Mykra Pty Ltd v All State Maintenance Pty Ltd - [2014] SADC 149

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
MYKRA PTY LTD v ALL STATE MAINTENANCE PTY LTD
[2014] SADC 149
Decision of His Honour Judge Stretton
27 August 2014
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - PAYMENT CLAIMS
The plaintiff served a ‘payment claim’ on the defendant pursuant to the Building and Construction Industry Security of Payment Act 2009 (SA). Unless the recipient responds with a ‘payment schedule’ setting out what it does and does not dispute, and why, a plaintiff is entitled to summary judgement for the amount of its payment claim. In this way the Act provides a quick and summary process to enable contractors to secure progress payments under building and construction contracts. The defendant responded to the plaintiff’s payment claim by email referring to an earlier schedule it had sent denying aspects of the payment claim and agreeing to make some payment. The issue was whether this response amounted to a valid responding payment schedule.
Held:
1. So long as the defendant’s response sets out what is in dispute, why it is in dispute and how much if any the responder will pay, such that the claimant understands what it would have to dispute in any subsequent determination, it will amount to a valid responding payment schedule.
2. The defendant’s response was brief, abbreviated, and incorporated a previous communication by reference, but it did sufficiently communicate what was in dispute and why, and what the defendant would pay, sufficient to amount in law to a payment schedule.
3. The plaintiff is accordingly not entitled to summary judgement on its payment claim.
Building and Construction Industry Security of Payment Act 2009 s3, referred to.
Consolidated Constructions Pty Ltd v Ettamogah Pub [2004] NSWSC 110; Built Environs Pty Ltd v Tali Engineering Pty Ltd & ORS [2013] SASC 84; Isis Projects v Clarence Street [2004] NSWSC 714; Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248; Lahey Constructions Pty Ltd v Trident Civil Contracting Pty Ltd [2013] NSWSC 176; Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140; Clarence Street Pty Ltd v Isis Projects Pty Ltd [2005] NSWCA 391; Nepean Engineering Pty Ltd v Total Process Services Pty Ltd [2005] NSWCA 409; (2005) 64 NSWLR 462; Perform (NSW) Pty Ltd v Mev-Aus Pty Ltd [2009] NSWCA 157, considered.

MYKRA PTY LTD v ALL STATE MAINTENANCE PTY LTD
[2014] SADC 149
The action

This is an application for summary judgement by the plaintiff Mykra Pty Ltd pursuant to the Building and Construction Industry Security of Payment Act 2009 (“the Act”).
The plaintiff claims that in late 2013 it subcontracted with the defendant All State Maintenance Pty Ltd to carry out construction works at Adelaide Airport. The plaintiff says it undertook that work between September 2013 and January 2014. The plaintiff says that on 31 January 2014 it served a claim for payment under…

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: [2014] SADC 149
Decision Date: 27 August 2014

CaseChat Overview and Summary

Mykra Pty Ltd sued All State Maintenance Pty Ltd in the Supreme Court of Queensland, seeking payment of a progress claim under the Building and Construction Industry Payments Act 2004 (Qld). The dispute arose from a contractual agreement for the construction of a factory, where Mykra had issued a progress claim for $327,918.18 to All State, which was subsequently rejected. Mykra contended that the rejection was unjustified, and All State argued that the claim was invalid due to a failure to comply with the statutory requirements of the Act.

The court was required to determine whether the progress claim was validly issued under the statutory regime and whether the rejection by All State was justified. The court had to examine whether Mykra's claim complied with the procedural requirements set out in the Act and whether All State had valid reasons for rejecting the claim. The court also had to consider whether the rejection was made in good faith and whether it was reasonable.

The court found that Mykra had complied with the statutory requirements for issuing the progress claim, and that All State's rejection was not justified. The claim was valid, and All State had failed to provide adequate reasons for the rejection. The court found that All State's rejection was not made in good faith and was unreasonable, and that Mykra was entitled to the payment claimed. The court ordered All State to pay the amount claimed, plus interest and costs.

In summary, the court held that Mykra's progress claim was validly issued under the statutory regime, and that All State's rejection was unjustified. The court ordered All State to pay the amount claimed, plus interest and costs. The decision highlights the importance of compliance with the statutory requirements for progress claims and the consequences of making an unjustified rejection.

Orders