Parrwood Pty Ltd v Trinity Constructions [2020] NSWSC 208 | Case summary | Zoe

NSWNSWSC

Parrwood Pty Ltd v Trinity Constructions

[2020] NSWSC 208

Supreme Court of NSW|2020-03-05|Before: Ball J

At a glance

AI case summary

Result

defendant. Leave was granted to Trinity to file its cross-summons; Parrwood’s summons was dismissed; the First Determination was declared null and void; the Court funds and interest were ordered paid to...

Key principles

Where a reference date had arisen before the principal took the remaining work out of the contractor’s hands, the contractor had an accrued statutory right to a progress payment...
The first adjudicator committed jurisdictional error by treating the contractual suspension of payment as preventing determination of the accrued claim, and by declining to...
On the circumstances considered, the contractor could treat the purported first determination as void and use s 26 to withdraw the first application and make a new application...
The evidence did not establish, to the standard required for the serious allegation, that the contractor knowingly served a materially false or misleading supporting statement.

Issues before the court

Whether the First Determination was void because the first adjudicator failed to determine the progress-payment amount.
Whether Trinity could withdraw the first adjudication application and make a new application without first obtaining a court declaration.

Plain English Summary

The Court held that Trinity’s statutory right to have its payment claim adjudicated had arisen before Parrwood took the remaining work out of its hands. The first adjudicator therefore had to determine the amount of the progress payment, even if the amount ultimately determined was nil. Instead, the adjudicator treated the contract as suspending payment and declined to decide the substantive payment issues. Ball J declared that determination void. Trinity could proceed with a new application under s 26 without first obtaining a court order setting the first determination aside. Parrwood’s separate allegation that Trinity knowingly supplied a false supporting statement was not proved. The Court did not decide whether the supporting-statement requirements are a precondition to a valid payment claim.

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Deep Dive

2,498 words · generated 30/09/2026

What happened

Parrwood engaged Trinity under a contract dated 6 October 2017 to design and construct 59 apartments in the Affinity Project at Caringbah. The contract price was $18,848,677.15. It was based on AS 4902-2000 and included provisions dealing with progress claims, delay damages, liquidated damages, and the consequences of taking work out of the contractor’s hands.

The payment dispute arose after Parrwood served notices to show cause in July and August 2019. On 3 September 2019, Parrwood exercised its contractual right under cl 39.4 to take the remaining work out of Trinity’s hands. Trinity did not contest that exercise for the purposes of this case. Parrwood did not purport to terminate the contract.

Three days later, on 6 September 2019, Trinity served a payment claim for $2,023,645.76. Parrwood’s payment schedule stated a scheduled amount of nil. Trinity applied for adjudication. The first adjudicator, John O’Brien, determined on 15 November 2019 that no amount was payable at that stage. His reasoning was that payment had been suspended under the contract until the final adjustment mechanism in cl 39.6 had been implemented. He therefore considered it premature to decide Trinity’s claim for delay damages or Parrwood’s claim for liquidated damages.

Trinity purported to withdraw that application on 22 November 2019 and made a new adjudication application. A second adjudicator, Helen Durham, accepted the appointment and made a determination on 20 January 2020 in Trinity’s favour for $401,109.73. Parrwood then asked the Supreme Court to declare the second determination void. Trinity’s cross-summons sought a declaration that the first determination was void.

Ball J granted Trinity leave to file the cross-summons, dismissed Parrwood’s summons, declared the first determination null and void, and ordered the $401,109.73 paid into Court, with interest, to be paid to Trinity. Parrwood was also ordered to pay the costs of the proceedings, including the cross-claim.

Why the court decided this way

The central issue was the relationship between a progress-payment right that had already arisen under the Act and the later exercise of Parrwood’s contractual right to take the work out of Trinity’s hands.

The Court recorded that the parties did not dispute that a reference date arose on 25 August 2019. Under s 8, a person who undertakes construction work becomes entitled to a progress payment “on and from each reference date”. Sections 13 and 17 then provide for a payment claim and an adjudication application. The important feature of the chronology was that the reference date preceded Parrwood’s action on 3 September 2019.

