Feature Point Constructions Pty Ltd v Sharetea Australia Pty Ltd
[2024] VCC 803
•5 June 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CI-24-00763
| Feature Point Constructions Pty Ltd (ACN 167 864 315) | Plaintiff |
| v | |
| Sharetea Australia Pty Ltd (ACN 160 436 911) | Defendant |
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JUDGE: | Her Honour Judge Kirton | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 15 March 2024 (on the papers) | |
DATE OF RULING: | 5 June 2024 | |
CASE MAY BE CITED AS: | Feature Point Constructions Pty Ltd v Sharetea Australia Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 803 | |
RULING
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Subject:CONTRACTS - Building and Construction Industry Security of Payment
Catchwords: Building contract – multiple contracts – payment claims under Building and Construction Industry Security of Payment Act 2002 (Vic) – no payment schedule – entitlement to unpaid amounts – reference dates – excluded amounts – compliance with Act
Legislation Cited: Building and Construction Industry Security of Payment Act 2002 (Vic)
Cases Cited:South City Plaster Ply Ltd v Modscape Pty Ltd [2018] VCC 1576; Yuanda Vic Pty v FAÇADE Designs International Pty Ltd [2020] VSCA 269; Leighton Contractors Pty Ltd v Campbelltown Catholic Club Ltd [2003] NSWSC 1103; Multiplex Constructions [2003] NSWSC 1140; Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106; Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd [2020] VSC 570; Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44; Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd [2015] VSC 500.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | A Rollnik of counsel | Elamine Lawyers |
| For the Defendant | Geoffrey Emmet (solicitor) | Greenoaks Construction Advisory c/ Piper Alderman Lawyers |
HER HONOUR:
Introduction
1In this proceeding, the plaintiff (“Feature Point”) applies for judgment against the defendant (“Sharetea”) pursuant to s16(2) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (“SOP Act”). Feature Point makes this application by summons on originating motion dated 7 February 2024. The application arises out of works that Feature Point completed for Sharetea in relation to fitouts for retail bubble tea stores.
2In opposing this claim, Sharetea relies on four grounds, namely:
(a) No valid reference date arises in relation to the Waurn Ponds, Caroline Springs and Blackburn sites;
(b) The Eastland and Caroline Springs payment claims include excluded amounts;
(c) The payment claims do not identify construction work for the purposes of section 14(2) of the SOP Act; and
(d) The payment claims were not validly served.
3In my view, Feature Point has been able to satisfy the preconditions to judgment under s16(2) of the SOP Act in relation to each of the four claims: the Waurn Ponds, Caroline Springs, Blackburn and Eastland sites. My reasons are set out below.
4Accordingly, there will be judgment for Feature Point in the sum of $139,226.91, plus interest. I will order that Sharetea pay Feature Point’s costs of and incidental to the proceeding on a standard basis, in default of agreement (unless either party has a basis for a different order as to costs). I invite the parties to prepare draft orders to give effect to these reasons, including a calculation of interest. I will determine any issue concerning costs on the papers.
Facts
5The relationship between Feature Point and Sharetea commenced in late 2022, when Alihsan Yucel, director of Feature Point, entered into discussion with Riva Putratama (then the Project Manager at Sharetea) about carrying out work for Sharetea at the Forrest Hill Shopping Centre.
6On 19 October 2022, Mr Putratama emailed Mr Yucel about the proposed works at Forrest Hill. The email detailed the stated date, and outlined payment terms for the project would be as follows:
· 30% initial deposit
· 30% for progress payment 1
· 30% for progress payment 2
· 10% retention until defects finished
7Feature Point agreed to the above approach.
8In early March 2023, Mr Yucel met with Steven Yeung of Sharetea at Forrest Hill Shopping Centre to discuss the prospect of Feature Point carrying out additional construction work for Sharetea, including fitout works. Mr Yeung then requested that Feature Point provide quotes for the fitout of retail shops at Blackburn, La Trobe University and Tarneit.
