APS Industrial Services Pty Ltd v Adcon Contracting Pty Ltd
[2023] VCC 400
•20 March 2023
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-22-04965
| APS Industrial Services Pty Ltd (ABN 142 495 207) | Plaintiff |
| v | |
| Adcon Contracting Pty Ltd (ABN 613 824 150) | Defendant |
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JUDGE: | Her Honour Judge Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers | |
DATE OF JUDGMENT: | 20 March 2023 | |
CASE MAY BE CITED AS: | APS Industrial Services Pty Ltd v Adcon Contracting Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 400 | |
REASONS FOR JUDGMENT
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Subject:CONTRACTS
Catchwords: Building contract – whether the parties entered into a construction contract – whether entitled to payment under a construction contract - identity of parties to a construction contract - payment claims - procedural requirements of payment claims – issuing of payment schedule
Legislation Cited: Building and Construction Industry Security of Payment Act2002 (Vic) ss3, 4, 6, 7, 9(1), 9(2), 12(2), 14(1), 14(2), 14(3), 14(4) 15, 15(2), 15(4) 16, 16(2)(a), 47, 48; Civil Procedure Act 2010 (Vic) ss61 and 63; County Court Civil Procedure Rules (Vic) 2018 rr 6.02, 6.09 and 6.11; Civil Procedure Act 2010 (Vic) ss7, 8, 9, 61, 63 and 65.
Cases Cited:Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; Vanguard Developments v Promax [2018] VSC 386; Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112; Pearl Hill Pty Ltd v Concorp Construction Group (Vic)Pty Ltd [2011] VSCA 99; Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2005) 62 NSWLR 385; 3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674; SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; John Beever v Roads Corporation [2018] VSC 635; ; Grave v Blazevic Holdings Pty Ltd (2010) 79 NSWLR 132; Baron Forge Contractors v Vaughn [2018] VSC 635; Best Fab Pty Ltd v Australian High Bay Installations Pty Ltd [2018] VCC 1053; Shells Venture Management v Agresta [2019] VSC 863; Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd (No 2) [2015] VSC 50; Crown Green Square Pty Ltd v Transport for NSW [2021] NSWSC 155; Lendlease Engineering Pty Ltd v Timecon Pty Ltd [2019] NSWSC 685; Collective Crane Hire Pty Ltd v ICR Steel Pty Ltd [2021] VCC 132; In the matter of Access Strata Management Pty Ltd [2022] VSC 639.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | M J Campbell | Doherty & Colleagues Lawyers |
| For the Defendant | C Chiang | Irish Bentley Lawyers |
HER HONOUR:
Summary and outcome
1In this proceeding, the plaintiff, APS Industrial Services Pty Ltd (“APS”) applies for judgment against the defendant, Adcon Contracting Pty Ltd (“Adcon Contracting”), pursuant to s16(2)(a)(i) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (“SOP Act”). APS makes the application by summons on originating motion dated 18 November 2022. The application arises out of the hiring of scaffolding together with the provision of labour associated for the services of erecting and dismantling scaffolding allegedly provided by APS to Adcon Contracting.
2APS submits that it is entitled to judgment because Adcon Contracting failed to make payment in response to its payment claims. The amount owing in respect of the said payment claims is $1,101,417.33 (inclusive of GST). APS says that it served 37 payment claims within three months of the respective reference date of each discrete construction contract and that Adcon Contracting did not provide a payment schedule in accordance with the SOP Act. Accordingly, that Adcon Contracting is required to pay the payment claims within 30 days of the invoice date which it has failed to do so and therefore has become liable to pay the claimed amounts pursuant to s15(4) of the SOP Act. In turn, that APS is entitled to recover the claimed amount as a debt under s16(1)(a)(i) of the SOP Act.
3Adcon Contracting opposes APS’s application on the basis no construction contract exists between APS and Adcon Contracting in relation to the purported payment claims. Further, that the payment claim were addressed to “Adcon” or “Adcon Group” neither of which is the defendant Adcon Contract.
4In my judgment, for the following reasons, APS has failed to establish that Adcon Contracting entered into a “construction contract”, or was “party” to a construction contract with APS, within the meaning of s4 of the SOP Act and, therefore, it is not entitled to claim payments from APS. Further, that the purported payment claims issued by the APS did not satisfy the formal and procedural requirements of s14(1) and (2) of the SOP Act as Adcon Contracting was not a respondent liable to make payment. Accordingly, there will be an order that APS’s application be dismissed.
5In respect of costs, I have taken the opportunity to comment on the Court’s expectation of parties’ conduct in light of their overarching obligations under the Civil Procedure Act 2010 (Vic) (“CPA”). My observation in this regard is relevant to the question of costs of this application, and I express below reasons for my tentative view as to the costs order I should make that there be no order as to costs in light of Adcon Contracting’s non-compliance with Court orders and conduct in the proceeding to date in accordance with case management principles under the CPA and I invite the parties to file and serve submissions and any further material on the question of costs, should either wish to do so. I will determine any issue concerning costs on the papers.
6I will first deal with the substantial application before turning to the case management concerns.
The relevant facts
7APS relies on the affidavits of David Murray, a director of Access Platform Pty Ltd (of which APS is a fully owned subsidiary), sworn on 18 November 2022 and 7 March 2023. APS also relies on the affidavit of service of John Burdolone, sworn on 22 December 2022, and its outline of written submissions dated 9 March 2023 which were filed in compliance with Court orders. Leave was not granted for APS to file reply submissions dated 14 March 2023.
8Adcon Contracting relies on the affidavit of Danny Isaac, former director of Adcon Contracting, sworn on 3 March 2023. Leave was not granted for Adcon Contracting to file a further affidavit of Nicholas Michael Weston sworn on 10 March 2023. Further, the defendant’s outline of written submission was not filed in compliance with the Court ordered deadline, despite numerous indulgences and extensions, and, therefore, will not be considered for the purposes of determining this application.
9By email correspondence dated 18 November 2022 Adcon Contracting’s legal representatives, Irish Bentley Lawyers, confirmed that it held instructions to accept service. Pursuant to the ASIC company extract, Adcon Contracting’s registered office is the business address of Irish Bentley Lawyers. I, therefore, accept that service on Adcon Contracting was properly affected.
10Mr Burdolone deposed that on 21 November 2022, APS’s solicitors caused the Form 1 SEPA Notice originating motion, summons and affidavit of David Murray to be emailed to Adcon Contracting’s legal representatives. On 1 December 2022, APS’s solicitors provided Adcon Contracting’s legal representatives via email my orders dated 30 November 2022. Irish Bentley Lawyers filed a notice of appearance on behalf of Adcon Contracting on 23 December 2022.
11By email correspondence dated 1 March 2023, the parties advised the Court that the matter had not resolved, and that Adcon Contracting was in breach of my orders dated 30 November 2022. I then made self-executing orders extending the time for Adcon Contracting to file and serve any affidavit material it intended to rely on by 3 March 2023 at 4.00pm, failing which the proceeding would be determined in the absence of Adcon Contracting. Adcon Contracting filed the affidavit of Danny Isaac by the date specified at 2.50pm and, therefore, intended to defend the application.
