BuildLaw Issue 27 March 2017 | Page 41

Construction Act imports the rule by law. No escape. So Galliford Try knocked on Estura’s door for the gross £12.66m less previous paid.
Just as in ISG vs Seevic, the payer screamed that this isn’t the true value of the interim account. Quite probably it isn’t, said the adjudicator, but that’s what is to be paid anyway. It’s nothing to do with the value of work. It’s a default system. More likely, and this I feel uncomfortable about, it is a penalty for keeping quiet. Get this fixed in your head: never ignore a demand for payment. Don’t behave the way we in construction have done for all time by tossing an application for payment on one side. Tackle it head on. Pipe up.
In ISG vs Seevic, interim application No.13 met silence. The adjudicator quite properly ordered the application to be paid in full less previous. He very fairly said in that formal decision: “I have not valued the work.” This, he said, is the default position. True. So Seevic began an adjudication on interim No.13 (again) requiring a decision as to the value. Can’t do that. No second bite of that cherry is allowed. The default cash payable is deemed to also be the value.
Go back to Galliford Try. Here we have the same circumstances of silence, so the application becomes payable. The judge helpfully said: “In the ordinary course of things any errors in an interim application, or the consequences of an employer’s failure to issue the relevant notices can often be put right on a subsequent interim application.” So, if the contractor is overpaid on interim 13, the ordinary position is that the overpayment can be corrected by an adjudicator in applications 14 or 15 etc. OK? Hmmm.
Some say that the JCT does not provide for repayment via a subsequent interim valuation. Some say you must wait until the final account because there in JCT it allows the repayment. True, the JCT does not say repay via interim accounts. Some say the JCT needs to move at lightning speed to put an express term into all its documents. It’s easy. They only need copy what NEC says.
But if JCT can’t move at emergency pace to bring in an express term, some say the Scheme deals with overpayments of interims via repayment. Goodness knows whether these folk are right. The notion is that when a gap is found in the contract itself, the payment rules in the Scheme fill the gap. It looks for “circumstances” not dealt with in a document. Each valuation date gives rise to a notified sum. That sum is the difference between the value of the work at that date and the sums paid. So there you have the balance to be paid. Some say: Hmmm. I say, come on JCT, hands to the pump.
As for the beautiful hotel job, Galliford Try didn’t get their £4m, they got £1.5m instead. It was a brilliant Lord Denning style approach. The £4m would “stifle further pursuit by Estura of its rights”, so the judge used his powers “as best I can”. It’s the way of things, I think.