Herbert & Mason Pty Ltd v O'Brien Group Australia Pty Ltd
[2021] VCC 620
•19 May 2021 (amended pursuant to r36.07 of the County Court Civil Procedure Rules 2018)
| IN THE COUNTY COURT OF VICTORIA AT Melbourne COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
Building Cases List
Case No. CI-20-04664
| Herbert & Mason Pty Ltd (ACN 138 195 847) | Plaintiff |
| V | |
| O’Brien Group Australia Pty Ltd (ACN 051 538 197) | Defendant |
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JUDGE: | Judicial Registrar Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers | |
DATE OF JUDGMENT: | 19 May 2021 (amended pursuant to r36.07 of the County Court Civil Procedure Rules 2018) | |
CASE MAY BE CITED AS: | Herbert & Mason Pty Ltd v O’Brien Group Australia Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2021] VCC 620 | |
REASONS FOR JUDGMENT
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Subject: CONTRACTS
Catchwords: Building contract – payment claim – whether payment claim contains excluded amounts – whether payment claim sufficiently identified the construction work to which it relates
Legislation Cited: Building and Construction Industry Security of Payment Act 2002 (Vic) ss 4, 9, 10A, 10B, 12, 14(2), 15, 16(2) and 48; Civil Procedure Act 2010 (Vic) s 61, 63
Cases Cited:Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; Vanguard Developments v Promax [2018] VSC 386; Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112; Pearl Hill Pty Ltd v Concorp Construction Group (Vic) Pty Ltd [2011] VSCA 99; Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2005) 62 NSWLR 385; 3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674; SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44; Cidec Pty Ltd v Citi-Con Pty Ltd [2021] VCC 553; Volan Group Pty Ltd v Prime Build Pty Ltd [2021] VCC 611; Jemzone v Trytan Pty Ltd (2002) 42 ACSR 42; John Beever (Aust) Pty Ltd v Paper Australia Pty Ltd [2019] VSC 126; Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liquidation) (2005) 64 NSWLR 462; Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | HFW Australia | |
| For the Defendant | Mr B Mason | Harwood Andrews |
JUDICIAL REGISTRAR:
1 In this proceeding, the plaintiff (“H & M”) applies for judgment against the defendant (“O’Brien”) pursuant to s16(2) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (“SOP Act”). H & M makes the application by summons on originating motion dated 19 October 2020. The application arises out of construction work that H & M performed at 54-62 Bourke Street and 15 Liverpool Street, Melbourne.
2 H & M submits that it is entitled to judgment because O’Brien failed to make payment in response to its payment claims.
3 In opposition to the claim, O’Brien contends that:
a) the Court cannot be satisfied that the August BS Payment Claim and the August LS Payment Claims do not contain excluded amounts; and
b) the August BS Payment Claim and the August LS Payment Claims fail to sufficiently identify the construction work to which they relate.
4 O’Brien has made no submissions with respect to the June BS Payment Claim, July BS Payment Claim, and the July LS Payment Claim.
5 In my view, grounds (a) and (b) have been made out. My reasons are set out below. Notwithstanding the Court's consideration of the other payments (namely the August BS Payment Claim and the August LS Payment Claim), there should be judgment entered against O’Brien for the sum of $102,639.09 (including GST) and accrued interest on the basis that these sums are debts due and recoverable pursuant to s16(2)(a)(i) of the SOP Act.
6 Accordingly, I order that O’Brien pay H & M the sum of $102,639.09 (including GST) and that O’Brien pay H & M’s costs of and incidental to the proceeding on the 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. I will determine any issue concerning costs on the papers.
The facts
7 H & M relies upon two affidavits of Matthew Herbert sworn 19 October 2020 and 23 December 2020. In opposition, O’Brien relies upon two affidavits of Kyle Johnston affirmed 3 December 2020 and 24 February 2021.
8 By a written contract dated on or about 10 October 2018, O’Brien engaged H & M to provide architectural and interior design services at 54-62 Bourke Street, Melbourne. The contract (“Bourke Street Contract”) comprised:
a) an email from H & M to O’Brien dated 27 July 2018 under the subject "RE: Presentation," enclosing an H & M Practice Overview;
b) a document titled "Fee Proposal 05" dated 10 October 2018;
c) H & M’s standard terms and conditions of engagement (“Terms and Conditions”); and
d) an email from Kyle Johnston of O’Brien to H & M dated 10 October 2018 accepting the fee proposal and Terms and Conditions, and attaching the Bourke Street Proposal and the terms and Conditions.
