Goodman Glass and Trade Pty Ltd v VK Homes
[2020] VCC 1689
•26 October 2020
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
BUILDING CASES LIST
Case No. CI-20-03033
| Goodman Glass and Trade Pty Ltd | Plaintiff |
| v | |
| VK Homes | Defendant |
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JUDGE: | Judicial Registrar Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the Papers | |
DATE OF JUDGMENT: | 26 October 2020 | |
CASE MAY BE CITED AS: | Goodman Glass and Trade Pty Ltd v VK Homes | |
MEDIUM NEUTRAL CITATION: | [2020] VCC 1689 | |
REASONS FOR JUDGMENT
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Subject: CONTRACTS
Catchwords: Building contracts – payment claims – whether plaintiff claimed for materials that defendant had paid for – whether plaintiff claimed for excluded amounts – whether plaintiff engaged in misleading and deceptive conduct – whether plaintiff was estopped from issuing payment claims or claiming payment
Legislation Cited: Building and Construction Industry Security of Payment Act2002 (Vic) ss4, 9, 10, 10A, 10B, 12, 14, 15, 16(2) and 17(2); Competition and Consumer Act 2010 (Cth), Schedule 2, ss 4 and 18.
Cases Cited:470 St Kilda Road Pty Ltd v Reed Constructions Australia Pty Ltd [2012] VSC 235; Aalborg CSP A/A v Ottoway Engineering Pty Ltd [2017] SASCFC 1587; Commonwealth v Vermayen (1990) 170 CLR 394; Neumann Contractors Pty Ltd v Traspunt No 5 Pty Ltd [2010] QCA 119; Seabay Properties Pty Ltd v Galvin Constructions Pty Ltd [2011] VSC 183; Simtec Group Pty Ltd v Ascot Building [2016] VCC 1127; Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Ms M Isobel | Johnston Construction Lawyers |
| For the defendant | Mr C Grewal | Rosendorff Lawyers |
JUDICIAL REGISTRAR:
1 In this proceeding, the plaintiff (“Goodman”) applies for judgment against the defendant (“VK”) pursuant to s16(2) of the Building and Construction Industry Security of Payment Act2002 (Vic) (“SOP Act”). Goodman makes the application by summons on originating motion dated 8 July 2020. The application arises out of Goodman’s installation of glass products in an apartment complex at 1 Tulip Crescent, Boronia.
2 Goodman submits that it is entitled to judgment because VK failed to issue a payment schedule in response to its payment claim. VK opposes the application on the following grounds:
· Goodman has already paid for the materials in invoice 229GGT;
· invoices 257GGT and 279GGT claim for excluded amounts;
· VK has claims in misleading and deceptive conduct and/or estoppel, which set-off any liability to Goodman.
3 For the reasons below, I find that the defendant has become liable to pay the claimed amount under s15(4) of the SOP Act as a consequence of having failed to provide a payment schedule to the plaintiff within the time allowed and by failing to pay any part of the claimed amount by the due date for the progress payment to which the payment claim relates. The plaintiff is entitled to judgment pursuant to s16(2)(a)(i) of the SOP Act.
4 I will order that the defendant pay the plaintiff’s costs of and incidental to the proceeding. The plaintiff seeks that the defendant pay the plaintiff’s costs on an indemnity basis pursuant to r63A.30.1 of the County Court Civil Procedure Rules 2018 (“Rules”), and by reason of a settlement offer made on 30 June 2019. In default of agreement between the parties in relation to the plaintiff seeking a different order as to costs, I will determine any issue concerning costs on the papers.
The facts
5 Goodman relies upon three affidavits of Varun Thakur, the sole director of Goodman, affirmed 3 July 2020 and 4 August 2020 and 2 October 2020. In opposition, VK relies upon an affidavit of Davinder Randhawa, a builder, affirmed 25 September 2020.
6 VK was constructing an apartment complex at 1 Tulip Crescent, Boronia. VK engaged Goodman to install glass balustrades on the balconies of the apartments.
7 In or around August 2018, Mr Randhawa telephoned Mr Thakur and requested that Goodman:
· complete the balcony glass works as soon as possible (and within 2 weeks of engaging Goodman);
· complete the works to a high standard, free from any defects;
· appropriately seal each balustrade post;
· install noggins for each balustrade post;
· ensure no water would seep through the balustrades or the balustrade posts.
8 According to Mr Randhawa, Mr Thakur agreed that Goodman would comply with those requirements. Mr Thakur denies that Mr Randhawa mentioned any of the detail set out above and that it was impossible to complete the job within 2 weeks of engagement as the works required custom made frosted glass. The manufacture alone would be about 2 weeks.
9 On or about 25 September 2018, Mr Thakur sent Mr Randhawa a quotation for the works in the sum of $28,204 (including GST).
10 On 18 October 2018, VK formally engaged Goodman to install the glass balustrades. Mr Randhawa sent a text message to Mr Thakur and requested that Goodman commence “urgently”.
11 In or around early November 2018, Mr Thakur advised Mr Randhawa that Goodman could not commence the works until tiling works were complete.
12 Mr Randhawa responded that:
· this was not what Mr Thakur said would occur;
· he only agreed to engage Goodman because Mr Thakur advised that the balcony glass works would be completed within 2 weeks of Goodman being engaged and would not require the tiling works to be completed first;
· the completion of the tiling works before the completion of the balcony glass works would potentially compromise the tiling works and the water tightness of the balconies.
13 Ultimately, Mr Thakur did not arrange for the balcony works to be completed before the tiling works. Nonetheless, Mr Randhawa needed to progress the works. Accordingly, on or about 11 November 2018, he arranged for the tiling works to be completed.
14 On or about 12 December 2018, the tiling works were completed. Mr Randhawa asked Mr Thakur to complete the balcony glass works urgently and within 2 weeks. However, in mid-December 2018, Mr Randhawa discovered that Mr Thakur had travelled overseas and would not return until early January 2019.
15 On 31 December 2018, Goodman commenced the balcony glass works. On 16 January 2019, VK paid a deposit of $13,000.00 (including GST) to Goodman for the works.
16 On or about 9 January 2019, Mr Randhawa requested that Goodman complete additional works, namely the supply and installation of 31 aluminium-framed and mirrored sliding doors into the master bedroom wardrobes of the apartments (‘the first variation works’).
17 On 9 January 2019, Goodman sent an email to VK attaching a written estimate for the first variation works in the sum of $5,965.50. On 30 January 2019, VK paid a deposit of $3,000.00 (including GST) for the first variation works. Goodman commenced the first variation works in or about late January 2019.
18 Mr Thakur alleges that in or about late January 2019, VK orally directed Goodman to supply and install two further balustrades on the second-floor balconies of units 1 and 2 of the site (‘the second variation works’). Mr Randhawa denies this. Goodman commenced those works in or about late January 2019.
19 Mr Thakur alleges that in or about early February 2019, VK orally directed Goodman to supply and install mirrors in the bathrooms of the apartments and a replacement toughened safety glass balustrade on the balcony of unit 1 (‘the third variation works’). Mr Randhawa deposes that he requested Goodman supply and install the mirrors but did not request the balustrade works. Goodman commenced the third variation works in or about February 2019.
20 Mr Randhawa deposes that on or about 14 February 2019, he attended the site and found that Goodman had failed to complete most of the balcony. He sent Mr Thakur a text message saying that he had failed to complete the glass works in a timely manner and required him to complete them within 24 hours. Mr Thakur responded: “If it is not finished by tomorrow, don’t pay me”.
21 Mr Randhawa deposes that this text message led him to believe that he was not required to pay Goodman for the balcony glass works if those works were not completed by 14 February 2019.
