Multiplex Construction Europe Ltd v. R & F One Ltd


Multiplex sought a declaration permitting it to suspend works at One Nine Elms on the basis that the Developer, R&F, had failed to provide the requisite payment security – a bond. R&F’s argument was that it had paid a sum equivalent to the amount of the bond into court and that could stand as security. Multiplex’s argument was that a payment into court at best provided security against insolvency and did not equate to the security provided by a bond.

The Court held: 1) payment into court did not comply with R&F’s obligations to provide a payment security and 2) payment into court could not be regarded as the same as or equivalent to the security provided by a bond. Multiplex was therefore entitled to suspend. The case therefore emphasises the important role that proper payment security ie a bond plays in preserving a contractor’s cashflow.

Sean Wilken QC acted for Multiplex.


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