Building Principals Pty Ltd v Chapter 03 Pty Ltd

[2025] VCC 1294

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

BUILDING CASES LIST

Case No.CI-25-04963

BUILDING PRINCIPALS PTY LTD (ACN 605 582 278)	Plaintiff
v
CHAPTER 03 PTY LTD (ACN 643 659 143)	Defendant

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JUDGE:	Her Honour Judge Burchell
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers
DATE OF RULING:	8 September 2025
CASE MAY BE CITED AS:	Building Principals Pty Ltd v Chapter 03 Pty Ltd
MEDIUM NEUTRAL CITATION:	[2025] VCC 1294

REASONS FOR JUDGMENT
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Subject:CONTRACTS – BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT REGIME – BUILDING CONTRACT

Catchwords:              Building contract – payment claim – where defendant failed to issue payment schedule in response to payment claims – whether there was a reference date – whether there was a final claim reference date

Legislation Cited:     Building and Construction Industry Security of Payment Act2002 (Vic) ss3, 4, 5, 6, 7, 9, 10B, 14, 16, 17, 47, 48, and 50; Civil Procedure Act 2010 (Vic) ss61 and 63; Domestic Building Contracts Act1995 (Vic) ss3, 5, and 40; Domestic Building Contracts Regulations 2017 (Vic) rr 12 and 13, Penalty Interest Rates Act 1983 (Vic) s2.

Cases Cited:Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; Vanguard Developments v Promax [2018] VSC 386; Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112; Pearl Hill Pty Ltd v Concorp Construction Group (Vic) Pty Ltd [2011] VSCA 99; Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd (2005) 62 NSWLR 385; 3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674; SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; John Beever v Roads Corporation [2018] VSC 635; Best Fab Pty Ltd v Australian High Bay Installations Pty Ltd [2018] VCC 1053; Shaw v Yarranova Pty Ltd (2006) 15 VR 289; Mirvac (Docklands) Pty Ltd v Philp [2004] VSC 301 [2004] VSC 301; Stephens v Cameron (2021) 65 VR 117; Cameron & Anor v Stephens [2021] VCC 127; Imerva Corporation Pty Ltd v Anton Kuna and Jaga Kuna [2017] VSCA 168; Diako Builders Pty Ltd v Compfam Pty Ltd [2021] VCC 784; Spentek Electrical Pty Ltd v 287 Whitehorse Road Pty Ltd [2025] VCC 399; All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289; MKA Bowen v Carelli Constructions [2019] VSC 436

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	D Wright- Neville	Lander & Rogers
For the Defendant	A Morrison	Sinisgalli Foster Legal

HER HONOUR:

Introduction

1In this proceeding, the plaintiff (“Building Principals”) applies for judgment against the defendant (“Chapter 03”) pursuant to s16(2) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (“SOP Act”). Building Principals makes the application by summons on originating motion dated 12 August 2025. The application arises out of services provided to Chapter 03 in relation to a four-level (three levels plus a basement), twenty-one unit development at 11A Keiler Street, Hampton (“the development”).

2Building Principals submits that it is entitled to judgment because Chapter 03 failed to issue a payment schedule in response to its payment claim.

3Chapter 03 opposes the application on the basis that there was no reference date.

4In my judgment, the ground relied on by Chapter 03 in opposition to Building Principals’ claim have not been made out. My reasons in respect are set out below.

5There will therefore be judgment for the plaintiff in the proceeding in the sum of $86,350.00, together with interest pursuant to s12(2)(a) of the SOP Act in the sum of $3,690.58. There will also be an order that the defendant pay the plaintiff’s costs of and incidental to the summons on the standard basis, to be taxed in default of agreement, unless either party has a basis for seeking a different order as to costs. I will invite the parties to prepare draft orders to give effect to these reasons and will determine any issue concerning costs on the papers.

The facts

1Building Principals relies upon the affidavits of Adam Geoffrey Wright, its Director, affirmed on 6 August 2025 and 1 September 2025, and the affidavit of Sonnia Joy Esguerra affirmed on 25 August 2025. In response, Chapter 03 relies upon the affidavit of Domenic Valastro, its Director, sworn on 25 August 2025.

2Unless otherwise stated, the facts of the proceeding are not materially in dispute.

