Multiplex Constructions Pty Ltd v Rapid Contracting Pty Ltd (in liq)

[1999] QCA 306

IN THE COURT OF APPEAL [1999] QCA 306

SUPREME COURT OF QUEENSLAND

Appeal No 10856 of 1998

Brisbane

[Multiplex Const P/L v Rapid Contracting P/L (In Liq)]

BETWEEN:

MULTIPLEX CONSTRUCTIONS PTY LTD

ACN 008 687 063

(First Defendant) Appellant

AND:

RAPID CONTRACTING PTY LTD (IN LIQUIDATION)

ACN 061 984 870

(Plaintiff) Respondent

PERPETUAL TRUSTEES VICTORIA LIMITED

ACN 004 027 258

(Second Defendant)

de Jersey CJ
Davies JA

Thomas JA

Judgment delivered 6 August 1999

Joint reasons for judgment of de Jersey CJ and Davies JA; separate reasons of Thomas JA concurring as to the orders made.

APPEAL ALLOWED. ORDER THAT:

1.          THE CLAIM OF CHARGE DATED 10 SEPTEMBER 1997 BE CANCELLED.

2.          THE SUM OF $249,984.51 PAID INTO COURT BY THE SECOND DEFENDANT BE PAID OUT TO THE APPELLANT.

3.          THE PARTIES SHOULD MAKE ANY FURTHER SUBMISSIONS ON COSTS WITHIN 48 HOURS AND THE COURT'S ORDER IN RELATION TO COSTS HERE AND BELOW IS TO BE PUBLISHED BY THE REGISTRAR.

CHARGES ACT (Q)

STATUTES - ACTS OF PARLIAMENT - INTERPRETATION

The respondent, an unlicensed subcontractor, made a claim of charge pursuant to s 10 Subcontractors' Charges Act 1974 - appellant made application to Supreme Court for cancellation of charge pursuant to s 21 - whether respondent carried out "building work" within meaning of Queensland Building Services Authority Act 1991 - whether appropriate class of licence for respondent to hold - whether payment should be made on basis of quantum meruit or estoppel.

Zullo Enterprises Pty Ltd & Ors v Sutton (CA No 8045 of 1998, 15

December 1998), followed

Queensland Building Services Authority Act 1991, s 4, s 42

Subcontractors' Charges Act 1974, s 5(2), s 21

Counsel:	Mr P A Keane QC, with him Mr P A Hastie, for the appellant Mr T Matthews for the respondent
Solicitors:	Bickford Feehely for the appellant Bennett & Philp for the respondent
Hearing Date:	21 July 1999

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No 10856 of 1998

Brisbane

Before de Jersey CJ
Davies JA
Thomas JA

[Multiplex Const P/L v Rapid Contracting P/L (In Liq)]

BETWEEN:

MULTIPLEX CONSTRUCTIONS PTY LTD

ACN 008 687 063

(First Defendant) Appellant

AND:

RAPID CONTRACTING PTY LTD (IN LIQUIDATION)

ACN 061 984 870

(Plaintiff) Respondent

PERPETUAL TRUSTEES VICTORIA LIMITED

ACN 004 027 258

(Second Defendant)

JOINT REASONS FOR JUDGMENT - de JERSEY CJ and DAVIES JA

Judgment delivered 6 August 1999

1                 The appellant is a building contractor. By agreement dated 13 May 1996 it agreed to build

for Perpetual Trustees Victoria Limited a building in Cairns described as Cairns Central. By a

subcontract agreement dated 14 August 1996 it engaged the respondent to perform work pursuant

to the agreement, described as "fabrication & erection of precast concrete" for the sum of $1.22M.

The respondent had been engaged in performing pre-cast concrete panel work since 1993.

