Cases - Pierce Design v International Ltd v Mark Johnston & another
Record details
- Name
- Pierce Design v International Ltd v Mark Johnston & another
- Date
- [2007]' [2007]
- Citation
- Adj.L.R. 07/17; EWHC 1691 (TCC)
- Legislation
- Keywords
- Contract - construction contract - interim payments - withholding notices - sums due under the contract - determination - whether, in the absence of a valid withholding notice, the contractor was entitled to payment of sums becoming due more than 28 days before the date of the determination and which the employer has unreasonably not paid - Housing Grants, Construction and Regeneration Act 1996 - JCT terms (with contractor's design) (1998 edn)
- Summary
-
The contract was in materially identical terms to that in Melville Dundas. The employer had determined the contract on the ground of failure to regularly and diligently to progress the works, rather than insolvency. Further, the sums due under various interim certificates had become finally payable some months before the date of the determination. No withholding notices had been served. The Court held that Melville Dundas in principle applied so that the employer was not obliged to make any further payments pursuant to clause 27.6.5.1. However, the outcome of the case turned on the meaning of the proviso to clause 27.6.5.1 (not relevant, and so not substantively considered by the House of Lords). This states that clause 27.6.5.1 shall not be construed to apply to payments becoming due more than 28 days before the date of the determination and which the employer has unreasonably not paid. It was common ground that the payments had become due more than 28 days before the determination.
The Court held that as a matter of construction of the contract, an employer would be unreasonable in not paying unless he had issued a withholding notice. It is thought that the same result would obtain in the absence of a contractual obligation to serve a withholding notice as a result of the application of s. 111 of the Act.