Deerns UK Ltd v VDC LHR11 Ltd

VDC engaged Deerns to provide engineering consultancy services. In a hearing before Eyre J, Deerns sought payment of £900k plus VAT, said to be due as a result of the failure by VDC to serve two timely pay less notices. Deerns said that the contract failed to provide a final date for payment as required by s110(1)(b) of the HGCRA, with the result that the Scheme applied. If the Scheme applied, then the pay less notices were indeed late.

Under the contract, the fee was to be paid in the instalments stated in Schedule 1. The due date for payment of each instalment was specified in Schedule 1. The final date for payment was 30 days after the relevant due date, save that if the invoice was issued late, the final date for payment would be postponed by the same number of days by which the invoice was late. If VDC intended to pay less than the notified sum, it was required to give a pay less notice not later than five days before the relevant final date for payment.