9On 21 March 2023, Mr Yucel emailed Mr Yeung four quotes for the proposed works at Blackburn, La Trobe University and Tarneit.
10Featurepoint started to carry out works at other sites owned and operated by Sharetea. Throughout 2023, Sharetea engaged Feature Point to undertake works on the following sites:
(i)Waurn Ponds
(ii)Tarneit
(iii)Blackburn
(iv)Footscray
(v)Delacombe
(vi)Armstrong Creek
(vii)Caroline Springs
(viii)Greenvale (which was then swapped out for Lilydale)
(ix)Leopold
11In addition to these projects, from time to time Sharetea requested that Feature Point undertake ad hoc tasks such as works at its site in Eastland.
12Throughout 2023, Sharetea paid invoices to Feature Point totalling $548,097.51.
13The parties did not enter into any formal written agreement for any of the works listed above. The usual process was that Feature Point would provide a quote, this quote would be approved by Shaeretea, and then Feature Point would issue payment claims correspondence with each stage of completion.
Eastland
14On or about 7 September 2023, Mr Yeung called Mr Yucel and requested Feature Point undertake some emergency works at Sharetea’s Eastland site. It was agreed that Feature Point would rectify the Eastland plumbing defects and Sharetea would pay the costs of the works.
15Feature Point says that they conducted the works over 7-8 September, and that it involved a blocked pipe, a blocked drainpipe and patching a cracked hose.
16Invoice 2081 issued by Feature Point on 25 September 2023 relates to the above Eastland emergency works.
17Sharetea does not accept that Feature Point completed the above works the subject of the invoice.
Waurn Ponds
18In May 2023, Mr Yeung asked Mr Yucel to provide a quote for Sharetea’s Waurn Ponds store.
19Mr Yeung sent plans to Mr Yucel on 26 May 2023 for review, and on 27 June 2023 Mr Yucel sent quote number Q9087 to Mr Yeung for the proposed works.
20The quote provided that payment would be made by way of a 30% deposit for stage 1, a 30% payment on joinery installation for stage 2, 30% payable for completion stage 3, and a 10% payment payable once it was confirmed by Sharetea and the landlord that all defects had been rectified, being stage 4.
21The works were carried out between 22 August 2023 and 6 October 2023.
22The parties dispute whether any defects were identified at the completion of the works, and therefore whether the final invoice is payable.
Caroline Springs
23In mid-2023, Anthony Mu of Sharetea engaged in discussion with Mr Yucel about Feature Point taking over as shop fitter for a site in Caroline Springs. The site had been partially completed by another contractor, AVA Group. The conversation between Mr Mu and Mr Yucel continued on 29 July 2023.
24Mr Mu says that during the 29 July 2023 conversation, Mr Yucel promised that he would charge $50,000 plus GST to finish the job and would not charge for labour.
25On 19 September 2023, Bec Allan of Feature Point sent an email to Mr Mu which stated that, among other things:
· Confirmation of AVA Group’s termination;
· Feature Point was to take over the build;
· Contact details of TDM/RDM to allow for necessary inductions;
· Confirmation as to how Permit would be reallocated;
· Arrangements for trade to inspect site for quoting;
· Noting that Mr Yucel is estimating a cost of $85k plus GST based on initial review;
· Concern over framing and plumbing of AVA works;
· Confirmation that they won’t be using AVA’s trades; and
· Confirmation of preparation for a 30% deposit.
26On 21 September 2023, Mr Yucel arranged for an email to be sent to Mr Yeung which was intended to breakdown the costing to take over and complete the Kiosk at Caroline Springs.
27The email placed the costs at $91,850.00, but included a note that Mr Yucel would be reducing his fee to only $10,000.00 and would be “effectively volunteering his time and labour”, as well as that a 30% deposit would be required before any works could commence.
28The email also confirmed that Feature Point would not be taking over any works while the site was still under AVA Group.
