Away The LADs?

In a 2008 House of Lords decision relating to withholding notices, a Contractor claimed to be entitled to determine its JCT '98 Private with Quantities contract on the ground (amongst others) that the Employer had repeatedly failed to make payment of sums due under the contract by the final date for payment. 

Background

The essence of the case was that the Employer's architect issued a notice of non-completion in accordance with the contract. Shortly afterwards, the Contractor issued an interim certificate seeking payment. That was followed by a section 111 notice of withholding from the Employer, showing a deduction of liquidated and ascertained damages (LADs). The Employer's architect then granted an extension of time for completion (EoT). The EoT was granted before the final date for payment under the interim certificate but after the notice of withholding had been issued and payment had been made to the Contractor under deduction of LADs.