FAÇAde Treatment Engineering v Brookfield Multiplex

The dispute between Façade Treatment Engineering and Brookfield Multiplex was brought before the court, with Façade Treatment Engineering seeking judgment under section 16 of the Building and Construction Industry Security of Payment Act 2002 (Vic) due to an alleged failure of Brookfield Multiplex to issue a valid payment schedule within the stipulated timeframe. The central legal issue before the court was whether Brookfield Multiplex's response to Façade Treatment Engineering's payment claim constituted a valid payment schedule as required by section 15 of the Act. Additionally, the court needed to determine if the Building and Construction Industry Security of Payment Act 2002 (Vic) was consistent with the Corporations Act 2001 (Cth), particularly considering the potential set-off defences available to Brookfield Multiplex against Façade Treatment Engineering, given that Façade Treatment Engineering was in liquidation.

The court held that the respondent's response did not constitute a valid payment schedule under section 15 of the Building and Construction Industry Security of Payment Act 2002 (Vic), primarily because it failed to comply with the statutory requirements of the Act. However, the court also noted that Façade Treatment Engineering's liquidation introduced complexities concerning the enforcement of judgment. The court examined section 109 of the Constitution, which addresses the inconsistency between State and Commonwealth laws, and concluded that the Corporations Act 2001 (Cth) prevailed over the Building and Construction Industry Security of Payment Act 2002 (Vic) due to its set-off provisions for insolvent companies. The court determined that the notice of insolvency precluded Brookfield Multiplex from exercising a set-off under section 553C(2) of the Corporations Act, effectively precluding Façade Treatment Engineering from obtaining judgment under section 16 of the Building and Construction Industry Security of Payment Act 2002 (Vic).

The court refrained from entering judgment for Façade Treatment Engineering, given the inconsistency with the Corporations Act 2001 (Cth) and the prevailing set-off provisions. Consequently, the court dismissed Façade Treatment Engineering's claim for judgment under section 16 of the Building and Construction Industry Security of Payment Act 2002 (Vic), highlighting the intricate interplay between State and Commonwealth legislation in insolvency proceedings.