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

Fecha: 21-Oct-2025

Lastly, if VCL’s Payment Notice #23 was out of time to serve as a payment notice, it was (indisputably) nevertheless in time to serve as a Pay Less Notice. It contained all the relevant information to

(3)

Lastly, if VCL’s Payment Notice #23 was out of time to serve as a payment notice, it was (indisputably) nevertheless in time to serve as a Pay Less Notice. It contained all the relevant information to communicate to Gypcraft that VCL intended to pay less than the amount applied for, with a breakdown of why that was. That being all the Subcontract and the HGCRA96 requires, there is no reason not to read the Payment Notice as a Pay Less Notice. Again, this is a pure point of construction on the documents.

I deal with the issues as follows:

The contractual and statutory background;

Procedural matters;

The relevant facts;

The Interim Valuation Date;

Estoppel;

Payment Notices and Pay Less Notices;

Conclusions.

The contractual and statutory background

The parties entered into the Subcontract dated 12 November 2020. This wasexecuted by Gypcraft on 28 June 2021.The Subcontract incorporated, amongst other things, the JCT DBSub/C 2016 standard form.

The Subcontract also incorporated “Numbered Document 6”. Numbered Document 6 set out agreed interim payment dates necessary to make clause 4’s interim payment regime work. However, Numbered Document 6 only covered an 11 month period from 3 April 2020 – 2 February 2021. Since Gypcraft’s works on site were agreed to start no earlier than 1 December 2020 and no later than 31 January 2021, Numbered Document 6 was virtually redundant as at the date of the Subcontract.

VCL therefore issued to Gypcraft a series of updated schedules, with further dates as the works progressed. The relevant Schedules, with fresh dates covering subsequent periods, were:

The 2021/22 Schedule;

ii)

The 2022/23 Schedule;

iii)

The 2023/24 Schedule.

The Schedules were all in similar terms. They contained, for each payment cycle, columns giving dates for:

Sub-Contractor Submission Valuation Date;

ii)

DUE date (sic) ;

iii)

Accounts to issue Payment Notice by;

iv)

Payless Notice to be issued by;

Final date for Payment.

Footnote 4 stated that “all Applications for Payments and Invoices are to be issued to [email address] by end of business on the Valuation date above”.

10.

The JCT Standard Form set out the following relevant terms:

Clause 4.6.1 provided that the monthly due dates for interim payments were to be 21 days “after the relevant Interim Valuation Date”;

ii)

Clause 4.6.3 stated that “… the Sub-Contractor may make a Payment Application in respect of an interim payment to the Contractor…not later than 4 days prior to theInterim Valuation Date”;

iii)

Clause 4.7.1, as amended, set the final date for payment as 21 days after the due date;

iv)

Clause 4.7.2 required that “Not later than 5 days after the due date in each case the Contractor shall give a notice to the Sub-Contractor which shall specify the sum that he considers to be or have been due at the due date and then basis on which that sum has been calculated (a ‘Payment Notice’) ...”

Clause 4.7.3 provided that “Subject to any Pay Less Notice given by the paying party under clause 4.7.5, the paying Party shall pay the sum specified in the Payment Notice…on or before the final date for payment. If the Contractor fails to give a Payment Notice…in accordance with clause 4.7.2, but a Payment Application has been or is then made, the Contractor shall, subject to any Pay Less Notice given under clause 4.7.5, pay the sum specified in the Payment Application”;

vi)

Clause 4.7.5.1 stated that “Where the Contractor intends to pay less than the sums stated in the Payment Notice…. the Party by whom the payment is stated to be payable shall not later than 1 day before its final date for payment give the other Party notice of that intention in accordance with clause 4.7.6 (a ‘Pay Less Notice’). Where a Pay Less Notice is given, the payment to be made on or before the final date for payment shall not be less than the amount stated in it as due.”

vii)

Clause 4.7.6 provided that “A Pay Less Notice given by either Party shall specify the sum he considers to be due to the other Party at the date the notice is given and the basis on which that sum has been calculated.”

11.

The above regime, which is intended to give effect to the Act, was accurately expressed pictorially by Mr Bowling in his skeleton argument as follows, using 5^th January as an example:

-4d: IPA	IVD	+12d: DD	+5d: PN	+15d: PLN	+1: FDFP
1 Jan	5 Jan	17 Jan	22 Jan	6 Feb	7 Feb
			 21d 

12.

The Act contains the following relevant provisions: