Laing O'Rourke Delivery Limited v Shepperton Studios Limited [2026] EWHC 612 (TCC)

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Laing O'Rourke Delivery Limited v Shepperton Studios Limited

[2026] EWHC 612 (TCC) | High Court of Justice, Business and Property Courts of England and Wales, King's Bench Division, Technology and Construction Court

Before Simon Lofthouse KC sitting as a Deputy Judge of the High Court | Heard 3 March 2026 | Handed down 16 March 2026

Interactive Process Flow | Notices, set-off and stay

Case Analysis Process Flow

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1. Case Overview

Case: Laing O'Rourke Delivery Limited v Shepperton Studios Limited [2026] EWHC 612 (TCC)
Court: High Court of Justice, Business and Property Courts of England and Wales, King's Bench Division, Technology and Construction Court
Judge: Simon Lofthouse KC sitting as a Deputy Judge of the High Court
Hearing Date: 3 March 2026
Judgment Date: 16 March 2026
Case No: HT-2026-000001

Laing O'Rourke Delivery Limited (LOR) sought to enforce an adjudicator's decision concerning payment cycle 45 under a building contract with Shepperton Studios Limited (SSL). The adjudicator held that SSL's Payment Notice and Pay Less Notice were both invalid and ordered payment of the £5,627,275.11 applied for, plus VAT and contractual interest. SSL had already issued Part 8 proceedings about the notices and also relied on five later adjudication decisions and LOR's financial position. The court agreed that the Payment Notice was invalid because it did not explain the build-up of the gross valuation, but held that the detailed Pay Less Notice remained valid. It therefore enforced £3,198,660.64 plus VAT and interest, rejected the proposed use of the five decisions as a set-off, and refused a stay because SSL held an enforceable parent company guarantee (paragraphs 1-13 and 30-69).

Central Legal Test: A Payment Notice had to state the sum considered due and the basis of its calculation, including the components of the contractual gross valuation. A valid Pay Less Notice could still deduct clearly explained sums from the application amount where the Payment Notice was invalid (paragraphs 14-16 and 23-41).

Parties and Representation

Claimant: Laing O'Rourke Delivery Limited, represented by Sanjay Patel KC, instructed by Fenwick Elliott LLP.

Defendant: Shepperton Studios Limited, represented by James Leabeater KC and James Bowling, instructed by Macfarlanes LLP.

Decision Under Enforcement

Mark Entwistle's decision dated 21 December 2025 concerned Payment Notice 45 and Pay Less Notice 45. He held both invalid and ordered SSL to pay £5,627,275.11 plus VAT, with contractual interest at 5% above Bank of England bank rate from 22 August 2025 (paragraphs 1-5).

Four Defences

SSL argued that its Part 8 case showed the notice decision was wrong; that the Pay Less Notice remained valid even if the Payment Notice failed; that five later adjudications substantially removed LOR's true entitlement; and that any judgment should be stayed because LOR was said to be insolvent (paragraph 6).

2. Procedural History

Payment Cycle 45

30 July 2025: SSL issued Payment Notice 45 for £2,420,516.84, derived from an unexplained gross valuation and prior payments (paragraph 19).

19 August 2025: SSL issued Pay Less Notice 45, attaching calculations for liquidated damages, utilities and temporary catering deductions (paragraph 20).

22 August 2025: The amount due under AFP45 became payable and contractual interest began to run (paragraphs 4 and 41).

Adjudication and Court Proceedings

The adjudicator issued the decision on 21 December 2025. LOR commenced enforcement proceedings on 2 January 2026. SSL had already started Part 8 proceedings about the notices, which were listed for 15 April 2026, but the construction points were fully argued during the enforcement hearing and the parties invited the court to determine them (paragraphs 1 and 7-13).

Five Other Adjudications

Between 20 November and 22 December 2025, five other adjudications produced decisions on completion dates, extensions of time, liquidated damages, utilities, catering and bonus entitlements. SSL asked the court to give effect to those decisions by reducing the amount enforced here (paragraphs 42-46).

3. Defendant's Position

SSL accepted the adjudicator's jurisdiction but challenged his construction of the notices through Part 8. It also sought to reduce the judgment by reference to five other decisions and requested a stay because of LOR's financial position (paragraphs 5-13 and 32-68).

Payment Notice Was Said to Be Sufficient

SSL argued that stating the gross valuation, deducting prior payments and showing the balance satisfied clause 4.7.5. It said a requirement to break down the gross valuation added words found in the final-payment clause but omitted from the interim-payment clause (paragraphs 23-29).

Pay Less Notice Was Independently Valid

SSL said each deduction was fully explained in attached calculations. Even if the Payment Notice failed, the Pay Less Notice supplied the information required by clauses 4.9.5 and 4.10.1 and should reduce the AFP45 notified sum (paragraphs 20-21 and 32-40).

Other Decisions and Stay

SSL said five interim-binding adjudications showed that LOR lacked substantive entitlement to most of AFP45 and should be allowed as a defence or set-off. It also relied on LOR's accounts and dependence on group support to seek a stay of any judgment (paragraphs 42-53).

4. Claimant's Position

LOR maintained that both notices were invalid and that the full adjudicated sum should be enforced. It said the later adjudication decisions could not be set off without separate enforcement proceedings and that SSL's parent company guarantee protected repayment risk (paragraphs 10-13 and 21-68).

Basis of Gross Valuation Was Missing

LOR said the Payment Notice stated a single gross valuation without identifying the amounts required by clauses 4.13 and 4.14. Earlier spreadsheets were not incorporated by reference, so the notice itself did not explain how the valuation had been built up (paragraphs 19 and 26-30).