22 In late February 2019, Mr Thakur advised Mr Randhawa that Goodman had completed the balcony works. However, Mr Thakur says he discovered that:
·Goodman had failed adequately to seal the balustrade posts with silicone sealant;
·the quality of workmanship was extremely poor and there were significant gaps between the flooring and the balustrade posts;
·Goodman had failed to install noggins for the balustrade posts;
·Goodman had drilled holes all the way through each of the balconies and had thereby compromised the structural integrity and water tightness of each of the balconies;
·Goodman had, as a result of completing the glass works following the tiling works, damaged a number of tiles on each of the balconies.
23 Between late February and March 2019, Mr Thakur denied liability for any breaches of the agreement and insisted that the fault lay with the caulker who Mr Randhawa engaged.
24 Mr Thakur deposes that Goodman completed all works (including the variation works) on 1 March 2019.
25 On 31 March 2019, Mr Thakur sent an email to Mr Randhawa attaching four invoices:
· invoice 229GGT in the sum of $15,204.20 for the glass works (“claim 1”).
· Invoice 256GGT in the sum of $3,399.00 for the first variation works (“claim 2”).
· Invoice 257GGT in the sum of $1,346.95 for the second variation works (“claim 3”);
· Invoice 279GGT in the sum of $2,955.70 for the third variation works (“claim 4”).
26 VK alleges that the email constitutes one payment claim. Goodman alleges that each invoice was a payment claim.
27 On or about 11 April 2019, Mr Thakur sent Mr Randhawa a text message stating, in part, that: “I am not asking you to pay me in full, hold some of it until you find out whose fault it is for the leakage”. Mr Randhawa deposes that this led him to believe that if any amount was payable, adjustments would be made in light of the “Balcony Glass Works Breaches” to invoice 229GGT for any rectification costs that he had incurred.
28 Later that day, Mr Thakur sent another text message stating, in part, that: “So far, you have paid $16,000, which is only enough to cover the cost of the glass. All the rest of the materials and labour is from my own pocket. You need to pay something.” Mr Randhawa deposes that this led him to believe he had already paid for the glass supplied for the balcony glass works.
29 In or around early April 2019, Mr Randhawa completed a handover of the site. Due to the delays in the works, he was required to pay liquidated damages in the sum of $4,000.
30 Following the handover, Mr Randhawa deposes that the new registered proprietors of the apartments contacted him regarding ongoing water leaks through the balconies and the balcony balustrade.
31 Mr Randhawa deposes that, as at March 2020, Mr Thakur had failed to rectify the balcony glass works breaches. Consequently, Mr Randhawa engaged Intex Construction Group (“Intex”) to rectify the glass works.
32 Mr Randhawa alleges that Intex confirmed the existence of the glass works breaches.
33 Mr Randhawa deposes that Intex attempted to rectify the alleged breaches at a cost of $7,700 (including GST). However, he says some issues remain and Intex provided him with a quote for approximately $25,900 (including GST) to rectify the alleged breaches.
34 VK failed to issue a payment schedule in response to the payment claim(s). Goodman now claims the sum of $22,905.85 (including GST) under s16(2)(a) of the SOP Act.
35 The parties have common ground in that the defendant instructed the plaintiff to undertake the first variation works and the third variation works insofar as they relate to the supply and installation of 4mm silver mirrors in the bathrooms of all six apartments. The plaintiff notes that the third variation works only relates to the supply and installation of 4mm silver mirrors in the bathrooms of all six apartments.
The legal context
36 The SOP Act seeks to ensure that persons who undertake to carry out construction work can recover progress payments for the performance of that work.[1] The Act provides a statutory entitlement to payment to contractors and subcontractors and a means by which progress payments may be recovered (ss3(2) and (3)).
[1]SOP Act s 3.
