Key Takeaways

• The decision is a timely reminder that under s 13(1C) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA), only one payment claim may be served after a construction contract is terminated.
• The decision also provides clarity that a payment claim post termination cannot be unilaterally withdrawn and replaced. It also finds that there is no direct support for the proposition, contrary to industry thoughts, that a payment claim can be unilaterally withdrawn. Withdrawal is only safe with the respondent’s agreement.
• Relabelling a later claim as a “final” or “replacement” claim does not avoid the limitation, and an adjudication on it is liable to be quashed.
• Claimants should collate every cost and invoice before serving their post-termination claim.

Background

Reem Built performed works at a commercial property in Casula for Reosteel. On 29 July 2025 the parties agreed that Reem would stop work. In August 2025, Reem issued a tax invoice for $45,290.15 that was endorsed as a SOPA payment claim. Reosteel did not respond. In June 2026, Reem served a “Final Payment Claim” for $132,850.34. It obtained an adjudication for the full amount. Pike J quashed the determination.

No Unilateral Withdrawal (at least post termination)

Following BCFK Holdings v Rork Projects [2022] NSWSC 1706, the Court held that s 13(1C) permits “a” payment claim, meaning one claim, after termination.

In the industry there was a school of thought that unilateral withdrawal was valid, relying on obiter comments in the Judgments of

• NC Refractories Pty Ltd -v- Consultant Bricklaying Pty Ltd [2013] NSWSC 842
• Kitchen Xchange v Formacon Building Services [2014] NSWSC 1602

Pike J considered these earlier authorities and found they support withdrawal by agreement only. Further, the Court noted they predate s 13(1C). The Court reasoned that allowing unilateral withdrawal and replacement would “substantially, if not wholly undermine” the statutory limitation of one final claim post termination.

It made no difference that Reosteel had never responded to the first claim. The Court also noted that the later claim did not clearly withdraw the first. Withdrawing earlier discounts is not the same as withdrawing a payment claim.

It remains to be decided if a claimant can unilaterally withdraw and replace a payment claim pre-termination.

Termination Changes the Rules

While a contract is on foot, s 13(5) allows one claim per named month. Once the contract is terminated, that recurring entitlement ends and is replaced by a single statutory opportunity. Claimants should therefore treat any invoice issued after termination with care. If it states that it is made under the SOPA, it may use up the claimant’s only adjudication pathway, even if it was intended as a commercial settlement figure.

The “One Chance” Final Payment Claim

Reem argued that this result was absurd, because a builder might receive further invoices after serving its claim. The Court rejected that argument and note the builder “can simply wait” until it has everything it wishes to claim. Serving early or incompletely cannot be fixed later. Any omitted amounts fall outside the SOPA, and the claimant is left with slower contractual or court remedies. Claimants should still serve within the s 13(4) time limit, but they should not rush.

Practical Steps

• Before serving a post-termination claim, check that it is complete and captures all amounts you may be entitled to claim.
• Avoid include SOPA endorsements on invoices issued to facilitate commercial settlements.
• If a replacement claim is genuinely needed, obtain the respondent’s written agreement to withdraw the earlier claim.
• Respondents should check whether a post-termination claim is the first claim served after termination. If it is not, they should challenge it promptly.