Laing O’Rourke Delivery Limited v Shepperton Studios Limited

By proceedings issued on 2 January 2026, the Claimant who, adopting the parties’ nomenclature, I will refer to as LOR, seeks to enforce an Adjudication Decision of Mr Mark Entwistle, dated 21 December 2025 (“the Decision”).

The Decision concerned the validity of Payment and Pay Less Notices issued under a building contract dated 16 November 2021 between SSL as Contractor and Shepperton Studios Limited (“SSL”) as Employer.

In summary, Mr Entwistle found in favour of LOR and concluded that SSL’s Payment Notice provided in relation to Application for Payment (AFP) 45 and SSL’s related Pay Less Notice were invalid as they did not set out the basis on which the sum considered to be owing to LOR had been calculated.

Consistent with that determination, Mr Entwistle decided that SSL must pay the sum of £5,627,275.11 plus VAT as applied for in AFP 45, together with interest at the contractual rate of 5% per annum above the official bank rate of the Bank of England from 22 August 2025, being the date on which the sum applied for in AFP 45 became due.

The principles underlying the Court’s approach to enforcement of adjudication decisions made within the jurisdiction of the Adjudicator (which it is accepted this was) are well known and not in issue before me. I do not propose to repeat them, save to the extent necessary in addressing the defences advanced by SSL.

Those defences advanced by Mr James Leabeater K.C. and Mr James Bowling, who appear for SSL, are helpfully set out at paragraph 2 of SSL’s skeleton argument as follows:

“First, SSL says the Decision is obviously wrong on a simple and straightforward reading of the Payment Notice and Pay Less Notice taken in their proper context and against the admitted background matrix of fact. SSL has commenced Part 8 Proceedings for final declarations to that effect. SSL’s Part 8 arguments are so strong that it would be unconscionable for the Court to enforce the Decision without regard to them (Elements (Europe) Limited v FK Buildings [2023] BLR 323).

Second, because even if SSL is wrong about the presence ofa requisite calculation in the Payment Notice, that does not affect the validity of the Pay Less Notice. That document gives a clear and obvious statement of why SSL intends to pay some £2,420,516.84 less than the notified sum otherwise due.If the Court declares the Payment Notice invalid but the Pay Less Notice valid, the net notified sum payable to LOR reduces from £5,627,275.11 to £2,420,516.86.

Third, because in any event there have already been some five separate, further adjudications which have determined the true value of LOR’s underlying claims. Those adjudications strike at, and very substantially undermine LOR’s entitlement; they are five interim binding decisions which mean that LOR must accept the notified sum is not in fact due and (at best) LOR will have to repay c. 90% of the notified sum and the Court can and should give SSL permission to defend the value of those five further Decisions, so as to give effect to all the interim binding decisions in place between the parties. This would reduce any summary judgment in LOR’s favour to a small fraction of the amount claimed.

Fourth and lastly, there should be a stay on any sums payable. LOR is insolvent. LOR now continues to trade only by the support, continued from time to time, of its parent. This in sharp contrast to the position when the contract was entered into (at which point in time LOR retained very significant funds). There is every risk if the Decision is enforced that the now-insolvent LOR will not be able to repay.”

I propose to deal with the defences in that order. As apparent from the first defence, there are separate Part 8 proceedings before the TCC due to be heard on 15 April 2026, with a time estimate of one day. Constable J gave directions in both proceedings. In his Order of 20 January 2026 in these proceedings Constable J stated:

“I have considered the papers in this matter. The Court does not consider it appropriate to depart from the usual expedition of Part 7 Proceedings to enforce. To the extent that the Defendant wishes to persuade the Court that summary judgment should not be granted in the light of the impending Part 8 Proceedings (which are to be set down for a hearing in April), it is not prevented from so arguing at the hearing directed by this Order. It is plain from the correspondence that the parties are generally aware of the relevant authorities in paragraph 9.4.5. of the TCC Guide. This Order does not pre-judge the outcome of any such arguments.”

Paragraph 9.4.5 of the TCC Guide provides:

“However, in cases where an adjudicator has made a clear error (but has acted within his jurisdiction), it may on occasions be appropriate to bring proceedings under Part 8 for a declaration as a pre-emptive response to an anticipated application to enforce the decision. In the light of this guidance, a practice had grown up of applications to enforce an adjudicator’s decision being met by an application for a declaration that the adjudicator had erred often without proceedings under Part 8 being commenced. This approach was disruptive and not in accordance with the spirit of the TCC’s procedure for the enforcement of adjudicator’s decisions. It is emphasised, therefore, that such cases are limited to those where:

a)

there is a short and self-contained issue which arose in the adjudication and which the defendant continues to contest;

b)

that issue requires no oral evidence, or any other elaboration beyond that which is capable of being provided during the interlocutory hearing for enforcement; and

c)

the issue is one which, on a summary judgment application, it would be unconscionable for the court to ignore; and further that there should in all cases be proper proceedings for declaratory relief.

Unusually, the Part 8 proceedings issued by SSL were commenced before the Decision was received, but after the Adjudication in issue had commenced. Whilst Mr Patel K.C., who appears for LOR, suggested various reasons why this may have been the case, if the Court concludes the requirements of paragraph 9.4.5 are engaged, I see no distinction, on the facts of this case, between proceedings starting before and after the Decision. Both satisfy the requirement at paragraph 9.4.5 c) of there being proper proceedings for declaratory relief. In that regard, it is clear on their face that the Part 8 proceedings reflect the arguments advanced by SSL in these proceedings concerning the validity and effectiveness of Payment Notice 45 and Pay Less Notice 45.

