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ARTICLE · 31 JANUARY 2024

More welcome clarity on SOP Act payment claims: Security called on by principal cannot be claimed

Holding Redlich
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Contractors cannot claim a drawdown of security by a principal as a 'payment claim'.

AustraliaReal Estate and Construction
Kyle Siebel
Kyle Siebel
Jessica Xu
Jessica Xu
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In December 2023, the Supreme Court of NSW held that contractors cannot claim a drawdown of security by a principal as a 'payment claim' within the meaning of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act).

This decision in Acciona Infrastructure Projects Australia Pty Ltd v EnerMech Pty Ltd [2023] NSWSC 1565 provided further clarity on the operation of security of payment regimes, following a recent Supreme Court of Victoria decision that held that retention moneys can be claimed. Read our article on Hunters Green Retirement Living Pty Ltd v JG King Project Management Pty Ltd [2023] VSC 536 here.

Background

Acciona Infrastructure Projects Australia Pty Ltd, Samsung C&T Corporation and Bouygues Construction Australia Pty Ltd (collectively Acciona) had formed an unincorporated joint venture to construct the WestConnex M4-M5 Link in Sydney.

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