Geotech Pty Ltd v Premier Developments Pty Ltd
[2017] VCC 874
•30 June 2017
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Suitable for Publication |
Case No. CI-17-01666
| GEOTECH PTY LTD (ABN 94 114 515) | Plaintiff |
| v | |
| PREMIER DEVELOPMENTS PTY LTD (ACN 007 081 236) | Defendant |
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JUDGE: | Judicial Registrar Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22 June 2017 | |
DATE OF JUDGMENT: | 30 June 2017 | |
CASE MAY BE CITED AS: | Geotech Pty Ltd v Premier Developments Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2017] VCC 874 | |
REASONS FOR JUDGMENT
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Subject: Application to set aside default judgment.
Catchwords: Whether default judgment irregularly entered – Service by post – Express post system – Delivered in the ordinary course of post – Snapping on judgment – Requirements for valid payment claim – Whether the construction work has been sufficiently identified – Whether inclusion of excluded amounts – Whether issue of final claim able to be served.
Legislation Cited: Building and Construction Industry Security Payment Act 2002 (Vic), Interpretation of Legislation Act 1984 (Vic), County Court Civil Procedure Rules 2008 (Vic), Evidence Act 2008 (Vic), Corporations Act 2001 (Cth), Civil Procedure Act 2010 (Vic).
Cases Cited:RT Co Pty Ltd v Minister for the Interior (1957) 98 CLR 168, Cash v Wells (1830) 1 B & Ad 375; 109 ER 826, Cash v Wells (1830) 1 B & Ad 375; 109 ER 826, Hall v Scotson (1853) 23 LJ Ex 85, Anlaby v Praetorius (1888) 20 QBD 764, ANZ Banking Group Ltd v Kostovski (VSC, Chernov J, No 5511/97, 2 July 1997, unreported, BC9703266), Kostokanellis v Allen [1974] VR 596, Lubura v Nezirevi [2013] VSCA 215, Day v RAC Motoring Services Ltd [1999] All ER 1, Scope Data Systems Pty Ltd v David Goman as Representative of the Partnership BDO Nelson Parkhill [2007] NSWSC 278, , Re Futre Developments Pty Ltd [2014] NSWSC 1712, Deputy Commissioner of Taxation v Manta’s on the Beach Pty Ltd [2012] FCA 417, Miles v Sydney Meatpreserving Co (Ltd) [1912] 16 CLR 50, Cockburn v Brotchie [1890] VLR 6, Bushby v Mackenzie (1919) NSWLR 104, Pope v Aberdeen Transport Co Pty Ltd [1965] NSWR 1550, Australian Musical Distributors Pty Ltd v Whebell [1969] Qd R 86, St George Bank Ltd v O’Reilly BC9900881 (17 March 1999), French v Triple M Melbourne Pty Ltd [2006] VSC 36, Gavin Boyle Constructions Pty Ltd v Fabrok Pty Ltd [2011] QDC 214, Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor [2009] VSC 156, Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140, Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106, Seabay Properties Pty Ltd v Galvin Constructions Pty Ltd [2011] VSC 183, Jotham Property Holdings Pty Ltd v Cooperative Builders Pty Ltd & Ors [2013] VSC 552, Hawkins Constructions (Aust) Pty Ltd v Mac’s Industrial Pipework Pty Ltd [2002] NSWCA 136, Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248.
Judgment: Geotech Pty Ltd v Premier Developments Pty Ltd [2017] VCC 874.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R. Andrew of Counsel | Champions Lawyers |
| For the Defendant | Mr A. Ritchie of Counsel | Ellinghaus Weill |
JUDICIAL REGISTRAR:
Introduction
By summons dated 7 June 2017, the defendant seeks orders that the default judgment entered by the plaintiff on 3 May 2017 be set aside. The application was supported by the affidavits of Marinos Angelodemou and Effi Blias sworn on 7 June 2017. The plaintiff relied on the affidavit of Richard Bohan sworn on 22 June 2017 and the affidavit of Traycie Louise Walker sworn on 2 May 2017.
Procedural History
By Writ and Statement of Claim filed on 20 April 2017, the plaintiff alleged that the parties had an agreement whereby the plaintiff would perform construction work within the meaning of the Building and Construction Industry Security Payment Act 2002 (Vic) (“the Act”) in connection with a property at 416 Smith Street, Collingwood.
On or about 24 March 2017, the plaintiff served the defendant with a payment claim for the sum of $215,457.90.
