[2007] EWCA Civ 601, 21 June 2007. Appeal by employer (R) against a decision ([2007] BLR 10, L137927) that a JCT contract had been validly determined by notice given by the respondent contractor (B). When an extension of time was granted following project delays, B assumed this would reduce the amount of liquidated damages that R could deduct. When R did not make further payment, B served a notice of default, and when R failed to make a payment pursuant to another certificate several months later, B gave notice of determination relying on the previous notice of default. R claimed B had unlawfully terminated the contract because the previous notice was invalid, but the judge held that the termination by B was valid. R appealed. "Held": appeal allowed. R was entitled to deduct the amount of damages specified in the notice (despite the fact that the certificate of non-completion was cancelled by the subsequent grant of an extension of time) because the conditions for the deduction of liquidated and ascertained damages from the payment certificate were satisfied at the time when R gave notice of intention to deduct.