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[2026] NSWCA 99
respondent. Leave to appeal granted; appeal dismissed; appellant ordered to pay respondent’s costs; $3,822,378.26 paid into Court ordered to be paid forthwith to the respondent.
9 cited instruments linked from this judgment.
The Court held that a builder’s payment claim can trigger the SOP Act’s payment consequences when the recipient does not serve a payment schedule, even if the builder has not first proved the claimed work was done. The parties’ contract permitted claims from the 21st day of each month once the owner’s quantity-surveyor option was used, so the two claims were not premature. The disability accommodation, with shared facilities and bedrooms that were not independently equipped as residences, was not shown to comprise “self-contained units”. The proposed expert-evidence issue was speculative. The appeal was dismissed after leave was granted.
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2,438 words · generated 08/10/2026
A J Portelli Medical Pty Ltd, as trustee of the A J Portelli Medical Trust, contracted with Black Sheep Building Pty Ltd on 14 May 2025 for the design and construction of high physical support accommodation at North Gosford. The project comprised four buildings, each intended to accommodate residents with disabilities. The contract scope included four buildings, each with five high physical support rooms and nurses’ quarters, and required compliance with National Disability Insurance Scheme Design Standards and SDA Guidelines [9].
The contract price was $13,944,595. The contract’s progress-claim arrangements included a general provision for claims on or before the 21st day of the month and a special condition for claims to be submitted to the owner’s quantity surveyor on the 21st of each month if the owner used one [9]-[11]. The Court noted that Portelli had used the quantity surveyor option, including because Black Sheep charged the contractual $5,500 assessment amount for each claim [52].
Black Sheep sent PC3 on 21 August 2025 and PC4 on 22 September 2025. The claims included work claimed for periods spanning 22 July to 21 August and 22 August to 21 September respectively [56], [59]. Portelli paid some amounts but did not pay either claim in full and did not serve a payment schedule under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) [3]. Black Sheep sued for the unpaid portions as a debt due under ss 14 and 15. The primary judge granted summary judgment for $3,822,378.26, including interest [4].
Portelli’s appeal arguments were that the claims could not trigger statutory liability unless Black Sheep objectively proved that claimed work had been done; that the claims had been served too early; and that the project was residential building work requiring insurance because the buildings or bedrooms were “self-contained units” under the Home Building Act 1989 (NSW) [5]-[6]. The Court granted leave to appeal but dismissed the appeal, ordered costs against Portelli, and directed that the $3,822,378.26 paid into Court be paid to Black Sheep [78]-[80].
The first issue concerned the kind of claim recognised by the SOP Act. Free JA read ss 13, 14 and 15 together. Section 13 permits a person who “is or who claims to be entitled” to a progress payment to serve a claim, and requires the claim to identify the work and amount the claimant “claims to be due” [38]. Under s 14(4), if the recipient does not serve a payment schedule within the required time, the recipient becomes liable to pay the claimed amount. Section 15(2) permits recovery of an unpaid portion as a debt [39].
The Court rejected a construction under which a claimant had to prove the claimed work as an objective fact before the claim could trigger those consequences. In the Court’s reasoning, that would conflict with Parliament’s choice to refer to what a claimant “claims” and to a person who “claims to be” entitled [40]-[41]. The decisive point was the statutory consequence of failing to respond: the debt arises from the Act because no payment schedule was served, not because the claimant has established its underlying contractual entitlement [43]. The Court distinguished that immediate statutory process from adjudication or ultimate litigation about the parties’ substantive rights [40], [42].
That reasoning depends on the role the judgment assigns to a payment schedule. If a recipient disputes any part of a claim, s 14 provides a way to identify the amount disputed and the reasons for withholding it, and the statutory adjudication process can follow [43]. The Court therefore concluded that Portelli’s proposed proof requirement would undermine the statutory process. It was not necessary for Black Sheep first to demonstrate that the work referred to in PC3 and PC4 had in fact been performed [44].
On timing, the Court considered ss 13(1A), 13(1B), 13(5) and 13(6). Section 13(1A) sets a monthly default date for claims. Section 13(1B) allows an earlier date where the construction contract makes provision for one. The Court treated the contract’s quantity-surveyor condition as effective because Portelli had chosen to use a quantity surveyor. It rejected the suggestion that only unconditional contractual terms could identify an earlier date: once the condition was met, the contract provided for claims on the 21st of the month [51]-[55].
The Court then applied that timing rule to each claim. PC3 was served on 21 August and covered work from 22 July to 21 August. The claim could include August work up to the claim date as well as work from July [56]. PC4 was served on 22 September and covered work from 22 August to 21 September. The Court held that it could include work carried out in both months, and could repeat the unpaid amount from PC3 because s 13(6)(b) permits an amount previously claimed to be included again [59]. The claims were therefore not premature [60].
The remaining issue concerned the meaning of “self-contained units” in Sch 1, cl 3(3)(d) of the Home Building Act. That provision excludes specially designed accommodation for persons with a disability from the definition of “dwelling”, except for self-contained units [63]. If the project involved residential building work, s 8(2)(b) of the SOP Act and s 92 of the Home Building Act were relevant because of the absence of the insurance identified in the judgment [61].
The Court rejected both versions of Portelli’s proposed characterisation. Treating each whole building as a self-contained unit was inconsistent with its design: five residents’ bedrooms, nurses’ quarters, and shared facilities such as kitchen, living, dining and laundry areas [13], [67]. Treating each bedroom with an ensuite as a self-contained unit also failed because the bedrooms did not contain the facilities needed to function as a separate residence, including kitchen and living areas [69].
The wider statutory context reinforced those conclusions. The Court reasoned that Portelli’s constructions would mean that the exception for self-contained units swallowed the exclusion for disability accommodation, leaving the exclusion with little or no practical work [68], [70]. It also rejected the suggestion that possible expert evidence created a triable factual dispute. Portelli had not established a realistic basis for expert evidence supporting either proposed meaning, and even such evidence would not overcome the statutory context [72]-[75].
The judgment’s account of the law before the dispute focuses on the operation of the SOP Act after the 2018 amendments. The Court explained that before those amendments the entitlement to a progress payment was linked to a “reference date” under the construction contract. The amendments removed that concept and introduced s 13(1A), allowing monthly claims, together with s 13(1B), preserving the parties’ ability to provide for an earlier claim date [47]-[49].
The judgment describes the purpose of the amended scheme as permitting monthly payment claims and avoiding contractual restrictions that could delay progress payments. It also explains that s 13(1B) was intended to preserve contractual freedom to nominate an earlier date [48]-[49]. The present decision applies that framework to a conditional contract provision: a contractual trigger can qualify once the condition is satisfied [53]-[55].
For claims made without a payment schedule, the decision clarifies that the claimant need not establish the truth of the claim as a precondition to statutory liability. The Act’s consequence follows from the recipient’s failure to serve a payment schedule, not from a prior judicial finding about the claimant’s underlying contractual rights [40]-[44]. The Court also stresses that payment under the statutory process is interim in character and does not determine the parties’ ultimate contractual rights [42].
On the Home Building Act issue, the judgment applies the words “self-contained units” by reference to both their ordinary residential sense and the statutory structure. It does not create an exhaustive checklist of facilities needed for every possible self-contained unit. Rather, it rejects these proposed characterisations of the particular buildings and bedrooms because of their shared facilities, the rooms’ limited features, and the consequences of Portelli’s reading for the statutory exclusion [65]-[70].
The decision does not establish a general test for every disability-accommodation design, nor does it decide what factual features would make other accommodation a self-contained unit. Its conclusions are tied to the plans, contract and arguments before the Court [12]-[13], [76].
At [41], the Court says that “the essence of a claim is that it is based on what the issuing party ‘claims to be’ entitled to.” In plain English, the SOP Act’s payment-claim process begins with an assertion of entitlement. The claimant’s assertion is not the same thing as final proof of the underlying contract claim.
At [43], the Court explains that the debt arises “as a consequence of the lack of response to a claim being made”. In plain English, where the statutory conditions are met and the recipient does not serve a payment schedule, the Act itself supplies the basis for recovery of the unpaid claimed amount. The underlying merits may still be disputed separately.
At [54], the Court says conditional and unconditional contract provisions can both identify a permitted claim date. In plain English, a contract does not have to set an unconditional date for s 13(1B) to operate. Here, the owner’s use of a quantity surveyor activated the relevant provision.