12By email dated 9 March 2023, the Court informed that parties that the parties were to file and exchange outlines of submissions by 8 March 2023 at 4.00pm. The Court had not received Adcon Contracting’s submissions. Adcon Contracting was given until 9.00am on 10 March 2023 to file its submissions. Any submission after this time would not be read.
13By email correspondence dated 10 March 2023, Catherine Chiang, of counsel for the defendant and instructed by Irish Bentley Lawyers, advised that she was recently retained in this matter and had no prior involvement before this. Ms Chiang sought an extension to file the defendant’s affidavit material and submissions which was granted by the Court. Adcon Contracting was given a final extension to 4.00pm on 10 March 2023 to file and serve its submissions.
14By further email correspondence on the same date, Adcon Contracting’s legal representatives sought orders that the hearing of the plaintiff’s summons filed 8 November 2022 be adjourned and further leave be granted to file an affidavit of Nicholas Michael Westcott sworn on 10 March 2023. Leave for the defendant to file the affidavit of Nicholas Michael Weston and adjourn the hearing of the plaintiff’s summons was denied.
15By correspondence dated 14 March 2023, APS further sought leave of the Court to briefly reply to Adcon Contracting’s delayed submissions in support of its adjournment application and, alternatively, orders dismissing the application. Leave for the plaintiff to file reply submissions was denied.
16The Court advised the parties by email correspondence dated 15 March 2023 that the application was to be determined on the papers considering each of the parties written submissions and affidavit material filed in compliance with the orders of the Court.
17I now turn to the relevant background and facts of the present application. APS is in the business of hiring scaffolding together with the provision of labour for the associated services of erecting and dismantling scaffolding. APS deposes that Adcon Contracting was a subcontractor engaged by the Cross Yarra Partnership for the construction of, amongst other things, the Metro Tunnel Project. By agreements made on or around February 2020 to about June 2022, APS at Adcon Contracting’s request says that it hired scaffolding and provided labour to Adcon Contracting for the erection, maintenance and dismantling of the scaffolding.
18APS deposes that payment claims in respect of the scaffolding and associated services provided by APS were served on Adcon Contracting on a monthly basis per Adcon Contracting’s request. The alleged payment claims were issued and served via email sent to Jody, Jay, or Michael Baysing of Adcon Contracting’s accounts department. The payment claims that remain unpaid are set out in the invoices listed in a Statement dated 13 October 2022, which were purportedly sent to Adcon Contracting.[1]
[1] The relevant Statement dated 13 October 2022 is exhibited at pages 670 to 671 of the affidavit of David Murray sworn on 18 November 2022.
19Adcon Contracting deposes that it is not a subcontractor engaged by the Cross Yarra Partnership for the construction of anything, including the Metro Tunnel Project. Adcon Contracting currently provides construction project and business management services to construction companies, primarily those of which Mr Isaac is a director of. Adcon Contracting does not engage in the business of the construction industry and has not done so since around December 2020.
20Mr Isaac says that Adcon Contracting is not part of any corporate group, including “Adcon Group.” It does not share a director, secretary, shareholder, or employees with any other company bearing the name Adcon Contracting and operates independently from all other entities bearing the name “Adcon.”
21Adcon Contracting deposes that Adcon Contracting has not issued any purchase orders to APS at all and that each of the invoices exhibited and relied upon in the affidavit of Mr Murray do not reference Adcon Contracting and were not issued pursuant to any contract or agreement between Adcon Contracting and APS. It says that no such agreements or contracts in fact exist.
22Adcon Contracting says that each of the invoices and payment claims in dispute refer to “Adcon” or “Adcon Group”, neither of which are the name of Adcon Contracting. Further, that it is unclear as to which company the invoices were issued to. However, it may have been intended to refer to Adcon Group of Companies Pty Ltd (ACN 600 464 033), which is an entirely separate entity from Adcon Contracting despite the similarity in name. Alternatively, Adcon Contracting says that APS may be intending to refer to the Adcon corporate group generally, which includes several companies, of which Mr Isaac is the director of, however, is not Adcon Contracting.
23Adcon Contracting further deposes that each of the covering emails which attaches the invoices exhibited to the affidavit of Mr Murray were addressed to the following emails:
(a) [email protected];
(b) [email protected]; and
(c) a general unidentifiable “Accounts” email address of Adcon Group.
It says that none of the above-mentioned email addresses belong to any employee of Adcon Contracting.
24In his affidavit sworn on 7 March 2023 Mr Murray, in response to Mr Isaac’s affidavit, sought to clarify matters in dispute and referred to purchase orders and accompanying documents titled “conditions of purchase order” which bear Adcon Contracting’s name and ABN (7661 382 4150) and APS seeks to rely on. The earliest purchase order is dated 5 June 2022 and the last purchase order is dated 30 March 2022. APS says that, except for the purchase order dated 5 June 2022, which contains a typo graphical error, that the conditions attached to the purchase orders and emails refer to the defendant, Adcon Contracting. The purchase orders relate to the hire and purchase of scaffolding and associated products which APS’s employees or agents were to erect, dismantle or move as required for which service a labour charge would be made as set out in its invoices and reflected in the signed day work dockets.
25Mr Murray deposes that every purchase order was issued by Adcon Contracting and addressed to APS and clearly states that it is from Adcon Contracting and includes its ABN. Further, that the purchase orders purportedly issued stated that “All Enquiries and Correspondence must be addressed to [email protected]” and that all of the payment claims were sent to this email address which appears as “accounts” on the covering emails from APS.[2] Mr Murray also says that after making enquiries with the respective accounts staff that the only email address it has for Adcon Contracting beginning with “accounts” is [email protected]. APS further refers to copies of remittance advices provided by Adcon Contracting to APS which it says confirms that payments were made from the Adcon Contracting’s bank account to APS.[3]
[2] A true copy of a screenshot of a sample Payment Claim email from the plaintiff to the defendant is exhibited at page 66 of the affidavit of David Murray sworn on 7 March 2023.
[3] A true copy of remittance advices provide by the defendant to the plaintiff is exhibited at page 68-69 of the affidavit of David Murray sworn on 7 March 2023.
26APS also refers to email exchanges between Mr Isaac and Mr Murray for the period between 21 June 2021 to 22 February 2022 in relation to the outstanding amounts which are the subject of this application. Mr Murray deposes that at no point did Mr Isaac question Adcon Contracting’s liability and, in fact to the contrary, he confirmed instalment payments of the outstanding amount as late as 13 February 2023.
The legal context
27The SOP Act seeks to ensure that people who undertake to carry out construction work can recover progress payments for the performance of that work. Section 4 defines construction contract as a “contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services for another party”. The SOP Act applies to any construction contract whether written or oral, or partly written and partly oral. “Construction work” is defined by s5.
