Augerpile Drilling and Underpinning P/L v Thompson
[2010] QMC 12
•26 March 2010
MAGISTRATES COURTS OF QUEENSLAND
CITATION:
Augerpile Drilling and Underpinning P/L v Thompson [2010] QMC 12
PARTIES:
AUGERPILE DRILLING AND UNDERPINNING PTY LTD
(plaintiff)
v
LYNETTE THOMPSON
(defendant)
FILE NO/S:
M51812/09
DIVISION:
Magistrates Courts
PROCEEDING:
Application for summary judgment
ORIGINATING COURT:
Magistrates Court at Brisbane
DELIVERED ON:
26 March 2010
DELIVERED AT:
Brisbane
HEARING DATE:
23 February 2010, 23 March 2010
MAGISTRATE:
Springer BL
ORDER:
The applicant/plaintiff is entitled to judgment against the respondent for the outstanding amount of $1480.00
CATCHWORDS:
TRADE PRACTICES – BUILDING AND CONSTRUCTION – payment of building contract – Payment Claim
Building and Construction Industry Payment Act 2003, s 17, s18, s19, s100
COUNSEL:
Defendant appeared on own behalf
SOLICITORS:
Introduction
The applicant/plaintiff applies for summary judgment to be entered against the respondent/defendant “for the full amount of the outstanding claim, costs and interests” and that the respondent pay the costs of the applicant of and incidental to the proceeding. The matter came before me originally on 23 February 2010 at which time I allowed an adjournment to allow the defendant to obtain legal advice. She appeared then and on 23 March 2010 without legal representation.
In these reasons I use the terms ‘plaintiff’ and ‘defendant’ rather than applicant and respondent.
The plaintiff did work which was intended to rectify cracks in the brickwork of the defendant’s house at [address]. The work constituted ‘construction work’ for the purposes of the Building and Construction Industry Payments Act 2004 (the BCIP Act)
Have proceedings been commenced in the correct district?
The defendant had filed an affidavit which included an assertion that the matter should have been lodged in the Ipswich Registry as the site where the work was carried out was in Bundamba and that is closest to the Ipswich registry. That issue was considered on the first occasion when the matter was before me,
Rule 39 of the Uniform Civil Procedure Rules (UCPR) allows a defendant to object to the starting of the proceeding other than in the correct district only if the objection is included in the defendant’s notice of intention to defend. She made such an objection in that form. That Rule also states that the objection is taken to be an application. Sub-rule 39(4) permits the court to make an order dismissing the objection.
Given the nature of the basis of the plaintiff’s claim being under the BCIP Act and the fact that I was then seized of the proceedings, I formed a view (which regrettably proved to be incorrect) that the matter could be dealt with expeditiously by me. I also had regard to the philosophy of the UCPR as set out in Rule 5. In the circumstances, I exercised my discretion and dismissed the objection.
Irregularities in affidavits from both parties
The affidavit of Richard Money in support of the plaintiff’s application for summary judgment does not comply with UCPR 434 in that it does not “state the day and place the person made the affidavit”.
Despite that, the affidavit otherwise complies with Rule 432. I regard the omission to date it as an irregularity and allow its use under UCPR 436. I note that it was filed in the court registry on 14 January 2010.
The defendant’s latest affidavit sworn 22 March 2010 was received by the court registry on the morning of 23 March, being the adjourned date of the plaintiff’s application. That affidavit also does not comply with UCPR 434 as it is not signed on every page. I treat that omission as an irregularity and allow it to be used by the defendant (as permitted under UCPR 436).
The nature of the plaintiff’s claim
The plaintiff’s statement of claim alleges that a final progress claim under the BCIP Act was issued on 3 August 2009 and there was no response to that claim. For ease of reference, extracts from the Act setting out sections 17, 18, 19, 100 and the Dictionary definition of ‘reference date’ are attached to these reasons as Appendix 1.
The plaintiff’s statement of claim pleads it was at all material times “the holder of a licence from the Queensland Building Services Authority being licensee number 7322324 for the classes concreting restricted to underpinning and foundation repair and foundation work (piling and anchors).” That seems to be confirmed by an exhibit to the defendant’s affidavit sworn 19 March 2010.
