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

VCL submit on this aspect that the document which they issued on 7^th February 2023 in response to application 23 was in fact a Pay Less Notice such that, in accordance with clause 4.7.5.1, the payment to be made on or before the final date for payment would not be less than the amount stated in it as due.

This is an ambitious submission. The covering email referred in the subject box, in two places, to “PN 23”. The body of the email twice referenced the provision of a “Payment Notice”. The attached document was headed “Payment Notice” and stated that “the basis on which the sum stated in this Payment Notice has been calculated is set out in the attached breakdown”.

Applying the helpful summary of the approach to contractual notices set out at para 47 of Advance JV v Enisca Ltd [2022] EWHC 1152 (TCC), 202 Con. L.R. 219, I have no doubt that this document was what it said it was: a Payment Notice. Any other reading of the document would be entirely artificial.

Furthermore, it would, in my view, entirely undermine the Act and the Sub-Contract if what the parties clearly intended at the time to be a Payment Notice could somehow retrospectively be converted into a Pay Less Notice. As Coulson J (as he then was) observed in Grove Developments Limited v S&T (UK) Limited [2018] BLR 173 at [29]:

“In my view, that general guidance applies equally to a payment notice and a pay less notice. Each has to make plain that it is, respectively, a payment notice or a pay less notice. Each has to clearly set out the sum which is said to be due and/or to be deducted, and the basis on which that sum is calculated. Beyond that, the question of whether or not it is a valid notice in accordance with the contract is a matter of fact and degree.”