Canberra Building and Maintenance Pty Ltd v WNA
[2023] ACTSC 153
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Canberra Building and Maintenance Pty Ltd v WNA Construction Pty Ltd |
Citation: | [2023] ACTSC 153 |
Hearing Date: | 23 May 2023 |
DecisionDate: | 22 June 2023 |
Before: | Curtin AJ |
Decision: | (1) Appeal upheld. (2) The Orders of the Magistrates Court dated 16 December 2022 are set aside. (3) In lieu thereof order judgment in favour of the appellant in the sum of $53,504.90. (4) Interest is payable on the sum set out in Order 3 above the rate of interest applying from time to time under the Court Procedures Rules 2006, schedule 2, part 2.2 from 26 April 2020. (5) The respondent is to pay the appellant’s costs of the appeal and of the proceedings below. |
Catchwords: | APPEAL – Building & Construction – Payment claim under the Building and Construction Industry (Security of Payment) Act 2009 – whether payment claim was served – whether payment claim contained adequate information about the construction works |
Legislation Cited: | Building and Construction Industry (Security of Payment) Act 2009 (ACT) ss 13, 15, 16, 17, 19 Magistrates Court Act 1930 (ACT) s 274 |
Cases Cited: | Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 Ausipile Pty Ltd v Bothar Boring and Tunnelling (Australia) Pty Ltd [2021] QCA 223 Browne v Dunn (1894) 6 R 67 Commercial Union Assurance Company of Australia Ltd v Ferrcom (1991) 22 NSWLR 389 Coulton v Holcombe (1986) 162 CLR 1 Denbrook Construction Pty Ltd v CBO Developments Pty Ltd [2022] QDC 184 Ex parte Harper; Re Rosenfield [1964-5] NSWR 58 at 62 Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd [2020] VSC 570 Jemzone Pty Ltd v Trytan Pty Ltd [2002] NSWSC 395 John Holland Pty Limited v Roads and Traffic Authority of New South Wales [2006] NSWSC 874 John Holland Pty Ltd v Cardno MBK (NSW) Pty Ltd [2004] NSWSC 258 Jones v Dunkel (1959) 101 CLR 298 KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178 Marks v Thompson 1 NYS 2d 215 (1937) Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) [2005] NSWCA 409; NSWLR 64 Pines Living Pty Ltd v John O’Brien and Walton Construction Pty Limited [2013] ACTSC 156 Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151; 95 NSWLR 82 Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151; 95 NSWLR 82 Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248 |
Texts Cited: | JD Heydon, Cross on Evidence (online, LexisNexis, 2023) |
Parties: | Canberra Building and Maintenance Pty Ltd ( Appellant) WNA Construction Pty Ltd ( Respondent) |
Representation: | Counsel A Greinke ( Appellant) WDB Buckland ( Respondent) |
| Solicitors Chamberlains Law Firm ( Appellant) Kamy Saeedi Law ( Respondent) | |
File Number: | SCA 48 of 2022 |
Decision under appeal: | Court/Tribunal: Magistrates Court Before: Magistrate Theakston Date of Decision: 24 November 2022 Case Title: Canberra Building and Maintenance Pty Ltd v WNA Construction Pty Ltd Court File Number: CS 88 of 2020 |
CURTIN AJ:
Introduction
This dispute concerns a purported payment claim issued by the appellant, Canberra Building and Maintenance Pty Ltd to the respondent, WNA Construction Pty Ltd, for construction work done across 13 development sites.
Canberra Building asserted that the payment claim was issued in accordance with the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (SOP Act), WNA did not serve a payment schedule in response, the payment claim remains unpaid, and accordingly Canberra Building is entitled to the amount of that payment claim together with interest.
WNA disputed the validity of the payment claim under the SOP Act, asserting that it was not served on WNA and did not adequately identify the construction work to which it related.
The matter was first heard in the ACT Magistrates Court, where Magistrate Theakston entered judgment for WNA.
Canberra Building brought an appeal by way of rehearing from Magistrate Theakston’s orders pursuant to s 274(2)(b)(i) of the Magistrates Court Act 1930 (ACT).
For the reasons set out below the appeal is upheld.
For ease of reference “AB” references in this judgment are Appeal Book page references.
Background
Canberra Building was incorporated in 2016 and has been undertaking construction work in the ACT and NSW. Mr Andrew Reid is the sole director of Canberra Building and is a qualified carpenter and licenced builder.
WNA is a construction company which specialises in the construction of residential properties. Mr Lei (Eddie) Xia was the manager of WNA. His parents are the directors and shareholders of WNA.
Ms Kaye Campos was an employee of WNA and had been working for the company since 2019. She used an email address ending in “@wnaconstruction.com.au” as her work email address.
Between late October 2019 and late 2020, Mr Peter Howman acted as a bookkeeper for WNA, although not formally employed by the company. He used an email address not ending in “@wnaconstruction.com.au” as his email address, presumably because he was not employed by WNA.
For reasons irrelevant to this decision, Mr Xia was unavailable to work for WNA from 15 October to 18 December 2019. Accordingly, on or shortly after 15 October 2019 Mr Xia directed Ms Campos to hire someone to assist with overseeing construction at a number of properties that were being developed.
Canberra Building was subsequently retained pursuant to Mr Xia’s request.
The development sites in the ACT that Canberra Building agreed to provide its services to WNA for were as follows (the Properties):
44 Vellacott Street, Denman Prospect
3 and 7 Chester Close, Holt
82 Lorrway Street, Holt
15 Fullston Way, Holt
60 Fitzhardinge Crescent, Evatt
86 Jaeger Street, Bruce
Negus Street, Watson
Over the next few months, Canberra Building performed construction work at the Properties and issued invoices for that work to WNA. All invoices except for the one in dispute were emailed to either Ms Campos or Mr Howman. There was no dispute that receipt by Ms Campos and Mr Howman of those emailed invoices amounted to receipt by WNA.
In early/mid-January 2020 Mr Xia recommenced his work at WNA.
Throughout January 2020, Mr Xia inspected the work carried out by Canberra Building and found the work to be, in his opinion, defective. As a result, Mr Xia terminated the contract with Canberra Building.
At the end of January 2020 Canberra Building ceased working for WNA.
Mr Reid’s evidence was that after Canberra Building ceased working for WNA he was instructed by Mr Howman not to send him any further invoices because “I” (which I take to mean Canberra Building) ceased working for WNA (AB 315.29-.32).
At least partly as a result of that conversation Canberra Building sent its final invoice, being Invoice No 217, to an email address different to the email addresses used by Ms Campos and Mr Howman and to which earlier invoices had been sent. Invoice No 217 was emailed to [email protected]. As would be observed, the “@wnaconstruction.com.au” part of that email address was identical to the equivalent part of the email address used by Ms Campos.
Mr Reid’s short oral evidence on this topic (at AB 315) is central to the disposition of this appeal and I shall therefore set it out in full:
MR BUCKLAND: All of the emails with invoices prior to April 2020 you sent to Kaye Campos or Peter Howman, correct?
