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

Total Construction Pty Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning a payment claim made by Kennedy Civil Contracting Pty Ltd. The dispute centred on whether a letter from Kennedy Civil's solicitors, accompanied by invoices, constituted a valid payment claim under the *Building and Construction Industry Security of Payment Act 1999* (NSW). Total Construction argued that this correspondence did not meet the statutory requirements for a payment claim.

The central legal issue before the Court of Appeal was whether the letter and attached invoices, when considered in light of previous payment claims, qualified as a payment claim within the meaning of section 13(1) of the Act. This required the court to determine if the asserted indebtedness in the letter, coupled with the invoices, satisfied the statutory criteria for a claim for a progress payment.

The Court of Appeal found that the primary judge had erred in concluding that the letter and invoices constituted a valid payment claim. The court reasoned that the correspondence did not clearly and unequivocally assert an entitlement to a progress payment in the manner required by the Act. Instead, it was viewed as a demand for payment of an alleged debt, rather than a claim for a progress payment arising from construction work. The court applied the principles that a payment claim must clearly identify the work performed and the amount claimed as a progress payment, and that mere assertion of a debt is insufficient.

Consequently, the appeal was allowed with costs. The parties were directed to file short minutes of order by 2 February 2024 to facilitate any further orders necessary to give effect to the appeal's outcome.