It is common ground between the parties that the defendant did not serve a payment schedule on the plaintiff within ten working days of service of the payment claim, or at all.
The plaintiff contended that, as a consequence, the defendant became liable to the plaintiff for the claimed amount pursuant to section 15(4) of the Act.
By affidavit of service of Traycie Louise Walker sworn on 2 May 2017, she deposed that:
a.at 5:05pm on 20 April 2017, she placed a sealed copy of the Writ and Statement of Claim into a prepaid express post envelope and placed that envelope into an express post mailbox in Douglas Parade, Williamstown addressed to the defendant at its registered office at 33-37 Hotham Street, Collingwood; and
b.on 2 May 2017, she spoke with Brent Row, of Australia Post, who told her that the location notation of the report obtained from Australia Post stating “1:24pm on Friday, 21 April 2017” was to the premises of Australia Post in North Melbourne from which the envelope was delivered, not the delivery location.
On Tuesday, 2 May 2017, the plaintiff attempted to e-file a judgment in default of appearance, received at 4:00pm. The default judgment was rejected for the following reasons:
1Interest calculations not set out on face of judgment; and
2 Interest calculations differ within judgment. This needs to be rectified. This will affect the overall total and also require date entered to be amended.
On Wednesday, 3 May 2017 at 10:52am, the plaintiff filed a judgment in default of appearance and Deputy Registrar Malone ordered that the defendant pay the plaintiff $215,457.90 being the claim outstanding, $826.41 being interest and $2,880 being costs for a total of $219,164.31.
At 11:25am (some 33 minutes later), the defendant’s solicitors filed a notice of appearance.
Was the default judgment irregularly entered?
Pursuant to rule 8.04(a) of the County Court Civil Procedure Rules 2008 (Vic), where the originating process is served within Victoria, the defendant must file a notice of appearance not less than 10 days after service.
There is a dispute between the parties as to when the 10 day period expired. The plaintiff’s position was that the Writ and Statement of Claim was served by express post on Friday, 21 April 2017 and, as such, the defendant was required to file an appearance by 1 May 2017. The default judgment was ultimately dated 3 May 2017.
The defendant claimed that the default judgment was entered prematurely and that any presumption of due service under section 49 of the Interpretation of Legislation Act 1984 (Vic) is displaced by the affidavit of Effie Blias in which she deposes that, as part of her routine, she would retrieve mail from the defendant’s post box between 2pm-4pm every day. When she retrieved the mail on Friday, 21 April 2017, there was no Writ or Statement of Claim in the post box. It was on Monday, 24 April 2017, at approximately 3pm, that she went to the post box and retrieved the Writ. On the defendant’s calculation, the appearance was due on 4 May 2017.
Pursuant to rule 21.07 of the County Court Civil Procedure Rules 2008 (Vic), a defendant may apply to set aside a default judgment.
It was common ground between the parties that I21.07.25 of Williams sets out the legal principles in respect of irregular judgments, being:
a.an irregular judgment ought not to be on the records of the court: RT Co Pty Ltd v Minister for the Interior (1957) 98 CLR 168 at 170;
b.if a judgment in default is irregular, it will be set aside ex debito justitiae: Cash v Wells (1830) 1 B & Ad 375; 109 ER 826; irrespective of whether the defendant has a defence on the merits: Hall v Scotson (1853) 23 LJ Ex 85; and
c.a judgment entered before the time the plaintiff is entitled to enter it will be set aside: Anlaby v Praetorius (1888) 20 QBD 764.
Not every irregularity in the means by which a judgment in default is obtained will entitle the defendant to have the judgment set aside as of right. The court may disregard the irregularity if the situation warrants it: ANZ Banking Group Ltd v Kostovski (VSC, Chernov J, No 5511/97, 2 July 1997, unreported, BC9703266).
Where it is a regular judgment, the application must show grounds as to why the court’s discretion should be exercised in the defendant’s favour: see Kostokanellis v Allen [1974] VR 596 at 603 at 5.
In the decision of the Court of Appeal in Lubura v Nezirevi [2013] VSCA 215 at [3] Warren CJ described the test for setting aside a default judgment as follows:
“The test for setting aside a default judgment is set out in Kostakanellis v Allen where the Full Court held that a court should assess:
·Whether there is a defence on the merits;
·The reasons for the default;
·Whether the application to set aside the judgement was made promptly after the judgment came to the knowledge of the first defendant; and
·Whether, if the judgment is set aside, a suitable award of costs and the giving of security would be adequate to cover the prejudice to the plaintiff in having the judgment set aside.
