WINDGLASS WINDOWS LTD V CAPITAL SKYLINE CONSTRUCTION LTD

The cross claim which the contractor sought to bring in the adjudication by way of defence to the sub-contractors claim could not properly be brought in the absence of an effective withholding notice having been given by the contractor in respect of that claim
 
 

Technology and Construction Court
Coulson J
14 July 2009

 
The cross claim which the contractor sought to bring in the adjudication by way of defence to the sub-contractor’s claim could not properly be brought in the absence of an effective withholding notice having been given by the contractor in respect of that claim
 
The sub-contractor made interim payment applications. There was a dispute as to whether the sub-contractor had agreed to make its payment applications in a particular form in that the contractor said that the sub-contractor had agreed to make applications in its standard format and the sub-contractor said that there was no such agreement. The contractor sent letters (in identical form) to the sub-contractor in response to its payment applications in which it stated that each application had to be in its standard format before it could be processed and refused to make any payment on any of the applications. The sub-contractor referred the resulting dispute as to its payment entitlement to adjudication and included as part of that dispute the (secondary) dispute as to whether there had been an agreement that the sub-contractor’s payment applications would be in the contractor’s standard form. The contractor contended in the adjudication that its cross claim for alleged delays and defects should be determined by the adjudicator as a defence by way of set off. The adjudicator decided that there had been no agreement as to the form of payment applications, that the contractor had failed to issue any effective notices of payment and/or withholding notices with the result that it was not entitled to raise any set off or cross claim either for defects or delay and that the sub-contractor was entitled to the sums it claimed.
 
Coulson J held that the cross claim which the contractor sought to bring in the adjudication by way of defence to the sub-contractor’s claim could not properly be brought in the absence of an effective withholding notice having been given by the contractor in respect of that claim. The purported withholding notices given by the contractor were not effective on the basis that the adjudicator’s conclusion that the contractor had failed to give effective such notices and could therefore not raise its cross claim by way of defence were matters on which the adjudicator was asked for his decision, all fell fairly and squarely within his jurisdiction and were in any event correct in the circumstances of the instant case.
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