Lamac Developments Pty Ltd v Devaugh Pty Ltd
[2002] WASC 38
•12 MARCH 2002
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: LAMAC DEVELOPMENTS PTY LTD -v- DEVAUGH PTY LTD [2002] WASC 38
CORAM: MASTER SANDERSON
HEARD: 6 MARCH 2002
DELIVERED : 12 MARCH 2002
FILE NO/S: CIV 2753 of 2001
BETWEEN: LAMAC DEVELOPMENTS PTY LTD (ACN 009 337 213)
Plaintiff
AND
DEVAUGH PTY LTD (ACN 008 792 265)
Defendant
Catchwords:
Practice and procedure - Application for leave to bring summary judgment application
Legislation:
Nil
Result:
Application for leave refused
Category: B
Representation:
Counsel:
Plaintiff: Mr J C Curthoys
Defendant: Mr G H Murphy
Solicitors:
Plaintiff: Slee Anderson & Pidgeon
Defendant: J D Finlay & Co
Case(s) referred to in judgment(s):
Clyde Contractors Pty Ltd (t/as Clyde Constructions) v Northern Beaches Developments Pty Ltd [2001] QCA 314
Case(s) also cited:
D A Christie Pty Ltd v Baker (1996) 2 VR 582
Devaugh Pty Ltd v Lamac Developments Pty Ltd [1999] WASCA 280
Lamac Developments Pty Ltd v Devaugh Pty Ltd [1991] WASC 76
Qantas Airways Ltd v Joseland & Gilling (1986) 6 NSWLR 327
MASTER SANDERSON: This is the plaintiff's application for summary judgment. As the application is brought more than 21 days after the entry of an appearance by the defendant, leave to bring the application is required. The defendant opposed leave being granted.
The defendant entered an appearance to the writ on 12 January 2001. This application for summary judgment was issued on 7 February 2002. The affidavits filed in support of the application offer no real explanation for the delay. In the course of his submissions, counsel for the plaintiff pointed out that there were on foot related proceedings: CIV 1153/2001. In those proceedings Devaugh is the plaintiff and Lamac is the defendant. Devaugh has claimed against Lamac for non‑performance of a contract, the same contract which is at the heart of this action. It was submitted that the defendant in this action has suffered no prejudice in terms of cost because the defence it has raised is essentially the mirror image of the claim raised in the other proceedings. Thus, it was said, the policy consideration underlying the requirement that a summary judgment application be brought within 21 days - to prevent a plaintiff incurring significant costs only to be met with a summary judgment application at a late stage in the proceedings - did not apply to this case. It was submitted that given the strength of the plaintiff's case it was proper in all the circumstances that the summary judgment application be allowed to proceed.
In the circumstances I would not be prepared to grant leave to the plaintiff to bring this application. I am not satisfied that any reasonable explanation has been offered for the delay in bringing the application. The length of the delay is significant. I appreciate the strength of the plaintiff's argument with respect to the related proceedings but I am not satisfied that this carries sufficient weight to justify a grant of leave. Furthermore, on 23 January 2001 the plaintiff issued a summons seeking summary judgment. It elected not to proceed with that application. There was no evidence as to what led to the decision not to proceed. It is not immediately apparent from evidence filed in support of this application that the plaintiff is in any better position now to seek summary judgment than it was in January 2001. While a second application for summary judgment can be permitted in certain circumstances, I see no compelling reason in this case why the second application should proceed.
As leave is refused it is, strictly speaking, unnecessary for me to say anything further about the merits of the application itself. However, in deference to the quality of the argument put by counsel for the plaintiff, I will deal briefly with the merits of the application. As I have concluded that if leave had been granted the application would, in any event, have failed, it is inappropriate that I deal in any detail with the issues raised on the application. These are matters which must finally be determined at trial and I would not presume to decide any issues between the parties on this application. Accordingly, my reasons will be brief.
The case between the plaintiff and the defendant concerns certain guarantees provided by the plaintiff to the defendant pursuant to a building subcontracted agreement entered into between the parties. Without going to the particular provisions of the agreement, it was open to the plaintiff rather than have "retention money" retained from each progress payment made under the contract to provide bank security to the defendant. This was done. In due course the contract works were completed. The parties had a tempestuous relationship culminating in a dispute which went to arbitration and a number of applications in this Court. None of these matters are presently of concern.
It is common ground between the parties that in or about September/October 2000 the defects liability period under the contract expired. At this point cl 42.7 and cl 42.8 of the contract are relevant. They are in the following terms: (See affidavit of Michael Reuben Lane sworn 12 February 2002, annexure "MRL1").
"42.7 Final Payment Claim
Within 21 days after the expiration of the Defects Liability Period, or where there is more than one, the last to expire, the Subcontractor shall lodge with the Main Contractor's Representative a final payment claim and endorse it 'Final Payment Claim'.