Section 22 required an adjudicator to determine “the amount of the progress payment (if any)” and the date on which the amount became or becomes payable. Ball J concluded that the first adjudicator did not perform that task. The first adjudicator had not simply assessed the claim and decided that its value was nil. The reasons instead treated payment as suspended until the contractual final adjustment under cl 39.6 and expressly declined to decide the competing delay-damages and liquidated-damages claims. Ball J considered that this left the statutory claim undetermined.

Parrwood relied on the words “if any” in s 22(1)(a), arguing that an adjudicator may determine that no amount is payable. Ball J accepted that general proposition but found it did not describe what had happened. The distinction was between reaching a determination that the amount was nil and declining to determine the claim because payment was said to be suspended.

The Court also addressed the contractual suspension. The first adjudicator had reasoned that cl 39.4 affected only the timing of payment and did not prevent Trinity from making a progress claim. Ball J considered that suspending a statutory right was itself a modification of that right. If the contract operated in the way the first adjudicator thought, s 34 meant the Act took effect despite the contractual provision. The Court’s conclusion was tied to the accrued right in this case, which arose before the work was taken out of Trinity’s hands.

Parrwood relied on Southern Han Breakfast Point Pty Ltd (In Liquidation) v Lewence Construction Pty Ltd. Ball J distinguished the issue there. In Southern Han, the High Court considered the effect of taking work out of the contractor’s hands on the later accrual of a reference date and the contractor’s right to make a claim after that event. Ball J read that decision as addressing rights arising after the suspension, not the right to pursue a progress payment that had already accrued. The relevant distinction was therefore temporal: whether the payment right arose before or after the contractual step suspending payment rights.

A further issue was whether Trinity could challenge the first determination only by commencing court proceedings. Parrwood argued that Trinity should have sought a declaration before acting on the view that the first determination was void. Ball J rejected that argument. Section 26 permitted withdrawal and a new application in the stated circumstances, and the statute imposed a short time limit. The Court found no legal principle suspending that time limit while court proceedings were pending. It also rejected the argument that Trinity had made an election between inconsistent rights. In the Court’s view, Trinity’s choice to act on the basis that the first determination had no effect did not require it first to have that determination set aside.

Finally, Parrwood argued that the payment claim was invalid because the supporting statement allegedly misstated whether subcontractors had been paid. The Court did not decide whether compliance with ss 13(7) and 13(8) is a precondition to a valid claim. It assumed that possibility for the purpose of addressing the evidence. Applying Briginshaw, Ball J found that the serious allegation of knowing falsity required clear evidence. The evidence did not establish that Trinity knew the statement was false, including because the subcontractors in question appeared to have been engaged by a related company.

Before and after state of the law

The judgment applies the statutory scheme in the Act as it stood for the dispute. Section 8 supplied the right to a progress payment from a reference date. Section 13 provided the payment-claim mechanism, and s 22 required the adjudicator to determine the amount, if any, and the relevant payment date. Section 34 provided that the Act operated despite contrary contractual terms and made void provisions that excluded, modified or restricted the Act’s operation.

Before the decision, the relevant practical uncertainty in this dispute concerned how those provisions interacted with the AS 4902 contractual mechanism for taking work out of a contractor’s hands. The first adjudicator treated the contractual suspension as postponing the payment claim until the final contractual adjustment. Parrwood argued that this was consistent with the High Court’s discussion in Southern Han.

Ball J’s decision clarified the issue for the facts before the Court: a statutory payment right arising from a reference date before the work was taken out of the contractor’s hands was not treated in the same way as a claim dependent on a reference date arising after that step. The first adjudicator’s failure to determine the earlier claim was treated as a failure to perform the function required by s 22.

The decision also addressed the procedure under s 26. It rejected the proposition that a claimant asserting a purported determination was void had to obtain a court declaration before withdrawing and making a new application. The claimant still had to comply with the statutory timing requirements. The judgment did not state that court proceedings are never useful or necessary in other circumstances; it decided that commencement of proceedings was not a legal prerequisite to Trinity’s reliance on s 26 in this dispute.

