Is It Too Late to Submit Your Final Account? How I Defeated Two High Court Case-Law Arguments

By Brian Moriarty MCIArb | Founder, BAM Consult

Can a main contractor refuse to consider a subcontractor’s final account simply because it was submitted long after the works were completed?

It is a question that may seem straightforward, but the answer can involve complex issues of contractual interpretation, statutory payment provisions and established case law.

Many subcontractors will have experienced projects where final accounts remain unresolved long after completion. Negotiations continue, payment applications are disputed and, sometimes, the main contractor eventually argues that the subcontractor has simply left matters too late.

But the passage of time does not, by itself, necessarily extinguish a subcontractor’s contractual entitlement.

In 2024, I represented Clavedale Limited in an adjudication against Wilks Holdings Limited, where this precise issue became the subject of a significant legal argument.

Wilks was represented by Forsters LLP, the established London law firm based at 22 Baker Street. I acted independently as Clavedale’s sole Lead Counsel, without solicitors or barristers.

During the proceedings, Wilks’ legal representatives advanced arguments based upon two reported High Court judgments, seeking to establish that Clavedale’s final payment application was invalid.

I examined the authorities, challenged the way they were being applied and presented Clavedale’s contractual position directly to the adjudicator.

The adjudicator rejected both challenges and accepted my argument that Clavedale’s final payment application was valid.

The case demonstrates an important principle: citing established case law is not enough. The legal authority must actually support the argument being advanced when applied to the relevant contractual circumstances.

The Background: A Final Account Submitted Years After the Works

Clavedale had undertaken construction works during 2021 under a cost-plus arrangement.

Although the parties had established the basis upon which management, labour and materials would be charged, the proposed written subcontract had never been formally completed.

The agreed commercial arrangements nevertheless included provisions for fortnightly valuations, with payment to follow within two weeks of submission.

Disagreements concerning the account continued long after Clavedale’s involvement on site had ended. Earlier payment applications had been submitted and certain payments made, but the final account remained unresolved.

In February 2024, Clavedale submitted Application for Payment No. 5, representing its final account.

Wilks challenged the application, arguing that it had been submitted too late and did not comply with the contractual payment arrangements.

The dispute proceeded to adjudication, with Forsters LLP representing Wilks.

Rather than confining its defence to individual valuation items, Wilks sought to defeat Clavedale’s entitlement at a more fundamental level by arguing that the application itself was invalid.

Two High Court authorities became central to that argument.

The First Legal Challenge: Leeds City Council v Waco UK Ltd

The first judgment relied upon by Wilks was:

Leeds City Council v Waco UK Ltd [2015] EWHC 1400 (TCC).

Wilks argued that, where a contract did not expressly specify when an interim payment application had to be submitted, the law imposed an obligation to submit it within a reasonable time.

Because Clavedale had submitted its final application more than two years after the works, Wilks maintained that it was outside any reasonable period and should therefore be treated as invalid.

On the face of it, this was a potentially significant argument. If the application was invalid, Clavedale’s ability to pursue payment through that application would be fundamentally undermined.

However, I considered that Wilks was attempting to extend the principle established in Leeds v Waco beyond the circumstances to which it properly applied.

How I Challenged the Interpretation

My argument was that Leeds v Waco concerned the timing of an interim payment application relative to the relevant contractual payment due date.

It did not establish a general prohibition against submitting a final account after a particular period had elapsed.

There was also a crucial contractual distinction.

The arrangements between Clavedale and Wilks contained provisions for the submission and payment of fortnightly valuations, but there was no express long-stop date preventing Clavedale from submitting its final account at a later stage.

I argued that Wilks could not rely upon a deadline that did not exist within the parties’ contractual arrangements.

The correct approach was to examine the principle established by the High Court, identify the circumstances in which it applied and then consider whether those circumstances were genuinely comparable with the dispute before the adjudicator.

A legal authority cannot simply be applied because it concerns a broadly similar subject. The principle must be relevant to the contractual issue actually being determined.

The Adjudicator Agreed With My Argument

In the decision dated 31 May 2024, the adjudicator expressly rejected Wilks’ interpretation.

The adjudicator concluded that the principle in Leeds v Waco concerned submission within a reasonable time relative to a particular payment due date, rather than imposing a general time restriction upon the submission of a final account.

Crucially, the decision stated:

“I disagree with Wilks’ interpretation of the Leeds City Council v Waco UK Ltd case. I agree with Clavedale…”

This was a clear finding in Clavedale’s favour on the legal argument I had advanced.

Despite Wilks being represented by an established London law firm, the adjudicator accepted my interpretation of the High Court authority over the interpretation advanced on behalf of the responding party.

That first challenge to the validity of our application had failed.

The Second Legal Challenge: JSM Construction v Western Power Distribution

Wilks’ legal representatives also relied upon a second High Court judgment:

JSM Construction Ltd v Western Power Distribution (West Midlands) plc [2020] EWHC 3583 (TCC).

This introduced a separate question concerning the statutory Scheme for Construction Contracts.

Under the Housing Grants, Construction and Regeneration Act 1996, as amended, qualifying construction contracts must contain payment provisions that satisfy the legislation. Where the contractual arrangements are inadequate, relevant provisions of the statutory Scheme may apply.

Wilks relied upon JSM Construction to support its position that a contract does not necessarily need a separate final account procedure to comply with the Construction Act.