29Feature Point says that between 22 and 25 September 2023, Sharetea accepted Feature Point’s offer to carry out the works at Caroline Springs as quoted in their emails. Feature Point says that Sharetea accepted the quote by notifying the Building Surveyor of change of builder and requesting Feature Point to provide the Building Surveyor with information needed to complete the changeover on the ‘CDC’ (compliance development certificate, which Mr Yucel says is the equivalent of a building permit).
30Feature Point commenced carrying out works at Caroline Springs on 29 September 2023.
31On 29 September 2023, Feature Point sent Mr Mu an email detailing the following:
· The invoice for Caroline Springs had been sent;
· Funds for Blackburn site had been used to commence work on Caroline Springs but Feature Point was now out of money;
· If Payment of invoice wasn’t received works would stop; and
· A copy of invoice number 2082 which stated ‘Caroline Springs Stage 1 Works – 30%’.
32In late September 2023, Mr Mu says he had a telephone conversation with Mr Yucel in which Mr Mu expressed confusion over the invoice, stating that when they had previously spoken Mr Yucel had agreed to complete the works for $50,000 plus GST, no fee would be charged for labour and that there would be a single invoice which would be payable upon payment of incentive by Landlord. Mr Mu says that Mr Yucel said he would “get the invoice reversed”.
33Sharetea says that invoice 2082 was subsequently reversed as noted in an email from Feature Point sent on 2 November 2023.
34Mr Mu says that due to the pressure he was under to get the Caroline Springs store open, he frequently called Mr Yucel, and formed the impression that Mr Yucel resented the arrangement.
35On 26 October 2023, Feature Point issued invoice number 2093 to Sharetea with a covering email that described the invoice as the ‘Final Invoice’ and noted that Mr Yucel had “reduced his Labour from 120hours to 60hours and waived his Supervision Fees”.
36On 27 October 2023. Feature Point sent an email to Sharetea in which it attached invoice 2097 for an amount of $101,641.08 stating that this was a ‘final invoice’ which was being sent “in lieu of Caroline Springs” and noting that no work would be commencing at Leopold until the Caroline Springs invoice was paid.
37On 28 October 2023, Feature Point sent an email to Sharetea attaching invoice 2093, stating that payment was two days overdue, and that if payment was not made on 28 October 2023, the invoice would be adjusted to include builders labour and supervision hours, said to be “in the vicinity of $20k”.
38On 30 October 2023 Feature Point issued a further invoice for Caroline Springs for ‘labour and supervision’, stating that these services were “charged in full due to non-payment at completion”.
39On 31 October 2023, Feature Point sent an email to Sharetea which purported to outline outstanding invoices, invoices that have been issued, and invoices that will be cancelled.
40On 2 November 2023, Feature Point sent an email to Sharetea which contained “revised list of invoices” which included various cancellation which were required due to omitting “initial deposit invoice raised for Caroline Springs” which needed to be noted because it was agreed that the project would be paid in full on completion.
41Sharetea says that they have not yet received the incentive payment from the landlord.
Blackburn
42In March 2023, Mr Yeung asked Mr Yucel for a quote of the Blackburn site. On 21 March, Mr Yucel sent quote number 9053 detailing proposed works, what was described as the “commercial fitout”.
43Sharetea accepted the proposed works and cost set out in Q9053.
44On 30 June 2023, Bec Allan of Feature Point sent Sharetea an invoice for the works at Blackburn which listed payment terms as: 45% (stage 1), 45% (stage 2) and 10% (stage 3). Stage 1 payment was made by Sharetea on 10 July 2023.
45Due to works simultaneously being carried out at Caroline Springs, Feature Point developed cash flow issues, and so the parties agreed that a 30% (stage 2) payment would be made. At this time, works at the Blackburn site had been completed to 75%. Feature Point issued invoice 2089 for the 30% stage 2 payment and payment was made 20 October 2023.
46100% of the works were completed pending inspection on 31 October, and as a result on 31 October, Feature Point issued invoice 2100 for stage 3, being 15%. This left 10% of the cost to be paid after satisfaction of any shopping centre identified defects. Feature Point says that works were last carried out at the Blackburn site on 10 November 2023.
