BOCOL CONSTRUCTIONS PTY LTD and KESLAKE GROUP PTY LTD
[2017] WASAT 15
•17 JANUARY 2017
BOCOL CONSTRUCTIONS PTY LTD and KESLAKE GROUP PTY LTD [2017] WASAT 15
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2017] WASAT 15 | |
| CONSTRUCTION CONTRACTS ACT 2004 (WA) | |||
| Case No: | CC:1079/2016 | 29 SEPTEMBER 2016 | |
| Coram: | MS P LE MIERE (MEMBER) | 17/01/17 | |
| 30 | Judgment Part: | 1 of 1 | |
| Result: | Application dismissed | ||
| B | |||
| PDF Version |
| Parties: | BOCOL CONSTRUCTIONS PTY LTD KESLAKE GROUP PTY LTD |
Catchwords: | State Administrative Tribunal Act 2004 (WA), s 20(1) State Administrative Tribunal Rules 2004 (WA), r 9, r 10 Whether an extension of time is required where no notice is given of a party's rights to apply for a review Construction Contracts Act 2004 (WA) Whether the description of the respondent as 'Trustee for' rather than using the trustee's correct name in the application for adjudication complied with the Act and Regulations Whether a claim for damages for breach of an implied term of the contract is a 'payment claim' under the contract |
Legislation: | Construction Contracts Act 2004 (WA), s 3, s 16, s 26, s 30, s 31(2)(a), s 46(1), Sch 1 - Div 4 cl 5 and Div 5 cl 6 cl 7 Construction Contracts Regulations 2004 (WA), reg 4, reg 5, reg 7 Interpretation Act 1984 (WA), s 18, s 74 State Administrative Tribunal Act 2004 (WA), s 20(1) State Administrative Tribunal Rules 2004 (WA), r 9, r 10 |
Case References: | BGC Construction Pty Ltd v Citygate Properties Pty Ltd [2016] WASC 88 Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes (WA) Pty Ltd [2009] WASAT 133 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 Curlewis and City of Albany [2011] WASAT 85 Delmere Holdings Pty Ltd v Green [2015] WASC 148 DPD Pty Ltd v McHenry [2012] WASC 140 Eccles v Koolan Iron Ore Pty Ltd [No 3] [2013] WASC 418 Georgiou Group Pty Ltd and MCC Mining (Western Australia) Pty Ltd [2011] WASAT 120 K & J Burns Electrical Pty Ltd v GRD Group (NT) Pty Ltd [2011] NTCA 1; (2011) 29 NTLR 1 Kellogg Brown & Root Pty Ltd v Doric Contractors Pty Ltd [2014] WASC 206 Laing O'Rourke Australia Construction Pty Ltd v Samsung C & T Corporation [2015] WASC 237 Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134 |
Orders | 1. The application is dismissed. |
Summary | The Tribunal found that in circumstances where notice by a decisionmaker of the right to review in compliance with s 20(1) of the State Administrative Tribunal Act 2004 (WA) has not been given, r 9 of the State Administrative Tribunal Rules 2004 (WA) does not apply and the time limit does not start to run until notice is given in compliance with s 20(1) of the State Administrative Tribunal Act 2004.,The Tribunal found that the use of the description of the respondent as 'the trustee' rather than use of its actual name did comply with the requirements of reg 4 of the Construction Contracts Regulations 2004 (WA) and accordingly the application for adjudication had been prepared and served in accordance with the Construction Contracts Act 2004 (WA).,The Tribunal found that there was not an implied term in the contract that the applicant could claim for damages. A claim for damages is not a payment claim because it is not 'a claim made under a construction contract ... by the principal to the contractor for payment of any amount in relation to the performance or nonperformance by the contractor of its obligations under the contract'.,The Tribunal rejected the applicant's submission that a broad approach to the interpretation of the meaning 'under' a construction contract should be taken. This is in line with the approach the courts have consistently adopted in interpreting the word 'under' to mean that there has to be a term in the construction contract that provides the right to make the claim not that the claim is 'referable to' or a genus of claim provided for by that contract' or 'by reason of the existence of the contract'. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : CONSTRUCTION CONTRACTS ACT 2004 (WA) CITATION : BOCOL CONSTRUCTIONS PTY LTD and KESLAKE GROUP PTY LTD [2017] WASAT 15 MEMBER : MS P LE MIERE (MEMBER) HEARD : 29 SEPTEMBER 2016 DELIVERED : 17 JANUARY 2017 FILE NO/S : CC 1079 of 2016 BETWEEN : BOCOL CONSTRUCTIONS PTY LTD
- Applicant
AND
KESLAKE GROUP PTY LTD
Respondent
Catchwords:
State Administrative Tribunal Act 2004 (WA), s 20(1) - State Administrative Tribunal Rules 2004 (WA), r 9, r 10 Whether an extension of time is required where no notice is given of a party's rights to apply for a review Construction Contracts Act 2004 (WA) Whether the description of the respondent as 'Trustee for' rather than using the trustee's correct name in the application for adjudication complied with the Act and Regulations Whether a claim for damages for breach of an implied term of the contract is a 'payment claim' under the contract
Legislation:
Construction Contracts Act 2004 (WA), s 3, s 16, s 26, s 30, s 31(2)(a), s 46(1), Sch 1 - Div 4 cl 5 and Div 5 cl 6 cl 7
Construction Contracts Regulations 2004 (WA), reg 4, reg 5, reg 7
Interpretation Act 1984 (WA), s 18, s 74
State Administrative Tribunal Act 2004 (WA), s 20(1)
State Administrative Tribunal Rules 2004 (WA), r 9, r 10
Result:
Application dismissed
Summary of Tribunal's decision:
The Tribunal found that in circumstances where notice by a decisionmaker of the right to review in compliance with s 20(1) of the State Administrative Tribunal Act 2004 (WA) has not been given, r 9 of the State Administrative Tribunal Rules 2004 (WA) does not apply and the time limit does not start to run until notice is given in compliance with s 20(1) of the State Administrative Tribunal Act 2004.
The Tribunal found that the use of the description of the respondent as 'the trustee' rather than use of its actual name did comply with the requirements of reg 4 of the Construction Contracts Regulations 2004 (WA) and accordingly the application for adjudication had been prepared and served in accordance with the Construction Contracts Act 2004 (WA).