2                 By notice dated 10 September 1997 the respondent gave notice to the appellant of having

made a claim of charge against Perpetual Trustees Victoria Limited pursuant to s 10 of the

Subcontractors' Charges Act 1974, in the sum of $249,984.51. On 1 October 1997 the

appellant gave to the respondent a notice disputing the respondent's claim on a number of grounds

which did not include the question ultimately in dispute. The second defendant nevertheless paid

into court the said sum of $249,984.51.

3                 The appellant then made application to the Supreme Court for cancellation of the charge

pursuant to s 21 of the Subcontractors' Charges Act and for payment out to it of the amount paid

into court. The sole basis for that application, as it was argued, was that the work which the

respondent carried out for the appellant was building work within the meaning of the Queensland

Building Services Authority Act 1991, that the respondent did not at any relevant time hold a

contractor's licence of the appropriate class under that Act, that consequently it was not entitled to

any monetary or other consideration for the work which it did[1] and that it was therefore not entitled

[1]Queensland Building Services Authority Act, s 42(3).

to a charge under the Subcontractors' Charges Act.[2]

[2]Subcontractors' Charges Act, s 5(2).

4                 It was conceded by the respondent that it did not at any time hold a contractor's licence of

any class under the Queensland Building Services Authority Act. The main question before this

Court then was whether, in consequence, the respondent was in breach of s 42 of that Act.

5                 That section relevantly provides:

"(1) A person must not carry out, or undertake to carry out, building work

unless that person holds a contractor's licence of the appropriate class under this
Act.
...

(3) A person who carries out building work in contravention of this section is

not entitled to any monetary or other consideration for doing so."

6 Building work is defined in s 4 of that Act to mean, relevantly:

"(a) the erection or construction of a building; or

...

(e) any site work ... related to work of a kind referred to above".

7                 It is not clear from the evidence before this Court whether the pre-cast concrete panels

which the respondent fabricated were fabricated on the site of the above building. Arguably their

fabrication was nevertheless part of the construction of a building and that was sufficient to bring it

within par (a) of the definition of "building work".

8                 It is clear that the pre-cast concrete was erected by the respondent on the building. That

was part of its subcontract. Arguably the erection of those panels was part of the erection or

construction of the building and that was sufficient to bring it within par (a) of the definition of

"building work". In any event it was site work related to that erection or construction within the

meaning of par (e).

9                 It does not matter, for the purposes of this appeal, whether or not the fabrication of the

concrete panels was "the erection or construction of a building" within the meaning of par (a) or

whether the erection of those panels was "the erection or construction of a building" within the

meaning of par (a). It is sufficient that the erection of those panels was site work related to that

erection or construction because the subcontract was a lump sum contract although payable by

instalments; no part of the consideration was separately apportioned to the fabrication of the panels

and no part of it was payable unless the panels were substantially erected. In performing its subcontract, therefore, the respondent was carrying out building work within the meaning of the

above definition. We respectfully disagree with the opinion of the learned primary judge that it may

be necessary to consider further facts before reaching that conclusion.

10 It was submitted by the respondent, nevertheless, that, on the proper construction of s 42(1)

and s 42(2), an unlicensed person does not carry out building work in contravention of that section

unless there is a contractor's licence of an "appropriate class" which the person must hold. And the

respondent submitted that, in this case, there was no appropriate class of licence.

11               Even if it be assumed that there may be cases where there is no appropriate class of licence

for some classes of building work, that is not the case here. In our view a concreting licence was

a licence of the appropriate class for the work the subject of the subcontract. The scope of the

work envisaged by such a licence included "Placing and fixing ... slabs on ground, suspended slabs,

walls, ...", "Placing ... and finishing of concrete ..." and "Curing concrete".[3] The first two of these

[3]Queensland Building Services Authority Regulation 1992, Schedule 2, Part 5.

plainly cover the erection of the pre-cast concrete slabs.

12 The respondent therefore carried out building work in contravention of s 42 and was not

entitled to any monetary or other consideration for doing so. And it appears to follow that there

was no payment, in accordance with the subcontract, which a charge could secure.