28Section 16(2)(a) of the SOP Act provides that a claimant may recover from a respondent any unpaid portion of an amount claimed in a payment claim where the respondent fails to submit a payment schedule within time (or at all) in response to the payment claim.
29Section 14 of the SOP Act concerns the form and content of payment claims. Sections 14(2) and (3) relevantly provide that a payment claim:
(a) must be in the prescribed form (if any) and contain the prescribed information (if any) – neither is prescribed;
(b) must identify the construction work or related goods and services to which it relates;
(c) must indicate the amount of progress payment that the claimant claims to be due;
(d) must state that it is made under the SOP Act; and
(e) must not include any “excluded amounts” (being amounts referable to particular categories of variations).
30Another important provision informing the formal requirements for payment claims under the Act is s9. Section 9(1) provides that “on and from each reference date under a construction contract” a claimant is “entitled to a progress payment under this Act calculated by reference to that date”.
31Section 9(2)(a) of the SOP Act provides that a reference date is a date determined by or in accordance with the construction contract as:
(a) a date on which a claim for a progress payment may be made; or
(b) a date by reference to which the amount of a progress payment is to be calculated,
(c) in relation to a specific item of construction work “carried out or to be carried out” or a specific item of related goods and services “supplied or to be supplied” under the contract.
32The rest of s9 concerns situations where the contract makes no express provision for reference dates.
33It is now well established in Victoria that unless a payment claim answering the description in s14(1) of the SOP Act is served, there can be no application to a court under s16(2)(a)(i). Although dealing with the alternative option of an adjudication application referred to in the New South Wales equivalent of s16(2)(a)(ii), this follows inexorably from the decision of the High Court in Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd[4] (“Southern Han”). On the other hand, the available defences to a payment claim are limited.
[4] (2016) 260 CLR 340 at [44].
34The available defences concern either the nature of the underlying contract or the form and service of the purported payment claim, and thus whether the payment claim is effective to trigger the procedures established by Part 3 of the SOP Act.[5] More particularly, the defences to a payment claim enlivened by the formal requirements of the SOP Act are, in substance, that the payment claim:
(a) does not relate to a “construction contract” (including because it does not involve carrying out “construction work”), or it relates to a construction contract excluded from the operation of the Act under s7 (for example, a construction contract that forms part of a loan agreement, or one that is a domestic building contract under the Domestic Building Contracts Act 1995);
(b) fails to satisfy the formal requirements of s14(2) (for example, by failing to identify the construction work or failing to state that it is made under the SOP Act);
(c) was made when no valid reference date existed,[6] including where it is served before an applicable reference date or relies on a reference date that has already been used up by an earlier payment claim;[7]
(d) includes variations that are “excluded amounts” under s10B; and
(e) was not validly served on the respondent under either the terms of the contract or under s50.
[5] Southern Han at [62].
[6] Southern Han at [61]– [62]; Vanguard Developments v Promax [2018] VSC 386 per Kennedy J at [121].
[7] SOP Act s14(8).
35Another issue that may arise, in rare circumstances, is where a defendant alleges that they are not party to or are not liable under the contract. This usually arises where multiple subcontractors are involved in the works. Applicable authorities addressing this issue include Shells Venture Management v Agresta[8](“Shells”), Baron Forge Contractors Pty Ltd v Vaughan Constructions Pty Ltd[9](“Baron Forge”) andGrave v Blazevic Holdings Pty Ltd[10](“Grave”), Collective Crane Hire Pty Ltd v ICR Steel Pty Ltd;[11] and 3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd[12](“3D Flow”).
[8] [2019] VSC 863 (“Shells”).
[9] [2015] VCC 1424 (“Baron Forge”).
[10] (2010) 79 NSWLR 132 (“Grave”).
[11] [2021] VCC 132.
[12] [2018] VCC 674 (“3D Flow”).
36Under s47, nothing in Part 3 of the SOP Act precludes bringing or continuing proceedings under the construction contract, including where those proceedings deal with the same issues in dispute in the proceeding relying on Part 3. Thus, a judgment under ss16 and 17 is a provisional judgment in what it grants and what it refuses.[13] The statutory context both contemplates and permits inconsistent judgments.[14] This section is, in effect, the statutory manifestation of the “pay now, argue later” description often given to the policy behind the SOP Act and its counterparts in other states.[15]
[13] Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112 [2] and [43]-[46] per Vickery J, cited with approval in Pearl Hill Pty Ltd v Concorp Construction Group (Vic)Pty Ltd [2011] VSCA 99 [11].
[14] Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2005) 62 NSWLR 385 [22] per Handley JA, with whom Santow JA and Pearlman AJA agreed.
[15] Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112 [2] and [43]– [46].
37Further, in considering any purported defences to a payment claim, it is important to be mindful of s48 of the SOP Act. This section provides that the provisions of the SOP Act have effect despite any contractual provision to the contrary. It further provides that any provision in any contract purporting to exclude, restrict or modify the operation of the SOP Act or that may reasonably be construed as an attempt to deter a person from taking action under the Act, is void.
38This court has endorsed the hearing of applications under the SOP Act on a summary basis by summons on originating motion with affidavit evidence.[16] Such claims are properly assessed on the balance of probabilities,[17] with the quality of the evidence weighed having regard to the fact that the legislation seeks to facilitate a swift but temporary remedy.[18]
[16] 3D Flow at [39]– [54]. See also SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805 [26].
[17] Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449, 449-450 per Mason CJ, Brennan, Deane and Gaudron JJ.
[18] 3D Flow at [51]– [54].
Construction Contract
Submissions & Evidence
APS’s Submissions
39APS submits that the construction work undertaken by APS was in the nature of erecting, maintaining or dismantling scaffolding within the meaning of s5 of the SOP Act and for the supply of related goods and services, namely, the hiring of materials in connection with the construction work and the provision of labour to carry out the construction work.
40It argues that whilst there was no single overarching contract between the parties, for the provision of the respective construction work, each of the 37 payment claims arose in consequence of a discrete construction contract or arrangement between the parties pursuant to which APS carried out construction work and supplied related goods and services within the meaning of s4 of the SOP Act. In turn, that APS was entitled to a progress payment in the nature of a single or one-off payment in relation to each of the payment claims.
41Citing Riordan J in In the matter of Access Strata Management Pty Ltd[19], APS submits that a legally enforceable contract may be inferred and that each of the construction contracts or arrangements were in writing and are to be inferred from the contemporaneous documents raised in respect of each payment claim and the parties conduct. APS says that the Court may infer from the evidence before it that each of the 37 payment claims arises in respect of 37 separate and discrete construction contracts.
[19] [2022] VSC 639 at [10].
42In respect of whether APS and Adcon were parties to a construction contract, APS submits that Mr Isaac’s assertions that Adcon Contracting has not issued any purchase order to APS and has never received the invoices or payment claims should be rejected. It refers to purchase orders exhibited to the affidavit of Mr Murray sworn on 7 March 2023 which bear Adcon Contracting’s name and ABN.
