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  • Writer's pictureWilsons

Provide a payment schedule. Every time.

Updated: Feb 20, 2021

TFM Epping Land Pty Ltd and Katoomba Residence Investments Pty Ltd (the principals) engaged Decon Australia Pty Ltd (the builder) to construct a residential development on land in Epping. In 2019 the builder lodged a progress claim seeking $6.4m pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW). The principals did not provide a payment schedule to the builder within 10 business days of the service of the claim as required, and so became liable to pay the claimed amount. The builder filed a summons and a notice of motion seeking summary judgment for the claimed amount. The principals filed a response challenging the validity of the claim and its service. The primary judge gave judgment for the builder, dismissing each issue raised in the response. The principals sought leave to appeal, contending that the payment claim was invalid and was not validly served.

In TFM Epping Land Pty Ltd v Decon Australia Pty Ltd [2020] NSWCA 93 the Court of Appeal granted limited leave and dismissed the appeal, holding:

  • Where leave is required for an appeal under the Act, the Court should be restrained in granting leave, absent a clear justification, to avoid the inherent additional delay in achieving a resolution of a disputed payment claim: [6].

  • The submission that the payment claim was invalid as the amounts claimed for variations were not available pursuant to the contract was rejected: [18]-[19]. The principals could have contended that the amounts claimed for variations did not properly arise under the contract by way of a s 14 payment schedule, indicating the reason for non-payment of any item not accepted: [20], [92]. The trial judge was correct to hold that it was not open to the principals to resist judgment for the full amount of the payment claim on the basis that some elements of the claimed amount were not available under the contract: [23].

  • The proposition that a payment claim which includes any amount which accrued after a reference date precludes the claim being made with respect to that date is untenable: [27]. The contract remained on foot and there was an available reference date, and therefore there was an entitlement to make a progress claim for work done up to that date: [32]. The inclusion of interest which accrued after the reference date did not preclude the payment claim from being made with respect to that date and did not invalidate the claim: [37], [94].

  • Section 13(7) of the Act provides for a penalty for serving a payment claim without a supporting statement, but does not invalidate such a claim nor does it invalidate the act of service: [47], [74], [88].

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