13               It was contended for the respondent below, on two further bases, that there was, arguably,

such a payment. The first of these was on the basis of a quantum meruit; the second on the basis

of estoppel. It is not entirely clear that either of these was pursued before this Court. However

because neither was expressly abandoned they should be dealt with.

14 There are two reasons why the first basis must fail. The first is that the decision of this Court
in Zullo Enterprises Pty Ltd & Ors v Sutton (CA No 8045 of 1998, 15 December 1998) held

that s 42(3) precludes a restitutionary claim. The second, in our view, is that a restitutionary claim

is not one which comes within s 5(2) of the Subcontractors' Charges Act which, in terms, appears

to be limited to securing payment of monies payable in accordance with a contract for work done

under it; in other words a contractual claim.

15               Both reasons apply equally to the contention founded on estoppel. Moreover the respondent

could not point to any conduct of the appellant which may have played a part in the adoption of, or

persistence in, any assumption by the respondent that it did not require a licence. Nor could it point to

any duty upon the appellant to give any advice to the respondent in respect of a licence. For all of those

reasons this contention must also fail.

16               Accordingly we would allow the appeal, cancel the claim of charge dated 10 September 1997

and order that the sum of $249,984.51 paid into court by the second defendant be paid out to the

appellant. The parties should make any further submissions on costs within 48 hours and the Court's

order in relation to costs here and below is to be published by the Registrar.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 10856 of 1998

Brisbane

Before de Jersey CJ
Davies JA
Thomas JA

[Multiplex Const P/L v Rapid Contracting P/L (In Liq)]

BETWEEN:

MULTIPLEX CONSTRUCTIONS PTY LTD

ACN 008 687 063

(First Defendant) Appellant

AND:

RAPID CONTRACTING PTY LTD (IN LIQUIDATION)

ACN 061 984 870

(Plaintiff) Respondent

PERPETUAL TRUSTEES VICTORIA LIMITED

ACN 004 027 258

(Second Defendant)

REASONS FOR JUDGMENT - THOMAS JA

Judgment delivered 6 August 1999

1                    This is yet another case where a subcontractor who has performed substantial work is met by

a contractor who says "I do not have to pay you anything because you did not have a licence of the

appropriate class".

2 There is evidence suggesting confusion within the Queensland Building Services Authority
bureaucracy as to whether the respondent needed a licence in order to perform the work in question.

The evidence suggests that the QBSA investigated the work being performed by the respondent and

concluded that it was not required to have a licence and that it advised the appellant of this. That

however does not prevent the appellant from relying on the absence of a licence if one was necessary

under the Act[4].

[4] Queensland Building Services Authority Act 1991 ss4 and 42.

3                    The Act is ill-drawn and so are the regulations. The regulatory exclusions[5] seem to have been

drawn ad hoc, without clear vision of the parameters of the building works and persons that are

intended to be covered by the statutory scheme. Some of these problems were noted by this court in

Stork Wescon Australia Pty Ltd v Morton Engineering Co Pty Limited [6]. Now that the number

of prescribed licences under s30(2) of the Act[7] has grown to 88, it must be very difficult for a concreter to know whether a light concreting licence or a minor concrete work licence or a concreting licence, or

no licence at all, is required.

[5]            Regulation 3A of the Queensland Building Services Authority Regulation 1992.

[6]            Appeal No 5735 of 1998, 5 March 1999.

[7]            See also the Queensland Building Services Authority Regulation 1992, Regs 6 and 7, and Schedule 2.

4                    In the proceedings below the learned chamber judge rightly held that the onus lay upon the

appellant contractor to prove the illegality relied upon, that it to say to show that the work in respect

of which the charge was claimed was of a kind which required the respondent to hold "a

contractor's licence" of the appropriate class under the Act[8]. Section 42(3) provides that a person

who carries out building work "in contravention of this section" is not entitled to any monetary or

other consideration for doing so. In short, a party who claims that someone is not entitled to

payment on such a ground has to prove a contravention of s42(1). No such contravention could

be shown unless it were proved that the work in question was work for which a licence was

required under the Act. If the appellant failed to prove this on the balance of probabilities the

learned chamber judge would have been quite correct in dismissing the appellant's application

[8] Section 42(1). Licences are contemplated for specified classes of building work (s30).