43APS submits that the requirements of s7 of the SOP Act has been satisfied, namely, that APS’s claims arise in respect of construction contracts made between APS and Adcon Contracting.
Adcon Contracting’s Affidavit
44Adcon Contracting says that each of the invoices and payment claims do not reference Adcon Contracting and were not received by Adcon Contracting. Further, that they were not issued pursuant to any contract or agreement between APS and Adcon Contracting because no such agreement existed.
45Additionally, that the invoices refer opaquely to “Adcon” or “Adcon Group” neither of which are the name of the defendant Adcon Contracting.
Analysis
46In order for the SOP Act to apply an applicant must be a party to a construction contract. A construction contract can be either written, oral or both. As summarised by Judge Woodward in 3D Flow[20] a “construction contract” is defined by s4 of the SOP Act to mean a “contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services for another party”.
[20] [2018] VCC 674 at [31].
47Subject to s7 of the SOP Act, the Act applies to any construction contract, whether written or oral, or partly written and partly oral, and applies even if the contract is expressed to be governed by the law of a jurisdiction other than Victoria.
48However, as clarified by Ball J in Lendlease Engineering Pty Ltd v Timecon Pty Ltd,[21] there remains some debate in the authorities as to whether an “arrangement” needs to give rise to a legally binding obligation. As Ball J observed[22]:
“It is plain that the SOP Act is not intended to affect the ultimate rights and liabilities of the parties to whom it applies. Rather, its purpose is to provide a mechanism by which contractors who do work in the construction industry, or provide related goods and services, and are entitled to be paid for that work are able to make progress claims and to have those claims paid promptly. The purpose of the SOP Act is not to create an obligation to pay where one does not otherwise exist.”
[21] [2019] NSWSC 685 at [67]– [87].
[22] Ibid at [68].
49Further, Henry J in Crown Green Square Pty Ltd v Transport for NSW[23] viewed that a factual element underpinning such an arrangement, for the purposes of the SOP Act, would involve some communication between the parties on the subject matter of payment for the works and recognition of the right to be paid. Additionally, there is the requirement of some element of reciprocity and consideration and something more than a party simply undertaking to carry out construction works for another.
[23] [2021] NSWSC 155 at [166]– [170].
50What is evident from the authorities is that this a somewhat grey area, in that the existence of a “construction contract” within the meaning of the SOP Act, where disputed, will ultimately turn to the facts and the circumstances of the proceeding.
51As addressed earlier, it is well-established that for the SOP Act to apply, a person who is entitled to a progress payment must be a “party” to a construction contract. Judge Cosgrave in Baron Forge,[24] affirming the principles in Grave,[25] confirmed that a person serving a payment claim who is not party to a contract has no entitlement to serve the payment claims. Further, and critically, that ss14 and 9 of the SOP Act are guided by the underlying legislative assumption that the claimant serving a progress payment claim is party to a construction contract.[26]
[24] Baron Forge.
[25] (2010) 79 NSWLR 132
[26] Baron Forge at [34].
52Relevantly, Baron Forge,[27] concerned a summary judgment application under s16(2) of the SOP Act on the basis that Vaughn Constructions Pty Ltd (“Vaughn”) had failed to provide a payment schedule in response to payment claims or pay the monies owed. In response, Vaughn argued that it had not contracted with the applicant Baron Forge; instead, it had contracted with Baron Forge Contractors (Vic) Pty Ltd (“BFVic”). The contract only made reference to Baron Forge and there were differences in various payment claims and correspondence served.
[27]Ibid.
53His Honour dismissed the summary judgment application primarily on the basis that Vaughn was not a party to a construction contract with Baron Forge and, therefore, had no claims under the SOP Act which were arguable. Critically, Cosgrave J noted that Baron Forge had not clearly rebutted why BFVic was not the contracting party. Indeed, the strongest factual arguments put forward were based on payment claims sent which were then paid.[28]
[28] Ibid at [28].
54In my view, whilst I accept the likely existence of “construction contracts” or arrangements within the meaning of the SOP Act in which APS, as evident in the material relied on by the parties, undertook works in the nature of erecting, maintaining or dismantling scaffolding and supplying related goods and services of hiring materials, it has still not overcome the fundamental hurdle that for the SOP Act to apply, a person who is entitled to a progress payment must be a “party” to a construction contract.
55Indeed, based on the material and submissions before me and relied upon by the parties, APS has not adequately rebutted why the defendant Adcon Contracting, rather than “ADCON Group” or “Adcon” as reflected in the payment claims exhibited to the affidavit of Mr Murray, was the correct “party” to the respective construction contracts and, therefore, the correct respondent on which progress payments were to be validly served and APS was entitled to claim payment from.
56Further, APS also has not appropriately addressed or responded to the fact that the invoices and payment claims themselves were issued to “ADCON Group” or “Adcon” and not the defendant “Adcon Contracting Pty Ltd.” By reference to Cosgrave J in Baron Forge, APS’s strongest evidence is based on these purported payment claims, purchase orders bearing the name Adcon Contracting and remittance notices invariably issued to and from Adcon Contracting’s accounts department via email.
57It is not disputed that APS did carry out scaffolding works and associated services at the Metro Tunnel Project, however, what remains in dispute is to which entities of the Adcon corporate group generally APS contracted with. Whilst I accept, the complexity of the Adcon corporate groups structure, in my view APS has not adequately rebutted Adcon Contracting’s defence that it was not party to the purported construction contract and has insufficiently relied on material that does not substantiate why the payment claims themselves did not refer to Adcon Contracting and in turn that Adcon Contracting is in fact the correct respondent on which APS is entitled to serve payment claims.
58It is likely that APS has inadvertently identified the incorrect respondent in purporting to serve its payment claims and has likely misidentified the correct defendant. In turn, APS ought to undertake appropriate investigations and cooperate further through discussions with Adcon Contracting to identify the correct defendant in its claims.
Payment Claims and Payment Schedule
Submissions & Evidence
APS’s Submissions
59APS submits, in accordance with s14 of the SOP Act, that each payment claim, together with supporting material, was served by APS on Adcon Contracting. Each payment claim identified the construction work and related goods and services, indicated the amount claimed and stated that it was made under the SOP Act. Accordingly, that in accordance with s15 of the SOP Act, APS validly served 37 payment claims within three months of the reference date applicable to each construction contract.
60APS says that Adcon Contracting did not provide a payment schedule to it within 10 business days of service on it as required by s15(4) of the SOP Act. Accordingly, that it was required to pay APS’s claimed amounts 30 days from the invoice date of each claim which it failed to do.
61APS submits that Adcon Contracting became liable to pay the claimed amount under s15(4), however, failed to do so and so is liable to pay the claimed amount by reason of s16(1) of the SOP Act which entitles APS to recover the claimed amounts as a debt.
Adcon Contracting’s Affidavit
62Adcon Contracting says that each of the invoices and payment claims do not reference Adcon Contracting and were not received by Adcon Contracting. Further that they were not issued pursuant to any contract or agreement between APS and Adcon Contracting because no such agreement existed.