The Tribunal found that there was not an implied term in the contract that the applicant could claim for damages. A claim for damages is nota payment claim because it is not 'a claim made under a construction contract ... by the principal to the contractor for payment of any amount in relation to the performance or nonperformance by the contractor of its obligations under the contract'.
The Tribunal rejected the applicant's submission that a broad approach to the interpretation of the meaning 'under' a construction contract should be taken. This is in line with the approach the courts have consistently adopted in interpreting the word 'under' to mean that there has to be a term in the construction contract that provides the right to make the claim not that the claim is 'referable to' or a genus of claim provided for by that contract' or 'by reason of the existence of the contract'.
Category: B
Representation:
Counsel:
Applicant : Mr G E Nairn
Respondent : Mr S J Davis
Solicitors:
Applicant : Lavan Legal
Respondent : Metaxas & Hager
Case(s) referred to in decision(s):
BGC Construction Pty Ltd v Citygate Properties Pty Ltd [2016] WASC 88
Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes (WA) Pty Ltd [2009] WASAT 133
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20
Curlewis and City of Albany [2011] WASAT 85
Delmere Holdings Pty Ltd v Green [2015] WASC 148
DPD Pty Ltd v McHenry [2012] WASC 140
Eccles v Koolan Iron Ore Pty Ltd [No 3] [2013] WASC 418
Georgiou Group Pty Ltd and MCC Mining (Western Australia) Pty Ltd [2011] WASAT 120
K & J Burns Electrical Pty Ltd v GRD Group (NT) Pty Ltd [2011] NTCA 1; (2011) 29 NTLR 1
Kellogg Brown & Root Pty Ltd v Doric Contractors Pty Ltd [2014] WASC 206
Laing O'Rourke Australia Construction Pty Ltd v Samsung C & T Corporation [2015] WASC 237
Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134
Introduction
1 This matter comes before the Tribunal by way of an application from Bocol Constructions Pty Ltd (applicant) dated and filed with the Tribunal on 18 July 2016 for review of the decision of an adjudicator, Mr Mark Taylor (adjudicator), to dismiss the applicant's application for adjudication of a contract dispute with Keslake Group Pty Ltd (respondent) under the Construction Contracts Act 2004 (WA) (CC Act) (adjudicator's decision).
2 The adjudicator dismissed the applicant's claim pursuant to s 31(2)(a) of the CC Act without making a determination on the merits.
3 The adjudicator found that the applicant's claim dated 22 March 2016 was not a valid payment claim and that the application for adjudication had not been prepared and served in accordance with s 26 of the CC Act.
4 The purpose of the review by the Tribunal of the adjudicator's decision is to produce the correct and preferable decision. It is a hearing de novo.
Legislative scheme
5 The right to seek a review arises under s 46(1) of the CC Act which provides:
A person who is aggrieved by a decision made under section 31(2)(a) may apply to the State Administrative Tribunal for a review of the decision.
6 Under s 31(2)(a) of the CC Act, an adjudicator must dismiss an application without determining it on its merits in the following circumstances:
(2) An appointed adjudicator must, within the prescribed time or any extension of it made under section 32(3)(a)
(a) dismiss the application without making a determination of its merits if
(i) the contract concerned is not a construction contract; or
(ia) the applicant gives written notice, to the adjudicator and each other party to the dispute, that they wish to withdraw the application; or
(ii) the application has not been prepared and served in accordance with section 26(1) and (2)(b) and (c); or
(iia) the application has not been prepared in accordance with section 26(2)(a), unless the adjudicator is satisfied that the application complies with section 26(2)(a) sufficiently for the adjudicator to commence adjudicating the dispute; or
(iii) an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract makes an order, judgment or other finding about the dispute that is the subject of the application; or
(iv) satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time or any extension of it is not sufficient for any other reason[.]
(1) To apply to have a payment dispute adjudicated, a party to the contract, within 90 business days after the dispute arises or, if applicable, within the period provided for by section 37(2)(b), must
(a) prepare a written application for adjudication; and
(b) serve it on each other party to the contract; and
(c) serve it
(i) if the parties to the contract have appointed a registered adjudicator and that adjudicator consents, on the adjudicator;
(ii) if the parties to the contract have appointed a prescribed appointor, on that appointor;
(iii) otherwise, on a prescribed appointor chosen by the party;
and
(d) provide any deposit or security for the costs of the adjudication that the adjudicator or the prescribed appointor requires under section 44(8) or (9).
(2) The application
(a) must be prepared in accordance with, and contain the information prescribed by, the regulations; and
(b) must set out the details of, or have attached to it
(i) the construction contract involved or relevant extracts of it; and
(ii) any payment claim that has given rise to the payment dispute;
and
(c) must set out or have attached to it all the information, documentation and submissions on which the party making it relies in the adjudication.
(3) A prescribed appointor that is served with an application for adjudication made under subsection (1) must comply with section 28.
8 Section 20(1) of the State Administrative Tribunal Act 2004 (WA) (SAT Act) provides:
If this subsection applies to a reviewable decision, the decisionmaker is to give any person who has a right under an enabling Act or section 44(3) to have the decision reviewed by the Tribunal written notice of
(a) the decision; and
(b) that right.
9 Rule 9 of the State Administrative Tribunal Rules 2004 (WA) (SAT Rules) provides:
Subject to these rules, an application to the Tribunal under its review jurisdiction must be made within 28 days of
(a) the day on which the decisionmaker gives a notice under the Act section 20(1); or
(b) the day on which the decisionmaker makes the decision under the Act section 20(5); or
(c) if, under the Act section 3(3)(a), the Act applies as if a person had made a decision, the day on which any provision of the enabling Act as to when the decision is taken to have been made has effect.
10 Regulation 7 of the Construction Contracts Regulations 2004 (WA) (CC Regulations) provides:
For the purposes of section 36(b) of the Act, an appointed adjudicator's decision must, in addition to the other information required by section 36 of the Act, contain
(a) the name of the appointed adjudicator;
(b) the applicant's name and contact details;
(c) the respondent's name and contact details; and
(d) the date and identification number (if any) of the adjudicator's determination.
11 Regulation 4 of the CC Regulations provides:
If a person is required by these regulations to give the contact details of a person, the person required to give the details must give the address, telephone and facsimile numbers and ABN of the person or the person's business (or ACN of the person if there is no ABN) to the extent to which the person required to give the details knows those details.
History
12 On or around 22 July 2015, the applicant entered into a contract with the respondent under which the respondent was to perform bituminous surfacing work on a remeasurable schedule of rates basis on the NorthamPithara Road near Jennapullin in Western Australia (Contract). It is not in dispute that the Contract was partly in writing and partly to be implied. In so far as the Contract was in writing it is comprised of the following documents:
1) the respondent's quotation BS 1869 02 dated 20 October 2014 (Quotation) (page 98, applicant's bundle); and
2) the applicant's purchase order 10102 dated 10 August 2015 (Purchase Order) (page 102, applicant's bundle).
13 It is not in dispute that the work the subject of the Contract was completed in July 2015.
14 It is not in dispute that the Contract is a construction contract for the purposes of the CC Act.
15 On 22 March 2016, the applicant sent a letter to Bitumen Surfacing in relation to the alleged nonperformance by Bitumen Surfacing of its obligations pursuant to the Contract, to perform the bituminous surfacing work.
16 On or around 19 April 2016, the respondent, by letter sent by its solicitor, Metaxas & Hager, disputed the claim and further disputed that it was a payment claim under the CC Act. Relevantly, the respondent's letter identified that the respondent was the client of Metaxas & Hager.
17 On 11 May 2016, the applicant served the respondent and the Institute of Arbitrators and Mediators Australia (IAMA) with an application for adjudication naming the Trustee for Complete Road Services Trust, trading as Bitumen Surfacing as the respondent to the application.
18 On 12 May 2016, IAMA appointed the adjudicator to determine the claim the subject of the adjudication application.
19 On 16 May 2016, the adjudicator sent a letter to the parties advising that he had been appointed as adjudicator.
20 On 25 May 2016, the respondent served the applicant and the adjudicator with a response to the adjudication application. On 25 May 2016, the parties exchanged emails in relation to making further submissions on matters in relation to the jurisdictional issue that arose out of the response.
21 By email from Mr Davies dated 25 May 2016 at 11:06 pm the applicant lodged further submissions with the adjudicator with respect to the jurisdictional issue.
22 On 27 May 2016, Mr Grub, of Metaxas & Hager, on behalf of the respondent, sent an email to the adjudicator attached to which was a copy of the respondent's responsive submissions with respect to the jurisdictional issue.
23 On 8 June 2016, the adjudicator dismissed the applicant's application pursuant to s 31(2)(a) of the CC Act without making a determination on the merits and notified the parties of his decision.
24 The adjudicator did not then or at any time notify the parties of their rights to seek a review of his decision.
25 On 18 July 2016, the applicant filed and served the current review application naming Keslake Group Pty Ltd as the respondent not the Trustee for Complete Road Services Trust trading as Bitumen Surfacing. The application for review also contained an application for an extension of time to lodge the application for review.
26 The review application was heard by the Tribunal on 29 September 2016 at which time the applicant withdrew its application for an extension of time. The applicant contended that as the adjudicator had not notified the applicant or the respondent of their right of review, the time for review had not commenced to run.
27 It is common ground that at the time the application for review was made to the Tribunal, both the applicant and respondent were operating under the belief that the application for review was out of time. Accordingly, the applicant also included with the application for review an application for an extension of time under r 10 of the SAT Rules.
28 Relevantly, orders were made by the Tribunal on 2 August 2016 that:
The applicant's application for an extension of time within which to bring the application is adjourned to the final hearing of the application[.]
29 Thereafter the matter proceeded on the basis that an extension of time to seek a review was required by the applicant and submissions by the parties in respect of this issue were filed in the Tribunal.
Extension of time - issue
30 It was not disputed by the respondent that:
a) notice of the right of review had not been given to the parties;
b) both the applicant and respondent were 'a person aggrieved';
c) section 20(1) of the SAT Act did apply to the adjudicator's decision; and
d) rule 9(b) and r 9(c) of the SAT Rules were not relevant.
31 On the morning of the hearing the applicant informed the Tribunal that (the day before the hearing) it had formed the view that time to apply for a review of the adjudicator's decision had not begun to run as notice of the right to seek a review of the adjudicator's decision under s 20(1) of the SAT Act had not been given to either of the parties by the adjudicator (the decisionmaker) and therefore an extension of time to seek the review was not required.
32 In relation to r 9(a) of the SAT Rules, the applicant submitted that the 28 day time limit in r 9 had not yet commenced, because the decisionmaker had not satisfied the notice requirement under s 20(1) of the SAT Act. It is submitted that this did not mean that an applicant could not apply for review; rather, it meant that an applicant could not be time barred from applying for review under r 9 of the SAT Rules.
33 The respondent originally submitted that an extension of the period prescribed by r 9 of the SAT Rules within which an application for review of this decision could be brought by the applicant was required. However, the respondent subsequently conceded that, as the requirements of s 20(1) of the SAT Act had not been met, the time for review had not begun to run.
34 The Tribunal finds that where a decisionmaker does not give notice of a right of review in compliance withs 20(1) of the SAT Act, r 9 of the SAT Rules does not apply and the time limit does not start to run until notice is given in compliance with s 20(1) of the SAT Act. This is consistent with an earlier decision of the Tribunal: see Curlewis and City of Albany [2011] WASAT 85.
Adjudicator's decision
35 The reasons the adjudicator gave for dismissing the adjudication application were:
a) the application had not been prepared and served in accordance with the CC Act because the party named in the application was 'the Trustee for Complete Road Services Trust' and that the correct name of the respondent was Keslake Group Pty Ltd as Trustee for the Complete Road Services Trust and the applicant was aware of this; and
b) the applicant's claim was a claim for damages at common law and was therefore not a claim that related to the respondent's obligations under the Contract.
Issues for determination
36 Thus there are two issues for determination:
1) Was the application prepared and served in accordance with the CC Act?
2) Was the claim in (or accompanying) the applicant's letter of 22 March 2016 a payment claim under the CC Act?
37 In order to determine if the application was prepared and served in accordance with the CC Act it is necessary for the Tribunal to:
a) determine if the use of the description of the party as the trustee as its name rather than specifying the actual name of the trustee meant the applicant had not used the correct name and therefore the application for adjudication was noncompliant with the CC Act or the CC Regulations; and
b) if it was noncompliant does its noncompliance mean that the application was not prepared and served in accordance with the CC Act?
38 To determine if the applicant's claim was a payment claim it is necessary for the Tribunal to determine if:
a) its claim is a claim under a construction contract;
b) the claim is a claim for payment of an amount; and
c) the claimed amount is in relation to either:
i) the performance by the contractor of its obligations under the contract; or
ii) the nonperformance by the contractor of its obligations under the contract.
39 There is no dispute that:
1) the respondent used the business name Bitumen Surfacing;
2) an ABN search with respect to the business name Bitumen Surfacing links the name to the Trustee for Complete Road Services Trust (pages 373 and 374, applicant's bundle of documents);
3) the invoice dated 31 July 2015 issued by the respondent to the applicant with respect to the work performed under the Contract (invoice) includes a reference to ABN 36 829 028 949;
4) ABN 36 829 028 949 is the ABN for the Trustee for Complete Road Services Trust (applicant's bundle of documents, page 103); and
5) Keslake Group Pty Ltd is the Trustee for the Complete Road Services Trust and Keslake Group Pty Ltd entered into the contract as the Trustee for the Complete Road Services Trust.
Applicant's contentions naming issue
40 The applicant submitted that there was no material error or omission in the naming of the respondent such that would invalidate the application. The applicant further refers to s 74 of the Interpretation Act 1984 (WA) (Interpretation Act) which provides that:
[w]here a form is prescribed or specified under a written law, deviations therefrom not materially affecting the substance nor likely to mislead shall not invalidate the form used.
41 The applicant submitted that this provision applies to the application form adopted by the applicant under the CC Act and that if there is any deviation from what is strictly required, there has been no material deviation.
42 The applicant further refers to BGC Construction Pty Ltd v Citygate Properties Pty Ltd [2016] WASC 88 (Citygate) at [134 140] as authority for the proposition that provided that the respondent's name can be found within the application considered as a whole, including attachments, that will suffice to correctly name the respondent.
43 The attachments to the adjudication application included a letter from Metaxas & Hagar dated 19 April 2016 (page 161 of the applicant's bundle) in which Metaxas & Hagar identify Keslake Group Pty Ltd as trading as Bitumen Surfacing, which stated that the respondent issued the invoice to the applicant, and that that invoice contains the ABN nominated by the applicant in its application.
44 Alternatively the applicant submits that all the CC Regulations require is that the applicant's name be included in the adjudication application. 'Name' is not defined.
45 The applicant points to the purpose of the adjudication proceedings, as stated in s 30 of the CC Act, as that being the adjudication of a payment dispute fairly and quickly, informally and inexpensively as possible. Interpreting the CC Act in a manner that would invalidate its claim, the applicant says would not promote the purpose or object underlying the written law as is required by s 18 of the Interpretation Act.
46 In any event the applicant submits that even if the letter from Metaxas & Hagar of 13 April 2016 is put to one side, the description of the respondent by reference to its trading name was sufficient to comply with the CC Regulations as the respondent uses the trading name Bitumen Surfacing in the course of its business.
47 The applicant refutes the respondent's submission that it is critical that the respondent be absolutely correctly named as there may be leave to enforce the judgment. The applicant points out that it is not the application that is enforced but the adjudicator's decision and there was ample material before the adjudicator from which the respondent could be fully named.
Respondent's contentions - naming issue
48 The respondent says that the Trustee for Complete Road Services Trust is an accurate description of the respondent but is not the right or correct name (T:3435; 29.09.16) however, does not explain why.
49 The respondent seeks to distinguish Citygate on the basis that the court found that the absence of the ABN number on the fact of the application for adjudication was not fatal because it could be found within the papers that made up the application but says in this instance it is not a case of supplementing missing information but of correcting a wrong description.
50 The respondent says further that the CC Act is an act that requires strict compliance with the CC Regulations. That the name of the respondent has to be 'got right', the other contact details such as the address and the ABN number, only have to be included to the extent that they are known by the applicant: reg 4 of the CC Regulations.
51 In any event the respondent says that the applicant knew the correct or right name of the respondent because it had been told by the respondent's lawyers that it was Keslake Group Pty Ltd.
52 The respondent also points out in its written submissions at paragraph 38(g), that:
[h]ere the precise legal entity of the respondent becomes particularly important, since if leave is given to enter judgement it may become necessary to enforce it[.]
53 Also at paragraph 38(e) of its written submissions, the respondent says that ensuring the proceedings are commenced against the correct legal entity is more important than simply using the correct name. The respondent in its oral submissions appears to abandon that argument and says that it is not the description of the party you have to get right, '[i]t's the name you have to get right' (T:45; 29.09.16).
Was the adjudication application prepared and served in accordance with the CC Act?
54 The respondent accepts that the applicant's naming of the party to the Contract as the Trustee for Complete Road Services Trust is an accurate description of the party that entered into the Contract. It maintains, however, that it is not the right or correct name as it should have used its name, Keslake Group Pty Ltd, not its title or description.
55 The respondent says that all requirements of the CC Act have to be complied with strictly. On the respondent's interpretation of the CC Act the inadvertent misspelling of a parties name or the use of a name by which a party is usually called, for example, Jack rather than John (where the party has received documents in which the parties correct name of John is used), would render an application for adjudication noncompliant and require the adjudicator to dismiss the application. The Tribunal does not accept that this could have been the intention of the legislature.
56 The Tribunal accepts that s 26 (2) of the CC Act cannot be:
… read down on the basis of recourse to the objectives of the adjudication process.
…
It is also clear that preparation of the application must comply with the requirements of s 26 that the application be prepared in accordance with the Construction Contracts Regulations 2004 (WA) (CC Regulations). If it is not, the adjudicator must dismiss the application. However, when regard is had to the CC Regulations, it will be seen that the information which must be provided with the application, in order that it can be prepared in accordance with the regulations, is inexact[.]
