3) Payment Application - Validity - Grounds for resisting enforcement: J Tomlinson Ltd v Balfour Beatty Group Ltd [2020] EWHC 1438 (TCC)Fraser J Fraser J enforced an adjudicator’s decision for the amount due on an interim payment application. This was what is somewhat inelegantly termed a ‘smash and grab’ adjudication where there was no payment or payless notice from Balfour and the sum applied for (over £1.4m), became the notified sum due. Balfour had contended before the adjudicator that JTL’s payment application was not in accordance with the particular requirements of the subcontract for three reasons. They now sought to resist enforcement on the basis that the payment application was invalid. This was not a case where Balfour asserted that the adjudicator had acted without jurisdiction or in material breach of the rules of natural justice and therefore the “pay now argue later” principle applied unless they could bring themselves within one of the two exceptions in Hutton Construction Ltd v Wilson Properties (London) Ltd[8].
Balfour relied on three arguments in the adjudication. The first was that the application was not in fact received within or as part of several boxes of documents delivered by JTL by hand and which JTL claimed contained the application. That factual dispute was resolved by the adjudicator in JTL’s favour and could not be pursued by Balfour on enforcement. Second, Balfour said, that to be valid, the application had to be delivered by email to its Leeds office with copy to site, as stated in part 5 of the appendix to the subcontract. There was some force in this argument in that the subcontract provided that in the event of a conflict between them, the appendices would have primacy over the conditions. But as a matter of construction the court found that there was no conflict so the primacy clause did not come into play. Nor were the words relied on in part 5 expressed in mandatory terms so as to prevent an application delivered by hand from being a valid one. payment applications after the valuation dates that had been scheduled in the appendix, must, on the wording of the appendix, be made on the nearest date one month after the last valuation date and the application in question was sooner and thus premature and invalid. The subcontract conditions had provided that applications based on the valuation dates were to be not later than those dates. Balfour relied on the authority of Mr Justice Edwards-Stuart, namely Leeds City Council v Waco UK Ltd [10] where the interim application, as a result of not being submitted on a specific date, was found to be invalid. Third, Balfour argued that
The first exception, admitted error, did not apply. Balfour relied on the second exception namely:
“The second exception concerns the proper timing, categorisation or description of the relevant application for payment, payment notice or payless notice, and could be said to date from Caledonian Modular Limited v Mar City Developments Limited [9].” Though Balfour had not issued a part 8 claim, which was now the established way to determine such a self-contained point as in this case, the validity of the application for payment, the court elected to deal with the point.
[8] [2017] BLR 344 [9] [2015] EWHC 1855 (TCC) [10] [2015] EWHC 1400 (TCC)
Made with FlippingBook - Online catalogs