The role of trifling defects of construction works has taken the floor in Mears , in which the Court of Appeal has rejected Claimant’s request for declarations aiming to find that a material variation (i) did not allow to certify practical completion of its works and (ii) constituted a material and substantial breach by the Contractor.
The Contractor was engaged to design and build two blocks for student accommodation. Under the construction contract the Contractor was forbidden to make any variation which materially affected the size of the rooms. It further provided that a reduction in size of more than 3% was a material variation.
The first instance judge found that some of the rooms were more than 3% smaller.
Claimant held that such a material variation amounted to a “material and substantial breach” which entitled it to terminate the contract and which prevented the certification of practical completion of the works.The Technology and Construction Court (per Waksman J.) rejected the claim. Claimant appealed.
The Court of Appeal (per Lord Justice Coulson) held that a material variation does not necessarily amount to a repudiatory breach and that if any failure to meet the tolerance, even if trivial, amounted to a material breach of contract, the result would be very uncommercial. Practical completion, it said, was easier to recognise than to define with precision; there were "no hard and fast rules". However, for practical completion to be certified, the works must be reasonably capable of their intended use: some nonconformity is acceptable, provided that it is insignificant.
The Court pointed out that the decision on whether practical completion may or may not be certified is, at least in the first instance, a question for the certifier, who was ready to certify it, notwithstanding the existence of that material variation in 56 rooms.
The Court assumed that the certifier’s position meant that it considered such a departure from tolerance to be trifling, a matter which in any event was not for that appeal.
The appeal was then dismissed.
This interesting case invites some comments.
First, the issue whether a prohibited material variation automatically amounts to a material breach is not an easy one.
Second, this dispute has given the opportunity to emphasize that a defect may have to be treated differently from the point of view of practical completion and from the point of view of a distinction between repudiatory and minor breaches of contract.
Third, even if a defect allows to use the works but there is a problem which does not allow on an objective basis to use them as intended, that cannot be treated as a trifling defect and consequently not only does it not allow to certify practical completion, but could amount to a repudiatory breach.