Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135
In 2025 the New South Wales Court of Appeal held that a respondent which had served no payment schedule could not resist summary judgment under the Building and Construction Industry Security of Payment Act 1999 (NSW) by arguing that the payment claim was in substance a claim for damages or restitution. Free JA, with whom McHugh and Ball JJA agreed, applied EnerMech Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd: the Act implies no precondition to validity that a payment claim be objectively one "for" construction work. On a test the parties accepted, the court also held that the claim, read with its spreadsheet and the earlier invoices it referred to, purported in a reasonable way to identify the work, so that there was no patent failure to identify it, and it ordered summary judgment for the claimant.
What the court decided
Manariti Plumbing Pty Ltd had a contract with Universal Property Group Pty Ltd to supply plumbing works for a multi-dwelling housing development that Universal was building at Lochinvar [3]. On 31 March 2024 Manariti Plumbing emailed Universal an invoice, a subcontractor's statement and a spreadsheet, claiming $221,901 and describing the claim as made under the Act [4]. Universal neither paid nor served a payment schedule [5]. Manariti Plumbing sued in the District Court to recover the claimed amount as a debt under section 15(2) of the Act, and applied for summary judgment [6], [8].
Universal's defence admitted receiving the claim but denied that it was a valid payment claim [7]. It contended that the claim did not identify the construction work or related goods or services, and that the amount claimed was not for a progress payment for work carried out or goods and services supplied [7]. It pleaded no other ground for resisting the statutory liability [7]. The primary judge refused summary judgment, on the basis that validity raised a real issue to be tried [8]. Manariti Plumbing sought leave to appeal from that interlocutory decision, and the application was heard concurrently with the appeal [8].
The invoice stated that it was a payment claim under the Act and referred to the period from 21 June 2023 to 12 January 2024 [11], [51]. The covering email described the attached spreadsheet as a breakdown of the invoice [11], [51]. The spreadsheet recorded Manariti Plumbing's actual costs of labour, labour oncosts and materials over consolidated periods, totalling $360,457.23 [16], [17]. Against those periods it listed the numbers and amounts of earlier invoices, which Universal had received and paid, totalling $192,625 [18], [19], [20]. It added profit, described as an average of 15 per cent, to the costs and deducted the amounts already invoiced [24], [25]. The result was a "Total owed" of $221,901 [22]. That was the amount claimed in the invoice [23]. For 1 to 12 January 2024 it recorded costs with no corresponding invoice [18]. Counsel for Manariti Plumbing conceded that the earlier invoices had been issued on a fixed price basis [27]. Free JA described the move to a cost-plus basis, including for work already invoiced and paid, as "an ostensibly curious shift" [27]. Nothing in the claim explained that change [28].
Free JA gave the reasons, and McHugh and Ball JJA each agreed with Free JA [1], [2], [3]. On the pleadings, the only element of section 15(1), read with section 14(4), left in issue was service of a payment claim [35]. Without a valid payment claim, Manariti Plumbing would have no proper basis for the statutory liability it asserted [36]. Universal ran the same two arguments on appeal as it had before the primary judge [37].
On the first ground, both parties accepted the approach of Hodgson JA in Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) [45]. Non-compliance with section 13(2)(a) must be patent on the face of the claim, and there is no patent failure if the claim purports "in a reasonable way" to identify the work [45]. Counsel for Universal also accepted the correctness of Manariti Plumbing's submission that the claim could reasonably be read as incorporating, by reference, what the earlier invoices contained, since Universal already had copies of them [49]. Given the nature of that test, Free JA considered that validity was apt to be resolved summarily, noting the concession that the evidence at trial would in substance be the same as that before the court [50].
Free JA held that the spreadsheet should be treated as a source of identification of the work, and that the ten earlier invoices it referred to were a further source, read as covering the same labour and materials over the same periods [51]. For 1 to 12 January 2024 no invoice was referenced, so identification rested on the dates and on the description of the costs as labour, labour oncosts and materials [52]. That was less detailed, but in Free JA's view it was not a failure to identify the work in a reasonable way [52]. That conclusion was reinforced by the context of a subcontracted plumber claiming for a further period after ten invoices on the same project, and by the fact that Universal had not drawn particular attention to the point [52]. Free JA added that Universal's alternative argument, which treated the claim as clear enough to show that the work had already been invoiced, involved an implicit concession that the claim was sufficiently clear [53]. The challenge under section 13(2)(a), if tried, would be bound to fail [54].
On the second ground, Universal argued that the claim was properly characterised as one for damages or restitution, not for payment under a contractual obligation to pay for work, and so was not a valid payment claim [55]. It relied on the statement of Kiefel, Bell, Gageler, Keane and Gordon JJ in Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd that the Act is not concerned to secure amounts claimed as damages for breach of a construction contract, or by way of restitution as an alternative to damages after the contract is terminated [56].
Free JA noted that in EnerMech Basten JA had said that Southern Han "did not purport to create an implied condition" of validity [58]. As Basten JA had noted, the Act contains no express requirement that a payment claim have the objective character of a claim "for" construction work or related goods or services; section 13(2)(a) instead requires the claim to identify the work to which the progress payment relates [61]. In Free JA's view, Universal's argument was ultimately indistinguishable from the one rejected in EnerMech [59]. To accept it would imply an essential precondition inconsistent with the text, context or purpose of the Act; there was no proper basis to distinguish EnerMech [63].
Free JA found that conclusion reinforced by section 15(4)(b)(ii), under which a respondent sued for the unpaid claimed amount as a debt cannot raise a defence about matters arising under the construction contract [64]. On its face the document asserted a claim for payment under the contract for work performed, so recourse to the contract would be needed to show that it was in substance a claim for damages or restitution [64]. Allowing a respondent to invoke the contract in that way to challenge validity would be inconsistent with the scheme [65]. A dispute of that kind is to be raised by a payment schedule and, if necessary, an adjudication response, leaving the adjudicator to decide whether the contract and the Act support the entitlement [65]. A respondent that fails to serve a payment schedule in time, and is then sued for the debt, effectively forfeits the right to resist the claim on that basis [65].
Free JA held that the court had the material and assistance it needed to reach a definite and certain conclusion that the only defence raised must fail, and that a final hearing would be otiose [66]. The primary judge had therefore erred in refusing summary judgment [67]. The court granted leave, allowed the appeal and set aside the District Court's orders [68]. In their place it ordered summary judgment for Manariti Plumbing for $221,901 plus interest, to be agreed or, failing agreement, determined by the District Court, with costs below and on appeal [68].
Why it matters
The decision applies EnerMech where a respondent served no payment schedule and was then sued for the claimed amount as a debt. An argument that the claim was in substance for damages or restitution, which depended on recourse to the contract, could not be raised as a ground of invalidity by a respondent that had served no payment schedule, and did not prevent summary judgment. The court also held, on a test the parties accepted, that this claim, read with earlier invoices the respondent already held, purported in a reasonable way to identify the work, and that a short final period identified by its dates and cost categories, without invoices, was not, in that context, a failure to identify the work in a reasonable way.
The decision was given on an appeal from a refusal of summary judgment, on the claim documents that were before the court. Readers should check the current Act and later authority before relying on it.
Numbers in square brackets are paragraph numbers of the judgment. This note summarises a decided case for education and is not legal advice. See how the notes are written.