At [68], the Court says Portelli’s reading would allow the exception to “devour the exclusion itself”. In plain English, a construction that made almost all specially designed disability accommodation a self-contained unit would deprive the statutory exclusion of much of its intended effect.
At [72]-[75], the Court characterises the possible expert evidence as speculative and finds that the proposed meanings remained inconsistent with the statutory context. In plain English, simply suggesting that an expert might support a party’s interpretation does not establish a substantial factual dispute. The prospect needs a realistic basis and must be relevant to deciding the case.
The payment-claim reasoning is especially relevant to a dispute where a contractor serves a payment claim under the NSW SOP Act, the recipient does not serve a payment schedule, and the recipient later argues that the claimant must prove the claimed work as a condition of statutory recovery. The judgment holds that objective proof of the underlying work is not a prerequisite to the statutory liability that follows from non-response [38]-[44]. It does not mean that the underlying contractual dispute is finally resolved in the claimant’s favour; the Court expressly distinguishes the statutory process from ultimate determination of contractual rights [40], [42].
The timing analysis is relevant where the contract specifies an earlier date for claims and the contractual provision is conditional. The relevant questions include whether the condition was met, what date the contract provided, and whether the claim includes work from the current or a previous month. In this case the owner’s quantity-surveyor option had been exercised, the contract provided for claims on the 21st, and the claims could include work up to that date and from a preceding month [52]-[59].
The “self-contained units” analysis may be relevant to specially designed accommodation for people with disabilities where the Home Building Act’s residential-building-work definition is in issue. The judgment’s reasoning draws attention to the statutory exception, the facilities available to residents, whether facilities are shared, and whether the proposed construction would deprive the exclusion of practical operation [63]-[70]. It does not establish that all supported accommodation is excluded or that every room with an ensuite is necessarily outside the concept. The actual design and statutory context matter.
Finally, the expert-evidence discussion applies where a party resists summary judgment by suggesting that an expert might provide evidence about technical or trade meaning. The decision indicates that a speculative possibility is insufficient; the proposed evidence must have a realistic foundation and a relevant bearing on the issue, while still being assessed in its statutory context [71]-[75].
The material provided contains this judgment and the cases it cites, but no later decisions applying or distinguishing A J Portelli Medical Pty Ltd v Black Sheep Building Pty Ltd. Its subsequent treatment therefore cannot be assessed from the supplied source.
Within this judgment, Free JA relies on Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135 for the broader statutory context and describes the earlier case as supporting an understanding of the SOP Act’s claim requirements [42]. The Court also cites authorities concerning the threshold for summary disposal where there is a serious conflict or substantial factual question [72]. Those are authorities the present Court uses; they are not later treatment of this decision.
The decision itself grants leave to appeal because Portelli sought to raise issues of principle under the SOP Act, but ultimately rejects the appeal grounds [78]. That procedural outcome does not establish how later courts will apply the judgment’s reasoning in materially different contractual or accommodation settings.
The judgment does not determine what evidence would be sufficient to establish a technical meaning of “self-contained unit” in another case. It holds that Portelli had not shown a realistic prospect of expert evidence supporting its proposed readings, and that those readings were inconsistent with the context in this case [73]-[75]. A future dispute with different evidence or building design may require a separate analysis.
Nor does the judgment give a comprehensive list of features necessary for a unit to be “self-contained”. It identifies the lack of kitchen, living, dining and laundry facilities as relevant to rejecting the bedroom characterisation, while acknowledging that some apartments may not have their own laundry facilities [69]. The judgment’s conclusion is contextual rather than a universal checklist.
The decision also does not address every possible question about a payment claim’s contents or the proof required in later proceedings. Portelli no longer pursued its separate argument that the work was inadequately identified, so that issue was not determined on appeal [34]-[35]. The Court’s holding concerns the asserted need for objective proof as a prerequisite to statutory liability following failure to serve a payment schedule [37]-[44].
Finally, the judgment explains that statutory payment consequences do not decide the parties’ ultimate contractual rights [40], [42]. It does not resolve what final contractual accounting between these parties might show. The orders resolve this appeal and direct payment of the sum held in Court, but the reasons preserve the distinction between the statutory recovery mechanism and final determination of substantive contractual entitlements [42]-[44], [79]-[80].
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: A J Portelli Medical Pty Ltd (ACN 669 583 475) ATF A J Portelli Medical Trust v Black Sheep Building Pty Ltd (ACN 665 735 197) [2026] NSWCA 99
Hearing dates: 9 March 2026
Date of orders: 27 May 2026
Decision date: 27 May 2026
Before: Ward P at [1]
Free JA at [2]
Griffiths AJA at [81]
Decision: (1) Leave to appeal is granted.
(2) Appeal dismissed.
(3) The appellant is to pay the respondent’s costs.
(4) The amount of $3,822,378.26 which was paid into Court by the appellant is to be paid out forthwith to the respondent.
Catchwords: CIVIL PROCEDURE — summary disposal — contract for design and construction of high physical support accommodation — recovery of unpaid payment claims — summary judgment for plaintiff below — whether triable issue as to valid service of payment claims — whether triable issue as to entitlement to claim progress payments where no insurance for residential construction — whether triable issue because of prospect of expert evidence informing statutory construction — no serious or substantial dispute of fact — no triable issue
BUILDING AND CONSTRUCTION — payment claims — Building and Construction Industry Security of Payment Act 1999 (NSW), s 13 — requirements for service of a valid payment claim — whether claimant must establish as a matter of objective fact that construction work was carried out within the relevant time period — failure to serve payment schedule — statutory liability arises from lack of response — payment claims not served prematurely
BUILDING AND CONSTRUCTION — Home Building Act 1989 (NSW), Sch 1, cl 3(3)(d) — residential building work — dwelling — accommodation specially designed for persons with a disability — meaning of “self-contained units” — no serious question of fact arising from speculative possibility of expert evidence on meaning of words — contextual indications of meaning of “self-contained units”
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW), ss 8, 11, 13, 14, 15
Building and Construction Industry Security of Payment Amendment Act 2018 (NSW)
Home Building Act 1989 (NSW), s 92
Supreme Court Act 1970 (NSW), s 101(2)(e)
A J Portelli Medical Pty Ltd (ACN 669 583 475) ATF A J Portelli Medical Trust
Black Sheep Building Pty Ltd (ACN 665 735 197)
Cases Cited: Chalak v G & G Mikhael Pty Ltd [2022] NSWCA 116
Clarence Street Pty Ltd v Isis Projects Pty Ltd (2005) 64 NSWLR 448; [2005] NSWCA 391
Fernandes Constructions Pty Ltd v Tahmoor Coal Pty Ltd t/as Centennial Coal [2007] NSWSC 381
General Accident Fire & Life Assurance Corporation Ltd v Commissioner of Pay-roll Tax [1982] 2 NSWLR 52
Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135
Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) (2005) 64 NSWLR 462; [2005] NSWCA 409
Rowston v Sydney County Council (1954) 92 CLR 605; [1954] HCA 66
R v AL (2016) 260 A Crim R 153; [2016] VSCA 156
Sidebottom v Cureton (1937) 54 WN (NSW) 88
Sharp v Glasser (1946) 46 SR (NSW) 379
Texts Cited: P Herzfeld and T Prince, Interpretation (3rd ed, 2024, Lawbook Co)
Category: Principal judgment
Parties: A J Portelli Medical Pty Ltd (ACN 669 583 475) ATF A J Portelli Medical Trust (Appellant)
Black Sheep Building Pty Ltd (ACN 665 735 197) (Respondent)
Representation: Counsel:
D S Weinberger SC / J Courtenay (Appellant)
F P Hicks SC / S J Steinhoff (Respondent)
Solicitors:
Aquila Lawyers (Appellant)
Level Playing Field Lawyers (Respondent)
File Number(s): 2026/4922
[This headnote is not to be read as part of the judgment]
The applicant, A J Portelli Medical Pty Ltd atf A J Portelli Medical Trust (Portelli), and the respondent, Black Sheep Building Pty Ltd (Black Sheep), are parties to a contract (Contract) for the design and construction of “high physical support accommodation” at Gosford. The development involves the construction of four buildings, each of which is designed to accommodate residents with disabilities.
