Here Akenhead J granted declaratory relief to an employer under a JCT Standard Building Contract (without quantities) where the contractor had issued an ineffective payment application. The contractor Beck had previously (in April 2015) applied for GBP 2.9 million (against a gross value of GBP 6.5 million) which included a sizeable claim for preliminaries in respect of an extension of time (EOT) which had yet to be awarded. The response to that application was interim payment certificate no. 18, giving a gross value of GBP 3.9 million and a sum payable of GBP 226,000. In May 2015, no interim application was issued, however the contract administrator (CA) issued an interim payment certificate no. 19, giving a gross value of GBP 4 million and a sum payable of GBP 18,000. The employer, Henia, then issued a payless notice, stating that GBP 0 was due to Beck under certificates 18 and 19 because it had an entitlement to LDs for 40 weeks' delay, amounting to GBP 373,000. Beck referred the matter to adjudication, and the adjudicator issued a decision largely in Henia's favour.
In the meantime Henia issued its part 8 proceedings (used to determine claims where there is no substantial factual dispute and/or a declaration is required on construction of a contract or a question of law), seeking decisions
- on the effectiveness of Beck's April application as a payment notice for the May payment date;
- the validity of Henia's payless notice; and
- whether the failure by the CA to provide a decision on the EOT prevented Henia from claiming LDs.
Akenhead J decided that (i) it was not an effective application for May (ii) the payless notice was valid and (iii) Henia was entitled to claim LDs even where the CA had not decided an EOT. This part of the judgment was obiter (because the adjudicator had decided Beck had not made an application for an EOT) and so assumed an effective EOT claim had been submitted, and the CA had failed to reach a decision on it. The judge concluded that clause 2.32 was not drafted in such a way that the CA's proper operation of the EOT provisions was a condition precedent to the entitlement to deduct LDs, although he found that the non-completion certificate and employer's notice were conditions precedent.