apply to staff responsible for payments – quantity surveyors, management and administrative teams – and Elements adduced factual evidence to support this argument
- When a payment application is made by email, it is received when it arrives in the inbox of the recipient
- There was factual evidence that the application was seen by FK and that emails were being checked by some of the recipients at FK, shortly after the application was emailed by Elements.
Elements’ factual evidence was unchallenged.
What did the judge decide?
The judge confirmed that there is a difference between a ‘day’ and a ‘clear day’. When something needs to be done no later than four clear days prior to a certain date, it must be done at the latest on the fifth day prior to that date.
As for something needing to be done merely ‘four days’ before a certain date, it may be done on the fourth day prior to that date. The judge found that the contract between the parties made no reference to ‘clear’ days.
Furthermore, the judge rejected the arguments about the need for the notice to be received on or before a defined time period. This was supported by the principle that the law does not count in fractions of a day. As the contract between the parties did not require that notices be served by the end of site working hours, the judge found that Elements’ application for payment could be received at any time up to 23:59:59 on 21 October 2022.
The judge concluded that the adjudicator’s award should be enforced and FK’s Part 8 claim was dismissed.