Calculating time — distinguishing between “at least x days before” and “x days before” an event
Professor Sharon Christensen QUEENSLAND UNIVERSITY OF TECHNOLOGY
Clauses imposing time limits on the performance of contractual obligations are fertile ground for disputes and non-compliance is often raised by parties seeking to terminate contracts. Common phrases such as “at least x days after” or “x days before” are used to describe time periods. Often the differences in meaning are subtle and depend in each case on a construction of the whole of the contract terms in the context of “rules of thumb” that have been applied over time.
The recent decision in Latimore Pty Ltd v Lloyd provides a useful context in which to explore some of these rules.
Latimore Pty Ltd v Lloyd
In this case the parties entered into a contract on 22 February 2020 following the sale of a residential property in Minyama by auction. Settlement was due on 22 April 2020.
The contract was on the terms of the REIQ House and Land Contract (16th edition) but contained a special condition:
Notwithstanding anything else in this contract, the Seller agrees to provide a Pool Safety Certificate to the Buyer 7 days prior to Settlement. The parties agree that this is an essential term of the contract.
The parties agreed and proceeded on the basis that the day “7 days prior to settlement” was 15 April 2020.
At 5.03 pm on 15 April 2020 the buyer terminated the contract because the pool safety certificate had not been provided. The seller provided the pool safety certificate at 6.31 pm on 15 April.
The seller brought a claim for specific performance which depended upon a construction of special condition 3.
The central issue was whether the seller had complied with the contract by providing the certificate on 15 April 2020 at 6.31 pm. This depended primarily upon whether the reference to a “day” in special condition 3 was limited by standard clause 10.4(5) of the contract to a time between 9 am and 5 pm.
Clause 10.4(5) of the REIQ Houses and Land Contract provides that a “notice” given by email after 5 pm on a Business Day will be treated as given or delivered at 9 am on the next Business Day.
Justice Bowskill held that a pool safety certificate was not a notice as referred to in cl 10.4(5). As a consequence, the reference to a day in special condition 3 was not limited by the restriction in cl 10.4 and the general principle applied. Where a term of a contract specifies a date by which something is to occur, satisfaction of the obligation can occur at any time on that day, effectively up until midnight. The contract had therefore not been validly terminated and an order for specific performance was made.
In the course of the judgment Justice Bowskill queried whether the parties had correctly calculated the date for compliance with special condition 3. Her Honour observed that the parties had obviously included the settlement date and could just have easily interpreted the contract as requiring exclusion of the settlement date in the calculation. The logical consequence of this view is that the last date for providing the certificate would have been 14 April 2020 and the seller would have been required to give the certificate 7 clear days prior to settlement.
This raises an important point for parties when calculating time periods where a notice, certificate or other action is required a certain number of days “prior to” or before an event. A variety of phrases may be used to describe this period, all of which may result in different calculations of time.
“x days before”
The phrase “x days before” 1 June or “before” 1 June will usually mean that the event has to occur for 1 June and if a number of days need to be calculated, the last day, 1 June is excluded. For example, a contract requires a buyer to “give a notice to the seller 10 days before the Settlement Date”. The Settlement Date is 30 April. How do you count the 10 days? Generally, the counting of days will exclude the settlement date but include the day on which the notice is to be given. On this basis, the notice may be given up to and including 20 April.
This is consistent with the approach to counting of days for phrases such as “x days after” a date or event. In that case the day of the event is excluded, and the final day included in the calculation.
There may however be circumstances in which a consideration of the whole of the contract results in a conclusion that clear days are required by the phrase. The concept of clear days was discussed in Mordechai v Minister for Immigration and Citizenship. This may depend in each case on the other terms of the contract.
“at least x days before”
Does the calculation of time change when the phrase “at least” is added?
There is a long line of authority which suggests that, unless a contrary intention appears, the expression “at least x days before” or “no later than x days before” should be read as requiring a period of [x] clear days between the start date and the end date: The basis of these decisions is the general rule that the law takes no account of fractions of a day, so a day requires a 24-hour period to elapse: This means when counting the period of days both the commencing date and the expiring date are excluded. For example, if a certificate must be given “at least 5 days before settlement” and settlement is 10 June then the last day for giving the certificate in compliance with the clause is on 4 June before 11.59 pm (unless the contract states an earlier time). The same rule is adopted for similar phrases in statues where the phrase “at least” a specified number of days is used.
“day” or “business day”
There is an important distinction between a clause referring to a day and one referring to a business day. A day is a consecutive period of 24 hours usually from midnight to midnight and at common law a Sunday, Saturday or public holiday is a day. If a provision is to be fulfilled by a named day, in the absence of a contrary contractual provision, it can be fulfilled at any time up to midnight on that date. For this reason it is common for contracts to include a contract term limiting the giving of notices or correspondence to a period of 9 am to 5 pm on a business day.
If parties want to exclude non-business days in the calculation of a time period, the phrase business days should be used in time provisions. A definition of “business day” will be required and in addition, a contractual provision should be made for any act or obligation falling on a non-business day to be performed on the following business day.
For more information about the issues discussed above, read the full article Calculating time — distinguishing between “at least x days before” and “x days before” an event or subscribe to our Australian Property Law Bulletin.