Argyle Building Services Pty Ltd (ACN 151 322 520) v One Three Wilson Pty Ltd (ACN 613 945 396) (No 2)

[2019] VCC 1890

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERICAL DIVISION

Revised
Not Restricted
Suitable for Publication

BUILDING CASES LIST

Case No. CI-19-04053

ARGYLE BUILDING SERVICES PTY LTD (ACN 151 322 520)	Plaintiff
v
ONE THREE WILSON PTY LTD (ACN 613 945 396)	Defendant

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JUDGE:	HIS HONOUR JUDGE MACNAMARA
WHERE HELD:	Melbourne
DATE OF HEARING:	12 November 2019
DATE OF JUDGMENT:	23 November 2019
CASE MAY BE CITED AS:	Argyle Building Services Pty Ltd (ACN 151 322 520) v One Three Wilson Pty Ltd (ACN 613 945 396) (No 2)
MEDIUM NEUTRAL CITATION:	[2019] VCC 1890

REASONS FOR JUDGMENT
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Subject:  Application to reopen
Catchwords:             Whether court proceeded upon a misapprehension of facts or law;

whether unsuccessful party deprived of opportunity to present argument

on relevant point.

Legislation Cited:     Building and Construction Industry Security of Payment Act 2002

Cases Cited:Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; Di Stasio v R & K Services Pty Ltd [2018] VSCA 340; De L v Director-General, NSW Dept of Community Services (No 2) (1997) 190 CLR 207; Smith v New South Wales Bar Association (1992) 176 CLR 256

Judgment:                Application to reopen dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J A F Twigg QC with Mr J Silver	KKI Lawyers
For the Defendant	Mr M Clarke QC	Noh Legal Pty Ltd

HIS HONOUR:

Background 

1       On 4 October 2019, I published reserved reasons for dismissing the Summons by Argyle Building Services Pty Ltd (“Argyle”), issued pursuant to the Building and Construction Industry Security of Payment Act 2002. Solicitors for Argyle have sought to reopen my determination. No final orders or judgment have been authenticated.

2 The factual circumstances surrounding the dispute between the parties, the contentions urged at hearing and my reasons for determining the matter against the plaintiff, are to be found in my reserved reasons [2019] VCC 1567. I incorporate those matters by reference.

The Plaintiff’s contention

3       Upon the hearing of Argyle’s application to reopen, it was represented by counsel who appeared for it at the initial hearing on 18 September, led by Mr Twigg QC.  In a written outline filed prior to the reopening application, these counsel contended that contrary to the conclusions I had reached:

“Clause N of the Contract does not expressly or by implication provide that a failure to issue a tax invoice is a contractual bar to recovery of the liability that arises under s. 15(4) of the [Building and Construction Industry Security of Payment] Act.”

4       They said, further, that Clause N did not identify the “due date” for payment to Argyle as that expression is used in s15(4) of the Act.  They continued:

“… we submit that the plaintiff was not given an opportunity to address argument to the Court on its [mistaken] findings … we submit that dismissing the summons would cause a miscarriage of justice.”

5       They referred to three sections or portions of clause N of the relevant contract, namely N5, N6 and N8.  They said that in the circumstances described in my judgment, One Three Wilson Pty Ltd (“One Three Wilson”), “became liable to pay the claimed amounts, being the progress payments, 10 business days after the payment claims were served”.  This was based on the finding which I had made that no payment schedule had been provided by One Three Wilson.

6       Crucially, according to plaintiff’s counsel, under s12(1)(b) of the Act, the progress payment became due and payable:

“…

(b) if the contract makes no express provision with respect to the matter, on the date occurring 10 business days after a payment claim is made under Part 3 in relation to the payment.

… .”

7       They continued:

“…  cls. N.6 and N. 8 provided for the due date for payment of a liability that arises on the certification of a claim, or upon the architects’ failure to certify the claim (subject to notice and time provisions, exceeding the 10 business days), but no part of cl N provides for the due date for payment of the claimed amount for which the defendant becomes liable to pay, which under s.15 is 10 business days after service of the payment claim.”

