Court restrains two winding-up petitions over construction debts

The Insolvency and Companies Court has granted final injunctions restraining a subcontractor from presenting winding-up petitions over two construction debtsNationalarchives, in a judgment that tightens petition advice on payment applications, cross-claims and limitation. In Amber Construction Services Limited v Ilyrian Construction Ltd [2026] EWHC 2603 (BP)Nationalarchives, Chief ICC Judge Briggs held on 16 October 2026NationalarchivesNationalarchives that neither of the two statutory demands dated 15 November 2025Nationalarchives — for 2019 works at the Alton Estate (now pursued at £27,119.90Nationalarchives) and £39,329 for 2021 works at Mander CourtNationalarchives — could found a petition.

On Alton, three independent reasons defeated the petition. First, the payment application failed the contract's mandatory content rulesNationalarchives: clause 6.4 of the subcontract made a valid application a condition precedent to paymentNationalarchives and required it to be addressed to the contractor and to quote the order number, job title, site address, a detailed description and a full build-upNationalarchives. The application was addressed to no oneNationalarchives, quoted no order numberNationalarchives and gave no job title or site addressNationalarchives. Following Netomnia v MJ Quinn [2026] EWHC 1824 (TCC)Nationalarchives, content requirements are enforced as writtenNationalarchives — a payer's understanding that payment is sought cannot cure themNationalarchives, and post-contract conduct cannot convert an invalid application into a valid oneNationalarchives. The £27,119.90 therefore never became the notified sum payable under sections 110B and 111 of the Housing Grants, Construction and Regeneration Act 1996NationalarchivesNationalarchives, which require payment of the sum in a compliant notice by the final date for paymentNationalarchives.

Secondly, Amber's £62,203.39 delay cross-claimNationalarchives was genuine and seriousNationalarchives and exceeded the Alton sumNationalarchives. It rested on a contemporaneous November 2019 notice of specified default, allegations of under-resourcing and poor workmanship, and deduction notices in April and September 2020. Thin quantification did not make it insubstantialNationalarchives: after six years, missing invoices and departed staff go to supporting detail, not to the claim's existence. Even a valid notified sum would not have saved the petitionNationalarchives, since an employer without a pay less notice may still answer with a genuine cross-claimNationalarchives. Amber's failure to litigate the cross-claim cast no doubt on it where both sides had stood off without suing.

Thirdly, the Alton claim was statute-barred in any eventNationalarchives. The final date for payment was 11 March 2020Nationalarchives, so the six-year limit in section 5 of the Limitation Act 1980LegislationNationalarchives expired on 11 March 2026Nationalarchives with no claim, adjudication or acknowledgmentNationalarchives. The JCT final-payment clause did not defer accrualNationalarchives: each interim payment is a distinct debt accruing when due and unpaidNationalarchives, and the clause's preservation of rights in unpaid interim payments keeps them alive on existing terms rather than postponing themNationalarchives — with the final notice deducting sums "previously due as interim payments" rather than carrying them into the balanceNationalarchives. A statutory demand is not an actionNationalarchives and did not stop timeNationalarchives.

On Mander Court, the position was reversed but the result the same. The £39,329 debt was held dueNationalarchives: Amber's deductions — £10,000 for missing fire certificationNationalarchives (contradicted by a 2022 meeting record of certification suppliedNationalarchives), £9,470 for rectification (a two-line third-party application with a blank job number, unconnected to any defect)Nationalarchives and £2,920.50 for overheadNationalarchives — did not survive scrutinyNationalarchives, and Amber's conditional acceptance that a sum was due evidenced a valid applicationNationalarchives. But the Alton cross-claim, at a net £47,728.01Nationalarchives, exceeded the whole Mander debt by £8,399.01Nationalarchives. A cross-claim need not arise under the same contract, only between the same parties in the same capacitiesNationalarchives, so both petitions were restrainedNationalarchives.

Legal basis: sections 110B and 111 of the Housing Grants, Construction and Regeneration Act 1996; section 5 of the Limitation Act 1980.