9 Pursuant to the Bourke Street Contract:
a) tax invoices were to be issued on a monthly basis; and
b) tax invoices were payable within 14 days.
10 In relation to the Bourke Street Contract, H & M served three purported payment claims on O’Brien by email:
a) on 12 June 2020 in the amount of $37,873.00 (including GST);
b) on 15 July 2020 in the amount of $36,608.00 (including GST); and
c) on 10 August 2020 in the amount of $203,548.28 (including GST).
11 O’Brien did not issue a payment schedule in response or make payment. On 14 August 2020, Mr Johnston sent a letter to H & M indicating that "O'Brien Group Australia rejects your claim as totally outrageous".
12 Mr Johnston deposes that the June BS Payment Claim is actually a payment claim under the contract concerning services at 15 Liverpool Street, Melbourne. He notes it was issued under cover of an email with the subject ‘HM Progress Claim Liverpool Street’ and that the project described in the document is referred to as ‘Liverpool Street-Obrien Group’.
13 By a further written contract dated on or about 11 April 2019, O’Brien engaged H & M to provide architectural and interior design services at 15 Liverpool Street, Melbourne. The contract (“Liverpool Street Contract”) comprised:
a) a document titled "Fee Proposal 00" dated 11 April 2019; and
b) the Terms and Conditions previously provided to O’Brien.
14 Pursuant to the Liverpool Street Contract:
(a) The Liverpool Street Works would be divided into two parts:
(i) works required to produce architectural and design documents to support and establish the scope of construction works to be carried out at the Liverpool Street Site; and
(ii) the provision of ongoing services with respect to the construction component of the works to be carried out at the Liverpool Street Site;
(b) the fee for the works under consideration was a lump sum amount of $416,000.00 (excluding GST) in accordance with fee schedule; and
(c) if H & M were required to redesign or redocument work to achieve a cost saving, it reserves the right to renegotiate the above fee or charge a variation for this service irrespective of the stage in the Liverpool Street Works.
15 In relation to the Liverpool Street Contract, H & M served two purported payment claims on O’Brien by email:
a) on 15 July 2020 in the sum of $28,158.09 (including GST); and
b) on 21 August 2020 in the sum of $184,338.28 (including GST).
16 O’Brien did not issue a payment schedule in response or make payment. H & M now claims the sum of $175,165.10 (including GST) under s16(2) of the SOP Act.
The legal context
17 The SOP Act seeks to ensure that people who undertake to carry out construction work can recover progress payments for the performance of that work.[1] 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 SOP Act applies to any construction contract whether written or oral, or partly written and partly oral.[2] “Construction work” is defined by s5. There is no dispute that the works the subject of this proceeding is “construction work” within the meaning of s5.
[1]s3.
[2]s7.
18 Section 16(2)(a) of the SOP Act provides that a claimant may recover from a respondent any unpaid portion of an amount claimed in a payment claim where the respondent fails to submit a payment schedule within time (or at all) in response to the payment claim.
19 Section 14 of the SOP Act concerns the form and content of payment claims. Sections 14(2) and (3) relevantly provide that a payment claim:
a) must be in the prescribed form (if any) and contain the prescribed information (if any) – neither is prescribed;
b) must identify the construction work or related goods and services to which it relates;
c) must indicate the amount of progress payment that the claimant claims to be due;
d) must state that it is made under the SOP Act; and
e) must not include any “excluded amounts” (being amounts referable to particular categories of variations).
20 Section 14(4) of the SOP Act addresses when a payment claim can be served, where it is not a payment claim in respect of a final, single or one-off progress payment. It provides that such a payment claim may only be served within:
a) the period determined in accordance with the construction contract “in respect of the carrying out of the item of construction work or the supply of the item of related goods and services to which the claim relates”; or
b) the period of three months after the “reference date referred to in s9(2) that relates to the progress payment”.
