Cases - VHE Construction plc v RBSTB Trust Co Ltd
Record details
- Name
- VHE Construction plc v RBSTB Trust Co Ltd
- Date
- [2000]
- Citation
- (TCC) BLR 187
- Legislation
- Keywords
- Adjudication - construction contract - withholding notice - payment notice - failure to issue withholding notice - real prospect of successfully defending the claim - defence - cross claim
- Summary
-
VHE had entered into a construction contract with RBSTB under the JCT standard form of building contract with contractor's design. The contract provided that if RBSTB should fail to issue a payment notice within 5 days of receipt of an application for payment, the contractor shall be entitled to be paid the sum applied for.
VHE made 2 applications for payment totalling £1,037,898.05, in respect of which RBSTB failed to serve any payment notices or withholding notices - nor did they pay the sum applied for.
This matter was the subject of 2 separate adjudications. In the first adjudication, the adjudicator decided that VHE were entitled to the sum applied for, namely £1,037,898.05. In the second adjudication, the adjudicator decided that he had the power to open up, review and revise the sum due to the contractor, and he reduced the amount due to £207,857.14 plus interest.
VHE issued an invoice in respect of the sum found to due by the first adjudicator in respect of which RBSTB failed to issue any withholding notices. RBSTB meanwhile claimed that it had an entitlement to liquidated damages, which reduced the sum payable pursuant to the decision of the second adjudicator to £46,974.69. This sum was duly paid.
Before looking at the issue of liquidated damages the judge concluded that the effect of the 2 decisions was that VHE were entitled to be paid the sum found due by the first adjudicator but became liable to repay the difference between that and the sum found due by the second adjudicator on the publication of the second adjudicator's decision.
With regard to the attempt by RBSTB to deduct liquidated damages, the judge found that there was no provision in the contract entitling RBSTB to deduct liquidated damages from the adjudicator's award, but on the contrary the contract required RBSTB to comply with the decision of the adjudicator.
This, the judge found, meant comply without recourse to defences or cross-claims not raised in the adjudication.
The judge therefore concluded that RBSTB had no real prospect of successfully defending the claim by VHE and therefore gave summary judgement against it.