The proper application of paragraph 9.4.5 was also at the forefront of LOR’s case. As a threshold issue, Mr Patel submitted the requirements of paragraph 9.4.5 of the TCC Guide are not met in this case. In particular it was submitted:

As will be apparent from this judgment, I have considered the questions of construction in issue in the Part 8 proceedings. The reason this could be done in a period of little more than two hours, rather than the day listed for the Part 8 proceedings is because it emerged that in those proceedings, SSL did not seek to cast its evidential net any wider than considering Payment Cycles 41 to 44 and that consideration was limited to documents forming part of that payment cycle. Mr Leabeater having confirmed this to be the case, the consequence was that the evidence served by LOR in the Part 8 proceedings (the factual evidence of Mr Mark Norwood, a Commercial Leader for LOR) fell away, as that evidence was directed primarily to responding to the witness statement of Mark Lawrence served by SSL in support of the Part 8 proceedings. The subject of Mr Norwood’s evidence, as he notes at paragraph 11 of his statement, was to join issue with Mr Lawrence’s evidence as to the “Payment Cycle process that the parties adopted, and his explanation of the Gross Valuation.”

For completeness I should also observe that at the conclusion of argument, Mr Patel submitted that, as the Court had been addressed on the issue of construction, it would be sensible to decide the same and save the parties the significant costs of the Part 8 proceedings due to be heard in April.

In Elements (Europe) Ltd v FK Building Ltd [2023] EWHC 726 (TCC), Constable J considered paragraph 9.4.5 of the TCC Guide. In that case the Court had listed the Part 7 claim for adjudication enforcement together with the Part 8 proceedings. Those Part 8 proceedings were directed to a point of construction central to the decision of the adjudicator which was sought to be enforced. Between paragraphs 29 and 34, Constable J considered whether a determination of the Part 8 was appropriate:

“29.

Mr Singer argues that his two contentions are short points and capable of being determined by the Court on a Part 8 application heard at the same time as summary judgment, in line with the principles which have been recently affirmed by the Court of Appeal in A&V Building Solutions Ltd v J&B Hopkins Ltd [2023] 2023 EWCA Civ 54. It is said that the limited agreed factual background corresponds with the factual basis of the Adjudicator’s Decision, and that the disputed facts are not relevant to the exercise of construction. The construction of the contract is not to be decided by the way in which the parties may have operated on site (absent any plea of waiver or estoppel, which it is pointed out has not been made). It is submitted by Mr Singer that the Court can and should simply construe Clause 4.6.3.1 of the Sub-Contract to determine what it meant and how it was to operate in light of the agreed factual position as to the date and time when Application No.16 was sent and received by email.

30.

Mr Lewis contends that the Part 8 Claim does not fall within the exception set out in Hutton Construction Limited v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC). The Court of Appeal in A&V Building Solutions effectively endorsed the decision, as had the wording of the recent TCC Guide published in October 2022. A&V Building Solutions encapsulates the position as follows:

38.

‘The proper approach to parallel proceedings was outlined by O'Farrell J in Structure Consulting Limited v Maroush Food Production Limited [2017] EWHC 962 (TCC). The judge should usually give judgment on the claim based on the adjudicator's decision and then – to the extent possible – endeavour to sort out the Part 8 proceedings. The same point was made in Hutton Construction Limited v Wilson Properties (London) Ltd [2017] EWHC 517 (TCC); [2017] BLR 344, where the judge said that the Part 8 claim should be dealt with after the enforcement, unless the point raised was straightforward and self-contained, and the parties were agreed that it could be dealt with at the enforcement application without adding to the time estimate.

39.

Warnings have continued to be given as to the over-liberal and inappropriate use of Part 8 in adjudication cases: see Jefford J in Merit Holdings Ltd v Michael J Lonsdale Ltd [2017] EWHC 2450 (TCC); [2017] 174 Con LR 92, and Ms Joanna Smith QC (as she then was) in Victory House General Partner Limited v RGB P&C Limited [2018] EWHC 102 (TCC).

40.

These concerns are reflected in the clear words of the TCC Guide dated October 2022. The relevant paragraphs say this:

“9.4.4

It sometimes happens that one party to an adjudication commences enforcement proceedings, whilst the other commences proceedings under Part 8, in order to challenge the 31. validity of the adjudicator's award. This duplication of effort is unnecessary and it involves the parties in extra costs, especially if the two actions are commenced at different court centres. Accordingly, there should be sensible discussions between the parties or their lawyers, in order to agree the appropriate venue and also to agree who shall be claimant and who defendant. All the issues raised by each party can and should be raised in a single action.

9.4.5

However, in cases where an adjudicator has made a clear error (but has acted within his jurisdiction), it may on occasions be appropriate to bring proceedings under Part 8 for a declaration as a pre-emptive response to an anticipated application to enforce the decision. In the light of this guidance, a practice had grown up of applications to enforce an adjudicator's decision being met by an application for a declaration that the adjudicator had erred often without proceedings under Part 8 being commenced. This approach was disruptive and not in accordance with the spirit of the TCC's procedure for the enforcement of adjudicator's decisions. It is emphasised, therefore, that such cases are limited to those where:

a)

there is a short and self-contained issue which arose in the adjudication and which the defendant continues to contest;

b)

that issue requires no oral evidence, or any other elaboration beyond that which is capable of being provided during the interlocutory hearing for enforcement; and

c)

the issue is one which, on a summary judgment application, it would be unconscionable for the court to ignore; and further that there should in all cases be proper proceedings for declaratory relief.”

31.

However, Mr Lewis relies explicitly upon paragraph 18 of Hutton in which Coulson J (as he then was) set out the factors which now are set out at the end of paragraph 38 of A&V Building Solutions and the end of section 9.4.5 of the TCC Guide, and continued: ‘18. What that means in practice is, for example that the adjudicator’s construction of a contract clause is beyond any rational justification, or that the adjudicator’s calculation of the relevant time periods is obviously wrong, or that the adjudicator’s categorisation of a document as, say, a payment notice when, on any view it was not capable of being described as such a document. In a disputed case, anything less would be contrary to the principles in Macob, Bouygues and Carillion.’

