AC Hall Airconditioning Pty Ltd v Victorian Education
[2010] VCC 1473
•20 October 2010
| IN THE COUNTY COURT OF VICTORIA | (Un) Revised Not Restricted |
| AT MELBOURNE CIVIL DIVISION COMMERCIAL LIST BUILDING CASES DIVISION |
Case No. CI-10-02331
| AC HALL AIRCONDITIONING CONTRACTING PTY LTD | Plaintiff |
| (ACN 091 308 637) | |
| v | |
| VICTORIAN EDUCATION FOUNDATION LIMITED | Defendant |
| (ACN 126 965 044) |
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| JUDGE: | HIS HONOUR JUDGE SHELTON |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 8 September 2010 |
| DATE OF JUDGMENT: | 20 October 2010 |
| CASE MAY BE CITED AS: | AC Hall Airconditioning Pty Ltd v Victorian Education Foundation Limited |
| MEDIUM NEUTRAL CITATION: | [2010] VCC 1473 |
REASONS FOR JUDGMENT
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Catchwords: Summary judgment application - Building & Construction Industry Security of Payment Act 2002, s.16(2)(a)(i) – Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 – Australian Can Co Pty Ltd v Levin & Co Pty Ltd [1947] VLR 332 – excluded amounts – variations.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr B Reid | Pilley McKellar Pty Ltd |
| For the Defendant | Mr R J Manly SC with | Lachlan Partners Legal |
| Mr M Whitten | ||
| HIS HONOUR: |
1 This is an application for summary judgment pursuant to Order 22 of the Count Court Civil Procedure Rules 2008. The application is based upon s.16(2)(a)(i) of the Building & Construction Industry Security of Payment Act 2002 (“the Act”).
2 The approach to be taken to an application such as this is as 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 and 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 Pursuant to an agreement made between the plaintiff and the defendant, the plaintiff provided air conditioning works for the defendant at 347 Flinders Street, Melbourne. The terms of the agreement between the parties were not well documented and are in dispute.
5 The plaintiff’s claim is for the sum of $280,500, calculated as follows:
Invoice No. 1839C, dated 26 February 2010 $231,000 Invoice No. 1839F, dated 30 March 2010 $49,500 _______ $280,500
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6 The two claims state, as required by s.14(2)(e) of the Act, that they are made under the Act and the plaintiff asserts that the two claims were payment claims pursuant to s.14 of the Act. Payment schedules were not provided within the time limited by s.15(4)(b) of the Act, as a consequence of which the plaintiff now brings its claim pursuant to s.16(2)(a)(i) of the Act.
7 Section 16(4)(a)(ii) of the Act provides that the sum claimed in a proceeding commenced under s.16(2)(a)(i) of the Act, as here, must not include any excluded amount [my emphasis]. “Excluded amount” is defined in s.4 of the Act as having “the meaning given in s.10B”.
8 Section 10B provides:
(1) This section sets out the classes of amounts (excluded amounts) that must not be taken into account in calculating the amount of a progress payment to which a person is entitled under a construction contract. (2) The excluded amounts are—
(a) any amount that relates to a variation of the construction contract that is not a claimable variation; … .”
9 Section 4 of the Act defines “claimable variation” as having “the meaning given in s.10A”.
10 Section 10A of the Act provides:
“10A Claimable variations (1) This section sets out the classes of variation to a construction contract (the claimable variations) that may be taken into account in calculating the amount of a progress payment to which a person is entitled in respect of that construction contract.
(2) The first class of variation is a variation where the parties to
the construction contract agree—
(a)
that work has been carried out or goods and services have been supplied; and
(b)
as to the scope of the work that has been carried out or the goods and services that have been supplied; and
(c)
that the doing of the work or the supply of the goods and services constitutes a variation to the contract; and
(d)
that the person who has undertaken to carry out the work or to supply the goods and services under the contract is entitled to a progress payment that includes an amount in respect of the variation; and
(e)
as to the value of that amount or the method of valuing that amount; and
(f) as to the time for payment of that amount. (3) The second class of variation is a variation where—
(a)
the work has been carried out or the goods and services have been supplied under the construction contract; and
(b)
the person for whom the work has been carried out or the goods and services supplied or a person acting for that person under the construction contract requested or directed the carrying out of the work or the supply of the goods and services; and
(c)
the parties to the construction contract do not agree as to one or more of the following—
(i) that the doing of the work or the supply of goods and services constitutes a variation to the contract;
(ii) that the person who has undertaken to carry out the work or to supply the goods and services under the construction contract is entitled to a progress payment that includes an amount in respect of the work or the goods and services;
(iii) the value of the amount payable in respect of the work or the goods and services;
(iv) the method of valuing the amount payable in respect of the work or the goods and services;
(v) the time for payment of the amount payable in respect of the work or the goods and services; and
(d)
subject to subsection (4), the consideration under the construction contract at the time the contract is entered into—
(i) is $5 000 000 or less; or (ii)
exceeds $5 000 000 but the contract does not provide a method of resolving disputes under the contract (including disputes referred to in paragraph (c)).