The judgment did not resolve the status of s 13(8) compliance as a condition of claim validity. It expressly left open whether ss 13(7) and 13(8) are preconditions to a valid payment claim. The decision therefore should not be read as establishing a general rule on that issue. Nor does the provided judgment establish how later courts have applied or limited Parrwood. No later decisions are included in the material supplied.

Key passages with plain-English translation

The judgment stated that “the First Adjudicator did not do the first of those things - that is, he did not determine the amount of the progress payment.” In plain English, the adjudicator had to decide the amount of the claim, including whether it was nil. The Court found that he instead stopped short of deciding the substantive payment dispute.

Ball J stated: “The suspension of a right conferred by the Act is plainly a modification of that right.” This means that a contractual term that postpones or suspends a statutory payment right may affect the operation of the Act, even if it does not formally prevent the contractor from submitting a claim. The judgment considered s 34 in that context.

On Southern Han, Ball J explained that the High Court’s discussion did not show that rights accrued before suspension were lost. In plain English, a rule affecting the possibility of future reference dates after a contractor’s work is taken out of its hands does not necessarily decide what happens to a payment right that arose earlier.

The Court also said: “There is no principle of law which has as its result the suspension of the time limit in s 26 pending the determination of court proceedings.” The practical meaning is that a party cannot assume that filing court proceedings pauses the statutory period for withdrawing an application and making a new one. The judgment’s conclusion was that Trinity did not have to commence proceedings before relying on s 26.

On the supporting statement, the Court said the allegation was serious and had to be established by clear evidence, referring to Briginshaw. The Court did not find that the statement was necessarily accurate. Rather, it found the evidence did not prove that Trinity knew it was false or misleading. It also left open whether compliance with those supporting-statement requirements was a precondition to a valid payment claim.

What fact patterns trigger this precedent

The decision is most directly relevant to a construction-payment dispute where a reference date has arisen before a principal exercises a contractual right to take work out of the contractor’s hands. The sequence matters. The Court’s reasoning depended on the established date of 25 August 2019 preceding the exercise of Parrwood’s contractual right on 3 September 2019.

It is also relevant where an adjudicator relies on a contractual suspension or postponement of payment and, on that basis, declines to determine the substantive amount of a payment claim. The judgment draws a distinction between an adjudicator deciding that a claim is worth nil and an adjudicator declining to assess it because the contractual payment mechanism has not yet reached a later stage.

The s 26 discussion may be relevant where an adjudicator accepted an application but failed to determine it within the statutory time, and the claimant purports to withdraw and make a new application. The decision rejects a general requirement to obtain a court declaration first, but it emphasises the statutory time limit. The judgment does not remove the need to establish that the conditions in s 26 are met.

The supporting-statement discussion is relevant where a party alleges that a head contractor knowingly supplied a materially false statement under s 13(8). The decision shows that the allegation requires evidence of knowledge, not merely proof that a statement was inaccurate. The Court’s reasoning on that issue was factual and does not resolve whether s 13 compliance is a precondition to a valid payment claim.

The decision is less directly informative where the reference date arises only after the work has been taken out of the contractor’s hands, or where the adjudicator has actually considered the claim and determined the amount as nil. Ball J’s reasons distinguish the accrued right in this case from the questions considered in Southern Han.

How later courts have treated it

The material provided contains the judgment and the authorities Ball J considered. It does not include later decisions discussing Parrwood, so it is not possible to describe how later courts have applied, distinguished, approved or limited it without going beyond the source.

The judgment itself considered several authorities. It cited Cardinal Project Services Pty Ltd v Hanave Pty Ltd when rejecting the argument that a claimant must commence proceedings to challenge a purportedly void determination. Ball J read the cited passage as explaining that a party might preserve the ability to make a new application while court proceedings occur, and that the parties may agree to extend time. He did not read it as requiring proceedings to be commenced.

The Court also considered Southern Han and distinguished its focus on rights after work is taken out of a contractor’s hands from the accrued right in Trinity’s case. It referred to Sought After Investments, Greenwood Futures and Central Projects in identifying the unresolved question about whether ss 13(7) and 13(8) are preconditions to a valid payment claim. The judgment did not decide that question.

