Citation: [2018] EWHC 123 (TCC)
The parties entered into a JCT contract for the design and construction of a new hotel at Heathrow. In response to an interim payment application by S&T, Grove issued a payment notice which contained sufficient information to enable S&T to know the basis of the valuation but it was issued out of time. Grove then issued a pay less notice in time but did not re-attach the detail of the calculation. Instead, it sought to expressly incorporate by reference the detail of the sum to be paid as set out in the earlier payment notice. S&T persuaded an adjudicator that this was insufficient to stand as a valid pay less notice. On a Part 8 application, Coulson J decided that Grove had complied with the requirement to “specify the basis of the calculation”. The pay less notice was in that respect compliant.
Grove also sought a declaration that, in any event, it was entitled to adjudicate the “true value” of the payment application even if both its notices had been invalid. This required it to persuade the Court that the first instance decisions in ISG v Seevic, Galliford Try v Estura and Kersfield v Bray and Slaughter should not be followed. Coulson J agreed that the reasoning in those cases was erroneous and incomplete. He therefore declared that upon payment, an employer was entitled to commence an adjudication to establish the true sum due and make a claim for any consequential financial adjustment that arose as a result.
In respect of delay, Grove was required to serve notice of an intention to deduct liquidated damages and, then, a subsequent notice actually making the deduction. S&T complained that serving both notices within the space of one minute, as Grove had done, was insufficient to enable it to consider the warning. Coulson J held that it was sufficient that the two notices had been sent and received in the correct sequence and that there was no minimum period required between the two.
The case has wide-ranging ramifications for the construction industry and grapples with key questions that have concerned the TCC for some time.
Alexander Nissen QC acted for Grove in succeeding on all issues before the Court.