37 Section 4 defines “construction contract” as a “contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services for another party”. The Act applies to any construction contract whether written or oral, or partly written and partly oral.[2] “Construction work” is defined by s5 of the SOP Act. There is no dispute that the works the subject of this proceeding is “construction work” within the meaning of s5 of the SOP Act.
[2]Ibid s 7.
38 In order to recover a progress payment, a claimant must first serve a “payment claim” in accordance with s14 of the SOP Act.
39 Section 15(1) of the SOP Act provides that a person on whom a payment claim is served may reply to the payment claim by providing a payment schedule to the claimant.
40 Section 15(2) sets out the information which must be provided in a payment schedule.
41 Section 16 of the SOP Act sets out the consequences of not paying a claimant in circumstances where no payment schedule has been served. Under s16(2)(a)(i), the claimant is able to recover the unpaid portion of the claimed amount from the respondent as a debt due to the claimant.
42 Pursuant to s16(4)(a) of the SOP Act, judgment is given in favour of the claimant for any unpaid portion of the claimed amount unless the claimed amount includes any excluded amounts.
43 A payment claim must not include an “excluded amount” under s10B(1) of the SOP 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 Properties Pty Ltd v Galvin Constructions Pty Ltd [2011] VSC 183 at [61]-[71]).
44 Claimable variations which do not constitute excluded amounts may be included in the payment claims (ss10A(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 service of the relevant payment claim.
45 “Variations” are defined at s4 of the SOP Act to be “a change in the scope of the construction work to be carried out, or the related goods and services to be supplied, under the contract.”
46 In proceedings for judgment under s16(2)(a), the respondent by reason of s16(4)(b) is not entitled to bring any cross-claim against the claimant or raise any defence in relation to matters arising under the construction contract.
47 Section 48 of the SOP Act also precludes contracting out of the Act by declaring to be void any contractual provisions (whether in writing or not) which is or purports to exclude, modify or restrict the operation of the Act.
48 Pursuant to s12(2)(a), a claimant is entitled to interest on the unpaid amount pursuant to the Penalty Interest Rates Act 1983 (Vic).
Has VK already paid for invoice 229GGT?
49 VK submits that it has already paid for the materials the subject of invoice 229GGT (which it calls “payment claim 1”). It refers to the text message of Mr Thakur dated 4 April 2019 that: “So far, you have paid $16,000, which is only enough to cover the cost of the glass.” The quote relied on by VK does not include the balance of the text message, which further said “All the rest of the materials and labour is from my own pocket. You need to pay something.”
50 Goodman responds that this is not a valid defence. It says VK should have included any dispute about the materials in a payment schedule. It says VK cannot now raise this issue.
51 Alternatively, Goodman says that VK’s claims are baseless as invoice 229GGT covers the balance of the original works in the quote of 25 September 2018.
52 Goodman concludes that invoice 229GGT is not a payment claim. It says the email attaching the invoices is the payment claim.
53 In my view Goodman misconceives the nature of the payment claim made by the plaintiff, which is in the form of an email sent to the defendant on or about 31 March 2019 attaching the four invoices 229GGT, 256GGT, 257GGT and 279GGT.
54 VK is now seeking to impermissibly raise matters that are now barred by the operation of s15(4)(b) of the SOP Act. If VK was of the view that the payment claim included amounts that has already been paid then these were matters that ought to have appeared in a payment schedule if VK wished to raise them. Once a valid payment claim has been issued, the proper valuation of the claim is a matter VK has in substance lost the right to argue in the present proceeding.
Did invoice 257GGT claim for excluded amounts?
55 VK submits that it did not discuss or agree to the works the subject of invoice 257GGT. It refers to the evidence of Mr Randhawa that he did not request any additional works on the balustrades.
56 Goodman responds that VK’s submission is internally inconsistent. It notes that the 25 September 2018 quotation, to which VK agreed, included the supply and installation of six balustrades on six balconies. It notes VK does not contest that Goodman supplied and installed eight balustrades on eight balconies.
