William Hare Ltd v Shepherd Construction Ltd

William Hare Ltd v Shepherd Construction Ltd

The 'pay when paid' clause, as drafted, only applied to administration by court order and did not cover self-certifying administration. Since Shepherd Construction Limited drafted the clause and sought to exclude liability, any ambiguity must be resolved against them. The clause did not relieve Shepherd from liability to pay the subcontractors in the circumstances of Trinity's self-certifying administration.

Parties
Respondent: William Hare Limited; Respondent: C R Reynolds (Construction) Limited; Appellant: Shepherd Construction Limited
Jurisdiction
England and Wales
Judgment Date
18 March 2010
Procedural Posture
Civil Appeal / Appeal From the Technology and Construction Court to the Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Pay When Paid Clauses, Contract Interpretation, Insolvency Definitions, Exclusion Clauses
Construction Law Contract Law Insolvency Law Pay When Paid Clauses Contract Interpretation Insolvency Definitions Exclusion Clauses

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Parties

William Hare Limited

Respondent

C R Reynolds (Construction) Limited

Respondent

Shepherd Construction Limited

Appellant

Procedural Posture

Civil Appeal / Appeal From the Technology and Construction Court to the Court of Appeal

Legal Issues

  1. 1 Whether the 'pay when paid' clause in the subcontract, drafted by reference to outdated statutory language, could be construed to include self-certifying administration under the amended Insolvency Act 1986 as a ground for withholding payment to subcontractors.

Ratio Decidendi

The 'pay when paid' clause, as drafted, only applied to administration by court order and did not cover self-certifying administration. Since Shepherd Construction Limited drafted the clause and sought to exclude liability, any ambiguity must be resolved against them. The clause did not relieve Shepherd from liability to pay the subcontractors in the circumstances of Trinity's self-certifying administration.

Court Disposition

Appeal dismissed

Orders

  • Appeal dismissed; judgment of Coulson J affirmed.