vi) The use of the terms “App25” and “AFP25” clearly pointed to an intention that the PLN was to related to that application. Nothing in the PLN or elsewhere in the package of documents, pointed to it being a response to AFP24. The notice contained Advance’s own assessment of ENISCO’s assessment of valuation at 19 November 2021 i.e. the assessment giving rise to the notified sum at AFP 25. v) vi) The fact the notice was given one day before the final date for payment of AFP24 was a neutral factor. Finally the court rejected the argument that there was justification for viewing the PLN on a “broader level”. The facts did not warrant such an approach. The declaration was refused.
It was ENISCA’ contention that the existence of a payment cycle to create a due date for payment and final date for payment was essential to the operation of the payment mechanism and therefore the ability to serve a valid payment notice or PLN.. The pointed to the case of Bexheat Ltd v Essex Services Ltd[13] in support. The court agreed. It was plain from a review of the payment regime under the Act that payment notices were required to referable to individual payment cycles. An individual PLN had to be referable to the payment notice in which the notified sum against which it was given was identified. Bexheat confirmed that view. Applications 24 and 25 were and were intended to be substantively different, assessed at different dates (22 October and 19 November) and they were for different amounts. Advance had a second string to their bow. There was nothing in the Act or contract to prevent a notice being given against more than one payment application. They contended their PLN against AFP25 could respond to AFP24 as well.
Comment
This case discusses several interesting points. First, it is useful to be reminded that it is the Act and not the Contract which lays down the payment regime. The contract should and usually will identify a means of establishing the payment cycle, from which the due date for payment, final date for payment and last date for giving a PLN can be calculated. (If the contract does not do so then the Act and Scheme will supply what is missing or replace non Act-compliant provisions.) Second, the court found that the PLN in question could not serve to answer two separate payment applications. It remains to be seen whether this is possible in different circumstances and if and when a PLN is so designed and expressed. Third it explores objectively speaking, what a reasonable recipient, in the position of the actual recipient (that is with that party’s knowledge, for example of the contract) would understand the
The court rejected this novel proposition for a number of reasons.
i) The use of the terms “App25” and “AFP25” clearly pointed to an intention that the PLN was to related to that application. Nothing in the PLN or elsewhere in the package of documents, pointed to it being a response to AFP24. The notice contained Advance’s own assessment of ENISCO’s ii) assessment of valuation at 19 November 2021 i.e. the assessment giving rise to the notified sum at AFP 25. The fact the notice was given one day before the final date for payment of AFP24 was a neutral factor. iii)
[13] [2022] EWHC 936
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