The plaintiff alleges in its pleadings that it has completed all work under the contract and quote. Paragraph 6 of the affidavit of Mr Money deposes that “Between 13 July 2009 and 3 August 2009, the plaintiff performed the works in accordance with the terms of the contract”. The plaintiff’s quote refers at Item 5 of the Scope of Works to “Repoint brickwork at existing cracks”.
The defendant’s response
The defendant, without the assistance of competent legal representation, appears to have struggled to address the issues that are relevant to the application before the court. Some documents she has referred to were filed; others were not. In my view, she has misconstrued some legislative provisions that she has referred to in documents filed and written submissions tendered. In the submissions tendered on 23 March 2010, she submits:
The Tribunal is without jurisdiction because the Applicant’s claim is bought under Section 111c of the Queensland Building Services Authority Act 1991 … and there is no regulation allowing for a summary decision pursuant to a claim brought under that section against the Defendant.
I do not see how section 111c of the Queensland Building Services Authority Act 1991 is relevant. It relates to: conviction of a company for an offence against a provision of that Act; if disciplinary action is taken against a company; where monies are owed by a company to the Authority in relation to an insurance claim. I am unable to see any relevance of that section to the application before me.
The defendant has filed material in opposition to the application for judgment in which she attempts to identify a range of issues that she argues that should properly be ventilated at a trial. Those issues relate to the allegedly poor quality of the work done by, or failure to complete work as should have been done by, the plaintiff. The most recent of the defendant’s affidavits was filed on 23 March 2010. The affidavit is, with respect, vague in places and I have not readily been able to discern some of the points I assume the defendant has been trying to make. From her written submissions, she seeks orders from the court for:
1. Release of the separate Report on Footings for insurance purposes
2. Release of the Appendix completed by the Complaint (sic)
3. The hearing to be adjourned and the matter set for trial at a future date.
The defendant raises in her affidavit the issue of the “pointing of the brickwork” not yet having been started as at 3 August 2009 (being the date of the purported payment claim) and “there was no provision for a progress payment and the listed item of work was not started”.
The Contract and the BCIP Act
The contract between the parties is exhibited to the affidavit of Richard Money, the director of the plaintiff. The contract includes clauses 7.1, 7.3 and 7.5, which are noteworthy. They state:
7.1 On reaching Practical Completion, the Contractor must give to the Owner:
(a) the final progress claim;
(b) a certificate of Practical Completion:
(i) stating the date the Works reached Practical Completion;
(ii) providing for a final inspection of the Works with the Owner at at date and time specified in the certificate.
7.3 If at the final inspection of the Works the Owner claims defects exist, or the Works are incomplete, the Contractor must give to the Owner a defects document that …
7.5. On giving the defects document to the Owner and notwithstanding that Practical Completion may have been reached with minor omissions or defects, the Owner must pay the final progress claim to the Contractor in accordance with the contractor. If the Owner … disputes the amount payable to the Contractor and the Contractor is a member of the Queensland Master Builders Association, the Owner may pay the disputed amount into the Queensland Master Builders Trust Account. (emphasis added).
The contract also includes a provision in Item 8 of the Trade Contract Schedule which stipulates payment was to be by “One Lump Sum Payment of the contract as adjusted under the Contract (upon completion of the work works (Excluding deposit)”.
Clause 2.3 of the contract (in the part dealing with the Owner’s obligations) states:
On receiving a progress claim, the Owner must pay the Contractor, within the period stated in item 9 of the Schedule, a progress payment calculated in accordance with the following …
The time for payment of progress claims after the contractor submits claims is ‘14 days’ as stipulated in Item 9 of the schedule to the contract. A “progress payment”, as set out in the Dictionary in Schedule 2 of the BCIP Act means:
A payment to which a person is entitled under section 12, and includes, without affecting any entitlement under the section –
(a) the final payment for construction work carried out, or for related goods and services supplies, under a construction contract.
