James Hardie Building Systems Pty Ltd v Epoca Constructions Pty Ltd - [1999] QSC 3

IN THE SUPREME COURT
OF QUEENSLAND

OS 9467 of 1998
IN THE MATTER of the Subcontractor’s Charges Act 1974

- and -

IN THE MATTER of an application by James Hardie Building Systems Pty Limited (ACN 010 654 994) against Epoca Constructions Pty Ltd (ACN 009 855 332) for a Notice of Charge to be cancelled.

CATCHWORDS: CIVIL - SECURITIES - Subcontractor’s Charges - application for summary determination to cancel or modify charge over the amount of money payable or to become payable in dispute - the statute must be strictly construed - a “debt” does not include unliquidated damages for breach of contract - onus on respondent to prove amount claimed in the Notice of Claim of Charge is a “debt” - regard must be had to the terms of the contract.

Sections 5, 9, 10, 11, 23 Subcontractor’s Charges Act 1974.
Groutco (Australia) Pty Ltd v Thiess Contractors Pty Ltd [1985] 1 Qd R 238 applied.

Counsel:Mr RN Wensley QC for the applicant
Mr AB Crowe for the respondent

Solicitors:Carter Newell for the applicant
Ebsworth and Ebsworth for the respondent

Hearing Date: 12 November 1998

REASONS FOR JUDGMENT - SHEPHERDSON J

Judgment delivered 20 January 1999

James Hardie Building Systems Pty Limited has applied by originating summons for the following orders:-
1.That a Notice of Charge, given by Epoca Constructions Pty Ltd to Pasminco Century Mine Limited pursuant to the Subcontractor’s Charges Act 1974 claiming a charge over all money including retention money under the Subcontractor’s Charges Act 1974 that is now or will be payable by Pasminco Century Mine Limited to James Hardie Pty Limited (sic) and dated 22 September 1998, be cancelled or modified;
2.That the applicant be at liberty to substitute an irrevocable bank guarantee in favour of the Registrar in lieu of any sum to which the charge attaches.
The application is opposed by Epoca Constructions Pty Ltd the respondent. Only the first of the above matters was argued. Quite a deal of material has been filed by both sides and this shows by way of background the following matters.
The applicant is the head contractor for the construction of an accommodation village, village central facilities and associated civil works at the Century Zinc Mine in North Queensland.
In July 1997 the applicant called tenders for two subcontracts one for accommodation village works and one for civil works.
The respondent submitted tenders for both contracts as follows:
4 AugustCivil works $1,557,000
12 AugustAccommodation village
central facilities $3,096,000
The respondent claims that the tenders were submitted on the condition that they were to be considered together as a single offer but the relevant documents do not say this. I mention in passing it is not necessary for me to resolve this claim.
The tenders were based on a document described as specification revision 3. On 2 October 1997, which was after tender but before contract, the applicant issued specification revision 5 to the respondent. This was by transmittal CZ0118.
By letter of award dated 16 October 1997 the applicant awarded the subcontracts to the respondent. The award was expressly based on specification revision 5 (transmittal CZ0118) (Ex RLN4).
Formal written subcontract documents dated 17 October 1997 were executed by the applicant and delivered to the respondent for execution. The respondent executed these documents in March 1998 long after the works had been under way. The contract sums which were lump sums were as follows:
Accommodation village and central facilities $3,096,000
Civil works $1,557,312
TOTAL:$4,653,312
The above figure for civil works was later reduced to $1,283,070 and the total thus became $4,379,070.
The respondent says that in February 1998 Michael Joseph Paul Allen, the contracts administration manager of the applicant, represented to it that the subcontract documents were merely formal documents required to satisfy audit and administrative procedures. The material filed on behalf of the respondent appears to suggest that the true arrangement or agreement between the parties were some sort of “partnering” or “partnership” agreement. While Mr Allen accepts that there were between the parties, conversations about cooperative endeavours on the project involving such concepts, he does not accept that the contractual arrangements were other than as appear in the signed agreements. Again, it is unnecessary for me to resolve this aspect of the matter before me - the matter is for summary determination.
What are said to be important clauses of the contracts before me (and they appear as exhibit MJPA 1) are:
(a)clause 8 dealing with variations
(b)clause 9 dealing with “valuation of variations”
(c)clause 14 dealing with “payment and security”
(d)clause 16 dealing with “disputes”
(e)clause 2.2 by which in certain circumstances the applicant was entitled to deduct sums from payments otherwise due.