3By a written contract dated 23 March 2023 titled “Proposal”, Building Principals and Chapter 03 entered into a construction contract pursuant to which Building Principals was to provide services to Chapter 03 in connection with the development (“the Contract”).

4Pursuant to the terms of the Contract:

(a)   Building Principals would provide services to Chapter 03 (set out under the heading titled “Scope of Services”) including:

(i)pre-construction consulting services (including design management, program sequencing and builder appointment);

(ii)project management and superintendent services during the construction phase; and

(iii)assistance with managing the defects liability period and contract administration after practical completion;

(b)   Chapter 03 would pay for Building Principals’ services (tabulated under the heading titled “Fee”) as follows:

(i)$3,300.00 (excluding GST) per week for pre-construction design management, for an estimate of eight weeks;

(ii)$6,000.00 (excluding GST) for the appointment of a builder;

(iii)$7,850.00 (excluding GST) per month during the construction phase (comprising project management and superintendent services); and

(iv)$11,775.00 (excluding GST) as a total twelve month fee for managing the defects liability period;

(c)   Chapter 03 would pay all fees within 30 days of receiving a tax invoice from Building Principals (pursuant to clause 4.2(b) of the “Terms and Conditions” of the Contract);

(d)   either party may terminate the Contract by giving ten business days’ notice of a breach (pursuant to clause 13(a)(i) of the “Terms and Conditions” of the Contract); and

(e)   the Contract is governed by the laws of Victoria (pursuant to clause 14.12 of the “Terms and Conditions” of the Contract).

5On or about 23 March 2023, Building Principals commenced the works.

6Building Principals provided the following services under the Contract:

(a)   prior to the construction works commencing, design management and builder appointment services between May 2023 and August 2023;

(b)   following the commencement of the construction works, project management services between August 2023 and November 2024. These services involved, but were not limited to:

(i)monitoring the contractor's OHSE management to ensure that health and safety requirements were complied with whilst the construction works were undertaken;

(ii)reviews of the construction works’ progress against the agreed construction program and the contractor's project cashflow; and

(iii)site inspections to review the construction works’ general compliance with project documents.

7On 19 September 2024, Building Principals wrote to Chapter 03 advising that it was intending to suspend the Contract (“the 19 September 2024 letter”) and would be unable to continue providing services pending payment of all outstanding fees.

8On 16 April 2025, Building Principals posted a payment claim to the defendant’s address, as identified in the Contract, being “PO Box 33087, Melbourne, VIC 3004”. However, the envelope was returned to the plaintiff marked as “Left address/unknown”.

9On 14 May 2025, Building Principals issued a notice of termination under clause 13(a)(i) of the “Terms and Conditions” of the Contract.

10Despite the 19 September 2024 letter, one of Building Principals’ employees, Mr  James Matthews, continued to perform the project management services during the period October and November 2024. Mr Matthews performed these services in circumstances where he had not been directed by Building Principals to do so – however, at this time, he had an ongoing contract of employment with Building Principals.

11As such, between 23 March 2023 and 22 November 2024, Building Principals performed services for Chapter 03.

12Between 31 May 2023 and 30 November 2023, Building Principals issued the following invoices dated:

(a)   31 May 2023 (INV 0019), in the sum of $7,260.00;

(b)   30 June 2023 (INV 0025), in the sum of $10,890.00;

(c)   31 July 2023 (INV 0045), in the sum of $3,630.00;

(d)   31 July 2023 (INV 0046), in the sum of $3,300.00;

(e)   31 August 2023 (INV 0056), in the sum of $8,635.00;

(f)    31 August 2023 (INV 0057), in the sum of $3,300.00;

(g)   30 September 2023 (INV 0074), in the sum of $8,635.00;

(h)   30 September 2023 (INV 0075), in the sum of $7,700.00;

(i)    31 October 2023 (INV 0096), in the sum of $8,635.00;

(j)    30 November 2023 (INV 0111), in the sum of $8,635.00;

(k)   21 December 2023 (INV 0125), in the sum of $8,635.00;

(l)    31 January 2024 (INV 0144), in the sum of $8,635.00;

(m)     29 February 2024 (INV 0171), in the sum of $8,635.00;

(n)   22 June 2024 (INV 0232), in the sum of $8,635.00;

(o)   31 July 2024 (INV 0250), in the sum of $8,635.00;

(p)   31 August 2024 (INV 0265), in the sum of $8,635.00;

(q)   16 September 2024 (INV 0272), in the sum of $8,635.00;

(r)   16 September 2024 (INV 0273), in the sum of $8,635.00; and

(s)   30 November 2024 (INV 0308), in the sum of $8,635.00.

