“The contractor will initially be appointed to carry out pre-construction services via a NEC4 Professional Services Contract. Draft Contract Data Part One for the PSC is included within Section 2. Following the conclusion of pre-construction services, and subject to satisfactory performance by the Contractor, and achieving an agreeable cost and contract terms, the construction works contract will be awarded using the NEC Engineering and Construction Contract (fourth edition reprinted with amendments June 2017) Option A Priced Contract with Activity Schedule. Draft Contract Data Part One for the ECC Option A Contract is included within Section 3. The Employer will require under the ECC Option A Contract that the contractor uses a Project Bank Account as the primary method of payment to some or all of their works package sub-contractors. Refer to Welsh Government Policy and Guidance on the implementation of Project Bank Accounts and the information contained within Appendix J.”
“As per PBA policy in all cases where a PBA is applied, tier 2 or lower tier suppliers should be engaged as follows: (a) Tier 2 or lower tier suppliers who account for at least 1% of the net contract award value must be invited to join the PBA.”
“Named Suppliers: To be confirmed”
“A. The Client has engaged the Contractor to carry out the Project (as defined below). B. To assist in the development and performance of the Project, the Contractor has engaged the Named Suppliers to carry out certain parts of the work required in respect of the Project as set out in more detail in the Sub-Contracts (as defined below). C. The Parties wish to adopt a payment mechanism which will (i) ensure the fair payment of both the Contractor and the Named Suppliers; and (ii) that the Named Suppliers receive payment entitlements in a timely fashion in accordance with the terms of the Sub-Contracts. To achieve this objective, the Parties have agreed to operate a bank account in accordance with the terms of this Deed.”
“I am concerned regarding the lack of confirmation on the completion of the Project Bank Account. It is imperative that we receive this confirmation as soon as possible to ensure the smooth progression of future valuations, in accordance with Welsh Government requirements. The timely confirmation of the Project Bank Account is not only a critical administrative step but also a contractual necessity. If we do not receive confirmation before next month’s valuation, we will likely be asked by the Vale of Glamorgan’s finance team to withhold payment. This is a scenario we are keen to avoid. Please can you confirm what the hold up is?”
“I have emailed Santander and decided to start the process again.”
“Santander have advised today—no PBAs until KYC comp[l]etes post sale.”
“Ok thanks Darren—once post sale what would be the timescale to set up PBA? Just need to manage client.”
“I would expect 8 weeks max as we have done a lot of ground work. I will push for shorte[ne]d timeline.”
“(1) Subject to the provisions of this Act, a person who is not a party to a contract (a ‘third party’) may in his own right enforce a term of the contract if— (a) the contract expressly provides that he may, or (b) subject to subsection (2), the term purports to confer a benefit on him. (2) Subsection (1)(b) does not apply if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party. (3) The third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into. (4) This section does not confer a right on a third party to enforce a term of a contract otherwise than subject to and in accordance with any other relevant terms of the contract. (5) For the purpose of exercising his right to enforce a term of the contract, there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and other relief shall apply accordingly). (6) Where a term of a contract excludes or limits liability in relation to any matter references in this Act to the third party enforcing the term shall be construed as references to his availing himself of the exclusion or limitation. (7) In this Act, in relation to a term of a contract which is enforceable by a third party— ‘the promisor’ means the party to the contract against whom the term is enforceable by the third party, and ‘the promisee’ means the party to the contract by whom the term is enforceable against the promisor.” (a) the contract expressly provides that he may, or (b) subject to subsection (2), the term purports to confer a benefit on him. ‘the promisor’ means the party to the contract against whom the term is enforceable by the third party, and ‘the promisee’ means the party to the contract by whom the term is enforceable against the promisor.”
“It thus seems to me that section 1(1)(b) is satisfied if on a true construction of the term in question its sense has the effect of conferring a benefit on the third party in question. There is within section 1(1)(b) no requirement that the benefit on the third party shall be the predominant purpose or intent behind the term or that it denies the applicability of section 1(1)(b) if a benefit is conferred on someone other than the third party. The 1999 Act has no such additional requirement and Laemthong International Lines Company Limited v Abdullah Mohammed Fahem & Co, unreported,[2005] EWCA Civ 519 , a decision of the Court of Appeal of the5th May 2005 , illustrates that there is no such additional requirement.”