The respondent performed the subcontract works beginning in early November 1997. The civil works contract was completed on 16 May 1998 and the accommodation and village and central facilities contract was completed on 4 August 1998.
During the course of the performance of the works it appears that provisions of the contracts appearing in MJPA 1 regarding claims for payment and payments were followed by the parties and during this time the respondent submitted eight progress claims which the applicant assessed and paid on (see para 23 of respondent’s affidavit by Mr Lambert).
During the course of the works and apparently in accordance with the contract terms:-
(a)The respondent submitted 23 variation claims totalling $524,824 and did so as part of its progress claims. The applicant says it assessed these claims in accordance with the contract in the amount of $333,234. (There appears some doubt whether this figure should be $333,234 of $333,224 (see first page of Ex MJPA 2 and page 3 of spreadsheet in Ex MJPA 2)). Some of the variation claims were rejected, some were allowed and some allowed in a reduced sum.
(b)Of the variations allowed -
(i)$190,542 has been paid.
(ii)the balance of the $333,234 allowed namely $142,692 was credited to the respondent in the final contract statement which dealt with progress claim No 8.
(c)Retention moneys in accordance with the contracts in the sum of $235,615.20 have been withheld.
On 5 August 1998 the applicant issued to the respondent a document described as “Century Zinc Accommodation Village and Central Facilities Statement of Final Contract Value” which is exhibit MJPA 2 and this document detailed as follows:-
“Original Contract Sum 4,653,312.00
Variations Claimed    524,824.00
Total Claimed Value                   5,178,146.00
Adjustments to Contract Sum
Schedule E Reductions                 -274,242.00
Variations Adjusted
Refer Addendum ‘B’  - 33,250.00
Variations Disallowed
Refer Addendum ‘C’  -158,350.00
Total of Adjustments  -465,842.00
Final Contract Value  5,178,146.00
Less Adjustments Nominated             -465,842.00
Approved Final contract Sum            4,712,304.00
Disbursement of Final Payment
Previously Approved Claim No 7      4,163,250.00
Final Approved Claim No 8              4,712,304.00
Retention Account 5% 235,615.20
Nett total Approved  4,476,688.80
Previously Paid            3,936,237.00
Balance Payable  540,451.80
Back charge Deductions
Addendum ‘D’ 425,600.00
114,851.80
Default works Addendum ‘E’               96,168.75
Final Payment  18,683.05
Prior to making the final payment of $18,683.05 we require that your Company sign the attached Statutory Declaration by Subcontractor. Upon receipt of the said Declaration the above sum will be released and the five percent retention of $235,615.20 released at the end of the warranty period being the 31st July 1999.”
16                   The final statement of contract value which I have just detailed contained a number of addenda and:-
(a)allowed for 23 variation claims above referred to;
(b)adjusted the variation amounts in the applicant’s favour by $33,250 as per Addendum ‘B’ to the statement of final contract value;
(c)set off (back charged) apparently under mechanism provided for in the contract, the sum of $425,600 for-
(i)equipment used by the respondent and paid for or provided by the applicant ($87,126)
(ii)accommodation, airfares and fuel costs incurred by the respondent but paid for by the applicant ($338,474)
(d)deducted apparently in accordance with the mechanism provided for in the contract $96,169 as the cost of work performed by the applicant which should have been performed by the respondent (see Addendum ‘E’ to the statement of final contract value)
17                   It appears that until the applicant issued the statement of final contract value on 5 August 1998 there was no challenge to any of the assessments, payments or retentions made by the applicant and the respondent did not refer any dispute for resolution by arbitration in accordance with cl.16 of the contract.
18                   After the statement of final contract value had been sent to the respondent the following matters occurred:-
(a)By letter dated 7 August 1998 (exhibit MJPA 3) the respondent rejected the applicant’s statement of “final contract value” and foreshadowed submission of “our semi-final claim associated with all work and our involvement at Century Zinc project at the earliest possible convenience when all details and costs are known”.
(b)On 26 August 1998 the respondent submitted what it called a progress claim No 9 for $1,902,522.42 (see Lambert’s affidavit para 23).