This test is not all that different from the test for summary judgment (citations omitted)”.
Warren CJ also highlighted certain comments from Lord Wright in Evans v Bartlam to the effect that, at [4]:
“The primary consideration is whether (the defendant) has merits to which the court should pay heed; if merits are shown the court will not prima facie desire to let a judgment pass on which there has been no proper adjudication”.
This test is not significantly different from the test for summary judgment under section 63 of the Civil Procedure Act 2010 (Vic), whether there is “real prospect of success”. A defendant is not required to show that its defence is bound to succeed. A prima facie defence is sufficient. In Day v RAC Motoring Services Ltd [1999] All ER 1, the Court of Appeal stated the test to be whether the defendant had raised an arguable defence which carried some degree of conviction.
Where a judgment has been entered prematurely under rule 21.01, that is, before the time limited for an appearance, the Court may set aside the default judgment as being irregular.
Service by post
Section 49 of the Interpretation of Legislation Act 1984 (Vic) relevantly provides that where a document is served by post, unless the contrary is proved, the service shall be deemed to be effected at the time at which the letter would be delivered in the ordinary course of post.
Section 160 of the Evidence Act 2008 (Vic) presumes (unless evidence sufficient to raise doubt about the presumption is adduced) that a postal article sent by prepaid post addressed to a person at a specified address is received at that address on the fourth working day after having been posted. In this case, Wednesday, 26 April 2017. To dispute timing, the parties must show evidence of delivery at a particular time such as to make the presumption of timing redundant.
In Scope Data Systems Pty Ltd v David Goman as Representative of the Partnership BDO Nelson Parkhill [2007] NSWSC 278 Justice White found at [38]:
“… If the evidence establishes the time at which the article is delivered to the postal address, then that is the time at which service is taken to be effected. If the evidence does not establish the time at which delivery was effected, then, unless the contrary is proved, delivery is deemed to have been effected in the ordinary course of post. What that is is a question of fact to be proved by evidence. In the absence of evidence on the topic, and in the absence of any presumption, there will be no proof that the article was delivered at a particular time. If it is established that the article was not delivered in the ordinary course of post, but the evidence does not establish when it was delivered, then again there will be no evidence as to the time of delivery. In either case, s 160 of the Commonwealth Evidence Act (applicable to federal courts), or s 160 of the New South Wales Evidence Act (applicable to New South Wales courts), affords a presumption as to when the article is to be taken to have been delivered. The presumption may assist in proving when delivery was made in the ordinary course of post. If the evidence shows that the article was not delivered in the ordinary course of post, the presumption may assist in proof of when the document was delivered” [Emphasis added].
Counsel for the plaintiff sought to differentiate the present case from the standard of “ordinary course of post” because of the use of the express post system. However, Re Futre Developments Pty Ltd [2014] NSWSC 1712 per Justice Robb relied on the equivalent provisions of s 49 of the Interpretation of Legislation Act and s 160 of the Evidence Act 2008 (Vic) in the context of express post. All that express post provides is a system that may assist in establishing when an item is delivered, particularly in circumstances where a corporate asserts non-delivery of the postal article. At [62], Justice Robb said:
“If s 160 is displaced, then delivery will be deemed to have occurred when delivery would have happened in the ordinary course of post, unless the contrary is proved. If s 160 applies, then unless evidence sufficient to raise doubt about the presumption is adduced, it will be presumed that the postal article was received at the address on the fourth working day after having been posted”.
In my view, it would be prudent for practitioners to wait out the 4 working day period even in the circumstances of using express post in order to avoid disputes about the expiration of a period prescribed by the rules. This, coupled with applying for default judgment hastily, and prior to the expiry of the statutory deemed service, only increases the risk that a defendant will be likely to seek to set aside the judgment and delay resolution of the dispute.
The express post system involves Australia Post providing a tracking number for the delivery and the evidence given on behalf of the defendant in Re Futre was that a tracking receipt showed that the covering letter for the statutory demand was delivered by Australia Post at 11:22 AM on Wednesday, 17 September 2014.
