Mackie Pty Ltd v Counahan - [2013] VSC 694

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

No. 05607 of 2013

MACKIE PTY LTD (ACN 097 603 846)	Plaintiff
v
NEIL COUNAHAN t/a NEIL COUNAHAN TRADING (ABN 19 375 306 158)	First Defendant
and
HARRY McIVER	Second Defendant

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	6 NOVEMBER 2013
DATE OF JUDGMENT:	13 DECEMBER 2013
CASE MAY BE CITED AS:	MACKIE PTY LTD v COUNAHAN and Anor
MEDIUM NEUTRAL CITATION:	[2013] VSC 694

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BUILDING CONTRACTS – Building and Construction Industry Security ofPayment Act2002 (Vic) – What constitutes “valid payment claim” - What constitutes “final payment claim” - Whether payment claim identified the construction work to which each payment claim related under s 14(2)(c) of the Act - Requirement to identify work in final claim under s 14(2)(c) of the Act - Whether payment claim served within time under s 14(4) of the Act – Whether invalidity under s 14(8) of the Act by reason of more than one final payment claim made.

ADMINISTRATIVE LAW - Construction progress payment disputes - Statutory adjudication process - Whether adjudicator had jurisdiction to make determination – Validity of adjudication determination made in respect of final payment claim.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J A F Twigg	ICA Lawyers
For the First Defendant	Mr R Andrew	Moores Legal
For the Second Defendant	No appearance

HIS HONOUR:

Background

This proceeding arises out of payment claims purportedly made under the Building and Construction Industry Security ofPayment Act2002 (the “Act”).

A construction contract (the “Construction Contract”) was entered into between the Plaintiff, Mackie Pty Ltd (“Mackie”) and the First Defendant, Neil Counahan t/as Neil Counahan Trading (“Counahan”) on 31 October 2012 pursuant to which Mackie engaged Counahan to supply and construct office furniture to be installed at the University of Melbourne, Barry Road, Carlton, Victoria (the “Project”). The contract price for the work, including GST, was $350,139.90.

Progress of the Works

Matters progressed broadly as follows:

On 5 November 2012 Counahan commenced works on the site. By approximately 15 December 2012, Levels 5 and 6 of the Project were completed by Counahan and were then occupied by the University. By approximately 1 February 2013 Levels 3 and 4 were completed by Counahan and subsequently occupied by the University from about mid March 2013. On 15 February 2013 "Practical Completion" for the Project was achieved.

However, on 21 February 2013, Mackie sent an email to Counahan notifying him that a number of minor defects in the work had been identified, which were required to be completed “ASAP”.

On 28 March 2013 Counahan had substantially completed its works on the Project, save for the provision of screens, which were completed on or about February 2013.

On 10 April 2013 Counahan replaced 6 overhead bookcases.

Commencing on 18 June 2013, a chain of emails between Counahan and Mackie extending to 27 June were sent regarding defects with the screens. On…

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

Case: [2013] VSC 694
Decision Date: 13 DECEMBER 2013

CaseChat Overview and Summary

In the matter of Mackie Pty Ltd v Counahan, the dispute revolves around the validity of payment claims made under the Building and Construction Industry Security of Payment Act 2002 (Vic). Mackie Pty Ltd, the respondent, sought to recover amounts from Counahan, the appellant, after a series of adjudications concerning the construction works performed on a project. The primary issue before the court was the interpretation and application of various sections of the Act, specifically those concerning the nature and timing of payment claims.

The legal issues before the court were whether the payment claims made by Mackie identified the construction work to which each claim related, as required by section 14(2)(c) of the Act. Additionally, the court had to determine whether the payment claims were final claims and if they were served within the time prescribed by the Act. A further issue was whether the payment claim was rendered invalid by section 14(8) due to the issuance of more than one final payment claim.

The court found that the payment claims did not clearly identify the construction work to which each payment was related, thus failing to comply with section 14(2)(c) of the Act. The court also held that the payment claim in question was not a final claim as it did not identify the total amount of money claimed in respect of the construction work. Furthermore, the court ruled that the claims were not served within the time prescribed by the Act, rendering them invalid under section 14(8). The court concluded that the adjudicator did not have jurisdiction to make a determination on the final payment claim due to these defects.

As a result, the court upheld the appeal and set aside the adjudication determination. The court ordered that Mackie take no further action to enforce the adjudication determination and that Counahan recover its costs of the appeal.

Orders