(c)On 15 September 1998 the respondent submitted what it called progress claim No 10 for $2,707,162.45 (see above para 23 in Lambert’s affidavit).
(d)Between 14 August 1998 and 3 September 1998 the respondent submitted 39 new variation claims (numbered 24-62). These appear in MJPA 5 and are said to total $1,625,809.
(e)By letter dated 31 August 1998 the applicant rejected as inadmissible the variation claims numbered 24-49 on the basis that the requirements of the contract concerning payment had not been met (see exhibit MJPA 6).
(f)On 16 September 1998 the respondent submitted 27 further variation claims which were numbered 63-89 inclusive (see exhibit MJPA 7 in which copies of these claims appear and are said to total $113,268.60).
(g)The applicant has rejected these claims 63-89 as inadmissible on the basis of failure by the respondent to comply with the contractual requirements for payment and more particularly the time and notice provisions (see exhibit MJPA 8).
(h)At the date of my hearing the application on 12 November 1998 there was evidence from Mr Allen that the respondent had threatened to make further - and so far unquantified - claim for extensions of time and “any late and additional costs”.
(i)As at 12 November 1998 the applicant was said to be assessing the variation claims 50-62 but had not then determined them.
(j)As at 12 November 1998 there was no evidence that the respondent had referred the applicant’s rejection of variation claims 24-49 and 63-89 to arbitration pursuant to the contract.
(k)On 22 September 1998 the respondent delivered to the applicant a “notice of claim of charge being given” pursuant to “Subcontractors’ Charges Act 1974‑1976" and claimed an amount of $2,569,674. The notice stated that the respondent had given notice to Pasminco Century Mine Limited that it claimed a charge upon all money including retention money under the Subcontractors’ Charges Act 1974 that is now or will be payable by Pasminco Century Mine Limited to you in respect of the following work done by [the respondent] in respect of its contract with [the applicant] that is to say Century Mine Village Project (construction of central facility, recreational facility, ancillary building and civil works) which work was done by [the respondent] under a subcontract with you between November 1997 and August 1998.
19                   The notice of claim of charge set out the amount claimed calculated as follows (in Australian dollars):
Subcontract sum (excluding variations)
Building  3,096,000.00
Civil  1,283,070.00
4,379,070.00
Less amount paid in respect of
contract sum  (3,972,708.00)
Amount outstanding
(excluding variations)  406,362.00
Variations
Variations claimed herein                   2,126,841.00
Less amount paid in respect of
variations   (190,542.00)
Amount outstanding in respect
of variations  1,936,299.00
Retention    227,013.00
TOTAL CLAIMED BY THIS CHARGE                   2,569,674.00
20                   Before proceeding further I should now set out certain provisions in the contract between the parties and which I have earlier mentioned.
8.Variations
8.1      The Sub-Contractor shall make such variations to the Sub-Contract Works, whether by way of addition, modification or omission, as may be ordered by the Client under the Contract and confirmed in writing to the Sub-Contractor by the Contractor or as ordered in writing by the Contractor.
8.2      Save as aforesaid the Sub-Contractor shall not make any alteration or modification to the Sub-Contract Works.
8.3      The Contractor shall not be liable for any change to the Sub-Contract Works unless the change has been ordered in writing by the Client and confirmed in writing by the Contractor or ordered in writing by the Contractor.
8.4      Where the Contractor issues an instruction which the Sub-Contractor considers constitutes a variation but which is not so ordered in writing by the Contractor then the Sub-Contractor shall as a CONDITION PRECEDENT to any entitlement to payment against the Contractor, provide a written notice to the Contractor under this Sub-Clause setting out full particulars of its claims within 7 days of receipt of the Contractor’s instruction, direction or order and the particulars as so set out shall be the only ones upon which the Sub-contractor may rely for prosecution of its claim against the Contractor under the Sub-Contract, or at law.
9.Valuation of Variations
9.1      All variations to the Sub-Contract Works ordered in writing by the Contractor in accordance with clause 8.1 above shall be valued as provided by this clause and the value thereof shall be added to or deducted from the Sub-Contract Sum.
9.2      The value of such variations shall wherever possible be agreed before commencement by reference to the rates and prices (if any), specified in this Sub-Contract for like or analogous work, but if there are no such rates and prices, then such value shall be determined by the Contractor as being fair and reasonable in all the circumstances. In determining what is a fair and reasonable valuation, regard may be had to any valuation made under the Contract in respect of the same variation.
