A & V Building Solutions Limited v J & B Hopkins Limited

Parallel court proceedings concerning a dispute already before a construction adjudicator are legally permissible, but adjudication enforcement should ordinarily be addressed first. A pre-emptive Part 8 claim must not circumvent the principle of “pay now, argue later”.

A payment timetable must be construed as a whole. Where bespoke provisions permitted applications at least seven days before the valuation date, an application meeting that deadline was valid despite missing the table’s ten-day target. Specific terms prevail over inconsistent standard terms. A party which unequivocally treats an application as valid may be estopped from later disputing its validity.

A mechanical and electrical sub-contractor submitted an interim payment application on Monday 22 March 2021, one day after the date listed in the contractual payment table but more than seven days before the valuation date. The first adjudicator held the application valid and awarded the sub-contractor £138,010.86, which the main contractor did not pay.

While the adjudication was continuing, the main contractor commenced Part 8 proceedings. Eyre J held in [2022] EWHC 1186 (TCC) that the application was late and invalid, and granted declarations accordingly. The sub-contractor appealed on the propriety of the parallel proceedings, contractual interpretation, and variation, waiver or estoppel. A subsequent final-account adjudication had meanwhile found a net sum payable by the sub-contractor, rendering the appeal financially academic.

1. Appeal allowed in part. The judge correctly refused to strike out the Part 8 proceedings. Court proceedings remain available while a construction adjudication is continuing, and the Housing Grants (Construction and Regeneration) Act 1996 does not provide otherwise. The costly duplication was therefore permissible, although undesirable.

2. The Part 8 proceedings should have been considered through the prism of the outstanding adjudicator’s decision. The “pay now, argue later” principle required enforcement to be addressed first. Only then should the court have considered whether the Part 8 claim defeated enforcement. Declaratory proceedings may exceptionally be suitable where the disputed point is short, self-contained and requires no oral evidence, particularly where it concerns pure contractual construction.

3. The payment provisions had to be construed as a whole. The table in Appendix 6 identified target application dates ten days before each valuation date. The subsequent bespoke paragraph nevertheless provided that an application would lose entitlement only if received less than seven days before the valuation date. That provision necessarily made applications received at least seven days beforehand timeously valid. Any other construction would render its seven-day period meaningless.

4. The application received on 22 March was more than seven days before the 31 March valuation date and was therefore valid. This construction gave effect to every contractual provision. It also respected the principle that a specific, bespoke term prevails over an inconsistent general provision in standard conditions. The declarations that the application was invalid and that no payment entitlement arose from it were quashed.

5. Although unnecessary to the disposition, the prior acceptance of one late application in 2020 was equivocal and could not establish variation, waiver or estoppel. The express non-waiver clause also prevented an earlier waiver from operating as a waiver of a subsequent breach.

6. By contrast, the main contractor had unequivocally affirmed the disputed application’s validity through its email, valuation and Payment Notice, without reserving its position. The parties proceeded for months on that common assumption, and the sub-contractor relied on it when commencing adjudication instead of repeating its claim in a later cycle. The ingredients of a simple estoppel appeared to be established.

7. No payment order was made because the later final-account adjudication had overtaken the first decision and the appeal sought no monetary relief.

1. Court of Appeal (Civil Division): In [2023] EWCA Civ 54 , allowed the contractual-interpretation ground, dismissed the abuse-of-process ground, and quashed the declarations that the interim application was invalid and conferred no payment entitlement. No further order was made.
2. High Court, Technology and Construction Court: Eyre J held in [2022] EWHC 1186 (TCC) that the application was one day late and invalid, rejected the variation and waiver arguments, and declared that the main contractor’s Payment Notice was valid.