Providence Building Services Limited (Respondent) v Hexagon Housing Association Limited (Appellant)

Hearing listed

Case summary
Appeal

Case summary

Case ID

UKSC/2024/0130

Parties

Appellant(s)

Hexagon Housing Association Limited

Respondent(s)

Providence Building Services Limited

Issue

In relation to a contract based on the 2016 edition of the JCT Design and Build Contract, whether – properly construed – a right to terminate under clause 8.9.3 must first have accrued before a contractor can have any right to terminate under clause 8.9.4.

Facts

Hexagon employed Providence to carry out building works. The parties entered into a contract for that purpose in February 2019 (the “Contract”). The Contract took the form of a standard form – the 2016 edition of the JCT Design and Build Contract – and a schedule of amendments (making changes to the standard form). Under the Contract, Hexagon was to make interim payments to Providence. If it did not make payment by the relevant deadline, then Providence could give it notice of a ‘specified default’ (under clause 8.9.1 of the Contract). If that specified default was not remedied within 28 days of Hexagon receiving the notice, Providence could terminate the Contract under clause 8.9.3: “8.9.3 If a specified default or a specified suspension event continues for 28 days from the receipt of notice under clause 8.9.1 or 8.9.2, the Contractor may on, or within 21 days from, the expiry of that 28 day period by a further notice to the Employer terminate the Contractor’s employment under this Contract.” Clause 8.9.4 provided for termination in the case of a repetition of a specified default: “If the Contractor for any reason does not give the further notice referred to in clause 8.9.3, but (whether previously repeated or not): .1 the Employer repeats a specified default; .2 a specified suspension event is repeated for any period, such that the regular progress of the Works is or is likely to be materially affected thereby, then, upon or within 28 days after such repetition, the Contractor may by notice to the Employer terminate the Contractor’s employment under this Contract.” Hexagon missed a payment in December 2022 and Providence consequently served a notice under clause 8.9.1. Hexagon then made the payment. Hexagon missed a further payment in May 2023. This time, Providence served a notice under Clause 8.9.4 purporting to terminate the Contract on the basis that Hexagon had repeated a specified default (pointing to the missed payment in December). The parties sought competing declarations from the High Court (under Part 8 of the Civil Procedure Rules) to clarify whether a right to terminate under clause 8.9.3 needed to have accrued before Providence could have a right to terminate under clause 8.9.4. The judge in the High Court sided with Hexagon, but Providence won on appeal. Hexagon now appeals to the Supreme Court.