47Mr Mu says that at the time of payment claim 2100, Mr Yucel refused to hand over certificate for the site meaning it could not trade.
Multiple contracts issue
48It is not in dispute that there was no formal written construction contract for any of the works undertaken by Feature Point for Sharetea. What is in dispute is whether the various works were the subject of one overarching construction contract, or were subject to individual contracts.
Sharetea’s submissions
49Sharetea says that there are multiple contracts, one for each work site.
50Sharetea says that Feature Point’s contention that there was one overarching construction contract is not a reflection of the conduct between the parties, specifically:
(a) Separate requests and separate quotes were provided for each of the various sites.
(b) Separate invoices were issued for each of the sites for progress payments or other works.
(c) The terms governing the works at the various sites, including payment terms, were not always the same.
(d) Not all of the various sites were ready for quotation or work at the same time the plaintiff alleged the single construction agreement came into effect.
51Sharetea says that given that the works at the various sites did not occur simultaneously, and given that the parties agreed that different worksites attracted different milestones for payment, it would be difficult to determine which progress payment would need to be made by reference to which reference date. For this reason, Sharetea says that the single contract argument does not give business efficacy to the arrangement.
52Sharetea also points out that it is inconsistent for Feature Point to rely on section 9(2)(b) of the SOP Act to impose reference dates for the single contract, but on other occasions maintain that there was an agreement as to a nominated reference date between the parties.
Feature Point’s submissions
53Feature Point says that there was one overarching contract which bound together all of the works conducted at the various sites. Feature Point says that the standard terms for the contract that underpinned all of their works for Sharetea emerged out of discussion between the two parties around 30 September 2022.
54Feature Point says that the usual standard terms were as follows:
· Stage one 30% deposit
· Stage two 30% when 60% of the works were completed
· Stage three 30% when works were completed
· Stage four 10% was paid when the relevant shopping centre confirmed that there was no defect.
55Feature Point says that although these were the standard terms, the parties deviated from these terms from time to time through oral and written agreements.
56Feature Point ultimately submits that it is not necessary for the Court to determine whether or not there was one contract or multiple contracts, as reference dates arise regardless as to whether there is deemed to be one or multiple contracts.
Analysis
57In the absence of any written agreement, in my view there are separate contracts for each of the projects in question. In reaching this conclusion, I have been most persuaded by the fact that there were no uniform terms across all of contracts.
58Some of the contracts prescribed different percentages to be paid at different stages, and some of the contracts prescribed differing number of payment stages. Important differences between the contracts can be identified as follows:
(a) The Waurn Pond contracts provided for 30% to be payable after stages 1-3 and 10% payable on stage 4 (“sign off”), whereas the Blackburn contract provided for 45% for stage 1 and 2, and 10% for stage 3.
(b) The Caroline Springs payment claim was for 100% of the works payable on completion, and was not paid in stages .
(c) The Caroline Spring payment claim included a provision that Mr Yucel would not charge for his labour, and a provision that payment would only be made upon receipt of the landlord incentive.
(d) The Eastland claim relates to once of payment for a callout fee, and not a staged payment contract.
Further, the history set out above shows that for each site there were separate quotations and offers made orally, and differing forms of response accepting the offers. Each of those offers and acceptances exhibit all the features of an individual contract. As his Honour Judge Macnamara said in South City Plaster Ply Ltd v Modscape Pty Ltd: [1] “I see no reason why they should not be treated as such.”
[1] South City Plaster Ply Ltd v Modscape Pty Ltd [2018] VCC 1576 at [91].
In any event, I agree with Feature Point's submission that ultimately, it makes little difference if there were one or multiple contracts. Reference dates arise regardless as to whether there is deemed to be one or multiple contracts.
Reference dates
Waurn pond
Sharetea’s submissions
61There is no dispute that the parties agreed that payment of the final 10% of the contract price would be due “on sign off”, in accordance with the terms of Q9087. The issue is the meaning of that phrase.
62Sharetea says that ”sign off” means when “both the plaintiff and the landlord of the premises [confirmed] that there were no defects.”[2]
[2] Defendant’s submissions dated 14 March 2024 at [16].
