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The recent decision from the NSW Supreme Court in Kyle Bay Removals Pty vs Dynabuild Project Services Pty Ltd  NSWSC 334 highlights some of the important elements of a legitimate Payment Claim being served under the Building and Constructions Industry Security of Payment Act 1999 (NSW) [“SOP Act”].
These elements for a valid Payment Claim include, but are not limited to, the following:
The Plaintiff in this case sought to set aside the adjudicator’s determination obtained by the Defendant in relation to a dispute over two Payment Claims – one in September 2015 and another in November 2015.
The Plaintiff claimed that the Defendant had failed to serve a valid “Payment Claim” in November 2015. The Plaintiff raised three arguments to support their claim, including that:
The Plaintiff’s first argument regarding the use of the same Reference Date for the September and November Payments Claims, was rejected on the basis that the Defendant had effectively set aside the September Payment Claim and therefore was entitled to make a valid further claim for November under the contract using the same Reference Date as previously used for the set aside September claim.
The Court also rejected the Plaintiff’s third argument that the Defendant had knowingly submitted a supporting statement containing false information and had therefore contravened s. 13(8) of the SOP Act. This argument was rejected based on the evidence from the Defendant’s subcontractors and the Defendant’s claim that it believed that no money was owed to subcontractors at the time of submitting the November Payment Claim and the accompanying supporting statement to the Plaintiff, it was an honest mistake on the part of the Defendant.
In these proceedings, the Court’s decision focused on how the drafting of the building contract affected the Defendant’s rights to serve Payment Claims. The Court held that the contract did not include any requirement restricting the Defendant to only make Payment Claims if work was completed in the preceding month. This meant the Defendant’s November Payment Claim [which was served on 23 November 2015] was valid as the contract entitled them to make Payment Claims for work carried out to 22nd of the month.
The Court’s decision to uphold the Adjudicator’s decision in favour of the defendant contractor in these proceedings are a reminder that: