Barclay Mowlem v Tesrol Walsh Bay - [2004] NSWSC 1232

CITATION: Barclay Mowlem v Tesrol Walsh Bay [2004] NSWSC 1232

HEARING DATE(S): 7, 8, 9 & 13 December 2004 (13 December for orders)

JUDGMENT DATE:
9 December 2004

JUDGMENT OF: McDougall J at 1

DECISION: See paras [58] to [60] of judgment

CATCHWORDS: BUILDING AND CONSTRUCTION - Building and Construction Industry Security of Payment Act 1999 - whether letter in law sufficient to be payment schedule - s 14(2)(b), (3) - whether "nothing" an amount for purposes of s 14(2)(b) - whether letter "provided" within meaning of s 14(1)

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999 (NSW)
Trade Practices Act 1974 (Cth)

CASES CITED: Brodyn v Davenport [2004] NSWCA 394
Connor v Blacktown District Hospital [1971] 1 NSWLR 713
Multiplex Constructions Pty Ltd v Luikens and Anor [2003] NSWSC 1140

PARTIES :
Barclay Mowlem Construction Limited (Plaintiff)
Tesrol Walsh Bay Pty Limited (Defendant)

FILE NUMBER(S): SC 55043/04

COUNSEL: M G Rudge SC/D R Sibtain (Plaintiff)
G Inatey SC/D TMiller (Defendant)

SOLICITORS: Corrs Chambers Westgarth (Plaintiff)
Malcolm Johns & Co (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

McDOUGALL J

9 December 2004 Ex tempore (Revised 10 December 2004)

TESROL WALSH BAY PTY LIMITED

JUDGMENT

1 HIS HONOUR: The plaintiff (BMC) as contractor and the defendant (TWB) as principal are parties to a construction contract made on 11 November 2002. On 7 May 2004, BMC served a payment claim, called “Progress payment claim number 13”, on TWB. On 18 May 2004, within the time for TWB to provide a payment schedule to BMC, TWB prepared a letter to BMC responding to the payment claim. BMC says that the letter was not a payment schedule and was not provided to it. Thus, it says, it is entitled to judgment for the amount of the payment claim, $1,111,923.

The issues

2 There are four:

(1) Was the letter of 18 May 2004 sufficient in law to be a payment schedule?

(2) Was that letter provided to BMC in circumstances where (TWB says) it was posted but (BMC says) it was not received?

(3) Alternatively, has TWB made out in fact an estoppel against BMC, preventing BMC from asserting that TWB has not provided a payment schedule to BMC?

Building and Construction Industry Security of Payment Act

3 A pleaded defence, relying on s 52 of the Trade Practices Act 1974 (Cth), was not pressed.

First issue

4 The Act creates a statutory right to progress payments under construction contracts: see s 8. The mechanism for recovering a progress payment is initiated by the service of a payment claim in accordance with s 13.

5 If the respondent to a payment claim does not concede the claim, it may provide a payment schedule to the claimant in accordance with s 14. By s 14, "payment schedule" means a schedule referred to in s…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NSWSC 1232
Decision Date: 9 December 2004

CaseChat Overview and Summary

The case involved a dispute between Barclay Mowlem and Tesrol Walsh Bay in the Supreme Court of New South Wales. The core issue was whether a letter sent by Tesrol to Barclay, which stated that Barclay owed nothing for the work completed, could be considered a payment schedule under the Building and Construction Industry Security of Payment Act 1999. The court had to determine if this letter was a sufficient document to trigger the adjudication process and if it could be considered as "providing" the amount due under the statute.

The primary legal issues were whether the letter constituted a payment schedule under section 14(2)(b) of the Act, whether "nothing" could be deemed an amount for the purposes of section 14(2)(b), and if the letter fulfilled the requirement of "providing" within the meaning of section 14(1). The court also had to consider the implications of these interpretations on the enforceability of the payment claim and the subsequent adjudication process.

The court found that the letter did not satisfy the statutory requirements for a payment schedule as it did not specify a precise amount due. The court held that "nothing" could not be construed as an amount for the purposes of section 14(2)(b) and that the letter did not "provide" an amount within the meaning of section 14(1). Consequently, the letter was insufficient to trigger the adjudication process under the Act. The court dismissed the claim, ruling that the adjudication process could not proceed on the basis of the letter in question.

The final orders of the court were that Barclay Mowlem's claim was dismissed, and there were no orders for costs. This decision highlights the importance of precise compliance with the statutory requirements for payment schedules under the Building and Construction Industry Security of Payment Act 1999.

Orders