Initial assessment valuation was not interim payment application

In Jawaby Property Investment Ltd v The Interiors Group Ltd & Anor [2016] the issue arose whether a valuation amounted to an interim payment application by the contractor (“TIG”).

The High Court said that the valuation was described only as TIG’s “initial” assessment. So the valuation was not TIG’s firm or final assessment.

For that reason it was not, and could not objectively be interpreted to be, a statement by TIG of what it considered was due to it for the purpose of Clause 4.8.1 of the Contract.

Rather it was only what TIG considered might be due to it, subject to further consideration.

TIG said that the word “initial” meant that it was TIG’s “first” valuation, intended to “get the ball rolling” for valuation purposes. The court said that was not remotely a statement by TIG of the sum that it considered to be due to it for the purpose of clause 4.8.1 of the Contract such as to carry the draconian consequences of the payment regime that followed the service of an interim payment application.

The reasonable recipient of the valuation would not have regarded it as unambiguously telling it that this was an interim payment application for the purpose of Clause 4.8.1.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.