57 Goodman notes that units 1 and 2 each had an additional balcony on their top floors, and Goodman was only instructed to supply and install those ones in January 2019, after internal stairs had been constructed within those two units, allowing access to the top floors.
58 Goodman concludes that it is irrational for VK to accept the details for the six balustrades contained in the 25 September 2018 quotation, accept that an extra two balustrades were supplied and installed on the second-floor balconies of units 1 and 2, yet claim that VK did not request or instruct Goodman to supply and install those extra two balustrades.
59 In my view, claim 2 is a claimable variation within s10A of the SOP Act. VK’s evidence that no variation was approved is not preferred. Goodman’s evidence is that in or about late January 2019, the defendant orally directed the plaintiff to supply and install two further custom-made balustrades on the second-floor balconies. The plaintiff commenced work on the second variation works in and about late January 2019. Goodman continued on-site until 1 March 2019.
60 It is implied that the supply of the extra two balustrades was requested by the defendant after the 25 September 2018 quote as access to those units was only constructed in January 2019. Tacit permission is inferred given the continuing presence of Goodman onsite until 1 March 2019 and the conduct of the parties.
Did invoice 279GGT claim for excluded amounts?
61 VK submits that it did not discuss or agree to the works the subject of invoice 279GGT. It refers to the evidence of Mr Randhawa that he requested Goodman supply and install the mirrors but did not request the additional balustrade works.
62 Goodman responds that VK’s submissions appear to be erroneous. It notes that VK defines "claim 4" as being invoice 279GGT. However, invoice 279GGT is only for a total of $1,346.95 (of which, the defendant concedes liability for $1,232 in respect of the supply and installation of the 4mm silver mirrors). Therefore, Goodman contends that this cannot be the invoice VK is referring to.
63 Goodman says it is likely VK meant to refer to invoice 256GGT. It notes invoice 256GGT did not concern 4mm silver mirrors, nor additional works on the balustrades. Invoice 256GGT concerned the supply and installation of 31 mirrored sliding doors in the master bedroom wardrobes in the six apartments (the first variation works). VK conceded that it instructed Goodman to undertake these works.
64 Goodman concludes that it is possible VK meant to refer to invoice 279GGT. This concerned the supply and installation of the 4mm silver mirrors (the third variation Works). It says VK may be objecting to being charged $114.95 for a replacement 10mm toughened safety glass balustrade on this invoice. Goodman says this is not a valid defence as VK should have raised any dispute about the invoice in a payment schedule.
65 In my view, VK is now seeking to impermissibly raise matters that are now barred by the operation of s15(4)(b) of the SOP Act. Any complaint about materials and services included in the payment claim should have been included in a payment schedule. VK did not issue a payment schedule.
Misleading and deceptive conduct and estoppel
66 VK submits that Goodman made the following pre-contractual representations as to present matters:
· Goodman could commence the works without the completion of tiling works at the site;
· Goodman could complete the works within 2 weeks of being engaged by VK.
67 VK submits that Goodman made the following representations as to future matters:
· Goodman would commence the works without the completion of tiling works at the site;
· Goodman would complete the works within 2 weeks of being engaged by VK;
· Goodman would appropriately seal each balustrade post;
· Goodman would install noggins for each balustrade post; and
· Goodman would ensure that no water would seep through the balustrades or the balustrade posts.
68 VK contends that Goodman made the representations in trade or commerce.
69 VK contends that the representations as to present matters were misleading and deceptive because, at the time the representations were made:
· Goodman could not commence the works before tiling works had been completed at the site; and
· Goodman could not commence the works within 2 weeks of being engaged by VK.
70 VK contends that the representations as to future matters were misleading and deceptive since, at the time they were made, Goodman did not intend to or have reasonable grounds to claim that the representations were true.
71 VK submits that by reason of the misleading and deceptive conduct, it has suffered loss and damage totalling $37,600, which it claims under s236 of the Competition and Consumer Act 2010 (Cth), Schedule 2 (“Australian Consumer Law”).