13Of the total amount of $148,335.00 invoiced, a sum of $86,350.00 remained outstanding, constituting the plaintiff’s claimed amount. 

14Each of the invoices set out above was sent to the defendant by email, marked to the attention of Mr Valastro at “[email protected]”.

15On 7 March 2025, Building Principals issued an alleged payment claim (INV 0351) in the sum of $86,350.00, inclusive of GST. 

16The alleged payment claim was served on Chapter 03 by way of email to “[email protected]”, generated and sent by Ms Esguerra through Building Principals’ Xero accounting software. 

17Mr Wright confirms that the construction works and related goods and services, the subject of the alleged payment claim, were provided by Building Principals to Chapter 03 under the Contract. He further alleges that no payment schedules were provided by the defendant within ten business days after service of the payment claim dated 7 March 2025, as required by s15(4) of the SOP Act, and that no payments were received for any of the alleged payment claims.

18Building Principals now claims the sum of $86,350.00 (inclusive of GST) under s16(2) of the SOP Act.

The legal context

19The SOP Act seeks to ensure that people who undertake to carry out construction work can recover progress payments for the performance of that work.[1]

[1] SOP Act, s3.

20Section 4 of the SOP Act defines “construction contract” as a “contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services for another party”. The SOP Act applies to any construction contract whether written or oral, or partly written and partly oral.[2] “Construction work” is defined in s5 of the SOP Act.

[2] SOP Act, s7.

21Section 16(2)(a) of the SOP Act provides that a claimant may recover from a respondent any unpaid portion of an amount claimed in a payment claim where the respondent fails to submit a payment schedule within time (or at all) in response to the payment claim.

22Section 14 of the SOP Act concerns the form and content of payment claims. Subsections 14(2) and (3) provide that a payment claim:

(a)   must be in the prescribed form (if any) and contain the prescribed information (if any) – neither is prescribed;

(b)   must identify the construction work or related goods and services to which it relates;

(c)   must indicate the amount of progress payment that the claimant claims to be due;

(d) must state that it is made under the SOP Act; and

(e)   must not include any “excluded amounts” pursuant s10(3).

23Section 14(4) of the SOP Act addresses the period of time in which a payment claim can be served where it is not a payment claim in respect of a final, single, or one-off progress payment. It provides that such a payment claim may only be served within:

(a)   the period determined in accordance with the construction contract “in respect of the carrying out of the item of construction work or the supply of the item of related goods and services to which the claim relates”; or

(b) the period of three months after the “reference date referred to in s9(2) that relates to th[e] progress payment”.

24Sections 14(5), (6), and (7) of the SOP Act concern payment claims claimed in respect of a final, single, or one-off progress payment and are not relevant for present purposes. Section 14(8) provides that a claimant “cannot serve more than one payment claim in respect of each reference date under the construction contract”. Section 14(9) provides that this limitation does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous payment claim if the amount has not yet been paid.

25Another important provision informing the formal requirements for payment claims is s9 of the SOP Act. Section 9(1) provides that “[o]n and from each reference date under a construction contract” a claimant is “entitled to a progress payment under this Act, calculated by reference to that date”.

26Section 9(2)(a) of the SOP Act provides that a reference date is a date determined by or in accordance with the construction contract as:

(a)   a date on which a claim for a progress payment may be made; or

(b)   a date by reference to which the amount of a progress payment is to be calculated –

in relation to a specific item of construction work “carried out or to be carried out” or a specific item of related goods and services “supplied or to be supplied” under the contract. The rest of s9 concerns situations where the contract makes no express provision for reference dates.

27It is now well established in Victoria that unless a payment claim answering the description in s14(1) of the SOP Act is served, there can be no application to a Court under s16(2)(a)(i). Although dealing with the alternative option of an adjudication application referred to in the New South Wales equivalent of s16(2)(a)(ii), this follows inexorably from the decision of the High Court of Australia in Southern Han Breakfast Point Pty Ltd (in liquidation) v Lewence Construction Pty Ltd.[3] On the other hand, the available defences to a payment claim are very limited.

