In Built Pty Ltd v Victorian Correctional Infrastructure Partnership Pty Ltd [2026] VSC 76, the Supreme Court of Victoria considered the implication of a “Linked Claims and Linked Disputes” contractual regime. Such regimes are commonly found in Public Private Partnership arrangements (frequently called PPPs).

Victorian Correctional Infrastructure Partnership Pty Ltd (VCIP) contracted with the State of Victoria to deliver the prison infill expansion program at the Metropolitan Remand Centre. VCIP subcontracted the design and construction work to Built Pty Ltd under a Construction Contract.

Contractual regimes providing for the resolution of linked claims and disputes are often used on PPPs. They seek to allow parties in back-to-back contract arrangements to make claims and resolve disputes in a back-to-back fashion, often by ‘pausing’ the dispute downstream pending resolution of the equivalent claims under the head contract to ensure a consistent result.

The issue in dispute in this case was whether a “Linked Claims and Linked Disputes” regime in the Construction Contract extended to a notice of dispute that VCIP issued to Built under the Construction Contract following a related notice of dispute issued by the State to VCIP in respect of alleged defective work.

Built sought to avoid the application of the “Linked Claims and Linked Disputes” regime which would have paused the dispute between VCIP and Built, on the basis that:

• VCIP’s notice of dispute did not contain “Linked Claims” and “Linked Disputes” under the Construction Contract;
• the regime is one that seeks to make VCIP’s liability to Built contingent on the operation of the head contract, constituting a ‘pay when paid’ provision (section 13) which had no effect by operation of the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOPA); and/or
• the regime is one that would suspend Built’s rights and entitlements under SOPA and defer its entitlement to payment, constituting a provision with the effect of excluding, modifying or restricting the operation of SOPA, which SOPA will render void (section 48 of SOPA).

The Court refused Built’s application for declaratory relief, primarily on the basis that there was no present controversy between the parties on the majority of the points for the Court to determine. As a result, there remains an open question as to the operation of Linked Claim and Linked Dispute regimes, and their interaction with SOPA. However, in doing so, the Court made helpful observations as follows:

• On the terms of the Construction Contract and having regard to the relevant notice of dispute, the Linked Disputes regime would apply in this context.
• Under section 13 of SOPA, ‘pay when paid’ provisions will only be of no effect in relation to payments for construction work, or the supply of related goods and services, under construction contracts. In this case, the relevant notice of dispute did not concern a payment to which section 13(1) of SOPA could apply.
• Likewise, the Court could not make a declaration that the Linked Claims and Linked Disputes regime was void for ‘contracting out’ under section 48 of SOPA, in the absence of a true factual dispute concerning the interaction between SOPA and the Construction Contract.

The Court’s useful commentary takes us a step further in considering the operation of linked claim and linked dispute provisions, and their interaction with SOPA.

The decision can be found here.