MR REID: I will say yes. If that’s – if that’s the date you’ve got.
MR BUCKLAND: Well, the last invoice you sent to a generic address at accounts at WNA but previous invoices, the emails that we have for previous invoices - - -?
MR REID: Yes, were going to Kaye or Peter.
MR BUCKLAND: Yes. So why the change?
MR REID: They asked to change the email, to send it to somewhere else.
MR BUCKLAND: They did?
MR REID: To somewhere else, yes.
MR BUCKLAND: But you’d finished working for WNA at the end of January 2020, hadn’t you?
MR REID: Thereabouts, yes.
MR BUCKLAND: So there would’ve been no request in February or March or early April 2020 would there?
MR REID: Request for what?
MR BUCKLAND: To change the email address?
MR REID: When I was working for them it was.
MR BUCKLAND: So you say the request came while you were working for them?
MR REID: Because there was more than one email, so there was more than one email we could sent it to.
MR BUCKLAND: But all the emails that you sent prior to 16 April, as I asked you a few minutes ago, were sent to Kaye Campos and Peter Howman?
MR REID: Yes, yes. Yes, and then I spoke to Peter after I left and he instructed me not to send him any more invoices because I no longer work for WNA.
MR BUCKLAND: Right. So you just, what found the invoice on – you found the email address on the internet?
MR REID: No, I already had that – already had that email.
MR BUCKLAND: So you just elected to send it to somebody else?
MR REID: I don’t recall why I picked that particular email
MR BUCKLAND: What was the reason for it?
MR REID: So they would get it.
MR BUCKLAND: Why didn’t you sent it to Kaye Campos?
MR REID: Because I was dealing with Eddy [sic] at that stage.
That evidence, together with the email dated 16 April 2020 (AB 193) shows that Invoice No 217 was emailed to [email protected] together with pdf copies of Canberra Building’s earlier invoices numbered 193, 194, 196, 198, 201, 202, 203, 204, 206, and 207.
The email of 16 April 2020 said:
To Eddie,
Please see attached our tax invoice for the work completed at the following job sites per our contract:
-Block and Section 13/64, 14/64. 16/64, 18/64, 19/64 and 21/64 Negus Street, Watson ACT 2602;
-44 Vellacott Street, Denman Prospect ACT 2611;
-3 and 7 Chester Close, Holt ACT 2615;
-82 Lorrway Street, Holt ACT 2615;
-15 Fullston Way, Holt ACT 2615;
-60 Fitzhardinge Crescent, Evatt ACT 2617; and
-86 Jaeger Street, Bruce ACT 2617.
We note claims for these works have previously been made and documents the works have previously been provided. However, please find attached these documents again for your reference. The amount is outstanding, and we would appreciate your prompt payment in full.
Invoice No 217 was alleged by Canberra Building to be a payment claim under the SOP Act. In that invoice in the box titled “Description” appeared the following:
For all work completed for WNA pursuant to our contract dated 9 November 2019 at the following job sites:
-Block and Section 13/64, 14/64, 16/64, 18/64, 19/64 and 21/64 Negus Street, Watson ACT 2602;
-44 Vellacott Street, Denman Prospect ACT 2611;
-3 and 7 Chester Close, Holt ACT 2615;
-82 Lorrway Street, Holt ACT 2615;
-15 Fullston Way, Holt ACT 2615;
-60 Fitzhardinge Crescent, Evatt ACT 2617; and
-86 Jaeger Street, Bruce ACT 2617.
oAll work completed at agreed hourly rates per the contract and as provided to you previously via invoices no. 193, 194, 196, 198, 201, 202, 203, 204, 206 and 207.
oPlease be advised that due to an accounting error on the previously issued invoice no. 203, the correct total for invoice no. 203 is $6,154.50, which is reflected in this invoice.
oPlease be advised that due to an administrative error on the previously issued invoices no. 194, 196, 198, 202, 204 and 206, those invoices failed to confirm they were inclusive of work completed at 82 Lorraway Street, Holt ACT 2615, and 15 Fullston Way, Holt ACT 2615.
oLess par payments totalling $12,875.70 towards invoice 194.
oThis is a payment claim pursuant to the Building and Construction Industry (Security of Payment) Act 2009 (ACT).
The total amount claimed in Invoice No 217 was $53,504.90.
There was no response to the email, WNA did not issue a payment schedule (under the SOP Act) and Invoice No 217 was never paid.
On 8 May 2020, Canberra Building commenced proceedings in the Magistrates Court against WNA claiming the sum sought in Invoice No 217 ($53,504.90) together with interest and costs.
In response, WNA said that Invoice No 217 was not a valid payment claim for two reasons. First, because the disputed payment claim did not adequately identify the construction work or related goods or services to which the claim related. Second, because the Court could not be satisfied that Invoice No 217 was given to the respondent.
The Magistrate’s Decision
The learned Magistrate said that the real issues in dispute were whether or not the payment claim was given to (or served on) the respondent and whether or not it adequately described or identified the construction work or related goods and services to which the progress payments were made.
His Honour referred to the adjustments that appeared in Invoice No 217 and held that the adjustments were clear about what was being adjusted (AB 6.32).
At AB 6.37 his Honour said that his concerns were that Invoice No 217 did not, in any real way, describe the construction work that the claim related to. His Honour said that, whilst it described a number of addresses, that in itself, was not enough.
Commencing at AB 6.42 his Honour said that while Invoice No 217 made a reference to a contract, that, in itself, was not enough. His Honour said that there was a need to refer to the contents of the invoices that were also attached to the email. His Honour said that whilst some of those invoices were quite detailed, some were not.
His Honour then referred to a number of authorities including Denbrook Construction Pty Ltd v CBO Developments Pty Ltd [2022] QDC 184, KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178, Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248 and Neumann Contractors Pty Ltd v Peet Beachton Syndicate Ltd [2009] QSC 376.
His Honour then reasoned as follows:
… My concerns are that when you look at invoice 217 it just does not, in any real way, describe the construction work that the claim related to. While it describes a number of addresses that, in itself, is not enough.
While it makes reference to a contract that, in itself, is not enough. There is a need to refer to the contents of the invoices that were attached. And while some invoices are quite detailed and more inadequate [sic] for the purpose of meeting this requirement, some are not. So, for example, the very first invoice simply has seven dates and then a list of materials. And states two sites and I think on its face applying the test which is an assessment of the way the document patently appears taking into account any extrinsic relationship or evidence of a relationship between the parties it simply is inadequate to describe what the work relates to.
Now, the authorities – a number of authorities have been put before me and I’ll just identify them again for completeness. They essentially consistently echo the same sentiments. The authorities are Denbrook Construction Pty Limited v CBO Developments Pty Limited [2022] QDC 184. Also, KDV Sport Pty Limited v Muggeridge Constructions Pty Limited and Jenny Phillips (Adjudication Registrar) and John Tuhtan [2019] QSC 178.