21 Section 14(5), (6) and (7) of the SOP Act concern payment claims claim in respect of a final, single or one-off progress payment and are not relevant for present purposes. Section 14(8) provides that a claimant “cannot serve more than one payment claim in respect of each reference date under the construction contract”. Section 14(9) provides that this limitation does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous payment claim if the amount has not yet been paid.
22 Another important provision informing the formal requirements for payment claims under the SOP Act is s9. Section 9(1) provides that “on and from each reference date under a construction contract” a claimant is “entitled to a progress payment under this Act calculated by reference to that date”.
23 Section 9(2)(a) provides that a reference date is a date determined by or in accordance with the construction contract as:
a) a date on which a claim for a progress payment may be made; or
b) a date by reference to which the amount of a progress payment is to be calculated,
in relation to a specific item of construction work “carried out or to be carried out” or a specific item of related goods and services “supplied or to be supplied” under the contract.
24 The rest of s9 concerns situations where the contract makes no express provision for reference dates.
25 It is now well established in Victoria that unless a payment claim answering the description in s14(1) of the SOP Act is served, there can be no application to a Court under s16(2)(a)(i).[3] On the other hand, the available defences to a payment claim are very limited.
[3]Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340 [44] (“Southern Han”).
26 Generally speaking, the available defences concern either the nature of the underlying contract or the form and service of the purported payment claim, and thus whether the payment claim is effective to trigger the procedures established by Part 3 of the SOP Act.[4] More particularly, the defences to a payment claim enlivened by the formal requirements of the SOP Act are, in substance, that the payment claim:
[4]Southern Han [62].
a) does not relate to a “construction contract” (including because it does not involve carrying out “construction work”), or it relates to a construction contract excluded from the operation of the SOP Act under s7 (for example, a construction contract that forms part of a loan agreement, or one that is a domestic building contract under the Domestic Building Contracts Act 1995);
b) fails to satisfy the formal requirements of s14(2) (for example, by failing to identify the construction work or failing to state that it is made under the SOP Act);
c) was made when no valid reference date existed,[5] including where it is served before an applicable reference date or relies on a reference date that has already been used up by an earlier payment claim;[6]
d) includes variations that are “excluded amounts” under s10B; and
e) was not validly served on the respondent under either the terms of the contract or under s50.
[5]Southern Han [61]-[62]; Vanguard Developments v Promax [2018] VSC 386 [121] (Kennedy J).
[6]SOP Act s14(8).
27 Under s47, nothing in Part 3 of the SOP Act precludes bringing or continuing proceedings under the construction contract, including where those proceedings deal with the same issues in dispute in the proceeding relying on Part 3. Thus, a judgment under ss16 and 17 is a provisional judgment in what it grants and what it refuses.[7] The statutory context both contemplates and permits inconsistent judgments.[8] This section is, in effect, the statutory manifestation of the “pay now, argue later” description often given to the policy behind the SOP Act and its counterparts in other states.[9]
[7]Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112 [2] and [43]-[46] (Vickery J) (“Hickory Developments”), cited with approval in Pearl Hill Pty Ltd v Concorp Construction Group (Vic)Pty Ltd [2011] VSCA 99 [11].
[8]Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2005) 62 NSWLR 385 [22] (Handley JA, Santow JA and Pearlman AJA agreeing).
[9]Hickory Developments (n 7) [2] and [43]-[46].
28 Further, in considering any purported defences to a payment claim, it is important to be mindful of s48 of the SOP Act. This section provides that the provisions of the SOP Act have effect despite any contractual provision to the contrary. It further provides that any provision in any contract purporting to exclude, restrict or modify the operation of the SOP Act or that may reasonably be construed as an attempt to deter a person from taking action under the Act, is void.
29 This Court has endorsed the hearing of applications under the SOP Act on a summary basis by summons on originating motion with affidavit evidence.[10] Such claims are properly assessed on the balance of probabilities,[11] with the quality of the evidence weighed having regard to the fact that the legislation seeks to facilitate a swift but temporary remedy.[12] The present proceeding was commenced by summons on originating motion, so questions of the application of the test under ss61 and 63 of the Civil Procedure Act 2010 do not arise.
[10]3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674 [39]-[54] (“3D Flow Solutions”). See also SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805 [26].
[11]Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449, 449-450 (Mason CJ, Brennan, Deane and Gaudron JJ).
