Concrete Construction Group (Victoria) Pty Ltd v 19 Wilkinson Pty Ltd atf 19 Wilkinson Unit Trust
[2025] VCC 247
•19 March 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
BUILDING CASES LIST
Case No. CI-24-07322
| Concrete Construction Group (Victoria) Pty Ltd (ACN 634 680 130) | Plaintiff |
| v | |
| 19 Wilkinson Pty Ltd atf 19 Wilkinson Unit Trust (ACN 628 239 403) | Defendant |
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JUDGE: | His Honour Judge Lauritsen | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | Heard on the papers | |
DATE OF JUDGMENT: | 19 March 2025 | |
CASE MAY BE CITED AS: | Concrete Construction Group (Victoria) Pty Ltd v 19 Wilkinson Pty Ltd atf 19 Wilkinson Unit Trust | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 247 | |
REASONS FOR JUDGMENT
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Subject:CONTRACTS - Building and Construction Industry Security of Payment
Catchwords: Payment claims under Building and Construction Industry Security of Payments Act 2002 (Vic) – no appearance by defendant – matter heard on the papers – contract to design and construct residential building complex – variation notices – retention payment claim – payment schedules - certificate of practical completion.
Legislation Cited: Building and Construction Industry Security of Payments Act 2002 (Vic).
Cases Cited:JG King Project Management Pty Ltd v Hunters Green Retirement Living Pty Ltd [2024] VSCA 310; Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; Vanguard Developments v Promax [2018] VSC 386; Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112; Pearl Hill Pty Ltd v Concorp Construction Group (Vic)Pty Ltd [2011] VSCA 99; Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2005) 62 NSWLR 385; 3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674; SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; Best Fab Pty Ltd v Australian High Bay Installations Pty Ltd [2018] VCC 1053.
Judgment: Judgement for plaintiff in the sum of $301,961.86, plus interest at the rate of 10 per cent per annum. Defendant to pay the plaintiff’s costs of this application.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms K Weston-Scheuber with Ms K Shenstone | Coopers Lawyers |
| For the Defendant | No appearance |
HIS HONOUR:
Introduction
1By an originating motion and summons, the plaintiff seeks, principally, judgment for $301,961.86, interest and costs. The monetary sum is sought under ss 16(2)(a)(i) and 17(2)(a)(i) of the Building and Construction Industry Security of Payments Act 2002 (Vic) (“the Act”) in relation to four payment claims (27, 28, retention and variations). The plaintiff’s claims are supported by the affidavits of Zenon Eleftheriou[1], the general manager of the plaintiff. The defendant has not appeared to oppose the plaintiff’s claim. I am deciding this matter on the papers.
[1] Sworn on 9 December 2024 and on 18 February 2025.
2I am assisted by the detailed written submissions of the plaintiff’s counsel[2].
[2] Dated 18 February 2025.
Circumstances
3On 21 October 2021, the plaintiff and defendant contracted for the plaintiff to design and construct a commercial and residential building complex in Wilkinson Street, Brunswick. Their contract was based on AS 4902-2000. Paragraph 9 of Mr Eleftheriou’s first affidavit sets out the principal terms of the contract.
Payment claim 27
4In his first affidavit, Mr Eleftheriou described the circumstances of payment claim 27.
5On 24 June 2024, the plaintiff’s project manager, Paul Torisi, emailed the defendant. The email attached a spreadsheet where the plaintiff claimed $64,235 (excluding GST) for work done between 16 May and 14 June 2024. The email contained three variation notices: variations 35, 36b and 37. The amounts of the variations were $3,097, $10,131 and $2,200 respectively. Those amounts excluded GST.
6On 15 July 2024, the Superintendent, Sam Leslie, sent to the plaintiff his and the defendant’s response to the payment claim. The response asserted the plaintiff was entitled to $66,531.81 (including GST). The plaintiff implicitly accepted the assessment by invoicing the defendant for $66,531.80 (including GST).
7Payment claim 27 became percentages of contract works completed for five variations (36b, 37, 38, 51 and 52). Variations 51 and 52 were negative variations for $464 and $8,211 respectively for “cost reduction for alternative tiles and cost reduction main wall and floor feature tiles”[3].
[3] [19] of the first affidavit.
8On 16 July 2024, this claim was served on the defendant by sending it in an email to three named persons. All previous claims were sent to one or two of those named persons.
9Clause 37(2)(a) of the contract required the provision of a payment schedule three days after the receipt of payment claim, that is, three days of 16 July. None was received within that period. However, a payment schedule was received on 21 August 2024 but no payment was made.