[3] (2016) 260 CLR 340 at [44] (“Southern Han”).

28Generally speaking, the available defences concern either the nature of the underlying contract or the form and service of the purported payment claim – and thus, whether the payment claim is effective to trigger the procedures established by Part 3 of the SOP Act.[4] More particularly, the defences to a payment claim enlivened by the formal requirements of the SOP Act are, in substance, that the payment claim:

(a) does not relate to a “construction contract” (including because it does not involve carrying out “construction work”), or it relates to a “construction contract” excluded from the operation of the SOP Act under s7 (for example, a construction contract that forms part of a loan agreement or one that is a domestic building contract under the Domestic Building Contracts Act 1995 (Vic) (“the DBC Act”));

(b) fails to satisfy the formal requirements of s14(2) (for example, by failing to identify the construction work or failing to state that the claim is made under the SOP Act);

(c)   was made when no valid reference date existed,[5] including where it is served before an applicable reference date or relies on a reference date that has already been used up by an earlier payment claim;[6]

(d)   includes variations that are “excluded amounts” under s10B; and

(e) was not validly served on the respondent under either the terms of the contract or under s50.

[4] Southern Han at [62].

[5] Southern Han at [61]–[62]; Vanguard Developments v Promax [2018] VSC 386 at [121] per Kennedy J.

[6] SOP Act, s14(8).

29Under s47, nothing in Part 3 of the SOP Act precludes bringing or continuing proceedings under a construction contract, including where those proceedings deal with the same issues in dispute in the proceeding relying on Part 3. Thus, a judgment under ss16 and 17 is a provisional judgment in what it grants and what it refuses.[7] The statutory context both contemplates and permits inconsistent judgments.[8] This section is, in effect, the statutory manifestation of the “pay now, argue later” description often given to the policy behind the SOP Act and its counterparts in other states.[9]

[7] Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112 at [2] and [43]–[46] per Vickery J (“Hickory Developments”), cited with approval in Pearl Hill Pty Ltd v Concorp Construction Group (Vic)Pty Ltd [2011] VSCA 99 at [11].

[8] Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd (2005) 62 NSWLR 385 at [22] per Handley JA, with whom Santow JA and Pearlman AJA agreed.

[9] Hickory Developments at [2] and [43]–[46].

30Further, in considering any purported defences to a payment claim, it is important to be mindful of s48 of the SOP Act. This section provides that the provisions of the SOP Act have effect despite any contractual provision to the contrary. It further provides that any provision in any contract purporting to exclude, restrict, or modify the operation of the SOP Act, or that may reasonably be construed as an attempt to deter a person from taking action under the SOP Act, is void.

31This Court has endorsed the hearing of applications under the SOP Act on a summary basis by summons on originating motion with affidavit evidence.[10] Such claims are properly assessed on the balance of probabilities,[11] with the quality of the evidence weighed having regard to the fact that the legislation seeks to facilitate a swift but temporary remedy.[12] Occasionally, a plaintiff nevertheless applies for relief under s16 by bringing a proceeding commenced by writ and statement of claim, then issuing a summons seeking summary judgment pursuant to s61 of the Civil Procedure Act 2010 (Vic) (“the CPA”).[13] This can add an additional layer of complexity in determining the test to be applied to any defences raised.[14] However, the present proceeding was commenced by summons on originating motion, so questions of the application of the test under ss61 and 63 of the CPA do not arise.

[10] 3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674 at [39]–[54] (“3D Flow Solutions”). See also SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805 at [26] (“SJ Higgins”).

[11] Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449-450 per Mason CJ, Brennan, Deane and Gaudron JJ.

[12] 3D Flow Solutions at [51]–[54].

[13] John Beever v Roads Corporation [2018] VSC 635. See also Best Fab Pty Ltd v Australian High Bay Installations Pty Ltd [2018] VCC 1053.

[14] SJ Higgins at [31].

Construction contract

32The contract in issue is a construction contract because it is a contract under which Building Principals undertook to carry out construction work – namely, project management services, amongst other things (ss4 and 5 of the SOP Act).

33The Contract involved the provision of pre-construction consulting services (including design management, program sequencing, and builder appointment) as well as project management and superintendent services during the “Construction Phase”. Building Principals submits that those services are covered by the definition of “services” under s6(1)(b) of the SOP Act.