32.

He contends that this is authority for the proposition that in addition to the factors identified, there is a requirement that the point or points raised by way of Part 8 have to be shown to be ‘obviously wrong’ or one to be taken ‘on any view’. This was disputed by Mr Singer, who contended that Hutton did not impose a higher burden on. the Part 8 applicant (perhaps equivalent to that which must be demonstrated to appeal from the decision of an arbitrator under Section 69 of the Arbitration Act 1996).

33.

It is clear to me that in paragraph 18 of Hutton, the learned Judge was not seeking to impose a higher Part 8 ‘test’ of any kind. In considering whether parallel Part 8 proceedings should be permitted to be heard at such a time as would, if successful, in practice affect the enforceability of the Award, the Court should be guided by those key factors identified in paragraph 38 of A & V Building Solutions and the TCC Guide, namely whether a) there is a short and self-contained issue which arose in the adjudication and which the defendant continues to contest; b) that issue requires no oral evidence, or any other elaboration beyond that which is capable of being provided during the interlocutory hearing for enforcement; and c) the issue is one which, on a summary judgment application, it would be unconscionable for the court to ignore. It is plain that paragraph 18 of Hutton provided examples of obvious candidates of the types of situations where the guidance would easily be met. Plainly, the clearer an error of contractual construction on the part of the adjudicator, the more readily the Part 8 applicant may satisfy the required ‘gateway’ criteria. But the words in paragraph 18 of Hutton were not intended in themselves to impose a further substantive requirement which must be met in order for a Part 8 applicant, proceeding in parallel with adjudication enforcement, to succeed on that application. Indeed, it can be seen from A & V Building Solutions itself that the substantive point of construction considered by the Judge at first instance in the Part 8 application (who came to the same conclusion as the Adjudicator) was a somewhat ‘nuanced’ one.

34.

Applying this A&V Building Solutions and the TCC Guide to the present case, I consider that the point of construction before me is a short and straight-forward one capable of determination by the Court. Had the evidence relied upon by Elements been disputed, and/or had the issue of waiver or estoppel been raised based upon the factual evidence of site practice, that self evidently would not have been a short point capable of determination on a Part 8 Claim (or certainly not a Part 8 claim associated with a related adjudication enforcement).”

With those principles in mind, I turn to the case before me and Mr Patel’s threshold objection. The interim payment provisions principally set out in clause 4 of the contract, in particular clauses 4.7.2, 4.7.3, 4.7.5, 4.9 and 4.10. Clauses 4.7.2, 4.7.3 and 4.7.5, as amended by the Schedule of Amendments incorporated into the building contract, provide as follows:

Clause 4.9 (as amended by the Schedule of Amendments incorporated into the building contract) provides:

“.1 The final date for payment of each Interim Payment and the final payment shall be 28 days from its due date.

.2 Subject to any Pay Less Notice given by the Employer under clause 4.9.5, the Employer shall pay the sum stated as due in the Payment Notice on or before the final date for payment.

.3 If a Payment Notice is not given in accordance with clause 4.7.5, the Employer shall, subject to any Pay Less Notice under clause 4.9.5, pay the Contractor the sum stated as due in the Interim Payment Application.

…

.5 Where:

.1 the Employer intends to pay less than the sum stated as due from him in a Payment Notice or Interim Payment Application or reinstatement work statement ….

…

the Party by whom the payment is stated to be payable shall not later than 3 days before the final date for payment give the other Party notice of that intention in accordance with clause 4.10.1 (a 'Pay Less Notice'). Where a Pay Less Notice is given, the payment to be made on or before the final date for payment shall not be less than the amount stated in such Pay Less Notice as due…"

Insofar as relevant, clause 4.10 provides:

“.1 A Pay Less Notice given by either Party shall specify the sum he considers to be due to the other Party at the date the notice is given and the basis on which that sum has been calculated.

.2A Payment Notice… or a Pay Less Notice to be given by the Employer may be given on his behalf by the Employer's Agent or any other person who the Employer notifies the Contractor as being authorised to do so.…”

The building contract provided that Alternative B (Periodic Payments) applied.

Having set out the contractual terms, I now turn to the notices in issue. I do so recognising the submission of Mr Patel that the Court should not entertain consideration of the correctness or otherwise of the Decision, having regard to the provision of paragraph 9.4.5 of the TCC Guide. As I observed in argument, it is necessary to proceed some way on the issue of construction in order to be satisfied that the exceptional circumstances in paragraph 9.4.5 do not apply. It is also fair to observe that in proceeding down that path, the questions of construction raised by the Part 8 proceedings were able to be fully ventilated, leading to Mr Patel’s invitation to determine the same.

SSL’s Payment Notice 045 dated 30 July 2025 identified a Gross Valuation of £367,137,528.39. Having deducted amounts previously notified or advanced, the amount of the notice, exclusive of VAT, was stated as £2,420,516.84. Importantly, the Gross Valuation was neither broken down nor was there reference to any other document in which it could be seen how that sum was calculated.

By SSL’s Pay Less Notice 045 dated 19 August 2025 it was stated:

LOR does not suggest that the basis of the calculation for each of the three deductions is in any way insufficient. It nevertheless maintains its case before the Adjudicator that as the deductions were made from the sum of £2,420,516.84, the figure in the Payment Notice, if that Payment Notice was invalid, the balance of £0(zero) said to be due in the Pay Less Notice must necessarily be wrong and by reason of that error the deductions cannot stand.

