SOPA – Security Payments into Court and Recent Judicial Guidance

You win an adjudication, you get paid – at least that’s what should happen if the respondent doesn’t appeal the adjudication determination.  

Last week, the Supreme Court of NSW and the Court of Appeal both weighed in on matters involving the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA), specifically, when a respondent appeals a determination and an order is made requiring them to award to be paid into Court (rather than to the successful claimant).  Relevant judgments include: 

• Builtcom Constructions Pty Ltd v VSD Investments Pty Ltd as trustee for The VSD Investments Trust [2025] NSWCA 93 

• Woonona-Bulli RSL Memorial Club Ltd v Warrane-Design Construct Fit-Out Pty Ltd [2025] NSWCA 89 

The Relevant Provision

Section 25 of the SOPA requires that a respondent, who is challenging an adjudication determination by way of judicial review, must pay the adjudicated amount into Court. This statutory mechanism serves to preserve the sum in dispute pending judicial resolution. 

Last week’s cases on the release of funds 

Builtcom Constructions Pty Ltd v VSD Investments Pty Ltd as trustee for The VSD Investments Trust [2025] NSWCA 93 

In these proceedings, the Court of Appeal directed that funds held by the Court be released to the builder, who had prevailed at adjudication. The Court emphasised several critical factors: 

1. The underlying purpose of SOPA, namely, to ensure cash flow; 
2. The balance of convenience; and 
3. The potential impact of the outcome of judicial proceedings on the sum awarded, being that the amount held would likely be released to the builder in any event. 

This decision reinforces that, while the SOPA provides for security of payment via Court deposits, the broader purpose of facilitating prompt payment continues to guide the Court’s discretion regarding release. 

Woonona-Bulli RSL Memorial Club Ltd v Warrane-Design Construct Fit-Out Pty Ltd [2025] NSWCA 89 

In these proceedings, the Court dismissed the Club’s application for a stay on the release of funds, resulting in the adjudicated amount being paid out to the builder.  Key observations included: 

1. The weakness of the Club’s underlying case and the absence of compelling grounds for withholding payment pending appeal; 
2. That the balance of convenience again supported release, particularly as the builder had not yet been paid for completed works (which is against the policy objectives of the SOPA); and 
3. The financial viability of the builder was a relevant but not determinative factor. 

Key takeaways 

These decisions serve as a timely reminder of the following: 

1. Post-adjudication funds may be held temporarily: Even a successful adjudication may not guarantee immediate payment.  Parties should anticipate that the award may be held by the Court during subsequent legal challenges. 
2. Evidence and proper grounds are crucial for a stay application: Applications seeking to stay the release of adjudicated sums must be supported by strong evidence relating to the merits of the case, public interest, balance of convenience, and issues in dispute. 
3. Policy objectives of SOPA remain central: While a party’s solvency and financial standing may be considered, the overarching objective of SOPA—to protect and promote cash flow in the construction industry—carries significant weight.