10Payment claim 27 does not include any excluded amounts as set out in s 10B of the Act. The claim has two parts:
(a) $57,485.21 (including GST), being part of the contract sum; and
(b) $7,046.60 (including GST) for variation work.
11The latter comprises five variations, each requested by the defendant:
(a) variations 36b, 37 and 38 involve amounts (excluding GST) and total $15,081.
(b) variations 51 and 52 are negative variations totalling $8,675.
Payment claim 28
12On 13 August 2024, the plaintiff served a payment claim for $12,650 (including GST), which comprised the balance of the contract sum. Contractually, the defendant needed to serve a payment schedule in three days after the receipt of the payment claim (ie by 13 August). None was received within the three-day period. However, on 28 September, the defendant sent to the plaintiff an email, which said in part:
“Draft assessment…is based on the understanding that CCG will complete contract works outstanding, hence full 100% approved assessment of those works”.
13A document entitled “Progress Claim Assessment” was attached to this email. It said the scheduled payment for the balance of the contract was $13,046.00 (inclusive of GST). This payment claim did not include any excluded amounts under s10B of the Act. In any event, no payment was received.
14On 6 August 2024, the defendant issued to the plaintiff a certificate of practical completion. The certificate said the date of practical completion was 19 July 2024.
Retention payment claim
15On 13 August 2024, the plaintiff served on the defendant another payment claim, being a retention payment claim. The amount claimed was $193,344.36 (including GST), which represented half of the retention amount. This claim was allowed by clause 5.1(a) of the contract. The plaintiff also sent an invoice.
16Again, the time for serving a payment schedule was 3 days from 13 August. No payment schedule was served in that period and no payment was received by the plaintiff.
Variations payment claim
17On 25 September 2024, the plaintiff served another payment claim for $94,938.53 (including GST). This claim represented work performed between 24 August 2023 and 8 August 2024. This claim represented the balance of a host of unpaid variations. The plaintiff assigned these numbers to the variations: 24, 27, 28, 30, 32, 33, 35b, 36a, 36b, 37, 38, 39, 44, 51, 52, 57, 59, 60, 66, 67 and 68.
18Explanations of each variation are set out at paragraphs 57 to 86 of the affidavit sworn 9 December 2024[4]. The works in each variation was requested by the defendant and completed by the plaintiff.
[4] Where the plaintiff claimed an amount, it is exclusive of GST. Where the defendant made a payment towards a claimed variation leaving a balance, the balance is exclusive of GST.
19With variation 24, the defendant approved variation at $6,583.50 instead of $7,524, which the plaintiff accepted. The defendant paid $5,643, leaving $940.50 unpaid.
20With variation 27, the defendant approved $5,672 instead of $7,480, which the plaintiff accepted. However, the defendant paid $4,468, leaving $1,164 unpaid.
21Variation 29 followed the same course as the previous two. The claimed amount was adjusted by the defendant and the adjustment was accepted by the plaintiff. The defendant’s subsequent payment left $483.75 outstanding.
22Variation 30 was initially accepted by the defendant but changed its position. In any event, nothing has been paid for this variation.
23With variation 32, the defendant adjusted the claimed amount but then paid a lesser amount, leaving $1,107.50 owing.
24Variation 33 seeks a large amount. The defendant said it approved a much smaller amount. Nothing has been paid.
25Although approved, nothing has been paid in respect of variation 35b. The amount claimed is $3,097.
26With variation 36a, an amount has been paid leaving $7,967 unpaid.
27Variation 36b was approved but unpaid. The amount claimed is $10,131. This claim is also part of payment claim 27.
28Variation 37 seeks $2,200. Although approved, it has not been paid. It too is part of payment claim 27.
29The plaintiff accepted the defendant’s adjustment to variation 38 but the adjusted amount ($4,250) was not paid. This variation was also claimed in payment claim 27 where the claim was a lesser amount, $2,750. The payment schedule assessed $1,500 as owing.
30Variations 39 and 44 for $1,875 and $1,836 respectively were approved by the defendant but not paid.
31Variations 51, 52, 57, 59, 60, 66, 67 and 68 are negative variations. The reasons why they are negative variations and their amounts are set out at paragraph 86 of the affidavit. They have been deducted.
32The day after the service of the variation payment claim, the defendant served a payment schedule. It asserted the scheduled payment was $29,435.70. Nevertheless, no payment was made.
Retention claim
33After the issue of a certificate of practical completion and all defects notified by the Superintendent at or before practical completion are rectified to the Superintendent’s satisfaction, the plaintiff requested the release to it of the reduced retention sum. A certificate of practical completion was issued on 6 August 2024. The total amount of retention held on the adjusted contract sum was calculated by the Superintendent at $351,535.21 (excluding GST).
