Looking into the future – The County Court rejects a claim under SOPA for work to be performed in the future in Rudyard Pty Ltd v ASEA1 Pty Ltd [2019] VCC 1995

The proceeding concerned an application pursuant to section 16(4) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (Act) for an order that the Defendant pay debts arising from its failure to satisfy or otherwise issue payment schedules in respect of three purported payment claims.

On the face of the payment claims relied on by the Plaintiff, each appeared to stand alone, and neither the second nor third claim purported to demand payment of any amount said to be due and payable by a failure to satisfy any earlier claim. Each claim identified a discrete amount that was claimed therein.

The Court held that the first two payment claims were invalid for the purpose of the Act as those claims appeared to claim for work yet to be performed in future periods. While a reference date prior to the end of the month had arisen and the claim was issued at or about that time, the stated period of the work done under the claim included future business days to the end of the month. Absent a clear contractual entitlement to claim for future work, and further absent any indicia that would allow the offending future dates to be severed from the claim, those claims were invalid beyond remedy.

Not suffering from any defect, the third payment claim was held valid for the purpose of the Act. Curiously though, the Court held that the value of the first two claims were incorporated into the third, despite the claimed value of the third claim excluded those earlier sums. This determination was made on the basis of evidence of imputed knowledge leading to the conclusion that a reasonable person in the position of the Defendant would have known or understood the third claim incorporated the value of the earlier claims.

The question then arises, where the third payment claim expressed on its face a claim value of work for the purpose of section 14(2)(d) of the Act (to the exclusion of the value of earlier claims) for a discrete period and for an amount less than the aggregate value of the three claims combined, was it open to the Court to conclude that the actual claimed amount was other than that identified as such on the payment claim itself?

Andrew Blair^#

Liability limited by a scheme approved under Professional Standards Legislation

* An application for leave to appeal was initially commenced but ultimately did not proceed.
^# The author appeared as counsel for the defendant.