A dispute arose about two payment claims issued by Black Sheep to Portelli in August 2025 (PC3) and September 2025 (PC4), purportedly pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act). Portelli did not pay the full amounts claimed in PC3 and PC4. Nor did it serve a payment schedule in response to either payment claim. Black Sheep brought proceedings in the Supreme Court asserting an entitlement to recover the unpaid portions of PC3 and PC4 as a debt due, pursuant to ss 14 and 15(2)(a)(i) of the SOP Act. Black Sheep sought summary judgment. The primary judge was satisfied that no triable issue arose and gave summary judgment in favour of Black Sheep in the sum of $3,822,378.26, comprising the unpaid portions of PC3 and PC4, plus interest.
Portelli sought leave to appeal. Its first argument was that there was a triable issue that PC3 and PC4 were not claims properly served on Portelli pursuant to s 13 of the SOP Act, so as to enliven a liability under s 14(4). Portelli’s primary contention in this regard was that a payment claim is not validly made and cannot enliven a liability on the part of the recipient unless it has been established as a matter of objective fact, and not merely as a matter of assertion by the claimant, that construction work was carried out within the relevant time period. Portelli also argued that PC3 and PC4 were served prematurely, having regard to the permitted times for service of a payment claim under subss (1A) and (1B) of s 13 of the SOP Act.
Portelli’s second argument was that, pursuant to s 8(2) of the SOP Act, Black Sheep had no entitlement to claim any progress payments under the SOP Act*,* because the development in question is “residential building work” and Black Sheep had no insurance in place for such work under the Home Building Act 1989 (NSW). Portelli’s argument turned on the proposition that the buildings to be constructed (or parts of those buildings) are “dwellings” within the meaning of the Home Building Act. It was common ground that the buildings in question constitute accommodation specially designed for persons with disability. Having regard to cl 3(3)(d) of Sch 1 to the Home Building Act, the decisive issue in applying the definition of “dwellings” then became whether the accommodation takes the form of “self-contained units”.
The Court held (Free JA, Ward P and Griffiths AJA agreeing), granting leave to appeal but dismissing the appeal:
As to the validity of service and the statutory liability arising from the payment claims
1. The essence of a payment claim under the statutory scheme is that it is based on what the issuing party “claims” to be entitled to. There is no room to construe the SOP Act as requiring that, as a precondition to the entitlement to payment created by the Act, the claimant must establish as a matter of objective fact that the work was performed. Such a requirement would be contrary to the plain words of the Act and the scheme that it creates. If the recipient of a payment claim wishes to resist payment, it should serve a payment schedule and engage the statutory process for adjudication of disputes. If the recipient neglects to do so, the statutory consequence is that a liability to pay arises: [48]-[54].
Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135, applied.
2. PC3 and PC4 were not served prematurely. Under s 13 of the SOP Act, applied by reference to the Contract, Black Sheep was permitted to serve those payment claims when it did. By a special condition in Sch 6, the Contract made provision for a payment claim to be served on the 21st day of each month. The fact that this contractual arrangement was conditional upon Portelli choosing to use a quantity surveyor does not affect that conclusion. Both conditional and unconditional contractual provisions can serve to identify the permitted date on and after which payment claims can be served.
3. Black Sheep was entitled to serve a payment claim on 21 August 2025 in respect of work in July and work in August up to the date of the payment claim. It was equally entitled to serve a payment claim on 22 September 2025 in respect of work spanning the period from 22 August 2025 to 21 September 2025: [55]-[70]
As to whether the accommodation takes the form of “self-contained units”
There is no serious triable issue in relation to Portelli’s argument that the accommodation being constructed is or contains “self-contained units”, such that Black Sheep required relevant insurance under the Home Building Act. Portelli’s characterisation of the accommodation is highly improbable and involves a construction of cl 3(3)(d) of Sch 1 that is impossible to reconcile with the statutory context. On Portelli’s approach, the label of “self-contained units” would apply to all, or practically all, accommodation specially designed for persons with a disability. The exception to the exclusion would thereby be given such a broad operation as to devour the exclusion itself, undermining the purpose of the clause: [71]-[80]
Portelli’s contention that it might be possible to adduce favourable expert evidence bearing on the trade meaning of “self-contained unit” was speculative. No serious or substantial question of fact, of the kind that would make summary judgment inappropriate, arises. Even if Portelli could obtain expert evidence in support of its preferred meaning of “self-contained units”, such a construction would be impossible to reconcile with the statutory context: [81]-[87].
General Accident Fire & Life Assurance Corporation Ltd v Commissioner of Pay-roll Tax [1982] 2 NSWLR 52, Sidebottom v Cureton (1937) 54 WN (NSW) 88, Sharp v Glasser (1946) 46 SR (NSW) 379, Rowston v Sydney County Council (1954) 92 CLR 605; [1954] HCA 66, applied.
WARD P: I agree with Free JA.
FREE JA: The applicant, A J Portelli Medical Pty Ltd atf A J Portelli Medical Trust (Portelli), is party to a contract (Contract) with the respondent, Black Sheep Building Pty Ltd (Black Sheep), for the design and construction of “high physical support accommodation” at Gosford. The development involves the construction of four buildings, each of which is designed to accommodate residents with disabilities. The Contract is a “construction contract” within the meaning of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act). It is common ground that at least some work under the Contract has been carried out by Black Sheep. This application for leave to appeal concerns two disputed claims for progress payments served on Portelli by Black Sheep in August and September 2025.
Payment Claim 3 (PC3) was served on 21 August 2025. Payment Claim 4 (PC4) was served on 22 September 2025. Each was stated to be a payment claim under the SOP Act. Portelli made some payments but did not pay either claim in full. Portelli did not serve a payment schedule under the SOP Act, so as to trigger the statutory machinery for dealing with disputed claims.
Black Sheep asserted that in those circumstances it was entitled to recover the unpaid portions of PC3 and PC4 as a debt due, pursuant to ss 14 and 15(2)(a)(i) of the SOP Act. It commenced proceedings in the Supreme Court and moved for summary judgment. The primary judge was satisfied that no triable issue arose and gave summary judgment in favour of Black Sheep in the sum of $3,822,378.26, comprising the unpaid portions of PC3 and PC4, plus interest pursuant to s 11(2)(a) of the SOP Act.
Portelli seeks leave to appeal and argues that the primary judge erred in two respects. Portelli’s first argument is that there was a triable issue that PC3 and PC4 were not claims properly served on Portelli pursuant to subss (1A) and (1B) of s 13 of the SOP Act, so as to enliven a liability under s 14(4). The resolution of that argument turns on the proper construction of ss 13, 14 and 15. Portelli’s primary contention in this regard is that a payment claim is not validly made and cannot enliven a liability on the part of the recipient unless it has been established as a matter of objective fact, and not merely as a matter of assertion by the claimant, that construction work was carried out within the relevant time period. Portelli also argues that PC3 and PC4 were served prematurely.
Portelli’s second argument is that there was a triable issue about whether Black Sheep had any entitlement to claim progress payments under the SOP Act, because of the nature of the development to which the Contract relates. Black Sheep was not relevantly insured for “residential building work” under the Home Building Act 1989 (NSW). Portelli contends that there is a triable issue that the work in question is residential building work, which would have the consequence of disentitling Black Sheep from recovering progress payments pursuant to the SOP Act because of s 8(2) of that Act. That contention turns on the proposition that the buildings to be constructed (or parts of those buildings) are “dwellings” within the meaning of the Home Building Act. In circumstances where the buildings in question constitute accommodation specially designed for persons with disability, the decisive issue in applying the definition of “dwellings” is whether the Contract provides for accommodation for disabled persons in the form of “self-contained units”. Portelli says that there is a triable issue in this respect and in the circumstances summary judgment ought not have been given.
In practical terms the summary judgment awarded by the primary judge resolved the claim brought by Black Sheep. Nevertheless, summary judgment is a form of interlocutory judgment. As such, leave is required pursuant to s 101(2)(e) of the Supreme Court Act 1970 (NSW). An order for summary judgment is not a matter of practice and procedure. It follows that the particular caution which attends a grant of leave in matters of that kind is not warranted: Chalak v G & G Mikhael Pty Ltd [2022] NSWCA 116 at [8]-[12].
