When does a Final Statement become a Final Final Statement?

In Oakland Wantage Care Homes Limited -v- Stepnell Limited [2026] EWHC 1530 (TCC), the Court considered what constituted a Final Statement under a JCT Design & Build Contract.

The parties entered into a JCT Design & Build Contract (2016 edition), subject to a bespoke schedule of amendments. The Works on the project were certified as having achieved practical completion on 26 April 2021, which then started a 12-month rectification period. Thereafter, various meetings and exchanges took place in which the Contractor’s Final Account was discussed.

These are the key events that followed those Final Account discussions:

• 17 February 2022: The Contractor issued a document which contained figures relating to its Final Account, but the document was labelled as a draft and the figures contained therein were described as a forecast (the “February 2022 Statement”).
• 7 March 2022: The Employer’s Agent, which had understood the February 2022 Statement to be the Contractor’s Final Statement under clause 4.24, disputed the sums applied for and issued a payment certificate in response to Interim Valuation 36 (“the “March 2022 Response”). The March 2022 Response was stated to have been prepared “Further to the [contractor’s] final account projection…”.
• 9 February 2024: The Contractor issued a further document which it later claimed to be the Final Statement (the “February 2024 Statement”). No payment certificate or pay less notice was issued in response to the February 2024 Statement.

The Court had to consider which of the Contractor’s statements constituted the Final Statement under clause 4.24. If it was the February 2022 Statement, the Employer’s Agent had issued a payment certificate disputing the sums claimed. If it was the February 2024 Statement, the Employer’s Agent had not issued a payment certificate or pay less notice, and the Employer would be required to pay the sums applied for in full.

The Judge concluded that a reasonable recipient of the February 2022 Statement would not have understood that document to be a Final Statement under clause 4.24, due to it being labelled as a draft and the figures being a forecast. The February 2024 Statement was the Final Statement and, despite the objections raised by the Employer’s Agent in March 2022, the sums stated therein were conclusive as to the sums due and owing to the Contractor.

Beale & Co’s observations

The circumstances of this case are not unusual. We have encountered scenarios in which a contractor or a subcontractor has made an application for payment, and the employer has responded by arguing that a Final Account has already taken place, with the Contractor/Subcontractor, in effect, seeking to benefit from a ‘Final Final Account’.

To avoid these types of scenarios arising, this case is a timely reminder that, whilst the Court will typically be guided by the substance of a document rather than the title, the title can still influence what a reasonable person would understand the document to be.

If, as here, a contractual document is being issued in draft, that document should be clearly labelled as such and should be treated accordingly by the recipient. If the figures in the draft are based on estimates or forecasts, which are subject to change in the final version, this should also be clearly stated.

The implementation of robust contract management procedures and the diarising of all critical dates will help to prevent these issues arising and/or mitigate the impact of them going wrong. If there is any doubt as to whether a Contractor or a Subcontractor has issued a valid Final Statement, it may be appropriate to issue a  notice setting out the perceived value of the account, without prejudice to that parties’ position on the validity of the Final Statement. Under no circumstances should a document that appears or purports to be a Final Statement be ignored, even if a payment certificate or pay less notice has already been given in respect of a previous purported Final Statement.

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