Most Read Contributor in Australia, September 2016
It is now clear that payment claims served out of time under the
Victorian Building and Construction Industry Security of Payment
Act (Act) will be invalid after the recent Victorian Supreme Court
decision in Hallmarc Construction v Saville  VSC 491.
Hallmarc Construction entered into a construction contract with
Mr Saville for the supply and installation of joinery for a
134-apartment residential development.
The contract between the two parties made no express provision
regarding time for payment, defects liability period or a final
payment certificate. As a result, the default provisions covering
such matters under the Act applied, meaning:
the reference date for a final payment claim was the date
immediately following the day after the construction work or
related goods or services were last carried out (s 9(2)(d) of the
the payment claim must be served no later than 3 months after
the reference date (s 14(5) of the Act).
Justice Vickery found that the last date on which Mr Saville
undertook construction work, or provided related goods or services,
under the contract was 30 September 2013.Therefore the reference
date was 1 October 2013, being the date from which the three month
period began to run.
Mr Saville submitted his first payment claim on 21 February
2014, and the second payment claim on 16 May 2014. As a result, the
Court found that both claims were 'hopelessly out of time'
and, therefore, any Adjudication Determination made under the Act
The Court found that while the Act is intended to provide for
the timely resolution of claims under construction contracts, the
availability of rights conferred by the Act, such as adjudication,
depends upon strict observance of the time limits expressed in the
Significance of the case
This decision highlights that parties seeking to assert their
rights under the Act need to strictly adhere to its time limits.
Nonetheless, contractors and subcontractors who fail to meet the
time limits mandated by the Act remain able to seek recourse for
any payment claims that may be due in court proceedings (rather
This case also highlights the need to ensure that parties ensure
that their contracts specify the time periods for serving and
paying claims in compliance with the Act.
For assistance and further information on how to meet your
obligations under the Act please contact a member of our
construction team below and view our practice webpage
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for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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