As well as Protectavale Pty Ltd v K2K Pty Limited [2008] FCA 1248 and then finally Neumann Contractors P/L v Peet Beachton Syndicate Limited [2009] QSC 376. Each indicate that the test is one that should be applied with common sense in a practical way. There’s no requirement for the description to be particularly technical but it needs to be adequate. And that means sufficient to provide the recipient with an understanding for the basis of the claim and therefore allow the recipient to provide a meaningful payment schedule which is a response to the claim.
In this case where work is simply not identified the precise property is not identified. For example, stating two properties where the work may have been done, one or the other or both is simply not enough. And so therefore, I make a positive finding that the payment claim does not adequately identify the construction work or related goods and services to which the progress payments relate.
In addition to that, the evidence is the payment claim was sent to an address and that address is [email protected]. Now, that domain name is consistent with the defendant’s name. And it’s also consistent with other email addresses used elsewhere within the material. But, there is simply no evidence that the precise email address relates to the defendant. And so, in those circumstances, I cannot be satisfied that the payment claim was, in fact, given to the defendant on 16 April 2020 or at any other time.
And so, for those reasons I return judgment for the defendant.
The Appeal
Canberra Building appeals the decision on five grounds:
(1)the Magistrate erred in finding that the payment claim failed to identify the construction work to which the progress claim related, within the meaning of s 15 of the SOP Act;
(2)the Magistrate erred by finding that the payment claim had not been served on WNA;
(3)the Magistrate ought to have found that the relevant construction contract was between the appellant and WNA;
(4)the Magistrate ought to have found that, since WNA had not served a payment schedule in answer to the payment claim, Canberra Building was entitled to judgment for the unpaid amount of the payment claim pursuant to s 17(2)(a)(i) of the SOP Act; and
(5)the Magistrate ought to have awarded interest by s 13(2) of the SOP Act.
Submissions
The Appellant’s Submissions
In substance, Canberra Building made four submissions.
The first was that there was sufficient evidence from Mr Reid that the email address [email protected] was an address he already had and that he already knew that that email address was one used by WNA.
Canberra Building submitted that Mr Reid’s evidence was not challenged in cross-examination nor contradicted by any evidence called by WNA.
In particular, Canberra Building submitted that Mr Xia (who gave written and oral evidence in the proceedings below) did not give any evidence that the subject email address was not an address used by WNA nor that the subject invoice had not been received.
Canberra Building submitted Mr Xia’s written evidence supported its case. The evidence referred to was a passage in Mr Xia’s written statement which said:
I have seen the invoice number 217 from plaintiff [sic]. It is very confusing.
The second submission was that the payment claim was adequately descriptive of the construction works.
Canberra Building submitted that the level of detail and nature of the contract informs the level of detail required for a sufficient payment claim. The invoice (together with the supporting invoices attached to the same email) included a detailed identification of the construction work, and there was adequate information for WNA to make inquiries if further information was needed and to provide a payment schedule if so desired.
Canberra Building submitted that the requirements of s 15(2)(a) of the SOP Act were not demanding. It submitted that payment claims should not be approached in an unduly technical manner or from an unduly critical viewpoint.
The third submission relied on what fell from Hodgson JA in Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) [2005] NSWCA 409; NSWLR 64, with which Ipp JA in substance agreed. The legislation there considered was in relevantly identical form to the SOP Act.
I shall return to this case later in these reasons but suffice to say for present purposes that Hodgson JA held that if there was some relevant lack of detail in a payment claim, that lack of detail would not invalidate a payment claim unless the defect was patent (obvious; easily recognisable) on its face. Rather, his Honour held, any lack of detail would justify a respondent saying in a payment schedule that the respondent would not pay the claim because of the lack of detail.
The fourth submission was to the effect that the remaining issues Canberra Building needed to prove before the Court below had been proved and were not contested. Those issues were that there was a construction contract between the parties and that a payment schedule had not been served by WNA.
Canberra Building submitted that in those circumstances it was entitled to judgment for the sum claimed together with interest and costs.
The Respondent’s Submissions
WNA submitted that Canberra Building had failed to establish that the email address [email protected] belonged to WNA, and that Canberra Building bore the burden of proof on that issue.
WNA submitted that during the hearing in the Magistrates Court Canberra Building’s solicitor had conceded that there was no evidence to suggest the subject email address had any connection to WNA and it was a concession upon which the Magistrate was entitled to act.
WNA submitted that Canberra Building had failed to cross-examine Mr Xia on the issue of service, and this had the consequence that Canberra Building could not ask the Court to draw an inference that the email was received pursuant to the rule in Browne v Dunn (1894) 6 R 67.
WNA submitted that no Jones v Dunkel (1959) 101 CLR 298 inference could be drawn against the failure to adduce evidence from Mr Xia as to the email address because Jones v Dunkel could not be used to fill gaps in Canberra Building’s case. WNA submitted that as WNA was obliged to prove service, any failure by WNA to lead particular evidence in relation to service could not be used to establish the positive fact of service on the part of WNA.
WNA submitted that the payment claim did not purport to reasonably identify the particular work done and did not meet the basic requirements of s 15(2)(a) of the SOP Act. WNA submitted that the payment claim was vague, and confusing, it did not particularise the work done, and it impermissibly required cross-referencing to previous invoices that were devoid of detail.
Relying on KDV and two other Queensland decisions, WNA submitted that Canberra Building’s payment schedule did not purport to, in a reasonable way, identify the particular work in respect of which the claim was made.
WNA also submitted, in response to the holding in Nepean referred to above, that a lack of detail (that was not patent on its face) did not amount to a nullity, that in KDV there had been a payment schedule served, but the Court nevertheless found a lack of detail in the payment claim such that the payment claim was held to be void.
WNA submitted that Canberra Building’s construction contract was, in part, not with it but with another unrelated entity, Translink.
Decision
In my view his Honour erred in three respects.
First, his Honour erred in finding the payment claim did not identify the construction work or related goods or services to which the payment claim related as required by s 15(2) of the SOP Act.
Second, his Honour erred in failing to apply the holding in Nepean to the effect that, unless the failure to identify the work was patent on its face, the question whether the payment claim complied with s 15(2) of the SOP Act was a matter for adjudication under s 19 of the SOP Act.
Third, his Honour erred in finding that there was no evidence that the email address [email protected] related to the respondent.
I shall deal with each error in that order, before turning to the remaining matters.
Identification of the Work
The relevant principles to apply were not substantially in dispute. They principally derive from authorities concerning the NSW, Victorian and Queensland equivalents to s 15(2) of the SOP Act which are in relevantly identical terms. I shall first set out the relevant terms of the various provisions before turning to the authorities.
Section 15(2) of the SOP Act says:
15Payment Claim
…
(2) A payment claim must—
(a) identify the construction work or related goods and services to which the progress payment relates;
Section 13(2) of the Building and Construction Industry Security of Payment Act 1999 (NSW) says:
13 Payment claims
…
(2) A payment claim—
(a) must identify the construction work (or related goods and services) to which the progress payment relates,
Section 14(2)(c) of the Building and Construction Industry Security of Payment Act 2002 (Vic) says:
14Payment claims
…
(2) A payment claim—
…
(c) must identify the construction work or related goods and services to which the progress payment relates;
Section 68(1)(a) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) says:
68Meaning of payment claim
(1) A payment claim, for a progress payment, is a written document that—
(a)identifies the construction work or related goods and services to which the progress payment relates;
As can be seen, the four sub-sections are in relevantly identical terms. For that reason, and for the additional reason that the parties agreed with this position, the principles concerning those sub-sections from those other jurisdictions are persuasive as to the proper construction of s 15(2)(a) of the SOP Act.