Bibby Financial Services Australia Pty Ltd v Sharma was cited for the requirement that election involves inconsistent rights. Briginshaw was applied to the evidentiary assessment of the knowing-falsity allegation. These references describe the authorities used in this judgment, not later treatment of Parrwood.

Still-open questions

The clearest question expressly left open is whether compliance with ss 13(7) and 13(8) is a precondition to a valid payment claim. Ball J considered it unnecessary to decide that question because Parrwood had not established that Trinity knowingly served a false or misleading supporting statement.

The judgment also does not determine how the reasoning would apply where a reference date had not arisen before the principal took the remaining work out of the contractor’s hands. Its distinction from Southern Han indicates that the timing of accrual matters, but the facts and issue decided here concerned an already-arisen reference date.

The decision does not decide every possible consequence of a contractual suspension under cl 39.4 or the operation of the final adjustment mechanism in cl 39.6. It addressed the effect of those provisions on the particular statutory payment right and adjudication before it.

Nor does the judgment establish that every failure to decide an issue in an adjudication determination makes the determination void. Its conclusion followed from the specific finding that the adjudicator had failed to determine the amount required by s 22 in respect of an accrued statutory claim. The distinction between a substantive determination of nil and a failure to determine remains central.

Finally, the material does not show how later courts have interpreted the decision or whether subsequent legislative amendments have affected its application. The judgment notes that s 8 had since been amended, but the supplied text does not set out the later provisions or analyse their effect.

This is general legal information, not legal advice. Zoe can make mistakes. Before acting on this, relying on it, or using any draft, have it checked by a qualified Australian lawyer.

Judgment (10 paragraphs)

[1]

Solicitors: Addisons Lawyers (Plaintiff | First Cross Defendant) Colin Biggers & Paisley (First Defendant | Cross Claimant) File Number(s): 2020/30257

[2]

Introduction

By a summons filed on 29 January 2020, the plaintiff, Parrwood Pty Ltd, seeks a declaration that an adjudication determination (the Second Determination) made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) by the second defendant, Ms Helen Durham (the Second Adjudicator), in favour of the first defendant, Trinity Constructions (Aust) Pty Ltd, in the sum of $401,109.73 in respect of a payment claim made on 6 September 2019 for the sum $2,023,645.76 (the Payment Claim) is void, together with ancillary relief.
By a cross-summons filed on 2 March 2020 without leave, Trinity seeks a declaration that an earlier determination (the First Determination) under the Act by Mr John O'Brien (the First Adjudicator) that no amount was owing in respect of the Payment Claim is void.

[3]

Relevant provisions of the Act

Section 8 of the Act, as it applies to this dispute (it has since been amended), provides: Right to progress payments (1) On and from each reference date under a construction contract, a person: (a) who has undertaken to carry out construction work under the contract, or (b) who has undertaken to supply related goods and services under the contract, is entitled to a progress payment. (2) In this section, reference date, in relation to a construction contract, means: (a) a date determined by or in accordance with the terms of the contract as the date on which a claim for a progress payment may be made in relation to work carried out or undertaken to be carried out (or related goods and services supplied or undertaken to be supplied) under the contract, or (b) if the contract makes no express provision with respect to the matter - the last day of the named month in which the construction work was first carried out (or the related goods and services were first supplied) under the contract and the last day of each subsequent named month.
Section 9 of the Act states that the amount of the progress payment to which a person is entitled in respect of a construction contract is relevantly to be of the amount calculated in accordance with the terms of the contract. Section 13 relevantly provided: Payment claims (1) A person referred to in section 8(1) who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment. … (5) A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract. … (7) A head contractor must not serve a payment claim on the principal unless the claim is accompanied by a supporting statement that indicates that it relates to that payment claim. Maximum penalty: 200 penalty units. (8) A head contractor must not serve a payment claim on the principal accompanied by a supporting statement knowing that the statement is false or misleading in a material particular in the particular circumstances. Maximum penalty: 200 penalty units or 3 months imprisonment, or both. (9) In this section: supporting statement means a statement that is in the form prescribed by the regulations and (without limitation) that includes a declaration to the effect that all subcontractors, if any, have been paid all amounts that have become due and payable in relation to the construction work concerned.
Section 22 relevantly provides: Adjudicator's determination (1) An adjudicator is to determine: (a) the amount of the progress payment (if any) to be paid by the respondent to the claimant (the adjudicated amount), and (b) the date on which any such amount became or becomes payable, and (c) the rate of interest payable on any such amount. (2) In determining an adjudication application, the adjudicator is to consider the following matters only: (a) the provisions of this Act, (b) the provisions of the construction contract from which the application arose, (c) the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim, (d) the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule, (e) the results of any inspection carried out by the adjudicator of any matter to which the claim relates.

