Building contract

Section 111 of the Housing Grants Construction and Regeneration Act 1996 required a withholding notice which set out grounds for withholding money otherwise due; any argument to the contrary went against the express words of the section.

Moreover, the Act did not permit a party to put in an ineffective withholding notice and then, in the subsequent adjudication, seek to put together an entirely different justification for withholding payment.

The Act emphasised the obligation on the paying party to give good reasons, there and then and in advance of the date for payment, if any part of a sum otherwise due was not going to be paid. If that paying party did not do so, then it had to “pay now and argue later”.