(Match Projects Pty Ltd and Arccon (WA) Pty Ltd [2009] WASAT 134 (Match Projects) at [65] and [67])
57 In Match Projects the Tribunal went on to suggest that if it was apparent from the materials provided to the adjudicator that the names and addresses of the respondent were known by the applicant but were not included in the application, the adjudicator would be required to dismiss the application.
58 The decision of the Supreme Court in Citygate throws some doubt on this comment given in that case the court took the view that all the materials supplied to the adjudicator form part of the application.
59 In any event that does not assist the Tribunal in determining if the description of the respondent as the Trustee for Complete Road Services Trust is not the 'name of the respondent' given the respondent concedes it is an accurate description of the respondent.
60 The Tribunal accepts that the meaning of 'name' is the nomenclature used to accurately describe a person or entity. There can be no doubt who is the Trustee for Complete Road Services Trust.
61 Enforcement proceedings could be commenced against the Trustee for Complete Road Services Trust (in an appropriate manner) by informing the court of the name of the trustee and seeking the enforcement orders against Keslake Group Pty Ltd as the Trustee for Complete Road Services Trust.
62 The wording of reg 5 of the CC Regulations is itself inexact. It does not say if it requires the 'name' the party is known by, in the case of an individual their full legal name or in the case of a corporation the name of its correct legal entity. It does not specify if a party's full name is required. On the respondent's interpretation of reg 5 it is possible that if an applicant 'knows' a party's full name but only includes its first name and its family name (omitting its middle name) then that naming would invalidate the application.
63 It would not promote the purpose or object underlying the written law as is required by s 18 of the Interpretation Act by interpreting s 26 of the CC Act and/or reg 5 of the CC Regulations to interpret that any error in the spelling of the name or the omission of a middle name would invalidate the application.
64 The Trustee for Complete Road Services Trust is the party that entered into the Contract with the applicant. This is not a misdescription of the respondent; the correct name of the respondent is the Trustee for Complete Road Services Trust.
65 If I am wrong and there is a deviation from what is strictly required, I find there has been 'no material deviation affecting the substance' of the application nor was it likely to mislead the respondent and therefore, in accordance with s 74 of the Interpretation Act, the deviation would not invalidate the application for adjudication.
66 The Tribunal finds the adjudicator did err in fact and law in finding that the applicant's application:
1) was not served on the correct party; and/or
2) failed to provide the correct name of the respondent.
Legislative scheme payment claim issue
67 A 'payment claim' is defined in s 3, cl 5 of Div 4 and cl 6 of Div 5 of the CC Act: Section 3 states:
payment claim
(a) means a claim made under a construction contract
(i) by the contractor to the principal for payment of an amount in relation to the performance by the contractor of its obligations under the contract; or
(ii) by the principal to the contractor for payment of an amount in relation to the performance or nonperformance by the contractor of its obligations under the contract[.]
5. Claim for payment, content
(1) In this clause
payment claim means a claim
…
(b) by the principal to the contractor for payment of an amount in relation to the performance or nonperformance by the contractor of its obligations under this contract.
(2) A payment claim must
(a) be in writing; and
(b) be addressed to the party to which the claim is made; and
(c) state the name of the claimant; and
(d) state the date of the claim; and
(e) state the amount claimed; and
(f) …
(g) in the case of a claim by the principal describe the basis for the claim in sufficient detail for the contractor to assess the claim; and
(h) be signed by the claimant; and
(i) be given to the party to which the claim is made[.]
6. Term used: payment claim
In this Division
payment claim means a claim
(a) by the contractor to the principal for payment of an amount in relation to the performance by the contractor of its obligations under this contract; or
(b) by the principal to the contractor for payment of an amount in relation to the performance or nonperformance by the contractor of its obligations under this contract.
(1) If a party that receives a payment claim
(a) believes the claim should be rejected because the claim has not been made in accordance with this contract; or
(b) disputes the whole or part of the claim,
the party must, within 14 days after receiving the claim, give the claimant a notice of dispute.
70 The applicant contends that by letter dated 22 March 2016 and its attachment entitled 'Payment Claim' (22 March 2016 Letter), it submitted to the respondent a payment claim under s 3 of the CC Act, being a claim under the Contract for breach of an implied term of the Contract, namely that the work was to be carried out with proper skill and care.
71 It says further that a 'payment dispute' arose 14 days after the payment claim was submitted to the respondent as payment had not been made in full or the claim had not been rejected wholly or partly within 14 days after receiving the claim as is required by cl 7, Div 5 of the CC Act.
72 The respondent denies that the 22 March 2016 Letter was a payment claim or that a payment dispute arose.
73 The applicant says the claim for damages made by the applicant as principal (in this instance the head contractor) against the subcontractor is a payment claim under the Contract.
74 The applicant further submits that while there is reference in the terms and conditions of the Contract set out in the Quotation as to how and when invoices will be sent by the respondent to the applicant (contractor to principal) this does not cover the situation of the principal making a claim under the Contract for payment from the contractor. Therefore, s 16 and s17 of the CC Act applies and the implied terms in Sch 1 cl 5 of Div 4 and cl 6 and cl 7 of Div 5 are implied into the Contract.
75 The respondent contends that a claim for damages for breach of contract is not a claim made under the Contract and is therefore not a payment claim as defined in the CC Act and therefore does not give rise to a payment dispute capable of adjudication under the CC Act.
76 The respondent submits that the Contract provides that the time when a payment must be made, whether by the contractor presenting an invoice to the principal or vice versa, is 30 days from the invoice date and therefore cl 7(3) in Sch 1 Div 5 of the CC Act is not a term implied in the Contract. The respondent accepts that cl 6, cl 7(1) and cl 7(2) are implied into the Contract but says that cl 7(3) and cl 7(4) are not.
77 The applicant asserts that breach of contract is synonymous with nonperformance of obligations under a contract.
78 The respondent disputes that nonperformance of obligations under a contract is synonymous with breach of a contract. It submits that not every nonperformance of obligations under a contract will necessarily amount to breach of the contract; it will depend on matters such as the terms of the contract and the extent of the alleged nonperformance of the obligations under the contract.
79 The breach asserted in the purported payment claim was for defective performance of the respondent's obligations under the Contract. The respondent's obligations under the Contract are defined in the CC Act as 'to carry out construction work'. The construction work under the Contract is the bitumen surfacing on the NorthamPithara Road. The claim is therefore more accurately described as one for payment of an amount in relation to the defective performance of the bitumen surfacing on the NorthamPithara Road (the performance of the respondent's obligations under the Contract).