“The presumption of enforceability is rebutted where the proper objective construction of the contract is that the parties did not intend the third party to have the right of enforceability. The onus of proof will be on the contracting parties (usually in practice the promisor), so that doubts as to the parties' intentions will be resolved in the third party's favour. A promisor who wishes to put the position beyond doubt can exclude any liability to the third party which he might otherwise have had. But to allay the fears of the construction industry we should clarify that, even if there is no express contracting out of our proposed reform, we do not see our second limb as cutting across the chain of sub-contracts that have traditionally been a feature of that industry. For example, we do not think that in normal circumstances an owner would be able to sue a sub-contractor for breach of the latter's contract with the head-contractor. This is because, even if the sub-contractor has promised to confer a benefit on the expressly designated owner, the parties have deliberately set up a chain of contracts which are well understood in the construction industry as ensuring that a party's remedies lie against the other contracting party only. In other words, for breach of the promisor's obligation, the owners' remedies lie against the head-contractor who in turn has the right to sue the sub-contractor. On the assumption that that deliberately created chain of liability continues to thrive subsequent to our reform, our reform would not cut across it because on a proper construction of the contract - construed in the light of the surrounding circumstances (that is, the existence of the connected head-contract and the background practice and understanding of the construction industry) - the contracting parties (for example, the sub-contractor and the head-contractor) did not intend the third party to have the right of enforceability. Rather the third party’s rights of enforcement in relation to the promised benefit were intended to lie against the head-contractor only and not against the promisor. For similar reasons we consider that the second limb of our test would not normally give a purchaser of goods from a retailer a right to sue the manufacturer (rather than the retailer) for breach of contract as regards the quality of the goods.”
“96. We consider that Lewis LJ and Underhill LJ fell into error in their interpretation and application of section 1(2). As identified in the commentaries referred to in paras 48-50 above, where the criteria in section 1(1)(b) and (3) of the 1999 Act are satisfied, a presumption arises that the relevant term in favour of the identified third party is enforceable. We agree with the view expressed in those commentaries that the presumption is a strong one. That is because, ex hypothesi, there is no express term stating the contrary, so in order to conclude as a matter of proper construction of the individual contracts of employment that the parties did not intend that the check-off term should be enforceable by the Union, it would be necessary to find that there was an implied term to that effect. As stated above, the test to imply a term where the contract is silent is a demanding one. 97. Where the statutory presumption of enforceability by the third party arises pursuant to section 1(1)(b), that is the starting point for analysis pursuant to section 1(2). In order for the presumption to come into play, it does not have to be shown that the parties positively intended that the relevant contract term should be enforceable by the third party. This is where the solution eventually adopted by the Law Commission in the Report and the draft Bill departs from the double intention approach which it originally proposed in the Consultation Paper. Under that abandoned approach, the difficulty of implying a term where the contract is silent would have meant that it was correspondingly difficult to find that the requisite positive objective common intention in favour of third party enforceability was made out. However, that impediment is removed by the application of the statutory presumption where the criteria in section 1(1)(b) and (3) are satisfied. 98. The statutory presumption is only rebutted under section 1(2) ‘if on a proper construction of the contract it appears that the parties did not intend the term to be enforceable by the third party’. This means that it has to be shown that, on the usual objective approach to interpretation of contracts, the parties had a positive common intention that the obligation should not be enforceable by the third party. That is a different question from that which would have been posed under the double intention test approach. Under the 1999 Act the usual difficulty involved in implying a contractual term means that it is correspondingly difficult to find that the presumption of third party enforceability is rebutted.”
“In relation to request 2.1, it is Jones’ case that by paying ISG direct, The Vale was in breach of the Main Contract (and particularly Clause Y1.8). Furthermore, paying Jones direct was a voluntary payment, as it was not a payment under the Main Contract and so could not be taken to be a payment to satisfy any obligation for payment under the Main Contract. In relation to requests 2.2 and 2.3, ISG could have sued The Vale for making payment which was not into the PBA. Jones relies on the fact that a payment which was not made in accordance with the Main Contract is a voluntary payment and so would not satisfy any obligation for payment under the Main Contract.”
“51.1 The Project Manager certifies a payment within one week of each assessment date. The Project Manager’s certificate includes details of how the amount due has been assessed. The first payment is the amount due. Other payments are the change in the amount due since the previous assessment. A payment is made by the Contractor to the Client if the change reduces the amount due. Other payments are made by the Client to the Contractor. Payments are in the currency of the contract unless otherwise stated in the contract. 51.2 Each certified payment is made within three weeks of the assessment date or, if a different period is stated in the Contract Data, within the period stated. If a certified payment is late, or if a payment is late because the Project Manager has not issued a certificate which should be issued, interest is paid on the late payment. Interest is assessed from the date by which the late payment should have been made until the date when the late payment is made, and is included in the first assessment after the late payment is made.”
“If The Vale had not paid ISG, ISG would have established the PBA before September 2024. When The Vale then paid the sums relevant to Application 4 into the PBA (which it would have done on27 August 2024 ), those sums would have been paid, not long after, to Jones, and in any event by the final date for payment for Application 4 under the Subcontract. Furthermore, until the sums were paid out of the PBA, they would have been held in the PBA on trust for Jones.”