Bare assertions are not enough

In 2017, an allegation was made by a third party that the contractor selected by the company had been overcharging. This led to threats by the company of potential claims against the petitioner for breach of contract, fraudulent misrepresentation, bribery and breach of trust. No claims were actually pursued and a petition later presented.

The court accepted that as the contract fell within the definition of a construction contract, the failure to serve any pay-less notices meant the company could no longer dispute that the sums in the invoice were due (as was the case in R&S Fire and Security Services Limited v Fire Defence plc [2013] EWHC). It could however raise a cross-claim to defeat the petition, provided it was genuine and serious. The threshold for establishing this is a low one but the burden rests with the company. It failed to meet that here.

Whilst not fatal the claims had not been pursued, this did give the impression the company was raising a cloud of objections. It had put forward serious allegations without having particularising those. It also produced no real evidence to show what audit or investigation had been carried out over three years, nor did it provide anything to substantiate the allegations of overcharging. Furthermore the lack of any pay-less notices prevented it from arguing that the failure to carry out services with reasonable skill and care must mean the sums were not due. They were nothing more than unsubstantiated statements of belief. 

This is marked contrast with another example, LDX International Group v Misra Ventrues Ltd, where the company concerned placed a substantial amount of evidence to support its assertions in addition to having prepared a letter of claim.

Fenton Whelan Limited v Swan Campden Hill Limited [2021] EWHC 2470