63Sharetea says that the landlord did not confirm that there were no defects until 1 November 2023, however the Waurn Ponds Payment Claim was issued on 4 October 2023. Therefore, it was issued before the reference date and is invalid.
64Further, Sharetea says that on its evidence, defects were still present on the site as at 15 November 2023.
65Sharetea also says that between 19 September 2023 and 18 October 2023 there were at least four other invoices issued in addition to the Waurn Pond Claim, and therefore the Waurn Pond payment claim is invalid.
Feature Point’s submissions
66In light of my determination that there were separate contracts for each project, Feature Point’s submission is that a reference date for Waurn Ponds arose on 27 October 2023.
67Feature Point says that this is because on 27 October 2023, Sharetea attended the premises and “agreed there were no defects”[3]. Feature Point says that this amounts to a “sign off”, this being the date on which a reference date would arise.
[3] Affidavit of Alihsan Yucel sworn 6 February 2024, at [53].
68Feature Point says that Mr Yucel’s evidence of Sharetea’s attendance on site on 27 October 2023 is not contested by Mr Mu, and accordingly a reference date arose on 27 October 2023.
69Feature Point notes that in exercising its rights it sent a payment claim on 27 October 2023 (albeit dated 4 October 2023). Feature Point says that the fact that that this payment claim was previously served on 4 October 2023 makes no difference.
Analysis
70In my view, the meaning of “sign off” is the date when Sharetea accepted there were no defects. I do not accept Sharetea’s submission that “sign off” occurred once the relevant shopping centre confirmed that there were no defects.
71The quotation itself does not make any reference to the landlord accepting the works. Instead it states that “I/we [being Sharetea] acknowledge and agree to your payment terms … 10% sign off”. [4] This appears to be a standard term of the quotation and there is no evidence that the parties ever discussed the meaning of the phrase.
[4] Affidavit of Alihsan Yucel sworn 6 February 2024, page 147.
72Further, contrary to Sharetea’s submission, there is no evidence that Feature Point agreed the need for the landlord to sign off. Mr Yucel’s evidence merely stated that the landlord had accepted there were no defects by 1 November 2023.
73For those reasons, I find that the reference date for the final 10% payment arose on 27 October 2023. This was the date that Sharetea agreed there were no defects.
Caroline Springs
Sharetea’s submissions
74Sharetea says that for Caroline Springs a reference date would only arise after an incentive payment was received by the Landlord.
75Sharetea says that given that no incentive payment has been received, no reference date has occurred and the Caroline Springs Claim has not been validly issued.
Feature Point’s submissions
76Feature Point says that the parties did not agree on a date for payment claims to be issued for Caroline Springs.
77Feature Point says that the parties were in agreements as to what works needed to be carried out at Caroline Springs, pointing towards an email from Mr Mu on 25 September 2023 for information on “amending building permit”, which Feature Point says was for the purpose of arranging for their taking over of AVA group. Feature Point insists that this email runs contrary to Mr Mu’s assertion in his affidavit that the email does not constitute acceptance, and only amounts to Mr Yuen negotiating logistics.
78Feature Point says that this email should carry more weight as proof of the nature of the agreement than the conversation outlined in Mr Mu’s affidavit, where Mr Mu recounted that Mr Yucel has promised to conduct the works for $50,000.00 and no charge for his own labour. Feature Point says that in placing more weight on the email than the conversation, the Court should conclude that no reference date arose pursuant to the ‘pay-when-paid’ provision, and that a ‘pay-when-paid' provision is also invalid under section 13 of the SOP Act.
Analysis
79Arguments relating to whether or not the Caroline Springs contract included a discount for labour will not be considered here. These are not relevant for the purposes of determining a reference date, and will be considered in relation to excluded amounts.
80With regards to whether the failure to receive a landlord incentive proves that no reference date occurs, in my view, regardless as to whether the contract did include a term which provided for the receipt of a landlord incentive to precede payment, such a term would amount to a ‘pay-when-paid’ provision which is prohibited under section 13(2)(c) of the SOP Act.