The present case before me is different because the Australia Post location report for 1:24pm on Friday 21 April 2017 only shows delivery at the North Melbourne Australia Post depot and not delivery to the defendant’s Collingwood registered office. Establishing delivery at North Melbourne does not establish service of the Writ in Collingwood. Even if I accept the plaintiff’s contention that, from the North Melbourne depot, delivery was effected on the defendant on 21 April 2017, the tracking receipt does not say when it was delivered at the Collingwood address (the ultimate delivery location). The report before me does not record the delivery or the time of the delivery at the recipient’s registered office. There are further concerns arising from the Australia Post Terms and Conditions in respect of Express Post at item 39, which states that there shall not be guaranteed delivery with the specified times published by Australia Post.
There is insufficient evidence before me on behalf of the plaintiff to show that, on a balance of probabilities, the Writ was served prior to 4:00pm on Friday, 21 April 2017. Rule 3.05 states that, in calculating time, any document served after 4:00pm is taken to have been served on the next day the office of the Court is open, that is, Monday, 24 April 2017, when the defendant contends it was served.
The cases on service indicate that, where there is a dispute as to delivery, there is a practical difficulty in defeating such an allegation without actual evidence of delivery. The best evidence of delivery is by hand to the registered office. In Deputy Commissioner of Taxation v Manta’s on the Beach Pty Ltd [2012] FCA 417, Justice Logan did not set a high bar for a Court to infer that a document had not been delivered from evidence that it was not received. Non-delivery may be inferred where there is evidence from the defendant of how mail is received and the usual practice in relation to collection and handing of mail (consistent with Ms Blias’ evidence in the present case).
In light of the above matters, I conclude that the plaintiff’s evidence does not establish the time at which the Writ was delivered by Australia Post at the defendant’s address. Therefore, Friday, 21 April 2017 cannot be the time at which service is taken to be effected. If the evidence does not establish the time at which delivery was effected, then, unless the contrary is proven, the delivery is deemed to have been effected on the fourth working day after having been posted. In the circumstances of this case, the earliest that the defendant could be taken to be served was Monday, 24 April 2017, or the latest by Wednesday, 26 April 2017.
Given the voluminous litigation surrounding service of documents, for example, under section 109X Corporations Act 2001 (Cth) and setting aside statutory demands, I endorse the observations in Kearny J found in Hogg v Isherwood-Kicks (1992) 108 FLR 263 that the practice of “snapping on a judgment” without notice immediately upon the expiration of a period prescribed by the rules should be strongly discouraged. Justice Kearney noted that “It serves no real purpose. It increases the costs of litigation unnecessarily”.
The default judgment regime exists as a vehicle for the production of judgments in which a defendant is not participating in the litigation. In the present case, the plaintiff sought to enter default judgment, on its calculation of time, at the earliest possible date, and without notice to the defendant. Minutes after the default judgment was entered, the defendant’s legal representatives filed a notice of appearance, on its calculation, one day prior to the expiry date. I note in Miles v Sydney Meatpreserving Co (Ltd) [1912] 16 CLR 50, the High Court said:
“A solicitor is bound to do all he can to win his client’s cause — yet he (sic) is not bound to resort to unfair means, or sharp practice, or to snap a judgment, or to do more than an honourable fair-minded man would think right; but he must not sacrifice any substantial advantage which the law gives his client” [Emphasis added].
I accept that in the present case the plaintiff was unaware that the defendant had legal representatives, unlike many of the leading authorities involving “snapping on” judgment in default: see Cockburn v Brotchie [1890] VLR 6, Bushby v Mackenzie (1919) NSWLR 104, Pope v Aberdeen Transport Co Pty Ltd [1965] NSWR 1550, Australian Musical Distributors Pty Ltd v Whebell [1969] Qd R 86, St George Bank Ltd v O’Reilly BC9900881 (17 March 1999) and French v Triple M Melbourne Pty Ltd [2006] VSC 36. However, I note that postdating all of these cases, the Civil Procedure Act 2010 (Vic) requires compliance with certain overarching obligations including a requirement to resolve disputes justly, quickly and efficiently: see Gavin Boyle Constructions Pty Ltd v Fabrok Pty Ltd [2011] QDC 214, referring to section 5 of the Queensland Uniform Civil Procedure Rules which echo the Civil Procedure Act: [14], [32]-[33] per McGill J.
In French v Triple M Melbourne Pty Ltd [2006] VSC 36, Bongiorno J said at [22]:
“Litigation is not a steeple chase nor even a bike race where a fall can determine the outcome. As the High Court made clear in Queensland v J L Holdings Pty Ltd “… the ultimate aim of a Court is the attainment of justice…”: (1997) 189 CLR 146 at 154 per Dawson, Gaudron and McHugh JJ.
