{"id":40286,"date":"2018-04-11T11:45:08","date_gmt":"2018-04-11T10:45:08","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=40286"},"modified":"2018-05-08T11:46:49","modified_gmt":"2018-05-08T10:46:49","slug":"common-sense-6-smash-grab-0","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/common-sense-6-smash-grab-0\/40286\/","title":{"rendered":"Common Sense 6 \u2013 Smash &#038; Grab 0"},"content":{"rendered":"<h2>Peter Vinden, Managing Director of The Vinden Partnership, considers the \u201csmash and grab\u201d culture of adjudication<\/h2>\n<p>When the drafting committee of the <a href=\"https:\/\/www.legislation.gov.uk\/wsi\/2011\/1597\/contents\/made\">Local Democracy, Economic Development &amp; Construction Act 2011<\/a>\u00a0saw the fruits of their efforts come into force on 1 October 2011, I very much doubt that they expected the changes they made to the interim payment regime under relevant construction contracts would be interpreted in the way that they have. The approach of the Courts to date, who have in effect sanctioned a \u201csmash and grab\u201d culture which has, until now, infiltrated and damaged so many contracting relationships in our industry, felt very \u201cun-British\u201d to me and at last we now have a decision from the Technology and Construction Court which, I believe, puts our industry back on the right track. \u00a0The case I am referring to is <em><strong>Grove Developments Ltd v S&amp;T (UK) Ltd [2018] EWHC (TCC) (\u201cGrove -v- S&amp;T\u201d)<\/strong><\/em>.<\/p>\n<h3>What do I mean by \u201csmash and grab\u201d?<\/h3>\n<p>Various decisions of the Courts bring us to the start of 2018, pre- Grove -v- S&amp;T, with a number of notions fixed firmly in our minds.<\/p>\n<ul>\n<li>The lack of response to a valid contractor\u2019s <strong>interim application<\/strong> for payment by way of a valid payment or pay less notice meant that the contractor\u2019s application for payment had to be paid in full without any deduction or set off because the contractor&#8217;s application had become the default payment notice.<\/li>\n<li>Even if this meant that the contractor was completely overpaid, this interim position could not be challenged and only subsequent valuations or the last payment becoming due could right this wrong.<\/li>\n<li>In the case of interim payments, there was no right to adjudicate on the true value of the actual work done in order to combat the absence of a valid payment or pay less notice.<\/li>\n<li>The lack of response to a valid contractor\u2019s <strong>final application for payment<\/strong> by way of a valid payment or pay less notice meant that the contractor\u2019s final application for payment had to be paid in full without any deduction or set off because the contractor&#8217;s application had become the default payment notice.<\/li>\n<li>The true value of the contractor\u2019s final application could be adjudicated upon.<\/li>\n<\/ul>\n<p>As a result of the decision of Mr Justice Coulson in Grove -v- S&amp;T things have now changed. The judgement lists 6 reasons why, contrary to the position believed by all to prevail, Mr Justice Coulson decided that an adjudicator does have the power and jurisdiction to decide the \u201ctrue value\u201d of a contractor\u2019s right to payment at any time:<\/p>\n<ol>\n<li>Just as a court has the inherent power to open up and decide upon the \u201ctrue value\u201d of any certificate, notice or application, so too has an adjudicator.<\/li>\n<li>There is no limitation on the nature, scope and extent of a dispute that can be referred to adjudication. <a href=\"http:\/\/www.legislation.gov.uk\/ukpga\/1996\/53\/section\/108\">Section 108(1) of The Housing Grants, Construction and Regeneration Act 1996<\/a> and paragraph 20 of the <a href=\"http:\/\/www.legislation.gov.uk\/uksi\/1998\/649\/contents\/made\">Scheme for Construction Contracts<\/a> are expressed in the widest language. An adjudicator would, therefore, have the power and jurisdiction to determine the \u201ctrue value\u201d.<\/li>\n<li>A dispute concerning the \u201ctrue value\u201d of a contractor\u2019s application is a different dispute to one which addresses whether a valid payment notice or pay less notice has been issued in time and\/or is valid.<\/li>\n<li>JCT contracts differentiate between \u201cthe sum due\u201d and the \u201cthe sum stated as due\u201d.\u00a0 The former refers to the mechanism designed to determine a contractor\u2019s precise entitlement and the latter the amount included in the contractor\u2019s application which will be payable in the absence of a valid payment and\/or pay less notice. These two things are not the same.<\/li>\n<li>Just as an Employer might serve a payment notice or pay less notice at a value less than an amount applied for by the contractor, resulting in an adjudication to determine the true value, it would be unfair to deny an Employer the same right where a late or invalid payment notice or pay less notice had been served by him or on his behalf.<\/li>\n<li>There was no contractual basis for differentiating between the position concerning an interim application for payment and the final payment.<\/li>\n<\/ol>\n<p>For me, this judgement returns us to an equitable position where any short-lived advantage gained from a successful unjust \u201csmash and grab\u201d adjudication can be rectified by a subsequent adjudication to determine the true value of a contractor\u2019s entitlement. This very clear judgement is a &#8220;must read&#8221;.\u00a0 It contains a thorough and comprehensive review of all relevant case law and can be found at: <a href=\"http:\/\/www.bailii.org\/ew\/cases\/EWHC\/TCC\/2018\/123\">www.bailii.org\/ew\/cases\/EWHC\/TCC\/2018\/123<\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Peter Vinden<\/strong><\/p>\n<p>Managing Director of the Vinden Partnership<\/p>\n<p><a href=\"mailto:pvinden@vinden.co.uk\">pvinden@vinden.co.uk<\/a><\/p>\n<p><a href=\"http:\/\/www.vinden.co.uk\">www.vinden.co.uk<\/a><\/p>\n<div class=\"mk-custom-module-container\">\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Peter Vinden, Managing Director of The Vinden Partnership, considers the \u201csmash and grab\u201d culture of adjudication<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[304],"tags":[853,676,656,728,871],"stakeholder_rel_tag":[172445],"contributor_rel_tag":[],"class_list":{"0":"post-40286","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-planning-construction-news","7":"tag-adjudication","8":"tag-construction","9":"tag-housing","10":"tag-quantity-surveyors","11":"tag-sh-gateley-vinden","12":"stakeholder_rel_tag-gateley-vinden"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v26.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Common Sense 6 \u2013 Smash &amp; 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