In a recent case in which we were acting for a specialist subcontractor there was an unpaid application for payment to the specialist subcontractor from its main contractor for in excess of £600,000.00.

In this case the main contractor had indeed failed to serve a notice to pay less and the Court held that the specialist subcontractor was within its rights to threaten to Petition to wind-up the main contractor for the unpaid payment application as absent such a notice the application was held to be an undisputed debt.

After heated correspondence the main contractor paid the outstanding payment application in full and the subcontractor avoided having to go into formal insolvency.

If the subcontractor had presented the Petition then the effect of issuing the Petition would have been to put the main contractor in breach of its £23 million main contract with its PLC client Employer, which contained an automatic termination provision on the presentation of a Winding-Up Petition.