Default payment notice meaning

Bellway Homes Limited v Surgo Construction Limited [2024] EWHC 10 (TCC) What are the practical implications of this case? In adjudications governed by the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), a party is permitted to place only one dispute before the adjudicator (HGCRA 1996, s 108(1)). Where more than one dispute is advanced, the adjudicator has no jurisdiction to proceed (Fastrack v Morrison). This decision is the first to address whether a payee’s interim payment claim that proceeds on two alternative footings—(i) the true valuation of the works and/or (ii) entitlement to the sum applied for because no valid payment or pay less notice was served (often termed a ‘smash and grab’ claim)—should be treated as a single dispute. The court concluded that it is one dispute, with the consequence that an adjudicator has jurisdiction to consider both bases within the same reference. The outcome will be of real importance to parties engaged in interim payment contests, as it confirms that valuation and notice-default arguments...

Background This appeal concerned the proper interpretation of a termination clause within a building contract. The parties adopted the Joint Contracts Tribunal (JCT) Design and Build Contract 2016, a standard-form agreement very widely used across the construction industry. The wording of the termination clause in dispute is unchanged in the 2024 edition of the JCT contract. The contract was between Hexagon Housing Association Ltd (the Employer) and Providence Building Services Ltd (the Contractor). Under that agreement, the Contractor was to construct buildings in Purley, London, in accordance with the Employer’s specification. A timetable governing payments formed part of the bargain. The dispute centred on two instances of late payment by the Employer. In December 2022, the Employer paid the Contractor 14 days after the date for payment. In May 2023, the Employer again failed to pay on time; on the following day, the Contractor issued a notice purporting to terminate the contract. The Contractor’s case was that the contract permitted termination upon two late payments...

VMA Services Limited v Project One London Limited [2025] EWHC 1815 (TCC) What are the practical implications of this case? The decision underscores that where an employer (or main contractor) does not issue a compliant Payment or Pay Less Notice, the contractor (or sub‑contractor) becomes entitled to the notified sum — namely the figure stated in the payee’s default payment notice — and the adjudicator may direct immediate payment of that amount, without need for a further adjudication. Paying the notified sum is a mandatory, immediate legal obligation of payment. A true valuation adjudication cannot be used by the employer (or main contractor) to challenge liability or quantum until the notified sum has first been paid in full. Accordingly, serving valid Payment or Pay Less Notices is essential to preserve the right to contest payment figures through the adjudication process and to avoid surrendering the opportunity. It also confirms an adjudicator’s jurisdiction to make a monetary award in favour of a responding party where, within the scope of...

JCT contracts include comprehensive rules on termination, explaining the grounds on which parties may end matters and the effects that follow. Under these forms, it is the Contractor’s employment that is brought to an end, rather than the contract itself. This distinction is intended to ensure the contract’s post-termination provisions remain operative after termination. This Practice Note addresses the termination clauses in the JCT Standard Building Contract (SBC) With Quantities 2011, 2016 and 2024 editions, found in section 8 of those agreements. Equivalent mechanisms also appear in other JCT contracts. It should be read in conjunction with Practice Note: Termination of a construction contract. Termination should always be approached with great care. If a termination is wrongful, or if the prescribed procedures are not followed precisely, the attempt to terminate may amount to a repudiatory breach of contract by the party seeking to do so. Furthermore, where the other party challenges the purported termination, the terminating party may find itself drawn into an expensive dispute...

What are the issues for a tenant if an intermediate landlord becomes insolvent? This Practice Note considers to whom the rent might be payable, and addresses disclaimer, forfeiture and surrender of the superior lease. Rent payment An insolvent landlord might default on rent owed to its superior landlord. Under the Commercial Rent Arrears Recovery (CRAR) regime, a superior landlord may issue a notice requiring an undertenant to pay rent straight to the superior landlord where the immediate tenant is in arrears, continuing until those arrears are cleared. If the undertenant then does not pay, the superior landlord may exercise CRAR against the undertenant. To promote fairness, where the tenant pays any sum under a notice served by a superior landlord, the undertenant may deduct that sum from the rent due to its immediate landlord, even if the amount has already been paid in full or in part by another person, or the notice has been replaced with one served on a different undertenant (subject to specified exceptions...

Court of Appeal—professional negligence ARCHIVED : This Practice Note has been archived and is not maintained. The Court of Appeal upheld an appeal in a claim against solicitors, holding that the loss of a chance head of damage was too remote. At first instance, the judge concluded that Lewis Silkin LLP had fallen below the required standard by not advising their client to include a jurisdiction provision in his employment agreement with a franchisee involved in the Indian Premier League’s Twenty20 competition. Because no jurisdiction clause appeared in the contract, when the client later issued proceedings against the franchisee over a severance entitlement, he faced jurisdictional challenges (ultimately dismissed) brought by the franchisee, which postponed his obtaining judgment for £10 million in severance. The client’s case was that, with proper advice on jurisdiction, the contract would have contained an exclusive jurisdiction clause. On that footing, he said, he would have secured judgment for the severance sum sooner (as there would have been no hold‑ups arising from jurisdiction objections) and...

[ Printed on borrower letterheaded paper ] [ insert date ] To: [ insert name of lender ] (the Lender) From: [ insert name of borrower ] (the Borrower) Facility agreement between the Borrower and the Lender dated [ insert date ] (the Facility Agreement) Terms and references in the Facility Agreement have the same meaning. We request [ the OR a ] Loan under the Facility Agreement as follows: Amount of Loan: £[ insert amount ] Drawdown Date: [ insert date ] Purpose of Loan: [ insert purpose of loan ] Pay the Loan into: Bank: [ insert name of bank ] Account name: [ insert name of account ] Account number: [ insert account number ] Sort code: [ insert sort code ] We confirm that on the notice date and the Drawdown Date: no Event of Default or Potential Event of...

This Deed is dated [ insert day and month ] 20[ insert year ] Parties [ insert name of Owner ], a company incorporated in [ England and Wales ], with registered number [ insert company number ], whose registered office is at [ insert address ] (the Owner); and [ insert name of Mortgagee ] of [ insert address ] (the Mortgagee) RECITALS (A) The Owner and the Mortgagee are parties to a loan agreement dated [ insert date ] (the Loan Agreement) [ a copy of which is attached to this Deed as Schedule 3 ], under which the Mortgagee has agreed to provide a loan of [ insert amount of loan ] to the Owner to [ re- ] finance the [ purchase OR construction ] of the m.v. [ insert name of ship ], registered as a United Kingdom ship in the Owner’s name under official number [ insert ship number ] (the Ship)...

Payee’s payment notice in default of payer’s notice Reference: [ insert appropriate reference to the contract and project ] Date: [ insert date ] To: [ insert recipient’s name ] Payment due date: [ insert the relevant due date of the payment, determined in accordance with the contract ] This notice is issued pursuant to section 110B of the Housing Grants, Construction and Regeneration Act 1996 and clause(s) [ insert number(s) ] of the contract dated [ insert date ], in the absence of a payer’s notice. Set out below is the sum we believe is, or was, payable on the payment due date together with the rationale for its calculation: Sum due at the payment due date: £[ insert amount due at payment due date ] Basis of calculation: Set out the basis of the calculation/refer to separate sheets Signed: [ insert name ] For and on behalf of: [ insert name ]...