Dial D Pty Ltd as trustee for the Smith Street Unit Trust v Kingston Building (Australia) Pty Ltd

Dial D Pty Ltd as trustee for the Smith Street Unit Trust (the appellant) appealed to the Court of Appeal of New South Wales against a decision of Stevenson J concerning a building contract with Kingston Building (Australia) Pty Ltd (the respondent). The dispute centred on whether the Superintendent was entitled to issue a progress payment certificate in a month where no work was performed and the contractor had not issued a progress claim, and consequently, whether such a certificate was void.

The primary legal issues before the Court of Appeal were the proper construction of the building contract, specifically clauses relating to the making of progress claims and the issuance of payment certificates by the Superintendent. The court was required to determine whether the Superintendent's power to issue a certificate was contingent upon the contractor first issuing a progress claim, and whether a certificate issued in the absence of a progress claim could be considered valid or was consequently void.

The Court of Appeal reasoned that the contract did not require the Superintendent to wait for a progress claim from the contractor before issuing a payment certificate. The court interpreted the relevant contractual provisions to mean that the Superintendent had an independent power to issue a certificate, even if no work had been done in a particular period and no progress claim had been made by the contractor. Consequently, the Superintendent's progress certificate was not void. The appeal was allowed in part, with the declaration made by Stevenson J being set aside, but the appeal was otherwise dismissed.