In a major decision for the construction industry, the NSW Court of Appeal has clarified key aspects of the Building and Construction Industry Security of Payment Act 1999 (NSW), confirming that payment claims don’t need to be perfect to be enforceable.
The case — Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135 — sends a strong message to developers and principals: you must respond to payment claims, and you can’t ignore them based on technicalities.
Background
Manariti Plumbing was contracted by Universal Property Group to perform plumbing works on a multi-dwelling residential development. After completing part of the work, Manariti submitted a payment claim via email, attaching an invoice, a statement, and a spreadsheet detailing the work.
Universal Property Group didn’t respond with a payment schedule and didn’t pay the claimed amount. Manariti sought summary judgment in the District Court, but the judge refused, questioning whether the claim was valid—particularly whether it clearly identified the work.
Manariti appealed and the NSW Court of Appeal overturned the decision, granting summary judgment in Manariti’s favour.
What was in the Payment Claim?
Manariti had previously invoiced on a fixed-price basis. But this claim was different—it was on a costs-plus basis, with a 15% profit uplift applied to earlier invoices (up to 1 January 2024). No explanation for the change was provided.
The claim also didn’t include a new invoice for work after 1 January. Instead, it provided a spreadsheet summarising costs for labour, “labour oncosts,” and materials.
Court of Appeal Decision
On appeal, Universal argued the payment claim was invalid because:
- The uplift wasn’t for construction work—it was really a claim for damages or restitution.
- The claim didn’t clearly identify the construction work or related goods/services.
The NSW Court of Appeal rejected both arguments. In doing so, it held:
- There is no express requirement that a claim have the objective character of being a claim “for” construction work or for related goods or services.
- Any debate about whether Manariti had a sound basis for making its claim on a cost-plus basis was a matter for adjudication. It is not relevant to the validity of the claim itself.
- The spreadsheet and previous invoices attached to the payment claim were sufficient to identify the work when taken in context, including for the period after 1 January.
Key Takeaways for Contractors and Principals
The case sends a clear message to operators in NSW:
- A payment claim does not need to be perfect. Nor does it need to objectively be a claim ‘for’ construction work. Provided the claim reasonably identifies the work when taken in context, it is valid.
- Contractual entitlement is irrelevant when assessing the validity of a claim.
- If you want to dispute a contractor’s entitlement, you must issue a payment schedule and go through adjudication. Ignoring the claim is not a valid option and will likely result in judgment against you.
For those in Queensland, the message is less clear.
The decision contrasts with the stricter approach taken in MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94, where the Queensland Court of Appeal emphasised that a payment claim must be objectively clear and cannot rely on the principal’s subjective understanding.
While the NSW decision isn’t binding in Queensland, it is persuasive and may influence future cases. Whether that happens remains to be seen.
For now, contractors in Queensland should not assume they can rely on context. Claims should be detailed and precise when identifying their work and avoid vague references like “5% of concreting”.
Watch this space.
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