Kennedy Civil Contracting Pty Ltd (subject to a Deed of Company Arrangement) v Total Construction Pty Ltd

In the case of Kennedy Civil Contracting Pty Ltd (subject to a Deed of Company Arrangement) v Total Construction Pty Ltd, the primary dispute involved the validity of a sub-contractor’s claim for payment under the Building and Construction Industry Security of Payment Act 1999 (NSW). Kennedy Civil Contracting, the principal contractor, contested the validity of payment claims made by Total Construction, the sub-contractor. The case was heard in the Supreme Court of New South Wales.

The central legal issues before the court were whether the sub-contractor’s payment claims complied with the statutory requirements under section 13 of the Security of Payment Act, whether the claims were properly characterised as ‘letters of demand’ rather than ‘payment claims,’ and whether there were multiple claims involved. Additionally, the court examined if the sub-contractor had engaged in misleading or deceptive conduct or abused the statutory process, considering the contractual requirements for progress claims in relation to the statutory requirements.

The court found that the sub-contractor’s claims did not strictly comply with the statutory format for payment claims, but the court adopted a flexible approach under the act, recognising the intent behind the claims. The court held that the claims, while not perfectly formed, were not purely ‘letters of demand’ and could be considered as valid payment claims. The court also determined that there were multiple claims rather than a single overarching claim, and that the sub-contractor had not engaged in misleading or deceptive conduct or abused the statutory process. The court acknowledged the contractual requirements for progress claims but emphasised that these did not override the statutory requirements under section 13.

The court’s final orders addressed the anticipatory stay application, considering the likelihood of the sub-contractor obtaining judgment for the statutory debt. The court noted the serious issues to be tried from the principal contractor’s muted claim and the significance of the Deed of Company Arrangement, which provided for any proceeds from judgment to be held on trust. The specific orders were detailed in paragraph 165.