In Built Pty Ltd v Victorian Correctional Infrastructure Partnership Pty Ltd [2026] VSC 76, Nichols J refused to make declarations sought by Build concerning the meaning of "Linked Claims" and "Linked Disputes", or the application of the "pay when paid" and "contracting out" provisions of SOPA.
The State of Victoria entered into a Head Contract with VCIP to deliver the prison infill expansion program. VCIP subsequently entered into a Subcontract with Built for the relevant design and construction work. This included the installation of modular cells procured by the State and design and constructed by a third party under a separate contract.
In 2023 the State alleged that VCIP was responsible for alleged defects in the modular cells and in March 2025 it issued a Notice of Dispute which has ultimately led to arbitration. Also in March 2025 VCIP issued Built with a Notice of Dispute under the Subcontract relating to the same alleged defects. Among other things, the NoD said that the matters raised concerned "Linked Claims" and gave rise to "Linked Disputes" and therefore under clause 48A of the Subcontract, would not been progressed until resolved under the Head Contract arbitration.
Built commenced proceedings seeking declarations that clause 48A did not apply, or was void. This was on the basis that the claims were not Linked Claims, or the clause was void under SOPA as an impermissible "pay when paid" or "contracting out" provision.
Her Honour considered the meaning of the terms "Linked Claims" finding that while this would not include a "bare denial" it was not limited to the pursuit of a positive assertion and included an advancement of factual or legal allegations. This meant that contrary to Built's submissions, clause 48A continued to apply even if it decided no longer to pursue a Linked Claim. Her Honour also found that Linked Disputes did not need to be co-extensive with Linked Claims and any "harshness" in Built being bound by the result of a dispute resolution process that it does not have a "seat at the table" applies by reason of the plain terms of the Subcontract. Ultimately, her Honour found that Built was not entitled to the declarations sought.
Her Honour also considered the sections 13 and 48 in SOPA dealing with pay when paid provisions and prohibiting contracting out. In determining whether s 13 applies it is necessary to look at both the character of the provision and the payment in issue, but it was not established that the NoD described any payment so there was no payment for the section to take effect, and Built's arguments on the existence of payment entitlements per clause 48A were "entirely abstract" and addressed to "entirely hypothetical circumstances". Similarly, the propositions undermining the conclusions that Build sought regarding s 48 were not concerned to resolve a real controversy arising over concrete facts concerning the operation or application of the SOPA and cl 48A.