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Is your payment claim a final claim? The Victorian Supreme Court considers the process for detemining whether a claim for payment is final in Citi-Con v Trojan Built [2020] VSC 557 ||| MTECC News 20.21

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Is your payment claim a final claim? The Victorian Supreme Court considers the process for detemining whether a claim for payment is final in Citi-Con v Trojan Built [2020] VSC 557 

In Citi-Con (Vic) Pty Ltd v Trojan Built Pty Ltd [2020] VSC 557, the issues considered by Justice Stynes of the Supreme Court of Victoria were those that often arise under the Building and Construction Industry Security of Payment Act 2002 (the Act).  Her Honour’s judgment provides a useful and comprehensive analysis of those issues and is a “one stop shop” for practitioners.  

The defendant (Trojan) was a subcontractor to the plaintiff (Citi-Con) in respect of the plaintiff’s development at 2 The Crossing Caroline Springs.  Trojan carried out the supply and installation of a flooring system at the site, with the works being completed in August 2019.  On 3 February 2020, Trojan served a payment claim on Citi-Con seeking payment of $239,606.74.  Also on 3 February 2020, Citi-Con issued a payment schedule in response to the payment claim assessing the amount payable as NIL.  The matter was subsequently subject to adjudication.  The adjudicator determined that the reference date for the payment claim was 25 January 2020. 

By Originating Motion, Citi-Con sought, amongst other relief, an order quashing the adjudication determination on the basis that the Adjudicator did not have jurisdiction to make the adjudication determination and committed jurisdictional error.

Citi-Con relied on the following four grounds:

  1. Ground 1 – there was no valid reference date for the payment claim;
  2. Ground 2 – further to Ground 1, the payment claim was not served within the time prescribed by s14(4)(b) of the Act;
  3. Ground 3 – alternatively to Grounds 1 and 2, the payment claim was a final payment claim and there was no valid reference date applicable to it; and
  4. Ground 4 – the Adjudicator failed to determine the amount of the progress claim and failed to provide reasons.

Stynes J dismissed the appeal.  Her Honour determined that the Adjudicator correctly determined the reference date, and that the reference date was valid, even though the works to which the payment claim related were completed over five months prior.  In relation to Ground 3, Stynes J said that given “final payment claim” is not defined for the purpose of the Act, whether a payment claim is a final payment claim is to be determined objectively.  Her Honour said that in doing so, the court should ascertain the meaning that the documentation would convey to a reasonable person having the background knowledge that should reasonably be ascribed to the parties at the time the document was served.  The parties’ background knowledge is deemed to include experience in the building industry and a familiarity with specific construction project and any issues regarding payment.

Amy Hando
Liability limited by a scheme approved under professional standards legislation


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