A and M Wilson Building Contractors Pty Ltd v Lavander Pty Ltd

[2009] VCC 1504

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE
COMMERCIAL LIST

BUILDING CASES DIVISION

Case No. CI-09-01415

A & M WILSON BUILDING CONTRACTORS PTY LTD	Plaintiff
(ACN 081 885 672)
v
LAVANDER PTY LTD	Defendant
(ACN 101 400 391)

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JUDGE:	HIS HONOUR JUDGE SHELTON
WHERE HELD:	Melbourne
DATE OF HEARING:	26 August 2009
DATE OF JUDGMENT:	9 September 2009
CASE MAY BE CITED AS:	A & M Wilson Building Contractors Pty Ltd v Lavander Pty Ltd
MEDIUM NEUTRAL CITATION:	[2009] VCC 1504
REASONS FOR JUDGMENT

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Catchwords: Summary judgment application – Building and Construction Industry Security of Payment Act 2002 – Payment claim not made in accordance with provisions of contract no bar to summary judgment – Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 – Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332 – Hawkins Construction (Australia) Pty Ltd v Mac’s Industrial Pipework Pty Ltd [2001] NSWSC 815 – Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd [2009] VSC 156 – Age Old Builders Pty Ltd v John Arvanitis and George Arvanitis [2006] VCC 1827 – Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248 – T S Constructions Pty Ltd v Piecor Pty Ltd [2009] VCC 1045.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J F Richardson	Slidders Lawyers
For the Defendant	Mr G S Lucas	Lander & Rogers
HIS HONOUR:

1          This is an application for summary judgment pursuant to Order 22 of the County Court Civil Procedure Rules. The application is based upon s.16(2)(a)(i) of the Building and Construction Industry Security of Payment Act 2002 (“the Act”).

2          The approach to be taken to a summary judgment application is stated by the High Court in Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87, at 89, as follows:

“The power to order summary or final judgment is one that should be exercised with great care. It should never be exercised unless it is clear that there is no real question to be tried.”

3          To similar effect is the statement of Herring CJ and Lowe J in Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332, at 334, that:

“Where there is a real case to be investigated either in fact or law, leave

to defend should be given.”

4          The plaintiff and the defendant entered into a contract dated 11 May 2007 pursuant to which the plaintiff was required to construct six domestic units at 30-38 Longwarry Road, Drouin, for the sum of $788,620 (“the contract”).

5          On or about 2 March 2009, the plaintiff forwarded to the defendant a final payment claim dated 27 February 2009 for the sum of $61,682. This claim stated that it was a payment claim under the Act. The defendant did not provide a payment schedule to this claim as required by s.15 of the Act.

6          The plaintiff now seeks summary judgment for the sum of $61,682 which remains unpaid.

7          The plaintiff had earlier prepared an invoice dated 6 February 2009, also for the sum of $61,682. It was addressed to “Box 165 Bunyip 3815”. Although it was sent by facsimile on 9 February 2009 to a director of the defendant, and a copy of it served on the same day by leaving it on the kitchen bench-top of one of the units at 30-38 Longwarry Road, Drouin, as requested by the wife of a director of the defendant, Andrew Wilson, a director of the plaintiff, deposes in his affidavit sworn 19 August 2009 that he was concerned that the address shown on the invoice was not the address of the defendant as stated in the contract. For that reason, the invoice of 27 February 2009 was prepared and forwarded to the defendant.

8 Since the invoice dated 27 February 2009 is for a final payment, s.14(7) of the Act allows it to be served, notwithstanding the provisions of s.14(6) of the Act. Here it is not in dispute that the amount claimed was not paid “by the due date” under the contract.

9          Mr Lucas, who appeared for the defendant, sought to rely upon the fact that the claim of 27 February 2009 was addressed to “Kevin Hogan care of Lavander P/L” and not to the defendant itself. As I indicated to Mr Lucas, I saw no merit in this submission. As Windeyer J said in Hawkins Construction (Australia) Pty Ltd v Mac’s Industrial Pipework Pty Ltd [2001] NSWSC 815 at paragraph [8]:

“This argument might have had some weight in 1800. ... It should not
have been put.”