81For this reason I am of the view that a reference date did arise from the date upon which works were completed, being 24 October 2023.
Eastland
82Submissions were not made in relation to the reference date for the Eastland works.
Blackburn
83Only Sharetea made submissions in relation to the Blackburn site’s reference date. Sharetea says that because there were at least two other invoices for Blackburn between the period 18 October 2023 and 16 November 2023, the reference date relied on in the Blackburn payment Claim has already been used up and therefore is invalid.
Analysis
84No documentary evidence has been provided to support Sharetea’s allegation that two other invoices were provided by Feature Point for stage 3 of the Blackburn works between the period 18 October 2023 and 16 November 2023.
85I see no reason to deny Feature Point a reference date in relation to the works completed as of 31 October 2023. This payment claim relates to 15% of the amount owing for the works as a result of the smaller 30% payment made instead of the full 45% for stage 2. This payment claim does not relate to the final 10% of the money owing pending satisfaction of any shopping centre identified defects.
Excluded amounts
Eastland
Sharetea’s submissions
86Sharetea says that the Eastland Claim included excluded amounts because Feature Point did not undertake any works, and there was no agreement that if Feature Point didn’t undertake works that they could charge for a call out fee. Sharetea says that any such terms was unilaterally imposed by Mr Yucel on behalf of Feature Point in his email of 8 September 2023.
87Sharetea says that the invoice represent amounts that are excluded amounts because they arise out of a variation that is not claimable because it was not agreed and was not for construction works actually performed.
Feature Point’s submissions
88Feature Point says that they sent out the ‘other’ plumber and not Sharetea, and for this reason the works do not constitute a variation and ought not to be treated as an excluded amount.
Analysis
89The only documentary evidence of an agreement between Sharetea and Feature Point that Feature Point would charge a call-out fee is contained in the email sent from Mr Yucel to Mr Yeung and Mr Mu on 8 September 2023. That email states that an invoice will be provided to Sharetea for a “minimum charge”, and that this was discussed on the phone with Mr Mu and Mr Yeung.
90Given that it is common practice for trade to charge callout fees when attending site and making an assessment on damage, and given that Sharetea continued to contract with Feature Point for further works after this email, I am satisfied that a conversation between the parties did occur in relation to the minimum charge callout fee, and therefore this charge does not amount to an excluded amount.
Caroline Springs
Sharetea’s submissions
91Sharetea says that there was an agreement between Feature Point and Sharetea that Feature Point would not charge for its labour with respect to Caroline Springs works.
92Sharetea notes that despite this alleged agreement, the Caroline Springs Claim included labour charged and a further invoice for additional labour charges.
93Sharetea says that the inclusion of labour costs amounts to an excluded amounts for the following reasons:
(a) The labour costs is a variation that is not claimable because it was not agreed for the purposes of section 10A(2) of the SOP Act; or
(b) The Labour costs do not amount to additional work undertaken beyond that which was contemplated by the initial scope of the works and therefore not a variation but an amount of compensation or damages that Mr Yucel felt entitled to after becoming frustrated with the project.
94Sharetea sights the case of Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd[5] (Yuanda), and says that it is authority for the proposition that the onus is on the plaintiff to establish an absence of excluded amounts. Sharetea says accordingly it must be considered whether “on the facts of the payment claim” the Plaintiff has established the absence of excluded amounts.
[5] Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44. (Yuanda)
Feature point’s submissions
95Feature Point reiterates its submissions made earlier that Mr Yucel’s evidence which is based on contemporaneous written communications should be preferred to Mr Mu’s interpretation. On this basis, no issue of excluded amounts arises because no variation occurred. Feature Point also says that at the time of the alleged labour discount, Feature Point was already experiencing difficulty receiving payment from Sharetea, and therefore, it was not in their interest to offer a discount for labour, and this allegation should not be accepted.
96Feature point says that Sharetea’s references to “further invoice” for “additional labour charges” are not relevant to this claim.
