Strathmore brought an action against Greig for payment for building work. Greig argued that Strathmore had failed to complete the work by the specified date, relying on a telephone message (that was earlier than Strathmore’s payment application) referring to a letter as notice of intention to withhold payment. One of the issues for determination was whether the letter or the conversation constituted an “effective notice” of intention to withhold payment under s111 of the Act.
The Judge held that the letter and the following conversation could not constitute an effective withholding notice. An effective notice under s. 111 had to be in writing notwithstanding that the words "in writing" were not used in the Act. In addition, s111(2) required a notice to be a considered response to the payment application and therefore could not validly be sent earlier than the payment application itself, as was the case in this instance.