Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135

Andrew Hales  |  Anique Mawa  |  Conor Bates

Key takeouts

• A payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) must identify the construction work (or related goods and services) to which payment relates.
• The work may be reasonably identified in a claim by reference to attachments to the payment claim as well as by reference to other documentation, including prior invoices.
• Minor deficiencies do not invalidate a payment claim if the work is reasonably identifiable.
• The SOP Act does not require a payment claim to be ‘for’ construction work as a pre-condition to the validity of the payment claim. That is a matter to be disputed by the respondent in the payment schedule and if required, determined by adjudication.
• Submitting a response to a purported payment claim by way of a payment schedule within the time limit of the SOP Act is essential to avoid forfeiting the right to resist the payment claim.

Facts

Manariti Plumbing Pty Ltd (claimant) contracted with Universal Property Group Pty Ltd (respondent) to provide plumbing works for a multi-dwelling housing development in Lochinvar. The claimant served a $221,901 payment claim on the respondent by email, attaching invoice 284, a subcontractor’s statement and a spreadsheet. The spreadsheet referenced prior invoices and detailed actual costs, profit margins and payments received. Each of the invoices described work which had been performed, with corresponding quantities, unit prices and claimed amounts. The respondent did not respond with a payment schedule and did not pay the amount claimed by the due date for payment.

The payment claim was made on a cost-plus basis, which was a shift from claiming on a fixed price basis, including in respect of work that had already been the subject of paid invoices calculated on a fixed basis.

District Court Decision

As no payment schedule was issued and no payment was made by the due date, the claimant sought summary judgment in the District Court to recover the $221,901 as a debt due to it under section 15(2) of the SOP Act.

The respondent challenged the application on the basis that the payment claim was not a valid claim for the purposes of the SOP Act, as:

• the payment claim failed to identify the construction work or related goods and services to which it relates; and
• the claimed amount was not for a progress payment for construction work carried out or related goods and services supplied (because it was categorised as a claim for damages or restitution rather than a claim for payment in discharge of a contractual obligation to pay for work).

The District Court refused the claimant’s application for summary judgment on the basis that there was a triable issue as to the validity of the payment claim. The claimant appealed the decision.

Decision

The NSW Court of Appeal (Court of Appeal) allowed the appeal, set aside the orders of the District Court and entered summary judgment for the claimant for $221,901 plus interest and costs.

The Court of Appeal held that the payment claim was valid under the SOP Act as the spreadsheet and references to prior invoices contained in it provided sufficient identification of the work claimed.

The Court of Appeal confirmed that a payment claim is not invalid unless the failure to identify work is patent on its face. This will not be the case if the claim identifies the work in a reasonable way. In this case, the spreadsheet met this standard as it detailed costs claimed and referenced prior invoices already provided to the respondent. Although a period of 12 days out of the 5 months to which the payment claim related lacked a referenced invoice, this was not a patent failure to identify the work to which that part of the claim related.

The Court of Appeal also rejected the respondent’s argument that the claim was not ‘for’ construction work, as there is no express requirement under the SOP Act that a payment claim must be ‘for’ construction work or ‘for’ related goods and services to be validly made. Rather, this is an argument to be made by the respondent in the payment schedule and, if required, to be determined by adjudication. Under the SOP Act, where the respondent fails to serve a payment schedule within the permitted time, and the claimant seeks to enforce the unpaid amount as a debt, the respondent effectively forfeits the right to resist a payment claim on that basis.

The respondent’s defence was bound to fail and accordingly summary judgment was appropriate. Relevantly, the substance of evidence at trial would have been the same as that which was before the Court of Appeal, with no scope for the application of the test for summary judgment to be affected by the evidence of witnesses.