14.Payment and Security
14.1     The Contractor shall pay to the Sub-Contractor the Sub-Contract Sum adjusted in accordance with this Sub-Contract.
14.2     The Contractor will pay to the Sub-Contractor by instalments the value of the Sub-Contract Works properly incorporated in accordance with the Sub-Contract PROVIDED ALWAYS the Sub-Contractor has:
(a)submitted its progress claim on or before the claim date set out above; and
(b)provided the progress claim in the form and with supporting information required by the Contractor; and
(c)made separate claims for every variation ordered by the Contractor and carried out by the Sub-Contractor; and
(d)provided evidence satisfactory to the Contractor that the Sub-Contractor has paid every person employed or engaged in any way by the Sub-Contractor on the Sub-Contract Works all amounts legally due to those persons, FAILING WHICH the Contractor may make such payments direct and any amount paid by the Contractor shall become due and owing from the Sub-Contractor to the Contractor; and
(e)not breached any term of this Sub-Contract.
14.3     Within the payment period above after receipt by the Contractor of payment for the Sub-Contract Works under the Contract, the Contractor shall pay to the Sub-Contractor corresponding and like amounts certified under the Contract and paid to the Contractor by the Client less deductions for previous payments, retention monies specified above and any amounts owed by the Sub-Contractor to the Contractor arising out of or related to this Sub-Contractor or any other agreement between the Contractor and the Sub-Contractor.
14.4     The Sub-Contractor must provide security for performance as set out in the above Retention.
14.5     The Contractor will reduce the Sub-Contractor’s security by half upon the later of the date of the certificate of practical completion for the Contract Works or the date on which the Sub-Contract Works are complete and will release the balance of the Sub-Contractor’s security at the end of the Defects Liability Period under the Contract.
16.Disputes
16.1     Any dispute or difference whatsoever arising out of or in connection with this Sub-Contract shall be submitted to arbitration in accordance with, and subject to. The Institute of Arbitrators Australia Rules for the Conduct of Commercial Arbitrations.
16.2     The decision of the arbitrator(s) shall be final and binding upon the parties.
16.3     The reference of any dispute or difference to arbitration shall not affect the obligations of the Sub-Contractor to complete the Sub-Contract Works and to perform its obligations under this agreement.
16.4     The Sub-Contractor shall afford all assistance to the Contractor in dealing with any dispute under the Contract concerning the Sub-Contract Works including disputes which have been made the subject of any dispute resolution proceedings in any court or elsewhere and the cost of such assistance shall be borne by the Sub-Contractor.
Clause 2.2
2.2      Should any breach of the Sub-Contract by the Sub-Contractor occur and the Contractor determines such breach as a cause of the Contractor incurring any extra costs, loss or damage including without limitation any liquidated damages under the Contract, then the Contractor, without prejudice to any other remedies available, shall be entitled to deduct such sums from any payment otherwise due to the Sub-Contractor, provided that the Contractor shall state its intention to make such deductions in writing, and shall state the basis for such action, and shall quantify and detail with reasonable accuracy the amounts to be deducted.
“Contractor” in the above clauses means the applicant and “Sub-Contractor” means the respondent. “the Contract” means the contract between the applicant and Pasminco Century Mine Limited (“the client”).
21                   “Claims date” specified and referred to in cl. 14.2 was “26the day of each month”.
22                   I add that in rejecting variation claims 24-49 and 63-89 the applicant relied on alleged contravention by the respondent of cl. 6.3 of the contract between the alleged contraventions of parties in addition to alleged contraventions of cll. 8.2, 8.3 and 8.4. I do not propose to set out cl. 6.3.
23                   In my view, given that the matter before me is to be determined summarily, I am not required and do not propose to deal with the question whether or not the rejections of those variation claims were justified. Those factual matters can be determined at trial of the action (see Re Westpac Australia Pty Ltd (OS 859 and 897 of 1194 - unreported judgment of Ambrose J delivered 15 November 1994).
24 The notice of claim of charge has been given pursuant to s.10(1) of the Subcontractors’ Charges Act 1974 and there is no evidence before me that the applicant has given any notice (pursuant to s.11(3)(b) of the same Act) that it disputes the claim. There was no argument concerning lack of such evidence and so I ignore that aspect.