The below authorities are dealt with in their chronological order.
In Nepean at 474–475; [35]–[36], Hodgson JA said:
35. It is true that, if a payment claim does not identify the work in a way comprehensible to the respondent to the claim, the respondent will be in difficulty in formulating a payment schedule, and this may give rise to further difficulty in any adjudication proceedings, inter alia because of the provisions to which I referred (at 466 [18] supra). But in my opinion, if a respondent is unable to identify some of the work in respect of which a payment claim is made, it can in the payment schedule say it does not propose to make any payment in respect of that work because it cannot identify the work, and because for that reason it disputes that the work was done or done to a standard justifying payment, or was within the contract or within any variation of it, and that any pre-condition to payment was satisfied. If an adjudicator then determined that the work was not identified in the payment claim, presumably he or she would not award any payment in respect of that work; and if the adjudicator determined that it was identified, the adjudicator could address matters put in issue in that general way by the respondent.
36. That is, I do not think a payment claim can be treated as a nullity for failure to comply with s 13(2)(a) of the Act, unless the failure is patent on its face; and this will not be the case if the claim purports in a reasonable way to identify the particular work in respect of which the claim is made.
(Emphasis added)
Ipp JA agreed with that approach in substance. His Honour said at 484; [76]:
In regard to the issue the subject of this application for leave to appeal, for the reasons given by Hodgson JA I would construe the Building and Construction Industry Security of Payment Act 1999 as follows. Provided that a payment claim is made in good faith and purports to comply with s 13(2) of the Act, the merits of that claim, including the question whether the claim complies with s 13(2), is a matter for adjudication under s 17 and not a ground for resisting summary judgment in proceedings under s 15. In particular, if no adjudication is sought summary judgment cannot be resisted on grounds that could have been raised by way of a payment schedule leading to adjudication.
(Emphasis added)
Santow JA, at 477; [47] agreed with Hodgson JA that the identification requirement was not to be made so demanding as to preclude summary judgment in an appropriate case but disagreed that a payment claim could not be treated as a nullity unless the failure was patent on its face. His Honour held that the test should require a little more than that required by Hodgson JA (or Ipp JA). His Honour said at 477; [48]:
… But here, consistent with the object of the Act and the means for its achievement, I consider that there must be sufficient specificity in the payment claim for its recipient actually to be able to identify a “payment claim” for the purpose of determining whether to pay, or to respond by way of a payment schedule indicating the extent of payment, if any. Nepean needs to be in a position to determine in meaningful fashion whether to make payment, or else dispute it with reasons so as in that case to permit adjudication of the dispute, utilising the summary procedures under the Act.
In Protectavale, a case which concerned the Building and Construction Industry Security of Payment Act 2002 (Vic), Finkelstein J said at [11]–[12] that (with changes made to the below so that references are to the ACT Act):
(1)the manner in which compliance with s 15 is tested is not overly demanding;
(2)the requirements for a payment claim should not be approached in an unduly technical manner;
(3)the words of the section should be applied in a common sense practical manner because the words are used in relation to events occurring in the construction industry;
(4)it is to be remembered that payment claims and payment schedules must be produced quickly;
(5)much that is contained in payment claims and payment schedules in an abbreviated form would be meaningless to the uninformed reader but will be understood readily by the parties themselves;
(6)the SOP Act emphasises speed and informality; and
(7)accordingly, one should not approach the question whether a document satisfies the description of a payment claim or payment schedule from an unduly critical viewpoint.
Finkelstein J did add two other considerations, namely that:
(8)nonetheless a payment claim must be sufficiently detailed to enable the principal to understand the basis of the claim, that is to say, a payment claim must put the principal in a position where he is able to decide whether to accept or reject the claim and, if the principal opts for the latter, to respond appropriately in a payment schedule; and
(9)the last mentioned matter is not an unreasonable price to pay to obtain the benefits of the statute.
However, the authority cited by his Honour in relation to the last two matters was Santow JA’s dissenting judgment in Nepean and the decision of Einstein J in John Holland Pty Ltd v Cardno MBK (NSW) Pty Ltd [2004] NSWSC 258 at [18]-[21].
In my view, the views of Hodgson and Ipp JJA should prevail where they diverge from those of Finkelstein J as their Honours’ reasoning prevails over that of Santow J. Equally, Einstein J’s decision must give way to the majority reasoning of the Court of Appeal.
In Neumann Contractors Pty Ltd v Peet Beachton Syndicate Ltd [2011] QSC 376; 1 Qd R 17 White J found that the payment claim in that case was invalid. His Honour did not apply any principles not referred to in the other authorities mentioned here. In relation to the general principle that a payment claim was required to be sufficiently detailed to enable the principal to understand the claim his Honour said the following about the facts of that case (footnotes omitted) at 27–26; [28] –[29]:
[28] ….
The invoice under consideration in that case indicated the amount claimed to be due by taking the contract sum and making a number of adjustments. Whilst certain items were set out in sufficient detail, his Honour concluded that what was noticeably absent was:
“… any identification of the work previously completed and paid for and the work (apart from the variations) to which the invoice relates.
… The only information provided is that the amount is referable to the ‘Contract Sum’ and ‘Payments Received’”.
[29] A similar observation might be made of this payment claim. Because the past payments by Peet have been made on the certificate of the superintendent on receipt of each invoice, Peet would have had to go to considerable effort to reconstruct the previous 11 claims so as to prepare a responsive payment schedule. …
Mr Beacham argues, however, that the basis of the claim is evident on the face of the document, that is, it is a claim for all work for which Neumann has previously claimed save for the work for which it has been paid. In order for Peet to decide whether it should respond it would need to engage in a careful analysis of the schedules exhibited to the summary set out the work which was undertaken under the contract over some 25 pages and marry the work with the amounts paid on the progress certificates and arrive at the outstanding items. Requiring a respondent to a payment claim to undertake that kind of research which would be subject to error and within the time constraint of 10 days under the Payments Act leads me to conclude that the payment claim does not identify the construction work to which that claim relates and does not fulfil the requirements of s 17(2) of the Payments Act.
