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Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (In Liq)

Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (In Liq)

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Case Copied 23 November 2005 53 min read

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Reported Decision:
64 NSWLR 462

Court of Appeal

CITATION:
Nepean Engineering Pty. Ltd. v. Total Process Services Pty. Ltd. (In Liquidation) [2005] NSWCA 409

HEARING DATE(S):
10 November 2005

JUDGMENT DATE:

23 November 2005

JUDGMENT OF:
Hodgson JA at 1; Santow JA at 41; Ipp JA at 75

DECISION:
1. Leave to appeal granted, Notice of Appeal to be filed within 7 days. 2. Appeal dismissed. 3. Appellant to pay respondent’s costs of the application for leave and of the appeal.

CATCHWORDS:
BUILDING AND CONSTRUCTION - Progress payments - Building & Construction Industry Security of Payment Act - Payment claims - Requirement of identification of work - Consequences of defecient identification - Whether payment claim a nullity - Whether, in absence of a payment schedule, a payment claim pruporting to identify the work can support a cause of action under s.15 of the Act - Whether summary judgment available.

LEGISLATION CITED:
Building & Construction Industry Security of Payment Act 1999, ss.13-15, 20-22

CASES CITED:
Brodyn v. Davenport [2004] NSWCA 394, 61 NSWLR 421
Clarence Street Pty. Limited v. ISIS Projects Pty. Limited [2005] NSWCA 391
Co-Ordinated Construction Co. Ltd. v. J.M. Hargreaves (NSW) Pty. Limited [2005] NSWCA 228
Co-ordinated Construction Co. Pty. Limited v. Climatech (Canberra) Pty. Limited [2005] NSWCA 229
Cox Brothers (Australia) Ltd. v. Cox (1934) 50 CLR 314
Estate Property Holdings Pty. Ltd. v. Barclay Mowlem Construction Ltd. [2004] NSWCA 393, 61 NSWLR 575
General Steel Industries Inc. v. Commissioner for Railways (NSW) (1964) 112 CLR 125
Isis Projects Pty. Limited v. Clarence Street Pty. Limited [2004] NSWSC 714
Multiplex Constructions Pty. Limited v. Luikens [2003] NSWSC 1140
O’Grady v The Northern Queensland Company (1990) 169 CLR 356
Petrusevski v Bulldogs Rugby League Club Ltd [2003] FCA 61
Prelea v. Westpac Banking Corporation, NSWCA, 3/7/92

PARTIES:
Nepean Engineering Pty. Limited - claimant
Total Process Services Pty. Limited (In Liquidation) - opponent

FILE NUMBER(S):
CA 40640/05

COUNSEL:
Mr. S. Donaldson with Mr. G. Carolan for claimant
Mr. P. Merity for opponent

SOLICITORS:
Marsdens Law Group, Campbelltown for claimant
Peter Merity, Parramatta for opponent

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
DC 1675/05

LOWER COURT JUDICIAL OFFICER:
Garling DCJ

CA 40640/05
DC 1675/05

HODGSON JA
SANTOW JA
IPP JA
Wednesday 23 November 2005

NEPEAN ENGINEERING PTY. LTD. V. TOTAL PROCESS SERVICES PTY. LTD. (IN LIQUIDATION)

Judgment

1 HODGSON JA: By Statement of Liquidated Claim filed in the District Court on 5 May 2005, the opponent Total claimed $260,048.93 in respect of a cause of action based on s.15(2)(a)(i) of the Building & Construction Security of Payment Act 1999 (the Act). In the Statement of Claim, Total also claimed interest pursuant to s.83A of the District Court Act from 23 March 2005 and costs. The claimant Nepean filed a Defence to this Statement of Claim on 9 June 2005; and on 20 June 2005, Total filed a Notice of Motion seeking the following orders:

1. Pursuant to Part 11A Rule 2 of the District…

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: [2005] NSWCA 409
Decision Date: 23 November 2005

CaseChat Overview and Summary

Nepean Engineering Pty Ltd (the appellant) sought to appeal a decision concerning a payment claim made under the *Building and Construction Industry Security of Payment Act 2002* (NSW) (the Act). The respondent, Total Process Services Pty Ltd (in liquidation), had made a payment claim to the appellant. The appellant did not provide a payment schedule in response. The core of the dispute revolved around whether the payment claim, which the appellant argued failed to adequately identify the work performed, was a nullity and therefore incapable of supporting a cause of action under section 15 of the Act, particularly in the absence of a payment schedule. The appellant also contended that summary judgment should not have been available to the respondent.

The Court of Appeal was required to determine whether a payment claim that purports to identify the work done, but does so inadequately, is a nullity under the Act. Further, the Court had to consider whether, in circumstances where no payment schedule is provided by the respondent, such a deficient payment claim could still support a cause of action under section 15 of the Act, which provides for the recovery of progress payments. The Court also had to assess whether summary judgment was an appropriate remedy given the appellant's arguments regarding the validity of the payment claim.

The Court of Appeal dismissed the appeal, upholding the primary judge's decision. Their Honours reasoned that the Act's scheme contemplates that a respondent who fails to provide a payment schedule within the prescribed time is liable to pay the claimed amount. The Court held that a payment claim is not a nullity simply because it may not perfectly identify the work performed. Instead, the adequacy of the identification is a matter to be assessed, and the absence of a payment schedule means the respondent is liable for the claimed amount, subject to any defence that might arise from a fundamentally invalid claim. The Court found that the payment claim in this instance was not so fundamentally flawed as to be a nullity, and therefore, in the absence of a payment schedule, it supported the respondent's claim for payment. Consequently, summary judgment was appropriately granted.

Orders

Orders of the court

1. Leave to appeal granted, Notice of Appeal to be filed within 7 days. 2. Appeal dismissed. 3. Appellant to pay respondent’s costs of the application for leave and of the appeal.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Nepean Engineering Pty. Ltd. v. Total Process Services Pty. Ltd. (In Liquidation) [2005] NSWCA 409
HEARING DATE(S):	10 November 2005
JUDGMENT DATE:	23 November 2005
JUDGMENT OF:	Hodgson JA at 1; Santow JA at 41; Ipp JA at 75
DECISION:	1. Leave to appeal granted, Notice of Appeal to be filed within 7 days. 2. Appeal dismissed. 3. Appellant to pay respondent’s costs of the application for leave and of the appeal.

CATCHWORDS:	BUILDING AND CONSTRUCTION - Progress payments - Building & Construction Industry Security of Payment Act - Payment claims - Requirement of identification of work - Consequences of defecient identification - Whether payment claim a nullity - Whether, in absence of a payment schedule, a payment claim pruporting to identify the work can support a cause of action under s.15 of the Act - Whether summary judgment available.
LEGISLATION CITED:	Building & Construction Industry Security of Payment Act 1999, ss.13-15, 20-22
CASES CITED:	Brodyn v. Davenport [2004] NSWCA 394, 61 NSWLR 421 Clarence Street Pty. Limited v. ISIS Projects Pty. Limited [2005] NSWCA 391 Co-Ordinated Construction Co. Ltd. v. J.M. Hargreaves (NSW) Pty. Limited [2005] NSWCA 228 Co-ordinated Construction Co. Pty. Limited v. Climatech (Canberra) Pty. Limited [2005] NSWCA 229 Cox Brothers (Australia) Ltd. v. Cox (1934) 50 CLR 314 Estate Property Holdings Pty. Ltd. v. Barclay Mowlem Construction Ltd. [2004] NSWCA 393, 61 NSWLR 575 General Steel Industries Inc. v. Commissioner for Railways (NSW) (1964) 112 CLR 125 Isis Projects Pty. Limited v. Clarence Street Pty. Limited [2004] NSWSC 714 Multiplex Constructions Pty. Limited v. Luikens [2003] NSWSC 1140 O’Grady v The Northern Queensland Company (1990) 169 CLR 356 Petrusevski v Bulldogs Rugby League Club Ltd [2003] FCA 61 Prelea v. Westpac Banking Corporation, NSWCA, 3/7/92
PARTIES:	Nepean Engineering Pty. Limited - claimant Total Process Services Pty. Limited (In Liquidation) - opponent
FILE NUMBER(S):	CA 40640/05
COUNSEL:	Mr. S. Donaldson with Mr. G. Carolan for claimant Mr. P. Merity for opponent
SOLICITORS:	Marsdens Law Group, Campbelltown for claimant Peter Merity, Parramatta for opponent

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 1675/05
LOWER COURT JUDICIAL OFFICER:	Garling DCJ