A recent Court of Appeal case has confirmed what I tell my workshop delegates, that
practical completion is easier to recognise than define
Whilst shying away from hard and fast rules, and confirming it is a matter for the contract administrator to decide, the Court said:
- latent defects cannot prevent practical completion
- practical completion is only achieved when any outstanding works and patent defects can be ignored as trifling
- whether something is trifling is matter of fact and degree
- the test is whether the client can take possession of the works and use them as intended
- a project with an irremediable defect (such as the Robin Rigg windfarm or the shallow swimming pool) can still be practically complete.
Any breach of the scope or quality requirements in a contract is a defect and the usual contractual remedy is to ask the contractor to rectify during the defects period and afterwards to claim compensation.
A contract administrator has an unfettered discretion to issue a statement or certificate of practical completion when the works are in her opinion practically complete. It cannot be withheld unless any outstanding works or defects prevent the client possessing and using the project as intended (and they are more than trifling).
Defining practical completion has rarely been successful – however requiring the contractor to prove performance by carrying out tests before completion results in a more objective approach to visual completion (and is common in engineering and process plant contracts).
What should you do?
Choose your contract administrator carefully and provide objective measures of completion where relevant. But be prepared for some debates about the blurry edges of practical completion.
Case: Mears Ltd v Costplan Services (South East) Ltd & Ors  EWCA Civ 502