The 12-month time limit in s 13(4) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) can be decisive where a payment claim is served after the relevant substantive works have been completed.

In Reward Interiors Pty Ltd t/as Reward Group v Stream Line Joinery Pty Ltd; Stream Line Joinery Pty Ltd v Reward Interiors Pty Ltd t/as Reward Group, [2026] NSWSC 940 (Hmelnitsky J), the Court considered whether a payment claim served almost 12 months after completion of the relevant joinery works was out of time. The judgment confirmed that the inquiry under s 13(4) is claim-specific: it is not sufficient that some work under the contract was performed within the preceding 12 months; the relevant work must be construction work to which the payment claim itself relates.

The decision also addressed two matters of broader significance: whether later defect rectification can be relied upon to extend the statutory period, and the requirement that an adjudicator’s error be material before judicial review will invalidate the determination.

Background

Reward Interiors Pty Ltd (Reward) was the contractor for refurbishment works at the Sofitel Wentworth Hotel in Sydney. In June 2024, it engaged Stream Line Joinery Pty Ltd (Stream Line) to supply, manufacture and install bespoke joinery.

On 30 September 2025, Stream Line served a payment claim, described as the balance of the joinery package. The supporting breakdown identified the contract items and agreed variations, deducted amounts already invoiced and paid, and included retention.

The timing of the claim was disputed. Reward contended that Stream Line had completed all relevant construction work by 25 September 2024. Stream Line relied on evidence that the final installation of certain banquette seating occurred on 1 October 2024 and that further rectification work was undertaken on 9 October 2024. Its evidence included contemporaneous photographs.

The adjudicator accepted Stream Line’s evidence and determined the claimed amount to be payable. Reward commenced proceedings in the Supreme Court seeking declarations that the adjudication determinations were void for jurisdictional error.

The statutory question under s 13(4)

Section 13(4) of the Act provides that a payment claim may be served only within (a) the period determined by or in accordance with the terms of the construction contract, or (b) the period of 12 months after the construction work to which the claim relates was last carried out (or the related goods and services to which the claim relates were last supplied), whichever is the later.

Consistent with earlier authority, the Court held that this does not mean any work performed under the construction contract. The relevant question is whether any of the work for which payment is claimed was carried out during the 12-month period preceding service of the payment claim.

That distinction is important. Later activity on site does not, of itself, preserve a claimant’s rights under the Act. The later work must form part of the construction work identified by, and claimed for in, the payment claim.

Why the payment claim was within time

The factual dispute was whether the banquette installation had been completed on 25 September 2024, as Reward contended, or on 1 October 2024, as Stream Line contended. The Court emphasised that the final installation of the banquettes was, on any view, work for which payment was claimed. The payment claim sought the balance of the joinery package and its supporting breakdown expressly included the relevant banquette items.

Hmelnitsky J was therefore not persuaded that the adjudicator had adopted the erroneous test alleged by Reward. Read as a whole, the adjudicator’s reasons were capable of being understood as addressing whether construction work to which the claim related had been performed within the relevant period.

The adjudicator’s finding that the banquette installation was completed on 1 October 2024 was sufficient to bring the payment claim served on 30 September 2025 within time.

Rectification work does not automatically restart the statutory period

The adjudicator had also relied on rectification work performed on 9 October 2024. The Court treated this aspect of the reasoning with caution. His Honour described it as “somewhat troubling” and observed that defect rectification would ordinarily not itself be work the subject of a payment claim.

Nevertheless, the payment claim in this case was framed as a claim for the balance of all work under the subcontract. In that context, it was open to the adjudicator to find that the rectification work fell within the work described by the claim. More importantly, even if the adjudicator had been wrong to rely on the 9 October rectification work, the 1 October installation work independently established that the claim was served within time.

The judgment should therefore not be read as establishing a general rule that attending site to rectify defects extends the s 13(4) period. Whether later work is relevant will depend on the scope and formulation of the payment claim, and whether the later work is genuinely work for which payment is sought.

Materiality and judicial review

Reward submitted that any error in applying s 13(4) would amount to jurisdictional error. The Court rejected that submission and held that an error in applying s 13(4) will be jurisdictional only if it is material.

The relevant question is whether, absent the alleged error, there was a realistic possibility that the adjudicator could have reached a different outcome. On the facts found by the adjudicator, there was not. Once the adjudicator found that the banquette installation was completed on 1 October 2024, and that installation was plainly work included in the payment claim, the outcome on the s 13(4) issue was inevitable.

The decision emphasised that judicial review of a determination under the Act is not merits review. An identifiable mistake will not necessarily invalidate a determination if the mistake could not realistically have affected the result.

Key Takeaways

• Treat the 12-month limit as claim-specific. The relevant date is tied to the construction work for which payment is claimed, not simply the last date on which any activity occurred under the contract.
• Do not rely on defect rectification to extend time. Rectification work will not automatically restart the 12-month period and may not be work to which the payment claim relates.
• Consider materiality before commencing judicial review. Even where an adjudicator appears to have misstated or misapplied the law, the challenge may fail if the outcome could not realistically have been different.