80 Additionally this breach is what was asserted in the 22 March 2016 Letter, which the applicant contends is the payment claim. In the 22 March 2016 Letter the applicant's claim was for defective performance of the respondent's obligations under the Contract.
81 The respondent points out that the applicant has, at different times in the application and proceedings before the adjudicator and Tribunal, described the breach of Contract as being a breach of warranties and a breach of an implied term to perform its work under the Contract with proper skill and care and a breach based on a failure to carry out construction work in a proper and workmanlike manner.
82 It says further that, if a claim for defective performance of the respondent's obligations under the Contract could be described as a claim for payment of an amount in relation to the performance or nonperformance by the respondent of its obligations under the Contract, it could not be said to have been a claim made under the Contract.
83 The CC Act uses the phrase 'under a construction contract' both with respect to the payment claim, and the payment dispute.
Meaning of 'under a construction contract'
84 The applicant contends that an analysis of Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes(WA) Pty Ltd [2009] WASAT 133 (Blackadder) (and the case applying it), together with the dissenting judgment of Southwood J in K & J Burns Electrical Pty Ltd v GRD Group (NT) Pty Ltd [2011] NTCA 1; (2011) 29 NTLR 1 (K & J Burns), support a broad construction of the words 'under a construction contract'.
85 The applicant says the courts when interpreting the words 'under a construction contract' in a narrow way did not express a binding view that a claim for breach of a construction contract cannot be a payment claim within the meaning of the CC Act and that the comments of Kenneth Martin J in Delmere Holdings Pty Ltd v Green [2015] WASC 148 (Delmere) at [133] were obiter.
86 The applicant also refers to Laing O'Rourke Australia Construction Pty Ltd v Samsung C & T Corporation [2015] WASC 237 (Laing O'Rourke) at [31] and to the dissenting judgment of Southwood J in K & J Burns as representing the narrow view of the meaning of 'under' a construction contract.
87 The applicant submits that even on the narrow view, 'under a construction contract' is equated with 'a claim for money is in accordance with or subject to the conditions of the construction contract' or 'a genus of claim provided for by that contract' a claim by the principal for payment of an amount in relation to the breach of a particular provision of a construction contract still satisfies the mark, particularly when it is appreciated that the CC Act expressly recognises that the claim for monies may be in respect of breach of a contract.
88 The application, the applicant says is only able to be made by reason of the existence of the Contract and, more particularly, the specific term said to be breached. The claim being advanced is, therefore, 'under the Contract' in the relevant sense.
89 The applicant also refers to the implied terms in cl 6 in Div 5 of the CC Act not referring to a claim having to be 'under a construction contract' but for the nonperformance by the respondent of its contractual obligations.
90 In summary, the applicant contends that there was an implied term that:
• the respondent must perform its work under the Contract with proper skill and care;
• the respondent breached that term;
• implied terms of the CC Act (Implied Terms) relating to how to make a payment claim, and how and when to respond to a payment claim, were applicable to the Contract;
• the definition of 'payment claim' in s 3 of the CC Act and the Implied Terms specifically contemplate 'payment claims' may be made by a principal (in this case the head contractor) for the payment of an amount in relation to the nonperformance by the contractor of its obligations under the Contract; and
• at least in the context of the claim for payment brought by the principal against a contractor, a claim for damages for non-performance (breach) of the contractor's obligations is:
• a claim under the Contract; and
• a payment claim within the meaning of the CC Act capable of giving rise to a payment dispute within the meaning of the CC Act;
• this is so given:
• the proper construction of the CC Act;
• further and any in any event, the operation of the Implied Terms, which render a principal's claim for nonperformance of a construction contract a claim under that contract;
accordingly, the applicant's claim in this case against the respondent for an amount of damages for breach of the Contract was a claim for payment of an amount in relation to the nonperformance by the contractor of its obligations under the Contract, and the nonpayment or rejection of which gives rise to a payment dispute within the meaning of s 6 of the CC Act.
Consideration
Is a breach of a term of the contract synonymous with nonperformance of the contract?
91 After the proceedings had concluded, the parties were provided with the opportunity to provide submissions as to whether a breach of a term of the Contract was synonymous with nonperformance of the Contract as this had not been raised during the hearing.
92 In its supplementary submissions the applicant maintained its assertion that breach of a term of the Contract was synonymous with nonperformance of the Contract.
93 The respondent in response disputed that a breach of a term of the Contract was synonymous withnonperformance of the Contract and submitted that the claim for the breach asserted by the applicant is more accurately described as one for the defective performance of its obligations under the Contract not nonperformance of a term or of obligations under the Contract.
94 I accept the respondent's submissions that breach of the Contract is not synonymous with nonperformance of the Contract. However, as the definition of 'a payment claim' encompasses both performance and nonperformance of a contract, as can be seen from my reasons below, it ultimately makes little difference.
Is the claim for damages an implied term in the Contract?
95 The applicant and respondent agree that it was an implied term of the Contract that the respondent must perform its work under the Contract with proper skill and care.
96 The applicant's claim is for damages for breach of that term.
97 The applicant is seeking to have the Tribunal, in addition to implying a term in the Contract that the construction work (construction work being the definition of a contractor's obligations in the CC Act), is to be carried out with proper skill and care, to also imply a further term into the Contract that the applicant is entitled to make a claim for damages if the respondent does not carry out the work with proper skill and care.
98 To find any such implied term, the implied term would need to meet all the wellknown criteria as established in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 at 26 namely that the term:
1) must be reasonable and equitable;
2) must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;
3) must be obvious that it 'goes without saying';
4) must be capable of clear expression; and
5) must not contradict any express terms of the contract.
99 In a contract that requires work to be carried out in a particular manner, unless there is a term in the contract providing for a claim for liquidated damages, a further term that the party can claim for damages for breach of that term will not be implied because it is not necessary to imply such a term to give business efficacy to the contract, nor is it so obvious that it 'goes without saying'. The right to claim damages for breach of the term exists at common law so it does not need to be implied into the contract.
