HT-2025-000036 - [2025] EWHC 2707 (TCC)

As finally formulated by reamendment, this contention was put as follows:

“10A. The 2022-23 Payments Schedule:

(a)

Was an instruction given by VCL under, and not a variation to the Subcontract.

(b)

Had therefore to be read subject to the Subcontract, and in particular subject to clause 4 of the Subcontract.

(c)

Did not set out a clear and transparent regime setting out what sums became due and when for the purposes of clause 4 of the Subcontract. In particular, the 2022-23 Payments Schedule did not set out any (alternatively any clear and unambiguous) Interim Valuation Dates for the purposes of continuing the interim payment regime beyond the dates set out in Numbered Document 6 to the Subcontract, meaning that the Scheme for Construction Contracts (England & Wales) Regulations 1998 (SI 649/1998) applied to fix the relevant (valuation) periods instead. That in turn meant that (so long as the 2022-23 Payments Schedule applied) there was no relevant right under the Subcontract to submit a contractually-compliant application pursuant to clause 4.6.3.1 as had otherwise been the case;

(d)

Alternatively, contemplated Gypcraft’s interim payment applications were to be submitted on the interim valuation date, and not 4 days in advance of it, meaning that any applications submitted in accordance with the 2022-23 Payments Schedule would not be submitted in accordance with the Subcontract;

(e)

Therefore on either basis the Subcontract at all material times (whether as amended, varied or supplemented by the 2022-23 Schedule) was not (or was no longer) a contract which required or permitted Gypcraft to submit an application within the meaning of s110B (4) of the Housing Grants, Construction & Regeneration Act 1996.”

As an initial observation, this argument is very technical and would have the practical result that the payment regime cannot work as, broadly speaking, the Act and the Sub-Contract intended. That does not necessarily mean that the argument is wrong, but the Court is, in my view, entitled to approach this part of the case with some scepticism. As Coulson LJ observed in Bennett Construction Ltd. v CIMC MBS Ltd. [2019] BLR 587 at [42]:

“the courts expect the parties to adopt business common sense as to the arrangements for invoicing and payment.”

What this argument really amounts to is the contention that it was not possible, reading together clause 4 and the 2022/3 and subsequent Schedules, for Gypcraft to give “such notification in accordance with the contract” as contemplated by section 110B(4)(b) of the Act.

I do not agree.

As to the first way of putting the case – that the Payments Schedule did not set out any (alternatively any clear and unambiguous) Interim Valuation Dates – this seems to me to be an impossible reading of the Schedule. In relation to the application with which the Adjudicator was concerned, the Schedule stated in terms that:

This was clearly and methodically giving effect to the dates and regime contemplated by clause 4. It would be perverse and uncommercial to hold that the regime could not work as intended because the words “Sub-Contractor Submission Valuation Date” were used rather than “Interim Valuation Date”. Furthermore, it is clear from footnote 4 the expression “Sub-Contractor Submission Valuation Date” does not refer to Applications for Payments, but to the valuation of those applications.

The second way this case is put – that interim payment applications were to be submitted on the interim valuation date, and not 4 days in advance of it, so that they would not be submitted in accordance with the Subcontract – fails for a number of reasons:

For these reasons, I reject the Interim Valuation date argument.