Can an employer refuse to honour an architect or engineer certificate on the grounds that the sum certified is incorrect, or is the employer legally obliged to pay the contractor the sum certified?
A payment certificate was once treated as money in the hand. Under the construction payment legislation the employer must now pay the notified sum unless it serves a valid pay-less notice, and its remedy for a genuine overvaluation comes only after it has paid.
No, not simply because it thinks the sum is wrong: under the construction payment legislation the employer must pay the notified sum by the final date for payment unless it has served a valid pay-less notice, and an arguable dispute is not enough, so its remedy for a genuine overvaluation is a true-value adjudication but only after it has paid the notified sum, as S&T (UK) Ltd v Grove Developments Ltd requires
No, not simply because it thinks the sum is wrong. Under the Housing Grants, Construction and Regeneration Act 1996, as amended by the 2009 Act, the payer must pay the notified sum, the amount in its own payment notice or the payee's default notice, by the final date for payment. The only way to pay less is a valid and timely pay-less notice stating the sum considered due and the basis of calculation. An employer cannot escape that obligation by asserting the certified sum is wrong or raising an arguable dispute; without a valid pay-less notice the notified sum is due and an adjudicator will order it paid, whatever the true value of the work. Its remedy is not to withhold but to pay and then challenge: in S&T (UK) Ltd v Grove Developments Ltd the Court of Appeal held that an employer which failed to serve a pay-less notice must first pay the notified sum and only then adjudicate the true value, the immediate duty to pay taking priority over the subordinate right to a true-value adjudication. The older cases treating a certificate as near-conclusive, and the summary-judgment and arbitration-stay decisions that softened it, explain how the certificate lost that status but no longer describe how a payment dispute is resolved.
| Notified sum | Must be paid by the final date unless a valid pay-less notice is served |
| Not enough | An arguable dispute over the certificate does not justify withholding |
| No pay-less notice | The notified sum is due and enforceable in adjudication |
| S&T v Grove | Pay the notified sum first, then adjudicate the true value |
| Old cases | Certificate and arbitration-stay authorities are now background |
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