LINDMAR Pty Ltd and KAYLOU Pty Ltd t/as Vasse Civil and Drainage v Sky City Blue Pty Ltd
[2011] WADC 220
•8 DECEMBER 2011
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS
LOCATION: PERTH
CITATION: LINDMAR PTY LTD & KAYLOU PTY LTD t/as VASSE CIVIL & DRAINAGE -v- SKY CITY BLUE PTY LTD [2011] WADC 220
CORAM: REGISTRAR KINGSLEY
HEARD: 3 NOVEMBER 2011
DELIVERED : 8 DECEMBER 2011
FILE NO/S: BUN 10 of 2011
BETWEEN: LINDMAR PTY LTD & KAYLOU PTY LTD t/as VASSE CIVIL & DRAINAGE
Plaintiffs
AND
SKY CITY BLUE PTY LTD
Defendant
Catchwords:
Practice - Application for summary judgment - Turns on own facts
Legislation:
Nil
Result:
Application allowed - Execution stayed
Representation:
Counsel:
Plaintiffs: Mr D F Beere
Defendant: Ms P Martino
Solicitors:
Plaintiffs: D F Beere
Defendant: P A Martino
Case(s) referred to in judgment(s):
Nil
REGISTRAR KINGSLEY: The plaintiff (Vasse Civil) received a request from Porter Consulting Engineers (the Superintendent) to tender for works in relation to a sub-division in Harvey. Vasse Civil submitted a tender which was accepted by the Superintendent on behalf of the defendant (Sky City). The tender required Sky City and Vasse Civil to execute a contract which incorporated the Australian General Conditions (AS 2124-1992) which was done in June 2009. For the purposes of the contract the principle is Sky City and the contractor is Vasse Civil.
Vasse Civil made various claims under the contract and the Superintendent issued a number of certificates of which five remain in issue. The certificates in issue are:
Certificate 4: For a balance $192,851.56
Certificate 8: $49,090.05
Certificate 9: $15,221.26
Certificate 11: $54,193.10
The Superintendent also issued Certificate 10A which contained an adjustment in Sky City's favour of $91,579.71. Taking this adjustment into account Vasse Civil says the amount owing by Sky City to it is $219,746.16.
Vasse Civil has brought an application pursuant to O 14 Rules of the Supreme Court 1971 (RSC) supported by the affidavit of Garry Ian Butterworth sworn 28 July 2011 (Butterworth's affidavit). Sky City opposes the application and has filed the affidavits of Timothy Paul Jasper sworn 20 October 2011 (Jasper affidavit) and that of David Edward Porter sworn 12 September 2011 (Porter affidavit).
The relevant contractual provision
Clause 42 is headed Certificate and Payments and clause 42.1 is headed Payment Claim, Certificates, Calculations and Time for Payments. Paraphrased, and relevantly for this application, upon issue of a Certificate of Practical Completion and within the time prescribed by cl 42.7 Sky City delivers to the Superintendent claims for payment. Within 14 days after receipt for a claim for payment the Superintendent shall issue to Sky City and to Vasse Civil a payment certificate. Within 28 days after receipt by the Superintendent of a claim for payment or within 14 days of issue by the Superintendent of the Superintendent's payment certificate Sky City shall pay Vasse Civil (or vise versa as the case maybe) an amount not less than the amount shown in the certificate. A payment made pursuant to cl 42.1 does not prejudice the right of either party to dispute, under cl 47 whether the amount so paid is the amount properly due and payable. Further, payment of monies shall not be evidence of the value of the work or admission of liability but shall be payment on account except as provided by cl 42.8.
Clause 42.2 enables the Superintendent, by a further certificate, to correct any error that has been discovered in any previous certificate other than a certificate of practical completion or final certificate.
Clause 42.7 provides that within 28 days after the expiration of the defects liability period Vasse Civil shall lodge with the Superintendent for final payment claim and endorse it 'final payment claim'. After the expiration of the period of lodging a final payment claim any claim which Vasse Civil could have made against Sky City and has not been made shall be barred.