100 As not all the criteria for implying a term into a contract are met the Tribunal declines to imply a term in the Contract that the applicant can claim for damages for breach of the implied term that the work is to be carried out with proper skill and care.
Is a claim for damages arising at common law for breach of an implied term of a construction contract a claim under a construction contract?
Meaning of 'under' a construction contract
101 A narrow approach to the meaning of 'under a construction contract' has been taken by the courts in Delmere and Laing O'Rourke and the majority judgment in K & J Burns.
102 The applicant, however, says that these cases were not considering a claim by a principal against a contractor as is the case in this matter and that the difference between the two claims was not addressed by Delmere, Laing O'Rourke or K & J Burns.
103 Whilst the Tribunal accepts this as correct, this very issue of whether a claim for payment of damages for poor workmanship, that is for work not carried out with proper skill and care can be a 'payment claim' under the CC Act was considered in Kellogg Brown & Root Pty Ltd v Doric Contractors Pty Ltd [2014] WASC 206 (Kellogg Brown & Root) where a similarly narrow approach was taken by Acting Master Gething as to the meaning of 'under a construction contract'.
104 Acting Master Gething found in Kellogg Brown & Root, that there was a bona fide dispute between the parties for two reasons. Firstly, he noted that the use by the principal of the CC Act procedure did not fit comfortably with the broad purpose of the CC Act. Further, that it was a claim for damages for nonperformance or defective performance of the contract, rather than a payment dispute under the CC Act. He said at [66]:
This term is defined in CCA s 6(a) to arise (so far as is relevant) if 'by the time the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full, or the claim has been rejected or wholly or partly disputed' (emphasis added). Only a 'payment dispute' may be referred to an adjudicator: CCA s 25. Second, CCA s 25 goes on to provide that it is only a payment dispute which 'arises under a construction contract' that may be referred to an adjudicator.
105 The applicant submitted that regard is to be had to the specific statutory context in the principal versus contractor scenario; that there is no reason, by any artificially narrow construction of the words 'under a construction contract', to limit the operation of the CC Act to exclude other liquidated claims for damages for breach.
106 The applicant relies upon the decision in Blackadder to support its proposition that the meaning of 'under a construction contract' should be construed broadly.
107 I do not read DPD Pty Ltd v McHenry [2012] WASC 140 at [25] [32] to support this proposition and to approve the 'broad' approach to interpretation of 'under a construction contract' (as submitted by the applicant). Nor do I consider Georgiou Group Pty Ltd and MCC Mining (Western Australia) Pty Ltd [2011] WASAT 120 at [64] to have followed this approach and to have found that a payment claim will be a 'payment claim' for the purposes 'under the construction contract' even when there is not strict compliance with the contract.
108 Additionally these cases were decided before Delmere and Laing O'Rourke, both Supreme Court decisions supporting the proposition that a payment claim must be made in compliance with its contractual requirements in order to fall within the definition of 'payment claim' in the CC Act. If there is a tension between the decisions of the Tribunal and the Supreme Court, I follow the later decisions of the superior court.
109 The applicant says that in the principal versus contractor scenario, a payment claim based on a breach of contract will be made under a construction contract where the payment claim is referrable to, and dependent on, the construction contract.
110 The applicant says its claim is specifically referable to the parties' Contract; that the application is only able to be made by reason of the existence of the Contract and, more particularly, the specific term said to be breached. It says therefore, that the claim is being advanced under the Contract in the relevant sense.
111 Kenneth Martin J in Delmere stated (when considering the definition of a 'payment dispute':
39 It is also clear that the chosen phrase 'under a construction contract' is relatively narrow in ambit. For instance, the terminology of a dispute 'in relation to', or surrounding a construction contract, is not the chosen terminology. The dispute must be 'under' the parties' construction contract. So, for instance, a claim in quasi contract, such as a quantum meruit claim seeking only a reasonable remuneration, such as where the underlying contract was uncertain, or had failed for some reason, would not present a dispute arising 'under' the construction contract for the purposes of the CC Act.
…
133 It also presents to me as fundamentally wrong that an implied term solution (if that is what happened) could be derived, as some sort of estimated figure - rather than determining a precise 'amount' due under the contract. Any notion of, in effect, a quick 'stab' at something as an amount roughly reasonable to Alliance, to be sorted out later if there is any issue, is conceptually incompatible with the concept of a 'payment claim' for an amount (of money) due and payable under a construction contract. The CC Act may seek as a matter of policy to deliver a swift and simple remedy to parties under construction contracts who are wrongly kept out of funds due to them. But the CC Act only provides relief for amounts arising under the parties' contract - not for the allowing of idiosyncratic, general fairness claims rendered at large. The CC Act is not an unfair contract terms statute designed to strike down perceived unfair bargains or to deliver 'palm tree' justice.
112 The Tribunal rejects the applicant's submission that his Honour's statement above should be regarded as obiter.
113 In Laing O'Rourke, his Honour Mitchell J stated at [32]:
It has been held that Northern Territory legislation, broadly similar to the Act, requires a payment claim to be a claim for money in accordance with or subject to the conditions of a construction contract [references omitted]. There is merit in this view being applied to the Act as, without such a requirement, the mere assertion of a right to claim under a construction contract would be sufficient to invoke the adjudication procedure. Such an assertion would then create a right to make a claim otherwise than by reference to the terms of the relevant construction contract (including the terms implied by the [CC] Act).
114 The Tribunal rejects the applicant's submission that a broad approach to the interpretation of the meaning 'under a construction contract' should be taken. As can be seen from the exerts of judgments of the Supreme Court of Western Australia referred to above, the courts have consistently adopted the approach of interpreting the word 'under' to mean that there has to be a term in the construction contract that provides the right to make the claim not that the claim is 'referable to' or 'a genus of claim provided for by that contract' or 'by reason of the existence of the contract'.
115 The right to claim for damages arises under the common law not under the Contract and therefore a claim for damages is not a payment claim because it is not 'a claim made under a construction contract … by the principal to the contractor for payment of an amount in relation to the performance or nonperformance by the contractor of its obligations under the contract'.
Should the Implied Terms be implied into the contract?
116 If I am wrong and the applicant's claim for damages is a payment claim, I reject the respondent's submission that the Implied Terms of Sch 1 Div 5 are not to be implied into the Contract.