8       They noted my observation at [6] of the principal judgment that:

“…the function of certification under the Contract is performed by the architect, who when doing so is not agent for the defendant. Thus, certification plays no part in determining the due date for payment of the liability to pay under s. 15(4) of the Act.”

9       Accordingly, the tax invoice was required only where an architect’s certificate was issued.  No architect’s certificate was issued.  Accordingly, there was no provision in the contract for a date on which a progress payment became “due and payable” in accordance with its terms, as would be necessary for the due date and if the liability of One Three Wilson were to be determined in accordance with s12(1)(a) of the Contract.  They said I had fallen into error in analysing matters on the basis that s12(1)(a) of the Act applied, and dismissing the Summons.

10      They referred to the decision of the High Court of Australia in Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 and the recent decision of the Court of Appeal in Di Stasio v R & K Services Pty Ltd [2018] VSCA 340 and De L v Director-General, NSW Dept of Community Services (No 2) (1997) 190 CLR 207. They said, in accordance with the formulation of the entitlement to seek a reopening of a judgment prior to authentication of orders adopted in the various judgments in Autodesk, Argyle had not been given an opportunity to address argument on this point.

11      Failure to intervene by way of reopening would, they said, create an injustice.  They conceded that a determination under the Act was, by its very nature, provisional, only.  However, as a result of the view which Argyle had taken to be its entitlement, it had exercised a statutory right under the Act to suspend work.   It took the failure to pay to be a repudiation.

The Defendant’s arguments

12      One Three Wilson was represented by Mr Marcus Clarke QC, who had not appeared at the original hearing.  Mr Clarke’s primary contention was that the Court should refuse to countenance a reopening. 

13      Mr Clarke took me, first, to the various judgments in Autodesk. He went, first, to the majority justices, namely, Brennan J (as he then was), Dawson and Gaudron JJ. He noted that Brennan J first acknowledged the existence of a jurisdiction, prior to the authentication of a judgment, for a party against whom a determination has been made to seek to reopen the adverse judgment on the ground that, “without fault” on that person’s part, he, she or it “has not had an opportunity to be heard as to why that judgment should not be pronounced”. (1993) 176 CLR 300. Secondly, his Honour said that a judgment ought not be pronounced against a party who has not had the opportunity to be heard:

“… However, a sufficient opportunity to argue a ground is given when the ground is logically involved in a proposition that has been raised in the course of argument before the court or is to be considered by the court as an unconceded step in determining the validity of a conclusion for which one of the parties contends”. (1993 176 CLR 300) (Footnote omitted)

14 His Honour noted that “the precise ground which a court or judge assigns for a decision will frequently be formulated in terms different from the terms of a submission by counsel” (1993) 176 CLR 300, 308. According to Mr Clarke, his Honour also said that the jurisdiction must be exercised with great caution because:

“… To entertain an application to reopen an appeal [as was the case in Autodesk] after judgment in order to consider further argument on an issue already decided would be to subvert the finality of litigation and to invite interminable arguments about the importance of the legal questions to be recanvassed and the correctness of the answers to those questions already given. (1993) 176 CLR 300, 310

15 Mr Clarke referred to the judgment of Dawson J, where his Honour stressed the need to exercise the jurisdiction “cautiously, bearing in mind the public interest in the finality of litigation” (1993) 176 CLR 300 (footnote omitted), his Honour’s statement that “‘Judges are more than mere selectors between rival views - they are entitled to and do think for themselves’” (1993) 176 CLR 300, 317 (footnote omitted) and his Honour’s finding that in the case before him, the losing party had not been restricted in the submissions that it might make (1993) 176 CLR 300, 318. Dawson J found the losing party had had “ample opportunity to be heard” (1993) 176 CLR 300, 321. Next, he referred to the judgment of the third member of the majority, Gaudron J, where her Honour said that “the circumstances in which justice requires that course are, in practice, extremely rare, particularly if there has been an opportunity for full argument” (1993) 176 CLR 300, 322 (footnote omitted). Finally, he referred to the judgment of Mason CJ, with whom Deane J concurred, who, whilst in dissent, gave a judgment that was treated as authoritative by the Court of Appeal in Di Stasio.  Mr Clarke referred to his Honour’s statement:

