Linke Developments Pty Ltd v 21st Century Developments Pty Ltd - [2014] SASC 203

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
LINKE DEVELOPMENTS PTY LTD v 21ST CENTURY DEVELOPMENTS PTY LTD
[2014] SASC 203
Reasons for Decision of The Honourable Justice Nicholson
22 December 2014
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - PAYMENT CLAIMS
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - GENERAL APPROACHES TO INTERPRETATION - PURPOSIVE APPROACH - GENERAL PRINCIPLES
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT
The appellant, Linke Developments Pty Ltd, was contractually engaged by the respondent, 21st Century Developments Pty Ltd, to undertake certain building work. The appellant brought an application for summary judgment in the Magistrates Court for an amount purportedly owed by the respondent pursuant to that engagement. The application was made on the basis that the respondent failed to adequately respond to a payment claim by the appellant, and therefore, under the Building and Construction Industry Security of Payment Act 2009, was summarily liable for the amount claimed. The appellant further sought that the respondent’s defence and counterclaim be struck out on the basis that such pleadings were proscribed by s15 of the Act. The Magistrate dismissed both aspects of the appellant’s application.
The appellant now appeals on the basis that the Magistrate erred in finding that the respondent adequately responded to the appellant’s payment claim. The appellant also maintains it submission that the respondent’s defence and counterclaim should be struck out.
Held: Appeal dismissed. The response provided by the respondent to the appellant’s payment claim met the basic requirements under the relevant provisions of the Act. In addition, and in the circumstances of this matter, the respondent is not precluded from pleading a defence and counterclaim. The pleading by the appellant of an alternative claim for relief obviated the application of s15 of the Act.
Building and Construction Industry Security of Payment Act 2009 (SA) s3, s8-s27, s32, s33; Building and Construction Industry Security of Payment Act 1999 (NSW); Building and Construction Industry (Security of Payment) Act 2009 (ACT); Construction Contracts (Security of Payments) Act 2004 (NT); Building and Construction Industry Payments Act 2004 (Qld); Building and Construction Industry Security of Payment Act 2002 (Vic); Construction Contracts Act 2004 (WA); Building and Construction Industry Security of Payment Act 2009 (Tas); Supreme Court Civil Rules 2006 r232; Magistrates Court (Civil Rules) 2013 r8, referred to.
Ceneavenue Pty Ltd & Ors v Martin & Ors (2008) SASC 158; Multiplex Constructions Pty Ltd v Luikens & Anor [2003] NSWSC 1140; Built Environs Pty Ltd v Tali Engineering Pty Ltd & Ors [2013] SASC 84; Springs Golf Club Pty Ltd v Profile Golf Pty Ltd [2006] NSWSC 344; Project Blue Sky v ABA [1998] HCA 28, (1998) 194 CLR 355, considered.

LINKE DEVELOPMENTS PTY LTD v 21ST CENTURY DEVELOPMENTS PTY LTD
[2014] SASC 203
Magistrates Appeal: Civil
NICHOLSON J.
Introduction

This is an appeal from a Magistrate’s dismissal of an application by…

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

AGLC: Linke Developments Pty Ltd v 21st Century Developments Pty Ltd [2014] SASC 203
Case: [2014] SASC 203
Decision Date: 22 December 2014

CaseChat Overview and Summary

Linke Developments Pty Ltd appealed against the dismissal of its application for summary judgment by a Magistrate against 21st Century Developments Pty Ltd, for an amount purportedly owed for the completion of building work. The appellant argued that the respondent had failed to respond appropriately to a payment claim issued by it, and that, in accordance with its entitlement under the Building and Construction Industry Security of Payment Act 2009 (the Act), the respondent was summarily liable for the amount claimed. The court was required to determine whether the respondent's response to the appellant's progress claim was valid, and if the appellant was entitled to summary judgment. The court found that the respondent's response to the appellant's progress claim was invalid as it was not a genuine attempt to assess the claim, but rather an attempt to re-litigate the claim. The court held that the respondent's response did not comply with the requirements of the Act, and therefore, the appellant was entitled to summary judgment.

