Wednesday 19 November 2008
We’re not being paid?
QUESTION
We are an electrical sub contractor working for a main contractor under the JCT 05 standard building sub contract. The main contractor is refusing to pay our latest monthly application for no apparent reason. We have tried contacting the QS but he simply ignores us. What can we do to get paid?
ANSWER
You will need to check compliance with the payment procedure under the sub contract. Under clause 4.9.1 the first interim payment is due on the date for issue of the interim certificate under the main contract (not the certificate itself but the date). If no date is stated in the main contract particulars it is due one month following start on site and thereafter on the same date in each month.
Under clause 4.9.3 the final date for payment is 21 days after the due date. It is critical to bear in mind the important distinction between the two dates. The due date is the moment at which your entitlement to payment crystallises, but it is not the date at which you are paid. That involves the second stage, the final date for payment this is the date when payment should actually be made.
Under clause 4.10.2 not later than five days after the due date, the main contractor is to give you notice of the amount of the proposed payment and the basis on which it is calculated. If the main contractor intends to set off monies from your application it must do so in accordance with clause 4.10.3 by issuing a withholding notice specifying the amount to be deducted and the grounds for such deduction.
If the main contractor has failed to pay by the final date for payment and has not issued a withholding notice you may give notice under clause 4.11 of your intention to suspend performance. If the non payment continues for seven days thereafter you may suspend performance. Under clauses 2.19.5 and 4.20.3 you have a right to claim loss and expense and an extension of time caused by a suspension.
You have a right to claim interest under clause 4.10.5 until payment is made.
You may also terminate the sub contract in accordance with clause 7.8 for non payment.
You can also initiate adjudication which covers any dispute arising between you and the main contractor and you also have the option of mediation before embarking on adjudication.