63Additionally, that the invoices refer opaquely to “Adcon” or “Adcon Group”, neither of which are the name of the defendant, Adcon Contracting.
Analysis
64In light of my earlier reasoning, in respect of the existence of a “construction contract” within the meaning of the SOP Act and whether Adcon Contracting was in fact a party to the construction contract, it is unnecessary for me to determine the merit, or the defence raised in respect of this issue.
65However, for the sake of completeness, s14(1) of the SOP Act reflects that, if entitled to a progress payment, a claimant may issue a payment claim to a respondent who is liable to make payment. The payment claim must identify the construction work to which the progress payment relates; must indicate the amount of the progress payment that the claimant claims to be due; and must state that it is made under the SOP Act.
66A payment claim may be served in accordance with the terms of the construction contract; or the period of 3 months after the reference date referred to in s9(2) of the SOP Act.
67Importantly service of payment claims may occur in a broad range of ways pursuant to s50 of the SOP Act. Further, that it is well-established that email service is acceptable.[29]
[29] Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd (No 2) [2015] VSC 500 at [122].
68Under s15 of the SOP Act, a person on whom a payment claim is served may reply to the claim with a payment schedule. Section 15(2) requires that a payment schedule must identify the payment the claim to which it relates, schedule the amount of the payment that respondent proposes to make and must identify any excluded amounts.
69Per s15(4) of the SOP Act, the respondent must issue a payment schedule as per the contractual timeframe or within 10 business days after the payment claim is served, whichever expires earlier. If a respondent does not provide a payment schedule to the claimant within statutory timeframes, it becomes liable to pay the entire claimed amount by the respective due date (s15(4) SOP Act).
70Each payment claim must be assessed and addressed separately. I am of the view of the following in respect of the unpaid invoices and payment claims (together “the Payment Claims”).
(a) Invoice 8172 (“Payment Claim 1”)
(i)On 6 December 2021 APS sent Adcon Group Payment Claim 1 together with a breakdown of the invoice and supporting documents by email.[30]
[30] A true copy of the email dated 6 December 2021 and Payment Claim 1 is exhibited at pages 30 to 63 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 1 was in the amount of $96,128.22 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)On or about 6 April 2022 Adcon Contracting paid $65,689.00 in respect of Payment Claim 1. No payment schedule was issued in relation to Payment Claim 1.
(iv)The amount of $30,439.22 (inclusive of GST) remains unpaid.
(v)Payment Claim 1 does not reference any specific respondent but merely lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(b) Invoice 8175 (“Payment Claim 2”)
(i)On 6 December 2021 APS sent Adcon Group Payment Claim 2 together with a breakdown of the invoice and supporting documents by email.[31]
[31] A true copy of the email dated 6 December 2021 and Payment Claim 2 is exhibited at pages 64 to 103 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 2 was in the amount of $109,966.22 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 2.
(iv)The amount of $109,966.22 (inclusive of GST) remains unpaid.
(v)Payment Claim 2 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(c) Invoice 8336 (“Payment Claim 3”)
(i)On 12 January 2022 APS sent Adcon Group Payment Claim 3 together with a breakdown of the invoice and supporting documents by email.[32]
[32] A true copy of the email dated 12 January 2022 and Payment Claim 3 is exhibited at pages 104 to 146 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 3 was in the amount of $60,285.90 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 3.
(iv)The amount of $60,285.90 (inclusive of GST) remains unpaid.
(v)Payment Claim 3 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(d) Invoice 8337 (“Payment Claim 4”)
(i)On 13 January 2022 APS sent Adcon Group Payment Claim 4 together with a breakdown of the invoice and supporting documents by email.[33]
[33] A true copy of the email dated 13 January 2022 and Payment Claim 4 is exhibited at pages 147 to 153 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 4 was in the amount of $35,787.32 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 4.
(iv)The amount of $35,787.32 (inclusive of GST) remains unpaid.
(v)Payment Claim 4 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(e) Invoice 8338 (“Payment Claim 5”)
(i)On 13 January 2022 APS sent Adcon Group Payment Claim 5 together with a breakdown of the invoice and supporting documents by email.[34]
[34] A true copy of the email dated 13 January 2022 and Payment Claim 5 is exhibited at pages 174 to 179 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 5 was in the amount of $15,431.43 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 5.
(iv)The amount of $15,431.43 (inclusive of GST) remains unpaid.
(v)Payment Claim 5 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(f) Invoice 8340 (“Payment Claim 6”)
(i)On 13 January 2022 APS sent Adcon Group Payment Claim 6 together with a breakdown of the invoice and supporting documents by email.[35]
[35] A true copy of the email dated 13 January 2022 and Payment Claim 6 is exhibited at pages 180 to 183 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 6 was in the amount of $584.57 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 6.
(iv)The amount of $584.57 (inclusive of GST) remains unpaid.
(v)Payment Claim 6 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(g) Invoice 8341 (“Payment Claim 7”)
(i)On 13 January 2022 APS sent Adcon Group Payment Claim 7 together with a breakdown of the invoice and supporting documents by email.[36]
[36] A true copy of the email dated 13 January 2022 and Payment Claim 7 is exhibited at pages 184 to 189 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 7 was in the amount of $14,602.50 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 7.
(iv)The amount of $14,602.50 (inclusive of GST) remains unpaid.
(v)Payment Claim references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(h) Invoice 8479 (“Payment Claim 8”)
(i)On 1 February 2022 APS sent Adcon Group Payment Claim 8 together with a breakdown of the invoice and supporting documents by email.[37]
[37] A true copy of the email dated 1 February 2022 and Payment Claim 8 is exhibited at pages 190 to 239 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 8 was in the amount of $66,129.25 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 8.
(iv)The amount of $66,129.25 (inclusive of GST) remains unpaid.
(v)Payment Claim 8 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(i) Invoice 8480 (“Payment Claim 9”)
(i)On 1 February 2022 APS sent Adcon Group Payment Claim 9 together with a breakdown of the invoice and supporting documents by email.[38]
[38] A true copy of the email dated 1 February 2022 and Payment Claim 9 is exhibited at pages 240 to 254 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 9 was in the amount of $7,262.35 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 8.
(iv)The amount of $7,262.35 (inclusive of GST) remains unpaid.
(v)Payment Claim 9 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(j) Invoice 8481 (“Payment Claim 10”)
(i)On 1 February 2022 APS sent Adcon Group Payment Claim 10 together with a breakdown of the invoice and supporting documents by email.[39]
[39] A true copy of the email dated 1 February 2022 and Payment Claim 10 is exhibited at pages 255 to 261 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 10 was in the amount of $15,101.43 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 10.
(iv)The amount of $15,101.43 (inclusive of GST) remains unpaid.