Legal considerations
34The Act seeks to ensure that people who undertake to carry out construction work can recover progress payments for the performance of that work.[5] Section 4 defines construction contract as a “contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services for another party”. The Act applies to any construction contract whether written or oral, or partly written and partly oral.[6] “Construction work” is defined by s5.
[5] s3.
[6] s7.
35Section 16(2)(a) of the Act provides that a claimant may recover from a respondent any unpaid portion of an amount claimed in a payment claim where the respondent fails to submit a payment schedule within time (or at all) in response to the payment claim. Section 17(2)(a) provides that where a respondent provides a payment schedule within time, a claimant may recover from the respondent any unpaid portion of the amount which the payment schedule states the respondent proposes to pay to the claimant.
36Section 14 of the Act concerns the form and content of payment claims. Sections 14(2) and (3) relevantly provide that a payment claim:
(a) must be in the prescribed form (if any) and contain the prescribed information (if any) – neither is prescribed;
(b) must identify the construction work or related goods and services to which it relates;
(c) must indicate the amount of progress payment that the claimant claims to be due;
(d) must state that it is made under the Act; and
(e) must not include any “excluded amounts” (being amounts referable to particular categories of variations).
37Section 14(4) of the Act addresses when a payment claim can be served, where it is not a payment claim in respect of a final, single or one-off progress payment. It provides that such a payment claim may only be served within:
(a) the period determined in accordance with the construction contract “in respect of the carrying out of the item of construction work or the supply of the item of related goods and services to which the claim relates”; or
(b) the period of 3 months after the “reference date referred to in s9(2) that relates to the progress payment”.
38Section 14(5), (6) and (7) of the Act concern payment claims claim in respect of a final, single or one-off progress payment and are not relevant for present purposes. Section 14(8) provides that a claimant “cannot serve more than one payment claim in respect of each reference date under the construction contract”. Section 14(9) provides that this limitation does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous payment claim if the amount has not yet been paid.
39Another important provision informing the formal requirements for payment claims under the Act is s9. Section 9(1) provides that “on and from each reference date under a “construction contract” a claimant is “entitled to a progress payment under this Act calculated by reference to that date”.
40Section 9(2)(a) provides that a reference date is a date determined by or in accordance with the construction contract as:
(a) a date on which a claim for a progress payment may be made; or
(b) a date by reference to which the amount of a progress payment is to be calculated,
(c) in relation to a specific item of construction work “carried out or to be carried out” or a specific item of related goods and services “supplied or to be supplied” under the contract. The rest of s9 concerns situations where the contract makes no express provision for reference dates.
41It is now well established in Victoria that unless a payment claim answering the description in section 14(1) of the Act is served, there can be no application to a court under s16(2)(a)(i). Although dealing with the alternative option of an adjudication application referred to in the New South Wales equivalent of s16(2)(a)(ii), this follows inexorably from the decision of the High Court in Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd[7] (“Southern Han”). On the other hand, the available defences to a payment claim are very limited.
[7](2016) 260 CLR 340at [44].
42Generally speaking, the available defences concern either the nature of the underlying contract or the form and service of the purported payment claim, and thus whether the payment claim is effective to trigger the procedures established by Part 3 of the Act.[8] More particularly, the defences to a payment claim enlivened by the formal requirements of the Act are, in substance, that the payment claim:
(a) does not relate to a “construction contract” (including because it does not involve carrying out “construction work”), or it relates to a construction contract excluded from the operation of the Act under s7 (for example, a construction contract that forms part of a loan agreement, or one that is a domestic building contract under the Domestic Building Contracts Act 1995);
(b) fails to satisfy the formal requirements of s14(2) (for example, by failing to identify the construction work or failing to state that it is made under the Act);
(c) was made when no valid reference date existed,[9] including where it is served before an applicable reference date or relies on a reference date that has already been used up by an earlier payment claim;[10]
(d) includes variations that are “excluded amounts” under s10B; and
(e) was not validly served on the respondent under either the terms of the contract or under s50.
[8]Southern Han at [62].
[9]Southern Han at [61]-[62]; Vanguard Developments v Promax [2018] VSC 386, Kennedy J at [121].
[10] Act s14(8).