“…The exercise of the jurisdiction to reopen a judgment and to grant a rehearing is not confined to circumstances in which the applicant can show that, by accident and without fault on the applicant's part, he or she has not been heard. It is true that the jurisdiction is to be exercised with great caution, having regard to the importance of the public interest in the finality of litigation”. (1993) 176 CLR 300, 301-2 (Footnote omitted)

16 His Honour noted that the requirements to maintain finality in mitigation should not be regarded as precluding the exceptional step of reopening when it is considered by the court that “it has proceeded on a misapprehension as to the facts or the law” (1993 176 CLR 300, 302). His Honour stressed, as had Gaudron J, that the situation of the High Court of Australia as the ultimate Court of Appeal, was a relevant consideration as to whether the discretion to reopen should be exercised since, in the case of a matter determined by the Full Court of the High Court, no remedy by way of appeal would lie. Mr Clarke stressed that this Court stood in a different situation to the High Court. There was a remedy of appeal available to an aggrieved litigant, albeit subject to the requirement of obtaining leave. Then, Mr Clarke referred to similar statements by the High Court in Smith v New South Wales Bar Association (1992) 176 CLR 256, where Brennan J (as he was then was), Dawson, Toohey and Gaudron JJ said:

“…The power is discretionary and, although it exists up until the entry of judgment, it is one that is exercised having regard to the public interest in maintaining the finality of litigation. Thus, if reasons for judgment have been given, the power is only exercised if there is some matter calling for review. And there may be more or less reluctance to exercise the power depending on whether there is an avenue of appeal. It is important that it be understood that these considerations may tend against the reopening of a case, but they are not matters which bear on the nature of the review to be undertaken once the case is reopened, as this case was.” (1992) 176 CLR 256, 265 (Footnotes omitted)

17      According to Mr Clarke, this was a classic example of a losing party seeking to have another opportunity to argue its case, now having had the advantage of the court’s reasons so as to redirect its arguments.  Effectively, having pursued one line of argument, claiming that the dispute before the court should be analysed on the basis that it was governed by s12(1)(a) of the Act, the plaintiff now sought to recast its case in reliance on s12(1)(b).  This was, he said, not a case of inadvertence or lack of opportunity to be heard, rather it was a case of an argument deliberately pursued, which has turned out to be unsuccessful.

The Plaintiff’s submissions in reply

18      Mr Twigg QC, in reply, took me in detail to the judgment of the Court of Appeal in Di Stasio, where the court declined to intervene in circumstances where, after publication of reasons for judgment, a reopening was allowed, which entailed both the making of further submissions, amendments to the Statement of Claim and the admission of further evidence, in circumstances where the person who represented the plaintiff at trial gave sworn evidence that the failure to advance a particular argument, adduce further evidence and seek an amendment to the Statement of Claim was due to his own inadvertence.  This, said Mr Twigg, indicated there was no hard and fast rule requiring that an applicant for reopening had to show that things went astray without any fault on his, her or its part, or on the part of its legal representative.  The court had reached this view, particularly in light of the remarks made by the High Court in De L’s case.

Natural justice

19      I reject the contention that Argyle, at the principal hearing, was denied natural justice or deprived of the opportunity to be heard.  The transcript of the original hearing shows that I was seeking clarification from Argyle’s counsel as to whether, for the purposes of its Summons, it contended that there was a “due date” which could be derived from the contract on the one hand or that, on the other hand, there was no such due date which could be derived and s12(1)(b) applied.  I pressed for a clear response over some pages of transcript (T31-34).  In particular, I said, “For the purposes of your contention today are you relying on s12(1)(a) or (b)?” Counsel replied, “Yes, (a)”.  A few minutes later I asked, “Does the contract make an express provision as to the date on which payment is [to be] made?” and counsel replied, “It does”.  As Mr Clarke correctly observed, this appears to be a clear election (to use the word in a non-technical sense) on counsel’s part to pursue a particular line of argument and not to press an alternative line based on the other subparagraph (b).  Mr Twigg said, however, that this apparent “election” should be seen, in truth, as not a choice between two stand alone alternatives, but, in fact, a more nuanced construction, suggesting that the two paragraphs should somehow be read together.  He referred to a passage in the middle of the exchange between me and counsel, where the latter stated:

