Last edited 01 Sep 2020

Certificate of non completion

The date for completion of construction works (or dates for completion of sections of the works) is generally set out in the contract particulars. However, it is not uncommon for delays to cause the completion date to be missed, that is, the works are not complete, and so a certificate of practical completion cannot be issued by the date for completion.

Where the client is responsible for the delay, an extension of time may be granted, the completion date adjusted, and the contractor may be entitled to claim loss and expense.

Where the contractor is responsible for the delay, the client may be entitled to claim liquidated and ascertained damages (at a rate set out in the contract particulars).

Some contracts (such as the JCT Standard Form of Building Contract), require that the contract administrator issues the contractor with a certificate of non-completion (sometimes referred to as a ‘non-completion certificate’ or ‘non-completion notice') as a prerequisite to claiming liquidated and ascertained damages.

The certificate of non-completion gives formal written notice to the contractor that they have failed to complete the works described in the contract by the completion date that was last agreed (the original completion date may have been adjusted during the course of the works).

The contract administrator must give due consideration to any applications for extension of time before issuing a certificate of non-completion, and if there are subsequent extensions of time that result in the completion date being adjusted, and the contractor then fails to meet this adjusted date, a new certificate of non-completion must be issued.

Where the contract provides for sectional completion of the works, separate certificates of non-completion must be issued for each section that is not completed by the required date.

The client may then deduct liquidated and ascertained damages from payments otherwise due to the contractor, providing that an appropriate notice has been issued (a pay less notice) setting out the basis of the calculation. Contractors may challenge claims for liquidated and ascertained damages if the procedures and the notice periods set out in the contract have not been followed.

Some contracts (such as the JCT Minor Works Building Contract) do not require that a certificate of non-completion is issued, although it may be considered best practice to issue one anyway.

It is very important when deducting liquidated damages to ensure that the correct contractual procedures are adhered to. In the case of Octoesse LLP v Trak Special Projects Ltd. [2016], Justice Jefford held that Octoesse 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. The JCT Intermediate Building Contract is 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.'

As Octoesse had not issued a further certificate of non completion, they were not entitled to deduct liquidated damages.

To find out more, see Octoesse LLP v Trak Special Projects Ltd.

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