Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135 is a recent NSW Court of Appeal decision which effectively ends arguments against summary judgment applications under the Building and Construction Industry Security of Payment Act 1999 NSW (SOPA) when no payment schedule has been provided. As long as the payment claim identifies construction work or related goods and services, that is all that is required.
District Court
Manariti served a payment claim by way of email which attached an invoice, a statement and a spreadsheet. The spreadsheet detailed a claim based on cost of work to Manariti plus a 15% uplift for profit. Manariti later admitted in Court that the payment claim was made on a cost-plus arrangement (i.e. do and charge), whereas all previous invoices had been submitted on a fixed price basis with reference to unit prices and quantities for the work claimed. No explanation was provided in the payment claim for the change from fixed price to a cost-plus arrangement.
Universal failed to provide a payment schedule in response to the payment claim. When Manariti sought summary judgment in the District Court, Universal defended the application on grounds that the payment claim was:
- not a payment claim under SOPA because it did not identify the construction work claimed; and
- essentially a claim for general damages rather than a claim in discharge of a contractual obligation to pay.
The District Court accepted that there was a triable issue and refused to grant Manariti summary judgment.
Court of Appeal
On appeal, the Court of Appeal traversed a number of long-standing authorities on section 13(2)(a) of SOPA (the requirement that a payment claim “identify the construction work or related goods and serves to which the claim relates”), distilling some general principles such as:
- any non-compliance must be patent on the face of the payment claim;
- section 13(2) must be understood in the broader context of SOPA which is a fast process; and
- payment is generally on account under construction contracts (meaning claims can be reversed later).
The Court also accepted the orthodox position and understanding that payment claims under SOPA cannot claim amounts that may be claimed under the general law by way of damages, restitution or by way of account.
The difficulty for Universal was that the general damages argument undermined its first argument that the payment claim did not identify the construction work claimed. By making the general damages argument, Universal made an implicit concession that the payment claim was sufficiently clear to enable it to understand both the work to which the payment claim related and the apparent basis of the claim.
Furthermore, the general damages argument was not a defence that could be raised in the District Court because of the operation of section 15(4)(b)(ii) of SOPA, which prohibits a respondent from raising a defence when a payment schedule has not been provided. The Court of Appeal considered the general damages argument to be in the nature of a defence contemplated by that section and not a threshold jurisdictional matter that can be raised (notwithstanding section 15(4)(b)(ii)) because SOPA only requires a payment claim to identify the construction work or related goods and services. There is no requirement that the payment claim actually (objectively) be a claim for construction work and/or related goods and services.
What does this mean?
Being a Court of Appeal decision, it will be near impossible in the future for a respondent to argue, in proceedings for summary judgment where there has been a failure to provide a payment schedule, that a payment claim is invalid on grounds that it is a claim for something other than construction work and/or related goods and services. Always serve a payment schedule (even if the payment claim may be invalid).
If you would like to discuss this article with us, please contact Simon Mok, Partner, or Rebecca Salib, Senior Associate on (02) 9261 5900.