Clause 42.8 provides that within 14 days after receipt of Vasse Civil's final payment claim the Superintendent shall issue to Vasse Civil and to Sky City a final payment certificate endorsed final certificate. Clause 42.8 goes onto provide that unless either party, either before the final certificate has been issued or not later than 15 days after the issue thereof, serve a notice of dispute under cl 47 the final certificate shall be evidence in any proceeding of whatsoever nature that the works have been completed in accordance with the terms of the contract except in the case of fraud, dishonesty, any defect which was not apparent at the end of the defects liability period or any accidental or erroneous inclusion or exclusion of any work, plant, materials or figures or any computation or any arithmetical error in any computations.
Clause 35.6 provides that if Vasse Civil fails to reach practical completion by the date for practical completion then Vasse Civil shall be indebted to Sky City for liquidated damages.
The date of practical completion
The contract provides the date of practical completion be 20 weeks from commencement. It appears common cause that the date of practical completion certified by the Superintendent was 15 February 2010.
There is an issue about the date of practical completion. Vasse Civil asserts that the works were practically complete on 15 December 2009 (Butterworth affidavit, par 15).
The defects liability period was 12 months and it is common cause that period expired 16 February 2011.
Certificate 11
On 27 April 2011 Vasse Civil issued a tax invoice being the 'final claim upon successful completion of 12 month maintenance period' totalling $219,776.16. On 27 April 2011 the Superintendent enclosed Valuation of Work Certificate No 11 which the Superintendent stated 'constitutes the final claim by Vasse Civil'.
Certificate II is not entitled 'Final Certificate'. Porter's letter of 27 April 2011 summarises the amounts, inclusive of GST, owing to Vasse Civil as $219,776.16.
Subsequently by letter 27 September 2011 the Superintendent issues Payment Certificate No 12 which is headed 'Final'. The letter notes Sky City and Vasse Civil have been in dispute regarding finalisation of the contract. Porter states that Sky City has formally claimed liquidated damages pursuant to clause 35.6 of the contract and has requested a Final Certificate be issued. Certificate 12, after taking into account the claim for liquidated damages in the sum of $148,850 is for $70,926.16.
Discussion
Payment Certificate 11 has all the colour of a final payment. The letter dated 27 April 2011 from Porter Consulting Engineers to Golden Hotel Pty Ltd (a related entity of Sky City) notes the 'satisfactory end of defects inspection of work completed by Vasse Civil'. This constitutes the final claim by Vasse Civil.
Pursuant to cl 42.8 it appears Sky City released to Vasse Civil the retention monies. Clause 42.8 provides that within 14 days of the issue of the Final Certificate, Sky City shall release to Vasse Civil any retention moneys.
Contractually there is no requirement for Sky City to request the issuance of a Final Certificate - the time periods to issue a Final Certificate are stated, and there is no provision to issue a Final Certificate upon request.
Certificate 12, and I have doubts that this document is in fact a Certificate, deducts the disputed claim for liquidated damages. Clause 35.6 of the Contract makes no provision for the issuance of a Certificate in relation to a claim for liquidated damages. Further cl 42 makes no reference to the issue of a Certificate in relation to liquidated damages. For this reason I have doubts whether Certificate 12 is in fact a Certificate of anything.
For there reasons, I am of the opinion Payment Certificate 11 is the Final Certificate. Contractually Sky City is bound to pay on that Certificate.
The counterclaim
Sky City says it has a claim for liquidated damages, pursuant to cl 36.6. It is clear there is a dispute as to the date of practical completion, and therefore a dispute on quantum of the liquidated damages.
The claim by Sky City is a liquidated claim and pursuant to cl 42.11 the unpaid moneys may be recovered as a debt due and payable.
No counterclaim has yet been filed or served by Sky City. However the prospect of the counterclaim being pursed ought be taken into consideration in relation to Vasse Civil's claim.
Accordingly there will be programming order 5 in relation to the filing and service of the counterclaim. I will hear counsel on the terms of those orders.
Conclusion
For there reasons Vasse Civil is entitled to judgment against Sky City in the sum of $219,746.46.
Execution on that judgment is stayed until further order pending disposition of the prospective counterclaim.
As Vasse Civil has been successful on its application, and on the action, Sky City is to pay the costs of the action and of the application, including reserved costs, to be taxed.
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