For the reasons which follow, Portelli has failed to demonstrate that there is a triable issue on either of the two bases advanced. Leave should be granted but the appeal dismissed, with costs.
Progress claims & payments (refer clause 15(b))
(i) Payment claims are to be made on the due date which is determined by the following:
(A) every …… days from commencement of work; or
(B) on or before the 21 [sic] day of the month.
(ii) Payment of the claim, as agreed or approved, will be made:-
(A) … days after the payment claim is received; or
(B) by the last day of the next month after the payment claim is submitted provided the payment claim is submitted by the due date.
The parties are encouraged to make frequent and smaller claims and to agree on more regular and consequently smaller payments as this will improve cash flow and allow the work to be monitored and changed if necessary.
15. Deposit & progress payments
…
(b) The contract price or sum is to be claimed and paid in accordance with the timetable described in Schedule 2 item (c).
If no period or date is identified at Schedule 2 item (c)(ii) for payment to the Builder to be made then the period will be five (5) business days after a payment claim or request, which complies with clause 15, is made by the Builder.
(c) A progress payment claim by the Builder is to show:-
(i) the value of the contract work performed at the date of the claim;
(ii) the value and brief description of any variations;
(iii) any other adjustments under the provisions of the Contract;
(iv) the amount previously paid by the Owner;
(v) the amount claimed by the Builder being the difference BETWEEN the total of paragraphs (i), (ii) and (iii) AND paragraph (iv); and
(vi) the proper GST charge relevant to the works to which the claim relates.
…
(f) The making of any progress payment to the Builder is to be taken as payment on account.
(g) Should any progress payment or the final payment not be made within ten (10) days after request the Builder is entitled to interest thereon at the rate of one per cent (1.00%) per month. The Builder may also act to suspend work and, as appropriate, terminate the contract. Refer clauses 12 and 27.
Payment Claims
The Owner has the option to use a Quantity Surveyor to assess any Payment Claim provided by the Builder, at the cost of the Owner. As a variation to the contract sum, the Builder shall charge a sum of Five Thousand dollars ($5,000 + gst) for any claim prepared and assessed by the Quantity Surveyor. The Builder shall not be obligated to provide Subcontractor Payment Claims as part of the Payment Claim assessment, due to the unreliable, unpunctual and non-conforming nature of Subcontractor submissions. The Builder shall provide a Subcontractor Statement to bestow the Owner and Quantity Surveyor as surety, surrounding the payments to its subcontractors and creditors, as is the case in conforming Payment Claims.
The Builders Payment Claims must be submitted to the Owners Quantity Surveyor on the Twenty First (21st) day of each month. The Quantity Surveyor must assess each Payment Claim within Five (5) working days of receipt of the Payment Claim, and provide by way of written notice, to the Owner and the Builder their assessment. The Owner must pay the Builder on the last day of that calendar month.
If the Quantity Surveyor does not approve the claim in full, then the Owner must pay the amount that is approved at the end of that calendar month, as per the Terms and Conditions of the Contract.
Any amount that is not approved as part of the Payment Claim by the Quantity Surveyor must be provided to the Owner and the Builder in writing, including reasons for withholding the portion of the Payment Claim, as assessed against the Builders detailed BOQ (bill of quantities).
…
The Court was taken to approved plans for the buildings being constructed pursuant to the Contract. It was common ground that there is no relevant difference, for the purposes of resolving the issues on the application, between the four dwelling buildings which make up the development.
Each building contains five bedrooms, each with an ensuite bathroom containing a toilet, shower and sink. There are various common facilities within each building. It is readily apparent that many of those facilities have been incorporated and designed to address the special needs of the occupants and those providing disability support services to them. In addition to shared laundry, living, dining and kitchen facilities, there is a plunge pool/shared bath facility, nurses’ quarters and a reception area.
PC3 was sent by email from Black Sheep to Portelli on 21 August 2025. The cover email relevantly referred to a new payment claim in respect of the Gosford project, identified as “BS90”. The email explained that although there was a “full invoice value” referred to in the attached material, the amount being sought as a progress payment was $480,004.21. This was described as the sum of $460,464.25, $14,039.96 and $5,500.00. The source of each of those figures is explained below.
A number of documents were attached to the email. One was a tax invoice. The tax invoice contains the statement that “This payment claim is made under ‘the Building and Construction Industry Security of Payment Act 1999’”. The invoice describes a number of line items with corresponding amounts. Relevantly, it includes the following items:
“Payment claim 3 for contract works (as per trade breakdown)”. The amount recorded against this item is $460,464.25, inclusive of GST;
“Payment of shortfall of BS67”. The amount recorded against this item is $14,039.96, inclusive of GST; and
“QS claim assessment (refer Schedule 6 – Special Conditions)”. The amount recorded against this item is $5,500.00, inclusive of GST. Plainly enough, this is a reference to the contractual entitlement of the Builder to claim $5,500.00 for any claim prepared and assessed by the Quantity Surveyor.
It can be seen that these amounts correspond to the three amounts referred to in the cover email as comprising the total claim amount of $480,004.21.
The tax invoice serves to explain the shortfall in respect of what is described as “BS67”. This is identified in the tax invoice as payment claim PC01, with the claim date of 8 April 2025. The claim total for PC01 is recorded as $1,534,060.00 and there is an entry for a payment on 30 June 2025 of $1,521,296.40. The difference between those amounts is $12,763.60. If GST is added, the amount becomes $14,039.96, which is the amount described in the tax invoice (and the cover email for PC3) as the shortfall in respect of BS67.
The second attachment to the email was a subcontractor’s statement regarding worker’s compensation, payroll tax and remuneration. It is described as a statement applying for work between 22 July 2025 and 21 August 2025, inclusive, which is the subject of the payment claim dated 21 August 2025.
The third attachment was a trade breakdown document. It takes the form of a table with a large number of items, extending over twenty pages. The first column records the line item. The second column contains a description of the relevant item. The third column is headed “Subtotal” and it is apparent from the contents of the table that this is the total amount provided for under the Contract for that category of work (as opposed to the proportion of such work that is the subject of a claim for payment). The fourth column is headed “PC03 – August 2025” and the fifth column is headed “Description of Individual Breakdown as per BC3 Contract dated 14 May 2025” (Description of Individual Breakdown).
The fourth and fifth columns serve to identify the work that is the subject of the payment claim. For the majority of items, no amount is recorded under “PC03 – August 2025” and where that is the case the corresponding entry in the column headed “Description of Individual Breakdowns” is “Not applicable” or “Nil to Claim”.
There are various line items where amounts are recorded under “PC03 – August 2025”. At the end of the trade breakdown, the total of those items is shown as $400,577.86. A builder’s margin of 10% is then shown as a claim of $40,057.79. The total of those two claimed amounts is shown as $440,635.65. This suggests some discrepancy with the tax invoice, given that the invoice records the amount of “Payment claim 3 for contract works (as per trade breakdown)” as $460,464.25. Neither party referred to this discrepancy, and nothing turns on it for the purposes of the argument about the validity of service of PC3 and PC4.
The more significant point for present purposes is that the trade breakdown serves to identify the various items of work said to support the total amount claimed in PC3. In some cases, the amount claimed is 100% of the amount provided for in the Contract. In other cases, the amount claimed is some lower percentage. In the “Description of Individual Breakdown” column, there are various entries to explain the amounts claimed in PC3. Examples include the following:
| Item no. | Description | Subtotal | PC-3 – August 2025 | Description of Individual Breakdown | | 3.01 | Public liability | $9,720.00 | 100% | $ 9,720.00 | Public liability insurance premium | | … | | | | | | | 4.02 | Site Manager (Full Time) | $208,000.00 | 8.33% | $ 17,326.40 | Monthly claim for site manager | | … | | | | | | | 5.01 | Portable Building – Site Office | $2,860.00 | 8.33% | $ 238.24 | Monthly claim for site office hire | | … | | | | | | | 10.03 | Demolish and dispose existing dwellings on site | $57,000.00 | 100% | $ 57,000.00 | Complete | | 10.04 | Flatten site in preparation for construction (create site shed pads) | $32,800.00 | 100% | $32,800.00 | Complete | | … | | | | | | | 11.02 | Strip site/ clear vegetation/ contaminated spoil/ dispose spoil | $197,160.00 | 100% | $197,160.00 | Complete |
PC4 was in a similar form to PC3. It was sent by email on 22 September 2025. The cover email did not provide any substantive explanation of the claim. It simply reads “[p]lease find attached payment claim 04 for Gosford”. As with PC3, the email attached a tax invoice, a subcontractor’s statement and a lengthy trade breakdown.