(b) …
Section 12 of the Act establishes rights to progress payments. That section reads:
From each reference date under a construction contract, a person is entitled to a progress payment if the person has undertaken to carry out construction work, or supply related goods and services, under the contract.
The expression “reference date” is defined in the Dictionary (see Appendix 1). There does not appear to be a provision in the contract specifying a reference date and therefore, paragraph (b) of the definition is relevant.
By s 18(2)(b) a payment schedule must state the “scheduled amount” – that is, the amount of the payment, if any, that the respondent proposes to make. Under s 20, if a respondent does not pay the scheduled amount, the applicant “may recover it as a debt, which the respondent may ultimately be able to “claw back” in civil proceedings”.[1]
[1]National Vegetation Management Solutions P/L v Shekar Plant Hire P/L [2010] QSC 3.
Section 18(4) stipulates that subsection (5) applies if a payment claim has been served and the respondent does not serve a payment schedule on the claimant within stated time frames.
Subsection (5) makes the respondent liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates.
I note the distinction in some provisions of the Act where reference is to work undertaken to be done, which should be contrasted with work actually done.[2]
[2]See, for example, section 12 and the definitions of ‘progress payment’ and “reference date” where it refers to construction work carried our undertaken to be carried out.
One should not approach the question whether a document satisfies the description of a payment schedule (or payment claim for that matter) from an unduly critical viewpoint. No particular form is required. The court need only be concerned with whether the content of the document in question satisfies the statutory description.
It must be noted that there is a fundamental difference between a proposal to make a payment within the meaning of s 18 (that is, a payment on an interim basis) and an offer, open for acceptance within a short time to make a payment in full satisfaction of the applicant’s claim. In the latter case, the liability to pay the amount offered depends on the applicant’s acceptance of the offer, and there is no scope for the respondent’s later “clawing it back”.[3]
[3]See National Vegetation Management (supra) at para [21]
In my view, the plaintiff’s invoice of 3 August 2009 satisfies the criteria for a “payment claim” within the meaning of s 17 of the Act.
In response to the invoice of 3 August 2009, the defendant deposes to having advised the Contractor that “she was not satisfied that the brickwork was completed and/or [it was] not carried out with due care and skill”.
She sent to the defendant a letter dated 20 August 2009[4] which the respondent identified as a possible ‘payment schedule’ for the purposes of the Act. The principal issue for determination on this application is whether that letter was a “payment schedule” within the meaning of s 18. If it was not a payment schedule, then the defendant became liable to pay the amount claimed[5] and on her failing to do so, the applicant became entitled to recover the amount claimed as a debt.[6]
[4]Given my view of the timing of the delivery of that, it is unnecessary to decide whether service by fax transmission was sufficient and whether service of the letter has been established.
[5] Building and Construction Industry Payments Act 1994 (Qld), s 18(5).
[6]Building and Construction Industry Payments Act 1994 (Qld), s 19(2)(a)(i).
To constitute a payment schedule the defendant’s document had to:
(i) identify the payment claim to which it related, and
(ii) state any amount which the recipient of the payment claim proposed to make in response to it.
(iii) Importantly, if that amount is less than the amount claimed the payment schedule it must state why it is less.
The defendant’s letter of 20 August 2009 sets out some areas of dissatisfaction with the job done by the plaintiff and continues:
I understand I am obliged to give you an opportunity to make the necessary repairs first. On the other hand my advice from Alf, is that he believes the bill he provided for the work, should be split about half and half with you.
Therefore to bring the matter to a swift conclusion I am willing to offer you $9,000 in full and final settlement.
Can you please let me know as soon as possible if this is acceptable to you so that I can make payment to your account.
I am travelling overseas very early on Tuesday of next week for some weeks and will not be able to deal with the account any further until I return if the matter is not settled by then.