5                    However it seems clear that the work the subject of the contract and of the relevant claim

included the erection of pre-cast concrete panels on the site, and of curing which may have occurred

on or off the site. For the reasons mentioned by the Chief Justice and Davies JA I consider that

such work probably falls within that for which a concreting licence was required[9], and it is

impossible to see how this primary conclusion could be refuted by further enquiries or evidence.

The remedy provided by s21 of the Subcontractors' Charges Act 1974 is a summary one which

may well require the determination of contentious issues. The real question here is whether the appellant failed to discharge the onus that lay upon it. It was common ground that the respondent

did not have a licence of any kind, and it seems to me to be inescapable that a licence was required

for work of the kind which the respondent was performing.

[9]            See Queensland Building Services Authority Act 1991 s4 (definition "building work"), s30, s42; Queensland Building Services Authority Regulation 1992 Regs 6 and 7, and Schedule 2.

6                    This statutory scheme continues to produce unfairness, hardship and opportunism. I have

earlier drawn attention to its undesirable consequences[10], suggesting that the courts should be

entrusted with a power to relieve against total forfeiture. Again I draw attention to a further triumph

of this unmeritorious defence.

[10]           Northbuild Construction Pty Ltd v Lockton (Appeal No 9823 of 1998, 26 March 1999).

7                    The appeal must be allowed. I agree with the orders proposed by the Chief Justice and

Davies JA.

IN THE COURT OF APPEAL	99.306
SUPREME COURT OF QUEENSLAND

Appeal No 10856 of 1998

Brisbane

[Multiplex Const P/L v Rapid Contracting P/L (In Liq)]

BETWEEN:

MULTIPLEX CONSTRUCTIONS PTY LTD

ACN 008 687 063

(First Defendant) Appellant

AND:

RAPID CONTRACTING PTY LTD (IN LIQUIDATION)

ACN 061 984 870

(Plaintiff) Respondent

PERPETUAL TRUSTEES VICTORIA LIMITED

ACN 004 027 258

(Second Defendant)

de Jersey CJ
Davies JA

Thomas JA

Judgment delivered 6 August 1999
Further Order delivered 13 August 1999

Further Further Order delivered 27 August 1999

Further Further Order of the Court

ORDER THAT THE SUM OF $249,984.51 PAID INTO COURT BY THE SECOND DEFENDANT BE PAID OUT TO THE APPELLANT WITH ACCRETIONS, IF ANY.

Mr T Matthews for the respondent

Solicitors:	Bickford Feehely for the appellant Bennett & Philp for the respondent
Hearing Date:	21 July 1999
IN THE COURT OF APPEAL	99.306
SUPREME COURT OF QUEENSLAND

Appeal No 10856 of 1998

Brisbane

[Multiplex Const P/L v Rapid Contracting P/L (In Liq)]

BETWEEN:

MULTIPLEX CONSTRUCTIONS PTY LTD

ACN 008 687 063

(First Defendant) Appellant

AND:

RAPID CONTRACTING PTY LTD (IN LIQUIDATION)

ACN 061 984 870

(Plaintiff) Respondent

PERPETUAL TRUSTEES VICTORIA LIMITED

ACN 004 027 258

(Second Defendant)

de Jersey CJ
Davies JA

Thomas JA

Judgment delivered 6 August 1999

Further Order delivered 13 August 1999

Further Order of the Court

ORDER THAT THE RESPONDENT PAY THE APPELLANT'S COSTS OF THE
APPEAL AND OF THE APPLICATION BELOW.

Solicitors:	Bickford Feehely for the appellant Bennett & Philp for the respondent
Hearing Date:	21 July 1999