The tax invoice for PC4 is dated 22 September 2025. The invoice refers to certain delay costs, and identifies the following amounts as also being payable:
“Payment claim 4 for contract works (as per trade breakdown)”. The amount recorded against this item is $2,678,822.23, inclusive of GST;
“QS claim assessment (refer Schedule 6 – Special Conditions)”. The amount recorded against this item is $5,500.00, inclusive of GST;
“Plus the unpaid balance from Payment Claim 01 (BS67)”. The amount recorded against this item is $14,039.96, inclusive of GST; and
“Plus the unpaid balance from Payment Claim 03 (BS90)”. The amount recorded against this item is $460,464.25, inclusive of GST.
The total amount in the tax invoice is $3,679,593.90. As with the tax invoice for PC3, the tax invoice for PC4 states that it is a “payment claim … made under ‘the Building and Construction Industry Security of Payment Act 1999’”.
The subcontractor’s statement contains a statement that it applies for work between 22 August 2025 and 21 September 2025 inclusive.
The trade breakdown for PC4 is a table in the same format as the trade breakdown accompanying PC3. There are again a large number of items where no amount is claimed and the entry in the column headed “Description of Individual Breakdown” is “not applicable”. For those entries that were already the subject of a 100% claim in PC3, the relevant item is described as “Complete”, and no further amount is identified as being an amount claimed in PC4 (for example, line items 10.03, 10.04 and 11.02). Large amounts are claimed in relation to line items that were not the subject of a claim in PC3. Examples include the following:
| Item no. | Description | Subtotal | PC-4 – September 2025 | Description of Individual Breakdown | | 4.06 | Labourer | $78,000.00 | | $15,600.00 | Labour for demobilisation | | … | | | | | | | 11.03 | Site cut / Bench to achieve RLs | $863,900.00 | 100% | $863,900.00 | Complete | | 11.04 | Remove and dispose bulk uncontrolled fill from site | $772,200.00 | 100% | $772,200.00 | Complete |
Before the primary judge Portelli advanced arguments along broadly similar lines to those advanced before this Court, to the effect that PC3 and PC4 were “served prematurely” contrary to s 13 of the SOP Act, and that Black Sheep had no entitlement to recover progress payments under the SOP Act because the Contract is for “residential” building work.
The primary judge was satisfied that the dispositive questions that arose were suitable for determination on a summary basis. Her Honour dealt with that issue at [7] (reference omitted):
Portelli did vaguely suggest that further evidence would be necessary for the determination of these issues, without identifying what that evidence would be. I consider that the issues in dispute turn on a proper construction of legislation, the contract and the particular alleged payment claim documents, and the arguments were fully ventilated. There is no serious conflict as to any matter of fact that would prevent summary judgment.
The primary judge held that there was no triable issue about the service of the payment claims. Her Honour was satisfied that, pursuant to s 13(1A) of the SOP Act, for work carried out in July 2025 Black Sheep was entitled to issue a payment claim from 31 July 2025. Black Sheep did so when it issued PC3 on 21 August 2025, which also complied with the Contract (which stipulated that payment claims be served on the 21st day of the month). In relation to PC4 the primary judge was satisfied that, although the claim was served on the 22nd day of the month, service complied with the SOP Act, on the basis that for work carried out in August 2025 Black Sheep was entitled to issue a payment claim from 31 August 2025, which it did by serving a payment claim on 22 September 2025.
In relation to PC3, this reasoning did not address the inclusion in the payment claim of work carried out in August 2025. Likewise in relation to PC4, the primary judge did not directly address the inclusion in the payment claim of work carried out in September 2025. However, her Honour went on to find that the Contract provided for payment claims to be made to Portelli’s Quantity Surveyor on the 21st day of each month. Applying s 13(1B), it followed that Black Sheep was entitled to serve a payment claim on or after the 21st day of the month, rather than on or after the last day of the month. As explained below, that is the answer to any complaint about PC3 incorporating work carried out in August 2025 up to the date of the claim, and PC4 incorporating work carried out in September 2025 up to the date of the claim.
As for the character of the accommodation being built under the Contract, the primary judge held that there was no triable issue that the accommodation was for “self-contained units”. Her Honour observed that any resident of the building would only have a self-contained bedroom, with ensuite bathroom. All of the other residential facilities (kitchen, living room, laundry and outside area) were part of the shared facilities. The individual bedrooms could not be characterised in those circumstances as “self-contained units”.
Portelli also advanced arguments below which it no longer relies on. Portelli argued that neither PC3 nor PC4 adequately identified the construction work to which it related. The primary judge held that there was no triable issue in that regard. Her Honour referred to the principle that what is required under the SOP Act is that a payment claim identifies the work “in a way comprehensible to the respondent to the claim”: Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq*)* (2005) 64 NSWLR 462; [2005] NSWCA 409 at [35].
The primary judge was satisfied that the trade breakdown documents in both PC3 and PC4 sufficiently identified the work alleged to have been completed. Among other things, the primary judge found that the trade breakdown was referrable to the bill of quantities in the Contract and would have been understood as such by a reasonable person in the position of Portelli. The relevant document or documents constituting a payment claim must be considered as a whole and in context, including the terms of any covering letter or email and the factual matrix at least to the extent it was known to both parties or ought to have been known: Fernandes Constructions Pty Ltd v Tahmoor Coal Pty Ltd t/as Centennial Coal [2007] NSWSC 381 at [27]. Construction work for which a claim is made may be identified by reference to other documents, including those that have previously passed between the parties: Clarence Street Pty Ltd v Isis Projects Pty Ltd (2005) 64 NSWLR 448; [2005] NSWCA 391 at [40]. Applying these principles, the primary judge was satisfied that when objectively construed each payment claim was a valid payment claim in respect of identified work.
In relation to the proposition that it was necessary for a claimant not only to identify the work to which a claim related but also to prove that such work was in fact carried out, the primary judge noted the following, at [31]:
Sensibly, Portelli did not make any oral submissions on the question of whether it was necessary for Black Sheep to finally prove that it had in fact carried out the construction work it alleged. … [A] payment claim is merely a claim under SOPA; it does not finally determine the rights of the parties, which are left to final rights litigation.
Portelli’s first argument is contrary to the plain words of the SOP Act and well-established principles about the nature of the scheme that the Act creates. Section 13(1) provides that a person referred to in s 8 “who is or who claims to be entitled to a progress payment” may serve a payment claim on the person who, under the relevant contract, “is or may be liable to make the payment” (emphasis added). Subsections (1A) and (1B) of s 13 then proceed to deal with when such a payment claim may be served. Subsection (2) requires that a payment claim must identify the construction work to which the progress payment relates and the amount of the progress payment “that the claimant claims to be due” (emphasis added).
If a claimant serves a payment claim on the respondent, and the respondent does not provide a payment schedule to the claimant within the applicable time limit, the statutory consequence is that the respondent “becomes liable to pay the claimed amount to the claimant” (emphasis added): s 14(4). Where such a liability has arisen and the amount is not paid by the due date the claimant may, relevantly, recover “the unpaid portion of the claimed amount from the respondent, as a debt due to the claimant, in any court of competent jurisdiction” (emphasis added): s 15(2).
Reading these sections together, there is no room to construe the SOP Act as requiring, as a condition of validity of a payment claim and/or as a prerequisite to establishing an entitlement to payment pursuant to ss 14(4) and 15 of the SOP Act, that the work that is the subject of a claim must be objectively established to have been performed. Different considerations apply where a payment schedule has been served and there is an adjudicated determination of the entitlement to recover the amount claimed. Likewise in the context of any ultimate dispute about entitlement to retain money paid pursuant to payment claims. But the question for present purposes is what must be present or established in order to make a claim that is recognised by s 13 of the SOP Act as a statutory payment claim, and which in turn can trigger the statutory consequences in ss 14 and 15 where no payment schedule is served in response.
