The applicant applied to strike out a winding up petition that had been presented against it. The parties had entered into two construction contracts under which the applicant had subcontracted the fabrication and erection of steelworks to the respondent in relation to two separate sites. The contracts failed to provide an adequate mechanism for payment such that the Housing Grants, Construction and Regeneration Act 1996 (as amended) (HGCRA 1996) and the Scheme for Construction Contracts (England and Wales) Regulations 1998 (as amended) applied. The applicant failed to issue payment notices required under para 9 of the Scheme and the HGCRA 1996. The respondent therefore submitted two default payment notices to the applicant.
It was alleged by the respondent that no pay less notices had been served by the applicant; the respondent therefore presented a winding up petition on the basis of the default payment notices served, in accordance with the decision in R&S Fire and Security Services Ltd v Fire Defence Plc  EWHC 4222 (Ch);  2 BCLC 92.
The applicant applied to strike out the winding up petition on the basis that the HGCRA 1996 did not apply to contracts of less than 45 days, such that the payment notices served by the respondent were not default notices within the meaning of the HGCRA 1996 and the decision in R&S Fire. The respondent’s case was that the Scheme and s 110 of the HGCRA 1996 provided for a system of giving default notices, which was applicable to every construction contract.
The court held that there was a serious dispute as to whether the provisions of s 110 of the HGCRA 1996 applied, and that it was not an appropriate forum for the determination of such a technical issue; the more appropriate forum was the Technology and Construction Court. Since there was a dispute on substantial grounds as to whether there was a debt in the sum sought by the respondent, the winding up petition had to be dismissed.