(v)Payment Claim 10 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(k) Invoice 8482 (“Payment Claim 11”)
(i)On 1 February 2022 APS sent Adcon Group Payment Claim 11 together with a breakdown of the invoice and supporting documents by email.[40]
[40] A true copy of the email dated 1 February 2022 and Payment Claim11 is exhibited at pages 262 to 267 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 11 was in the amount of $9,694.15 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 11.
(iv)The amount of $9,694.15 (inclusive of GST) remains unpaid.
(v)Payment Claim 11 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(l) Invoice 8483 (“Payment Claim 12”)
(i)On 1 February 2022 APS sent Adcon Contracting Payment Claim 12 together with a breakdown of the invoice and supporting documents to Adcon Contracting’s accounts department by email.[41]
[41] A true copy of the email dated 1 February 2022 and Payment Claim 12 is exhibited at pages 268 to 271 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 12 was in the amount of $584.57 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 12.
(iv)The amount of $584.57 (inclusive of GST) remains unpaid.
(v)Payment Claim 12 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(m) Invoice 8637 (“Payment Claim 13”)
(i)On 2 March 2022 APS sent Adcon Group Payment Claim 13 together with a breakdown of the invoice and supporting documents by email.[42]
[42] A true copy of the email dated 2 March 2022 and Payment Claim 13 is exhibited at pages 272 to 314 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 13 was in the amount of $73,841.70 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 13.
(iv)The amount of $73,841.70 (inclusive of GST) remains unpaid.
(v)Payment Claim 13 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(n) Invoice 8639 (“Payment Claim 14”)
(i)On 2 March 2022 APS sent Adcon Group Payment Claim 14 together with a breakdown of the invoice and supporting documents by email.[43]
[43] A true copy of the email dated 2 March 2022 and Payment Claim 14 is exhibited at pages 315 to 339 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 14 was in the amount of $36,018.12 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 14.
(iv)The amount of $36,018.12 (inclusive of GST) remains unpaid.
(v)Payment Claim 14 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(o) Invoice 8640 (“Payment Claim 15”)
(i)On 2 March 2022 APS sent Adcon Group Payment Claim 15 together with a breakdown of the invoice and supporting documents by email.[44]
[44] A true copy of the email dated 2 March 2022 and Payment Claim 15 is exhibited at pages 340 to 346 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 15 was in the amount of $11,622.28 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 15.
(iv)The amount of $11,622.28 (inclusive of GST) remains unpaid.
(v)Payment Claim 15 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(p) Invoice 8641 (“Payment Claim 16”)
(i)On 2 March 2022 APS sent Adcon Group Payment Claim 16 together with a breakdown of the invoice and supporting documents by email.[45]
[45] A true copy of the email dated 2 March 2022 and Payment Claim 16 is exhibited at pages 347 to 352 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 16 was in the amount of $8,598.85 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 16.
(iv)The amount of $8,598.85 (inclusive of GST) remains unpaid.
(v)Payment Claim 16 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(q) Invoice 8642 (“Payment Claim 17”)
(i)On 2 March 2022 APS sent Adcon Group Payment Claim 17 together with a breakdown of the invoice and supporting documents by email.[46]
[46] A true copy of the email dated 2 March 2022 and Payment Claim 17 is exhibited at pages 353 to 356 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 17 was in the amount of $528.00 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 17.
(iv)The amount of $528.00 (inclusive of GST) remains unpaid.
(v)Payment Claim 17 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(r) Invoice 8830 (“Payment Claim 18”)
(i)On 4 April 2022 APS sent Adcon Group Payment Claim 18 together with a breakdown of the invoice and supporting documents by email.[47]
[47] A true copy of the email dated 4 April 2022 and Payment Claim 18 is exhibited at pages 357 to 403 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 18 was in the amount of $138,619.03 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 18.
(iv)The amount of $138,169.03 (inclusive of GST) remains unpaid.
(v)Payment Claim 18 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(s) Invoice 8831 (“Payment Claim 19”)
(i)On 4 April 2022 APS sent Adcon Group Payment Claim 19 together with a breakdown of the invoice and supporting documents by email.[48]
[48] A true copy of the email dated 4 April 2022 and Payment Claim 19 is exhibited at pages 404 to 434 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 19 was in the amount of $39,853.78 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 19.
(iv)The amount of $39,853.78 (inclusive of GST) remains unpaid.
(v)Payment Claim 19 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(t) Invoice 8832 (“Payment Claim 20”)
(i)On 4 April 2022 APS sent Adcon Group Payment Claim 20 together with a breakdown of the invoice and supporting documents by email.[49]
[49] A true copy of the email dated 4 April 2022 and Payment Claim 20 is exhibited at pages 435 to 442 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 20 was in the amount of $11,383.43 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 20.
(iv)The amount of $11,383.43 (inclusive of GST) remains unpaid.
(v)Payment Claim 20 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(u) Invoice 8833 (“Payment Claim 21”)
(i)On 4 April 2022 APS sent Adcon Group Payment Claim 21 together with a breakdown of the invoice and supporting documents by email.[50]
[50] A true copy of the email dated 4 April 2022 and Payment Claim 21 is exhibited at pages 443 to 448 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 21 was in the amount of $8,232.72 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 21.
(iv)The amount of $8,232.72 (inclusive of GST) remains unpaid.
(v)Payment Claim 21 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(v) Invoice 8834 (“Payment Claim 22”)
(i)On 4 April 2022 APS sent Adcon Group Payment Claim 22 together with a breakdown of the invoice and supporting documents by email.[51]
[51] A true copy of the email dated 4 April 2022 and Payment Claim 22 is exhibited at pages 449 to 452 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 22 was in the amount of $584.57 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 22.
(iv)The amount of $584.57 (inclusive of GST) remains unpaid.
(v)Payment Claim 22 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(w) Invoice 9011 (“Payment Claim 23”)
(i)On 4 May 2022 APS sent Adcon Group Payment Claim 23 together with a breakdown of the invoice and supporting documents by email.[52]
[52] A true copy of the email dated 4 May 2022 and Payment Claim 23 is exhibited at pages 453 to 468 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 23 was in the amount of $82,023.85 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 23.
(iv)The amount of $82,023.85 (inclusive of GST) remains unpaid.
(v)Payment Claim 23 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(x) Invoice 9012 (“Payment Claim 24”)
(i)On 4 May 2022 APS sent Adcon Group Payment Claim 24 together with a breakdown of the invoice and supporting documents by email.[53]
[53] A true copy of the email dated 4 May 2022 and Payment Claim 24 is exhibited at pages 469 to 495 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 24 was in the amount of $23,415.85 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 24.
(iv)Payment Claim 24 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(v)The amount of $23,415.85 (inclusive of GST) remains unpaid.
(y) Invoice 9013 (“Payment Claim 25”)
(i)On 4 May 2022 APS sent Adcon Group Payment Claim 25 together with a breakdown of the invoice and supporting documents by email.[54]
[54] A true copy of the email dated 4 May 2022 and Payment Claim 25 is exhibited at pages 496 to 503 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 25 was in the amount of $10,296.00 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 25.