(Emphasis original)
In Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151; 95 NSWLR 82 McColl JA, with whom Beazley ACJ (as Her Excellency then was) and Macfarlan JA agreed, noted the following features of the NSW SOP Act at 106–109; [102] –[110]. Her Honour said:
(1)the broad scheme of the SOP Act is to provide a coherent, expeditious and self-contained scheme for resolving disputes with respect to payment claims;
(2)in short, it creates a “pay now, argue later” system for the prompt resolution of disputes concerning progress payments;
(3)the SOP Act enables the right to an interim payment to be determined informally, summarily and quickly, and then summarily enforced without prejudice to the common law rights of both parties which can be determined in the normal manner;
(4)amendments effected to s 13 in 2002 were intended to ensure that a person was able to make a valid payment claim even though it may ultimately be proved that no payment was due under the construction contract;
(5)the SOP Act operates in a way that has been described as ‘rough and ready’ and provides extremely abbreviated time frames for the exchange of payment claims, payment schedules, adjudication applications and adjudication responses;
(6)the documents the parties bring into existence under the SOP Act are not pleadings;
(7)those documents should not be approached in an unduly technical manner and so the words of the section should be applied in a common sense practical manner;
(8)those documents should be read bearing in mind that they are, in many cases, given and received by parties who are experienced in the building industry and are familiar with the particular building contract, the history of construction of the project and the broad issues which have produced the dispute as to the claimant’s payment claim;
(9)much that is contained therein in an abbreviated form may be meaningless to the uninformed reader but will be understood readily by the parties themselves;
(10)payment claims and payment schedules should not be required to be as precise and as particularised as a pleading;
(11)nevertheless, precision and particularity must be required to a degree reasonably sufficient to apprise the parties of the real issues in the dispute (citing Nepean in support).
In KDV, decided on 23 July 2019, and upon which WNA relied, Brown J found, at [53], that the subject payment claim was invalid because the respondent could not ascertain with sufficient certainty the work to which the claim related. His Honour was referred to the judgments of Hodgson and Ipp JJA in Nepean and seemed to have accepted their Honours’ holdings to be applicable. However, it appears his Honour considered that in the case before his Honour the payment claim did not meet Hodgson and Ipp JJA’s undemanding tests. At [44] his Honour said (footnotes omitted):
Mr Beacham QC relied upon statements of Hodgson JA in Nepean Engineering that if a respondent is unable to identify some of the work in respect of which a payment claim is made, it can in the payment schedule say it does not propose to make any payment in respect of that work because it cannot identify that work, suggesting that such an item would not invalidate the payment claim. That statement must, however, be seen in the context of the requirement that the claim must reasonably purport to identify the work the subject of the claim. It may be accepted that in some cases, if there were some items which were affected by mathematical errors such as those pointed out by KDV, that would not be sufficient to invalidate the payment claim under s 17(2)(a) of the Payments Act. However, where such errors affect some 15 items, such that the amounts claimed cannot be reconciled with the amount referred to in the other claims, and there is further no substantive description of the work done, the mathematical errors and inability to reconcile the figures do impact on whether the claim reasonably identifies the construction work to which it relates. They also serve to further confuse the bases upon which the payment claim is advanced, given Muggeridge’s stated approach of claiming the entire percentage of work done. While Hodgson JA’s observation may well be correct in relation to an item of construction work claimed, it does not mean that a claim is valid where the errors contribute to the claim not reasonably identifying the construction work to which it relates, such that the basis of the claim is not reasonably comprehensible to its principal.
(Emphasis added)
His Honour’s implied finding in the above paragraph that the payment claim did not purport in a reasonable way to identify the particular work was perhaps unsurprising when the payment claim was in the following form:
| WUC–Site Project Student Accommodation Big 18 Chisholm Road Carrara QLD | Prior Payment | Total Claim to Date | This Claim | |||
| Trade Breakdown | Total Amount | Total Paid to Date | Total claim % to date | Total Claimed Trade to date | Progress Claim 13 | |
| … | ||||||
| 8 | CONCRETE SUPPLY | $229,454 | $217,981 | 100% | $229,454 | $4,589 |
| … | ||||||
| 19 | ALUMINIUM WINDOWS & DOORS | $811,840 | $32,474 | 67% | $543,933 | $97,421 |
| … | ||||||
| 23 | BATHROOM POD – COMPLETE SUPPLY AND INSTALL | $659,231 | $560,346 | 98% | $646,046 | $52,738 |
| … | ||||||
| 39 | ELECTRICAL | $783,827 | $470,296 | 78% | $611,385 | $101,898 |
| 40 | MECHANICAL | $920,220 | $690,165 | 82% | $754,580 | $36,809 |
| … | ||||||
| 49 | BUILDERS PRELIMIINARIES | $820,407 | $672,734 | 100% | $820,407 | $123,061 |
| … | ||||||
| Contract Works Subtotal excl GST | $817,586 | |||||
| GST | $81,759 | |||||
| Contract Works Subtotal incl GST | $899,345 | |||||
| Variations | Submitted Claim | Prior Payment | Total Claim To Date | This Claim | ||
| Total Paid to Date $ | Total claim % to date | Total Claimed Trade to date | Progress Claim 13 | |||
| Variation #1 VO 003 | $1,925 | $ - | 100% | $1,925 | $ - | |
| … | ||||||
| Variation #5 VO 008 | $54,075 | $15,373 | 100% | $54,075 | $38,702 | |
| … | ||||||
| Variation #12 VO 016 – Fire rating upgrade | $10,095 | $ - | 100% | $10,095 | $10,095 | |
| Variation #13 VO 017 – Structural design JN designers | $726 | $ - | 100% | $726 | $726 | |
| … Variation 029 | $21,606 | $ - | 100% | $21,606 | $21,606 | |
| Variation 030 | $9,507 | $ - | 100% | $9,507 | $9,507 | |
| Variation 031 | $82,806 | $ - | 100% | $82,806 | $82,806 | |
| Contract Works Subtotal excl GST | $1,466,087 | |||||
| GST | $146,609 | |||||
| Contract Works Subtotal incl GST | $1,612,696 | |||||
| Total Progress Claim | $2,283,673 | |||||
| GST | $81,759 | |||||
| Total Value of Claim #12 | $2,365,432 | |||||
In TFM Epping Land Pty Ltd v Decon Australia Pty Ltd [2020] NSWCA 93 the passages from the judgments of Hodgson and Ipp JJA in Nepean which I have quoted above were quoted with approval by Basten JA, with whom Meagher JA and Emmett AJA agreed at [21]–[22].
In short, as Emmett AJA said in TFM at [95], the scheme of the SOP Act contemplates that payment disputes be determined by an adjudicator (rather than a Court).
In Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd [2020] VSC 570 Riordan J impliedly preferred the views expressed by Hodgson and Ipp JJA to that of Santow J (and Finkelstein J to the extent his Honour relied on Santow JA’s views).
It is important to note that, in relation to the point made in some of the earlier authorities that payment claims are to be understood or evaluated against the backdrop of the parties’ knowledge and dealings, his Honour held that courts should not have regard to extrinsic evidence of those matters (surrounding circumstances). His Honour reasoned, and relied on Nepean and TFM in part, as follows at [36] (footnotes omitted):
In my opinion, in determining whether a payment claim complies with s 14(2)(c) of the Act, the Court should not have regard to extrinsic evidence of surrounding circumstances for the following reasons:
(a) Compliance with s 14(2)(c) of the Act is assessed on an objective basis. Evidence of conversations between parties or the subjective ability of parties to understand a payment claim should not be permitted.
