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ARTICLE · 04 SEPTEMBER 2020

Take-out will not take away a right to payment

In NSW, if rights to payment have accrued prior to take out action, the contractor may still be entitled to payment.

AustraliaReal Estate and Construction

Parrwood Pty Ltd v Trinity Constructions (Aust) Pty Ltd  [2020] NSWCA 172

The New South Wales Court of Appeal recently handed down its decision in Parrwood Pty Ltd v Trinity Constructions (Aust) Pty Ltd.1  The Court of Appeal upheld a finding at first instance that, where a reference date had arisen under the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act), a claimant's entitlement to payment was not suspended by the respondent subsequently issuing a notice to take works out of the claimant's hand after that reference date had accrued.

The decision sought to clarify the seminal words of the High Court in Southern Han,2 relating to the effect of suspension on reference dates under the Security of Payment legislation.  The decision also affirms the principle that a party is not able to take steps under a contract to 'invalidate' reference dates that have already accrued.

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