MPA Construction Pty Ltd v Profine Construction Pty Ltd (No 2)

[2020] VCC 1254

IN THE COUNTY COURT OF VICTORIA

AT Melbourne

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

Building Cases List

Case No. CI-20-01533

MPA Construction Pty Ltd	Plaintiff
v
Profine Construction Pty Ltd	Defendant

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JUDGE:	His Honour Judge Woodward
WHERE HELD:	Melbourne
DATE OF HEARING:	On the papers, on notice seeking review of a determination of the Court constituted by Judicial Registrar Burchell, dated 30 July 2020
DATE OF JUDGMENT:	18 August 2020
CASE MAY BE CITED AS:	MPA Construction Pty Ltd v Profine Construction Pty Ltd (No 2)
MEDIUM NEUTRAL CITATION:	[2020] VCC 1254

REASONS FOR JUDGMENT
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Subject:  CONTRACTS

Catchwords:             Building contract – payment claim – whether reference date available for payment claim – whether payment claim invalidated by include work done after the payment claim is issued – weight to be afforded to reasons subject to de novo review

Legislation Cited:     Building and Construction Industry Security of Payment Act 2002 (Vic) ss4, 9, 10A, 10B, 12, 14(2), 15, 16(2), 17(2); Civil Procedure Act 2010 (Vic) s61

Cases Cited:Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (2019) 99 NSWLR 317; Southern Motors Pty Ltd v Australian Guarantee Corporation Ltd [1980] VR 187

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B Mason	KCL Law
For the Defendant	Ms A Hando	C-Stone Project Pty Ltd

HIS HONOUR:

1 In this proceeding, the plaintiff (“MPA”) applies for judgment against the defendant (“Profine”) pursuant to s16(2) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (“SOP Act”) in relation to MPA’s provision of labour, materials, plant and equipment in relation to concreting works at 54-56 Scott Street, Dandenong. The proceeding comes before me as an application by Profine under s17V of the County Court Act 1958 (Vic) and r84.03 of the County Court Civil Procedure Rules 2018 (Vic), for review by the court, constituted by a Judge, of the orders contained in the reasons for judgment of Judicial Registrar Burchell made 20 July 2020 (“JR Reasons”).[1]

[1]MPA Construction Pty Ltd v Profine Construction Pty Ltd [2020] VCC 1035

2       Although the issue is not entirely free from doubt, the practice of the Commercial Division is to hear any review of a decision of a Judicial Registrar de novo, subject to the limitation on further evidence under r84.03(6)(a).[2] I proceeded accordingly. In particular, the Judicial Registrar determined the matter on the papers and without an oral hearing, relying on the affidavits and written submissions filed on behalf of each party. As neither party has sought to file additional evidence, I will do likewise. I have read the affidavits and submissions filed by both parties and relied on before (and by) the Judicial Registrar. I should add that I have the considerable additional advantage of reading the comprehensive JR Reasons.The JR Reasons should be read with these reasons.

[2]See, for example, David Gurupatham v Jim Lim [2017] VCC 948

3       This is a refreshingly straightforward application. In particular, the facts are not materially in dispute. Both the facts and the submissions are comprehensively summarised in the JR Reasons, which I will not repeat. The issues in dispute were also confined. Although I accept that the parties’ submissions traversed into other related areas, I am satisfied that the substantive issues in dispute in the proceeding are encapsulated in the following passages from the JR Reasons:

“Accordingly, the defendant contends that Payment Claim 10 likely contains works referable not only to unexhausted reference dates of 28 October 2019 and 1 November 2019, but also to future reference dates. Therefore, the defendant concludes that Payment Claim 10 is at least partially invalid. (JR Reasons at [42])

…

In reply, the plaintiff emphasises that the defendant's defence is as follows: that Payment Claim 10 includes work referable to a future reference date; and that the impugned portion cannot be severed.” (JR Reasons at [45])

4       It is convenient to set out Judicial Registrar Burchell’s findings on these issues more or less in full.

“The starting point for an analysis of reference dates is s9 of the SOP Act. The effect of s9 is that a payment claim must be submitted 'on and from' a reference date. The authorities indicate that 'on and from' means 'on or after'. [citing All Seasons Air Ply Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289 [13]-[14]] (JR Reasons at [64])

…

In Southern Han [Breakfast Point Pty Ltd (in liq) v Lewence ConstructionPty Ltd (2016) 260 CLR 340], the High Court held that a reference date is the 'precondition' to the submission of a payment claim. That is, a reference date must exist before a payment claim can be made upon it. (JR Reasons at [67])

…

The real question for determination is the distinction between when a reference date accrues and how a person's progress payment entitlement is calculated: Southern Han at [59].

Where a construction contract expressly provides a method for calculating the value of a progress payment, it is to be determined in accordance with those terms (s10(1)(a)). A progress payment becomes payable in accordance with the terms of the contract (s12(1)(a)).