(b) The proposition that the validity of payment claims under s 14 of the Act should be determined by reference to the face of the payment claim is supported by the weight of authority, including the following:
(i) In Jemzone Pty Ltd v Trytan Pty Ltd, Austin J held that the claimant was obliged to ensure that the payment claim complied ‘on its face’ with s 13(2) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (‘the NSW Act’), being the equivalent of s 14(2) of the Act. He observed that extraneous circumstances and previous communications should not be considered, stating:
[T]he payment claim must on its face contain all the ingredients required by the Act. While the court should not take an unduly strict approach to the construction of the claim, it ought not to cure defects in the claim document by reference to extraneous circumstances or previous communications.
(ii) In Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq), Hodgson JA said that a payment claim would not be a nullity unless its failure to comply with s 13(2) of the NSW Act was ‘patent on its face’. His Honour held that the test of validity was whether the payment claim ‘purports in a reasonable way to identify the particular work in respect of which the claim is made’.
(iii) Ipp JA agreed with the reasons of Hodgson JA and formulated the test of validity as being whether the payment claim ‘is made in good faith and purports to comply with s 13(2) of the [NSW] Act’.
(iv) In TFM Epping Land Pty Ltd v Decon Australia Pty Ltd, the New South Wales Court of Appeal held that, for the purposes of the New South Wales equivalent of s 16 of the Act, the question of whether a claim was made for a variation under the NSW Act was resolved by reference to the face of the claim.
In my opinion, the admission of extrinsic evidence of surrounding circumstances would be inconsistent with the assessment of compliance on the basis of the purport of the payment claim document.
(Emphasis original)
Relevantly following Hodgson and Ipp JJA in Nepean, his Honour said at [38]–[39] that the principles to apply were (footnotes omitted):
38. The undemanding standard for compliance with s 14(2)(c) is demonstrated by the following principles:
(a) A payment claim is only required to be bona fide and reasonably purport to identify the particular work in respect of which the claim is made.
(b) A payment claim is only a claim. It is unlike a payment schedule, which is intended to identify the scope of the dispute, and articulate the respondent’s case to be determined by the adjudicator.
(c) A payment claim is not required to be as precise or as particularised as a pleading. It need only provide sufficient detail to enable the respondent to identify the subject matter of the claim, not to make its own assessment of the amount payable.
(d) Evidence of what officers did in response to a payment claim is unhelpful and whether they were able to understand the payment claim in fact is not relevant.
…
(f)To interpret the identification requirement under s 14(2)(c) as imposing a more exacting standard would encourage challenges to the validity of purported payment claims in the courts. The words of s 14(2)(c) do not mandate such an approach. I consider that a more exacting standard would not accord with the legislative intention. As Hodgson JA observed in Nepean Engineering, it cannot be consistent with the scheme of the Act for it to be construed as promoting:
[A] respondent [to] avoid the effect of the Act by not serving a payment schedule, and defending the [s 16] proceedings by raising a question as to identification, which could be as to just one of many items in a claim and could be such as to depend upon a very detailed examination of all the circumstances of the contract.
39. A possible consequence of finding a payment claim to be valid simply by examining the claim document ‘on its face’, may be that the respondent is unable in fact to identify the work to which the claim related. However, this issue is remedied by the adjudication process set out in pt 3, div 2 of the Act. A respondent in such a case is entitled to serve a payment schedule refusing to make payment on the basis that it cannot identify the work. The dispute would then be referred to and settled by an adjudicator, who would determine whether or not the work was adequately identified in the payment claim under s 23 of the Act.
Riordan J’s decision was the subject of an appeal: Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44. However, none of the matters set out above were challenged in that appeal. However, it is worth noting that McLeish and Niall JJA held:
(1)where there are substantive issues in dispute about the contents of a payment claim, the proper course is to pursue adjudication (at [18]);
(2)the Act exhibits a clear policy that disputes regarding liability for payment are dealt with by adjudication, with the Court’s function being to order recovery of unpaid amounts (at [19]);
(3)the ‘face’ of the payment claim (see Riordan J at [36(b)] includes the documents supporting the payment claim and which can be taken to mean documents referred to in the payment claim or served with it (at [38]); and
(4)a construction of the Act that confines the role of the Court and encourages disputes to be resolved through adjudication better advances the objects and policy of the Act (at [39]).
In Ausipile Pty Ltd v Bothar Boring and Tunnelling (Australia) Pty Ltd [2021] QCA 223 Morrison JA, with whom Fraser JA and North J agreed, made the same point at [100] as Emmett JA had in TFM at [95], namely:
Nothing in s 75(1) suggests that the respondent to a payment claim can simply ignore the payment claim or the statutory obligation to respond under s 76(1), by contending that issues such as whether the payment claim is truly under one contract should be first litigated to finality. The whole scheme of the Act is designed to enable compulsory and fast payment to subcontractors, with issues to be determined at an adjudication rather than by traditional litigation.
At [120] his Honour said that the reasoning in TFM (which included approval of the holdings of Hodgson and Ipp JJA (see at [114]–[115]) was correct. His Honour said:
In my respectful view, the reasoning in TFM is correct and should be followed. A payment claim should not be treated as a nullity for failure to comply with s 75(1) of the Act, unless that failure is patent on its face. Where a payment claim purports to be made under one contract, it is not rendered invalid simply because at a later time (either during the adjudication or otherwise) it is determined that part of the claim was, in fact, a claim under a different contract. Provided a payment claim is made in good faith and purports to comply with s 75(1) of the Act, the merits of that claim, including questions as to whether it complies with s 75(1), is a matter for adjudication after having been raised in a payment schedule. A recipient of a payment claim cannot simply sit by and raise that point later, if it is not put in a payment schedule in response.
That perhaps overly long discussion of the authorities reveals that at the end of the day the question of whether a payment claim complies with the SOP Act is one of fact, and there is no divergence in the authorities of the relevant principles to apply with the possible exception being Finkelstein J’s preference for Santow JA’s more demanding test in Nepean rather than the less demanding test described by Hodgson and Ipp JJA.
In my view the above principles apply to the SOP Act.
As Lee J, with whom Elkaim J agreed, pointed out in Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd [2022] ACTCA 42:
46. In all Australian jurisdictions, a contractor and subcontractor’s entitlement to payment for building and construction work is protected by legislation. The SOP Act is one such statute. It is based upon the Building and Construction Industry Security of Payment Act 1999 (NSW) (NSW Act), and largely similar to the acts across all other states: Pines Living Pty Ltd v John O’Brien and Walton Construction Pty Limited [2013] ACTSC 156 (at [18] per Mossop M).
47. The SOP Act was intended to establish a system for the rapid adjudication and interim resolution of payment disputes. It provides a “minimalist, hands-off” alternative to “costly and protracted” court proceedings, with the aim of alleviating pressure on subcontractors and small business operators: Presentation Speech, Hansard (Thursday 15 October 2009) (at 4541–4543); Explanatory Statement, Building and Construction Industry (Security of Payment) Bill 2009 (ACT) (at 3). The statute is commercial in focus, designed to protect against the failure of any one party in a chain of “cascading payment obligations” to pay for work, goods or services: Presentation Speech (at 4541). The building and construction industry is particularly vulnerable to security of payment issues because it is uniquely reliant on subcontracting relationships with inherent imbalances in bargaining power: Explanatory Statement (at 3).