Pay Less Notice Was Said to Share the Defect

LOR accepted that the three deductions were explained but argued that the notice began from the invalid £2,420,516.84 figure and therefore arrived at an incorrect nil balance. It said that error invalidated the entire Pay Less Notice (paragraphs 21 and 32-39).

No Set-Off and No Stay

LOR relied on the requirement for separate enforcement of competing adjudication decisions and the rule that a notified sum must be paid before a true-value adjustment is recovered. On security, LOR gave an undertaking and relied on a continuing parent company guarantee from Laing O'Rourke Corporation Limited (paragraphs 47-68).

5. Court's Analysis

Part 8 Construction Issues Could Be Decided

The questions ultimately required no oral evidence beyond the payment-cycle documents. Although the Payment Notice issue was not simple enough to meet the exceptional enforcement gateway by itself, full argument had occurred and both sides invited a decision, so the court determined the construction issues (paragraphs 7-18 and 31).

Payment Notice 45 Was Invalid

Clause 4.7.5 required more than the gross valuation and arithmetic deduction of previous payments. Read with clauses 4.13 and 4.14, it required identification of the amounts comprising the gross valuation. Earlier spreadsheets could not cure the defect because the notice did not incorporate them by reference (paragraphs 23-31).

Pay Less Notice 45 Was Valid

Once the Payment Notice failed, clause 4.9.3 made the AFP45 amount payable subject to a Pay Less Notice. The three deductions were sufficiently explained, and an incorrect starting figure did not destroy the independent notice. The proper calculation was the application amount less those deductions (paragraphs 32-41).

Other Adjudications Could Not Be Used as a Defence

Interim-binding declaratory decisions must be respected, but competing decisions are set off only where each is valid, enforceable and separately brought before the court for enforcement. SSL had not issued such proceedings, and permission to defend by the amount of the five decisions would achieve the same impermissible result (paragraphs 42-51).

Parent Guarantee Defeated the Stay Application

LOR's own financial evidence and undertaking did not displace the prima facie case for a stay. However, SSL held an irrevocable, unconditional and continuing guarantee from LOR's ultimate holding company, governed by English law and covering LOR's contractual liabilities. That recourse removed the repayment risk relied on by SSL (paragraphs 52-68).

6. Decision and Outcome

Winner: The Claimant (Laing O'Rourke Delivery Limited) succeeded.

Result: The adjudicator's decision was enforced to the extent of £3,198,660.64 plus VAT, being the court's stated difference between AFP45 and the Pay Less Notice deductions. Contractual interest ran from 22 August 2025. SSL succeeded on the validity of its Pay Less Notice but failed on set-off and stay (paragraphs 40-41 and 47-69). The Defendant (Shepperton Studios Limited) did not succeed on this application.

Practical Effect: SSL had to pay the reduced notified sum immediately, without setting off the five other adjudication outcomes. The Part 8 construction issues were resolved in this judgment, and the parent guarantee protected SSL if a later decision established a repayment obligation.

Amount Enforced

LOR was awarded £3,198,660.64 plus VAT and contractual interest from 22 August 2025 (paragraph 41).

Notice Rulings

Payment Notice 45 was invalid because it did not explain the gross valuation. Pay Less Notice 45 was valid because its deductions were adequately detailed and remained effective against AFP45 (paragraphs 30 and 40-41).

Set-Off and Stay Refused

The five other adjudication decisions could not be used as an unissued set-off or defence. A stay was refused because the continuing parent company guarantee provided effective recourse for any later liability of LOR (paragraphs 47-51 and 64-68).

7. Key Legal Principles and Practice Points

Basis of Calculation in a Payment Notice

Where the contract requires the basis of the sum to be stated, a single gross valuation and subtraction of prior payments may be insufficient. The notice should identify the valuation components or expressly incorporate documents which do so (paragraphs 23-30).

Pay Less Notice Can Survive a Defective Payment Notice

A valid Pay Less Notice may operate against the amount in the contractor's application after the employer's Payment Notice fails. Adequately explained deductions do not lose effect merely because the notice began with an incorrect payment-notice figure (paragraphs 32-41).

Competing Adjudication Decisions

Declaratory and monetary decisions are both binding on an interim basis. A court will not ordinarily net competing decisions unless each is valid, capable of enforcement and brought before the court in separate enforcement proceedings (paragraphs 42-51).

Security May Displace an Insolvency Stay

An insolvent claimant will ordinarily face a stay where repayment is at risk. A legally enforceable parent company guarantee covering the relevant contractual obligations may displace that starting position even where the claimant itself depends on group support (paragraphs 52-68).

Practice Implications

For Claimants:
A contractor should ensure its application states the notified sum and its basis in full. When challenging an employer's notice, analyse the Payment Notice and Pay Less Notice separately because one can fail while the other survives. If solvency is disputed, identify any contractual guarantee which secures repayment rather than relying only on management projections or a comfort letter.

For Defendants:
An employer's Payment Notice should break down every gross-valuation component or expressly incorporate an attached valuation. A Pay Less Notice should give a clear calculation and supporting schedule for each deduction. Competing adjudication decisions should be enforced through proper proceedings if they are to be set off against another award.

General Practice Points:
Parallel Part 8 issues should be confined to short document-based points and commenced through proper declaratory proceedings. Parties should avoid assuming that prior spreadsheets cure a notice which does not refer to them. Guarantees should use clear continuing-obligation wording and an effective governing-law and jurisdiction clause.

Legal Disclaimer

This interactive process flow is provided for educational and professional development purposes only and does not constitute legal advice. The content reflects interpretations and analyses that may not apply to specific circumstances. Contract interpretation depends on specific wording, jurisdiction, and factual context. Always consult qualified legal professionals before making decisions based on this content. SCCSI and its contributors accept no liability for reliance on this material.