In considering the validity or otherwise of the notices the Court is required to interpret the requirements placed on SSL in the payment clauses set out above. On the issue of interpretation, the skeleton argument of SSL referred to Arnold v Britton [2015] UKSC 36 per Lord Neuberger. In that case, Lord Neuberger, having reviewed the authorities stated:

“16.

For present purposes, I think it is important to emphasise seven factors.

17.

First, the reliance placed in some cases on commercial common sense and surrounding circumstances (eg in Chartbrook, paras 16-26) should not be invoked to undervalue the importance of the language of the provision which is to be construed. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision. Unlike commercial common sense and the surrounding circumstances, the parties have control over the language they use in a contract.

And, again save perhaps in a very unusual case, the parties must have been specifically focussing on the issue covered by the provision when agreeing the wording of that provision.

18.

Secondly, when it comes to considering the centrally relevant words to be interpreted, I accept that the less clear they are, or, to put it another way, the worse their drafting, the more ready the court can properly be to depart from their natural meaning. That is simply the obverse of the sensible proposition that the clearer the natural meaning the more difficult it is to justify departing from it. However, that does not justify the court embarking on an exercise of searching for, let alone constructing, drafting infelicities in order to facilitate a departure from the natural meaning. If there is a specific error in the drafting, it may often have no relevance to the issue of interpretation which the court has to resolve.

19.

The third point I should mention is that commercial common sense is not to be invoked retrospectively. The mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly, or even disastrously, for one of the parties is not a reason for departing from the natural language. Commercial common sense is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made. Judicial observations such as those of Lord Reid in Wickman Machine Tools Sales Ltd v L Schuler AG [1974] AC 235, 251 and Lord Diplock in Antaios Cia Naviera SA v Salen Rederierna AB (The Antaios) [1985] AC 191, 201, quoted by Lord Carnwath at para 110, have to be read and applied bearing that important point in mind.

20.

Fourthly, while commercial common sense is a very important factor to take into account when interpreting a contract, a court should be very slow to reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of wisdom of hindsight. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed. Experience shows that it is by no means unknown for people to enter into arrangements which are ill-advised, even ignoring the benefit of wisdom of hindsight, and it is not the function of a court when interpreting an agreement to relieve a party from the consequences of his imprudence or poor advice. Accordingly, when interpreting a contract a judge should avoid re-writing it in an attempt to assist an unwise party or to penalise an astute party.

21.

The fifth point concerns the facts known to the parties. When interpreting a contractual provision, one can only take into account facts or circumstances which existed at the time that the contract was made, and which were known or reasonably available to both parties. Given that a contract is a bilateral, or synallagmatic, arrangement involving both parties, it cannot be right, when interpreting a contractual provision, to take into account a fact or circumstance known only to one of the parties.

22.

Sixthly, in some cases, an event subsequently occurs which was plainly not intended or contemplated by the parties, judging from the language of their contract. In such a case, if it is clear what the parties would have intended, the court will give effect to that intention. An example of such a case is Aberdeen City Council v Stewart Milne Group Ltd [2011] UKSC 56, 2012 SCLR 114, where the court concluded that “any … approach” other than that which was adopted “would defeat the parties’ clear objectives”, but the conclusion was based on what the parties “had in mind when they entered into” the contract (see paras 17 and 22).

23.

Seventhly, reference was made in argument to service charge clauses being construed “restrictively”. I am unconvinced by the notion that service charge clauses are to be subject to any special rule of interpretation. Even if (which it is unnecessary to decide) a landlord may have simpler remedies than a tenant to enforce service charge provisions, that is not relevant to the issue of how one interprets the contractual machinery for assessing the tenant’s contribution. The origin of the adverb was in a judgment of Rix LJ in McHale v Earl Cadogan [2010] EWCA Civ 14, [2010] 1 EGLR 51, para 17. What he was saying, quite correctly, was that the court should not “bring within the general words of a service charge clause anything which does not clearly belong there”. However, that does not help resolve the sort of issue of interpretation raised in this case.

As would be expected, the only difference between the parties is as to the application of these factors to the provisions relating to payment and pay less notices. SSL submits that the requirement to identify the basis on which the sum in the payment notice has been calculated requires no more than, as was provided, the identification of a gross valuation from which the sum paid is deducted, giving the balance due. SSL further submits that any requirement for the breakdown of the gross valuation in the payment notice is an impermissible gloss on the plain words used. Reliance was placed on the speech of Lord Hoffmann in AG Belize v Belize Telecom [2009] 1 WLR 1988 at [16] that “the court has no power to improve the instrument which it has called upon to construe, whether it is a contract, a statute or article of association.”

In support of its submission that SSL does not have to show how the gross valuation is calculated, SSL relies on the provisions of clauses 4.24.2 and 4.24.4 concerning Final Statement and Final Payment. These provide:

“4.24.2

The Final Statement shall set out the adjustment for the Contract Sum to be made in accordance with clause 4.2 and shall state:

.1 The Contract Sum, as so adjusted; and

.2 The sum of amounts already paid by the Employer to the Contractor,

And the final payment shall be the difference (if any) between the two sums, which shall be shown as a balance due to the Contractor from the Employer or to the Employer from the Contractor, as the case may be. The Final Statement shall state the basis on which that amount has been calculated, including details of all such adjustments.

.3 If the Contractor does not submit the Final Statement within three months of practical completion of the Works, the Employer may on or after the expiry of that period give the Contractor notice that unless that statement is submitted within 2 months from the date of the notice the Employer may himself issue a final statement in lieu of that from the Contractor.