[12]3D Flow Solutions (n 10) [51]-[54].
Excluded amounts
30 The first ground relied upon by O’Brien in opposition to the claim is that the Court cannot be satisfied that the August BS Payment Claim and August LS Payment Claim do not contain excluded amounts.
31 O’Brien notes that the entire amount claimed in those invoices consists of variations labelled ‘Project Change Notices’. Indeed, H & M acknowledges they are either first class or second class variations.
32 O’Brien contends that the Court cannot be satisfied the items are second class variations. It says that on the face of the claims, there is no evidence that O’Brien requested or directed the services (s10A(3)).
33 O’Brien further submits that the Court cannot be satisfied the items are first class variations. It says on the face of the claims, there is no evidence in the claims or the documents to which they refer that the parties agreed that:
(a) the supply of H & M’s services constituted a variation (s10A(2)(c)); or
(b) H & M was entitled to a progress payment which included an amount in respect of the variation (s10A(2)(d)).
34 O’Brien concludes that the Court cannot award judgment on the payment claims.
35 H & M contends that the variations contained in the August BS Payment Claim and August LS Payment Claim are ‘second class variations’ under s10A(3) of the SOP Act, and therefore are not ‘excluded amounts’. In making this submission, H & M relies on extensive evidence of meeting records and other correspondence passing between the parties contained in Herbert affidavits. However, the relevance of this evidence has been overtaken by the recent decision of the Court of Appeal in Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd (“Yuanda”)[13].
[13][2021] VSCA 44 (“Yuanda”).
36 In Yuanda, the Court of Appeal considered the proper approach to proceedings commenced under s16(2)(a). In particular, s16(4)(a)(ii) of the SOP Act provides as follows:
(4) If the claimant commences proceedings under subsection (2)(a)(i) to recover the unpaid portion of the claimed amount from the respondent as a debt-
(a) judgment in favour of the claimant is not to be given unless the Court is satisfied-
(i) of the existence of the circumstances referred to in subsection (1); and
(ii) that the claimed amount does not include any excluded amount …
37 The Court of Appeal also considered what level of inquiry is to be undertaken in order for the Court to be satisfied that no excluded amount has been claimed. This Court has recently applied the relevant considerations set out in Yuanda in Cidec Pty Ltd v Citi-Con Pty Ltd[14] and Volan Group Pty Ltd v Prime Build Pty Ltd.[15] I rely on the analysis adopted by the Court in those cases.
[14][2021] VCC 553.
[15][2021] VCC 611.
38 In Yuanda, McLeish and Niall JA (Sifris JA dissenting) held that s16(4)(a)(ii) of the SOP Act prohibits the Court from giving judgment if ‘the claimed amount’ includes any excluded amount.[16] The Court of Appeal confirmed that ‘the claimed amount’ in s16(4)(a)(ii) is the amount claimed in the payment claim,[17] consistent with ss4 and 14(3) of the Act. Therefore, if the amount claimed in the payment claim includes any excluded amount, the Court is precluded from giving judgment in favour of the claimant.[18]
[16]Yuanda (n 13) [24] (McLeish and Niall JJA).
[17]Ibid[27] (McLeish and Niall JJA).
[18]Ibid [27] (McLeish and Niall JJA).
39 McLeish and Niall JA considered that a ‘tolerably clear statutory scheme’ exists by which ‘if there is a dispute about the extent to which excluded amounts are being claimed, that is a matter for adjudication.’[19] Further, that resort to the Court under s16(2)(a)(i) (rather than by adjudication) should be seen as an option intended to be used ‘only in a clear case.’[20] Thus, if a claimant proceeds straight to Court to seek recovery, rather than pursue adjudication (at [21]),:
At that point, the Court ‘is not to’ give judgment in favour of the claimant unless it is satisfied that the claimed amount does not include ‘any’ excluded amount. Consistently with the policy of the Act to prevent recovery of excluded amounts and the role of the Court in enforcing a liability determined by the statute, the natural meaning of those words is that, if the claimed amount includes any excluded amount, it is not to give judgment.
[19]Ibid [21] (McLeish and Niall JJA).
[20]Ibid [24] (McLeish and Niall JJA).
