HT-2023-000016 - [2024] EWHC 1825 (TCC)

ProMep advanced a further and alternative argument that, even if the insolvency set-off applied, there was no mutuality of dealings which require both parties to owe each other debts in the same right. That absence of mutuality arose, it was said, from the fact that Henry’s claims against ProMep fell to be dealt with in the CVA while ProMep’s claims against Henry fell to be dealt with outside the CVA. That does not seem to me to assist ProMep’s case because it is simply another aspect of the issue of construction of clause 8.3.

It was also submitted that there can be no set-off between different contracts. For that argument, ProMep relied on the provisions of section 110(1A) of the Housing Grants Construction and Regeneration Act 1996 which, in effect, provides that an adequate payment mechanism cannot be one that makes payment conditional on performance of obligations under another contract. ProMep then submitted that the effect was that sums due on different projects lacked mutuality. I cannot see that that contention could be right as it would take construction contracts to which the 1996 Act applied outside the operation of rule 14.25 and that is clearly not the case.