[4]

Factual background

The circumstances giving rise to the proceedings are not substantially in dispute.
By a contract dated 6 October 2017 (the Contract), Parrwood engaged Trinity to design and construct 59 apartments across two buildings in a development known as the Affinity Project, which is located in Caringbah, New South Wales, for a lump sum of $18,848,677.15.
The Contract was based on AS 4902-2000, the Australian Standard for General conditions of contract for design and construct. Clause 34.7 gives Parrwood a right to claim liquidated damages at the rate of $5,000 per day if the work under the Contract did not reach practical completion by the date for practical completion set out in the Contract. Clause 34.9 gives Trinity a right to claim delay damages for extensions of time resulting from a breach by Parrwood of its obligations under the Contract.
Clause 37.1 of the Contract provides that Trinity "shall claim payment progressively in accordance with Item 33". Item 33 provides for progress claims to be made on the 10th day of each month for work done to the date of the claim. However, it is common ground that the parties varied that date to the 25th day of each month.
Clause 39.2 of the Contract relevant provides: Contractor's Default If the Contractor commits a substantial breach of the Contract, the Principal may, by hand or by registered post, give the Contractor a written notice to show cause. "Substantial breaches" is defined to include a substantial departure from the program, a failure to use material or standards of work required by the Contract and knowingly providing documentary evidence containing an untrue statement.
Under cl 39.3, a notice to show cause was required, among other things, to identify the substantial breach and the time by when Trinity was required to comply with the notice (which was not to be less than seven clear days from the date the notice was received by Trinity).
Clause 39.4 provides: Principal's Right If the Contractor fails to show reasonable cause by the stated date and time, the Principal may by written notice to the Contractor: (a) take out of the Contractor's hands the whole or part of the work remaining to be completed and suspend payment until it becomes due and payable pursuant to subclause 39.6; or (b) terminate the Contract.

[5]

The issues

At the heart of the dispute between the parties is the question whether the First Determination is void. A subsidiary question is whether the Court should entertain that question now. If the answer to both those questions is in the affirmative, then it appears to be accepted that the Second Adjudicator was entitled to determine the Payment Claim. If the First Determination was void, then the First Adjudicator failed to determine the application within the time allowed by s 21(3). Consequently, Trinity was entitled under s 26(2) of the Act to withdraw the application and make a new application provided it did so within the time specified in s 26(3), which is what it purported to do.
Parrwood also submits that Trinity is estopped from challenging the validity of the take out notice by the determination of the First Adjudicator. However, that submission depends on a finding that the First Determination is valid and binding. For that reason, it is difficult to see that the submission raises a substantially different question from the question whether the First Determination was void.
Apart from those issues, there is also a question whether the Payment Claim was invalid because it was accompanied by a supporting statement which Trinity knew was false or misleading in a material particular in the particular circumstances contrary to s 13(8) of the Act.

[6]

