Roofing Contractor Suffers Breach of Contract After Payment Dispute

THE DETAILS of an ongoing payment dispute for a roofing subcontractor client have been released by Arbicon who say the case shows what is becoming an increasingly common situation in the construction industry as it recovers from the pandemic .

The chartered surveyors and construction claim consultants were instructed by a roofing contractor which had not been paid their latest payment application in accordance with the contract terms for two roofing subcontracts, despite the sum being notified as due.

Payment Dispute

The payment dispute escalated and the roofing contractor’s contract was wrongfully terminated, resulting in repudiatory breach from the Main Contractor. The roofing subcontractor suffered delay and disruption on both projects as they did not have access to complete the works.

JCT contracts were in place for both subcontracts and payment applications had been issued and underpaid, with no Payment or Pay Less Notice submitted.

Arbicon worked closely with their subcontractor client to establish what payments were due and subsequently issued letters requesting payment to be made.

Following continued non-payment, the consultants advised their client to give notice to suspend the works, with non-payment being the grounds for suspending performance. The contract and construction Act provided entitlement to both time and payment of all losses and expenses incurred because of the suspension.

Repudiatory Breach of Contract

The Main Contractor then terminated the roofer’s contract whilst the works were suspended, amounting to repudiatory breach.

The repudiation was conclusive for wrongful contract termination during suspension, failure to pay the sums due and exclusion from site. Arbicon says it’s client is entitled to payment, interest and damages for the repudiation, the matter is however, ongoing.

Jonathan Nugent, Managing Director, Arbicon ADR Ltd

Jonathan Nugent, Managing Director, Arbicon ADR Ltd said, “Unfortunately, our client was hit with typical non-payment issues and subsequent repudiatory breach through wrongful contract termination. With our extensive knowledge in construction contracts, we were able to set our client’s position by suspending the works and then subsequently dealing with the wrongful termination so that a full claim could be made.”

The roofing subcontractor has asked Arbicon to carry out a review of their terms of business in order for them to maintain the strongest position in procurement of future contracts. The subcontractor said, “Jon looked into our case with nothing but a keen eye and pure professionalism. Jon gave us clear direction and confidence and was always on hand when we had any questions or there were new developments in the case. I wouldn’t hesitate recommending Arbicon’s services to anyone else in a similar situation.”