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Must a payment claim be made in good faith?

by David Levin

David Levin KC & Luke Stanistreet (2012) 28.6 BCL 388.

In 470 St Kilda Road Pty Ltd v Reed Constructions Australia Pty Ltd, Vickery J had the courage to dissent from his own earlier view. In dismissing the proceeding and declaring the adjudication determination valid under s 1 of the Building and Construction Industry Security of Payment Act 2002 (Vic) (the Act), he held that there is no requirement for a payment claim under the Act to be made in good faith. Notably, his Honour declined to follow his own decision in Metacorp, insofar as he had determined in that case that a payment claim must be made bona fide in order to be valid. The court also considered (and dismissed) a number of grounds raised by Reed which challenged the jurisdiction of the adjudicator. The case confirmed the court’s reluctance to imply obligations into the Act and, moreover, to disturb adjudicators’ findings.

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