25                   The notice of claim of charge has been verified by an engineer Mr Mackie. I add, although it is not necessary to decide this point at present, that Mr Wensley QC who appeared for the applicant criticised the certificate as not being independent because in his affidavit sworn 9 November 1998 Mr Mackie said (para 3):
“Prior to certifying the amount of the charge I caused an investigation to be undertaken to confirm that those variations which were certified were either:
(a)supported by a written notification from James Hardie;
(b)confirmed by Epoca; or
(c)otherwise accepted by James Hardie.
Where I was not satisfied as to one of the above the variation was not included in my certification of the charge. I consider that in respect to each claim for variation certified by me is a proper subcontract variation.” (sic)
26                   I turn now to the relevant law.
27 Section 5 of the Subcontractors’ Charges Act creates charges in favour of subcontractors. It provides:-
“5(1) Where an employer contracts with a contractor for the performance of work upon or in respect of land or a building, or other structure or permanent improvement upon land or a chattel, every subcontractor of the contractor shall be entitled to a charge on the money payable to the contractor or a superior contractor under the contractor’s, or superior contractor’s contract or subcontract.
(2) The charge of a subcontractor shall secure payment in accordance with the subcontract of all money that is payable or is to become payable to the subcontractor for work done by the subcontractor under the subcontract.
(3) The total amount recoverable under the charges of subcontractors shall not exceed the amount payable to the contractor or subcontractor under the contract or subcontract, as the case may be.”
28                   In Groutco (Australia) Pty Ltd v Thiess Contractors Pty Limited [1985] 1 Qd R 238 Campbell CJ with whose reasons the other members of the Full Court agreed considered extensively various sections of the Subcontractors’ Charges Act. Of s.5 he said (at p.243):-
“It can be seen that subsec. (2) of s.5 sets up two separate criteria, each of which must be satisfied before a charge can be supported. These are that the charge shall secure (a) payment in accordance with the subcontract, and (b) payment of all money that is payable or is to become payable to the subcontractor for work done by him under the subcontract. Section 5 gives to a subcontractor an entitlement to a charge, to secure such payment, on the money payable by a superior contractor to the contractor under the latter’s contract. Subsection (3) is significant in that it limits the total amount recoverable under the charges of subcontractors to the amount payable to the contractor under his contract.”
29                   This passage from his Honour’s judgment is in my view important in the present case.
30                   I add that Campbell CJ went on to consider in some detail analogous legislation in New Zealand and he said (at p.243):-
“When dealing with analogous legislation in New Zealand (the Contractors’ and Workmen’s Liens Act 1892) Edwards J who delivered the principal judgment of the Court of Appeal in In Re Williams, ex parte Official Assignee (1899) 17 NZLR 712, said, at pp.719-720:
‘The purpose of the Act is shortly and correctly described in its title, ‘An Act to make Better Provision for securing the Payment of Money due to Contractors and Workmen, and for other Purposes.’ In pursuance of the purpose so defined, the 3rd section of the statute provides that a contractor, subcontractor, or workman who does, or procures to be done, any work upon or in connection with any land, or any building or other structure or permanent improvement upon land, or does, or procures to be done, any work upon or in connection with any chattel, is entitled to a lien upon the whole interest of the employer in that land or chattel for the contract price of the work, subject to certain specified limitations, the main object of which is to provide that the aggregate amount of liability so imposed upon the employer shall not exceed his liability under his contract. This section is, I think, the key to the interpretation of the statute.’
I agree with that observation. In construing the Act I also agree with the approach adopted by Alpers J in Farmers’ Union Trading Co Ltd v AW Bryant [1925] NZLR 390 who, when considering analogous provisions of the Wages Protection and Contractors’ Liens Act, 1908 (NZ) said, at pp.392-3:
‘The object of the Act is to protect workers and subcontractors, and for their benefit to intercept contract moneys in the hands of the employers. To that extent it is an interference with the complete freedom of action of the employer under his contract. But the scope of the protection thus afforded and the interference thus authorised must be strictly limited by the language employed ... The Act does not enlarge the obligations of the employer; it merely intercepts the money actually payable by him to his contractor. ... the statute must be subject to strict construction.’