97Feature Point does not agree with Sharetea’s interpretation of Yuanda, and does not accept that this case is authority for the position that the plaintiff bears the onus under s 16 of the SOP Act.
Analysis
98Regardless as to whether there was a conversation between Mr Yucel and Mr Mu in which Mr Yucel agreed to “help out” Mr Mu of Sharetea and waive his labour costs and only charge $50,000.00 for the works, I am of the opinion that any such verbal agreement was superseded by the 21 September 2023 email Feature Point sent to Sharetea that included $10,000.00 for a builders fee and a total costing of $91,850.00.
99I am persuaded that the emails sent from Sharetea to Feature Point in the period following this email, being between 22 and 25 September 2023 amount to an acceptance of these revised terms. These emails involve attempts to amend the building permit so that Feature Point could take over, and given that at this point Sharetea was live to the revised quote, I accept that this conduct in transferring the permit amounts to acceptance.
100I am not persuaded that in late September 2023, a conversation occurred between Mr Mu and Mr Yucel in which Mr Yucel agreed to reverse invoice 2082 for the purposes of reducing the overall fee to $50,000.00 and taking out any labour costs. Mr Mu’s evidence is that the reversing of this invoice was evinced by the email sent from Feature Point on 2 November 2023. The email sent from Feature Point on 2 November 2023 is not a reversal of the of invoice 2082 for the purposes of matching any original verbal agreement to charge $50,000.00, it simply refers to invoices 2093 and 2099, being the payment claims submitted on 26 October and 30 October 2023. The reversal referred to in the 2 November 2023 email relates to the fact that it was agreed that the Caroline Springs works would be paid for in full upon completion, and therefore a 30% stage 1 claim requested in invoice 2082 was invalidated, and also the fact that Feature Point as now charging additional fees for labour.
101Indeed, this 2 November 2023 email was sent at a time in which relations between parties had deteriorated and Mr Yucel was now claiming for additional labour costs that had not been agreed to in the 21 September 2023 email, and so cannot be taken as a concession to only charge $50,000.00.
102Given my above findings, I am of the view that the payment claim for Caroline Springs sent form Feature Point to Sharetea on 26 October 2023 does not include any excluded amounts despite including some labour. It was agreed in the 21 September 2023 email that Mr Yucel would charge some amount for labour, and the reduction in labour to 60 hours from over 120 hours appears to reflect this initial agreement .
103As I have determined that the 26 October 2023 payment claim did not include excluded amounts, consideration as to whether Yuanda requires a plaintiff to bear an onus to establish the absence of excluded amounts is not relevant.
Non-compliance with section 14(2) of the SOP Act
Sharetea’s submissions
104Sharetea says that none of the payment claims specifically identify the construction work.
105Sharetea says that this is particularly the case with regards to the Caroline Springs payment claim, which it says does not identify the scope of works. Sharetea says that the quotation referred to in paragraph 69 of Mr Yucel’s affidavit does not accurately break down works and includes arbitrary amounts and description such as ‘misc’.
106Sharetea also says that the above quote provided by Feature Point was not accepted and was superseded by a further agreement which included an agreement not to charge for labour costs.
Feature Point’s submissions
107Feature Point rejects Sharetea’s submissions that its payment claims do not identify construction work, arguing that as per Leighton Contractors Pty Ltd v Campbelltown Catholic Club Ltd[6] the requirement of identification under s 14 of the SOP Act is not overly demanding, and that as per Multiplex Constructions[7] the requirements of a payment claim “should not be approached in an unduly technical manner”.
[6] Leighton Contractors Pty Ltd v Campbelltown Catholic Club Ltd [2003] NSWSC 1103 at [54].
[7] Multiplex Constructions [2003] NSWSC 1140 at [76].
108Along with its submissions emphasising that an analysis need not be overly technical, Feature Point draws upon the statements of Vickery J in Gantley Pty Ltd v Phoenix International Group Pty Ltd[8], and in particular, the view that when assessing the identification of work “it is appropriate to take into account the background knowledge of the parties derived from their past dealings and exchanges of information”.
