Background
Reem Built Pty Ltd carried out refurbishment work at a commercial property in Casula for Reosteel Pty Ltd. After the parties agreed in July 2025 that Reem would perform no further work, Reem issued a Security of Payment Act payment claim for $45,290.15. Reosteel did not respond.
In June 2026, Reem served a “final payment claim” for $132,850.34, withdrawing earlier concessions and claiming the asserted full value of the work. Reosteel served a nil payment schedule. An adjudicator determined that Reosteel must pay the claimed amount, interest and adjudication fees. Reosteel sought to quash that determination.
The Court’s Holding
Pike J quashed the adjudication determination. Under s 13(1C) of the Building and Construction Industry Security of Payment Act 1999 (NSW), a claimant may serve only one payment claim after termination of a construction contract. Reem had already exercised that entitlement through its first post-termination claim.
The Court held that the Act does not permit a claimant unilaterally to withdraw that claim and replace it with a later one. The authorities supported withdrawal by agreement, but Reosteel had not agreed. In any event, the June 2026 claim did not clearly state that the earlier claim was withdrawn; withdrawing prior discounts and concessions was not the same as withdrawing the earlier statutory payment claim.
The Court rejected Reosteel’s separate argument that Reem’s restricted residential-building licence prevented its Casula claim. The evidence did not establish a single overarching construction contract covering both the Casula commercial work and separate Monterey residential work. That issue did not affect the result because the post-termination payment-claim ground succeeded.
Key Takeaways
- After termination, s 13(1C) permits only one Security of Payment Act payment claim.
- A claimant cannot unilaterally replace its sole post-termination claim with a larger or revised claim.
- Withdrawal of a payment claim requires the respondent’s agreement; withdrawing commercial concessions is insufficient.
Why It Matters
The decision reinforces the strict finality of the statutory post-termination payment claim. Contractors should ensure their sole post-termination claim captures all amounts they wish to pursue through adjudication before serving it.
For principals, the case confirms that an adjudication founded on an impermissible replacement claim may be quashed, even where the principal did not answer the original claim. Reosteel recovered the court-held funds, interest and its costs.