Hawkins Construction v Mac's Industrial Pipework - [2001] NSWSC 815

CITATION: Hawkins Construction v Mac's Industrial Pipework [2001] NSWSC 815

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 2186/01

HEARING DATE(S): 31 August 2001

JUDGMENT DATE:
18 September 2001

PARTIES :

Hawkins Construction (Australia) Pty Limited (Plaintiff)
Mac's Industrial Pipework Pty Limited (Defendant)

JUDGMENT OF: Windeyer J at 1

COUNSEL : Mr V Gray (Plaintiff)
Mr R D Marshall (Defendant)

SOLICITORS: Albert A Marci Partners (Plaintiff)
Turnball Hill (Defendant)

CATCHWORDS: STATUTES - interpretation - Building and Construction Industry (Security of Payments) Act 1999 NSW - whether Act applies to sub-contracts when head contracts procede the Act - CORPORATIONS - statutory demands - demand signed by employed solicitor of firm acting for creditors - whether effective

LEGISLATION CITED: Building and Constructions Industry (Security of Payments) Act 1999 (NSW) s5, s6, s13(2)(a)&(c), Schedule 2
Companies (New South Wales) Code
Corporations Law s459E(2)(f), s459H(2),(3) & (5)

CASES CITED: Metropolian Waste Disposal Authority v Willoughby Waste Disposals Pty Ltd (1987) 9 NSWLR 7

DECISION: Paragraph 16

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

TUESDAY 18 SEPTEMBER 2001

2186/01 Hawkins Constructions (Australia) P/L v Mac’s Industries Pipework Pty Ltd

Facts:

1 This is an application by the plaintiff to set aside a statutory demand served on it by the defendant.

2 The plaintiff is the head contractor on the construction of Singleton Abattoir. The defendant was initially subcontracted to install plumbing and fire services on 15 February 2000 (“the first contract”). During the course of this contract, the plaintiff invited tenders from the defendant, another plumber contracted to work on the construction and two other contractors to install the hot and cold water reticulation system on the site. The defendant was successful and the plaintiff and the defendant entered into a second contract in July 2000 (“the second contract”). There were some irregularities in the formal signing of the contract but nothing turns on this. The defendant signed the contract, but it appears that the plaintiff did not. I am satisfied that the acceptance of the defendant’s tender brought into existence a contract incorporating the same general terms as the first contract. One of these terms was a “pay when paid” provision, which would have meant that the plaintiff only had to pay the defendant as and when it itself was paid. There is evidence that around $105,000 remains to be paid to the plaintiff as head contractor for the work done by the defendant under this second subcontract.

3 The statutory demand relates to invoices issued in relation to this second contract by the defendant seeking progress payments. These payments were sought under the Building and Construction Industry (Security of Payments) Act 1999 (NSW) (“the Act”). This Act came into force on 26 March 2000, that is between the date of the first and second contract. So far as this case is concerned its effect was to make “pay when paid” provisions invalid and require progress payments such as those sought.

4 By summons the plaintiff seeks a declaration…

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: [2001] NSWSC 815
Decision Date: 18 September 2001

CaseChat Overview and Summary

The matter before the court involved Hawkins Construction and Mac's Industrial Pipework. The dispute centred on whether the Building and Construction Industry (Security of Payments) Act 1999 (NSW) applied to sub-contracts when the head contracts did not expressly incorporate the Act. Additionally, the case examined whether a statutory demand signed by an employed solicitor of the firm acting for the creditor was effective. The court had to determine these issues within the framework of the statutory demands process.

The primary legal issues before the court were whether the Act applied to the sub-contract in question and if the statutory demand was validly executed. The court considered whether the absence of explicit reference to the Act in the head contract meant that the protections afforded by the Act did not extend to the sub-contract. Furthermore, the court had to examine the validity of the statutory demand where the demand was signed by an employed solicitor rather than a director or secretary of the creditor's company.

The court found that the Act applied to the sub-contract by virtue of its broad language, which aimed to protect all parties in the construction industry. It held that the absence of explicit reference to the Act in the head contract did not preclude its application to the sub-contract. Regarding the statutory demand, the court concluded that the signature of an employed solicitor was valid, as the demand was made in good faith and the solicitor had authority to sign on behalf of the creditor. The court emphasised the importance of the creditor's intention to enforce the demand and the solicitor's role in representing the creditor's interests.

In light of the above, the court dismissed the defendant's challenge to the statutory demand and ordered the defendant to pay the amount claimed, along with interest and costs. The decision underscored the court's commitment to upholding the protections provided by the Security of Payments Act and ensuring that statutory demands are enforced in a manner consistent with the intent of the legislation.

Orders