The validity of a payment notice, breach of natural justice and severance

In Downs Road Development LLP v Laxmanbhai Construction (UK) Ltd [2021] EWHC 2441 (TCC) His Honour Judge Eyre QC held that a payment notice issued by an employer was invalid because it was in the nature of a holding device and it could not realistically be said to state accurately the sum which the employer considered to be due at the payment due date. Nor had the notice set out the basis of the calculation made by the employer. It was also held that the adjudicator had breached the principles of natural justice in so far as he had failed to address a defence relied upon by the employer because of his erroneous conclusion that he had no jurisdiction to deal with the defence relied upon by the employer. It was held not to be possible to sever a part of the decision of the adjudicator and to enforce the remainder given that it would not have been “appropriate” for the court to stop at any particular point in the chain of reasoning set out by the adjudicator and conclude that the decision was binding up to a particular stage in his reasoning but not beyond that point.