34Building Principals states that Chapter 03 operates a property development business known as “Primetone Projects” and it was “in the business of building residences”. 

35In this regard, Building Principals observes that the SOP Act:

(a)   applies “to any construction contract, whether written or oral, or partly written and partly oral, and so applies even if the contract is expressed to be governed by the law of a jurisdiction other than Victoria” (s7(1)); but

(b)   does not apply to “a construction contract which is a domestic building contract within the meaning of the Domestic Building Contracts Act 1995 between a builder and a building owner (within the meaning of that Act), for the carrying out of domestic building work (within the meaning of that Act), other than a contract where the building owner is in the business of building residences and the contract is entered into in the course of, or in connection with, that business” (s7(2)(b)). (emphasis added).

36Building Principals submits that the Contract was entered into in the course of or in connection with that business. Therefore, it contends that s7(2)(b) of the SOP Act engages the exception to the applicability of the DBC Act.

37In addition, Building Principals argues that it was not otherwise “arranging or managing” the carrying out of “domestic building work” within the meaning of ss3 and 5 of the DBC Act. Building Principals cites Neave J in Shaw v Yarranova Pty Ltd, who found that “the fact that a developer has the powers … to … select the builder and approve variations, is insufficient, to bring it within [ss 3 and 5 of the DBC Act].”[15]

[15] (2006) 15 VR 289 at [85] (“Shaw v Yarranova”).

38In Shaw v Yarranova, Mr John Shaw entered into an off-the-plan contract to purchase a residential apartment from Yarranova Pty Ltd (“Yarranova”). The contract included a clause requiring Yarranova, as the vendor, to enter into a separate contract with a builder for the construction of the apartment. Mr Shaw later sought to avoid the contract, arguing that it was a “major domestic building contract” under the DBC Act and that Yarranova had failed to comply with the DBC Act’s requirements. The issue was whether Yarranova did “arrange or manage” the carrying out of domestic building work, thereby triggering the application of the DBC Act.

39The Victorian Court of Appeal found that the DBC Act did not apply because Yarranova, as the vendor, did not itself undertake or manage the construction – it merely contracted with a third-party builder to carry out the work. This case distinguished Mirvac (Docklands) Pty Ltd v Peter Evan Philp,[16] where the developer was found to have arranged or managed the building work. The Victorian Court of Appeal emphasised that the legislative intent behind the 2005 amendments to the DBC Act was to exclude off-the-plan sales from the scope of the DBC Act, provided the developer was not directly involved in the construction.

[16] [2004] VSC 301.

40Chapter 03 submits that the project of a four-level, twenty-one unit residential development is “domestic building work” within s5(1) of the DBC Act, and that it applies regardless of scale.

41Chapter 03 contends that the services supplied to it by Building Principals were provided under a contract to “arrange or manage the carrying out of” domestic building work. This satisfies the definition of a “domestic building contract” and renders Building Principals a “builder” under s3(1) of the DBC Act.

42Therefore, Chapter 03 suggests that although Building Principals’ services fall within the operation of the SOP Act, through the DBC Act exception (pursuant to s7(2) of the SOP Act), by reason of a contract where “a building owner is in the business of building residences and the contract is entered into in the course of, or in connection with, that business”, Building Principals’ services must be characterised as services to “arrange or manage the carrying out of” domestic building work.

43Chapter 03 relies on the case of Stephens v Cameron, which involved Paul Cameron and Joseph Alesci (“the owners”), who entered into a “Construction Management Contract” with Lucas Stephens, a registered builder, for the construction of two townhouses in Mornington.[17] Mr Stephens was described both as a “Construction Manager” and “builder/construction manager” in the contract. 

[17] (2021) 65 VR 117 at [64].

44The owners paid Mr Stephens $567,000.00 in progress payments. The parties’ relationship deteriorated, and the contract was terminated in January 2013. In 2018, the owners sued Mr Stephens in the County Court, seeking to recover overpayments allegedly made in breach of s40(2) of the DBC Act.

45Judge Woodward (as his Honour then was) held that the contract was a domestic building contract.[18] Mr Stephens’ argument that his role was merely managerial was rejected. Mr Stephens – not the owners – was found to be the builder. His company was listed as the builder on permits and insurance documents. 

[18] Cameron & Anor v Stephens [2021] VCC 127.

