JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	10-11 FEBRUARY 2015
DATE OF JUDGMENT:	24 FEBRUARY 2015
CASE MAY BE CITED AS:	FAÇADE TREATMENT ENGINEERING v BROOKFIELD MULTIPLEX
MEDIUM NEUTRAL CITATION:	[2015] VSC 41

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BUILDING AND CONSTRUCTION LAW – Building and Construction Industry Security of Payment Act 2002 (Vic) (the ’BCISP Act’) - Payment claim - Whether respondent’s response a valid payment schedule under s 15 of the BCISP Act – Requirements of s 15 of the BCISP Act - Claimant company seeks judgment under s 16 of the BCISP Act – Judgment not entered where a valid payment schedule submitted within time.

CONSTITUTIONAL LAW – Claimant company in liquidation - Respondent company has potential cross-claims and set-off defences against claimant company – s 109 of the Constitution Act (Cth) - Inconsistency of State legislation (s 16 of the Building and Construction Industry Security of Payment Act 2002 (Vic)) with a law of the Commonwealth (s 553C of the Corporations Act) – Commonwealth legislation prevails – Entry of judgment pursuant to s 16 of the Building and Construction Industry Security of Payment Act 2002 (Vic) precluded.

CORPORATIONS LAW – Set-off provisions for insolvent companies under s 553C – Whether notice of insolvency precludes set-off under s 553C(2) – Relevant time that creditor must have such notice.

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APPEARANCES:

Counsel

Solicitors

For the Plaintiff

Mr I Upjohn SC with

Mr B Mason of Counsel

Aiken Partners

For the Defendant

Mr MG Roberts QC with
Mr L Connolly of Counsel

Norton Rose Fulbright

HIS HONOUR:

Background
Introduction

By a sub-contract dated 7 September 2011 (the ‘Sub-contract’) the Plaintiff, Façade Treatment Engineering Pty Ltd (In Liq) (‘Façade’), became a sub-contractor of the Defendant, Brookfield Multiplex Constructions Pty Ltd (‘Multiplex’), for a building project known as the Upper West Side Redevelopment – Stage 1, on the site of the former City West Power Station in Lonsdale Street, Melbourne. The Sub-contract involved the design, supply and installation of façade and curtain wall works on the building being constructed on the site.

In this proceeding, Façade seeks to recover from Multiplex the total sum of $1,193,469.20 (inclusive of GST) by entry of a judgment in its favour pursuant to s 16(2)(a)(i) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (the ‘BCISP Act’). This sum comprises:

(a)$600,187.50 (inclusive of GST), specified in Payment Claim No 18, which was issued to the Defendant on 23 August 2012 in the amount of $1,198,343.30 (inclusive of GST), and in respect of which a part payment of $598,155.80 was received; and

(b) $593,281.70 (inclusive of GST), specified in Payment Claim No 19, which was issued to the Defendant on 27 September 2012. The sum of $296,640.85 was due on 14 October 2012 and the sum of $296,640.85 was due…

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.

Continue reading FAÇAde Treatment Engineering v Brookfield Multiplex

Details

AGLC: FAÇAde Treatment Engineering v Brookfield Multiplex [2015] VSC 41
Case: [2015] VSC 41
Decision Date: 24 FEBRUARY 2015

CaseChat Overview and Summary

FAÇAde Treatment Engineering sought judgment from the Supreme Court of Victoria against Brookfield Multiplex for payment under the Building and Construction Industry Security of Payment Act 2002 (Vic). The dispute arose from a building contract between the two parties, where FAÇAde submitted a payment claim under the Act, seeking an adjudicated amount for work performed. Brookfield responded with a payment schedule that FAÇAde deemed invalid, leading to the current application for judgment under section 16 of the Act. The court had to determine whether Brookfield's response constituted a valid payment schedule under section 15 of the Act and whether the claimant's insolvency precluded the entry of judgment.

The primary legal issues were whether Brookfield's response was a valid payment schedule, satisfying the requirements of section 15 of the Act, and whether the entry of judgment under section 16 of the Act was permissible given the claimant's insolvency. The court also considered whether the Building and Construction Industry Security of Payment Act 2002 (Vic) was consistent with the Corporations Act 2001 (Cth), particularly in the context of insolvent companies and set-off provisions under section 553C. The timing of notice of insolvency and its impact on the ability to claim set-off under section 553C(2) was another crucial aspect.

The court ruled that Brookfield's response did not meet the criteria of a valid payment schedule under section 15 of the Act. However, the claimant's insolvency raised constitutional issues under section 109 of the Constitution, as the Corporations Act 2001 (Cth) provided set-off defences that conflicted with the Building and Construction Industry Security of Payment Act 2002 (Vic). Given the inconsistency between the State and Commonwealth laws, the court held that the Commonwealth legislation prevailed, precluding the entry of judgment under section 16 of the Building and Construction Industry Security of Payment Act 2002 (Vic).

The court dismissed the application for judgment, highlighting that Brookfield had potential cross-claims and set-off defences against FAÇAde due to its insolvency. The court noted that any creditor's notice of insolvency would have relevantly precluded a set-off under section 553C(2) of the Corporations Act 2001 (Cth). Consequently, the entry of judgment was precluded, and no orders were made in favour of FAÇAde.

Orders