In the recent case of Jawaby Property Investments Ltd v The Interiors Group Ltd  EWHC 557 (TCC), Jawaby, the employer, sought a declaration from the Technology and Construction Court in relation to Interim Payment obligations under a contract it entered into with Interiors.
The contract was an amended JCT 2011 Design and Build Contract, and related to the refurbishment of Holborn Tower in central London.
The contractor, Interiors, was required to make monthly Interim Applications for Payment to Jawaby on the 8th day of the month. These applications were to contain supporting information which gave a breakdown of the submitted valuation. The first six Interim Payment Applications were submitted in this way.
On 7 January 2016, Interiors sent an email to Jawaby which included an ‘initial assessment’ for valuation.
Jawaby argued that this was not a valid Interim Application for Payment for the following reasons:
1)The valuation was sent by email and this did not comply with the requirements for service within the contract.
2)The valuation was not actually described as an Interim Application.
3)The valuation didn’t include the requisite supporting information which should accompany an Interim Application.
The judge held that:
1)On the issue of whether an Interim Application could be served by email, the contract neither expressly nor impliedly excluded the electronic service of valuations. Parties who do not wish service by email to be valid should expressly include a provision to this effect in the contract. Regardless of this, Jawaby had accepted the previous six valuations via email and had been satisfied that these were all valid Interim Applications. Jawaby had subsequently established a convention which permitted the service of valuations electronically.
2)Aside from the electronic service issue, the email sent on 7 January was not a valid Interim Application. The valuation was described as an ‘initial assessment’, and so could not objectively be considered a firm or final assessment as it didn’t conform to the requirements under the contract. None of the previous valuations had used this description, and so Jawaby could not be expected to deem this a valid Interim Application for Payment.
This case shows that professionals should ensure Interim Payment Applications are set out with clarity and adhere to the requirements within the contract. The court will be reluctant to declare Interim Payment Applications as valid if they are ambiguous. Moreover, this need for clarity also extends to all other contractual notices.
It is also worth noting the serious implications of deviating from a contract and establishing a convention. If this occurs, the court may acknowledge your conduct and hold you to this course of action in the future.