Supreme Court decides when a contractor can terminate under JCT D&B 2016 following serial late payments

Judgment 15 January 2026 in Providence Building Services Ltd v Hexagon Housing Association Ltd [2026] UKSC 1 overturning the Court of Appeal decision concerning when a contractor can terminate the contract following serial late payments under the JCT Design and Build Contract 2016 edition with amendments.

Ratio decidendi 1:
On an objective natural meaning of the words in their context the contractor must have accrued a right to terminate before they can later use that right, the employer must have been 28 days as amended from 14 days late following the final date for payment and a notice served. In this case the right to terminate never accrued because the employer was never 28 days late paying. It is only when there is a second 28 day late payment that the contractor can give notice to terminate.

Ratio decidendi 2:
It would be a sledge hammer to crack a nut if the contractor could terminate when the employer was just late twice, not requiring the employer to be 28 days late as specified, this clearly was not the intention of the words used.

Ratio decidendi 3:
There is no requirement for the employer's rights to terminate and the contractor's rights to terminate to align. Each party has differing obligations and so it makes sense they would have differing requirements before termination could be performed. In this case their rights are clearly asymmetrical.

Obiter Dicta
It would be wrong to try and distort the clear simple meaning of the words used in the contract in an attempt to protect the contractor from cash flow difficulties caused by late payments. There are statutory provisions available to help the contractor deal with these scenarios.