High Court today delivers important decision on reference dates and appeals from Adjudicators
The High Court of Australia today handed down the decision in Southern Han Breakfast Point Pty Ltd (in liquidation) v Lewence Construction Pty Ltd & Ors [2016] HCA 52.
Implications of decision
- The decision of the High Court has important ramifications for at least three issues arising under security of payment legislation.
- First, the Court clarified the confusion in BCIPA legislation around Australia by confirming that the existence of a reference (claim) date is a precondition to the making of a valid payment claim. Therefore, an adjudicator’s decision as to whether a reference date exists can be reviewed/appealed by the courts.
- Second, where a principal exercises its contractual rights to take work out of a contractor’s hands, and as a result the contractor’s contractual right to payment is suspended; reference dates may cease accruing under the contract. Whether this occurs depends upon the drafting of the particular contract.
- Third, reference dates will not automatically accrue after termination. However, they may survive termination if a construction contract so provides.
- The key provisions of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) on which this decision is based, are in identical, or very similar, terms to the equivalent provisions of security of payment legislation in all other states and territories, save for Western Australia and the Northern Territory. Therefore, the decision of the High Court has implications beyond the NSW statutory regime, and will promote consistency in how the above issues are dealt with in Queensland.