(iv)The amount of $10,296.00 (inclusive of GST) remains unpaid.
(v)Payment Claim 25 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(z) Invoice 9014 (“Payment Claim 26”)
(i)On 4 May 2022 APS sent Adcon Group Payment Claim 26 together with a breakdown of the invoice and supporting documents by email.[55]
[55] A true copy of the email dated 4 May 2022 and Payment Claim 26 is exhibited at pages 504 to 510 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 26 was in the amount of $6,147.43 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 26.
(iv)The amount of $6,147.43 (inclusive of GST) remains unpaid.
(v)Payment Claim 26 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(aa) Invoice 9015 (“Payment Claim 27”)
(i)On 4 May 2022 APS sent Adcon Group Payment Claim 27 together with a breakdown of the invoice and supporting documents by email.[56]
[56] A true copy of the email dated 4 May 2022 and Payment Claim 27 is exhibited at pages 511 to 514 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 27 was in the amount of $565.72 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 27.
(iv)The amount of $565.72 (inclusive of GST) remains unpaid.
(v)Payment Claim 27 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(bb) Invoice 9211 (“Payment Claim 28”)
(i)On 7 June 2022 APS sent Adcon Group Payment Claim 28 together with a breakdown of the invoice and supporting documents by email.[57]
[57] A true copy of the email dated 7 June 2022 and Payment Claim 28 is exhibited at pages 515 to 556 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 28 was in the amount of $104,279.24 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 28.
(iv)The amount of $104,279.24 (inclusive of GST) remains unpaid.
(v)Payment Claim 28 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(cc) Invoice 9213 (“Payment Claim 29”)
(i)On 7 June 2022 APS sent Adcon Group Payment Claim 29 together with a breakdown of the invoice and supporting documents by email.[58]
[58] A true copy of the email dated 7 June 2022 and Payment Claim 29 is exhibited at pages 557 to 597 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 29 was in the amount of $85,138.03 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 29.
(iv)The amount of $85,138.03 (inclusive of GST) remains unpaid.
(v)Payment Claim 29 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(dd) Invoice 9214 (“Payment Claim 30”)
(i)On 7 June 2022 APS sent Adcon Group Payment Claim 30 together with a breakdown of the invoice and supporting documents by email.[59]
[59] A true copy of the email dated 7 June 2022 and Payment Claim 30 is exhibited at pages 598 to 605 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 30 was in the amount of $7,920.00 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 30.
(iv)The amount of $7,920.00 (inclusive of GST) remains unpaid.
(v)Payment Claim 30 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(ee) Invoice 9215 (“Payment Claim 31”)
(i)On 7 June 2022 APS sent Adcon Group Payment Claim 31 together with a breakdown of the invoice and supporting documents by email.[60]
[60] A true copy of the email dated 7 June 2022 and Payment Claim 31 is exhibited at pages 606 to 612 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 31 was in the amount of $5,407.28 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 31.
(iv)The amount of $5,407.28 (inclusive of GST) remains unpaid.
(v)Payment Claim 31 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(ff) Invoice 9216 (“Payment Claim 32”)
(i)On 7 June 2022 APS sent Adcon Group Payment Claim 32 together with a breakdown of the invoice and supporting documents by email.[61]
[61] A true copy of the email dated 7 June 2022 and Payment Claim 32 is exhibited at pages 613 to 616 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 32 was in the amount of $584.57 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 32.
(iv)The amount of $584.57 (inclusive of GST) remains unpaid.
(v)Payment Claim 32 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(gg) Invoice 9392 (“Payment Claim 33”)
(i)On 4 July 2022 APS sent Adcon Group Payment Claim 33 together with a breakdown of the invoice and supporting documents by email.[62]
[62] A true copy of the email dated 4 July 2022 and Payment Claim 33 is exhibited at pages 617 to 632 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 33 was in the amount of $19,972.07 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 33.
(iv)The amount of $19,972.07 (inclusive of GST) remains unpaid.
(v)Payment Claim 33 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(hh) Invoice 9393 (“Payment Claim 34”)
(i)On 4 July 2022 APS sent Adcon Group Payment Claim 34 together with a breakdown of the invoice and supporting documents by email.[63]
[63] A true copy of the email dated 4 July 2022 and Payment Claim 34 is exhibited at pages 633 to 642 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 34 was in the amount of $4,400.00 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 34.
(iv)The amount of $4,400.00 (inclusive of GST) remains unpaid.
(v)Payment Claim 34 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(ii) Invoice 9394 (“Payment Claim 35”)
(i)On 4 July 2022 APS sent Adcon Group Payment Claim 35 together with a breakdown of the invoice and supporting documents by email.[64]
[64] A true copy of the email dated 4 July 2022 and Payment Claim 35 is exhibited at pages 643 to 649 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 35 was in the amount of $3,488.57 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 35.
(iv)The amount of $3,488.57 (inclusive of GST) remains unpaid.
(v)Payment Claim 35 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(jj) Invoice 9395 (“Payment Claim 36”)
(i)On 4 July 2022 APS sent Adcon Group Payment Claim 36 together with a breakdown of the invoice and supporting documents by email.[65]
[65] A true copy of the email dated 4 July 2022 and Payment Claim 36 is exhibited at pages 650 to 653 of the affidavit of David Murray sworn on 18 November 2022.
(ii)Payment Claim 36 was in the amount of $1,345.15 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 36.
(iv)The amount of $1,345.15 (inclusive of GST) remains unpaid.
(v)Payment Claim 36 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
(kk) Invoice 9399 (“Payment Claim 37”)
(i)On 5 July 2022 APS sent Adcon Group Payment Claim 37 together with a breakdown of the invoice and supporting documents by email.[66]
(ii)Payment Claim 37 was in the amount of $51,731.68 (inclusive of GST) and was endorsed as a payment claim under the SOP Act.
(iii)No payment schedule was issued in relation to Payment Claim 37.
(iv)The amount of $51,731.68 (inclusive of GST) remains unpaid.
(v)Payment Claim 37 references “ADCON Group” as the respondent and lists the principal address of “39 Taras Avenue Altona North VIC 3025”.
[66] A true copy of the email dated 5 July 2022 and Payment Claim 37 is exhibited at pages 654 to 669 of the affidavit of David Murray sworn on 18 November 2022.
71In my view, whilst the Payment Claims do indicate the amount for construction work due, adequately identify the works to which the purported progress payment relates, states that it is made under the SOP Act, does not include excluded amounts and was validly served on Adcon Group via email it does not satisfy the formal and procedural requirements of s14(1) and (2) of the SOP Act given that it was not issued to “Adcon Contracting Pty Ltd” who APS claims is liable to make payment to APS and party to the purported construction contract.
72Accordingly, APS has failed to satisfy the formal requirements of s14(1) by not issuing its Payment Claims on a respondent who is liable to make payment. In turn, Adcon Contracting was not required to respond to the Payment Claims by issuing a payment schedule or is liable to pay APS’s claimed amounts in accordance with s15(2) or (4) of the SOP Act. Pursuant to s16(1) of the SOP Act APS is not entitled to claim recovery of the outstanding amounts as a debt against Adcon Contracting.
