Building and Construction Industry Security of Payment Act 1999 (NSW) (Act) – whether payment claim is valid – claimants served two payment claims in relation to same reference date – whether there was an unilateral withdrawal of a payment claim – whether service of payment claim is valid where the payment claim is not accompanied by supporting statement
A payment claim served in breach of section 13(5) of the Act in respect of the same reference date as an earlier payment claim is not a valid payment claim.
Section 13(7) of the Act renders ineffective service of a payment claim served without the requisite supporting statement.
In May 2014, Kitchen Xchange (plaintiff) and Formacon (defendant) entered into a construction contract (contract). The defendant engaged subcontractors to perform works under the contract and was therefore a head contractor for the purposes of the Act.
The defendant served three payment claims in relation to the same reference date. The first payment claim was withdrawn. The plaintiff served a payment schedule in response to the second payment claim. The plaintiff failed to respond to the third payment claim. None of the payment claims were accompanied by a supporting statement.
The third payment claim was referred for adjudication. The plaintiff applied to set aside the determination of the adjudicator.
The court found that the adjudicator lacked jurisdiction to make his determination.
McDougall J held that section 13(5) of the Act prohibits the service of more than one payment claim in respect of each reference date. The third payment claim, which was served in respect of the same reference date as the second payment claim, was therefore not a valid payment claim.
The defendant submitted that it had withdrawn the second payment claim. McDougall J declined to decide whether or not a claimant could unilaterally withdraw a payment claim.
McDougall J also held that section 13(7) of the Act prohibits the service of a payment claim that is not accompanied by the requisite supporting statement. This had the effect of rendering ineffective service of the payment claims.