Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In liquidation) [2019] NSWCA 11

The NSW Court of Appeal has decided that SOPA enforcement is available to claimants in liquidation in NSW, contrary to its equivalent Court in Victoria.   The same statutory words now have consequences that differ north and south of the border.

Why does this matter? 

Get your 5 Minute Fix of major projects and construction news. This issue: significant security of payment reform on the agenda in WA, review of the BCIIP Act tabled, Infrastructure Victoria's report on the investment required to support automated and zero emissions vehicles, more on cladding and the High Court grants special leave to consider the availability of a quantum meruit claim as an alternative to contract damages upon repudiation of a building contract.

Review of security of payment reform for WA subcontractors released

This is a quote from a 2015 report by the Senate Economics References Committee into insolvency in the Australian construction industry (chapter 11.4).

A recent Supreme Court of Queensland decision as to what constitutes a ‘’construction company’’ under the QBCC Act brings consequences for construction groups who undertake works under different State entities.

Partner, Ted Williams, and Senior Associate, Gemma Twemlow, review the decision and what it means for construction companies.

Get your 5 Minute Fix of major projects and construction news. This issue: discover the latest cladding developments; resources construction work now caught by WA training levy; mind the gap: public transport at the urban fringe; avoid slip-ups in your payment schedule; and the availability of insolvency processes under the Corporations Act 2001 for recovering SOP debts.

Cladding update ‒ NSW

On 28 September 2018, the NSW Supreme Court in Greenwood Futures v DSD Builders (No. 2) [2018] NSWSC extended a stay of a judgment in favour of a contractor based upon a Security of Payment Act NSW (SOPA) adjudication on the basis that the contractor was at risk of insolvency. This is consistent with previous decisions of the court in similar circumstances.

It is fair to say that my initial reading of the Building Industry Fairness (Security of Payment) Act 2017 (BIFA) a little over 12 months ago left me shocked in terms of the sheer scale and magnitude of the reforms and changes proposed to be imposed on the industry.

This week’s TGIF examines a recent decision of the New South Wales Court of Appeal in Hosking v Extend N Build Pty Limited [2018] NSWCA 149, which considered whether payments made by a third party to an insolvent company’s creditors could be recovered by the liquidator as unfair preferences.

What happened?

While most Australians enter construction contracts with no issues whatsoever, there remain instances in which builders take advantage of consumers. For instance, we draw attention to the example of Tevita and Siosiana Ungounga’s (“the Ungoungas”) and theircompany, T & T Sandstone Construction Pty Ltd (“T & T Sandstone”), recently published by NSW Fair Trading.

A recent NSW Supreme Court decision has decided that an insolvent contractor can claim under Security of Payment legislation, rejecting Victorian Court of Appeal precedent as "plainly wrong". It might have significant ramifications for participants in the building and construction industry across Australia.

In Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2018] NSWSC 412, the NSW Supreme Court considered the extent to which Security of Payment (SOP) legislation can be relied upon by an insolvent contractor.