RETROSPECTIVE ALTERATIONS OF THE FINAL DATE FOR PAYMENT AND THE 1996 ACT

Melville Dundas Ltd v George Wimpey UK Ltd [2005] CSIH 88

In Melville Dundas Ltd v George Wimpey UK Ltd [2005] CSIH 88 the Inner House of the Court of Session held that a clause in the contract between the parties did not, as a matter of construction, have the effect of altering retrospectively the final date for payment. Rather, the true effect of the clause was to permit the employer to withhold, in certain circumstances, an amount due after the final date for payment thereof. Section 111 of the Housing Grants Construction and Regeneration Act 1996 applied to this type of situation and prevented the defenders from relying on the clause in order to withhold payment where they had not served an effective notice of intention to withhold payment in accordance with the requirements of the Act.