.4 Unless the Contractor submits the Final Statement prior to the Employer exercising that right, the Employer may at any time after the 2 month period issue a final statement to the Contractor (“the Employer’s Final Statement”) in the form and with the details required by clause 4.24.2 so far as the Employer, on the information is his possession, is reasonably able to do so.”

SSL relies in particular on the last sentence of clause 4.24.2 submitting that the requirement to state the basis on which the amount has been calculated, including details of all such adjustments in clause 4.24.2, is absent in clause 4.7.5 and the requirement to provide such details would represent a “gloss” on the requirements of clause 4.7.5.

I am unable to accept that submission. Firstly, the wording of the last sentence of clause 4.24.4 views the provision of details as within the requirement to state the basis of calculation. This is clear from the words “including details of such adjustments”. Further,the reference to adjustments is to clause 4.2 which makes provision for the Contract Sum to be adjusted for matters such as Changes and other adjustments listed therein. It is correct that such words do not appear in clause 4.7.5, however such words are unnecessary given that the Payment Notice under clause 4.7.5 must state a sum due, calculated “in accordance with clause 4.12 or 4.13 and 4.14 and the basis on which that sum has been calculated.”

As already observed, under the contract between the parties, Alternative B clause 4.13 applies. Clauses 4.13 and 4.14 provide:

“ The Gross Valuation for each Interim Payment shall be the total of the amounts referred to in clauses 4.13.1 and 4.13.2, less the deductions referred to in clause 4.13.3, each calculated at the Interim Valuation Date:

.1 The total values of the following, which are not subject to Retention

.1 Work properly executed including any design work carried out by the Contractor and works are executed for a value which has been agreed pursuant to clause 5.2 or which has been valued under the Valuation Rules, but excluding any amount referred to in clause 4.13.2.4;

.2 Site Materials provided they are adequately protected against weather and other casualties and they are not on the Works prematurely; and

.3 Listed Items (if any) to which the conditions set out in clause 4.15 are satisfied;

Those values shall be adjusted, where appropriate, in accordance with any applicable Fluctuations Provision or any Acceleration Quotation for which there has been Confirmed Acceptance;

.2 The total of the following, which are not subject to Retention;

.1 Any amount to be included in accordance with clause 4.3 by Employer as a result of payments made or costs incurred by the Contractor under clause 2.5.2, 2.20, 3.12, 6.10.2 or 6.10.3, 6.11.3, 6.12.2 or 6.20;

.2 Any amounts payable under clause 4.11.2;

.3 The amount of any loss and/or expense to which the Contractor is entitled under clause 4.19.1 or by a Confirmed Acceptance;

.4 Where Insurance Option B or C applies or to the extent that the work is under clause 6.15.5.3 to be treated as a Change, any amounts in respect of reinstatement work under clause 6.13.4; and

.5 any amount payable to the Contractor under any applicable Fluctuations Provision other than means of an adjustment made under clause 4.13.1;

.3 The following deductions:

.1 Any amounts deductible under clause 2.35, 3.6, 6.12.2 or 6.19.2; and

.2 Any amount allowable by the Contractor under clause 6.10.2 or under any applicable Fluctuations Provision, other by means of an adjustment made under clause 4.13.1.

The reference to the basis on which “that sum has been calculated” in the last sentence of clause 4.7.5 is, in my judgement, a reference to the same word earlier in the same sentence. On that basis, unless it does no more than require the Employer to identify whether Alternative A or Alternative B is being adopted, which construction I reject, it must refer to identifying the amounts comprising an Alternative B Gross Valuation calculated in accordance with clause 4.13. I am fortified in that view by the subsequent reference to clause 4.14 which, as set out above, provides that the sum due as an Interim Payment will be the gross valuation less the deduction set out therein and amounts paid in previous Interim Payments. It follows that unless the reference to the basis of calculation in clause 4.7.5 is simply to identify the requirements of clause 4.14, it must impose an additional requirement. I do not read the reference to basis of calculation as being no more than requiring the calculation set out in clause 4.14. The requirement to set out that calculation is in clause 4.14. It does not need to be restated elsewhere. For this further reason, I consider that clause 4.14 imposes an additional requirement to set out how the gross valuation is calculated.

SSL further submits that if there is a requirement to provide a breakdown of the gross sum, a breakdown to the gross valuation had been separately provided on numerous occasions and that it was in a constant figure throughout AFP 41-44. I have looked at the Excel spreadsheets relied on in the earlier payment application process and it is correct that LOR had the detail of the breakdown to a figure of £367,137,520.39. SSL contends that this makes good any deficiency in the payment notice in failing to identify how a figure has been calculated. I am unable to accept that submission. Had the spreadsheets been incorporated by express reference on the face of the payment notice, then as in S&T (UK) Limited v Grove Developments Limited [2018] EWCA Civ 2448, to which I was referred by Mr Leabeater, it may well be that any objection as to lack of detail on the notice itself would fail. However, that is not this case. One purpose of the payment notice is to identify how the sum said to be due is built up. The parties have agreed what is to be provided. The commercial sense in providing a contractor with that information, so he can see on which elements of the breakdown any disagreement lies, is obvious. To that end, there should generally be no need to look beyond the document itself or, in appropriate cases as in S&T v Grove Developments, documents incorporated by reference. In particular, what is not required or envisaged when considering the validity of such notices is an enquiry into the detail passing between employer and contractor to see if, regardless of the failure to comply with the contractual requirements, the contractor was nonetheless aware of the breakdown.

It follows that I agree with Mr Entwistle in his conclusion that payment notice 45 was not a valid payment notice.

Whilst in the time available I have been able to and have determined the issue of construction, I agree with Mr Patel that, for the purposes of paragraph 9.4.5 of the TCC Guide, the issue of the construction of the payment notice would not have satisfied the criteria of paragraph 9.4.5(c). The issue was not straightforward and occupied the large part of oral submissions before me.

