TCC confirms validity of interim application for payment (1st Formations Limited v Lapp Industries Ltd [2025] EWHC 1526 (TCC))

In 1^st Formations Limited v Lapp industries Ltd, DHCJ Adrian Williamson KC decided that the Claimant was not entitled to any declarations and that the Part 8 proceedings should be dismissed. He decided that LAPP had submitted a valid application for payment.

LAPP was the successful party in an adjudication brought against Formations in November 2024. LAPP successfully argued before the adjudicator that an interim application for payment was valid and in the absence of a payment or pay less notice, LAPP became entitled to the notified sum. The Court then granted summary judgment in respect of the decision: [2025] EWHC 943 (TCC). Formations sought to overturn the decision and the judgment by showing that the Application was not a valid application for interim payment: [2].

Formations argued that LAPP had not submitted a valid application for interim payment in accordance with the Scheme because:

(i) it was not an application for an amount representing an interim payment in accordance with para 2(1) of Part II of the Scheme as the amount purportedly applied for was not the difference between an amount determined in accordance with paragraph 2(2) of the Scheme and an amount determined in accordance with paragraph 2(3) of the Scheme;

(ii) it was ambiguous and was not by substance, form and intent an interim payment application under the Scheme because:

(1). The “total payment now due” was stated to be £341,854.32 (inclusive of VAT) but the payment “requested on account” in the application was £100,000 plus VAT. It was stated to be a request for an arbitrary sum as “payment on account” based on a “provisional valuation of the works carried out” pending a proper valuation of the works and/or agreement of the value of the works;

(2). Payment was stated to be due “within 14 days” whereas if it was an application under the Scheme, payment would have been due either “on the expiry of 7 days following the completion of the work to which the payment relates” or “the making of a claim by the payee”.

(3). The sums described in the application were stated to be provisional and “subject to any agreed adjustment following assessment by Jonathan Grubb of Northcote Building Consultancy”.”

DHCJ Williamson KC decided that the application for payment was valid.

As to (i), the application did set out “the difference between the amount determined in accordance with sub-paragraph (2) and the amount determined in accordance with sub-paragraph (3)”, as required by para 2(1) of the Scheme: [32]. In the judge’s view, LAPP had complied with para 2 of the Scheme, but then went on to seek a lesser sum “on account”: [34].

As to (ii), the application was in substance, form and intent an interim payment application under the Scheme since LAPP set out their valuation of the works as a whole and then confined the application for payment to a lesser sum: [36]. It provided an adequate agenda for an adjudication as to the true value of the Works. As to the dates for payment, it may have been that one or other of the due date or final date for payment was erroneous, but that would not invalidate the application [38].

Standing back, and looking at the application in a common sense, commercial way, the Judge considered it obvious that LAPP were making an application for an interim payment in the sum of £100,000.00 plus VAT [40].  Any other approach to the application would be to fall into the trap of “nice points of textual analysis or arguments which seek to condemn the notice on an artificial or contrived basis” [41].

Felicity Dynes (instructed by Bryan Cave Leighton Paisner LLP) acted for the Claimant.

Sheriar Khan (instructed by Alston Asquith Limited) acted for the Defendant.

Click here to read the full judgment.