Can a payment notice and pay less notice both be valid, despite being sent at the same time?

This is precisely what happened in the recent case of Placefirst Construction Ltd v. CAR Construction (North East) Ltd [2025]. The court said they could – but with conditions.

The case

CAR, a sub-contractor, issued a ‘smash and grab’ adjudication against Placefirst, the contractor. CAR was successful in this adjudication and applied to court to enforce that successful decision when Placefirst did not pay the sum owed. However, Placefirst also issued Part 8 proceedings about the underlying dispute and sought to defend the adjudication enforcement on that basis alone.

Part 8 proceedings are used where there is a discreet issue to be determine that does not involve a substantial dispute of fact. The TCC opted to hear both the adjudication enforcement and the Part 8 claim together.

The main question

The underlying dispute between the parties concerned interim application number 30. In response to CAR’s application for payment, and prior to the final date for payment, Placefirst issued an email to CAR containing two attachments. The first attachment was a letter which purported to be a pay less notice. The second attachment was an Excel spreadsheet entitled “Valuation 30”. The body of the email referred to “the attached Payless Notice and Valuation 30 to support…”.

CAR’s position was that a payment notice had not been issued, and further that the purported pay less notice had been issued in advance of the date that it should have been issued pursuant to the Contract (and the Construction Act). Placefirst’s position, on the other hand, was that it had issued both a timely and valid payment notice and pay less notice to CAR. The basis of the Part 8 proceedings was that Placefirst sought a declaration that the “Valuation 30” document was a valid payment notice, and additionally, that the pay less notice issued within the same covering email was also valid and effective.

The judge considered the case of Advance JV v. Enisca Ltd [2022], referring to the interpretation of payment notices and giving consideration to how a reasonable recipient would interpret any such notice.

The result?

The adjudicator’s decision was not enforced. Assessing the facts and principles in Advance, the judge determined that the Construction Act does not require a payer to serve both a payment notice and pay less notice if they contain the same information (as was the case here).

In addition, the judge determined that the “Valuation 30” document was intended to be a payment notice, therefore, the ‘payment notice’ and ‘pay less notice’ could be served simultaneously within the same email. The judge concluded that there was no requirement for “Valuation 30” to describe itself as a payment notice, and further, that a payment notice is not required to expressly state that the sum contained within it is the sum considered due at the due date.

Conclusion

This case will be seen to provide a refreshing decision, not least because the court opted not to take an “unduly legalistic interpretation” of the requirements of the Act, instead taking an arguably quite sensible approach. It was clear that the parties knew what was being paid and why, so the court steered away from holding the parties to an overly technical requirement.