The Subcontractor shall include in that claim all moneys which the Subcontractor considers to be due from the Main Contractor under or arising out of the Subcontract or any alleged breach thereof.
After the expiration of the period for lodging a Final Payment Claim, any claim which the Subcontractor could have made against the Main Contractor and has not made shall be barred.
42.8Final Certificate
Within 28 days after receipt of the Subcontractor's Final Payment Claim or, where the Subcontractor fails to lodge such a claim, the expiration of the period specified in Clause 42.7 for lodgement of the Final Payment Claim by the Subcontractor, the Main Contractor's Representative shall issue to the Subcontractor and to the Main Contractor a final payment certificate endorsed 'Final Certificate'. In the certificate the Main Contractor's Representative shall certify the amount which in the Main Contractor's Representative's opinion is finally due from the Main Contractor to the Subcontractor or from the Subcontractor to the Main Contractor under or arising out of the Subcontract or any alleged breach thereof.
Unless either party, either before the Final Certificate has been issued or not later than 8 days after the issue thereof, serves a notice of dispute under Clause 47, the Final Certificate shall be evidence in any proceedings of whatsoever nature and whether under the Subcontract or otherwise between the parties arising out of the Subcontract, that the Works have been completed in accordance with the terms of the Subcontract and that any necessary effect has been given to all the terms of the Subcontract which require additions or deductions to be made pursuant to the Subcontract, except in the case of -
(a)fraud, dishonesty or fraudulent concealment relating to the Works or any part thereof or to any matter dealt with in the said Certificate;
(b)any defect (including omission) in the Works or any part thereof which was not apparent at the end of the Defects Liability Period, or would not have been disclosed upon reasonable inspection at the time of the issue of the Final Certificate; or
(c)any accidental or erroneous inclusion or exclusion of any work, plant, materials or figures in any computation or any arithmetical error in any computation.
Within 14 days after the issue of the Final Certificate which certifies a balance owing by the Main Contractor to the Subcontractor, the Main Contractor shall release to the Subcontractor any retention moneys or security then held by the Main Contractor."
It is common ground between the parties that the plaintiff did not lodge the final payment claim. That being the case, the main contractor's representative - that is, the defendant's representative - was required 49 days after the expiry of the defects liability period to issue a "Final Certificate". It was, once again, common ground that this certificate was not issued within the period required by the contract. In fact, a certificate was issued on 24 January 2001 but on any view of the matter, this was well beyond the time required by the agreement.
It was the plaintiff's case that once there was a failure to issue the final certificate on time, the right to retain retention moneys or security was lost. In effect, it was said that the breach by the defendant of its contractual obligation to issue a final certificate had the consequence of terminating the right to retain the security. It is apparent, putting the argument that way, that the plaintiff says that time is the essence of the contract.
I am not satisfied that the plaintiff's interpretation of cl 42.8 can be sustained. In my view, it is arguable that a final certificate which is issued late is nonetheless effective. No doubt the plaintiff, at any time after the expiration of the time limited by cl 42.7 and cl 42.8 could have sought an order requiring the defendant to issue a final certificate. Equity would, in all probability, have come to the plaintiff's aid. But if that was done, there appears to be no reason why the final certificate should not have included claims by the defendant against the plaintiff which would have the effect of not releasing the security. After all, the final sentence in cl 42.8 appears to anticipate that the security will only be released if the final certificate shows a balance owing by the defendant to the plaintiff. I find it difficult to see how a breach of contract by the defendant in failing to issue a final certificate can give rise to a discharge of the security. It may give rise to a claim for damages. It may also be a repudiation of the contract which the plaintiff could accept, thus bringing the contract to an end and allowing for the discharge of the security. But that is not the case the plaintiff puts.
In support of its application the plaintiff relied upon the decision of the Queensland Court of Appeal in Clyde Contractors Pty Ltd (t/as Clyde Constructions) v Northern Beaches Developments Pty Ltd [2001] QCA 314. This case involved a contract which was, in all relevant respects, the same as the contract in this case. No final certificate had been issued and the respondent, at first instant, had obtained judgment for the amount of the retention moneys. It was only on appeal that the appellant raised the issue of the final certificate. It was submitted that no final certificate had been issued and therefore there was no basis upon which the retention moneys could be released. Williams JA pointed out in the course of his reasons (par 18) that there was no evidence before the Court which suggested there was any basis upon which the appellant could have refused to issue the final certificate. If this matter had been raised at first instance, then it could have been remedied - presumably by way of an order requiring the appellant to issue the final certificate. In the circumstances then, there was no basis upon which the appellant could retain the retention moneys.
This case is significantly different. The final certificate has now been issued and the condition precedent to the release of the retention moneys has been met. Of course, the final certificate is qualified so that pursuant to the agreement, the defendant says it is entitled to retain the security. I am satisfied that the defendant's position is arguable.
I would dismiss the plaintiff's application for summary judgment. I will hear the parties as to costs.
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