Cases - Pearce Design International Ltd v Mark Johnson & another
Record details
- Name
- Pearce Design International Ltd v Mark Johnson & another
- Date
- [2007]
- Citation
- BLR 381
- Legislation
- Keywords
- Pre-LDEDCA: Meaning of a 'sum due' - payment - not issuing withholding notices
- Summary
-
The parties entered into a contract for certain building works to be carried out at the employer's house using the JCT Standard Form of Building Contract with Contractor's Design (1998 Edition). Clause 27.2.1 of the contract permitted the employer to determine the contract if the contractor failed to proceed regularly and diligently with the performance of its obligations. The parties' obligations regarding payment following such determination were governed by clause 27.6.5.1, which is set out in the case summary for Melville Dundas Ltd v George Wimpey UK Ltd.
During the course of the works the employer had failed to make full payment in respect of interim payments over a period of 8 months and had not issued any withholding notices. The employer then determined the contract under clause 27.2.1. The contractor sought to recover the amounts due on the interim payments by way of summary judgment on the grounds that no withholding notices had been issued.
The court held that the employer could not rely on clause 27.6.5.1 in order to resist payment for the following reasons:
- The contractor's rights to the sums due on the interim payments had accrued more than 28 days before the date of determination of the contract.
- Because he had not issued a withholding notice, the employer had 'unreasonably not paid' the sums claimed by the contractor.
- Accordingly, the express terms of clause 27.6.5.1 prevented him from relying on that clause as an excuse for non-payment following determination of the contract.