[8] Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106 at [51].
109Feature Point says that taking into account parties’ past dealings and exchanges of information, the description of work provided is sufficient. It points to the various invoices, quotes and payment claims provided in Mr Yucel’s affidavit as proof of the adequacy of identification.
Analysis
110I agree with Feature Point’s analysis of the above authorities. I accept that a valid payment claim need not be overly technical and precise, and can take into account shared knowledge derived from “past dealings and exchanges of information”.
111I have also had regard to the decisions of Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd[9] (Façade), and on appeal Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd[10] (Yuanda). In order to assess whether a payment claim contains excluded amounts, the Court may only examine “the face of the payment claim”, which comprises the claim itself, any supporting documents, and any references to those documents. [11]
[9] Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd [2020] VSC 570. (Façade)
[10] Yuanda .
[11] Yuanda at [44], [120].
112The “supporting documents” of a payment claim will include documentation expressly or impliedly referred to on the face of the payment claim, or prepared in the lead up to the claim. The test is whether a reasonable building practitioner in the position of the recipient would have understood the payment claim to refer to such supporting documentation. [12]
[12] Façade at [41]-[42].
113In relation to the Blackburn and Waurn Ponds payment claims Mr Yucel’s evidence is that both payment claims relate to staged progress payments which were referred to in the original quotation. Critically, these quotes included specific descriptions of works to be undertaken in the course of completing the overall fitout.
114In accordance with Yuanda and Façade, I am able to take these quotations into account when considering the adequacy of the description of the work. I am satisfied that the quotes amount to a sufficient “exchange of information” such that it should be clear that the staged payment claim related to the completion of these specific works.
115In relation to the Caroline Springs site, I do not agree with Sharetea’s contention that simply because the quote included a reference to ‘misc’ works, it is impossible to determine what works were undertaken. It is not uncommon for construction contracts to allow for a degree of unforeseen miscellaneous works, and the rest of the works are identified with sufficient clarity. Further, the 26 October 2023 payment claim listed clearly itemised description of works and the amount that these works cost to be completed.
116The Eastland payment claim clearly set out that the amount charged was made with regards to a service call.
117Accordingly this ground of defence relied on by Sharetea fails.
Failure to serve properly
Sharetea’s submissions
118Sharetea says that because no written contract exists, Feature Point was obliged to serve a payment claim consistent with section 50 of the SOP Act. Sharetea says that because each payment claim was sent by email, this does not comply with the section 50 of the SOP Act requirements.
Feature Point’s submissions
119Feature Point says that service by email is effective because section 50 of the SOP provides mechanisms of service which “may” be effective, and therefore is facilitative rather than exclusive.
120To support this view Feature Point relies upon Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd[13], in which Vickery J held that section 50 is a facilitative provision and does not prescribe a mandatory regime for service. Vickery J stated “it does not exclude emailing as a means of service, either expressly or by implication”.
[13] Amasya Enterprises Pty Ltd v Asta Developments (Aust) Pty Ltd [2015] VSC 500 at [116].
Analysis
121I agree with Feature Point’s analysis of the authorities as they explain section 50 of the SOP Act, and therefore accept that section 50 is facilitative and does not preclude service by email. The defendant does not dispute that it received the claims by email. For these reasons, this complaint made by the defendant fails.
Additional requirements under the SOP Act
122I am satisfied that all of the payment claims related to construction work for the purposes of section 5 of the SOP act, and that each payment claim relevantly states that the claim was made pursuant to the SOP Act. No payment schedule was served by Sharetea in response to the payment claims.
123The above is not disputed by Sharetea.
Conclusion
124For the foregoing reasons, there is judgment for Feature Point in the sum of $139,226.91, with interest and costs to be addressed in accordance with paragraph 4.
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Certificate
I certify that these 24 pages are a true copy of the ruling of her Honour Judge Kirton delivered on 5 June 2024.
Dated: 5 June 2024
Tracey Huang
Associate to her Honour Judge Kirton
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