Can a SOPA judgment be stopped? Key lessons for owners, developers, builders and subcontractors

A recent decision of the New South Wales District Court highlights the evolving approach to applications to stay (or pause) the enforcement of judgments arising under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA). In Made Development Group Pty Limited v Halliday [2026] NSWDC 159, the Court confirmed that, while the “pay now, argue later” regime remains central to the objectives of the SOPA, courts have the discretion to grant a stay where the interests of justice require it, particularly in circumstances where an adjudicated amount is unreliable.

Facts

Made Development Group Pty Limited (MDG) obtained an adjudication determination in its favour under the SOPA against Kara Halliday (Halliday). Pursuant to section 25 of the SOPA, MDG obtained an adjudication certificate and filed it as a judgment debt against Halliday (Judgment).

MDG sought to enforce the Judgment against Halliday by way of a garnishee order, recovering approximately $38,000.00 by that process.

Halliday applied to the Court to stay enforcement of the Judgment. In support of that application, Halliday relied on several matters:

1. that MDG had accepted that several invoices that formed part of the adjudicated amount had been improperly altered and inflated by a subcontractor and did not actually reflect the work performed. There was no evidence that MDG knew of, or was responsible for, the altered invoices;

2. Halliday contended that further discrepancies in the invoices may exist;

3. Halliday obtained an expert report which indicated a potential rectification claim against MDG of approximately $240,000 (Rectification Claim); and

4. when considering the inflated invoices and the amount recovered through the garnishee order, the remaining balance of the Judgment was roughly equivalent to the value of the Rectification Claim.

MDG opposed the stay emphasising that the purpose underpinning the SOPA, the “pay now, argue later” regime, was to ensure the risk of cash flow and insolvency falls on the owner rather than the builder and that there was insufficient evidence of hardship on the part of Halliday to justify departure from that policy.

Key issue

The key issue for determination was whether the Court should exercise its discretion to stay enforcement of the Judgment, notwithstanding the SOPA’s policy favouring prompt payment, and if so, on what terms.

What the Court decided

The Court granted a stay of enforcement of the Judgment, however, this was conditional on Halliday paying $120,000 to MDG within 28 days.

In staying the Judgment, the Court confirmed that:

1. the SOPA does not exclude the power of a Court to stay enforcement of a section 25 judgment;

2. while the statutory policy of “pay now, argue later” is a significant consideration, it is not determinative; and

3. the discretion to grant a stay must be exercised judicially, taking into account all relevant circumstances, and is not dependent on establishing “exceptional circumstances” as a strict prerequisite.

The Court found that the present case fell within an unusual category warranting the exercise of the discretion, having regard to:

1. MDG accepting the overstatement of the adjudicated amount by approximately $122,000;

2. the existence of a credible Rectification Claim of a similar magnitude to the remaining judgment amount;

3. the early stage of the substantive dispute, with uncertainty as to the ultimate liabilities of the parties; and

4. evidence suggesting that MDG was financially stable and unlikely to suffer significant prejudice from a partial delay in payment.

Key takeaways

The decision highlights that courts are prepared to exercise their discretion to stay section 25 judgments in appropriate cases, notwithstanding the objectives of the SOPA.

In summary:

1. the “pay now, argue later” regime remains central, but it is not absolute;

2. courts may intervene for developers or upstream contractors where there is clear evidence that the adjudicated amount is materially unreliable;

3. a stay may be granted even in the absence of catastrophic financial consequences, particularly where competing claims may substantially offset the judgment;

4. conditional stays (such as requiring partial payment) are likely to be a preferred mechanism employed by the courts to balance competing risks between the parties; and

5. builders should check subcontractor invoices carefully, as enforcement of an adjudication judgment may be compromised and costly even if the builder was not involved in misconduct.

Ultimately, the decision underscores the courts’ careful balancing of the statutory objectives of the SOPA against the interests of justice in each case.

If you have any questions or require any assistance regarding adjudications, enforcement of debts, staying judgments or SOPA related matters generally, please do not hesitate to contact the authors.

Authors: Anish Wilson & Barbara Farhat

This publication is intended as a source of information only. No reader should act on any matter without first obtaining professional advice.