Construction Case Law Update - Top 5 Adjudication Cases Of 2018 (Video)

This two-part webinar series explores the top construction court cases from 2018, to provide an understanding of the key developments in construction law and adjudication practice and how these might affect your construction projects and disputes in 2019.

Read or watch the second in the series below: the top five adjuducation cases of 2018.

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1. S&T (UK) Limited v Grove Developments [2018] EWCA Civ 2448

   Grove employed S&T to design and build a new hotel at Heathrow Airport under a JCT Design and Build Contract. In response to an interim payment application by S&T, Grove issued a payment notice which had clearly set out the basis of the valuation, however it was issued late. Grove then issued a pay-less notice which, although issued on time, did not provide the detailed calculation of the basis of the valuation. S&T disputed that it was a valid pay-less notice because they said it did not set out the basis for the sum due, a requirement for a pay-less notice. The dispute was referred to adjudication, where the adjudicator decided that it was not a valid pay-less notice as the calculation detail was insufficient. The case was then referred to the TCC, which found that Grove had complied with the requirement to specify the basis of the calculation, therefore the pay-less notice was valid.

   The Court also held that, upon payment, Grove was entitled to pursue a further adjudication to determine the 'true value' of the works. This was an important development in 'smash and grab' adjudications as it meant that even in the absence of a valid payment or pay-less notice, a payer can raise a counter-adjudication on the true value of an interim payment application. S&T appealed.

   The Court of Appeal upheld the decision of the TCC and dismissed the appeal by S&T, finding that Grove was entitled to bring a counter-adjudication on the 'true value' of the work. However, the Court of Appeal stressed that payment of the 'smash and grab' adjudication award must be made before a dispute on the true value of the application can be adjudicated on.

   While this appeal decision has confirmed that a payer can raise a 'true value' adjudication for an interim application even in the absence of a payment or pay-less notice, it does not make it any less important for payers to ensure that payment notices and pay-less notices are served correctly and on time, as payment must still be made of the (often inflated) sum sought by the payee. Therefore, whilst the threat and...