Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (In Liq)

Nepean Engineering Pty Ltd (the appellant) sought to appeal a decision concerning a payment claim made under the *Building and Construction Industry Security of Payment Act 2002* (NSW) (the Act). The respondent, Total Process Services Pty Ltd (in liquidation), had made a payment claim to the appellant. The appellant did not provide a payment schedule in response. The core of the dispute revolved around whether the payment claim, which the appellant argued failed to adequately identify the work performed, was a nullity and therefore incapable of supporting a cause of action under section 15 of the Act, particularly in the absence of a payment schedule. The appellant also contended that summary judgment should not have been available to the respondent.

The Court of Appeal was required to determine whether a payment claim that purports to identify the work done, but does so inadequately, is a nullity under the Act. Further, the Court had to consider whether, in circumstances where no payment schedule is provided by the respondent, such a deficient payment claim could still support a cause of action under section 15 of the Act, which provides for the recovery of progress payments. The Court also had to assess whether summary judgment was an appropriate remedy given the appellant's arguments regarding the validity of the payment claim.

The Court of Appeal dismissed the appeal, upholding the primary judge's decision. Their Honours reasoned that the Act's scheme contemplates that a respondent who fails to provide a payment schedule within the prescribed time is liable to pay the claimed amount. The Court held that a payment claim is not a nullity simply because it may not perfectly identify the work performed. Instead, the adequacy of the identification is a matter to be assessed, and the absence of a payment schedule means the respondent is liable for the claimed amount, subject to any defence that might arise from a fundamentally invalid claim. The Court found that the payment claim in this instance was not so fundamentally flawed as to be a nullity, and therefore, in the absence of a payment schedule, it supported the respondent's claim for payment. Consequently, summary judgment was appropriately granted.