Further, in French, Justice Bongiorno found that entry of a default judgment at the earliest opportunity, even if regular, was relevant to the exercise of the Court’s discretion to set aside and the question of costs.
If I am wrong in relation to the irregularity of the entry of the default judgment, in my view, the defendant has an arguable defence on the merits that the purported final claim does not satisfy the mandatory requirements of the Act as examined below.
Arguable Defence on the merits
The Act entitles claimants to receive progress payments and provides a framework through which claimants can receive progress payments by presenting payment claims. The rights and liabilities under the Act exist alongside, and without prejudice, to the parties’ underlying contractual rights and liabilities. In essence, a party liable to make a progress payment is compelled to “pay now, argue later”: Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 at [96].
The Act provides contractors with a statutory right to progress payments for the construction work they have undertaken to carry out or the related goods and services they have undertaken to supply.
Does the payment claim satisfy the statutory requirements?
First, Part 3 of the Act sets out the process through which the right to progress payments can be realised. The claimant initiates the process by submitting a payment claim under section 14(1). The payment claim is to identify, amongst other things, the construction work or related goods and services to which the payment claim relates: section 14(2)(c).
Justice Vickery in Jotham Property Holdings Pty Ltd v Cooperative Builders Pty Ltd & Ors [2013] VSC 552 at [73] observed that given the Act “gives very valuable, and commercially important advantages to builders … the availability of rights conferred by the Act are governed by, and depend upon, the observance of clear specifications … Such provisions, in accordance with the legislative purpose … call for strict observance” [Emphasis added].
The progress claim must sufficiently identify the construction work or the related goods and services to which it relates. There are two reasons for this. One is to enable the respondent to consider and respond to the payment claim by either accepting it in its entirety or in part or disputing it. Second, to define the issues in dispute if the matter is adjudicated. Vickery J in Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106 at [49] and [51] said that this need not be “an overly exacting exercise” or involve “an artificial degree of precision or particularity”. Instead, at [51] his Honour said:
“It is to be tempered by what is reasonably necessary to be comprehensible to the recipient party when considered objectively, that is from the perspective of a reasonable party who is in the position of the recipient. In evaluating the sufficiency of the identification of the work, it is appropriate to take into account the background knowledge of the parties derived from their past dealings and exchanges of information” [Emphasis added].
In Gantley, Vickery J was dealing with a payment claim amounting to $388,214 which was identified merely by a calculation referring to the contract sum, previous payments, and other claimed items. The amount was severed from the progress claim because it lacked any breakdown or explanation for that work, or any content to identify it: at [117].
In Seabay Properties Pty Ltd v Galvin Constructions Pty Ltd [2011] VSC 183 at [148], the validity of a payment claim containing information of a description of the work undertaken, the portion of the contract sum applicable to that work, the amount previously certified in relation to the work, the percentage of work claimed to have been done, the value of the claim for the category of the work and the total of the invoice was upheld. See also Mackie Pty Ltd v Counahan & Anor [2013] VSC 694 at [65]-[68], [7]0-[71] and [74]-[75] per Vickery J in relation to description requirements for final payment claims, being a statement (express or implied) that the claim is a final payment claim, that the works under the contract are complete and a statement of account which sets out with sufficient clarity precisely what is claimed, and how the claim has been calculated or arrived at.
In the present case, the final claim gives no breakdown or explanation for the claim for $215,457.90. There is a calculation of the value of the contract completed to date and a deduction of alleged payments. The final claim also includes a claim for $199,989 of variations but there is no breakdown. The evidence before me of previous payment claims includes annexures of variation reports. No variation report is attached to the final claim: Parkview Qld Pty Ltd v Fortia Funds Management Ltd [2009] NSWSC 1065 at [38].
In my view, on the evidence before me and on the state of the relevant authorities, there is an arguable defence on the merits that the payment claim insufficiently identifies the work to which the progress payment relates in relation to the variations in breach of section 14(2)(c) of the Act.
The plaintiff argues that the defendant, with his background knowledge derived from past dealings and exchanges of information, would have been able to identify the work: Hawkins Constructions (Aust) Pty Ltd v Mac’s Industrial Pipework Pty Ltd [2002] NSWCA 136 at [20]; Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248 at [10]-[15]. The plaintiff claims that the defendant should have been able to piece together the last payment claim variation report schedule with the email of 17 November 2015 from Mr Rohan to “Steve” (who I assume to be Stelios Angelodomou, the sole director and secretary of the defendant and the father of Mr Marinos Angelodomou, the manager of the defendant and deponent) to work out the items claimed as variations (I note, however, that the mathematics of these two pieces of paper does not exactly match the sum of $199,989 in the final claim).
