The existence of a valid and available ‘reference date’ is a fundamental pre-condition to a claimant’s entitlement to make a progress claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act).  Without one, the payment claim will not be a claim under the Act. 

Reference dates arise in one of two ways.  Under s8(2)(a) of the Act, being ‘a date determined by or in accordance with the terms of the contract as the date on which a claim for progress payment may be made in relation to work carried out’ or, if the contract ‘makes no express provision with respect to the matter’, then s8(2)(b) of the Act provides that the reference date is the ‘last day of the named month in which the construction work was first carried out .. under the contract and the last day of each subsequent named month’ (Implied Reference Date).

The interpretation of the expression ‘named month’ hadn’t figured prominently before the decision of Grid Projects NSW Pty Ltd v Proyalbi Organic Set Plaster Pty Ltd [2012] NSWSC 1571, but  Stevenson J’s finding in that case that ‘named month’ means ‘the month ‘named’ in the claim for progress payment as being the month in which the work referred to in the claim for progress payment was undertaken’ became an instant hit. Respondents relied upon it, often successfully, to argue that payment claims issued in respect of an Implied Reference Date that did not include any claim for work in the relevant month (such as payment claims issued during a defects liability period) were invalid.  Arguably this became the accepted position, with many adjudicator nominations being declined on the basis that an Implied Reference Date has not arisen.  

However, the pendulum swung back in claimants’ favour on 9 July 2015 with McDougall J’s decision in Broadview Windows Pty Ltd v Architectural Project Specialists [2015] NSWSC 955.  The facts of the dispute in that case were as follows:

  1. In April 2014, Broadview Windows and Architectural Project Specialists (APS) entered into a construction contract within the meaning of the Act under which APS was to install windows and doors on a building site at Bellevue Park.   
  2. APS issued invoices for its works on 10 and 12 August 2014 (Invoices).  It did not carry out any work under the contract after 31 August 2014.  
  3. On 24 November 2014, APS served a payment claim under the Act which attached the Invoices (First Payment Claim).  Broadview failed to provide a payment schedule.  APS made an adjudication application, but due to withdrawal of nominated adjudicators, decided not to pursue that application.  
  4. APS issued a further payment claim on 23 February 2015 (Second Payment Claim).  It also attached the Invoices.  Broadview provided a payment schedule and APS subsequently applied for its claim to be adjudicated.    
  5. In its adjudication response, Broadview contended that the adjudicator did not have jurisdiction, based on s 13(5) of the Act which provides that ‘claimant cannot serve more than one payment claim in respect of each reference date under the construction contract’.  It asserted that there was no available Implied Reference Date.  
  6. The adjudicator determined that he had jurisdiction and determined the matter wholly in favour of APS.

Broadview challenged the determination on the basis that the Second Payment Claim must have been referable to the reference date of 31 August 2014 (the last day of the named month in which the work the subject of the claim was performed) and that the First Payment Claim must also have been referable to the same date. The Second Payment Claim would therefore fall foul of section 13(5) of the Act, which provides that ‘claimant cannot serve more than one payment claim in respect of each reference date under the construction contract.

McDougall J found in favour of the claimant, finding (with some sympathy expressed to Stevenson J) that the interpretation of the expression ‘named month’ in the Grid Projects decision (upon which Broadview’s challenge was based) was both:

  • inconsistent with the definition of ‘named month’ set out in the Interpretation Act 1987 (which provides that “named month means January, February, March, April, May, June, July, August, September, October, November or December”; and  
  • inconsistent with previous Court of Appeal authority: Brodyn Pty Ltd v Davenport (2004) and Falgat Constructions Pty Ltd v Equity Australasia Corp Pty Ltd (2006) that permitted successive claims to be made for the same work, the only non-contractual limit on the occurrence of reference dates is that which in effect flows from the limits in s13(4)[1] of the Act.

Accordingly, even though no further work was being performed under the construction contract, Implied Reference Dates continued to accrue.  This is very different to Allsop P’s position in Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) that:

I see no warrant under either the contract or the Act, section 8 for permitting a [claimant] to create fresh reference dates by submitting the same claim for the same completed works in successive payment claims.  That is not the intended operation of the last phrase of section 8(2)(b) (“and the last day of each subsequent named month”).[2]

Conclusions

It remains the case that there can be only one claim under the Act in respect of each reference date[3] and that a claim can only be served within the period of 12 months after works were last carried out[4]. However, it would appear that the (arguably) prevailing view that the generation of new Implied Reference Dates depends upon further works being performed is no longer a reliable answer to a payment claim.

There is however no escaping the fact that the Act entitles the parties to contractually ‘limit’ the occurrence of reference dates.  Potential respondents who do not want exposure to the risks associated with successive payment claims for each of 12 months after the construction works have ceased should ensure that the contract expressly limits the dates or occasions upon which a progress claim can be made.