As is clear from the words of s 13(1), the essence of a claim is that it is based on what the issuing party “claims to be” entitled to. That involves an assertion of contractual entitlement as well as an assertion that the construction work has been carried out or undertaken to be carried out as per the payment claim. If a “claim” did not have the legal character of a claim under s 13 unless the claimant could establish as a matter of objective fact that the work in question was in fact carried out (or undertaken to be carried out) as asserted, that would mean that a claim may only be made by a person who is in fact entitled to payment. That is impossible to reconcile with the clear words of s 13 in referring to a person who is “or claims to be” entitled to a progress payment.
These conclusions are reinforced by the broader statutory context. In Manariti Plumbing Pty Ltd v Universal Property Group Pty Ltd [2025] NSWCA 135, in the course of dealing with an argument about the need for identification of work stemming from s 13(2) of the SOP Act, I considered a number of authorities that have described the scheme of the Act, at [42]-[44] (Ball and McHugh JJA agreeing):
Such analysis of the requirements of s 13(2) must be understood in the broader context of an Act that has the purpose, as described by Basten JA in Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229; (2005) 21 BCL 364 at 381 [45], of providing “a speedy and effective means of ensuring that progress payments are made during the course of the administration of a construction contract, without undue formality or resort to the law”. A related contextual consideration is that progress payments are payments on account: see [Southern Han Breakfast Point Pty Ltd (in liq*) v* Lewence Construction Pty Ltd (2016) 260 CLR 340; [2016] HCA 52] at [4], quoting the second reading speech for the Bill for the original SOP Act. The statutory entitlement of a party to a progress payment does not affect the substantive rights of the parties under the construction contract: see s 32, SOP Act. Hence the description of the statutory scheme as “pay now, fight later”: Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 at [8] (per Payne JA, with whom Gleeson JA and Griffiths AJA agreed).
In TFM Epping Land Pty Ltd v Decon Australia Pty Ltd [2020] NSWCA 118, the Court (Bell P, Macfarlan and Leeming JJA) said this about the SOP Act at [25]:
Thus the Act provides for a speedy but interim determination and enforcement of disputes arising out of construction contracts through the service of payment claims and payment schedules and adjudications, leading to an entitlement to payment, enforcement of the parties’ entitlements by way of judgment, and ultimately if necessary by way of execution, but without affecting the parties’ contractual rights as determined in the ordinary way in litigation.
To similar effect, in Style Timber Floor Pty Ltd v Krivosudsky (2019) 100 NSWLR 133; [2019] NSWCA 171 … , Bell P (with whom Simpson AJA agreed) explained the scheme of Part 3 in the following terms:
[25] Part 3 specifies how the legislative purpose of achieving a prompt pro tem resolution of disputes and payment of monies, all without prejudice to the parties’ rights at law, is to be effected. This reflects what Hodgson JA said (with the agreement of Mason P and Giles JA) in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394 at [51]:
The Act discloses a legislative intention to give an entitlement to progress payments, and to provide a mechanism to ensure that disputes concerning the amount of such payments are resolved with the minimum of delay. The payments themselves are only payments on account of a liability that will be finally determined otherwise: ss 3(4), 32.
If the recipient of a payment claim wishes to resist payment of any part of the payment claim, the appropriate response under the SOP Act is to serve a payment schedule which indicates the amount in dispute and the respondent’s reasons for withholding payment: s 14(2) and (3). Where that occurs, the statutory process for adjudication of disputes under Pt 3 Div 2 of the SOP Act is engaged. If the recipient of a payment claim neglects to serve a payment schedule, then the statutory consequence is that a liability to pay arises and the amount in question can be recovered by the claimant as a debt due. That debt arises from the Act as a consequence of the lack of response to a claim being made, and not because the claimant demonstrates the underlying contractual entitlement to the amount in question. This scheme would be subverted if it was also necessary for a claimant, as a precondition of seeking to recover the amount due because of such a claim, to prove the correctness of the matters asserted in the claim.
For these reasons, I reject the argument that Black Sheep could not enforce the statutory liability arising from PC3 and PC4 without demonstrating that at least some of the work referred to in those claims was performed.
The second argument is that PC3 and PC4 were issued “prematurely”, in the sense of having been made before the time when Black Sheep was entitled under the SOP Act (read in the context of the Contract) to make a claim. Because PC3 includes a claim for work carried out in August 2025, Portelli argues that under s 13 of the SOP Act it could not be validly served until after the end of August 2025. An equivalent argument arises for PC4, because it incorporated a claim for payment in respect of work in September 2025, but was issued before the end of September 2025.
There are a number of subsections within s 13 of the SOP Act that have a bearing on the content of payment claims and the time of service of those claims. The propositions which emerge from s 13 include the following (focusing for the sake of simplicity on construction work, and putting to one side the treatment of related goods and services that are supplied or undertaken to be supplied):
a payment claim may be served on and from the last day of the named month in which the construction work was first carried out under the contract and on and from the last day of each subsequent named month: s 13(1A). However, if the construction contract makes provision for an earlier date for the serving of a payment claim in any particular named month, the claim may be served on and from that date (instead of on and from the last day of that month): s 13(1B);
except as otherwise permitted by the construction contract, a claimant may only serve one payment claim in any particular named month for construction work carried out in that month: s 13(5). Implicit in that subsection is the proposition that a payment claim served in a particular named month may be issued in respect of construction work carried out in that month. The point of the restriction in subs (5) is that no more than one payment claim may be issued in a particular month for work carried out in that month, unless that is authorised by the relevant contract;
a claimant may serve a single payment claim in respect of more than one progress payment (s 13(6)(a));
a claimant may include in a payment claim an amount that has been the subject of a previous claim (s 13(6)(b));
a claimant may serve a payment claim in a particular named month for construction work carried out or undertaken to be carried out in a previous named month (s 13(6)(c)); and
there is an outer temporal limit on the service of a payment claim set by s 13(4). Such a claim may be served only within the later of the period set by the construction contract, or the period of 12 months after the construction work to which the claim relates was last carried out.
Subsections (1A) and (1B) of s 13 were introduced by the Building and Construction Industry Security of Payment Amendment Act 2018 (NSW). The second reading speech for the Bill which became the amending Act included the following explanation for the introduction of subs (1A):
New subsection 13(1A) provides that a payment claim may be served on and from the last day of the named month in which work was carried out, or goods and services first supplied, and on and from the last day of each subsequent named month … There is a concern that respondents currently delay progress payments through contract under the current section 8(2)(a). The new section will remedy that mischief.
Prior to the amendments, a claimant only had an entitlement to a progress payment under then s 8 of the SOP Act “on and from each reference date under a construction contract”. Section 8(2)(a) provided that if the contract stipulated the date on which a claim for a progress payment may be made, that was the reference date for the purposes of s 8. The 2018 amendments removed the concept of a reference date. The point emphasised in the second reading speech was that the amendments to s 13, by permitting monthly payment claims, removed the possibility of contractual restriction of progress payments.
The new subs (1B) was intended to facilitate the contractual nomination of a date earlier than the end of each month for the service of payment claims, as explained in the second reading speech:
New subsection 13(1B) operates to preserve the contractual freedom of parties to determine a date, earlier than the last day of a named month, for the making of a payment claim. It provides that if the construction contract makes provision, specifically or otherwise, for an earlier date for the serving of a payment claim in any particular named month, the claim may be served on and from that date.
The argument in the present case about the validity of PC3 and PC4 proceeded on the basis that before those purported claims were served work had been carried out by Black Sheep under the Contract and other payment claims had been served. In terms of the application of subss (1A) and (1B), construction work had therefore been “first carried out” at some earlier point and Black Sheep had become entitled to serve its first payment claim from (at the latest), the last day of the month in which that work was first carried out.
The question in the present case falls to be resolved by reference to the statutory rules governing subsequent payment claims. Reading subss (1A) and (1B) of s 13 together, there are only two possibilities. If the Contract makes provision for Black Sheep to serve a payment claim in any particular named month at a date earlier than the end of the month, then Black Sheep was entitled to serve a payment claim “on and from” that date: s 13(1B). If the Contract does not make such provision, then the default position applies, and Black Sheep was entitled to serve a payment claim on and from the last day of each month: s 13(1A).
