Bitannia Pty Ltd v Parkline Constructions Pty Ltd

Bitannia Pty Ltd and others (appellants) appealed to the Court of Appeal of New South Wales against a decision of the District Court concerning progress payments under the *Building and Construction Industry Security of Payment Act 1999* (NSW). The dispute arose from a payment claim made by Parkline Constructions Pty Ltd (respondent) under the Act.

The primary legal issues before the Court of Appeal were whether a claimant under the *Building and Construction Industry Security of Payment Act 1999* must have a bona fide belief in the entitlement to the claimed amount for a payment claim to be valid, and whether a defence based on a breach of section 52 of the *Trade Practices Act 1974* (Cth) could be raised, notwithstanding section 15(4)(b)(ii) of the *Building and Construction Industry Security of Payment Act 1999*. Relatedly, the court considered whether section 109 of the Constitution rendered section 15(4)(b) of the *Building and Construction Industry Security of Payment Act 1999* invalid to the extent that it prevented the raising of such a cross-claim.

The Court of Appeal held that a bona fide belief in the entitlement to the claimed amount was not a prerequisite for a valid payment claim under the Act. Furthermore, the court determined that section 15(4)(b)(ii) of the *Building and Construction Industry Security of Payment Act 1999* did not preclude a respondent from raising a defence or cross-claim based on a breach of section 52 of the *Trade Practices Act 1974* (Cth). The court found that the *Building and Construction Industry Security of Payment Act 1999* did not validly exclude such a defence, and therefore, there was no constitutional inconsistency under section 109.

The appeal was allowed, and the orders of the District Court were set aside. Leave was granted to the appellants to file a defence and reopen their case, with the matter remitted to the District Court for determination in accordance with the judgment. The respondent was ordered to pay the appellants' costs of the appeal.