“What (b) talks about is the date occurring ten business days so the terms that 1(a) is referring to are the terms, that is the number of days after the claim is put in, that is the term that says, ‘if I put in a claim on Monday you must pay me five days from now’.” (T34, L19-24)

20      Counsel continued:

“It is not interested in any other terms such as – and you also must issue a tax invoice because as the structure of the Act makes clear a payment claim is not a tax invoice, it doesn’t say that”. (Ibid, L26-29)

21      I asked if, hypothetically, I were to conclude that paragraph (b) “governs”, would the plaintiff’s claim still be successful, to which the counsel replied, “it certainly would be”.  (T35, L5-8)  Mr Twigg said that these matters were elaborated in an Outline of Submissions made on behalf of the plaintiff in reply at the original hearing.  He referred to paragraphs 29 and 30 of the Outline which stated:

“29To defendant (sic) seeks to construe subsection 12(1)(a) of (sic) importing a contractual hurdle that has the `effect’ of restricting the operation of the SOPA, that is, saying that despite the clear words of subsection 15(4) (if no schedule is served, ‘the respondents becomes (sic) liable to pay the claimed amount to the claimant on the due date for the payment’) and section 17 (where a schedule is served, subsection 17(d) says the scheduled amount must be paid on or before the due date), a due date does not arise unless a tax invoice has been provided.

30All that subsection 12(2)(a) [does], in using the words `on the date on which the payment becomes due and payable in accordance with the terms of the contract’ is to pick up the actual number of days from the fulfilment of the payment claim procedure when the claim is due and payable; as much as clear (sic), when looking at subsection 12(2)(b), which states that payment is due: if the contract makes no express provision with respect to the matter, on the date occurring 10 business days after a payment claim is made under Part 3 in relation to the payment.”

22      Mr Twigg did not seek to support these paragraphs as a proper guide to the construction of s12.  He noted that the references in paragraph 30 to ss(2) should be taken as references to ss(1).  He agreed, however, that the proper construction of this subsection was that it provided two freestanding alternatives which should be construed each on its own terms.

23      In the circumstances, I do not accept that the plaintiff has been deprived of procedural fairness or an opportunity to be heard on the proper application of the Act to the present state of facts.

Disposition

24 The argument advanced on the Review Application seems to be that clause N6.1, insofar as it renders claims by Argyle “within the period shown in item 10 of schedule 1 after delivery of the certificate and the tax invoice (if applicable)” is not operative in this case. It is not obvious to me why, in accordance with the submission made on review, the fact that the architect is not to be regarded as an agent of the owner in giving a certificate leads to the conclusion that an architect’s certificate “plays no part in determining the due date for payment of the liability” under s15(4) of the Act, as counsel for the plaintiff submitted. The terms of the contract provide for an architect’s certificate to be issued as part of the contractual process. Mr Twigg’s argument was that in the events that happened, since the architect did not provide certificates, this process in the contract could be regarded as inoperative. This might occur by reason of an oral variation to the contract or by some sort of waiver. No distinct submission to either of these effects was made at the main hearing or on the application to reopen. Mr Paritsi’s affidavit, paragraph 26, left the matter uncertain. Was the Bank’s quantity surveyor to be treated as substituted for Mr Antrobus as “the architect” or was certification as a process to be simply ignored? (See [2019] VCC 1567) In these uncertain circumstances I cannot make a distinct finding as to a waiver or an oral variation of the contract. The contract stands as printed.

25      Mr Twigg stressed correctly, if I may respectfully say so, that the interests of justice are the overriding consideration which should guide the Court in deciding whether to exercise the undoubted discretion to reopen in circumstances such as the present.  In this case, I am of the view that there has been no denial of an opportunity to be heard.  I would accept that the interests of justice would favour a reopening if my determination was shown to proceed upon a misapprehension of fact or law.  In the event, I am unpersuaded that this is so.

26      The application to reopen should be dismissed.

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