Clause 1 of the Contract stated that the plaintiff would endeavour to provide tax invoices in accordance with the Act by the 1st and the 28th of each month for the full value of the works completed to the date of the invoice. Therefore, there was an available reference date of 28 October 2019 and 1 November 2019. There is a dispute between the parties as to whether the progress claim included works performed by 1 November 2019 or also included works conducted from 2 November 2019 onwards.

Applying the principles set out in Seymour Whyte Constructions Ply Ltd-v Ostwald Bros Ply Ltd (in liq) [(2019) 99 NSWLR 317 at [228] the NSW Court of Appeal recognised that [a] progress payment can include advanced payments. Therefore, any distinction of whether work was performed before or after 1 November 2019 is irrelevant.

The expression “a person ... who is or who claims to be entitled to a progress claim . . . may serve a payment claim” under s 14(1) is a person who has undertaken to carry out construction work or supply related goods and services under the Contract in accordance with s9(1). Southern Han makes it clear that a person who meets the description in ss9(1) and 14(1) of a person who has undertaken to carry out construction work is immediately by force of that provision entitled to a progress payment. The provision is cast in future tense.

The language of s9(1), read in light of the analysis in Southern Han and Seymour Whyte, creates an entitlement to a progress payment in an amount to be quantified in accordance with Part 3 of the SOP Act. The entitlement accrues on satisfaction of the (sic) each of the conditions that the person had undertaken to carry out construction work under the Contract and a reference date under the Contract has arisen

Both Southern Han and Seymour Whyte stand for the proposition that the progress payment to which a person is entitled as and from the reference date is a payment for work done, or for work undertaken to be done, where some element of advance payment has been agreed under the contract: at [67] and [228] respectively. This is because a progress payment is an amount that a Contract requires to be paid as part of the total price of the construction work: Southern Han at [68] and Seymour Whyte at [228].

Seymour Whyte clarifies that the text of the SOP Act distinguishes work undertaken to be carried out and work carried out. Therefore, if Parliament intended s 9(1) to be subject to a requirement that the claimant actually carry out the construction work on the reference date, it would have said so: at [232].

As such, the provisions of s 9(1) for an entitlement for a progress payment does not depend on the claimant actually performing the work under the Contract on the reference date: Seymour Whyte at [234].

In the circumstances of the present case, the Contract provided that the plaintiff endeavour to submit payment claims by the 1st and 28th of each month; s9 entitles the plaintiff to submit a payment claim on and from the reference date (the relevant payment claim, here, being 18 November 2019) and condition 1 of the Contract provided that the amount claimed may encompass the full value of works completed to the due date of the invoice. Therefore, the payment claim was calculated by reference to the reference date in accordance with s 9(1).

It does not, then, matter whether the payment claim is unclear on its face as to whether the works were conducted on 18 November 2019; on or before 1 November 2019 or up to and including 18 November 2019. On a proper reading of the provisions of the SOP Act and the contractual terms, it was open to the plaintiff to include the full value of works completed to the due date of the invoice.” (JR Reasons at [71]-[81])

5       In a decision of the Full Court of the Victorian Supreme Court in Southern Motors Pty Ltd v Australian Guarantee Corporation Ltd [1980] VR 187, Starke, Murphy and Brooking JJ at 190 (in which the judgment of the Court was delivered by Brooking J) the court held (emphasis added):

“…the application is to be heard de novo in the sense that the party who was applicant before the Master is the party to begin, the appeal is determined on the evidence placed before the judge, no regard being had to the evidence placed before the Master, and the judge determines the appeal without being in any way fettered by the decision of the Master, but giving such weight to the decision of the Master as appears proper.”

6       In my view, it is proper in this case to give considerable weight to the JR Reasons (and, in particular, the passage extracted above), for the following reasons:

·     the summary of the facts and argument is comprehensive;

·     the analysis of the relevant law is plainly correct; and

·     the conclusions reached are unimpeachable.

7       Further, given these matters and the summary nature of these proceedings, it is neither necessary nor appropriate for me to add substantively to the JR Reasons just for the sake of doing so. I therefore adopt without repeating the summary of facts and argument, the analysis of the law and the conclusion reached in the JR Reasons.

8       It follows that, like Judicial Registrar Burchell, I am satisfied that Claim No 10 issued on 18 November 2019 is a valid payment claim, totalling $135,668.94 (inclusive of GST) and I give judgment in favour of MPA accordingly. I will also order (to the extent necessary) that Profine pay any of MPA’s costs of and incidental to the review, on the standard basis in default of agreement.

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Certificate

I certify that these 4 pages are a true copy of the judgment of his Honour Judge Woodward delivered on 18 August 2020.

Dated:  18 August 2020   

Claire Findlay

Associate to His Honour Judge Woodward