I now turn to consider the pay less notice.This is the subject of SSL’s second defence. Clearly, the same principles of interpretation apply to the clauses governing the pay less notice of 19 August 2025 as to those governing the payment notice of 30 July 2025.

As regards the pay less notice LOR accepts the sums to be deducted are sufficiently detailed. It is nevertheless said that as the pay less notice starts off with the wrong figure, it ends with the wrong balance due and as such, the ability to make the deductions is lost as the notice is invalid. That in essence was the decision of Mr Entwistle who considered that the absence of a build-up of the gross valuation was fatal to the pay less notice.

Given SSL had detailed in the pay less notice itself the sums sought to be deducted, it is not an attractive argument to submit that SSL is nevertheless unable to make those deductions. The Decision concluded that is what the contract provided and this issue of construction is one of the issues advanced in the Part 8 proceedings.

As I understand Mr Patel’s submissions, he points to the payment scheme which, by clause 4.9.5 provides “Where a Pay Less Notice is given, the payment to be made on or before the final date for payment shall not be less than the amount stated in it as due”. Mr Patel submits that that the pay less notice is the document that identifies the particular sum to be paid and if the calculation commences with an unsupportable gross valuation, the consequence of that calculation is to arrive at the wrong sum, which sum cannot be due and the pay less notice is therefore invalid.

I understand that Counsel had not been able to identify any authority where the lack of detail in a defective payment notice contaminated an otherwise properly detailed pay less notice where the same undetailed figure appeared in both.

I do not consider that the failure to detail the make-up of the gross valuation contaminates both the payment notice and the pay less notice in the manner submitted by LOR. The contract gives the contractor relief where the payment notice does not identify how the gross valuation is made up. That relief, provided by clause 4.9.3, is that the sum applied for by the contractor in the interim payment application becomes payable, subject to any pay less notice under clause 4.9.5.

The only further information required by the contractor in the pay less notice is the detail of the sums sought to be deducted. In circumstances where it is accepted that this information has been provided, I do not consider that the ability to deduct falls aways simply because the mathematical calculation of which those deductions are part commences with the incorrect figure. The contractor has its remedy for a failure by the employer to provide the necessary detail of the gross valuation. The purpose of clause 4.10.1 is to provide the contractor with that detail which it will not have as a result of the operation of 4.7.5 namely, how the sums to be deducted have been calculated. As provided by clause 4.9.3, the starting point where a payment notice is not in accordance with clause 4.9.5 is that the contractor is entitled to the sum stated as due in the interim payment application. That entitlement is expressly subject to any pay less notice. In those circumstances the calculation of the sum properly due is clear where, as here, the contractor accepts that the sums sought to be deducted by way of a pay less notice are sufficiently detailed.

I reach this conclusion on the wording of clauses 4.9.3, 4.9.5 and 4.10.1. I consider that wording reflects the commercial purpose behind the requirement for detail as to how sums are calculated. I do not consider as fatal to that construction that the balance stated as due in the payment application is the incorrect sum, because the contract at clause 4.9.3 provides the alternative calculation where a payment notice is not in accordance with clause 4.9.5. As Mr Leabeater submits, in such circumstances, the proper course is for the contractor to adjudicate the defective payment notice, accepting that, if it is correct, the sums notified in the pay less notice fall to be deducted from the sum applied for by the Contractor

It follows that I conclude that the pay less notice of 19 August 2025 was not defective. Again, whilst for the reasons set out above the question of the operation of paragraph 9.4.5 of the TCC Guide does not strictly arise, I do not consider Mr Entwistle’s decision on this issue was one which, on a summary judgment application, it would be unconscionable for the Court to ignore. Had I not had the benefit of full argument and been invited to determine the same, it is likely I would have enforced the decision within jurisdiction before considering whether there should be a stay of payment by SSL, pending the Part 8 proceedings.

For these reasons I uphold the Decision to the extent of £3,198,660.64 plus VAT being the difference between the sum applied of £5,627,275.11 and the sums detailed in the Pay Less Notice totalling £2,428,614.47. This sum is due to LOR together with contractual interest from 22 August 2025. I do not understand that date to be in issue as a matter of calculation.

This is the third defence advanced by SSL. In short, it seeks to rely on the decisions in five other adjudications between the parties identified by reference to name of the adjudicator. These were (1) The Silver Adjudication, (2) The Davies Adjudication, (3) The Eyre Adjudication, (4) The Pye Adjudication, and (5) The Molloy Adjudication. The adjudications proceedings commenced with the Silver Adjudication on 20 November 2025 and concluded with the decision in the Molloy Adjudication on 22 December 2025.

As summarised at paragraph 87 of LOR’s skeleton argument, these five adjudications taken together interim bind LOR to findings that:

As a consequence, SSL submits that:

In reliance on these decisions SSL submits that if it is bound to pay the “notified sum” of £5,627,275.11 under the Decision, the outcome of the Silver, Davies, Eyre, Pye and Molloy Adjudications demonstrates that LOR has no entitlement to the vast majority of the sums making up that total figure as summarised in the table below:

The accuracy of the table is not in issue before me. What divides the parties is the relevance of the same to the present enforcement application. It will be noted that the sums determined as due for utilities and catering costs are less than the sums which were the subject of the pay less notice however I did not understand it to be submitted by Mr Patel that this was relevant to answering the question as to what sum should have been paid in respect of payment cycle 45.

The requirement to comply with an adjudicator’s decision applies equally whether that decision is declaratory or for a specified sum. This is clear from the judgment of Akenhead J in HS Works Limited v Enterprise Managed Services Limited [2009] EWHC 729 (TCC). At paragraph 61, Akenhead J observed:

“By necessary implication, the Sub-Contract between the parties must therefore be read as requiring the parties to comply with and abide by the valid decision of an adjudicator. Thus, where, as here, the adjudicator’s decision is declaratory, it must still be complied with by the parties, who must abide by it.”

