Contractors and subcontractors know that getting the payment machinery wrong can be ruinous. Placefirst Construction Ltd v CAR Construction (North East) Ltd [2025] EWHC 100 (TCC) is a timely reminder that the court will look past labels and minor defects and ask a simple, practical question: does the notice, read objectively and in context, do the statutory job? On the facts, the TCC held that Placefirst had served both a valid payment notice and a valid pay less notice, even though they went out together and neither was a model of drafting neatness. As a result the “smash-and-grab” adjudication in CAR’s favour was not enforced.
Background and the contractual machinery
The parties were working under an amended JCT Design & Build 2016 sub-contract. CAR submitted an interim application near the end of July 2024. On 31 July, Placefirst emailed two attachments: a document described as a pay less notice, and an Excel workbook headed “sub-contract payment certificate / Valuation 30”. In adjudication, CAR succeeded on a “smash-and-grab” basis i.e. the adjudicator decided Placefirst had failed to issue a valid payment notice, and that its pay less notice was invalid because it was “too early”. Placefirst challenged in the TCC and won.
The payment notice: substance over form
The judge held that the “Valuation 30” workbook was a compliant payment notice. It set out the sum Placefirst considered due and the basis of calculation; the fact it was called a “certificate”, not “payment notice”, and was emailed alongside a pay less notice did not matter. Nor did it matter that the workbook stated an amount assessed before the due date; the court was not prepared to elevate wording technicalities over the obvious purpose and effect of the document. The decision adopts a practical, objective reading, consistent with the Construction Act’s focus on clear communication over formal labels.
That approach resonates with prior guidance: courts look at what a reasonable recipient, knowing the contract and the context, would understand. They are slow to strike down notices on technical points if the core statutory requirements are met. The court’s approach is similar and can be compared to the pragmatic and context-driven reading of notices in Advance JV & Ors v Enisca Ltd [2022] EWHC 1152 (TCC).
The pay less notice: “early” can still be valid
The court also held that Placefirst’s pay less notice was valid even though it was issued before the contractual deadline for a payer’s payment notice had expired (and before CAR’s application could have turned into a payee’s notice in default). The key to this was section 111(5) of the Construction Act which says that a pay less notice cannot be served before the “notice by reference to which the notified sum is determined”, but once there is a qualifying payment application in play, there is no logical reason why a payer cannot serve a pay less notice earlier than the last permissible moment. In other words, “early” is not the same as “invalid”.
This marks a liberal and common-sense reading of the Act’s timetable and has been widely noted in industry commentary. It will not rescue a fundamentally unclear document, but it undercuts “timing trap” arguments where the substance of a pay less notice is otherwise sound.
Why the adjudicator’s “smash-and-grab” award failed
Because the court found both notices valid, the adjudicator’s decision (that the notified sum was the amount in CAR’s application) could not stand. Put simply, proper notices defeat a smash-and-grab. The High Court was prepared to make final declarations on the validity of the two documents, and, having done so, declined to enforce the award.
How this sits with earlier authority
Placefirst does not give licence for sloppy paperwork. The TCC’s willingness to uphold notices is grounded in clarity of substance. Where a notice (or application) is ambiguous, the courts have taken a stricter line. In Henia Investments Inc v Beck Interiors Ltd [2015] EWHC 2433 (TCC), the contractor’s unclear interim application failed precisely because a reasonable recipient could not tell what payment cycle it related to, the court would not let formality and ambiguity trigger draconian “notified sum” consequences. The message across the cases is consistent: be clear, be specific, and serve on time.
Similarly, the court’s reasoning in Placefirst followed the same objective, purpose and context approach as that adopted in Advance JV v Enisca, a notice will be judged by what it says and does in its contractual setting, not by its heading or file name.
Practical lessons for payers and payees
Label your documents, but don’t rely on labels. Call a payment notice a “Payment Notice” and cite the relevant clause. Do the same for any pay less notice. If you forget, the court may still save you if the content does the job, but do not invite a fight.
You can serve early (with care). A pay less notice can validly be served after receiving a qualifying application, even before the payer’s payment-notice window has closed, provided the contract and section 111(5) are satisfied. The risk is a practical one, if you later serve a different payment notice setting a new notified sum, you may need to re-serve a consistent pay less notice.
Ensure payment notices are concise and contractually compliant. State the sum considered due and the clear basis of calculation. A “zero” or even negative valuation may be acceptable where the contract and context justify it, what matters is intelligibility to the reasonable recipient.
Do not assume small drafting slips will sink an otherwise valid notice. Placefirst shows reduced appetite for ultra-technical attacks where the notice’s purpose is clear. Focus your effort on substance (valuation, entitlement) rather than hoping for a timing tripwire to secure a windfall.
What this means for “smash-and-grab” tactics
The case does not abolish smash and grab adjudications; if a payer misses deadlines or issues a confusing, non-compliant document, the notified sum regime continues to operate. But Placefirst widens the ground on which a payer can resist. A workmanlike document that conveys the sum due and the reasons for paying less will likely survive timing and labelling critiques. Placefirst therefore signals that future disputes are more likely to turn on the substance of notices rather than the fine print of their headings.
How CCC can help
At Contract & Construction Consultants, we draft and audit payment and pay less notices that stand up in adjudication and in the TCC. We review applications and notices to ensure they meet contractual and statutory requirements. If you are facing a smash and grab or planning to defend one, we analyse both form and substance against the Construction Act and the latest case law and either support your position or test the robustness of the other side’s paperwork. If you want your payment regime to work in practice, not just on paper, we can put that in place.