46Section 40(2) of the DBC Act, where it applies (noting parties may contract out of its application pursuant to s40(4) and reg 13 of the Domestic Building Contracts Regulations 2017 (Vic) (“the DBC Regulations”)), prescribes limits on staged progress payments made under a major domestic building contract and prevents a builder under a “major domestic building contract” from demanding, recovering, or retaining more than the prescribed percentage of progress payments depending on the corresponding stage of completion. For a contract to build all stages, those prescribed percentages are as follows:

(a)   Base stage: 10% of contract price;

(b)   Frame stage: 15% of contract price;

(c)   Lock up stage: 35% of contract price; and

(d)   Fixing stage: 25% of contract price.

47The Victorian Court of Appeal in Stephens v Cameron observed that s40(2) of the DBC Act did not create a statutory cause of action for an owner to recover amounts overpaid to a builder. Rather, the provision is a penal provision concerned with prohibiting certain conduct.

48In addition, Chapter 03 cites Imerva Corporation Pty Ltd v Anton Kuna and Jaga Kuna,[19] in which the Kunas’ initials on the page bearing a warning of changes to their legal rights, as owners of the relevant property, did not satisfy the signature requirement under reg 12(a) of the DBC Regulations. The custom payment schedule was therefore invalid, and the statutory schedule under s40 of the DBC Act was applied.

[19] [2017] VSCA 168 (“Imerva”).

49Chapter 03 refers to Diako Builders Pty Ltd v Compfam Pty Ltd,[20] where Diako Builders Pty Ltd argued that the parties had varied the payment terms to allow for monthly claims to be made. The Court found that the alleged variation did not comply with s40(4) of the DBC Act and reg 13 of the DBC Regulations. Therefore, no valid reference date existed and the payment claim failed.

[20] [2021] VCC 784 at [53] (“Diako”).

50Chapter 03 argues that payment stages and percentages in the table under s40(2) of the DBC Act would not apply only if the parties agreed to move to monthly payments “in the manner set out in the regulations” as required by s40(4) of the DBC Act. In the present case, the parties have not elected to opt out of the s40 DBC Act regime and did not attempt to. Therefore, in that respect, the cases of Imerva and Diako are not analogous to the present matter.

51The key distinctions between the cases cited by the parties are as follows.  Building Principals relies on Shaw v Yarranova, which concerned an off-the-plan sale with a separate contract between Yarranova and a builder. The developer’s role was one in which it did not manage or arrange building work and thus, the DBC Act was not applicable. In Stephensv Cameron, there was a direct building contract, and the builder was directly engaged and did manage or arrange building work. Thus, the DBC Act was held to be applicable.

52In my view, the facts in Stephens v Cameron are analogous to the project management agreement in the present case. Chapter 03 engaged Maxim Built Pty Ltd to construct the building works and contracted with Building Principals for the purposes of project management and superintendent services during the “Construction Phase”. This was part of the works necessary to undertake the construction of the units. The project management and superintendent services provided by Building Principals were to assist in managing the build, and to sign off on the various stages of the units as the works progressed. The payment claim itself describes the services provided as “project management works”. Therefore, it follows that Building Principals is the “builder” under s3(1) of the DBC Act, not Chapter 03.

53If the present proceeding fell within the purview of the DBC Act, then I would agree with Chapter 03’s contention that the plaintiff’s payment claim is invalid because the Contract did not include either a Form 1 warning or a Form 2 payment clause, required under reg 13 of the DBC Regulations if a party is to contract out of s40 of the DBC Act. In those circumstances, Building Principals’ entitlement to progress payments would therefore be confined to the statutory milestone contained in s40 of the DBC Act. Further, the completion of the framing stage at the end of November 2024 would determine when the reference date arose under the Contract.

54However, the facts of the present case are such that Chapter 03, in operating a property development business, was “in the business of building residences” and the Contract was entered into in the course of or in connection with that business, as understood by s7(2)(b) of the SOP Act.

55As such, the DBC Act does not apply to the Contract and it does not affect the entitlement to progress payments under the SOP Act. Chapter 03’s arguments set out above assume that s40 of the DBC Act governs any entitlement to a progress payment in the present case. By statute, it does not.

