S&T (UK) Limited v Grove Developments Limited  EWCA Civ 2448
In late 2018, the Court of Appeal upheld the decision in Grove Developments Limited v S&T (UK) Limited that a paying party can seek an assessment of the true value of an interim application, even if a procedural (‘smash and grab’) adjudication has previously been brought in relation to that same interim application.
The 2015 case of ISG v Seevic had held that, in the absence of a valid payment notice or pay less notice, a paying party must pay the ‘notified sum’ (i.e. the sum applied for, or notified, by the payee) and was unable to seek reassessment of that particular interim valuation.
Preferring the approach of the first instance judge in Grove to that in Seevic, the Court of Appeal has now confirmed that:
The requirement to pay up before launching a ‘true value’ adjudication means that some parties will continue to bring ‘smash and grab’ adjudications in an effort to gain commercial advantage and short-term cash-flow benefits.
This potentially exposes the paying party to the risk of payee insolvency until such time as a true value adjudication can be concluded, and the appropriate financial adjustments made. Service of valid payment or pay less notices therefore remains fundamental to mitigating project risk.
The decision in Grove should also encourage paying parties to ensure valuations are actively managed so that, should a true value adjudication nevertheless prove necessary, this can be done promptly to minimise potential risks.
In addition, the decision provided further useful guidance that: