Placefirst Construction Limited v CAR Construction (North East) Limited
Citation: [2025] EWHC 100 (TCC)
Background Facts
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Placefirst Construction Ltd ("Placefirst") engaged CAR Construction (NE) Ltd ("CAR") as subcontractor on a project in Durham under a JCT Design and Build 2016 subcontract (amended).
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CAR submitted an interim payment application on 24 July 2024.
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On 31 July 2024, Placefirst sent an email containing a document labelled as a payless notice, along with a detailed valuation (described as a subcontract payment certificate).
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An adjudicator decided on 18 October 2024 that Placefirst owed CAR £867,031.36 plus VAT because it had not served a valid payment or payless notice.
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CAR started enforcement proceedings (Part 7) to obtain payment; Placefirst filed a Part 8 claim asserting that it had in fact served valid notices.
Judgment
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Payless notice validity:
The court ruled that Placefirst’s payless notice was valid. It was held that a payless notice could be served any time after the payee’s application was received, even before the payer's own payment notice deadline expired.
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Payment notice validity:
The subcontract payment certificate was found to qualify as a valid payment notice, even though it was not explicitly titled as such. Its content and context demonstrated it was intended to fulfil that function.
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Outcome:
Placefirst succeeded on both points. The adjudicator’s decision ordering payment to CAR was not enforced, and CAR’s summary judgment application was dismissed.
General Principles Developed
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Objective interpretation of notices:
Notices should be assessed based on how a reasonable recipient would understand them in context, not by strict formalities or labels.
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No rigid requirement for formal labels:
A document does not have to be expressly called a "payment notice" or "payless notice" to be valid, provided it sets out the necessary sum and basis for calculation clearly.
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Timing flexibility for payless notices:
The Act allows a payless notice to be served any time after receiving an application, supporting commercial flexibility and cash flow.
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No need for separate notices if content overlaps:
While payment and payless notices are distinct under the Act, they can be served together in one communication, or at the same time, as long as statutory and contractual requirements are met.