Recommendation 14 of the Murray Review recommends that a harmonised security of payment (SOP) legislative model move away from "reference dates". Instead, it should focus on allowing contractors to seek payment on a monthly basis (or more frequently if the contract allows).

The recent cases briefly described below are examples of the confusion that can arise in relation to the relevant impact of "reference dates" under the SOP legislation. Both cases considered whether a construction contract had adequately regulated the circumstances in which a "reference date" may occur, including in months during which no construction works were carried out and following termination for insolvency.

No "reference date" after contract termination

In Green Suburban Pty Ltd v Vita Built Ltd [2018] VSC 330, the Victorian Supreme Court confirmed that where a payment claim under the Victorian SOP legislation is submitted after the termination of the relevant construction, no "reference date" may arise and there may be no legislative entitlement to submit a payment claim. The express terms of the construction contract made it clear that a "reference date" could not occur following termination on the grounds of an insolvency event. Therefore, as the construction contract was terminated on that basis, there was no relevant "reference date" and the adjudication determination was overturned.

New "reference date" even in months during which no construction work was undertaken 

In Pinnacle Construction Group Pty Ltd v Dimension Joinery & Interiors Pty Ltd [2018] NSWSC 894, the relevant construction contract limited the subcontractor to submitting a payment claim once in respect of each reference date, and required that payment claims be submitted on the 15th day of the month. The subcontractor submitted a payment claim in December 2017, which was for the sum of unpaid invoices from February to May 2017. The main contractor argued that the relevant construction contract provided that a "reference date" only occurred during the months in which construction work was undertaken, which would have meant that the payment claim in dispute was a second payment claim in respect of the May 2017 "reference date". Justice Stevenson rejected this argument, as the drafting in the contract did not support the limitation sought by the main contractor. Therefore, a new "reference date" occurred in December 2017, and the subcontractor was entitled to submit a payment claim for earlier works pursuant to section 13(6) of the NSW SOP legislation.