The NSW Court of Appeal in the case of Joye Group Pty Ltd v Cemco Projects Pty Ltd recently considered whether an email issued in response to the appellant’s payment claim stating: “Please be advised that no payment for above Invoices, until all works been completed.[sic]” was a valid payment schedule under the NSW SOP Act.
The NSW Court of Appeal (overturning an earlier NSW District Court decision) unanimously held the email was not a valid payment schedule. By simply refusing payment, the obligation to give reasons for withholding payment under section 14(3) of the NSW SOP Act was triggered. The Court held the statement “until all works been completed” could not be credited as a reason at all. The statement on its face directly contradicted the claimant’s right to progress payments in s8 of the Act. Further, the email was issued more than 10 days after the claim reference date and failed to provide (or otherwise refer to) details of any incomplete work at the relevant time.
The consequences of failing to provide a valid payment schedule (and failing to pay) are significant, including that it triggers a claimant’s right to apply to the Court for judgment and limiting available defences, and triggering rights to suspend work. The decision serves as a useful reminder to all businesses in construction of the importance of providing a valid payment schedule within time which is sufficiently detailed to define all matters in dispute.