56Although I agree with Chapter 03 that Building Principals is a “builder” who was “arranging or managing” the carrying out of domestic building work within the meaning of ss3(1) and 5 of the DBC Act, it was not governed by the DBC Act due to the exception applicable under s7(2)(b) of the SOP Act. As such, the SOP Act applies.

57This position was clarified in the recent decision of Judge Kirton in Spentek Electrical Pty Ltd v 287 Whitehorse Road Pty Ltd,[21] in which her Honour observed:

“The plaintiff is an electrical contractor. The defendant is a developer and builder. The plaintiff was engaged to carry out electrical works at a multi residential unit development …

Although the building works were to construct a domestic building, there is no dispute that the [SOP] Act applies, as the defendant is a special purpose entity that was effectively the developer for the project and was ‘in the business of building residences’”.

[21] [2025] VCC 399 at [1] and [2] (“Spentek Electrical”).

58I accept Building Principals’ submission that the decision in Spentek Electrical is analogous to the present case. Here, Chapter 03 is a special purpose entity in the business of building residences and the Contract was entered into in the course of carrying on that business. 

59It is common ground between the parties that the DBC Act is “consumer protection legislation” and should be strictly construed. However, by reason of the exception set out in s7(2)(b) of the SOP Act, in my view, Parliament never intended to oust the statutory entitlement to progress payments under the SOP Act in circumstances where the building owner is carrying out a residential property development business.

60I will now consider the dispute in relation to the available reference dates below. 

Reference dates

61The next ground raised by Chapter 03 is that the payment claims lack a reference date, as required by statute. In effect, the payment claims must only be submitted “on and from” a reference date, pursuant to s9(1) of the SOP Act.

62In this proceeding, the Contract did not contain any express provision for progress payments or the dates by which the amount of a progress payment were to be calculated. 

63Building Principals relies on the implication of a reference date pursuant to s9(2)(b) of the SOP Act, which relevantly provides:

“…if the contract makes no express provision with respect to the matter, the date occurring 20 business days after the previous reference date or (in the case of the first reference date) the date occurring 20 business days after –

(i) construction work was first carried out under the contract; or

(ii) related goods and services were first supplied under the contract.”

64Building Principals submits that Mr Wright deposed that Building Principals first provided services under the Contract on 23 March 2023. Mr Wright, in his affidavit affirmed on 6 August 2025, also sets out his calculation of the reference dates – occurring every twenty business days from 23 March 2023 – and states that services were provided continuously thereafter.

65Building Principals contends that on this basis, the reference dates prior to the payment claim occurred on 24 April 2023, 23 May 2023, 21 June 2023, 19 July 2023, 16 August 2023, 13 September 2023, 12 October 2023, 10 November 2023, 8 December 2023, 10 January 2024, 8 February 2024, 7 March 2024, 9 April 2024, 8 May 2024, 5 June 2024, 4 July 2024, 1 August 2024, 29 August 2024, 26 September 2024, 25 October 2024, 25 November 2024, 23 December 2024, 23 January 2025, and 21 February 2025.

66Building Principals contends that the payment claim is supported by a reference date which occurred on 21 February 2025. No other payment claim has been served in respect of this reference date.

67Building Principals argues that the payment claim, having been served on Chapter 03 on 7 March 2025 by way of email to “[email protected]”, is neither a “single or one-off payment” (within the meaning of s 9(2)(c) of the SOP Act) or allocated or intended as a “final payment” (within the meaning of s 9(2)(d) of the SOP Act). Building Principals states that the payment claim served on 7 March 2025 only seeks payment for work performed under the contract to date. It asserts that it is not a “final claim”, noting that the Contract contemplated that Building Principals would continue providing services during the “Construction Phase” and eventually the “Defect and Liability Management Phase”.

68Chapter 03 submits that, to the extent it is contended by Building Principals that the Payment Claim was a claim for final payment, the reference date either:

(a) had expired under s9(2)(d)(iii)(A) of the SOP Act; or

(b)   had not yet accrued.

69Building Principals did not contend that the payment claim was a “final payment” which was triggered upon completion of the “framing stage”. Further, Building Principals did not rely on any express contractual provision for “final payment”. It is unnecessary for me to consider this issue, given Building Principals observes that, while it attempted unsuccessfully to suspend services, the Contract was only terminated on 14 May 2025 (after the reference date occurred on 21 February 2025 and the payment claim was served on 7 March 2025) and, therefore, the payment claim was not a final claim.

