Construction | June Issue
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Welcome back to the Legal Lowdown: Construction Issue. This bi-monthly newsletter provides you with summaries of the latest legal cases in the construction industry so that you have the information you need to stay updated.
Our construction newsletter has been written and reviewed by one of our construction legal experts,?Dr Julian Critchlow?who has over 38 years' of expertise in the industry.
Adjudication – time limit for commencing adjudications
BW commenced an adjudication against Atalian challenging Atalian’s Final Account Statement.?It had 28 days to mount the challenge and it did so in time.?The Adjudicator resigned and BW commenced a fresh adjudication – outside the 28 day period.?Atalian argued (amongst other things) that the second Adjudication was out of time and invalid.?The Inner House, Scottish Court of Session rejected the argument.?BW had recommenced on the resignation as provided for by Paragraph 9(3) of the Scheme for Construction Contracts (Scotland) Regulations 1998 in substantially the same form as the original Adjudication.?It was held that, accordingly, that the second Adjudication was valid.?(In any event, BW had instituted proceedings in Court timeously.)
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Applications for payment – validity – timing
Elements was FK’s Subcontractor on a construction contract.?It served an Application for Payment for about ￡4m.?FK failed to serve a pay less notice.?Elements adjudicated for payment of the Application sum and the Adjudicator awarded the amount claimed.?Elements applied to enforce the Decision.?FK made a Part 8 Application claiming that the Decision was unenforceable because the Application was invalid.?The Subcontract provided that applications for payment had to be submitted no later than four days before the relevant Interim Valuation Date.?FK asserted that that meant four “clear days”, so excluded weekends.?The Court rejected that argument.?Four days meant four calendar days.?Furthermore, there was no obligation for the Application to be served during business hours: it could be served at any time of day.?
Construction payment regime - validity of application for payment – estoppel
In a construction contract, A & V, as mechanical and electrical Subcontractor made an interim Application for Payment to J & B as Main Contractor.?J & B responded with its own valuation and pay less notice.?A & V adjudicated.?J & B claimed in the Adjudication that the Application was a day late, so invalid.?The Adjudicator held that the Application was in fact valid and the first instance Judge agreed.?So did the Court of Appeal.?However, the Court of Appeal also decided obiter that if it had been late, because the parties had acted on the assumption that it was valid, J & B would have been estopped from denying its validity in any event.
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