The payment machinery imposed by the Construction Act targets cash flow and, naturally, interim payments. But does it also apply to payments due following completion or termination? Architects sent a final invoice to their developer client who did not respond with a pay less notice and did not pay. But should the developer have served a pay less notice?

The Court of Appeal ruled that section 111 of the Construction Act applies to both interim and final applications for payment. This was on the basis of the clear words of section 111, which relates to all payments “provided for by a construction contract”, not just interim payments, and in the light of the case law. If the developer therefore wished to resist paying the architects’ final or termination account, then (subject to a separate repudiation issue) it was obliged to serve a pay less notice.

Adam Architecture Ltd v Halsbury Homes Ltd [2017] EWCA Civ 1735