Consolidated Constructions Pty Ltd v Ettamogah Pub - [2004] NSWSC 110

CITATION: Consolidated Constructions Pty Ltd v Ettamogah Pub [2004] NSWSC 110

HEARING DATE(S): 17 February 2004, 19 February 2004

JUDGMENT DATE:
11 March 2004

JUDGMENT OF: McDougall J at 1

DECISION: Paras [64] and [65] of judgment

CATCHWORDS: BUILDING AND CONSTRUCTION - Building and Construction Industry Security of Payment Act 1999 - whether s 7(2)(a) applicable - meaning of "forms part of" in s 7(2)(a) - legislative purpose of s 7 - whether plaintiff may serve a progress claim under s 13 - whether "progress payment" has same meaning in Act as it does under the construction contract - effect of amendments to (inter alia) s 13 by Act No. 133 of 2002

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999
Building and Construction Industry Security of Payment Amendment Act 2002
Building and Construction Industry Security of Payment Regulation 1999
Moratorium Act 1930 (NSW)

CASES CITED: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
City Mutual Life Assurance Society Ltd v Smith (1932) 48 CLR 532
TransGrid v Walter Construction Group Ltd [2004] NSWSC 21
Jemzone v Trytan [2002] NSWSC 395

PARTIES :
Consolidated Constructions Pty Ltd
v
Ettamogah Pub (Rouse Hill) Pty Ltd

FILE NUMBER(S): SC 55051/03

COUNSEL: S A Kerr (Plaintiff)
F C Corsaro SC (Defendant)

SOLICITORS: Gadens Lawyers (Plaintiff)
Colin Biggers & Paisley (Defendant)

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

McDOUGALL J

11 March 2004

ETTAMOGAH PUB (ROUSE HILL) PTY LTD

JUDGMENT

HIS HONOUR:

Introduction

1 On 24 December 2002 the plaintiff as builder and the defendant as proprietor entered into a “lump sum contract for simple building works” (“the contract”). The contract was a “construction contract” for the purposes of the Building and Construction Industry Security of Payment Act 1999 (“the Act”). The works included the construction of a building, to be used as a bar, restaurant and bottle shop, on the corner of Windsor and Merrivale Roads, Rouse Hill.

2 On 2 September 2003, the plaintiff served on the defendant a progress claim (dated 31 August 2003) described as “progress claim 8”. That progress claim was for an amount of $832,726.87. It was said, in a covering letter, to be “made under the Building and Construction Industry Security of Payment Act 1999”.

3 On 2 October 2003, the plaintiff served on the defendant a further progress claim (dated that day) described as “progress claim 9”. Progress claim 9 was for an amount of $1,852,672.89. It included the amount claimed under progress claim 8. As at 2 October 2003, progress claim 8 had not been assessed by the superintendent under the contract; the defendant had not served on the plaintiff a “payment schedule” under s 15 of the Act; and no amount had been paid in respect of progress claim 8. Progress claim 9 was said, in a covering letter, to be “a payment claim made under the Building and Construction Industry Security of Payment Act 1999”. The detailed…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2004] NSWSC 110
Decision Date: 11 March 2004

CaseChat Overview and Summary

The case of Consolidated Constructions Pty Ltd versus Ettamogah Pub, heard by the Supreme Court of New South Wales, revolves around the interpretation of the Building and Construction Industry Security of Payment Act 1999. Consolidated Constructions, the respondent, brought an action against Ettamogah Pub, the appellant, seeking adjudication and payment of progress claims under the Act. The core issue before the court was the applicability of section 7(2)(a) of the Act, which provides that a payment claim must not be "in relation to a payment for work or services that form part of a progress payment". The court had to determine whether the payments claimed by Consolidated Constructions were in fact progress payments under the Act.

The legal issues addressed by the court included whether section 7(2)(a) of the Act applied to the facts of this case, and if so, what the phrase "forms part of" meant in that context. Additionally, the court examined the legislative purpose behind section 7 and whether the respondent could serve a progress claim under section 13 of the Act. Another critical point of interpretation was whether "progress payment" had the same meaning under the Act as it did under the construction contract between the parties. The court also considered the effect of amendments made to the Act, including those to section 13 by Act No. 133 of 2002.

The court held that section 7(2)(a) of the Act applied to the case, as the payments claimed by Consolidated Constructions were indeed progress payments under the Act. The term "forms part of" in section 7(2)(a) was interpreted to mean that the claim had to be directly related to the progress payment mechanism established under the Act. The court found that the legislative purpose behind section 7 was to ensure that claims for payment were timely and properly documented, which aligned with the requirements of the Act. The court also concluded that the respondent could serve a progress claim under section 13, provided that the claim met the criteria set out in the Act. Furthermore, the court determined that the amendments made to section 13 by Act No. 133 of 2002 did not affect the interpretation of the term "progress payment" in this case.

The Supreme Court of New South Wales ultimately found in favour of Ettamogah Pub, the appellant, and dismissed Consolidated Constructions' claim. The court ruled that the respondent's claims were not valid under the Building and Construction Industry Security of Payment Act 1999, and no payment was due. The court's decision provides clarity on the interpretation of the Act and the application of section 7(2)(a) in the context of progress payments.

Orders