Progress Payments and Failing to Provide Supporting Statements

Supporting Statement under the SOP Act

In news for our clients in the construction industry, recent case law has highlighted the importance of providing a Supporting Statement with claims made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act).

Whilst section 13(9) of the SOP Act is already quite clear on the definition of a Supporting Statement, that being it must require a statement that all subcontractors under the applicant have been listed and note whether paid or unpaid, the recent case of Central Projects Pty Ltd v Davidson [2018] NSWSC 523 now drives home the importance above requirement.

In that case, the respondent resisted that claim on the basis that the payment claim served by Central Projects (the applicant) was not accompanied by a supporting statement, which is considered mandatory, that met the requirements of s 13(7), (8) and (9) and, therefore, was not validly and effectively served on him.

Ultimately, Justice Ball still ordered in favour of the applicant, but only did so on the basis that the subcontractors unpaid invoices formed part of the payment claim as a whole and their identities were at least addressed in the payment claim. In Justice Ball’s ruling however, the point was reiterated that a supporting statement will be false or misleading in a material particular if it omits one or more subcontractors from the list of subcontractors and that omission is material.

It will also be false or misleading in a material particular if, contrary to the declaration, not all subcontractors have been paid (apart from those in respect of whom a dispute exists) and the amount owed to an unpaid subcontractor is material. In either case, if a head contractor knows that the supporting statement is false or misleading, the head contractor will commit an offence by serving the statement.

In summary, the SOP Act has many pitfalls, requirements and tight time frames to be mindful of. You must also be wary of section 13 of the SOP Act when making an adjudication application, and be sure to list and highlight your subcontractors, whether paid or unpaid, to avoid being in breach of the Act and committing an offence.

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Authored by

Raea Khan

Director Lawyer

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Raea Khan Circle
Director Lawyer
Raea Khan

Raea is Managing Director and Principal Lawyer for PBl Law Group. Raea assists clients with major projects, property developments, construction and strata law.

He has worked in Western Australia and Queensland assisting with expansion projects in the energy and resource sector and now predominately advises clients in Strata and Community Association matters.

He is a member of the Australian College of Strata Lawyers where majority of his work is advising developers and owners corporations with dispute related minor and major defects, strata governance and common property litigation. He is proficient at leading negotiations and meetings.

Raea has a particular interest in the commercial aspect of any dispute and always tries to weigh up the risk, reward and benefit of legal proceedings at each different stage.

Raea enjoys all forms of competitive sport, including Crossfit and actively participates in Triathlons, representing Australia as an age group athlete. He was a member of Red Head Surf Lifesaving club.

  • Strata Law
  • Construction & Major Projects
  • Commercial and Business Law
  • Planning & Environment Law