[48] When the nature of this “pay now, argue later” scheme is appreciated, it is unsurprising that a cardinal component of the statutory regime is that the SOP Act does not decide final rights: it preserves them for later resolution: Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151; 95 NSWLR 82 (at 106–107 [102] per McColl JA, Beazley ACJ and Macfarlan JA agreeing at 85 [1] and 116 [146] respectively); John Holland Pty Limited v Roads and Traffic Authority of New South Wales [2006] NSWSC 874 (at [33] per McDougall J) …
…
[54] Again, consistently with the statutory purpose generally, Pt 4, Div 4.2 of the SOP Act provides for the rough and ready adjudication of payment claim disputes.
(Emphasis added)
That is, as the broad purpose of the SOP Act in the ACT is the same as cognate legislation in other States where the statutory provisions are in identical or largely similar terms, where those in the building industry frequently work in more than one territory and state (and particularly so in the ACT which is surrounded by NSW), and where coherence in the law is a valuable commodity, the principles applied to that cognate legislation in the other jurisdictions referred to above should apply equally to the SOP Act.
Turning to the decision in this case, his Honour below found that the payment claim in this case did not “in any real way” describe the construction work that the claim related to. His Honour said that describing the addresses and making reference to a contract was “not enough”.
His Honour said that some supporting invoices were detailed but some were not. His Honour referred to the “first invoice” which I take to mean Invoice No 193 (AB 246) and said it had seven dates, a list of materials and referred to two sites. His Honour said that that invoice was “simply inadequate to describe what the work relates to”.
In my view his Honour erred in that assessment. Invoice 193 (and other supporting invoices) each separated labour and materials. For each date labour was supplied, the number of hours charged, and the hourly rate applied were both expressly set out. For materials, the materials supplied were separately listed e.g. sand, cement etc and the amount charged for each item was expressly set out.
It is true that all supporting invoices mentioned two sites, and that there was no separation of labour/materials for one site from the labour/materials for the other. But it seems to me that Invoice No 217, read with its supporting invoices, met Nepean’s undemanding test. Although each case must be assessed on its own facts, the payment claim in this case is distinctly different from those considered in KDV and Neumann Contractors, the two cases relied on by WNA.
In my view, Invoice No 217 purported to comply with s 15(2) of the SOP Act. No allegation of bad faith is apparent, and no such allegation was put in cross-examination to Mr Reid. Taking into account the speed with which these documents were to be produced, interpreting them in a common sense practical manner and remembering that what may appear as unintelligible shorthand to a lawyer would be readily understood by the parties who were experienced in the building industry and were familiar with the particular construction contract, I am of the view his Honour, with respect, erred in holding Invoice No 217 to be invalid for not identifying the construction work or related goods and services to which the progress payment related.
It is true, as WNA submitted, that the payment claim did not identify the work done by Mr Reid for which he charged “labour” in the payment claim. But the payment claim was not a pleading and did not need to be as precise as that type of document. When Canberra Building was contracted to provide the services of Mr Reid as foreman, then Mr Reid’s labour was self-evidently provided in that role and no more precise description was required. There was no need for Canberra Building to detail, almost on a time-charging basis, what particular work he was supervising on a building site at any given time. To require that level of detail would be to frustrate the purposes of the SOP Act.
In my view there was no failure to comply with s 15(2) of the SOP Act which was patent on the face of Invoice No 217. The invoice purported in a reasonable way to identify the particular work and any reasonable assertion by WNA that it was unable to identify some of the work could be made clear in a payment schedule justifying a refusal to pay, as Hodgson JA held. That dispute could then be determined by adjudication.
It follows that in my view his Honour erred in finding that the payment claim did not include the minimum amount of detail required.
His Honour did not expressly refer to the holdings I have mentioned in Nepean, and erred in not addressing the question whether the payment claim met the test of whether it purported in a reasonable way to identify the particular work (Hodgson JA) or was made in good faith and purported to comply with s 15(2) of the SOP Act (Ipp JA).
Had that test or tests been applied, the result should have been a finding in favour of Canberra Building.
It follows that I accept Canberra Building’s second and third submissions and uphold ground 1 of the appeal.
Service of the Payment Claim
Canberra Building’s first submission, and the second ground of appeal, was that his Honour erred in finding that there was “simply no evidence” that the email address [email protected] related to the respondent.
In my view, Canberra Building’s submission should be accepted. There was such evidence. The evidence was given by Mr Reid in his written evidence in chief and in cross-examination (AB 315).
In Mr Reid’s affidavit he said, in paragraph 20 (AB 30), that he “emailed the payment claim to Eddie Xia of” WNA. It is true that that statement is probably not in admissible form, but no objection was taken to it and it was received in evidence. Further, that evidence was not challenged in cross-examination.
In Mr Reid’s cross-examination Mr Reid gave uncontradicted and unchallenged evidence that “they” asked him to send his future invoices to “somewhere else”. The “they” at AB 315.12 is obviously a reference to Ms Campos and Mr Howman who were mentioned in the immediately preceding answer.
He was told to do that when Canberra Building was still working for WNA (AB 315.23) and at a time when he’d been provided with more than one email address to send invoices to. He already had (at that time) the email address he eventually used.
He denied finding that email address on the internet, although he could not recall why he picked that particular email address at the time. But he said he did not send it to Ms Campos because he was dealing with Mr Xia at that stage.
That evidence is corroborated by the fact the email attaching Invoice No 217 began with the words “Dear Eddie” (Eddie being the first name used by Mr Xia).
In my view, taking that evidence in its totality, there was some evidence that someone at WNA had provided that email address to Mr Reid, and that therefore that email address was related to WNA.
Also to be considered is that Mr Xia gave no evidence on the topic. He was a witness who one would have expected could have given evidence whether the email address used by Canberra Building was related to WNA, and whether WNA had received the email attaching Invoice No 217.
In Commercial Union Assurance Company of Australia Ltd v Ferrcom (1991) 22 NSWLR 389 Handley JA held, at 418, in an oft-cited passage:
There appears to be no Australian authority which extends the principles of Jones v Dunkel to a case where a party fails to ask questions of a witness in chief. However I can see no reason why those principles should not apply when a party by failing to examine a witness in chief on some topic, indicates “as the most natural inference that the party fears to do so”. This fear is then “some evidence” that such examination in chief “would have exposed facts unfavourable to the party”: see Jones v Dunkel (at 320-321) per Windeyer J. Moreover in Ex parte Harper; Re Rosenfield [1964-5] NSWR 58 at 62, Asprey J, citing Marks v Thompson 1 NYS 2d 215 (1937) at 218, held that inferences could not be drawn in favour of a party that called a witness who could have given direct evidence when that party refrained from asking the crucial questions.