The provisions of the Contract bearing on the service of payment claims are described above. Those provisions permit (and require) Black Sheep to serve payment claims earlier than the last day of each month. The same provisions also impose obligations on Portelli as to the payment of such claims, when served in accordance with the contractual timeframes. The focus for present purposes is on the first aspect of these provisions, and how they interact with the SOP Act. Under the general condition, cl (c) of Sch 2, the “due date” for payment claims is on or before the 21st day of the month. However, where the Owner has taken up the option of using a quantity surveyor, the applicable special condition in Sch 6 applies, with the consequence that the Builder’s Payment Claims are required to be submitted on the 21st day of each month. Portelli has evidently taken up the option to use a quantity surveyor under the Contract. This is reflected in Black Sheep charging $5,500.00 for its claims to reflect the cost of the claim being prepared and assessed by the quantity surveyor, as Black Sheep is entitled to do under the special conditions where the Owner uses a quantity surveyor. Black Sheep was therefore permitted by the special conditions of the Contract to submit a payment claim on the 21st day of each month (and was contractually required to do so).
Portelli argued that for the purposes of s 13(1B) of the SOP Act the Contract did not, by the special condition in Sch 6, make provision “for an earlier date for the serving of a payment claim in any particular named month”, because the special condition was conditional. It was only engaged if and when Portelli took up the option of using a quantity surveyor to assess payment claims. That argument must be rejected. The fact that the contractual specification of a date for service of a payment claim is conditional, in this case on the choice of the Owner to use a quantity surveyor, is neither here nor there when it comes to the application of s 13(1B) of the SOP Act. The point is simply that where the condition was satisfied, as it was here, the Contract did relevantly make provision for an earlier date for service. Indeed where the condition was satisfied Black Sheep was contractually obliged to submit payment claims on the quantity surveyor on the 21st day of the month.
Portelli did not explain in its submissions why s 13(1B) should be read as engaging with unconditional contractual provisions, but not conditional contractual provisions. Both kinds of contractual provisions are equally apt to have the same consequence of identifying the permitted date for service of payment claims. To pick up the point regarding contractual freedom, as alluded to in the second reading speech for the Bill that introduced subs (1B), respecting both conditional and unconditional contractual provisions gives effect to the contractual choices made by the parties.
The Contract therefore does make provision for a payment claim to be served on a date earlier than the last day of the month, being the 21st day of each month. The statutory consequence flowing from s 13(1B) is that in any month Black Sheep is entitled to serve a payment claim “on and from” the 21st day of the month.
PC3 was a claim in respect of work spanning the period from 22 July 2025 to 21 August 2025. Black Sheep was entitled to serve a claim in respect of such work “on and from” the 21st day of August. It did so by serving a claim on that day. Consistently with s 13(5), Black Sheep was entitled to include within that claim construction work carried out in August. The fact that the claim also incorporated work performed in the previous month of July is not problematic. A payment claim in a particular named month may include a claim in respect of construction work carried out or undertaken to be carried out in a previous named month: s 13(6)(c).
Portelli sought to attach significance to the fact that, on its reading, PC3 did not specify precisely which work was carried out on particular dates. Portelli accepted that, reading the documents accompanying PC3 together, the claim was in respect of identified work spanning the period from 22 July 2025 to 21 August 2025. But Portelli contended that because the work in question straddled July and August it was not possible to discern which work, if any, was carried out in July as opposed to August. Nothing turns on this point. For the reasons set out in the preceding paragraph, Black Sheep was entitled to issue a payment claim on 21 August 2025 that encompassed a claim for work done in both July and August, prior to the date of the payment claim. There is no longer any complaint by Portelli that the work in question was not identified. No further specification about the precise timing of particular work was required in order for the claim to have the character of a valid payment claim under the SOP Act.
In any event, as Black Sheep submits, if it was necessary to demonstrate that at least some work that was the subject of PC3 was claimed to have been done in July 2025 and at least some work was claimed to have been done in August 2025 (as Portelli submitted), that requirement was satisfied. For example, item 4.02 (extracted in the table above) was a “monthly claim” for the full time work of the Site Manager. Read fairly and in context, that was plainly a claim for the work of the Site Manager on each working day from 22 July 2025 to 21 August 2025.
PC4 was a claim in respect of work spanning the period from 22 August 2025 to 21 September 2025. Black Sheep was entitled to serve a claim in respect of such work on and from the 21st day of September. It did so by serving a claim on 22 September 2025. Black Sheep was entitled to incorporate within the claim work that had been done in both August and September. PC4 also incorporated a further claim for the amount that had been the subject of PC3, and which remained unpaid. That is expressly permitted by s 13(6)(b).
It follows that each of PC3 and PC4 was served at a time authorised by the SOP Act, having regard to the contents of the payment claims and the terms of the Contract*.* The primary judge was right to reject the argument that PC3 and PC4 were served “prematurely”. Her Honour was also correct in observing that the issue is capable of resolution on a summary basis, turning as it does on a proper construction of the SOP Act*,* applied in light of the Contract, and interpretation of the documents constituting the payment claims.
Portelli’s remaining argument is that summary judgment ought not to have been awarded because there was a triable issue about whether Black Sheep had any entitlement to recover progress payments pursuant to the SOP Act, having regard to the nature of the development under the Contract. The issue arises because Black Sheep was not insured, in respect of this development, for “residential building work” under the Home Building Act*.* Pursuant to s 8(2)(b) of the SOP Act, a person is not entitled to a progress payment under s 8(1) if the construction contract in question involves construction work that is residential building work done in contravention of s 92 of the Home Building Act. Section 92 of the Home Building Act relevantly provides that a person must not do “residential building work” under a contract unless there is a compliant contract of insurance in force in relation to that work.
The primary judge was not satisfied that there was any triable issue arising from Portelli’s contention that Black Sheep is carrying out “residential building work” under the Contract. Schedule 1, cl 2 of the Home Building Act relevantly provides:
2 Definition of “residential building work”
(1) In this Act, residential building work means any work involved in, or involved in co-ordinating or supervising any work involved in—
(a) the construction of a dwelling, or
(b) the making of alterations or additions to a dwelling, or
(c) the repairing, renovation, decoration or protective treatment of a dwelling.
3 Definition of “dwelling”
(1) In this Act, dwelling means a building or portion of a building that is designed, constructed or adapted for use as a residence (such as a detached or semi-detached house, transportable house, terrace or town house, duplex, villa-home, strata or company title home unit or residential flat).
…
(3) Each of the following is excluded from the definition of dwelling—
(a) a boarding house, guest house, hostel or lodging house,
(b) all residential parts of a hotel or motel,
(c) any residential part of an educational institution,
(d) accommodation (other than self-contained units) specially designed for the aged, persons with a disability or children,
(e) any residential part of a health care building that accommodates staff,
(f) a house or unit designed, constructed or adapted for commercial use as tourist, holiday or overnight accommodation,
(g) any part of a non-residential building that is constructed or adapted for use as a caretaker’s residence,
…
Portelli’s contention is that there is at least a triable issue that the buildings being constructed by Black Sheep pursuant to the Contract are “dwellings”, or contain “dwellings”, according to this statutory definition. Portelli accepts, as it must, that the Contract provides for the construction of accommodation specially designed for persons with a disability, so as to prima facie engage the exception in cl 3(3)(d) of the Home Building Act. Portelli nevertheless contends that there is a triable issue that the exception does not apply, on the basis that the Contract provides for the construction of “self-contained units”. That is, Portelli invokes the exception to the exclusion in cl 3(3)(d), created by the words in parentheses.
The Home Building Act does not define “self-contained” or “self-contained units”. There are no other references in the Act to “self-contained units”. Where other provisions of the Act refer to “unit” or “units” as a form of accommodation, it is apparent from the context that it is intended to be a reference to a form of dwelling akin to an apartment. For example, cl 3(3)(f) provides that another form of accommodation excluded from the definition of “dwelling” is “a house or unit designed, constructed or adapted for commercial use as tourist, holiday or overnight accommodation”. That accords with the ordinary usage of “unit” in the context of describing forms of accommodation.
Portelli puts the argument in two alternative ways. The first is that each of the four buildings to be constructed under the Contract, characterised on a whole of building basis, is a “self-contained unit”. The second is that each building contains “self-contained units”, in the form of the five bedrooms occupied by the residents.