31                   Campbell CJ then considered material provisions of the Subcontractors’ Charges Act other than s.5. Those provisions included ss.10, 11, 9 and 23. Of these I note the following:
“10.(1) A subcontractor who intends to claim a charge on money payable under the contract to the subcontractor’s contractor or to a superior contractor -
(a)shall give notice to the employer or superior contractor by whom the money is payable, specifying the amount and particulars of the claim certified as prescribed by a qualified person and stating that the subcontractor requires the employer or superior contractor, as the case may be, to take the necessary steps to see that it is paid or secured to the subcontractor; and
(b)shall give notice of having made the claim to the contractor to whom the money is payable.
(1A) The claim shall be in respect of -
(a)money payable to the subcontractor at the date of the notice;
(b)money to become payable to the subcontractor after the date of the notice for work done by the subcontractor prior to that date.
(2) A notice of claim of charge may be given although the work is not completed or the time for payment of the money in respect of which the charge is claimed has not arrived, but we (sic) the work is completed shall be given within 3 months after such completion.
...
(4) If notice is not given pursuant to this section, the charge shall not attach.
...
(6) A claim -
(a)that is not certified in accordance with subsection (1); or
(b)that is supported by a certificate given by a person in contravention of section 10A(2);
shall not be a valid claim for the purposes of this section and a notice of claim of charge based on such a claim shall be of nor force or effect.”
32 Section 11 deals with consequences of notice of claim of charge. In the present case Pasminco who is the head contractor has retained $1,412,200.22 (Allen’s affidavit para 20). This amount is not sufficient to satisfy the claim made by the respondent and in light of the provisions of s.5(3) appears to be the maximum possible amount of the charge.
33 Section 9 reads:-
“9.(1) Where the debt secured by a charge passes to another person upon the death or bankruptcy of the person entitled to the charge, or otherwise by operation of law, the right to the charge passes with that debt.
(2) A charge may be assigned together with the debt secured thereby.”
34 Section 23 reads:-
“23. Save as is otherwise expressly provided, nothing in this Act shall be construed to affect the right of a person to whom a debt is due and owing for work done to maintain a personal action to recover the debt against the person liable for it, and a judgment obtained by the plaintiff in any action brought shall not affect a charge or other right to which the plaintiff is entitled under this Act.”
35 In considering ss.9 and 23 Campbell CJ emphasised the word “debt” appearing in these sections. He referred also to the definition of “contract price” in s.3(1) of the Subcontractors’ Charges Act. That definition read:-
“Contract price” includes the money payable for the performance of work under a contract or subcontract, express or implied, whether or not the price is fixed by express agreement.”
36                  At p.247 his Honour said:-
“The phrase “contract price” is referred to in the Act only for the following purposes: in the definition of “retention money” as any part of the contract price retained for rectification of defects; in providing that references in the Act “to the amount of money payable under a contract or subcontract” shall be deemed to include all amounts under a contract or subcontract are to be credited or allowed in complete or partial satisfaction of the contract price otherwise and upon payment in money (s.3(2)); and in providing that the amount of money payable to the contractor or subcontractor under his contract or subcontract “shall be deemed to include all money paid in reduction of the contract price to a person other than the subcontractor claiming the charge unless that money is paid in good faith and not for the purpose of defeating or impairing a claim to a charge existing or arising under this Act and is paid otherwise than in contravention of section 11" (s.6).”
37                   His Honour referred to s.8 and then went on (pp.247-8):-
“The parts of the Act to which I have referred show that its object and purpose are to secure claims for payment of money due for work done calculated in accordance with the actual payment provisions of the subcontract. It is my opinion that the money payable (or to become payable) to a subcontractor “in accordance with his contract” for work done by him under the subcontract are those moneys which the terms of the subcontract itself provide as being or becoming payable.
I have earlier set out the terms of cl.3 of the subcontract agreement dealing with the full consideration for the performance of the work including additions or reductions. In effect, the subcontract provides that the subcontractor is to be paid an amount for particular work calculated upon certain rates stated in the subcontract. That work has been measured, the subcontract rates applied to the measured work giving a sum payable to the subcontractor which has been paid in full to the latter (subject to retention money).
Although ss.5, 10, 11 and 12 do not refer to “contract price”, the definition in the Act of “contract price” supports the construction that s.5(2), when it refers to moneys payable “in accordance with the subcontract”, is limited to the money payable in accordance with the payment terms of that subcontract relating to the work to be performed under it. The reference to “the debt secured by a charge” in s.9 and to “the right of a person to whom a debt is due and owing for work done” in s.23 also support this view.”
