In Bouygues (UK) Ltd v Febrey Structures Ltd [2016] EWHC 1333 (TCC) the court once again considered the impact of a payment schedule on a party's entitlement to payment.  Bouygues employed Febrey to construct a concrete frame and structural topping for a new building at the University of Bath.  The subcontract value was £626k and incorporated GC/Works subcontract terms, but the payment terms had been amended and referred to a payment schedule.  The schedule provided that final date for payment would be 21 days after the Main Contractor Assessment Date for 60% of the application, and 35 days after the Main Contractor Assessment Date for 40% of the application.  Works started in March 2015 and Febrey applied for monthly payments in accordance with the schedule. On 23 October 2015 Febrey applied for £123k.  This meant the due date was 16 November 2015, and the final date for payment of the initial 60% was 23 November 2015. The payment notice for the whole application also fell due on 23 November, but the payment schedule stated the payless notice for the 60% payment was due on 20 November. Bouygues served a payment notice on 23 November, stating that minus £2,041 was due.

No payless notice was served. Febrey argued that it was entitled to the full amount of its application as a payless notice should have been served on 20 November. Febrey referred the dispute to adjudication in January 2016, arguing that the schedule did not comply with the Construction Act because the payment notice was served more than 5 days after the due date. Bouygues accepted the schedule was non-compliant, but asserted that either the contract terms relating to payment should apply, or the Scheme.  The adjudicator found in favour of Febrey. On enforcement, Bouygues applied for declaratory relief, arguing that the contract terms should be preferred as they were Construction Act compliant; on this basis the payless notice was validly served.  Alternatively the schedule should be adjusted to make it compliant with the Act, meaning the date for the payless notice would be 3 December and it would have been served in time. The judge refused to grant the relief sought, finding that the parties had agreed a payment regime in the schedule, and had complied with it.  The reference to 20 November appeared to have been an error, but there was no room for an implied term which would be contrary to the express provisions of the payment schedule.  This is the second case this year where payment schedules have been strictly interpreted, and highlights the importance of getting these right. To read more please click here.