40 The majority is clear that the Court has no ability to simply reduce the payment claim or the claimed amount or to ‘carve out’ excluded amounts to give judgment for a lower amount.[21]
[21]Ibid [23]-[27] (McLeish and Niall JJA).
41 The Court of Appeal (the majority and Sifris JA in dissent) confirmed that the proper approach by which the Court is required to be satisfied that the claimed amount does not include any excluded amount is ‘on the face of the payment claim’.[22] Thus the Court has a limited role[23] and is not required to conduct a full investigation of the facts and circumstances.[24] Rather, it must be satisfied as to the issue of whether the claimed amount does not include an excluded amount by having regard to the face of the payment claim and documents to which it refers or which were served with it.
[22]Ibid [38]-[48](McLeish and Niall JJA) and[112]-[121] (Sifris JA).
[23]Ibid [44] (McLeish and Niall JJA).
[24]Ibid [98], [112] (Sifris JA).
42 The Court of Appeal in Yuanda considered that, consistent with s14(2)(c), the payment claim will have included those amounts that have been taken into account in calculating the claimed amount, the work goods or services to which they are referable and ‘provided an explanation for their inclusion’.[25] Accordingly, the inquiry may be confined ‘to the material disclosed in the payment claim’.[26]
[25]Ibid [42]-[43] (McLeish and Niall JJA).
[26]Ibid [43] (McLeish and Niall JJA).
43 In my view, unlike in Yuanda, the August BS Payment Claim and the August LS Payment Claims issued by H & M are not ‘detailed’ and do not refer to or provide any supporting documents. Each of the invoices fail to provide sufficient detail to identify the construction work in respect of which payment is sought and explain why such amounts are claimed. On the face of these payment claims, the Court cannot be satisfied that they do not include excluded amounts.
44 The Court should not conduct a full investigation into the facts and circumstances, for example, by having regard to the extrinsic evidence provided by H & M such as affidavit evidence of when it says the services were supplied to O’Brien, or O’Brien’s alleged request or direction to carry out the services, in order to be satisfied the payment claims do not include any excluded amounts.
45 In particular, the August BS Payment Claim and the August LS Payment Claims issued by H & M do not include any statement, including supporting documents, or refer to any supporting documents that expressly or inferentially show that:
(a) the parties agreed that the doing of the work or the supply of the goods and services constitutes a variation to the contract, as required for first class claimable variations (s10A(2)(c)); or
(b) O’Brien requested or directed the carrying out of the work or the supply of the goods and services, as required for second class claimable variations (s10A(3)(b)).
46 The August BS Payment Claim and the August LS Payment Claim do not include any statement, include any supporting documents or refer to any supporting documents that expressly or inferentially show that the work has been carried out or goods and services have been supplied as required for second class claimable variations (s10A(2)(a) or any agreement to that effect as required for first class claimable variations (s10A(3)(a)).
47 In accordance with the ‘on the face of the payment claim’ approach confirmed in Yuanda, the Court cannot be satisfied that the amounts claimed as variations satisfy the requirements of either a first class or second class claimable variation under s10A and therefore are not excluded amounts under s10B. Therefore, the Court cannot be satisfied that the claimed amount in the August BS Payment Claim and the August LS Payment Claims do not include any excluded amounts: s10B(2)(a).
48 Applying the ‘on the face of the payment claim approach’, the Court cannot be satisfied that each of the payment claims do not include any excluded amounts.
49 Ground (a) has been made out.
Identification of the construction work
50 O’Brien’s second contention is that the August BS Payment Claim and the August LS Payment Claim fail to sufficiently identify the related goods or services to which they relate.
51 O’Brien notes that the ‘August BS Payment Claim’ describes the services purportedly performed in respect of ‘Project Changes Notices’ 005, 006, 007, 008, 009, 010 and 011 using the formulation ‘Changes included but not limited to….’ O’Brien notes that the ‘August LS Payment Claim’ employs the same language with respect to ‘Project Change Notices’ 002, 003, 004, 005, 006, 007 and 008. O’Brien complains that the language is in non-exhaustive terms and that the descriptions outline some related goods and services, but not all.