72 VK also alleges a further representation by Goodman that, on or about 14 February 2019, if the works (particularly the glass balustrades and related tasks) were not completed by 14 February 2019, VK would not be required to pay Goodman for those works. It notes that Goodman failed to complete those works by 14 February 2019. It notes that Claim 1, Claim 3 and approximately $1,723.70 of Claim 4 relate to the glass works.
73 VK submits that the representations were in trade or commerce. It says they were misleading and deceptive because when Goodman made the representations, it did not intend to or have reasonable grounds to believe that it would waive or refrain from claiming payment for the glass works (including because it now seeks payment).
74 In the alternative, VK submits that since it relied to its detriment upon that representation, Goodman was estopped from issuing Claim 1, 3 and 4 insofar as they related to the glass works, or from otherwise seeking further payment for the glass works.
75 VK referred to Aalborg CSP A/A v Ottoway Engineering Pty Ltd [2017] SASCFC 1587. In Aalborg, the Full Court of the South Australian Supreme Court held that the phrase ‘a defence in relation to matters arising under the construction contract’ in the Construction Industry Security of Payment Act 2009 (SA) did not preclude a defence on the basis of misleading and deceptive conduct under the Australian Consumer Law or on the basis of estoppel. VK notes that s16(4) of the SOP Act employs the same wording.
76 Goodman responds that VK is attempting to avoid the prohibition in s16(4) of the SOP Act by cloaking its claims about delay and defects in the works under a purported claim for misleading and deceptive conduct. Goodman says this subverts the purpose of the SOP Act.
77 Alternatively, Goodman contends that the misleading and deceptive conduct still breaches s16(4) of the SOP Act because it relates solely to the performance of the contract and works completed under the contract. That is, it is a defence “in relation to matters arising under the construction contract”.
78 Finally, Goodman distinguishes the cases which have held that claims for misleading and deceptive conduct do not breach s16(4) (including Aalborg). It notes that the claims in those cases concerned the manner in which the plaintiffs performed their obligations under the SOP regimes (such as how they have served payment claims), rather than the performance or failure to perform under the construction contract. In the former case, Goodman says the defences do not arise under the construction contract.
79 Goodman elucidates that distinction by reference to the following excerpt of Muir JA in the Queensland Court of Appeal decision of Neumann Contractors Pty Ltd v Traspunt No 5 Pty Ltd[3] (at [47]-[48]):
In my view, s 19(4)(b)(ii) prohibits the raising of a defence only if it can fairly be described as one which relates to matters arising under the relevant construction contract ... I do not consider that a defence that the payment claim relied on by the claimant is virtually identical in all relevant respects to a previous one made by the claimant meets the description in s 19(4)(b)(ii), at least, where, as is the case here, the merits of the defence stand to be determined essentially by the comparison of one document with another.
Had the provision been intended to catch all defences having a connection with the construction contract, however remote, all words in s 19(4)(b)(ii) after "to raise any defence" would have been otiose: all payment claims are necessarily concerned with "matters arising under the construction contract". The aim of the provision would appear to be to prevent respondents to claims relying on allegations that the moneys claimed are not owing for reasons referable to the terms of the construction contract and/or to the parties' performance or failure to perform thereunder. If such matters are to be relied on as a defence to a payment claim, they must be included in a payment schedule.
[3] [2010] QCA 119.
80 In my view, in relation to the alleged pre-contractual representations, relying on the authorities set out above, the defendant as a respondent in this proceeding is prohibited from bringing a cross-claim or raising any defence in relation to the matters arising under the construction contract. Accordingly, VK cannot now raise any claims or defences in this proceeding. It can, pursuant to s47 of the SOP Act, litigate any such matters in separate proceedings.
