What is ‘practical completion’?
In this article, Mediatelegal panel member Ken Salmon, also of Slater Heelis Solicitors, consider recent developments on the legal question of ‘practical completion’. There has been plenty of caselaw on this issue – perhaps mediation can be used more often to explore an alternate approach to reaching a solution? Let’s see what Ken has to say. . . .
The Court of Appeal has considered the law on practical completion. After reviewing previous authorities the court concluded with the following summary.
Practical completion is easier to recognise than define: see Keating on Construction Contracts, 10thEdition, at paragraph 20 – 169. There are no hard and fast rules: see Construction Lawby Baileyparagraph 5.117, footnote 349.
The existence of latent defects could not prevent practical completion. If the defect was latent, nobody would know about it and it could not therefore prevent the certifier from concluding that practical completion had been achieved.
In relation to patent defects, the cases showed that there was no difference between an item of work that had yet to be completed (i.e. an outstanding item) and an item of defective work which required to be remedied. Snagging lists can and usually do identify both types of item without distinction.
The existence of a patent defect did not prevent practical completiona practical approach developed by Judge Neweyand adopted in all the subsequent cases. The correct approach was that the works had to be completed free from patent defects, other than ones to be ignored as trifling.
Whether or not an item was trifling was 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” (see Salmon LJ in Jarvis). This approach was not to be elevated into a proposition that if, say, a house was 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 remained to be completed/remedied.
The fact that a defect was irremediable did not mean the works were not practically complete. Whether or not a defect was remediable went to the measurement of loss not the issue of completeness.
The court declined to address the question whether there might be a difference between ‘practical completion’ and ‘substantial completion’.
Ken Salmon comment
It appears that the question is an objective one to be viewed from the perspective of the certifier and having regard to the terms of the contract and the nature and extent of the defects and their effect on occupation or intended use. If a building is not fit for occupation or intended use it is all the more likely it will not be practically complete. On the other hand the fact that it is fit for occupation or its intended use does not mean the works are practically complete. In this case a reduction in the size of 56 rooms in a student accommodation block by more than 3% in area did not prevent practical completion. The reduction in size was irremediable and therefore irrelevant to that issue.
K T Salmon – Solicitor at Slater Heelis LLP, and Mediatelegal Panel Mediator.
Coulson LJ in Mears Ltd v Costplan Services (South East) Ltd and Plymouth (Notte Street) Ltd and JR Pickstock Ltd  EWCA Civ 502 at 
Westminster Corp v J Jarvis & Sons Ltd  1 W.L.R. 1448
PerSalmon LJ in Jarvis
HW Nevill (Sunblest) Ltd v William Press & Sons Ltd  1 WLUK 230 and Emson Eastern v EME Developments  6 WLUK 322 followed.
Ruxley Electronics v Forsyth  A.C. 344 considered.