52 O’Brien compares the general statements in the payment claims with the case of Jemzone v Trytan Pty Ltd (“Jemzone”).[27] In Jemzone, a statement that a purported payment claim related to ‘motel construction for Jemzone Pty Ltd’ was regarded as ‘fall[ing] well short of satisfying’ the identification requirement.[28]
[27](2002) 42 ACSR 42 (“Jemzone”).
[28]Ibid [43].
53 O’Brien also refers to the fact that:
(a) Mr Johnston deposed that he was not aware of the work to which the purported payment claims related based on the descriptions given in relation to the ‘August BS Payment Claim’ and the ‘August LS Payment Claim’.
(b) Mr Johnson did not alter that position in his further affidavit, despite H & M’s submissions of ‘volte face’; and
(c) the documents exhibited to Mr Herbert’s second affidavit do not provide any explanation of the other related goods and services to which H & M intended that these documents relate or establish that O’Brien should objectively have been aware of them.
54 O’Brien relies on Lyons J’s decision in John Beever (Aust) Pty Ltd v Paper Australia Pty Ltd,[29] his Honour distilled the following principles in relation to the ‘identification requirement’ of s14(2)(c):
[29][2019] VSC 126 at [83].
(a) the test of whether a claim is a payment claim for the purpose of the Act is objective;
(b) the manner in which compliance is tested is not overly demanding and should not be approached in an unduly technical manner or from an unduly critical point of view;
(c) it is necessary that the payment claim reasonably identifies the construction work to which it relates, such that the basis of the claim is reasonably comprehensible to the recipient party when considered objectively (that is, from the perspective of a reasonable party in the recipient’s position); and
(d) in evaluating the adequacy with which the work has been identified, the Court may go beyond the face of the document and take into account the background knowledge of the parties from their past dealings and prior exchanges of information, including correspondence passing between them before and at the time of the payment claim.
55 O’Brien submits that the ‘August BS Payment Claim’ and the ‘August LS Payment Claim’ do not satisfy these requirements. In the case of the ‘August BS Payment Claim’, the services purportedly performed in respect of ‘Project Changes Notices’ 005, 006, 007, 008, 009, 010 and 011 are described using the formulation ‘Changes included but not limited to …’ The same formulation is applied in the ‘August LS Payment Claim’ with respect to ‘Project Change Notices’ 002, 003, 004, 005, 006, 007 and 008.
56 O’Brien contends that in each case, ‘August BS Payment Claim’ and the ‘August LS Payment Claim’ sought to describe the related goods and services to which they relate in non-exhaustive terms. On their plain language, the descriptions provided outline some of the related goods and services in question, but not all of them.
57 O’Brien states that this formulation fails to identify the services to which the payment claim relates with the required ‘minimum level’[30] of specificity.
[30]Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liquidation) (2005) 64 NSWLR 462, [65] (Santow JA).
58 I agree with O’Brien’s submissions that a reasonable party in the defendant’s position is left guessing as to the work these purported payment claims are intended to capture. These documents cannot satisfactorily apprise O’Brien of the claim put against it, nor set the limits for any adjudication if there was to be a dispute about the purported payment claim.
59 Consequently, I find that the ‘August BS Payment Claim’ and the ‘August LS Payment Claim’ cannot perform the statutory function of a payment claim by helping to crystallise the dispute and establish the parameters of any adjudication.[31]
[31]Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140, [44]-[45] (Palmer J).
60 Accordingly, I uphold ground (b).
Conclusion
61 For the foregoing reasons, although grounds (a) and (b) have been made out by O’Brien, in circumstances where H & M has issued to the June BS Payment Claim, July BS Payment Claim and the July LS Payment Claim and no payment schedules have been delivered, nor payments made, there is judgment for H & M in the sum of $102,639.09 (including GST), together with interest accrued and costs.
62 Pursuant to s12(2)(b) of the SOP Act, the interest payable on the unpaid amount of a progress payment is the greater rate provided under the Penalty Interest Rates Act 1983 or the rate specified under the construction contract. Item 6 of the Terms and Conditions provided for at a rate of 14.5%. Accordingly, the applicable interest rate is 14.5%.
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Certificate
I certify that these 14 pages are a true copy of the judgment of Judicial Registrar Burchell delivered on 19 May 20201.
Dated: 19 May 2021
Gillian Lee
Associate to Judicial Registrar Burchell
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