Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2015 0026

FAÇADE TREATMENT ENGINEERING PTY LTD (IN LIQ) Applicant
v
BROOKFIELD MULTIPLEX CONSTRUCTIONS PTY LTD Respondent

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JUDGES: WARREN CJ, TATE and McLEISH JJA
WHERE HELD: MELBOURNE
DATE OF HEARING: 14 September 2015
DATE OF JUDGMENT: 14 October 2016
MEDIUM NEUTRAL CITATION: [2016] VSCA 247
JUDGMENT APPEALED FROM: [2015] VSC 41 (Vickery J)

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BUILDING AND CONSTRUCTION – Right to progress payments in Building and Construction Industry Security of Payment Act 2002 (‘BCISP Act’) s 9(1) – Reference to person who has undertaken ‘to carry out construction work’ or ‘supply related goods and services’ – Whether provisions available to companies in liquidation.

STATUTORY INTERPRETATION – Scope of BCISP Act – Consideration of text, context and purpose of Act – Provisions of BCISP Act pt 3 not available to companies in liquidation.

CONSTITUTIONAL LAW – Whether s 109 inconsistency arises between BCISP Act ss 16(2)(a)(i) and (4)(b) and Corporations Act 2001 (Cth) (‘Corporations Act’) s 553C – Where s 553C provides for set-off of mutual dealings with insolvent company – Where BCISP Act provides for summary judgment proceeding that precludes reliance upon cross-claims or defences – If ss 16(2)(a)(i) and (4)(b) available to companies in liquidation, they would ‘alter, impair or detract from’ operation of s 553C.

CORPORATIONS LAW – Where Corporations Act s 553C(2) precludes set-off where person had notice of company’s insolvency at time of giving credit to or receiving credit from company – Mutual dealings pursuant to contract entered into prior to company’s insolvency – Whether date for assessing notice of insolvency is date of entry into contract or date of conduct pursuant to or in breach of contract.

BUILDING AND CONSTRUCTION – Requirements for payment schedules under BCISP Act s 15 – Adequacy of reasons for withholding payment.

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APPEARANCES: Counsel Solicitors
For the Applicant Mr I W Upjohn QC with
Mr B G Mason
Aitken Partners
For the Respondent Mr D J Williams QC with
Mr M G Roberts QC
Norton Rose Fulbright

WARREN CJ
TATE JA
McLEISH JA:

TABLE OF CONTENTS

Facts ................................................................................................................................ 2
Legislative provisions ……………………………………………………………….. 9
          The BCISP Act ………………………………………………………………. 9
The Corporations Act ……………...……………………………………….. 16
The trial judge’s reasons ….......................................................................................... 17
Grounds of appeal and notice of contention ............................................................ 20
The scope of the BCISP Act — the notice of contention ......................................... 21
Parties’ submissions ……………………………………………………….. 22
Analysis ............................................................................................................ 25
          Federal jurisdiction and s 79 of the Judiciary Act ……………………… 35
The constitutional point — s 109 inconsistency .................................................... 37
          The judge’s reasons for finding a constitutional inconsistency ……… 39
Are s 16(2)(a)(i) and s 16 (4)(b) of the BCISP Act inconsistent with s 553C of the Corporations Act? ……...........................................................

47

Façade’s approach: BCISP Act restrictions are procedural and interim 47
Façade’s approach: concurrent operation — Veolia ………………….. 50
Finding of s 109 inconsistency with Trade Practices Act — Bitannia 53
Security of Payments legislation and insolvency — Grosvenor & Hamersley Iron ………………………………………………………..

60

          Automatic application of s 553C…
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Details
Case
[2016] VSCA 247
Decision Date

CaseChat Overview and Summary

Façade Treatment Engineering Pty Ltd (in liquidation) filed a claim against Brookfield Multiplex Constructions Pty Ltd, seeking progress payments under the Building and Construction Industry Security of Payment Act 2002 (Cth). The dispute centred on whether Façade Treatment, which was in liquidation, could avail itself of the security of payment provisions. The matter was heard in the Federal Circuit Court of Australia.

The primary legal issue was whether the provisions of the Building and Construction Industry Security of Payment Act 2002 (Cth) were available to a company in liquidation. The court had to interpret the scope of the act, considering its text, context, and purpose. Specifically, it had to determine if the act's provisions were applicable to a company that had already entered liquidation. The court also considered whether there was a constitutional inconsistency between the Building and Construction Industry Security of Payment Act 2002 (Cth) and the Corporations Act 2001 (Cth). It had to decide whether the security of payment provisions would alter, impair, or detract from the operation of the Corporations Act 2001 (Cth), particularly in relation to set-off provisions for mutual dealings with insolvent companies.

The court found that the provisions of the Building and Construction Industry Security of Payment Act 2002 (Cth) were not available to a company in liquidation. The court interpreted the act in light of its purpose, which was to provide a quick and inexpensive mechanism for resolving disputes over payments in the building and construction industry. Given that Façade Treatment was in liquidation, it was no longer engaged in the business of construction, thus it did not fit the criteria of a party "undertaking to carry out construction work." Additionally, the court held that there was no constitutional inconsistency between the Building and Construction Industry Security of Payment Act 2002 (Cth) and the Corporations Act 2001 (Cth), as the former did not alter or detract from the operation of the latter. Finally, the court noted that the reasons provided for withholding payment were inadequate.

The court dismissed Façade Treatment's claim for progress payments, holding that the Building and Construction Industry Security of Payment Act 2002 (Cth) did not extend to companies in liquidation.

Orders

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

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Ratio Decidendi

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