HT-2020-000448 - [2024] EWHC 1185 (TCC)

Before looking at the clauses themselves, I consider general principles derived from the caselaw as applicable to notice requirements said to be conditions precedent which affect entitlement. The overriding principle is that, of course, each contract is to be construed according to its own particular terms. Clauses, or parts of clauses, which look similar but which are set in different contractual matrices may have different effect. As stated by Leggatt J (as he then was), when faced with what superficially appeared to be conflicting first instance authorities in Scottish Power UK PLC v BP Exploration Operating Company Ltd [2016] All ER 536 at [204]:

Insofar as identifying a framework for consideration of the construction of such clauses, the starting point is generally seen to be Bremer Handelsgesellscheft Schaft v Vanden-Avenne Izegem PVBA [1978] 2 Lloyd’s Rep 109, in which Lord Wilberforce said:

The case itself is helpful in illuminating how these principles may be applied. The House of Lords considered clause 21 of the GAFTA Form 100, in the context of an embargo imposed by the United States government which prohibited the export of soya bean meal. The clause stated:

Having provided the three point guidance quoted above, Lord Wilberforce considered, as to (i), that the clause was not framed as a condition precedent, in that the first sentence was not expressed to be conditional upon the second sentence being complied with. Absent a link phrase such as ‘provided that’, the second sentence does not attain conditional status. Moreover, he considered that the generality of the words told against the construction as a condition precedent, which, if intended, would more likely set a definite time limit. As to (ii), the rest of the contract was considered and Lord Wilberforce concluded on the basis of the wording of other clauses that ‘if such a condition were intended, other and stricter language would have been used’. As to (iii), the Court observed that a clause such as this should an innominate term so that in many, possibly most, instances, breach could be adequately sanctioned by damages, but always so to treat it may be unfair to the seller and unnecessarily rigid.

In London Borough of Merton v Stanley Hugh Leach Ltd (1985) 32 BLR 51, Vinelott J considered Clause 24 (1) of the 1963 Edition of the JCT Standard form which stated:

This clause was described as an ‘if’ provision, which only operated in the event that the contractor invoked it by making a written application. The word ‘if’ is sufficient to create the conditionality between the required action and the entitlement. Having considered Merton in WW Gear Construction Limited v McGee Group Limited [2010] EWHC 1460 (TCC), Akenhead J considered, in the context of Clause 4.21 of the JCT Trade Contract terms (TC/C) 2002 edition that the opening sentence of the clause (‘If the Trade Contractor makes a written application to the Construction Manager stating that he has incurred or is likely to incur direct loss and/or expense’) makes it clear that the trigger for the operation of Clause 4.21 is the making of the application by the Contractor. The judge observed that the maxim is presumably that he or she who does not ask does not get. Thus, fulfilment of a contingency introduced by the word ‘if’ is likely to be a condition precedent.

A further case relied upon as demonstrating the potency of an ‘if’/provided’ is Steria Limited v Sigma Wireless Communications Limited [2007] EWHC 3454 TCC. The relevant parts of the clause read:

Notwithstanding the fact that the words ‘condition precedent’ were not used in the clause, and that the clause did not expressly state the contractual consequences of not giving a notice, HHJ Stephen Davies rejected those arguments and found that service of a notice was a condition precedent to a right to an extension, stating (at [90-91]):

One case which points in the opposite direction is Yuanda (UK) Company Limited v Multiplex Construction Europe Limited & Others [2020] EWHC 468 (TCC) in which Fraser J (as he then was) considered clause 2.21 of the JCT Design and Build Sub-Contact Conditions 2011 which states:

The Judge held, obiter, that the wording of the clause suggests that it is not a condition precedent. In the context of the issues before him, it was unnecessary for him to consider the clause in any detail. However, applying Bremer Handelsgesellscheft Schaft it seems likely that Fraser J was unpersuaded that the clause was a condition precedent, not withstanding the ‘if’ language, because of the absence of clearer language and, potentially, the absence of a specified period (as opposed to ‘a reasonable time’).

In Scottish Power, referred to above, Leggatt J (as he then was) considered a number of previous authorities relating to notice provisions in the context of force majeure clauses, which authorities were also relied upon in front of me. In Scottish Power itself, the relevant clause provided that ‘A Party, when claiming relief under Clause 15.2 shall:-…’ and then set out certain information to be provided within different time periods in the following sub-clauses. It was accepted that the party claiming force majeure relief had not complied with one of the sub-clauses. I note that whilst there was the language of obligation ‘(‘shall’) there was no express or implied language of conditionality. Leggatt J in Scottish Power concluded that, ‘I find it impossible to conclude that reasonable parties would have intended the requirements of art 15.4 to constitute conditions precedent (or subsequent) to a claim for relief without ‘thinking it necessary to say so expressly’.

Any attempt to articulate an exhaustive checklist of factors to consider when considering whether a particular clause in a particular contract is a condition precedent will inevitably be futile. However, the following can be distilled from the foregoing authorities as obviously relevant matters I should, and do, have well in mind in the present case when considering whether the relevant clauses should be construed as a condition precedent: