Uncertainties after Grove v S&T

Uncertainties after Grove v S&T

What appears to be the last case decided in the TCC by Coulson J prior to his elevation to the Court of Appeal has already attracted widespread comment. Louis Zvesper, of Hardwicke Chambers, considers some of the uncertainties and practical implications arising from this decision, including whether payment of the notified sum is anecessary precondition to referring adispute on the true value of the works to adjudication, and what tactics parties might now employ to seek to minimise further the impact of unwanted smash and grab adjudications. 

Grove v S&T departs from the previous decisions of ISG v Seevic and Galliford Try v Estura (and those cases which rely upon them, such as Kersfield v Bray) by deciding that aparty to aconstruction contract can refer the true value of an interim payment to adjudication, whether or not the appropriate notices have been served. For asummary of the facts and other findings of the case, subscribers to LexisPSL Construction can also access the following News Analysis: Failure to give apayment or pay less notice—a change of approach (Grove Developments v S&T).

Click here for afree trial of LexisPSL Construction.

Previous position

Prior to Grove, the position had been that where an employer had failed to serve apayment notice or pay less notice, it could not adjudicate on the true value of that interim payment. It had to pay the sum set out in the contractor’s payment application, and could not revisit this amount until the next interim payment or in the final account. The reasoning behind this was that in the absence of any disagreement by way of notices from the employer, it was deemed to have agreed the notified sum, and so there was no dispute to be referred to adjudication.

An employer could, however, make up for overpayments on subsequent payment cycles – but towards the end of

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