Since the Construction Act was amended, failure to serve the right notices at the right time can have serious consequences. The payment application, however optimistic (unless fraudulent), has to be paid in full. But only if the application has been properly made. Mr Justice Akenhead drove the message home in Henia v Beck.
He said that the interim application under the contract wording in question should be considered in the same light as a certificate. If there were to be potentially serious consequences flowing from it being an interim application, it must be clear that it was what it purported to be, so that the parties knew what to do about it and when. An application had to comply with the relevant contract clause, and had to be clear and unambiguous that an application relating to a specific due date was being made. The application in question did not.
The judge also ruled on the interpretation of the contract provisions dealing with the issue of a pay less notice which, he said, were consistent with, and effectively reflected, the Construction Act drafting. He said that the pay less notice could not only raise legitimate set-offs and deductions specifically permitted by the contract but also deploy the employer’s own valuation of the works.
The judge also offered his view on a final point that he did not need to decide, that a failure on the part of the contract administrator to operate the extension of time provisions did not prevent the employer from deducting liquidated damages, where the contract conditions for making such a deduction had been met.