10 May 2018

Supporting Statements – A Fork In The Road?

Ian Roberts SC

On 30 April 2018 Justice Ball handed down his decision in Central Projects Pty Ltd v Davidson [2018] NSWSC 523. The case dealt with the requirements of sections 13(7) and (8) of the Building and Construction Industry Security of Payment Act (NSW) 1999 relating to supporting statements.

Sections 13(7) to (9) were introduced to the Act by the 2013 amending Act and apply to Construction Contracts entered into after 21 April 2014. The effect of the amendment was to require head contractors to accompany all payment claims with a supporting statement in the prescribed form.

The decision in Central Projects is important for two reasons. First, it confirmed an obiter view expressed by McDougall J in Kitchen Xchange Pty Ltd v Formacon Building Services Pty Ltd [2014] NSWSC 1602 regarding compliance with s.13(7). Second, it represents a divergence of views between two Judges of the Technology and Construction List on an important issue.

As to the first reason, in Kitchen Xchange, McDougall J said at [45] it is easy to see whether the requirement of subs (7) has been met, because it is easy to see whether the accompanying statement meets the requirements set out in subs (9), incorporating as it does the relevant clause and form set out in the Regulation.

Meagher JA implicitly followed that approach in Kyle Bay Removals Pty Ltd v Dynabuild Project Services Pty Ltd [2016] NSWSC 334 when dealing with a claim that the supporting statement did not include all the relevant subcontractors. His Honour found that the contractor’s explanation was sufficient to avoid a breach of s.13(8) but had compliance with s.13(7) required an examination of the accuracy and completeness of the supporting statement there would have been no need to consider the explanation for the purposes of s.13(8).

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