In that case, the Court was considering the circumstances in which it was permissible to set off one adjudication decision against another. Having reviewed the authorities, Akenhead J concluded at paragraph 40:

“In my view, these steps need to be considered before one can consider whether in effect or in actually to permit a set off of one decision against another:

(a)

first, it is necessary to determine at the time when the Court is considering the issue whether both decisions are valid; if not or it cannot be determined whether each is valid, it is unnecessary to consider the next steps;

(b)

if both are valid, it is then necessary to consider if, both are capable of being enforced or given effect to; if not or other is not so capable, the question of set off does not arise;

(c)

if it is clear that both are so capable, the Court should enforce or give effect to them both, provided that separate proceedings have been brought by each party to enforce each decision. The Court has no reason to favour one side or the other if each has a valid and enforceable decision in its favour;

(d)

how each decision is enforced is a matter for the Court. It may be wholly inappropriate to permit a set off of a second financial decision as such in circumstances where the first decision was predicated upon a basis that there could be no set off.”

In his oral submissions, Mr Leabeater accepted, correctly in my view, that the test in HS Works is not satisfied on the facts before me given that there are no separate proceedings brought by SSL to enforce those decisions. In its skeleton, SSL also recognised the difficulties posed to this defence, at least in respect of the £3m worth of bonus payments payable under AFP 45. by S&T (UK) Ltd v Grove DevelopmentsLtd which held that party A could only reclaim from party B the difference between the notified sum and the “true value” once the notified sum had been paid to party B. In its written submissions, SSL argued that the effect of the adjudicator’s decisions, properly construed, was they removed the LOR’s substantive entitlement. That submission was not pressed before me. That submission, if correct, would be an answer in many if not all cases where a party contends that the notified sum is not the true value because the notified sum fails to take into account separate determinations.

In his oral submissions, Mr Leabeater relied on the provisions of paragraph 9.4.5 of the TCC Guide submitting that it would be unconscionable for the Court to ignore such decisions. I am unable to accept that submission. I do not read paragraph 9.4.5 as having any application to such a situation. It is directed to the treatment of Part 8 proceedings in the context of applications to enforce adjudication decisions. There is nothing in paragraph 9.4.5 to suggest it intended to depart from the principles established in the authorities as to the circumstances in which set off of decisions should be permitted.

Giving permission to defend to the value of those five further Decisions is to the same effect as a set off against the decision before me and is equally objectionable.

This defence sought a stay of execution of any judgment, both pending the Part 8 proceedings and generally. The basis for the stay was the insolvency of LOR and the prima facie entitlement to a stay in accordance with the well-known principles stated by Coulson J (as he then was) in Wimbledon v Vago [2005] EWHC 1086 (TCC). SSL submitted that having regard to the true value of LOR’s works and the sums due by reason of the other adjudications LOR in its words “has already had all of the money out of the building contract.”

The context to the application for the stay and the application of the principles in Wimbledon v Vago was SSL’s submission that the letter of comfort provided by the parent is of no fixed intent or duration and perhaps inevitably, given the recent observations of Jefford J in One Hyde Park Ltd v Laing O’Rourke Construction South Ltd [2026] EWHC 155 (TCC) to which I was referred, SSL further submitted that any support to LOR given by its parent cannot be assumed to continue should SSL be successful in the Part 8 proceedings or in demonstrating that the true value due to LOR is less than that paid to date. In that judgment Jefford J agreed with the description of the conduct of a decision to “pull the plug” on the defendant at a late stage of the proceedings as “commercially amoral”.

The issue of the financial strength of LOR generated an exchange of witness evidence and, at the conclusion of the oral submissions, an oral undertaking by Mr Patel on behalf of LOR that it would repay any monies awarded in any judgment in the Part 8 proceedings. Given this undertaking was raised for the first time at the conclusion of the argument, I directed that the same be provided in writing, and that SSL should, briefly, respond to the same.

The undertaking provided on LOR notepaper signed by Simon Chatwin, Commercial Director, Europe provided:

“Further to the hearing on 3 March 2026 in the Part 7 proceedings, and the directions of Mr Simon Lofthouse KC sitting as a Deputy High Court Judge in the TCC, we, Laing O’Rourke Delivery Limited (formerly Laing O’Rourke Construction Limited) (“LOR”), having our registered office at Bridge Place, Anchor Boulevard, Crossways, Dartford, Kent DA2 6SN hereby undertake to pay Shepperton Studios Limited (“SSL”) the sum awarded in any judgment in the Part 8 proceedings (the “Payment”), provided always that:

1.

LOR is awarded a positive sum in any judgment in the Part 7 Proceedings; and

2.

that sum is paid by SSL to LOR without delay and before any judgment in the Part 8 Proceedings.

The payment will be processed within two full business days following receipt by LOR of the demand for payment from SSL on official letterhead, confirming the bank account the Payment is to be made to.

This undertaking for Payment is provided for the purposes of addressing the alleged impecuniosity of LOR (which is firmly denied) in the Part 7 Proceedings only.”

The basis for the denial of the impecuniosity was the evidence from Ilze Williamson, the European Finance Director for the wider European Laing O’Rourke group entities, the effect of which was that LOR had a growing pipeline of work and that its financial position had significantly improved since the last filings of accounts.

