RGB Plastering Ltd v TAWE Drylining and Plastering Ltd

An interim payment application under a construction subcontract must be clear in substance, form and intent. It must identify the sum claimed, the basis of calculation and the relevant contractual payment date. An application that is ambiguous as to the payment cycle, values work to a date not recognised by the payment schedule, or fails to comply with specified delivery requirements is invalid. An administrative provision dealing with late applications does not cure substantive defects or convert an invalid application into one for a later payment cycle. A late attempt to introduce an estoppel claim and supporting evidence may be refused where the breach is serious and admission would cause procedural prejudice, delay and expense.

RGB engaged Tawe as a drylining subcontractor. Tawe submitted an interim payment application on 7 May 2019. The application was sent to employee email addresses rather than the address specified in the payment schedule, referred to valuation number 6, and valued work to 30 April 2019, a date not identified in the contractual payment timetable.

RGB sought a declaration that the application was invalid. Tawe argued that it related to the next payment cycle or, alternatively, that RGB was estopped from relying on strict contractual requirements. Tawe also sought to rely on a witness statement served shortly before the hearing. The issues were whether the application complied with the subcontract and whether permission should be given for the late evidence and estoppel argument.

1. Validity of the application. The application had to be clear in substance, form and intent, so that the recipient could understand what payment was claimed, the relevant due date and when it had to respond. The principles in Caledonian Modular Ltd v Mar City Developments Ltd [2015] EWHC 1855, Henia Investments Inc v Beck Interiors Ltd [2015] EWHC 2433 (TCC) and Jawaby Property Investments Ltd v Interiors Group Ltd and Black [2016] EWHC 557 (TCC) were applied.
2. The reference to work valued up to 30 April 2019 created uncertainty whether the application was a late application for the April cycle or an early application for the May cycle. It did not value the works to either contractual valuation date, 3 May or 2 June 2019. It was also sent to the wrong email address. Those defects meant that it did not comply with the subcontract and was invalid.
3. The payment-schedule provision stating that late applications would be administered with the following month’s payments was administrative. It did not cure the other defects or transform the application into a valid application for the following cycle.
4. Late evidence and estoppel. The application to rely on the late witness statement and raise estoppel was governed by CPR Part 8.6 and the principles in Denton v TH White Ltd [2014] EWCA Civ 1537. The breach was serious and no satisfactory explanation had been given. Admission would prejudice RGB, which had prepared on the basis that no estoppel claim would be pursued, and would probably require further evidence, cross-examination, delay and expense. Permission was therefore refused.
5. RGB was entitled to a declaration that the application was invalid. Consequential matters were to be dealt with by written submissions and a draft order within 14 days.

First-instance decision. No appellate history is stated in the judgment.