70As noted above, Chapter 03 contends that the last completed milestone was the framing stage in November 2024. I accept Building Principals’ own evidence that no work was done after November 2024. Chapter 03 then concludes that the reference date arose no later than 30 November 2024 and that, by force of s14(4)(b) of the SOP Act, any claim founded on that reference date had to be served within three months. Chapter 03 calculated a deadline of 28 February 2025. My calculations are that the specified date for a payment claim to be served is 2 March 2025. However, the Payment Claim was served on 7 March 2025 which was out of time on either computation, should the “last completed milestone” analysis be accepted as the correct methodology.

71However, given my anterior findings that the SOP Act applies to the Contract and that the Contract does not expressly deal with the timing for progress payments, it is open to Building Principals to rely on a “rolling” reference date implied by s9(2)(b) of the SOP Act. Such reference dates occur every twenty days from the date work is first carried out.

72I accept Building Principal’s submissions that, under s9(2)(b) of the SOP Act, the “last completed milestone” is irrelevant as the completion of any such work has no bearing on the implication of a reference date under that section. Section 9(2)(b) implies a reference date every twenty days from when work was first carried out (i.e. on 23 March 2023) – not when work was last carried out (cf. ss9(2)(c) and 9(2)(d)(iii)(A) of the SOP Act).

73The authorities indicate that a payment claim must be submitted on or after a reference date.

74In Southern Han, the High Court held that a reference date is the “precondition” to a valid payment claim.[22]

[22] Southern Han at [61]–[62].

75In All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd, the majority applied Southern Han and held that:

“[A] statutory payment claim served before the relevant reference date is not served ‘on or from’ that reference date for the purpose of the NSW SOP Act, the effect being that the phrase ‘on or from’ when properly construed, is to be understood as meaning ‘on or after’ the relevant reference date.”[23]

[23] [2017] NSWCA 289 at [14].

76Finally, in MKA Bowen v Carelli Constructions, Digby J held that:

“In my view … it is sufficiently clear in light of Southern Han and All Seasons that s 9 and s 14 of the SoP Act (Vic) do not operate so as to permit the valid service of a payment claim prior to the relevant reference date which itself establishes a valid foundation for that payment claim to be made under the SoP Act (Vic) …”. (references omitted)[24]

[24] [2019] VSC 436 at [60].

77Where the Contract does not provide a reference date, the default reference date provisions in s9(2)(b), (c), and (d) of the SOP Act apply. In the present case, the Contract does not provide an express provision for reference dates. Under s9(2)(b) of the SOP Act, the first reference date in respect of the Contract arises twenty business days after the commencement date of construction work and subsequent reference dates arise every twenty business days thereafter.

78The first reference date arises twenty business days after the construction works were first carried out pursuant to s9(2)(b)(i) of the SOP Act, and on the evidence, the works were first carried out on 23 March 2023. Accordingly, the first reference date arose on or about 24 April 2023. I accept the calculation of the refence dates as set out in Mr Wright’s affidavit affirmed on 6 August 2025.

79In these circumstances, in my view, the payment claim served on 7 March 2025 was supported by a rolling twenty-day reference date that occurred on 21 February 2025 – accordingly, it had a valid reference date.

80For the reasons set out above, on the balance of probabilities, the payment claim is valid for the purposes of the SOP Act.

Conclusion

81Building Principals seeks interest under s12(2)(a) of the SOP Act at a rate of 10.00% per annum (being the rate fixed under s2 of the Penalty Interest Rates Act 1983 (Vic)) in circumstances where the Contract does not include a provision for interest. The payment claim was due on 6 April 2025.

82I accept that Building Principals is entitled to interest on the unpaid amount of the progress payment that was due and payable under s12(2)(a) of the SOP Act, calculated at the rate of penalty interest for the period between 6 April 2025 to 8 September 2025. As such, I will award interest in the sum of $3,690.58.

83Accordingly, for the forgoing reasons, there is a valid reference date for the payment claim and there is judgment for the plaintiff in the sum of $86,350.00 (including GST), together with interest and costs. 

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Certificate

I certify that these 21 pages are a true copy of the judgment of Her Honour Judge Burchell delivered on 8 September 2025.

Dated: 8 September 2025

Gavin Choong

Associate to Her Honour Judge Burchell