Court of Appeal considers meaning of practical completion

Court of Appeal considers meaning of practical completion

 

In Mears v Costplan [2019] EWCA Civ 502, the Court of Appeal has provided a useful summary of the law on the meaning of practical completion.

The ruling is an important one for construction lawyers—'practical completion' is a term widely used, but often not defined, in construction contracts.

Following a review of various authorities on the meaning of practical completion, the court summarised the law as follows:

  • practical completion is easier to recognise than define. There are no hard and fast rules
  • the existence of latent defects cannot prevent practical completion. In many ways this is self-evident—if the defect is latent, nobody knows about it and it cannot therefore prevent the certifier from concluding that practical completion has been achieved
  • in relation to patent defects, there is no difference between an item of work that has yet to be completed (ie an outstanding item) and an item of defective work which needs to be remedied. Snagging lists usually identify both without distinction
  • practical completion is a state of affairs in which the works have been completed free from patent defects, other than ones to be ignored as trifling
  • whether or not an item is trifling is a matter of fact and degree, to be measured against ‘the purpose of allowing the employers to take possession of the works and to use them as intended’ (per Jarvis v Westminster  [1969] 3 All ER 1025). However, the court warned that:
‘...this should not be elevated into the proposition that if, say, a house is capable of being inhabited, or a hotel opened for business, the works must be regarded as practically complete, regardless of the nature and extent of the items of work which remain to be completed/remedied.’

In this regard, the court noted that the emphasis in Bovis Lend Lease v  Saillard Fuller (2001) 77 ConLR 134 on the employer's ability to take possession should not be regarded (without more) as an accurate statement of the law

  • the mere fact that the defect is irremediable does not mean that the works are not practically complete (the court rejected the submission that Ruxley v Forsyth [1996] AC 344 supported such a proposition)

For our full analysis of this case, in which the court also concluded that a breach of a term in an agreement for lease concerning the sizing of the property did not necessarily preclude practical completion of the works, see News Analysis: Court of Appeal considers meaning of practical completion under agreement for lease (Mears v Costplan) (subscription required).

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