Costs and Civil Procedure Act
73The CPA imposes “overarching obligations” on parties to proceedings and their legal practitioners.
74Sections 7 and 8 of the CPA provides that the:
overarching purpose of this Act and the rules of court in relation to civil proceedings is to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute.
…
court must seek to give effect to the overarching purpose in the exercise of any of its powers, or in the interpretation of those powers… (emphasis added).
75Relevant obligations include the requirement to:
(a) cooperate in the conduct of civil proceedings (s20);
(b) use reasonable endeavours to resolve the dispute (s22);
(c) use reasonable endeavours to narrow the issues in dispute (s23);
(d) use reasonable endeavours to ensure costs are reasonable and proportionate (s24); and
(e) use reasonable endeavours to minimise delay (s25).
76Section 9 further lists certain mandatory and permissive considerations to which a Court may have regard:
in making any order or giving any direction in a proceeding. (emphasis added).
77Section 29 gives the Court the power to make any order it considers appropriate in the interests of justice where it is satisfied, on the balance of probabilities, that there has been a contravention of an overarching obligation.
78Section 65C(1) of the CPA empowers the court to make any order as to costs which it considers appropriate in order to further the overarching purpose.
79Where a plaintiff’s summons or application made pursuant to the SOP Act is dismissed, I would normally propose that the plaintiff pay the defendant’s costs of and incidental to the summons on the standard basis, to be taxed in default of agreement, unless either party has a basis for seeking a different order as to costs. However, the Court notes the following matters in relation to Adcon Contracting’s non-compliance and conduct in respect of court orders in this proceeding:
(a) on 18 November 2022, Adcon Contracting’s legal representatives, Irish Bentley Lawyers, confirmed that it held instructions to accept service;
(b) on 21 November 2022, APS’s legal representatives caused the originating motion, summons and affidavit material to be served on Adcon Contracting;
(c) on 1 December 2022, APS’s legal representatives served the procedural orders made on 30 November 2022 on Adcon Contracting;
(d) by email dated 22 December 2022, APS’s legal representatives noted that Adcon Contracting had failed to file a notice of appearance within 21 days of being served with the originating motion. APS requested that the matter proceed summarily in the absence of Adcon Contracting and/or judgment be granted in its favour;
(e) Irish Bentley Lawyers filed a late notice of appearance on behalf of Adcon Contracting on 23 December 2022 and the Court informed that parties of the timetable requiring Adcon Contracting to file and serve its affidavit in opposition was due by 17 February 2023 at 4.00pm;
(f) the Court requested an urgent status update on 1 March 2023 in relation to the matter and pursuant to the orders made on 30 November 2022 Adcon Contracting was to file and serve any affidavit material by 17 February 2023. There was no material filed by the defendant on the Court file.
(g) the Court did not receive any correspondence or response from Adcon Contracting or its legal representatives.
(h) Adcon Contracting failed to comply with the orders of her Honour Judge Burchell dated 30 November 2022.
(i) by email dated 1 March 2023, APS advised the Court that the parties had not resolved the matter and Adcon Contracting was in breach of Court orders. APS requested a self-executing order against Adcon Contracting for its continued failure to comply with orders.
(j) self-executing orders were made on 2 March 2023 extending the time for Adcon Contracting to file and serve any affidavit material to 3 March 2023 at 4.00pm (and was so filed).
(k) the Court requested a further urgent status update on 9 March 2023 from Adcon Contracting in relation to its outline of submissions that were due on 8 March 2023 at 4.00pm. The Court requested that Adcon Contracting provide its submissions by 9.00am on 10 March 2023 and that any submissions after this time would not be read.
(l) counsel for Adcon Contracting advised in correspondence dated 10 March 2023 that she was only retained in this matter by Irish Bentley Lawyers the previous afternoon and had no prior involvement in the matter before then. She sought a further indulgence by way of an extension to file affidavit material and submissions. The Court granted an extension to the defendant to file and serve its submissions by 4.00pm on 10 march 2023.
(m) Adcon Contracting also sought that the hearing of the application be adjourned to enable further time to investigate matters and leave to file further affidavit material, which was denied.
(n) Adcon Contracting sought to file and serve its written outline of submissions after the Court ordered deadline at 7.47pm on 10 March 2023, despite the further extensions of time and indulgences afforded to them.
80Parties to a civil dispute are required by the CPA to assist the Court achieve its objectives in resolving matters quickly, inexpensively, efficiently, and justly. Parties and legal representatives should ensure that they comply with practice directions and orders of the Court that outline the obligations of legal representatives in case management.
81Where a party will default or is not in a position to comply with an order of the Court, this should be addressed frankly and promptly and supported by reasonable explanation. This is particularly relevant in the context of applications made pursuant to the SOP Act whereby the very rationale of the legislation seeks to facilitate the timely resolution of payment disputes.
82Despite being served with APS’s material since 21 November 2022, Adcon Contracting was late in filing its notice of appearance, repeatedly breached court orders for the filing of its affidavit and written submissions, did not brief counsel until the afternoon before the hearing date, and purported to request for a further adjournment to undergo further investigation and put on more material.
83In addition, Adcon Contracting failed to communicate with the Court about its non-compliances. At no stage prior to 10 March 2023 did Adcon Contracting provide any explanation, let alone a satisfactory explanation, for its delay and repeated breach of court orders. Further, the decision to brief counsel the day prior to the return date of the hearing was likely to have added materially to the cost, and delayed the progress of the proceeding.
84Before I make any orders on the question of costs reflecting my concerns set out above, I will give the parties the opportunity to respond directly to the specific concerns that I have raised, including offering an alternative explanation for the conduct that I have surmised above, if so advised.
85To that end, I express my tentative view that there be no order as to costs considering Adcon Contracting and its legal representative’s non-compliance with orders and conduct in the proceeding. This is in accordance with case management principles and in furthering the overarching purposes of the CPA.
86In forming my tentative view on costs, I have had regard to the usual order for costs on an application of this kind in which the plaintiff has failed to satisfy the statutory requirements of its payment claims is that the plaintiff must pay the defendant’s costs of the proceeding on a standard basis to be taxed in default of agreement. In my view, the appropriate balance between the usual order and my putative concerns over the conduct of Adcon Contracting discussed, above, is best achieved by there being no order as to the costs of and incidental to the plaintiff’s summons on originating motion.
87I will hear further from the parties on the question of costs and invite the parties to prepare draft orders to give effect to these reasons.
Conclusion
88For the foregoing reasons, the plaintiff’s summons on originating motion is dismissed.
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Certificate
I certify that these 43 pages are a true copy of the judgment of Her Honour Judge Burchell delivered on 21 March 2023
Dated: 21 March 2023
Nikki Thomson
Associate to Her Honour Judge Burchell
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