117 The reference in the terms and conditions of the Contract set out in the Quotation as to how and when invoices will be sent by the respondent to the applicant do not cover the situation of the applicant (principal) making a claim under the Contract.
118 It is quite plain from the ordinary meaning of the words that the payment terms could only apply to claims by the respondent against the applicant for payment and not for circumstances where the applicant would seek payment from the respondent.
119 I therefore find that if there was a payment claim I would have applied s 16 and s17 of the CC Act and implied the Implied Terms into the Contract.
120 I find that the respondent did not dispute the purported payment claim within 14 days or pay the purported payment claim within 28 days.
Can a claim for unliquidated damages be a claim for 'an amount'?
121 It is doubtful whether a claim of unliquidated damages can be said to be a claim for 'an amount'. Kenneth Martin J in Delmere at [13] did not appear to consider it could. As the applicant accepts that it must establish not just that the claim was for 'payment of an amount' but also a claim 'under' a construction contract (applicant's written submissions dated 23 August 2016 at paragraph 56) and I have found that the applicant's claim was not a claim 'under a construction contract' I do not need to determine the issue.
Estoppel issue
122 The respondent submits that the purported 'payment claim' was misleading and the applicant appeared or omitted to state its intention to rely on Sch 1 Div 5 cl 7(3) of the CC Act and therefore the applicant is estopped from relying upon the deeming provisions of cl 7 Div 5 of the CC Act and (in its submissions to the arbitrator) relies upon the principals of promissory estoppel.
123 The three essential elements to set up a promissory estoppel are set out by his Honour Le Miere J in Eccles v Koolan Iron Ore Pty Ltd[No 3] [2013] WASC 418 at [91], they are:
First, the party claiming the estoppel must have adopted an assumption as the basis of an act or omission: Commonwealth v Verwayen (1990) 170 CLR 394, 413 (Mason CJ), 444 (Deane J). Secondly, the claimant, upon the basis of the assumption, must have so acted or abstained from acting that a detriment will be suffered if the person against whom the estoppel is asserted is afterwards allowed to set up rights inconsistent with it: Verwayen (413) (Mason CJ), (444) (Deane J). Thirdly, the party against whom the estoppel is alleged must have played such a part in the adoption or, or persistence in, the assumption that freedom to act otherwise than in a manner consistent with it would be unfair or unjust: Verwayen (444) (Deane J).
124 While there is or was evidence before the arbitrator as to the first two criteria, the third criterion is not met.
125 There is no representation in the 22 March 2016 Letter that would lead a prudent legal practitioner to assume that a response to the purported payment claim only had to be made within 28 days not the 14 days as required by the Implied Terms of the CC Act.
126 All that the 22 March 2016 Letter says is that if payment is not received within the 28 days the applicant will proceed to arbitration and nothing more.
127 I consider that there was sufficient reference to the CC Act by the reference to submitting the purported payment claim for adjudication and from the heading 'Payment Claim' in the 22 March 2016 Letter to alert the respondent to the fact that the time limits provided for in the CC Act would or may be relied upon by the applicant. The respondent was legally represented and as such should have been aware of the relevant provisions of the CC Act and the possible application of cl 7 of Div 5 and the serious consequences of not abiding by the time limits set therein.
128 The Tribunal finds the applicant would not be estopped from relying upon cl 7 of the Implied Terms of the CC Act if there was a payment claim.
Sufficient detail as to basis of claim
129 The applicant says the purported payment claim meets the requirements of cl 5(2)(g) of the CC Act Implied Terms, that is, to describe the claim in sufficient detail for the contractor to assess the claim.
130 The Tribunal agrees with the respondent that the applicant did not make it clear if its claim against the respondent was for breach of an implied term of the Contract or breach of warranty or whether the allegations were in respect of a defective seal or an improperly applied primer. However, it was clear that the applicant was alleging some sort of defective workmanship whether its claim was for breach of warranty or an implied term of workmanship and therefore, the Tribunal finds there was sufficient detail for the contractor to assess the claim, that is, to reject it wholly or partly or to give the applicant a notice of dispute.
Complexity
131 The issues surrounding the details in the purported payment claim are relevant to the question as to whether the purported payment claim was one that the arbitrator could be satisfied that it was possible to fairly make a determination because of the complexity of the matter.
132 As indicated above, the applicant's claim against the respondent is not either factually or legally clear.
133 There is a dispute as to what the cause of the failure of the work is. Whilst there is expert evidence from both the applicant and respondent the factual basis of both reports is not the same.
134 Additionally there is some lack of certainty as to whether the applicant is now relying upon a breach of warranty which was as proposed in the applicant's submissions to the arbitrator at paragraph 12, and if so what the warranty was or whether it is relying upon a breach of an implied term, as now appears in the applicant's submissions to the Tribunal.
135 In respect of factual matters it appears from the expert evidence that the weather on the day the seal was applied is relevant or may be relevant in determining the reason the works failed and no conclusive evidence is available in respect of that.
136 There would also be problems with determining the quantum of damages as two methods of remedying the purported defective work were originally advanced by the applicant's expert and no reason was given for choosing one over the other or evidence as to the differing costs of the two methods.
137 The Tribunal finds that it was too complex a matter to enable the arbitrator to fairly make a determination.
Conclusion
138 The Tribunal finds the adjudicator did err in fact and law in finding that the applicant's application:
1) was not served on the correct party; and/or
2) failed to provide the correct name of the respondent.
139 The applicant's claim is for damages at common law arising out of the performance of the contractor's obligation to carry out construction work under the Contract (that is the implied term of the Contract that the work be carried out with proper skill and care). The applicant's claim for damages is a right arising at common law not under the Contract.
140 The Tribunal finds that the applicant's claim for damages is not a claim made under the construction Contract and is therefore not a payment claim as defined in the CC Act and therefore does not give rise to a payment dispute capable of adjudication under the CC Act.
141 The decision of the adjudicator to dismiss the applicant's claim pursuant to s 31(2)(a) of the CC Act without making a determination on its merits is the correct and preferable decision and the applicant's application for review of the adjudicator's decision should be dismissed.
Order
1. The application is dismissed.
I certify that this and the preceding [141] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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MS P LE MIERE, MEMBER
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