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LUL had to present Pillar with an invoice showing a breakdown of costs supported by invoices. Pillar then had 10 days to pay.

LUL sent Pillar an invoice for £510,247.85 with a breakdown and a sheaf of documents. Pillar did not pay. Charges were obscure or didn't add up. They didn't all directly relate to the figures on the breakdown. There was even a LUL staff charge for 'football'.

In court, Pillar argued that LUL had failed to prove that the charges had been properly incurred. Pillar felt unless all charges were allocated and the invoice was arithmetically correct, it need not pay.

That's nonsense, said the court. Pillar can't withhold cash over such technicalities. The court looked at the details and ordered Pillar to pay £244,776.55.

Moral: Pay what you agree

Case: London Underground Ltd v Pillar Broadway Ltd Technology & Construction Court, January 2003

The main risk
Egger's new factory in East Aryshire is state-of-the-art. Raw logs in one end. High quality chipboard out the other. Skanska built the factory in eight months on a hybrid Design-and-Build-cum-Management contract for a £12m Guaranteed Maximum Price.

In the end, Skanska and Egger went to court over the final account. Neither was happy with the first court judgment and both parties appealed.

One of the principal points of contention was the fire main.

Skanska had designed and installed a single fire main. Egger had added two new fire-fighting systems. These required a second main costing Egger £250,000. Egger argued the extra cost was down to Skanska, as it should have installed two fire mains originally as was required by British Standards 5306.

Skanska's expert Mr. Howard pointed out that a single main was acceptable as long as Skanska's design had taken into account full hydraulic conditions, mains operating pressure and surge conditions.

The Court of Appeal agreed. Egger's requirement for two mains was a Change entitling Skanska to payment.

Moral: Don't just rely on British Standards

Case: Skanska Construction Ltd v Egger (Barony) Ltd Court of Appeal December 2002

And having writ moves on...
Sites move quickly. Verbal agreements are made. Then sometimes a dispute arrives before the written agreement. The Construction Act requires that the contract be in writing or 'evidenced in writing'. If not, then the payment requirements and Notices of Intention to Withhold don't come into play.

Debeck Ductwork Installation was on site for T&E Engineering on an Eli Lilley contract when a Debeck director confirmed an agreement by fax. The fax had been sent while Debeck was working on site. Debeck thought it was home and dry.

The work was completed and Debeck claimed the £27,000 contract sum plus £3,204 in extras. T&E didn't pay. Debeck thought T&E hadn't issued a valid Notice of Withholding and had no defence. As a consequence, Debeck sought a summary judgment in court.

The court didn't wear Debeck's argument, pointing out that the fax didn't set out the whole agreement. All of it must be included, not just the parts that suited Debeck. The validity of T&E's notice was irrelevant. Debeck had failed.

Moral: Be precise with the paperwork

Case: Debeck Ductwork Installation Ltd v T&E Engineering Ltd Technology & Construction Court October 2002