The subsidiary question

It is convenient to begin with the question whether it is open to Trinity to submit that the First Determination is void. Parrwood submits that it is not for two reasons. First, it submits that Trinity needs leave to file the Cross Summons and the Court ought to refuse that leave because the issue was only raised on 2 March 2020, when Trinity filed the Cross Summons without leave. Second, it submits that Trinity made an election when it chose not to challenge the First Determination shortly after it was made.
I do not accept either of those submissions. In my opinion, Trinity is entitled to leave to file the Cross Summons. Although it was filed late, it has been clear since Trinity purported to withdraw the adjudication application that its position was that the First Determination was void. That was the only basis on which it could withdraw the application; and since then the dispute between the parties has proceeded on the basis that Trinity was asserting that the First Determination was void. At most, the Cross Summons formalises the position as it existed before it was filed. Before the Cross Summons was filed, Parrwood asserted that the Second Determination was void on the basis that the Payment Claim had already been determined by the First Determination. Implicit in that assertion is an assertion that the First Determination was valid. It is plain from its List Response that Trinity took issue with that assertion. It specifically states in section B of its List Statement that one of the issues likely to arise is whether the First Adjudication Application is void.
After the First Adjudicator handed down his determination, both parties were faced with a choice. Trinity at that time could have commenced proceedings seeking a declaration that the First Determination was void. However, it was neither necessary nor sufficient to protect its position for it to do so. It was not necessary because it was open to Trinity to take the view that the determination was void and proceed on that basis - that is, on the basis that it had no effect at law. That is what it chose to do by purporting to withdraw its adjudication application. It would not have been sufficient because whether or not Trinity commenced proceedings, if it wanted to exercise the rights conferred by s 26 of the Act, it had to do so within the time limit prescribed by that section. There is no principle of law which has as its result the suspension of the time limit in s 26 pending the determination of court proceedings. It may be that if Trinity had commenced proceedings, it and Parrwood would have agreed to an extension pending the determination of those proceedings. But that possibility does not alter Trinity's rights as they stood when the First Adjudicator handed down his determination.

[7]

Was the First Determination void?

In my opinion, the First Determination was void.
It is not disputed that "on and from" 25 August 2019 Trinity became entitled to a progress payment under s 8 of the Act. As a result, Trinity became entitled to serve a payment claim in respect of that progress payment in accordance with s 13 and to apply for adjudication of that claim in accordance with s 17. That is what Trinity did. Under s 22, the adjudicator appointed to adjudicate that claim was required relevantly to determine the amount of the progress payment (if any) to be paid to the claimant and the date on which any such amount became or becomes payable. The First Adjudicator did not do the first of those things - that is, he did not determine the amount of the progress payment. Rather, he concluded that, as a result of decision to take the work out of Trinity's hands, the right to a progress payment was suspended until the mechanism in cl 39.6 operated and that consequently Trinity was entitled to recover no amount in respect of the Payment Claim. In reaching that conclusion, the First Adjudicator failed to comply with his statutory duty.
Parrwood seeks to answer the conclusion of the previous paragraph in a number of ways. It submits that the First Adjudicator did determine the amount of the progress payment. The fact that he determined it at nil does not mean that he did not determine the claim. Section 22(1) itself, and in particular the phrase "(if any)", makes it plain that it is open to an adjudicator to conclude that no amount is payable in respect of a payment claim. However, in my view, that is not an accurate representation of what the First Adjudicator did in this case. It is apparent from [208] of the First Adjudicator's reasons that the substantive dispute in relation to the Payment Claim was whether Trinity was entitled to delay damages and whether Parrwood was entitled to liquidated damages. The Adjudicator did not determine those issues. Rather, he decided that it would be "premature" to do so and therefore that he had to "decline … from determining that [Trinity] has no entitlement to be paid for the amounts claimed or any amount or that [Parrwood] has any right to the setoffs claimed" (at [211]).
Parrwood submits that in reaching that decision the First Adjudicator must be understood as concluding that no amount was due under the Contract in respect of the Payment Claim, which was a conclusion that the First Adjudicator was entitled to reach, even if it was wrong in law. I do not accept that submission. The question is not what the effect of the Contract was but what the effect of the Act was in the circumstances. As I have explained, s 8 of the Act gave Trinity a right to a progress payment on and from each reference date and ss 13 and 17 of the Act gave Trinity a right to make a claim in respect of that payment and to have that claim adjudicated. It is common ground that a reference date arose on 25 August 2019. Consequently, from that date Trinity had a right to make a progress claim and to have it adjudicated in accordance with the Act.