The court considered the relevant provisions of the Act, which provide for a process for making and responding to progress claims and payment claims. The court noted that the purpose of the Act is to provide a quick and inexpensive way to resolve disputes over progress payments in the building and construction industry. The court held that the respondent's response to the appellant's progress claim did not comply with the requirements of the Act, as it did not provide a valid assessment of the claim. The court found that the respondent had not provided any reasons for its assessment of the claim, and had instead attempted to re-litigate the claim. The court held that this was not a genuine attempt to assess the claim, and therefore, the respondent's response was invalid.

The court granted the appellant's application for summary judgment, and ordered the respondent to pay the amount claimed by the appellant, plus interest and costs. The court held that the respondent was summarily liable for the amount claimed, as its response to the appellant's progress claim was invalid. The court noted that the purpose of the Act is to provide a quick and inexpensive way to resolve disputes over progress payments, and that the respondent's response had frustrated this purpose. The court held that the respondent's conduct was unreasonable, and that the appellant was entitled to summary judgment.

Orders

Orders of the court

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Background

Background to the litigation

This is an appeal from a Magistrate’s dismissal of an application by the appellant, Linke Developments Pty Ltd, for summary judgment with respect to an amount purportedly owed by the respondent, 21st Century Developments Pty Ltd, for the completion of certain building work. The appellant claims that the respondent failed to respond appropriately to a payment claim issued by it and that, in accordance with its entitlement under the Building and Construction Industry Security of Payment Act 2009 (the Act), the respondent is summarily liable for the amount claimed. Background facts In or about April 2012, the appellant was contractually engaged by the respondent to undertake building works at the Woodcroft Shopping Centre, a site which the respondent owned. The construction manager appointed for the building works was Badge Constructions (SA) Pty Ltd (Badge). Under the terms of the contract, the appellant had the right to claim periodic payments from the respondent for works it had completed. Such claims were described in the contract as “progress claims”. The appellant also enjoyed, pursuant to relevant provisions of the Act, a right to make, and receive payment for, periodic “payment claims”. This latter statutory process will be considered in greater detail later in these reasons. The contract stipulated that progress claims were to be submitted by the appellant to Badge on the 20th of each month. Badge was required, within 14 days of receiving any such progress claim, to issue a progress certificate setting out its opinion of the amount of moneys due and the reasons for any shortfall. On 20 April 2013, the appellant submitted a progress claim to Badge for the sum of $40,826.70 (inclusive of GST), described as “Claim No. 09”. By way of a document entitled “Payment Advice and Payment Schedule SC Inv No: PC11” and with “Reference Date” 30 April 2013, addressed to the attention of the appellant’s director, Mr Linke, the respondent advised that an amount of $42,548.62 had been certified by Badge as due and payable. The reason for the slightly higher certified amount was that Badge, in its capacity as independent certifier, had reached a different calculation as to the amount of monies due by the respondent. The document identified itself as a “Payment Schedule under [the Act]” and referred to a “Payment Claim 11”. During argument, counsel for the appellant conceded that the reference by the respondent to “Payment Claim 11” had been an administrative oversight; no such document in fact existed. The respondent’s Payment Advice and Payment Schedule document was responding to the appellant’s Claim No. 09 dated 20 April 2013. The reference number on the progress certificate issued by Badge, being PC 11, had been erroneously adopted. It was agreed by counsel for both parties that subsequent references by the respondent in the correspondence to a “Payment Claim 11” were to be understood as referring to the progress claim dated 20 April 2013, Claim No. 09. To avoid confusion in these reasons, the appellant’s letter of 20 April 2013 will be referred to as Progress Claim 9 even through in subsequent correspondent it is referred to as Payment Claim 11.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

NICHOLSON J

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Ratio Decidendi

Legal Principle Established

Established by: NICHOLSON J

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