Judicial consideration of the BCIP Act
The BCIP Act has been considered in several cases. In National Vegetation Management Solutions P/L v Shekar Plant Hire P/L [2010] QSC 3, Justice M Wilson at paragraph [11] of her judgment considered the Act as it is relevant here:
[11] The Act provides for progress payments to contractors whether or not the relevant contract makes provision for progress payments, and establishes a procedure for the making and recovery of such claims and their speedy adjudication where they are disputed. However, a party may “claw back” progress payments recovered from it under the Act in subsequent civil proceedings.[7]
[7]Citation and footnotes omitted from this extract
In that case, Her Honour referred to various decisions that had considered the BCIP Act, including (at paragraph [14]) the decision of Justice Chesterman in Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd, where His Honour considered whether a particular email was a payment schedule. Justice Chesterman said:[8]
Before considering the first question, I think, it necessary to remember the purpose of the Act because that purpose will influence the approach one takes to the construction of the 14 December email. As Hodgson JA said in Brodyn Pty Ltd T/as Time Cost and Quality v Davenport:
‘The Act discloses a legislative intention to give an entitlement to progress payments, and to provide a mechanism to ensure that disputes concerning the amount of such payments are resolved with the minimum of delay. The payments themselves are only payments on account of a liability that will be finally determined otherwise…The procedure contemplates a minimum of opportunity for court involvement…’
[8]Citations and footnotes omitted from this quoted extract.
In Brodyn Pty Ltd t/as Time Cost and Quality (ACN 001 998 830) v Philip Davenport & OrsEinstein J referred to the legislation as:
‘…a fast track interim progress payment adjudication vehicle.’
As noted by Justice Wilson, the BCIP Act emphasises speed and informality.
In Construct Assist Pty ltd v PDMS Group Pty Ltd [2008] QDC 303 Judge Tutt referred to the “somewhat unique provisions of the BCIP Act”. He said at paragraph [21]:
In keeping with the “Object of Act” I interpret the legislation to mean that is a respondent to a payment claim fails to serve “a payment schedule” on the claimant a statutory debt arises in the respondent to pay the claimant, which may be recovered “in any court of competent jurisdiction” and pursuant to s 19(4)(b) a respondent is expressly prohibited form bringing “any counterclaim against the claimant; … or to raise any defence in relation to matters arising under the construction contract”.
Conclusion
I can appreciate the defendant’s wish to oppose judgment because of possible defects in the work performed by the plaintiff and because of the allegation she has made that not all the work was done at the time the invoice of 3 August 2009 was delivered. However, the legislation is designed to create, in effect, a statutory debt and to preclude a party from raising a defence in relation to matters under the contract.[9]
[9]See Construct Assist quoted above. National Vegetation Management
The date of the defendant’s letter was 20 August 2009 – 17 days after the date of the payment claim. Accordingly, it has not satisfied the time requirement set out in section 18(4) of the BCIP Act. Further, if it were necessary to decide, I would view the defendant’s offer of $9000 – couched in the way it was – as not being an offer within section 18, but rather an offer in full satisfaction of the plaintiff’s claim. Liability to pay that amount would then have been contingent on the plaintiff accepting that and there would be no opportunity for the defendant here to recover that at a later stage.[10] That means, in my view, the defendant’s letter was not a payment schedule for the purposes of the Act and I so find.
[10]See paragraph 28 above, and the approach taken on this aspect by Wilson J in (supra).
The defendant “not having served a payment schedule within 10 days of the service of the payment claim”, she became liable to pay the amount of the payment claim on the due date for the progress payment to which the payment claim related.
No amount was paid until 25 August when $1,900 was paid, leaving the sum of $8,180 owing to the plaintiff. The subsequent payments made by the defendant mean that the balance outstanding at this time is $1480.00.
For the reasons set out above, I do not consider I should make any of the orders sought by the defendant. If she wishes to pursue a claim for the quality of the workmanship, by virtue of section 100 of the BCIP Act, there would seem nothing to prevent her from doing so, although she would need to establish the appropriate forum for such proceedings (ie the court or the Queensland Civil and Administrative Tribunal).
The applicant/plaintiff is entitled to judgment against the respondent for the outstanding amount of $1480.00.
I will hear submissions on whether the applicant/plaintiff seeks judgment for that amount and on the question of costs.