81 It would be inconsistent with the nature of the “pay now, argue later” purpose of the SOP Act, if VK were allowed to raise a defence about representations of defects and delays in relation to the matters arising under the construction contract in the current proceeding. Further, it would be most unfair if the defendant’s argument were accepted in the present circumstances as it would in effect operate to give a defendant an unassailable defence in every s16 application.
82 In relation to the alleged further representation, that there was an alleged binding representation made by the plaintiff that if works were not completed by 14 February 2019 the defendant would not be required to pay the plaintiff in respect of those works, again, falls foul of s16(4) of the SOP Act. The alleged representation relates to the performance of the contract and work completed under the construction contract by the plaintiff. It is within the scope of “in relation to matters arising under the construction contract”.
83 VK claims that the plaintiff is estopped from seeking recovery under the payment claims insofar as they relate to any glass works by reason of the further representation.
84 The High Court enunciated the principles of common law estoppel in Walton Stores[4] applicable to the present case as follows:
[4]Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 at 428-9 (Brennan J).
· Goodman, by clear and unequivocal words or conduct must induce VK to assume a particular state of affairs exist between them;
· VK relied on that assumption to its detriment;
· It would be unconscionable to permit departure from the assumption.[5]
[5]Commonwealth v Vermayen (1990) 170 CLR 394.
85 VK claims that it adopted an assumption that it would not be liable to pay for the works if Goodman did not finish the glass works by the next day. VK claims that it was induced that by that assumption by Goodman’s response. VK relied to its detriment upon the assumption by allowing Goodman to continue the works. Goodman knew and intended that VK would rely upon his text message (although it is noted that there is no response to the text message by VK in evidence affirming the assumption). Goodman departed from the assumption by failing to complete until late February 2019 and pursuing VK for payment of the works. In those circumstances, VK asserts that it is unconscionable for Goodman to deny the existence of the further representation.
86 The argument is put on the basis of a future representation and not an agreement or an accord and satisfaction (cf. Simtec Group Pty Ltd v Ascot Building [2016] VCC 1127 at [16]-[17]). The text restricts the right of the plaintiff to claim under s16, which is impermissible under ss16(4) and 48.
87 It follows that even if the elements of Walton Stores could be satisfied, and even if it could be said that the defendant was not obliged to pay the amounts claimed by Goodman in its payment claim as owing to Goodman and that Goodman would not enforce its rights under s16(2)(a)(i) of the SOP Act, the purported representation is nevertheless void and of no effect as it seeks to vary or amend terms of the contract and/or raise a defence in relation to matters arising under the construction contract.
88 In my view, the text message excludes, modifies or restricts the operation of the SOP Act, contrary to s48 of the Act. Section 48 extends to provisions of an agreement that purport to exclude, modify or restrict the operation of the Act, and to provisions that may reasonably be construed as an attempt to defer a person from taking action under the Act.
89 In addition, it is noted that a payment claim need not be served in good faith to be valid (470St Kilda Road Pty Ltd v Reed Constructions Australia Pty Ltd [2012] VSC 235 at [47]). The rights under the SOP Act are strict.
90 Finally, VK submits that by reason of the misleading and deceptive conduct, it has suffered loss and damage totalling $37,600, which it claims under s236 of the Australian Consumer Law and operates as a complete set-off in respect of the payment claims.
91 By force of s17(4)(b) of the SOP Act, VK is prohibited from bringing a cross-claim or raising any defence in relation to the matters arising under the construction contract.
92 It follows that I am satisfied that claim is a valid payment claim as stated in the claim, totalling $22,905.85 (inclusive GST). As a result, Goodman is entitled, pursuant to s16(2)(a)(i) of the SOP Act, to recover the full claim amount as a debt due in this court, plus interest pursuant to s12(2) of the Act.
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Certificate
I certify that these 16 pages are a true copy of the judgment of Judicial Registrar Burchell delivered on 26 October 2020.
Dated: 26 October 2020
Simon Bobko
Associate to the Judicial Registrar Burchell
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