I do not find that evidence sufficient to displace the starting position in Wimbledon v Vago that if a claimant is in insolvent liquidation or there is no dispute on the evidence that the claimant is insolvent then, a stay of execution will usually be granted (paragraph 26(e) refers). Ms Williamson’s assessments rely, at least in part, on future projections and on unverifiable extracts from management accounts. In reaching this decision I do not overlook the explanation given by Ms Williamson that Laing O’Rourke Construction South Limited was a legacy dormant subsidiary with no assets and had not been trading for some time before it entered administration. Whilst I do not see how that explains pulling the plug on Laing O’Rourke Construction South Limited after the PTR, the Laing O’Rourke Group having previously provided support, my decision is that the evidence as to LOR’s financial strength does not displace the starting position to which I have referred.

I next turn to consider the undertaking. The terms of the undertaking are not acceptable to SSL. If this was the only security available to SSL, I would not consider the undertaking changes the position that there should be a stay of the sum I determine is otherwise due to SSL. In particular, it is given by LOR rather than any other company in the LOR group.

It is not in issue that LOR is dependent on the support of other companies in the group. As Mr Leabeater observed in his written submissions on the letter, the genesis for the undertaking was the absence of any assurance in Ms Williamson’s statement that a relevant group company would continue to provide support to LOR.

I make clear that it was not suggested that there was any legal obligation for any other company in the Laing O’Rourke Group to provide financial security to SSL. However, it is right to observe that a parent company guarantee has been provided by Laing O’Rourke Corporation Limited and that this was referred to by Ms Williamson in her evidence. I therefore turn to consider whether the terms of this guarantee displace the starting position in Wimbledon v Vago to which I have referred.

I should note at this stage that the terms of the guarantee were not the subject of detailed oral submissions before me beyond SSL noting that Laing O’Rourke Corporation Limited, as Guarantor, was registered in Jersey. The terms of the guarantee were not addressed in SSL’s written skeleton on the stay. That skeleton referred to a letter of comfort from the parent the purpose of which, as explained by Ms Williamson in her evidence, was to provide comfort to the subsidiary that the parent will not restructure in the short term. As such, I consider that the letter of comfort was wholly insufficient to displace the starting position in Wimbledon v Vago.

Having provided the parties with my judgment in draft, I received further submissions drawing attention to the guarantee. LOR also offered to provide a further parent company guarantee to SSL from Laing O’Rourke Holdings Ltd, an English registered company.

It is not appropriate in this judgment to consider the suggested further guarantee. Firstly, under the terms of the draft judgment any action towards providing such a guarantee would have offended against the embargo on that draft judgment. Secondly, after considering the parties initial exchange on the guarantee provided by Laing O’Rourke Corporation Limited, I directed that no further submissions were required for the purposes of finalising this judgment. It follows that I have not been addressed by SSL as to any concerns it may have with this latest offer.

The guarantee provided by Laing O’Rourke Corporation Limited, as the ultimate holding company of LOR, irrevocably and unconditionally guarantees to the Employer (SSL) as primary obligor the due and punctual performance by the Contractor (LOR) of all of the Contractor’s obligations warranties duties and undertakings under the Building Contract (clause 2.1 refers). Clause 12 provides that the guarantee is governed by English law. By clause 5 the guarantee is a continuing guarantee and remains in full force and effect until all the Contractor’s obligations, warranties, duties and undertakings under the Building Contract have been satisfied. By clause 6, SSL is not obliged to pursue any means of recourse against LOR before being entitled to enforce the guarantee but if it does so, any judgment of a court or adjudicator’s decision against LOR in favour of SSL in relation to the Building Contract shall be conclusive evidence for the purposes of the guarantee as to any liability of LOR to which such judgment or decision relates.

In addressing LOR’s impecuniosity between paragraphs 67 and 78 of his statement Mr Lawrence gives evidence as to the financial strength of LOR and the letter of comfort. I have addressed these above. In particular, in addressing the letter of comfort, he notes, at paragraph 71, that it is by its very nature, not a parent company guarantee. However in those paragraphs, to which I am also referred in SSL’s skeleton argument, Mr Lawrence does not address the parent company guarantee. Whilst paragraph 74 refers to Laing O’Rourke Corporation Limited it does so in the context of Laing O’Rourke Construction Limited being a subsidiary which together with LOR, the Laing O’Rourke group leave to trade with very significant ongoing losses. In that context, I believe reference must have been intended to be to Laing O’Rourke Construction South Limited.

If my understanding is incorrect and Mr Lawrence was suggesting that the conduct of the LOR Group of companies was such that SSL could not rely on the continuing existence of the parent company guarantee, I do not reach that conclusion on the evidence before me. As set out above, the guarantee is a continuing guarantee. Similarly, I fail to see how Laing O’Rourke Corporation Limited being a Jersey registered company, materially affects the benefit of the guarantee. The difficulty to SSL with the place of registration has not been explained in either written or oral submissions. As already observed, the guarantee is governed by English law and the parties, by clause 12, submit to the non-exclusive jurisdiction of the Courts of England and Wales as regards any claim arising out of or in connection with the guarantee.

It follows that I consider that the existence of the parent company guarantee does displace the starting point of a prima facie entitlement to a stay of execution. The commercially amoral conduct referred to by Jefford J does not have the effect of precluding proper consideration of the evidence before me in accordance with established principles. Such conduct may be directly relevant where the Court is considering a situation where a subsidiary is trading only with the support of a parent and no other source of recovery is available to the party contracting with the subsidiary. Given the parent company guarantee, that is not this case.

In conclusion and having regard to the existence and effect of the guarantee, I do not consider that SSL has established an entitlement to a stay of the sum I have found due to LOR.

I ask the parties to agree the terms of an order reflecting my finding as to LOR’s entitlement including the appropriate sum otherwise due by way of interest from the date when the sum should have been paid. The order should also deal with any consequential matters, including costs. If any part of the order is incapable of agreement, I will give directions as to their resolution in due course.