prior to the payment of any immediate payment obligation was not engaged and no question of
jurisdiction could arise. The payment obligation only became immediate upon Mr Rayner
finding the PLN invalid and was discharged within the timeframe set down by him. They also
drew the Court's attention to Stuart Smith J's analysis of Harding (t/a MJ Harding Contractors)
v Paice in the case of Davenport in which it was said the Court of Appeal implied that it was
not an essential prerequisite to relying upon a later true value adjudication decision that the
earlier immediate obligation should be discharged before launching the later true value
adjudication. Paice did not pay its immediate obligation under the third adjudication before
launching the fourth, and they were not precluded from proceeding with or relying upon the
fourth adjudication for that reason. This suggested that the critical time would be when the
court was deciding whether to enforce the immediate obligation.
Alu-Fix submitted that the authorities were clear: you could not commence a TVA until the
existing liability had been discharged.
What is the date of the immediate payment obligation in this case?
The court held that the resolution of the issue lay in determining the commencement date of
the immediate payment obligation: was it the final date for payment under s111 of the Act? Or
in the case of a genuine dispute as to entitlement, the date of the decision of the adjudicator?
Section 111(1) of the Act provided that the notified sum must be paid by the final date for
payment. This created the immediate payment obligation ( Bexheat para. 76(ii)). And that is
what Mr Rayner decided in the SGA.
The existence of a genuine dispute as to the existence of an immediate payment obligation did
not alter the position. For it to be allowed to do so would be to undermine the right to payment
and to tip the balance in favour of the disputing party. And it might also require the court to
decide whether a dispute was genuine or not. The payer could protect itself by serving a PLN.
In what circumstances might a genuine dispute as to the existence of a PLN entitle the
payer to commence a TVA before payment?
Recognising there could be a tension between an apparently premature TVA being a nullity or
surviving for the purposes of reliance, the court suggested the following solution. If an adjudicator in Mr Rayner’s position upheld a "zero" PLN, or the validity of a payment application was successfully challenged, there would have been no ‘notified sum’ within the
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