43Under section 47, nothing in Part 3 of the Act precludes bringing or continuing proceedings under the construction contract, including where those proceedings deal with the same issues in dispute in the proceeding relying on Part 3. Thus, a judgment under ss16 and 17 is a provisional judgment in what it grants and what it refuses.[11] The statutory context both contemplates and permits inconsistent judgments.[12] This section is, in effect, the statutory manifestation of the “pay now, argue later” description often given to the policy behind the Act and its counterparts in other states.[13]
[11] Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112 [2] and [43]-[46] (Vickery J), cited with approval in Pearl Hill Pty Ltd v Concorp Construction Group (Vic)Pty Ltd [2011] VSCA 99 [11].
[12] Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2005) 62 NSWLR 385 [22] (Handley JA, with whom Santow JA and Pearlman AJA agreed).
[13]Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112 [2] and [43]-[46].
44Further, in considering any purported defences to a payment claim, it is important to be mindful of s48 of the Act. This section provides that the provisions of the Act have effect despite any contractual provision to the contrary. It further provides that any provision in any contract purporting to exclude, restrict or modify the operation of the Act or that may reasonably be construed as an attempt to deter a person from taking action under the Act, is void.
45This court has endorsed the hearing of applications under the Act on a summary basis by summons on originating motion with affidavit evidence.[14] Such claims are properly assessed on the balance of probabilities,[15] with the quality of the evidence weighed having regard to the fact that the legislation seeks to facilitate a swift but temporary remedy.[16]
[14] 3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674 [39]-[54]. See also SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805 [26].
[15] Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449, 449-450 (Mason CJ, Brennan, Deane and Gaudron JJ).
[16]3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674 [51]-[54].
Discussion
46The plaintiff seeks:
(a) under s16(2)(a) of the Act, $272,526.16 (including GST) plus interest and costs; and
(b) under s17(2)(a)(ii), $29,435.70 (including GST).
47The plaintiff has served these payment claims on the defendant. The defendant has not provided a payment schedule for any of them within the time required by the contract or ten business days after service of the claim (whichever is the earliest). None of the amounts in the payment claims was paid by the due date. The claimed amounts do not include excluded amounts.
48By the contract, the due date for payment was within 15 business days of a payment certificate issued by the Superintendent.
49Since some of the payment claims were claims for progress payments, the issue of reference dates became important.
50Payment claim 27 is such a claim. Referring to ss14(2) and s14(3) of the Act and a decision of a judge of this Court, the plaintiff asserts: the claim identifies the construction work to which it relates; it indicates the amount of progress payment claimed to be due; it is endorsed under the Act; and it does not include any excluded amounts.
51The constituents of this claim are expressed as percentages of the contract work completed.
52The reference date to this claim was 15 June 2024 and the claim was served within three months of that date.
53No payment schedule was issued within the required time. The Superintendent’s payment certificate was received out of time (ie 21 August 2024) and it was not issued by the defendant.
54This payment claim does not include excluded amounts.
55The plaintiff is entitled to its claim of $66,531.80 (including GST).
56Payment claim 28 was served and satisfies the requirements of a valid payment claim.
57The retention payment claim sought half of the retention held. Relying on the majority opinion in JG King Project Management Pty Ltd v Hunters Green Retirement Living Pty Ltd[17], the plaintiff submits its making of a claim for the first half of the retention monies does not depend on proof the defects identified at or prior to practical completion have been rectified to the satisfaction of the Superintendent. I accept that submission.
[17] [2024] VSCA 310 at [60]-[61] and [240].
58Nevertheless, the plaintiff deposes all defects were identified at practical completion on 19 July 2024 and were rectified[18]. Although not expressly stated, it is likely they were rectified to the satisfaction of the Superintendent.
[18] Second affidavit at [13]-[19].
59The reference date for the retention payment claim was 6 August 2024, being the day on which the certificate of practical completion was issued.
Conclusion
60I am satisfied the plaintiff complied with the requirements of valid payment claim in relation to each of the payment claims. It is entitled to an order for $301,961.86 on those claims.
61It is also entitled to interest at the rate of 10 per cent per annum. As to the time from which interest is calculated, they are:
(a) payment claim 27 – 30 July 2024;
(b) payment claim 28 – 27 August 2024;
(c) retention payment claim – 27 August 2024; and
(d) variations payment claim – 16 October 2024.
62In addition to an order on the claims, I order the defendant to pay interest, with the amount reserved and liberty to the plaintiff to apply to fix the amount of the interest.
63Finally, I order the defendant to pay the plaintiff’s costs of this application to be assessed by the Costs Court in default of agreement.
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Certificate
I certify that these 12 pages are a true copy of the judgment of His Honour Judge Lauritsen delivered on 19 March 2025.
Dated: 19 March 2025
Rachel Galik
Associate to His Honour Judge Lauritsen
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