Trant resisted enforcement on the basis that by the time that the adjudication was commenced in January 2020, Hopkins was no longer entitled to be paid the sum stated in Application 26. This was because any entitlement had been superseded by subsequent interim payment cycles, in which Hopkins made further applications for payment which were the subject of valid payment payless notices, and which ‘superseded and corrected’ the sum payable under the Sub-contract as at August 2019. And they had “gone along with” these subsequent payment cycles on a cumulative basis. Thus, Trant said: “The current entitlement as at the date of these proceedings is against the Claimant's application PA33 dated 28 February 2020 in respect of which the Defendant served a payment notice/payless notice which constitutes the notified sum of the amount due under the Sub-contract.”
The first question was whether the so called “correction principle” existed and then second whether enforcing the decision would be inconsistent with it. Alternatively, if the decision were enforced the Court should give effect to the current payment entitlement with the result that payment would be met with an immediate obligation to repay” “…it would be manifestly unjust to permit the Claimant to enforce a decision in respect of PA26, when that sum had ceased to be due, following later payment cycles which the Claimant went long with, before the adjudication started, and no longer represents the current payment entitlement under the Sub-contract. To enforce the decision would be inconsistent with, and undermine, the 'correction' principle set out in the case law, namely, that interim payments can be corrected in the next interim payment cycle. Here that correction occurred long before the adjudication was commenced and so the earlier payment entitlement ceased to exist and is replaced by the current sumdue pursuant to s111.
The court held on authority that such a principle did exist[14].
The “correction principle” referred to meant that if an interim application was not met by the required notices, leading to the result that the sum applied for became the sum due, any correction to reflect the true value of the work (and the application) was permissible on later applications. However, the quid pro quo was that the amount due on the original application was precisely that: the amount due. It fell due as in this case, because the relevant notices were not issued. But the correction principle could not be applied to lead to a result that the amount was not due at all. The fact that it was an interim application, and the amount could be corrected later, did not assist Trant.
Counsel for Trant accepted that this was a novel point.
He identified, correctly, that there was another adjudication currently on foot between the parties on the same project, to determine the extent to which Hopkins was entitled to payment of any further sums under the sub-contract which would take some weeks or more to decide.
It was therefore contended that:
[ 11] [2020] EWHC 1305 (TCC) [12] See Macob Civil Engineering Limited v Morrison Construction Limited [1999] EWHC Tech 254, and [1999] BLR 93, [13] Hutton Construction Limited v Wilson Properties (London) Limited [2017] BLR 344 at [3]. [14] ICI Limited v Merit Merrell Technology Limited [2017] EWHC 1763 (TCC); S&T (UK) Limited v Grove Developments Limited 2018 EWCA Civ 2488
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