Macfarlanes secures Court of Appeal win for Grove Developments upholding landmark decision for construction adjudication

07 November 2018

The Court of Appeal’s Judgment has today been handed down in the Defendant’s appeal against the High Court judgment of Coulson J (as he then was) in the case of Grove Developments Limited v S&T(UK) Limited. The Court of Appeal has dismissed the appeal in all respects and has upheld the first instance judgment.

The first instance judgment had created conflicting High Court decisions, as it had departed from the line of cases starting with ISG v Seevic that provided the basis for the practice of contractors’ “smash & grab” adjudications. The Court of Appeal judgment has resolved this conflict and has confirmed that employers are able to challenge, via separate adjudication proceedings, the valuation of a contractor’s payment application, even if no valid payment notice or pay less notice has been issued. The Court of Appeal has, however, made clear that employers must “pay first, argue later”. So they must first make payment to the contractor before challenging the valuation.

The Court of Appeal also upheld the High Court’s decisions regarding the requirements for the content of pay less notices, and the operation of the notice regime to allow the employer to claim or deduct liquidated damages for delay under one of the principal standard forms of construction contract.

Grove Developments Limited was represented by Alexander Nissen QC and a Macfarlanes team of Andy Mather (partner) and Richard Rowlatt (solicitor).

Andy Mather comments: “We are delighted to have secured this important result for Grove Developments in the Court of Appeal. More generally, this decision also provides important clarification for the construction industry about the practice of "smash & grab" adjudications and the options for paying parties under construction contracts where, for whatever reason, payment and pay less notices have not been served correctly.”