City Basements Ltd v Nordic Construction UK Ltd (TCC - 14.4.2014)

A dispute arose as to the non-payment of the sub-contractor’s interim payment application by its final date for payment despite the non-payment not being discussed and the contractor failing to serve a payment or pay less notice


Technology and Construction Court

Ramsey J

14 April 2014

The sub-contractor submitted interim payment application 8. The contractor failed to serve any payment or pay less notice in respect of the application. The sub-contractor referred the question of the contractor’s non-payment to adjudication and was awarded the amount of its application. The contractor submitted in support of its contention that no dispute had arisen that (i) The sub-contractor’s interim payment application was merely overlooked in the course of concerns both as to its continued performance and as to achieving practical completion of the works and (ii) There was therefore no basis for inferring that there was a dispute when the final date for payment of the payment application passed five days before the notice of adjudication was served without any payment having been made.


Ramsey J rejected the contractor’s contention on the basis that it disputed the payment being made on the final date for payment or at any date after that because (i) There was a period of some three weeks from the date for payment until the final date for payment when it was open to the contractor to take any points it sought legitimately to take under the contract (ii) If payment was not made on the final date for payment or shortly afterwards, the clear inference on an objective basis was that there was a dispute as to whether the contractor would make the payment (iii) There is no need for the parties to do anything else other than comply with the contractual provisions in the case of an adjudication where, as in the instant case, there is a simple dispute about payment (iv) If the parties had complied with the contractual provisions, payment would have been made on the final date for payment and (v) Payment was not made on the final date for payment and the only possible inference was that there was a dispute as to the making of payment on that date, despite the fact that the contractual mechanism for a payment notice or pay less notice had not been complied with. The contractor’s submission that it merely overlooked the position should be rejected because the court was not concerned with the parties’ subjective positions.