- Our Motto
- Practice Areas
- Our People
- Our Cases & Articles
Member since 2013
Member since 2012
On 19 June 2019 the New South Wales Court of Appeal considered the requirements for obtaining a stay of execution of a Judgment Debt arising under the Building and Construction Industry Security of Payment Act 1999 (NSW) (“The SOP Act”).
In that case the Developer sought a stay of a Judgment following the service of a Payment Claim by the Builder, in order to litigate a cross claim against the Builder.
The facts leading to the Judgment in favour of the Builder were as follows:
The Developer sought the stay on the basis that:
The Court noted that the Application before him for a stay was inconsistent with the regime established by the SOP Act namely that the amounts would be payable subject to an opportunity to have the matter re-determined pursuant to Section 32 of the SOP Act to bring substantial final proceedings that may re-determine the issue that had been the subject of the Payment Claim.
The procedure is under Section 32 of the SOP Act:
The Court of Appeal in the SOP Act claim said:
“As is well established the Act (“SOP Act”) makes provision for payment, if necessary enforceable by Judgment, of a builder’s or sub-contractor’s relevantly uncontested claim for claimed but unpaid monies in order to ensure continuity of cashflow, whilst not precluding the principal from seeking to reverse the effect of such a judgment in later substantive proceedings …”
The Court of Appeal did indicate that there is no particular reason under the SOP Act or otherwise which determines that a stay cannot in appropriate circumstances be granted.
The Court of Appeal in the SOP Act proceedings found that the Developer did not establish in those proceedings that the practical effect of failing to obtain a stay would stultify litigation of the Cross Claim. For example if the Developer went into liquidation it would be open to a liquidator to proceed with such a claim.
Further in this particular case there was a significant delay by the Developer in filing the Cross Claim in the Construction List proceedings.
It can be seen that the Court of Appeal has not closed the door on a Stay Application however great care is required to establish the appropriate evidence.
The Court of Appeal in the SOP proceedings also stated:
“A stay would generally be less readily available in relation to judgments entered following an adjudication under the SOP Act than in relation to Appeals arising from a (“Court”) proceedings, “such as the default position which arises when there is no Payment Schedule is lodged in response to a Payment Claim.”
These cases highlight a number of practical matters including:
If you are in the building and construction industry and are unsure of the ramifications when it comes to non compliance of Payment Claims or have any issues relating to claims and/or counterclaims under the building and construction contractual arrangements, we recommended that you seek appropriate advice expeditiously. At Watson & Watson our highly experienced Building and Construction Lawyers can provide advice and assist in navigating what could possibly be, a challenging dispute. Please contact Richard Watson Accredited Specialist Building and Construction or his Personal Assistant Shereen Da Gloria to discuss your important matter.
This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.
Contact Us to Discuss your Matter
Phone 02 9221 6011Send us your enquiry