10        In similar vein are the comments of Vickery J in Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd [2009] VSC 156 at paragraph [46]:

“The Act also manifests another central aspiration, that of freedom from excessive legal formality. The provisions demonstrate a pragmatic concern to provide a dispute resolution process which is not bedevilled with unnecessary technicality. ... If the Victorian Act became prone to challenges founded on fine legal points, an important object of the Act would be defeated by the twin adversaries of cost and time.”

11        The principal submission of Mr Lucas in opposing the summary judgment application was that the plaintiff had no contractual entitlement to serve the payment claim dated 27 February 2009. In my view, this is no defence. I have set out my views upon this in Age Old Builders Pty Ltd v John Arvanitis and George Arvanitis [2006] VCC 1827 where I stated:

“17 In any event, I am of the view that there was no obligation upon the plaintiff to show compliance with the provisions of the Contract for making progress claims prior to making a Payment Claim. I have set out my reasons for so concluding in Blueview Constructions Pty Ltd (trading as WRS Constructions) v Vain Lodge Holdings Pty Ltd (2005) VCC 1325, a judgment delivered on 15 November 2005. In brief, section 4 defines “progress payment” as a “payment to which a person is entitled under section 9”. Section 9 then provides that:

“(1) On and from each reference date under a

construction contract, a person –

(a)	who has undertaken to carry out construction work under the contract;
...

is entitled to a progress payment under this Act,
calculated by reference to that date.”

18      It will be noted that the wording “entitled to a progress payment” is then picked up in section 14(1).

19      Section 9(2)(a)(1) defines “reference date” for the purposes of sub- section (1) as “a date on which a claim for a progress payment may be made”. Under the terms of the Contract this is the 15th day of each month. In coming to the conclusion in Blueview Constructions that there was no obligation upon the plaintiff to show compliance with the terms of the Contract in relation to the making of a progress claim, I relied upon comments made in Beckhaus Civil Pty Ltd v Council of the Shire of Brewarrina (2002) NSWSC 960 at paragraphs 52 and 60–64 per Macready AJ, which were followed in Walter Construction Group Ltd v CPL (Surry Hills Pty Ltd) (2003) NSWSC 266, particularly at paragraphs 52 and 53 per Nicholas J., and Okaroo Pty Ltd v Vos Construction & Joinery Pty Ltd (2005) NSWSC 45 at paragraph 46, again per Nicholas J.

...
23	…I further note that in Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liquidation) [2005] NSWCA 409, a decision of the New South Wales Court of Appeal delivered on 10 November 2005, Ipp JA stated at paragraph 76:

“Provided that a payment claim is made in good faith and purports to comply with s 13(2) of the Act, the merits of that claim, including the question whether the claim complies with s 13(2), is a matter for adjudication under s 17 and not a ground for resisting summary judgment in proceedings under s 15. In particular, if no adjudication is sought summary judgment cannot be resisted on grounds that could have been raised by way of a payment schedule leading to adjudication.”

24 Section 13(2) of the New South Wales Act broadly corresponds with section 14(3) of the Act.

25      Similarly, in Brookhollow Pty Ltd v R & R Consultants Pty Ltd [2006] NSWSC 1, Palmer J, stated at paragraph 41:

“... if the respondent does not serve a payment schedule within the time limited under the Act and the claimant ultimately seeks the entry of judgment under s 15(4), the respondent may not resist summary judgment on the ground that the payment claim was not a valid payment claim by reason of non-compliance with the requirements of s 13: the respondent has only one chance to take that objection, namely, in a timeously served payment schedule.”

12        I also note the comment of Finkelstein J in Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248 at paragraph [5]:

“... if the principal does not provide a payment schedule within due time, whether intentionally (because he disputes the claim) or unintentionally, he becomes liable to pay the claimed amount.

13        In T S Constructions Pty Ltd v Piecor Pty Ltd [2009] VCC 1045 I considered a submission “that the decisions in Nepean Engineering and Brookhollow should be confined to whether a plaintiff has an entitlement to payment and that [it] did not extend as to whether a party was entitled to serve a payment claim in the first place.” I stated, “In my view, these judgments should not be read so narrowly.”

14        The defendant had an opportunity to raise the issue of whether the plaintiff was entitled to serve the payment claim in a timeously served payment schedule. It did not do so.

15        There is no real question to be tried. There will be judgment for the plaintiff in the sum of $61,682.

16        I will hear from the parties on the question of interest and costs.

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