NewGrow Pty Ltd v Buxton Constructions (Vic) Pty Ltd
[2019] VCC 464
•10 April 2019
sss
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-18-05544
| NEWGROW PTY LTD | Plaintiff |
| v | |
| BUXTON CONSTRUCTIONS (VIC) PTY LTD | Defendant |
---
JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 7 March 2019 | |
DATE OF JUDGMENT: | 10 April 2019 | |
CASE MAY BE CITED AS: | NewGrow Pty Ltd v Buxton Constructions (Vic) Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2019] VCC 464 | |
REASONS FOR RULING
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr B Reid | Colin Biggers & Paisley |
| For the Defendant | Mr A Downie | Thomson Geer |
HIS HONOUR:
Nature of application
1 By Originating Motion filed on 12 December 2018, the plaintiff (“NewGrow”) seeks judgment pursuant to section 16(2)(a)(i) of the Building and Construction Industry Security of Payments Act 2002 (“the Act”) in the amount of $245,379.65, together with interest pursuant to section 12(2)(b) of the Act, by reason of the failure of the defendant (“Buxton”) to provide to it a payment schedule in response to its payment claim.
2 NewGrow’s claim is based on two payment claims served in August and September 2018. NewGrow alleges that Buxton failed to serve payment schedules in response within the 10 day period specified in section 15(4) of the Act and, accordingly, NewGrow is entitled to judgment.
3 Buxton opposes NewGrow’s application and says that:
(a) in respect of the first payment claim, a payment schedule within the meaning of section 15 of the Act was provided within 10 business days of NewGrow serving the payment claim;
(b) in respect of the second payment claim, NewGrow agreed to revise its payment claim for September 2018 to match the payment schedule delivered in response (albeit late) and, therefore, the amount claimed for the purposes of section 16(1)(b) of the Act is the amount set out in the payment schedule and paid to NewGrow.
Background
4 NewGrow is a commercial landscaping contractor.
5 Buxton is a company which carries on business as a contractor within the building industry.
6 Buxton won a contract to construct an aged care facility at 40-48 Dorking Road, Box Hill (“the property”). Pursuant to a subcontract executed in April 2018 (“the subcontract”), Buxton engaged NewGrow to perform landscaping work on the property. NewGrow commenced the works on about 14 March 2018.
7 On 25 August 2018, NewGrow served payment claim 6, claiming $281,923.20 (including GST) by email (“the August payment claim”).
8 On 31 August 2018, Buxton served a payment schedule in response (“the August payment schedule”). The document said that Buxton would pay a total amount of $59,811.57 including GST.
9 On 11 September 2018, Buxton served a revised payment schedule in response to payment claim 6. This document said that the total amount which Buxton would pay was $140,279.29 including GST (“the revised August payment schedule”).
10 On 25 September 2018, NewGrow served payment claim 7, seeking $214,790.52 including GST (“the September payment claim”).
11 On 1 October 2018, Buxton paid NewGrow the sum of $102,892.
12 On 2 October 2018, NewGrow complained to Buxton that it had been short paid by approximately $40,000.
13 On 5 October 2018, NewGrow served revised payment claim 7 upon Buxton, claiming $204,735.70 including GST (“the revised September payment claim”).
14 On 25 October 2018, Buxton served a payment schedule in response to the revised September payment claim (“the September payment schedule”). Buxton said it would pay NewGrow an amount of $138,395.64, including GST.
15 On 1 November 2018, Buxton paid NewGrow the sum of $138,395.64.
Agreed facts
16 For the purposes of this proceeding, the parties agreed upon certain material facts, namely:
(a) the contract between the parties in connection with the project at the property was a construction contract within the meaning of the Act;
(b) the August payment claim was a payment claim within the meaning of section 14 of the Act;
(c) the September payment claim was a payment claim within the meaning of section 14 of the Act.
