Victorian courts will not award construction payment claims containing excluded amounts

In a recent decision¹ that will have important implications for claimants making statutory payment claims in Victoria, the Victorian Supreme Court has decided that if a payment claim contains an excluded amount under the Building and Construction Industry Security of Payment Act 2002 Act (Vic) (Act), the Court is precluded from giving a judgment in favour of the claimant. Rather, the claimant should pursue adjudication.

It is well established that the main purpose of the Act was to create a 'pay now, argue later' scheme to enable those engaging in construction work, or supplying goods and services, recover progress payments in a timely and cost effective manner.

This decision contributes to broader policy debate about whether the purpose of the Act is best served by adopting a strict technical or a more flexible approach when interpreting the requirements of the legislation.