In Advance Earthmovers Pty Ltd v Fubew Pty Ltd  NSWCA 337,
the New South Wales Court of Appeal has found that a corporation
cannot be considered a 'resident' of a premises and as
a result is liable to claims under the Building and Construction
Industry Security of Payment Act 1999 (NSW) (SOP Act). The
residential exclusion under the SOP Act was deemed not effective
against a corporation. The decision clears the way for building
contractors to issue claims under the SOP Act to corporate land
owners and developers for disputes concerning residential building
An earthmoving company (Advance) contracted with a corporate
land owner (Fubew) to do earthmoving work on Fubew's
property. The earthmoving work involved developing an access road
prior to construction on the site of a proposed residence for the
corporate directors of Fubew.
Advance completed the work and rendered invoices to Fubew. Fubew
paid $15,000 of the $95,000 claimed by Advance and disputed the
Advance submitted a claim under the SOP Act and obtained an
adjudication determination against Fubew in the sum of $79,120.
Advance then obtained summary judgment for that determination
against Fubew in the District Court.
Fubew then lodged a claim in the Consumer, Trader & Tenancy
Tribunal (CTTT) against Advance claiming it had been overcharged.
Separately, Advance filed a Statement of Claim in the District
Court claiming breach of contract and quantum meruit (a claim for
the reasonable value of the work plus costs), or in the
alternative, payment of the SOP Act determination in its
Prior to the determination of the proceedings before the CTTT
and the District Court, Advance issued a statutory demand on Fubew
relying on the summary judgment. Subsequently, Fubew had the
statutory demand set aside in the Supreme Court, pending
determination of either the proceedings in the CTTT, or
Advance's claim in the District Court. Fubew then filed a
motion in the District Court seeking to set aside the summary
judgment in favour of Advance and transfer the proceedings to the
CTTT. In deciding Fubew's application, the District Court
held that it had no jurisdiction to determine the matter and the
summary judgment in favour of Advance should be set aside. This
decision was overturned in the New South Wales Court of Appeal.
The key issue before the Court of Appeal was whether
Advance's payment claim was excluded by section 7(2)(b) of
the SOP Act because it concerned residential building work.
Section 7(2)(b) of the SOP Act states the Act does not apply
'a construction contract for the
carrying out of residential building work (within the meaning of
the Home Building Act 1989) on such part of any premises as the
party for whom the work is carried out resides in or proposes to
The Court of Appeal held that because a corporation (ie Fubew)
could not 'reside' in a premises, the section 7(2) (b)
exclusion in the SOP Act did not apply. Therefore Advance's
payment claim under the SOP Act had merit and there was no
reasonable defence to that claim. Accordingly, summary judgment in
favour of Advance was restored by the Court. The Court of Appeal
noted that Fubew did have a right to make a further application to
the District Court to set aside the summary judgment however on the
material before the Court, it suggested that the prospects of
success would be minimal.
Where a building contractor enters into a contract for
residential building work with a corporation (including corporate
land owners and corporate developers), the building contractor may
use the mechanisms available to it under the SOP Act to claim
regular payments, or even suspend work, should a dispute arise
under the contract. The same principle is likely to apply where a
building contractor enters into a contract for residential building
work with a corporate entity such as a trustee on behalf of a
trust, or an administrator or liquidator on behalf of an insolvent
corporation. Typically this situation will arise where an
administrator or liquidator steps into the shoes of an insolvent
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