Cases - Melville Dundas Ltd (in receivership) v George Wimpey UK Ltd
Record details
- Name
- Melville Dundas Ltd (in receivership) v George Wimpey UK Ltd
- Date
- [2007]
- Citation
- BLR 257
- Legislation
- Keywords
- Contract - construction contract - payment - interim payments - withholding notices - insolvency - whether a party was entitled to withhold payment in the absence of a valid withholding notice where the contract expressly provided that where one party went into receivership that the provisions of the contract which required any further payment or any release or further release of retention to the contractor would not apply - Housing Grants, Construction and Regeneration Act 1996, section 111(1) - JCT Standard Form with Contractors' Design (1998) edition - Pre-LDEDCA: meaning of ‘sum due’ - insolvency of contractor
- Summary
-
The receiver sought to recover the interim payment on the grounds that no withholding notice had been issued. The employer relied on clause 27.6.5.1, which provided that in the event of the determination of the contract under clause 27:
'Subject to cl 27.5.3 and 27.6.5.2 the provisions of this contract which require any further payment or any release or further of retention to the contractor shall not apply; provided that clause 27.6.5.1 shall not be construed so as to prevent the enforcement by the contractor of any rights which have accrued under this contract in respect of amounts properly due to be paid by the employer to the contractor which the employer has unreasonably not paid and which, where clause 27.3.4 applies, have accrued 28 days or more before the date when under clause 27.3.4 the employer could first give notice to determine the employment of the contractor or, where clause 27.3.4 does not apply, which have accrued 28 days or more before the date of determination of the employment of the contractor' (emphasis added).
Given the timing of the Melville's receivership it was not possible for Wimpey to serve a withholding notice within the statutory time limits. The court held that the effect of the above clause was that the employer was no longer required to pay the interim payment, despite the fact that no withholding notice had been issued.