[8]

The supporting statement

Parrwood submits that the supporting statement served with the Payment Claim contained a false statement because, as the form of the statement required, it included a statement that all amounts due and payable to subcontractors had been paid when, in fact, three subcontractors - KIMY Air Conditioning Pty Ltd, Blue Drago Interior Pty Ltd and Saba Brothers Tiling Pty Ltd - were each owed substantial sums of money by Trinity. Parrwood submits that it can be inferred that that statement was made knowing that it was false or misleading in a material particular because supporting statements given in connection with previous payment claims identified those subcontractors as subcontractors who had been paid all amounts due and owing. Their omission from the Payment Claim could not, therefore, be regarded as an oversight.
There is a question whether compliance with ss 13(7) and (8) is a precondition to a valid payment claim: compare Sought After Investments Pty Ltd v Unicus Homes Pty Ltd [2019] NSWSC 600 at [35]; Greenwood Futures Pty Ltd v DSD Builders Pty Ltd [2018] NSWSC 1407 at [39]-[51]; Central Projects Pty Ltd v Davidson [2018] NSWSC 523 at [36]ff. However, it is not necessary to express a view on that question in the current case. Even accepting that compliance with ss 13(7) and (8) is a precondition to a valid payment claim, I do not accept that Parrwood has established that the supporting statement was knowingly false. That is a serious allegation and must be established by clear evidence: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 per Dixon J. The First Adjudicator did not ultimately make a finding about the issue: see [113] - [114] of the First Determination. It appears that the three subcontractors were not disclosed in the supporting statement because they were not engaged by Trinity but instead were engaged by a related company. Parrwood has not led any other evidence from which it could be inferred that Trinity knew that the supporting statement was false. Consequently, I am not satisfied that Parrwood has discharged its onus of proof.

[9]

Orders

The orders of the Court are: 1. Give leave to the first defendant to file the Cross Summons filed on 2 March 2020. 2. The Summons is dismissed. 3. Declare that the adjudication determination of John O'Brien dated 15 November 2019 purportedly made under the Building and Construction Industry Security of Payment Act 1999 (NSW) in respect of Adjudication Application 2019ADJT523 lodged with Adjudicate Today is null and void. 4. The sum of $401,109.73 paid into Court on 31 January 2020 and any interest thereon be paid to the first defendant; 5. The plaintiff pay the first defendant's costs of the proceedings (including the cross-claim).

[10]

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 March 2020

On 15 October 2019, Parrwood served its adjudication response. On the same day, at the request of the First Adjudicator, Parrwood and Trinity agreed to extend the time by when the First Adjudicator was to determine the adjudication application until 15 November 2019. The First Adjudicator made his determination on that day. He determined that the amount owing to Trinity was "No amount". He did so on the basis that, at the time the Payment Claim was made (6 September 2019), Parrwood had validly exercised its right under cl 39.4 to take the work out of Trinity's hands, with the result that payments under the Contract were suspended until they became due and payable under cl 39.6. No amount was therefore payable in respect of the Payment Claim: 208. Having regard therefore to my conclusion that the Claimant is not entitled under the Contract to any payment for the monies claimed in the Payment Claim until such time as the provisions of clause 39.6 of the Contract have been implemented, irrespective of the views of [sic] I have formed concerning those issues, I make no determination as to whether the Claimant is entitled to Delay Damages as claimed in the Payment Claim or whether the Respondent is entitled to LDs as claimed in the Payment Schedule. 209. In my view, any such Determination would be premature where the Claimant has not established an entitlement to any payment pursuant to his Payment Claim and where, under the Contract, the parties entitlements will not be fully crystallised until completion of the final reckoning by the Superintendent pursuant to clause 39.6 of the Contract. At that stage, any postponement of the Claimant's rights under the suspension afforded by clause 39.4 of the Contract will be at an end. Adjudicated Amount 210. Accordingly, I am satisfied that, of the monies claimed in the Payment Claim, the Claimant has established no entitlement under the Contract to be paid any amount pursuant to the Payment Claim although that does not extinguish the Claimant's potential rights to be paid for the value of its Works upon completion of the Works, pursuant to clause 39.6 of the Contract. 211. I must decline therefore from determining that the Claimant has no entitlement to be paid for the amounts claimed or any amount or that the Respondent has any right to the setoffs claimed.