R & C Electrical Engineers Ltd V Shaylor Construction Ltd

There should be no order that the unpaid balance of final sub-sub-contract sum which the adjudicator held to be due to the sub-sub-contractor should be paid to it immediately by the sub-contractor
R & C Electrical Engineers Ltd V Shaylor Construction Ltd
Technology and Construction Court
Edwards-Stuart J
15 May 2012
Whether the sub-contractor had been entitled to withhold the final sub-sub-contract sum determined by the adjudicator as being due to the sub-sub-contractor raised the issue of what was meant by “in accordance with clause 21.8(b)” of the sub-sub-contract in that part of the adjudicator’s decision in which he held that any sum to which the sub-sub-contractor was entitled to be paid by the sub-contractor was not to be paid forthwith and was only to be paid following the issue of the final certificate under the sub-contract "in accordance with" clause 21.8(b). Akenhead J held that the sub-contractor was in principle to withhold payment of that sum in respect of the cost of delays.
"In accordance with" meant “in accordance with” the provisions of clause 21.8(b) and those provisions specifically conferred a right on the sub-contractor to withhold a sum against the final payment on giving at least 7 days notice and could therefore not be excluded from the scope of the adjudicator’s decision. The sub-sub-contractor correctly submitted that the amount of the final payment would be the amount of the final sub-contract sum less any contra charges and that this was the exercise carried out by the adjudicator although in fact the contra charges amounted to nil because he found that the sub-contractor had failed to prove the loss caused by the four weeks delay that he attributed to it. If a relevant contra charge was overlooked or was the subject of a contra charge notified to the sub-contractor by the contractor after the issue of the final payment notice to the sub-sub-contractor the sub-contractor would in principle be entitled to deduct that charge from the amount of the final payment provided that it complied with the notice requirements of the second part of clause 21.8(b). However, whilst the sub-sub-contractor’s further submission that the adjudicator had considered the sub-contractor's claim for delay and had rejected it was correct in the sense that that claim was only advanced under clause 20.1, which was an approach that was bound to fail since the adjudicator held that time was at large, did not suggest that the sub-contractor was not entitled to advance a claim for damages for the sub-sub-contractor's failure to carry out and complete the works within a reasonable time and did not reject such a claim but said that no such claim had been made but could have been made as a matter of principle in the adjudication the sub-contractor had chosen to make it.