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A payment notice is invalid if it fails to set out the amount genuinely considered due – placeholder notices don’t count, says Tony Bingham
The contractor’s interim application for payment no. 34 claimed £1.88m net payment. The employer said 97p! This was £1, minus retention. Was this taking the mick? Actually, the employer always issued a 97p sum due notice for all interim valuations. I suspect that at some point in the past, this employer had boobed by failing to send any sum due notices and lumbered itself with having to pay the contractor’s application by default. So, the 97p thing was a sham sum due notice. Then, when ready, the employer would send a proper one.
Interim application no. 34 eventually received a sum due notice from the employer for £903,884 instead of the 97p. Let me cut to the chase: all these manoeuvres came to court. The judge said the 97p sum due notice was not a notice at all, so it failed as a sum due. Then the second sum due notice was out of time and that too fell over. Hurrah, said the contractor, those failed sum due notices mean that the interim application for payment figure applies in default, being £1.88m.
Wait: the lesson here is twofold. First, if you have the bright idea of sending a sham sum due notice for £1, or whatever sham figure, then it is useless.
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