In my view such an inference should be drawn. That is, the most natural inference to draw from the failure of Mr Xia to address whether the email address used by Canberra Building was related to WNA, and whether WNA had received the email attaching Invoice No 217, was that WNA feared to adduce that evidence from him. That is therefore some evidence that such examination in chief would have exposed facts unfavourable to WNA. The result of that is that I am able to more readily accept Mr Reid’s evidence of service: Cross on Evidence, online ed, at [1215].
The principle in Jones v Dunkel only applies where a party or witness is required to explain or contradict something: Cross on Evidence, online ed, at [1215]. Here, it was the requirement to explain or contradict the evidence of service given by Mr Reid.
WNA submitted that the issue of service was raised on the pleadings and Canberra Construction bore the onus of proof. Arguably the issue of service was raised on the pleadings although the pleadings on this point were far from clear. But assuming the service of the payment claim was disputed on the pleadings the order of subsequent events is important in assessing the evidence.
The next event after the close of pleadings was the service of Mr Reid’s affidavit in which he said he emailed the invoice to Mr Xia. Subsequently, WNA served Mr Xia’s written statement that did not contradict that evidence of Mr Reid. Ordinarily, uncontradicted evidence is to be accepted if it is otherwise regarded as reliable and trustworthy and not inherently implausible, and Mr Xia (nor any other evidence adduced by WNA) did not contradict Mr Reid’s evidence.
There then followed Mr Reid’s cross-examination which I have outlined above. Subsequent to that cross-examination there was no application to adduce oral evidence from Mr Xia in response to the evidence given by Mr Reid.
When those events are ordered chronologically, it can be seen that WNA’s submission that a Jones v Dunkel inference could not be used to fill gaps in Canberra Building’s case is not applicable. That is, whilst the legal proposition is correct (see Cross on Evidence, online ed, at [1215]), there was no gap in Canberra Building’s case. There was evidence of service in Canberra Building’s written evidence in chief, and further oral evidence which emerged in cross-examination.
It follows from what I have said that the learned Magistrate erred in saying there was no evidence the email address was related to WNA. The evidence was, as I have described above, supported by the inference that should have flowed from the failure of Mr Xia to give evidence on the email address and receipt of the email attaching Invoice No 217.
I do not draw any conclusion from the similarity between the email address used and the email address used by Ms Campos.
I shall now briefly state my reasons for not accepting the remaining submissions made by the parties.
I do not accept Canberra Building’s submission that Mr Xia’s written evidence that “I have seen the invoice number 217 from plaintiff [sic]. It is very confusing” was an admission against interest. The statement is ambiguous and could equally be a reference to Mr Xia’s seeing the invoice for the purposes of preparing his statement, rather than seeing it at about the time it was sent.
I do not accept WNA’s submission that Canberra Building’s solicitor (who appeared for Canberra Building below) conceded that there was no evidence to suggest the subject email address had any connection to WNA and that it was a concession upon which the Magistrate was entitled to act for two reasons.
First, when the transcript is fairly read it is apparent that the learned Magistrate referred to Mr Reid’s oral evidence (that I have discussed above) at AB 376.15. So much was fairly conceded by WNA on the appeal.
When his Honour then asked at AB 376.44 whether there was any evidence to suggest that the subject email address had any connection to WNA, and the solicitor answered “No, your Honour, there is nothing before you”, that question and answer was directed to any evidence additional to the oral evidence of Mr Reid.
It is probably fair to observe that Mr Reid’s written evidence was overlooked by everybody at that point, but I would not hold the solicitor’s answer against Canberra Building when everybody involved overlooked that written evidence.
Second, it was put that his Honour was entitled to act on that concession, but it is apparent that his Honour did not so act. No mention of this concession is made in the brief oral reasons for decision, a fact which reinforces my view that, just as I do not consider Canberra Building’s solicitor made a concession, neither did his Honour.
WNA submitted that Mr Xia was not cross-examined on the service issue and therefore, per Browne v Dunn, could not ask the Court to draw an inference (or, more correctly, to put the submission) that the email was received.
I do not accept this submission for two reasons. First, Mr Xia gave no evidence that the email was not received and gave no evidence that the email address used did not relate to WNA. Browne v Dunn only applies where the particular witness gives evidence contradictory to that of the opposing party’s witnesses. As Hunt J explained in Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 at 16 (footnote omitted):
It has in my experience always been a rule of professional practice that, unless notice has already clearly been given of the cross-examiner's intention to rely upon such matters, it is necessary to put to an opponent's witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings.
(Emphasis added)
As Mr Xia gave no evidence on the topic, there was no requirement to cross-examine him on the issue.
WNA submitted that Canberra Building’s construction contract was, in part, not with the it but with another unrelated entity, Translink. I do not accept this submission.
The issue was raised in cross-examination only (as accepted by the appellant). It was not the subject of opening or closing submissions, was not included in the pleadings (T 41.2), was not the subject of a cross-appeal or notice of contention and nor was anything said about it in WNA’s written submissions on the appeal.
As the point was not taken below, and because Canberra Building could have given evidence on the issue, the issue should not be allowed to be raised for the first time on appeal: Coulton v Holcombe (1986) 162 CLR 1 at 560.
Further, even if the point had been taken below, I would not have given leave for it to be raised for the first time in oral submissions when the matter was not the subject of a cross-appeal or notice of contention and was not mentioned in WNA’s written submissions on the appeal.
Remaining Matters
It follows from the above that the appeal succeeds, and his Honour’s orders should be set aside. The question then is what orders I should make.
Canberra Building’s remaining grounds of appeal contend that I should enter judgment for it because the remaining issues were not in dispute. That is, it was not in issue in the Court below that there was a construction contract between the parties (ground 3) and it was not in issue that WNA had not served a payment schedule per s 16 of the SOP Act.
The failure to serve a payment schedule has the consequence that WNA became liable to pay the claimed amount pursuant to s 16(4) of the SOP ACT, and Canberra Building was thereby entitled to recover the claimed amount from WNA pursuant to s 17(2)(a)(i) of the SOP Act (ground 4), together with interest pursuant to s 13(2) of the SOP Act (ground 5).
No defence to those claims was made in the pleadings in the Court below other than disputing the validity of the payment claim. No issue was taken with those matters in submissions in the Court below nor on the appeal.
I am satisfied the construction contract contended for existed between the parties and am satisfied that WNA did not serve a payment schedule.
Accordingly, there should be a judgment for Canberra Building in the amount claimed together with interest.
Orders
I make the following orders:
(1)Appeal upheld.
(2)The Orders of the Magistrates Court dated 16 December 2022 are set aside.
(3)In lieu thereof order judgment in favour of the appellant in the sum of $53,504.90.
(4)Interest is payable on the sum set out in Order 3 above the rate of interest applying from time to time under the Court Procedures Rules 2006, schedule 2, part 2.2 from 26 April 2020.
(5)The respondent is to pay the appellant’s costs of the appeal and of the proceedings below.
| I certify that the preceding one hundred and forty [140] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Acting Justice Curtin. Associate: Date: |
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