Neither of these arguments gives rise to a serious triable issue. The first approach involves characterising a building that houses five disabled residents, plus nurses in their quarters and various common shared facilities, as a single “self-contained unit”. That is a highly unlikely characterisation, premised on an improbable construction of the words used in cl 3(3)(d). As a matter of statutory construction, it does not accord with any accepted conception of a residential “unit”. For each of the disabled residents, the building is not self-contained for his or her exclusive use, but features facilities shared with other residents (not being part of the same family group), including nurses who occupy the nurses’ quarters from time to time. This is not analogous to a family sharing a single residential unit, or a group of residents in a shared unit. The better analogy is with institutional forms of accommodation, such as residential colleges and boarding houses. As a form of accommodation for residents, a building that contains institutional accommodation of that kind cannot be described as a “self-contained unit”.
Moreover, Portelli’s approach to interpretation of the exception in cl 3(3)(d) is impossible to reconcile with the statutory context. Giving such an expansive operation to the exception created by the words in parentheses – self-contained units – would mean that the exclusion itself in cl 3(3)(d) would have no real work to do. Two clear conclusions can be drawn from the statutory context. One is that there may be forms of accommodation that are “self-contained units” specially designed for the aged, persons with a disability or children. The second is that such units are a subset of a broader class of accommodation specially designed for such people. On the applicant’s construction, a building that is specially designed to accommodate multiple disabled residents, living in separate bedrooms but with shared common facilities, is itself a “self-contained unit”. On that approach, the label of “self-contained units” is apt to apply to all, or practically all, accommodation specially designed for persons with a disability. The exception to the exclusion would thereby be given such a broad operation as to devour the exclusion itself. This is an untenable approach to construing the statutory definition and applying it to the facts of this case.
The alternative argument, that each bedroom with an ensuite bathroom is itself a “self-contained unit”, is equally untenable. Again, textual and contextual considerations point compellingly against that approach. Accommodation of that kind does not provide the basic characteristics of a residential dwelling or a residential “unit” as conventionally understood. It has no kitchen facilities, no living area, no dining area and no laundry facilities. None of those traditional elements of residential accommodation is contained within the area said to comprise a “self-contained unit”. It may be accepted, as Portelli contends, that some apartments that would likely qualify as “self-contained units” do not contain laundry facilities of their own. But it does not follow, and cannot be accepted, that a bedroom that does not contain living quarters or the facilities to prepare and consume food is nevertheless a “self-contained unit” of residential accommodation.
Portelli’s alternative argument would, like its primary argument, give the exclusion in cl 3(3)(d) no real work to do in the context of the Home Building Act. If each bedroom that is constructed within an accommodation building that is designed for persons with a disability constitutes a “self-contained unit” in its own right, then every accommodation building of that kind will be treated for the purposes of the Home Building Act as incorporating “dwellings”. The consequence will be that, among other things, insurance for “residential building work” will be required for the construction of such accommodation. That would subvert the evident purpose of cl 3(3)(d), which is to exclude at least some forms of accommodation specially designed for the aged, persons with a disability or children from the operation of the Home Building Act as it relates to residential building work. Again, the exception from the exclusion would operate to devour the exclusion itself.
Portelli sought to argue that there is a possibility that expert evidence could be adduced bearing on the trade meaning of “self-contained unit”, which could be relevant to the proper construction of cl 3(3)(d) of Sch 1 to the Home Building Act. This argument invokes the principle that the technical meaning of a non-legal phrase can be established by evidence: General Accident Fire & Life Assurance Corp**oration Ltd v Commissioner of Pay-roll Tax [1982] 2 NSWLR 52 at 54. Portelli argues that because of the prospect of such evidence being adduced, a factual controversy may need to be resolved, such that this is not a matter amenable to determination on a summary basis.
It may be accepted that summary disposal of a matter is inappropriate if there is any “serious conflict” as to any matter of fact: Sidebottom v Cureton (1937) 54 WN (NSW) 88; Sharp v Glasser (1946) 46 SR (NSW) 379 at 383 cited with approval in Rowston v Sydney County Council (1954) 92 CLR 605 at 613; [1954] HCA 66. In the same passage in Rowston the High Court referred to cases involving any “substantial question of fact to be determined” as being unsuitable for summary disposition. Here Portelli has not demonstrated that there is a question of fact that is serious or substantial. Its argument about the prospect of expert evidence being adduced that has a relevant bearing on the meaning of “self-contained unit” is, in a number of important respects, no more than speculative.
While it was not incumbent on Portelli to approach the issue as if it were a final hearing, Portelli did not establish a realistic prospect that any planning expert or construction expert might give evidence that “self-contained unit” should be given a meaning consistent with one or other of the two arguments advanced by Portelli. As explained above, both propositions are inherently improbable. It cannot simply be asserted or assumed in favour of Portelli that there is a real prospect of an expert opining that within the planning and/or construction industries a bedroom with an ensuite bathroom is described as a “self-contained unit”, or alternatively that a complete building incorporating multiple bedrooms for disabled residents would be described in its entirety as a “self-contained unit”. Nor did Portelli seek to demonstrate why, as a matter of contractual construction, the phrase ought be given a technical meaning of the kind that may be the subject of expert evidence.
Most tellingly, Portelli did not grapple with the contextual implications of the arguments that it was advancing. Let it be assumed, notwithstanding the lack of any proper foundation established by Portelli, that there is a realistic prospect that a planning or construction expert might give evidence to the effect postulated. As I have explained above, it is impossible to reconcile either usage of the phrase “self-contained unit” with the statutory context. That in turn would provide a compelling indication that the legislature did not intend to adopt any such trade meaning. Where a word or phrase has both an ordinary meaning and a technical meaning, unless the context indicates otherwise the ordinary meaning is presumed to have been intended: see P Herzfeld and T Prince Interpretation (3rd ed, 2024, Lawbook Co) at [2.190]; R v AL (2016) 260 A Crim R 153; [2016] VSCA 156 at [11]-[12]. Here the context would only serve to reinforce that presumption. As a result, neither of these asserted approaches to the construction of cl 3(3)(d) would be sustainable, even if there was evidence to that effect.
Portelli has therefore failed to demonstrate that any dispute of fact about the trade meaning of “self-contained unit” is a serious or substantial dispute with a relevant bearing on the disposition of the present matter.
Portelli also submitted, albeit somewhat faintly, that there is an unresolved factual dispute about the character of the accommodation being constructed pursuant to the Contract. That submission should also be rejected. The character of the accommodation is readily apparent from the Contract, which is highly prescriptive as to the features of the buildings to be constructed, and from the design documents which were in evidence. There was no suggestion that those documents are not a reliable guide to the nature of the accommodation being constructed pursuant to the Contract. Indeed, argument proceeded on the basis that they are.
Moreover, the proper operation of the Home Building Act assumes that the classification of building work under that Act, including on the decisive question of whether the work is or is not “residential building work”, is something that is capable of being determined at the outset of construction work. Among other things, that follows from the requirement not to do any “residential building work” under a contract unless a compliant contract of insurance is in force in relation to that work: s 92 of the Home Building Act. Given that context, the characterisation of building work does not depend, as Portelli’s submissions suggested, on such matters as how the building is in fact likely to be used once constructed.
None of the grounds in the draft notice of appeal is established. In circumstances where Portelli sought to raise issues of principle under the SOP Act, it is appropriate that leave be granted. However, the appeal should be dismissed.
The Court was advised by the parties that, pursuant to orders made by Richmond J on 2 January 2026, Portelli has paid into Court $3,822,378.26. Senior Counsel for Portelli accepted that in the event that the appeal was unsuccessful there would be no reason why the Court should not order that the amount be paid out to Black Sheep forthwith. An order to that effect should be made in light of the outcome of this appeal.
The orders that I would make are:
Leave to appeal is granted.
Appeal dismissed.
The appellant is to pay the respondent’s costs.
The amount of $3,822,378.26 which was paid into Court by the appellant is to be paid out forthwith to the respondent.
GRIFFITHS AJA: I agree with Free JA.
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(2005) 64 NSWLR 448
(2005) 64 NSWLR 462
(1954) 92 CLR 605
(2016) 260 CLR 340
(2019) 100 NSWLR 133
(2004) 61 NSWLR 421
Leave to appeal granted; appeal dismissed; appellant ordered to pay respondent’s costs; $3,822,378.26 paid into Court ordered to be paid forthwith to the respondent.