Hexagon given permission to appeal to Supreme Court in late payment case

Hexagon has been granted permission to appeal to the Supreme Court in a legal dispute with a contractor.

The long-running dispute with Providence Building Services Limited is about whether the contractor was wrong to terminate its contract with the housing association over alleged late payments.

The south-east London housing association had initially prevailed in front of an adjudicator and a deputy High Court judge, but the Court of Appeal overturned these initial rulings earlier this year.

Kerry Heath, development and sales director at Hexagon, said she was “pleased” to have been given permission to appeal.

“In the meantime, we remain focussed on completing the affected project which will provide 37 much needed affordable homes for rent,” she said.

Mark London, senior partner at Devonshires, who represents Hexagon, said: “We are grateful to the Supreme Court for granting permission to appeal on this important matter for the construction sector. We look forward to setting out our arguments in full in court.”

The 4,500-home association hired the West Sussex-based Providence in 2019 on a £7.2m contract to build a development of 37 flats in Purley.

It failed to pay the contractor a £365,812 bill, issued on 28 April last year, within the 21-day deadline specified in the contract, resulting in a termination notice being noticed the next day.

It came after a previous late payment by Hexagon of £264,242 for a bill issued in November, which had resulted in Providence issuing a specified default notice on the following day.

Hexagon paid this bill in full a fortnight later.

When Providence issued its termination notice in May, it said the housing association’s failure to pay on time repeated the default specified in the December notice.

In total, the contractor claimed that 19 of Hexagon’s 32 payments due had been made late.

Hexagon challenged the termination notice on the grounds that the default notice only applied to the previous payment delay.

In July 2023 an adjudicator found in favour of the association, a verdict which was backed up in November of that year by a deputy High Court judge.

But after an appeal, the Court of Appeal overturned the previous rulings in August 2024.

No date has yet been set for the Supreme Court hearing, but it is expected to be held next year.

Providence has been contacted for comment.