Further, the plaintiff submitted that the defendant would have understood the payment claim because in its affidavit in support, Mr Marinos Angelodemou was able to depose to the defendant only ever agreeing to two variations to the total value of $60,300 (exclusive of GST) that he was then able to identify the balance of the claimed items that comprised the variations of $199,989 for the purposes of timeously serving a payment schedule. These arguments would have had more force if the final claim referred to the last payment claim variation report and the 17 November 2015 email as part of the description by incorporation or attached them to the payment claim (as had been the practice for all of the previous payment claims).
The plaintiff further claimed that the $91,461 for additional shotcrete was not a variation (although these items were included in the variation report for payment claim number 8 and the 17 November 2015 email) as it was in accordance with the terms of page 3 of the quotation. Although at paragraph 8 of Mr Rohan’s affidavit, he deposes that of the balance of the sum of $139,689, $91,461 is for the cost of additional shotcrete, he does not provide details of the how the calculation totalling $91,461 has been arrived at by reference to the items in the last variation report and 17 November 2015 email.
In my view, these are all triable issues and not for me to determine at an interlocutory stage.
Excluded amounts
Second, a payment claim must not include an “excluded amount” under section 10B(1) of the Act. These amounts relevantly include variations but not “claimable variations”. Where a payment claim erroneously includes an “excluded amount” then any adjudication determination in respect of that claim will be void to the extent that it accommodates that amount but remains valid to the extent that claims are properly claimable: Seabay at [61]-[71].
Claimable variations which do not constitute excluded amounts may be included in payment claims: sections 10A(1) and 10B(2). These agreed variations must be in writing, oral or implied from the conduct of the parties, or a combination: Seabay at [40]. They must be in place at the time of the service of the relevant payment claim: Seabay at [49].
In my view, it is arguable that the payment claim may erroneously include “excluded amounts”.
The defendant claimed that there were no variations to the price agreed with the plaintiff save for two variations totalling $60,300 (exclusive of GST). This left a balance of $139,689 (exclusive of GST) of disputed variations which exceeds 10% of the original total price of $1,060,800 (exclusive of GST) and are not claimable variations under section 10A(4) of the Act.
In answer to this contention, the plaintiff, on the one hand, claimed that $91,461 of the claimed variations of $199,989 is the cost of additional shotcrete which was charged in accordance with page 3 of the quotation which provided for a rate of $440 per cubic meter exclusive of GST as set out above, and on the other hand, sought to rely on the agreed rate of $440 per cubic meter as evidence that the additional shotcrete was not in fact a variation (despite being labelled so in the final payment claim) but rather was part of the scope of works pursuant to the contract. This would bring the claimed variations down to $48,228, which does not exceed 10%. In my view, I accept the defendant’s submission that this is arguably only evidence of an agreement of a rate to be charged, not an agreement between the parties that the extra shotcrete be done.
Time to issue payment claim
There is a further dispute between the parties as to whether the time had crystallised for the final claim to be issued pursuant to section 14(5) of the Act. This arises from what properly constitutes the contract between the parties and whether clause 37.4 of the AS-4903-2000 contract was invoked such that the plaintiff was not entitled to lodge a final claim.
The plaintiff claimed that the effect of this submission was to impermissibly contract out of the Act under section 48 and the defendant cannot invoke the contract to defeat a claim for judgment under section 16(2) of the Act.
The defendant relied on the learned author, Marcus Jacobs in Security of Payment in Australia Building and Construction Industry (6th edition) Lawbook Co 2017 at p 244 for the proposition that the limits of the operation of section 16(4)(b)(ii) have not been proved: see Neumann Contractors Pty Ltd v Traspunt No 5 Pty Ltd [2010] ACQ 119 at [45]-[48]. The law on this point is said to be uncertain: p 182.
Again, these are disputed questions of fact and law which, in the circumstances of this case, are arguable and cannot be finally determined on this application.
Conclusion
For the above reasons, the court proposes to set aside the default judgment dated 3 May 2017. I will hear the parties as to the appropriate orders and submissions on costs.
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Certificate
I certify that these 11 pages are a true copy of the reasons for judgment of Judicial Registrar Burchell delivered on 30 June 2017.
Dated: 30 June 2017.
Larissa Travassaros
Associate to Judicial Registrar Burchell
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