Charles Brand Ltd v Donegall Quay Ltd
Northern Ireland, High Court, Queen’s Bench Division
20 May 2010
The contract incorporated JCT 98. The contractor referred a dispute to adjudication which encompassed an application for an extension of time for the overrun period of 147 days and for the loss and expense associated with the extension and a claim for the value of additional works. The adjudicator awarded the contractor an extension of time of 44 days and sums in respect of loss and expense additional works. The employer refused to pay the sums awarded and sought to set off against those sums the liquidated damages represented by the period of overrun of 103 days in respect of which the contractor had not been awarded an extension of time. The requirements for the employer to be able to pay or deduct liquidated damages under JCT 98 were (i) The issue by the architect of a non completion certificate under clause 24.1 (ii) The employer having informed the contractor in writing before the date of the final certificate that he might require payment of or might withhold or deduct liquidated damages and (iii) The employer not later than five days before the final date of payment of the debt due under the final certificate having required the contractor in writing to pay the employer liquidated damages or given notice under clause 30 to the contractor that he would deduct liquidated damages from monies due to the contractor under an interim certificate or the final certificate. These requirements were satisfied after but not at the time the adjudicator’s decision was issued.
Weatherup J held that the employer was not entitled to set off liquidated damages for the period in respect of which the contractor was not awarded an extension of time by the adjudicator against the sums which the adjudicator awarded to the contractor. Whilst the employer had complied with the procedural requirements under JCT 98 for the payment or deduction of liquidated damages after the time the adjudicator’s decision was issued, it had not complied with them at the time it was issued with the result that the employer had no entitlement to such damages at that time.