That proposition was not, in itself, incorrect.

However, the issue before the adjudicator was not simply whether every construction contract must contain an express final account procedure. It was whether the actual arrangements agreed between Clavedale and Wilks prevented Clavedale from submitting its final application and whether the relevant provisions of the Scheme applied.

Why I Disagreed With Wilks’ Position

I maintained that the contractual arrangements did not establish any deadline beyond which Clavedale lost its right to submit the final account.

Although the agreement identified the frequency of interim valuations and the period for payment, it did not establish a final account submission deadline or provide a contractual mechanism that conclusively resolved the final payment position.

The absence of those provisions was significant.

My position was that the relevant provisions of the Scheme applied to the final payment and that Clavedale’s application could not be rejected merely because it had been submitted after a prolonged period.

Once again, the distinction was between recognising the legal principle established by a judgment and correctly applying that principle to the contract actually under consideration.

The Adjudicator’s Finding

The adjudicator considered the JSM Construction authority and expressly acknowledged that not every construction contract requires a separate final account procedure to satisfy the Construction Act.

However, the adjudicator found that the Clavedale arrangements contained no contractual long-stop date for submitting an application or final account.

The adjudicator therefore determined that paragraph 5 of Part II of the Scheme applied to the final payment and that Clavedale’s application became due when submitted on 26 February 2024.

The adjudicator concluded that Clavedale had acted within the applicable contractual and statutory payment provisions.

The second case-law argument had therefore also failed to invalidate the application.

Why This Was an Important Legal Victory

What made this adjudication particularly significant to me was the nature of the challenge and the professional representation involved.

Wilks had instructed Forsters LLP, an established London law firm, and advanced its position through arguments supported by reported High Court decisions.

I represented Clavedale independently, taking responsibility for analysing the relevant contractual arrangements, preparing the written arguments and challenging the application of those authorities.

This was not simply a disagreement over whether a particular labour rate or material invoice was payable.

It concerned whether Clavedale had a valid contractual and statutory basis to submit its final account at all.

Had Wilks’ interpretation succeeded, the application could have been rejected before its underlying valuation was examined.

Instead, the adjudicator accepted the arguments I advanced on Clavedale’s behalf and determined that the application was valid.

I had successfully defended Clavedale’s contractual position against two separate High Court case-law challenges advanced by a team of professional solicitors.

I consider this a particularly important example of why construction disputes require more than a general familiarity with contractual provisions.

Successful representation often depends upon the ability to examine legal authorities critically, distinguish their relevance and apply the correct principles to the particular agreement and circumstances.

That was precisely what this adjudication required.

What Can Subcontractors Learn From This?

Although the circumstances of every project are different, the Clavedale adjudication highlights several important lessons.

A delayed final account is not automatically an invalid final account. The contract must be examined to determine whether an express deadline exists, how the payment provisions operate and whether any statutory provisions apply. Separate limitation periods and other contractual restrictions must also be considered.

The wording of the actual agreement is fundamental. A main contractor cannot necessarily rely upon a restriction that was never incorporated into the parties’ contractual arrangements.

The Scheme for Construction Contracts can be commercially significant. Where the agreed payment terms do not adequately address a particular statutory requirement, the Scheme may supply the relevant provisions. Its operation should be considered carefully rather than dismissed simply because some payment terms have been agreed.

Case law must be interpreted, not simply quoted. A judgment may establish an important legal principle without supporting the particular argument for which it is being cited.

Finally, subcontractors should not assume that an argument is correct simply because it has been advanced by a solicitor acting for the main contractor.

Professional legal advice deserves proper consideration, but the ultimate question remains whether the contractual interpretation and legal authorities support the position being advanced.

The Clavedale adjudication demonstrated that a well-prepared and properly reasoned argument can successfully challenge the interpretation of case law advanced by experienced legal representatives.

Final Thoughts

Construction disputes can become particularly difficult when legal arguments are introduced concerning the validity of payment applications, contractual deadlines and statutory entitlement.

For a subcontractor without its own legal department, being confronted by an established law firm relying upon High Court judgments can be daunting.

However, the outcome of such an argument should depend upon the merits of the contractual and legal position, not the size or reputation of the legal team advancing it.

In the Clavedale adjudication, I was faced with precisely that situation.

Acting as sole Lead Counsel, I successfully challenged the interpretation of two High Court judgments relied upon by Wilks Holdings’ solicitors, Forsters LLP. The adjudicator expressly accepted Clavedale’s position and confirmed that its final account application was valid.

That finding allowed the application to be considered on its merits rather than being dismissed on the procedural grounds advanced by the responding party.

For me, the case reinforces a fundamental principle of construction commercial management: understanding the contractual position is essential, but knowing how to defend that position when challenged is equally important.

At BAM Consult, we bring that experience to the protection of subcontractors’ commercial interests, with an emphasis on establishing clear contractual rights, resolving disputes wherever possible and providing robust representation when formal proceedings become necessary.

A well-founded contractual argument should be judged on its merits, regardless of who is sitting on the other side of the table.

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Brian Moriarty MCIArb is the founder of BAM Consult, providing specialist commercial management, contract reviews and construction dispute-resolution services exclusively to construction subcontractors.

This article is provided for general information and does not constitute legal advice. Payment entitlements and contractual deadlines depend upon the particular circumstances and applicable law.

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