38                   The passage I have just quoted is important in the present case because it decides that the money payable or to become payable to the respondent - and it is this money only which is to be subject to the charge - is money which the terms of the contract between the parties provide as being or becoming payable.
39                   And so one looks to the terms of the contract as to payment.
40                   Clause 14 which I have earlier set out contains a number of conditions precedent to the applicant being obliged to pay the respondent pursuant to that clause. See cl.14.2.
41                   According to the documentary evidence before me there is a dispute between the parties concerning the amount of the money payable or to become payable pursuant to the contract.
42                   The amount of the charge claimed is $2,569,674 and that amount is disputed. Of that sum the applicant concedes that the respondent is entitled to a charge of $254,298.25 being the total of the $18,683.05 appearing in the statement of final contract value dated 5 August 1998 and $235,615.20 retention moneys.
43                   Beyond that sum it is impossible to say how much more, if any, money is payable or to be payable by the applicant to the respondent in terms of the contract between the parties.
44                   In my view, until the terms of the contract dealing with ascertainment of moneys payable to the respondent are complied with, what amount of money if any is payable or will be payable cannot be stated.
45                   The contract in cl.14 provides the procedure to be followed in order to ascertain that amount. That procedure has not yet been followed. The contract also contains in cl.16 the procedure for resolving disputes between the parties. There is a dispute concerning the amount payable or to be payable. Until it is, the debt, if any, from the applicant to the respondent cannot be ascertained by arbitration. The debt can of course be ascertained at trial of the respondent’s action.
46 The charge secures a debt. The Full Court has decided that “debt” in ss.9 and 23 cannot be construed so as to include unliquidated damages for breach of contract (see Groutco p.248).
47                   While it may well transpire that at the end of the procedures prescribed by the contract the liquidated amount is found to be payable from the applicant to the respondent beyond the $254,298.25 already admitted by the applicant, I am not empowered to guess at what that amount may be. If it is possible on the evidence for me to determine without hearing evidence and deciding disputed matters of fact what that further amount be, I should and would do so. However, the application before me is to be determined summarily (s.21(2) Subcontractors’ Charges Act). In my view the respondent has an onus of proving the amount claimed in the Notice of Claim of Charge is a debt i.e. a liquidated demand.
48                   Mr Crowe who has appeared for the respondent has submitted that the deductions made by the applicant in its final statement of 5 August 1998 and as appearing in Addenda B, C, D and E will ultimately be found to be moneys payable by the applicant to the respondent and therefore I should on this hearing include in the charge those amounts which total $713,368.78. In my view to do so would be quite wrong as I would, without hearing evidence, be pre-judging issues in dispute and yet to be decided.
49                   Mr Crowe has further submitted that the amounts of the variations claimed after 5 August 1998 should be included. He relies on an argument of estoppel/waiver and a claim for relief under the Trade Practices Act (ss.52 and 87). In my view, these matters are still in dispute and I propose to follow the decision of Ambrose J in the matter of an application by Westpac Australia Pty Ltd (859 and 897 of 1994) - judgment 15 November 1998 - reported in Butterworths unreported judgments 1997 in which his Honour held that an application made under s.21 was inappropriate to determine facts or issues in dispute.
50                   The matters to which Mr Crowe has referred can be determined by action in the usual way if not earlier resolved by arbitration.
51                   In summary then the applicant has satisfied me that the amount claimed by way of charge should be reduced to $254,298.25.
52                   I would add that if, after the applicant has assessed and determined variation claims 50 to 62 that an amount of money is payable or will become payable to the respondent, the above sum of $254,298.25 will be increased by the amount determined by the applicant.
53                   I therefore order that the claim of charge by the respondent dated 22 September 1998 be modified by reducing the amount claimed from $2,569,674 to $254,298.25 plus such amount, if any, as the applicant after assessing and determining variation claims 50 to 62 has determined on or before 2 February 1999 is payable or will become payable to the respondent under any or all such claims.
54                   The sum of $254,298.25 is made up as follows:-
Balance appearing in statement of final contract value  $18,683.05
Retention moneys  $235,615.20
TOTAL:          $254,298.25
55                   I shall hear from the parties on costs.