Fernandes Constructions v Tahmoor Coal (t/as Centennial Coal) - [2007] NSWSC 381

CITATION: Fernandes Constructions v Tahmoor Coal (trading as Centennial Coal) [2007] NSWSC 381
This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S): 30 March 2007

JUDGMENT DATE :
27 April 2007

JURISDICTION: Technology & Construction List

JUDGMENT OF: McDougall J at [1]

DECISION: See para [42] of judgment

CATCHWORDS: CONSTRUCTION CONTRACT - Building and Construction Industry Security of Payment Act 1999 - payment claim - where tax invoice states that it "is prepared under" the Act - whether tax invoice complies with s 13(2)(c)

LEGISLATION CITED: A New Tax System (Good and Services) Act 1999
Building and Construction Industry Security of Payment Act 1999

CASES CITED: Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421
Brookhollow Pty Ltd v R & R Consultants Pty Ltd & Anor [2006] NSWSC 1
Jemzone Pty Ltd v Trytan Pty Limited (2002) 42 ACSR 42
Leighton Contractors Pty Ltd v Campbelltown Catholic Club Limited [2003] NSWSC 1103
Parist Holdings Pty Ltd v WT Partnership Australia Pty Ltd [2003] NSWSC 365
The Council of the Upper Hunter County District v Australian Chilling and Freezing Co Limited (1968) 118 CLR 429
Walter Construction Group Ltd v CPL (Surry Hills) Pty Ltd [2003] NSWSC 266

PARTIES: Fernandes Constructions Pty Ltd (Plaintiff)
Tahmoor Coal Pty Ltd (trading as Centennial Coal) (Defendant)

FILE NUMBER(S): SC 55004/07

COUNSEL: G E Underwood (Plaintiff)
G K J Rich (Defendant)

SOLICITORS: Vincent CCL Pty Ltd (Plaintiff)
Clayton Utz (Defendant)

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

McDOUGALL J

27 April 2007

COAL PTY LTD (TRADING AS CENTENNIAL COAL)

JUDGMENT

1 McDOUGALL J: The plaintiff (Fernandes) and the defendant (Centennial) entered into a construction contract whereby Fernandes undertook to carry out construction work for Centennial. It is common ground that the provisions of the Building and Construction Industry Security of Payment Act 1999 (the Act) applied to that contract.

2 On 4 December 2006, Fernandes sent Centennial a document described as “tax invoice 05”, claiming payment of $919,427.52 inclusive of GST. There was a schedule attached to that tax invoice identifying the construction work that was the subject of the claim. The invoice stated that it was “prepared under” the Act. Centennial did not provide a payment schedule. Fernandes seeks judgment for the amount of $782,025.72 being the amount claimed by tax invoice 05 less an amount of $137,401.80 already paid.

The issue

3 The only issue between the parties is whether tax invoice 05 is a “payment claim” that complies with the requirement of s 13(2)(c) of the Act: ie, whether tax invoice 05 is a payment claim that states that it is made under the Act.

4 If that issue is resolved in favour of Fernandes, it is entitled to judgment in the amount claimed together with interest and costs. If that issue is resolved in favour of Centennial, the proceedings must be dismissed with costs.

Relevant provisions of the Act

5 Section…

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: [2007] NSWSC 381
Decision Date: 27 April 2007

CaseChat Overview and Summary

The matter before the court involved a dispute between Fernandes Constructions and Tahmoor Coal (trading as Centennial Coal) over a payment claim submitted under the Building and Construction Industry Security of Payment Act 1999. Fernandes Constructions, a sub-contractor, had submitted a payment claim for monies owed under a contract for construction work. The primary issue before the court was whether the tax invoice provided by Fernandes Constructions complied with the statutory requirements outlined in section 13(2)(c) of the Act. Specifically, the court needed to determine whether the tax invoice sufficiently indicated that it was prepared under the Act, as required by the legislation.

The court examined the language of the tax invoice provided by Fernandes Constructions. The invoice stated that it "is prepared under" the Security of Payment Act, which the court interpreted as an attempt to comply with the statutory requirement. However, the court noted that the phrase "is prepared under" did not explicitly state that the invoice was "prepared in accordance with" the Act, which is the precise language required by section 13(2)(c). The court held that the minor difference in wording was significant and that the invoice did not strictly comply with the statutory requirement. As a result, the payment claim was not valid under the Act.

Having found that the payment claim did not comply with the statutory requirements, the court dismissed the claim. The court concluded that, because the tax invoice did not strictly adhere to the mandatory language specified in the Act, Fernandes Constructions' claim for payment was invalid. Consequently, the court ordered that Fernandes Constructions' claim be dismissed with costs.

Orders