Here the TCC has found that a contractor had no right to make interim payment applications once a payment schedule had expired, although the works were ongoing. The contract, worth GBP 121 million, started in July 2013 and was due to complete in July 2015, but the works were still incomplete in January 2016 when the employer sought a declaration from the court concerning the contractor's right to submit further payment applications.
The form of contract was a JCT D&B 2011, with bespoke amendments. The parties had elected Alternative A (stage payments) and agreed a schedule of 23 interim payment applications covering the payment period. The contractor had issued a 24th payment application in August 2015, and received an adjudicator's decision enforcing payment of it. The employer issued part 8 proceedings, seeking a decision from the court that the contractor had no right to issue the additional payment application. Alternatively, that it had served a pay less notice in time.
The judge considered whether the Scheme for Construction Contracts would operate to imply any payment terms into the contract, but concluded that it was unnecessary because the parties had agreed the amounts and intervals of payments. The fact that these did not cover all of the works did not mean the Scheme had to be imported to supplement the agreement. Accordingly, the contractor was not entitled to issue application no. 24. The decision highlights the importance for contractors when agreeing to a schedule of stage payments to agree a mechanism for additional payments should the works continue beyond the dates envisaged by the schedule. It is also worth noting that the bespoke payment provisions did not link the payments to progress of the works, as contemplated by the JCT drafting. Contractors agreeing to stage payments need to be aware of the risk of agreeing to stage payments which are not linked to the works.
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Grove Developments Ltd v Balfour Beatty Regional Construction Ltd [2016] EWHC 168 (TCC)
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