(4)
If at any time the total amount of claims under a construction contract for the second class of variations exceeds 10% of the consideration under the construction contract at the time the contract is entered into, subsection (3)(d) applies in relation to that construction contract as if any reference to "$5 000 000" were a reference to "$150 000".
Example
… .”
11 Importantly, in s.4, “variation” is defined as follows:
“variation in relation to a construction contract, means a change in the scope of the construction work to be carried out, or the related goods and services to be supplied, under the contract.”
12 Mr Manly, senior counsel, who with Mr Whitten appeared for the defendant, submitted that arguably, the two payment claims included excluded amounts. His submission is succinctly summarised in a written outline handed to me on the hearing of the application on 8 September last:
“33. The disputed invoices do not contain any statement or description of any claims for variations. However, at paragraphs 42 to 44 and 60 of his second affidavit and 14 and 15 of his third, Platten refers to a number of variations, which presumably, form part of the total amount claimed. 34. None of the asserted variations is identified in terms of either work or value in any of ACH’s invoices. 35. Further, VEF denies that:
(a) there were any variations to the works; (b) ACH ever made any claims in respect of any variations; (c) VEF ever approved any variation claims. 36. If ACH’s claim includes variations, then they are not ‘claimable variations’ within the meaning of section 10A of the Act, and are therefore ‘excluded amounts’ under section 10B. 37. It is not possible to identify the value of any alleged variations from ACH’s invoices or any of the Platten affidavits.”
13 The plaintiff, in its Amended Statement of Claim, alleges that an agreement to carry out the works was made on 13 November 2009 or, alternatively, 10 December 2009. Desmond John Robert Platten, contracts manager of the plaintiff, states, in his affidavit sworn 24 August 2010, at paragraph 33, that more than 90 per cent of the scope of the works was agreed at a meeting on 10 December 2009 “and the remaining scope was affected by the customer’s preferences”.
14 On 20 November 2009, 6 January 2010 and 26 February 2010, the plaintiff forwarded quotations to the defendant.
15 In a written submission dated 1 October 2010, Mr Reid, who appeared for the plaintiff, states:
“. . .
8. Ninety percent (90%) of the works (as per paragraph 33 of the Platten Affidavit dated 24 August 2010) was determined on the 10 December 2009. The remaining work scope was determined after the Defendant had advised the Plaintiff of its, and its tenants, requirements.
9. There are no variations to the Works as that term is understood, and, which the Defendant at paragraphs 33 - 37 of its 8 September 2010 Submissions alleges. To characterise the directions / instructions of the Defendant regarding the final 10% of the scope of Works, as variations is a mis-characterisation and interpretation of the evidence.
. . . 13. … Clearly these items of work are not ‘variations’ but finalisation of the remaining scope, following Instructions / consultations with the Defendant regarding its preferences. It is the finalisation of these preferences that are reflected in the quotation of 26 February 2010. . . . 16. The above facts reveal that the Defendant’s allegations in paragraphs 33 - 37 of its submissions, that is, the quotation of the 26 February 2010 includes ‘variations’, is a misinterpretation of the evidence and the process undertaken by the parties to finalise the scope of work that the Defendant wished the Plaintiff to undertake. . . . .”
16 Thus, Mr Reid answers the plaintiff’s contentions by submitting that finalising the scope of the works to be performed by the plaintiff is not a variation.
17 However, “variation” is defined in s.4 of the Act as meaning “a change in the scope of construction work to be carried out”.
18 Given this definition, it is, in my view, at least arguable that the finalising of the scope of works is a variation.
19 The plaintiff’s application for summary judgment thus fails.
20 I will hear from the parties as to the appropriate orders to be made with respect to the setting down of this proceeding for hearing and other pre-trial matters.
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