TQM Design & Construct Pty Ltd v East End Stage 2 Pty Ltd [2026] NSWSC 1032

Andrew Hales |  Andrew Clark  |  Isabella Greenhalgh

Key takeouts

• A judgment enforcing an adjudicator’s determination under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) binds the debtor until it is set aside. An application to pay the amount owed in instalments is not a vehicle for running the underlying contract dispute.
• Instalment applications turn on the debtor’s financial circumstances. Instalment applications are not a vehicle to obtain disclosure of documents for use in collateral proceedings.
• Debtors seeking an instalment order must lead complete evidence of financial means, including support from related entities if relevant.

Facts

Background to the judgment debt

TQM Design & Construct Pty Ltd (TQM) built terraces for East End Stage 2 Pty Ltd (East End) under an October 2020 construction contract. In March 2026, TQM obtained an adjudicator’s determination under the SOP Act for amounts it claimed it was owed. In August 2026, TQM obtained judgment for $6.3 million to enforce the adjudicator’s determination.

East End had earlier tried to restrain enforcement of the adjudicator’s determination. TQM did not oppose the injunction provided it was conditional upon the usual practice being followed; that East End pay the adjudicated amount into Court or give an unconditional bank guarantee. East End’s offer of a mortgage over its real property assets and a parent company guarantee to secure the adjudicated amount was not agreed. See our case update on that decision here.

East End had commenced proceedings in May 2026 under s 32 of the SOP Act seeking declarations, damages and restitution. East End alleged that TQM had already been paid the sum of $6.3 million by a third party. Those proceedings were in the process of being prepared for hearing when this matter came before the Court.

The motions before the Court

East End brought two motions, filed on 6 and 11 August 2026, seeking:

production by subpoena and notice to produce directed to TQM and a related third party of financial records said to show that TQM had already been paid.

an order that the judgment debt be paid by monthly instalments of $354,237 over some 18 months, during which East End expected the other proceedings would be heard; and

Decision

The Court dismissed both motions.

The instalment application

The judgment enforcing the adjudicator’s determination bound the parties unless and until it was set aside. East End’s contractual claim was irrelevant to the instalment application. East End’s approach would depart from the restitutionary remedy the SOP Act contemplated if it succeeded on its case, and the Court could not assume that it would. Entertaining the contractual dispute as part of this motion risked inconsistent findings across the two proceedings.

East End’s evidence did not reliably establish its financial position or its capacity to meet the instalments. It deposed to assets of about $50 million against liabilities of about $29 million, but also to only $100 in bank accounts, more than $26 million in loans to unidentified associates, and an unexplained change in its net receivables position. Notwithstanding the lack of clarity as to the reasons for a recent change in its financial position, East End’s assets were in any event more than sufficient to pay the debt. It followed that East End did not satisfy the onus that fell upon it.

Production of the financial records Schmidt AJ accepted the documents were relevant to the underlying contractual dispute, but East End had not shown they were material to the instalment application. The instalment application only required evidence of East End’s financial circumstances, being the matter in issue, and not the merits of the contractual claim.