APPENDIX 1
Extracts from Building and Construction Industry Payment Act 2003
17 Payment claims
(1) A person mentioned in section 12 who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment (the respondent).
(2) A payment claim—
(a) must identify the construction work or related goods and services to which the progress payment relates; and
(b) must state the amount of the progress payment that the claimant claims to be payable (the claimed amount);
and
(c) must state that it is made under this Act.
(3) The claimed amount may include any amount—
(a) that the respondent is liable to pay the claimant under section 33(3); or
(b) that is held under the construction contract by the respondent and that the claimant claims is due for release.
(4) A payment claim may be served only within the later of—
(a) the period worked out under the construction contract; or
(b) the period of 12 months after the construction work to which the claim relates was last carried out or the related
goods and services to which the claim relates were last supplied
(5) A claimant can not serve more than 1 payment claim in relation to each reference date under the construction contract.
(6) However, subsection (5) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim.
18 Payment schedules
(1) A respondent served with a payment claim may reply to the claim by serving a payment schedule on the claimant.
(2) A payment schedule—
(a) must identify the payment claim to which it relates; and
(b) must state the amount of the payment, if any, that the respondent proposes to make (the scheduled amount).
(3) If the scheduled amount is less than the claimed amount, the schedule must state why the scheduled amount is less and, if it is less because the respondent is withholding payment for any reason, the respondent’s reasons for withholding payment.
(4) Subsection (5) applies if—
(a) a claimant serves a payment claim on a respondent; and
(b) the respondent does not serve a payment schedule on the claimant within the earlier of—
(i) the time required by the relevant construction contract; or
(ii) 10 business days after the payment claim is served.
(5) The respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates.
19 Consequences of not paying claimant if no payment schedule
(1) This section applies if the respondent—
(a) becomes liable to pay the claimed amount to the claimant under section 18 because the respondent failed to serve a payment schedule on the claimant within the time allowed by the section; and
(b) fails to pay the whole or any part of the claimed amount on or before the due date for the progress payment to which the payment claim relates.
(2) The claimant—
(a) may—
(i) recover the unpaid portion of the claimed amount from the respondent, as a debt owing to the claimant, in any court of competent jurisdiction; or
(ii) make an adjudication application under section 21(1)(b) in relation to the payment claim; and
(b) may serve notice on the respondent of the claimant’s intention to suspend, under section 33, carrying out construction work or supplying related goods and services under the construction contract.
(3) A notice under subsection (2)(b) must state that it is made under this Act.
(4) If the claimant starts proceedings under subsection (2)(a)(i) to recover the unpaid portion of the claimed amount from the respondent as a debt—
(a) judgement in favour of the claimant is not to be given by a court unless the court is satisfied of the existence of the circumstances referred to in subsection (1); and
(b) the respondent is not, in those proceedings, entitled—
(i) to bring any counterclaim against the claimant; or
(ii) to raise any defence in relation to matters arising under the onstruction contract.”
100 Effect of pt 3 on civil proceedings
(1) Subject to section 99, nothing in part 3 affects any right that a party to a construction contract—
(a) may have under the contract; or
(b) may have under part 2 in relation to the contract; or
(c) may have apart from this Act in relation to anything done or omitted to be done under the contract.
(2) Nothing done under or for part 3 affects any civil proceedings arising under a construction contract, whether under part 3 or otherwise, except as provided by subsection (3).
(3) In any proceedings before a court or tribunal in relation to any matter arising under a construction contract, the court or tribunal—
(a) must allow for any amount paid to a party to the contract under or for part 3 in any order or award it makes in those proceedings; and
(b) may make the orders it considers appropriate for the restitution of any amount so paid, and any other orders it considers appropriate, having regard to its decision in the proceedings.
Dictionary definition of “reference date”
reference date, under a construction contract, means—
(a) a date stated in, or worked out under, the contract as the date on which a claim for a progress payment may be made for construction work carried out or undertaken to be carried out, or related goods and services supplied or undertaken to be supplied, under the contract; or
(b) if the contract does not provide for the matter—
(i) the last day of the named month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract; and
(ii) the last day of each later named month.
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