Issues
17 Counsel for the parties identified for the court the specific issues for determination in this matter as follows:
(a) is the August payment schedule a payment schedule within the meaning of section 15 of the Act?;
(b) if the answer to (a) is yes, is the revised August payment schedule a payment schedule within the meaning of section 15 of the Act?;
(c) if the answer to (b) is yes, did the September payment claim include a claim for the outstanding amount?;
(d) if the answer to (b) is yes, was the outstanding amount paid?;
(e) do the documents at court book 218, 251 and 253 constitute an agreement between the parties to vary the September payment claim?
Is the August payment schedule a payment schedule within section 15 of the Act?
18 Buxton contended that the August payment schedule was a payment schedule under the Act.
19 Section 15 of the Act is in the following terms:
“(1) A person on whom a payment claim is served (the respondent) may reply to the claim by providing a payment schedule to the claimant.
(2) A payment schedule—
(a) must identify the payment claim to which it relates; and
(b)must indicate the amount of the payment (if any) that the respondent proposes to make (the scheduled amount); and
(c)must identify any amount of the claim that the respondent alleges is an excluded amount; and
(d)must be in the relevant prescribed form (if any); and
(e)must contain the prescribed information (if any).
(3) If the scheduled amount is less than the claimed amount, the schedule must indicate why the scheduled amount is less and (if it is less because the respondent is withholding payment for any reason) the respondent's reasons for withholding payment.
(4) If—
(a) a claimant serves a payment claim on a respondent; and
(b)the respondent does not provide a payment schedule to the claimant—
(i)within the time required by the relevant construction contract; or
(ii)within 10 business days after the payment claim is served;
whichever time expires earlier—
the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates.”
20 Andrew O’Brien of Buxton sent the document purporting to be the August payment schedule to Kenan Huric of NewGrow on 31 August 2018 at 5.06pm. Buxton argued that whether or not the document met the requirements of section 15 of the Act was to be determined objectively. Buxton relied upon the views expressed by Finkelstein J in Protectavale Pty Ltd v K2K Pty Ltd.[1]
[1][2008] FCA 1248 at [10]-[12].
21 In dealing with the issue of whether payment claims or payment schedules complied with the requirements of the Act, his Honour made a number of observations:
· the test is an objective one: that is, it must be clear from the terms of the document that it contains the required information.
· the document must be read in context. This involves acknowledging that claims are usually given and received by parties experienced in the building industry who are familiar with particular construction contracts, the history of the project, and issues which might have arisen.
· the words used in such documents must be applied in a common sense and practical manner. The Act emphasises speed and informality. The court should not approach the question of whether or not a document satisfies the Act from an unduly critical viewpoint.
· a payment claim must be sufficiently detailed to enable the principal to understand the basis of the claim. It must enable the principal to decide whether to accept or reject the claim. If the principal opts for the latter, it must enable him to respond appropriately in a payment schedule.
22 It was in this context that Buxton submitted that the August payment schedule satisfied the requirements of the Act: it identified the payment claim to which is related; it indicated the amount which it proposed to pay NewGrow; it indicated why the amount it was proposing to pay was less than the amount which NewGrow sought – that is, it gave reasons for withholding part of the payment.
23 Buxton contended there were several grounds for saying that the August payment schedule identified the payment claim to which it related: it argued that the August payment schedule had the same reference number as displayed on the covering email enclosing the August payment claim; it was attached to an email which was part of the chain of emails under which NewGrow served the August payment claim; it made specific reference on its face to payment claim PC6, which was the August payment claim; in the “Subcontractor Claim” section of the summary schedule, it had the same or substantially similar figures as appeared in the payment claim; it had the same percentage completion for the work identified by NewGrow in the August payment claim.
24 Secondly, Buxton contended, and I accept, that the August payment schedule indicated the amount of the payment which Buxton proposed to make, namely $59,811.57 (including GST).
25 Thirdly, Buxton contended that the August payment schedule indicated why the scheduled amount was less than the claimed amount. It argued that the payment schedule set out the percentage differences between NewGrow’s assessment of its claim and Buxton’s assessment of the claim, and the calculation of the retention.
26 The schedule to the August payment claim set out the various line items for which NewGrow claimed. The schedule included sections which set out the subcontract value for each component of the subcontract and sections to set out details about the subcontractor’s claim and Buxton’s assessment. Hence, in the former were columns to spell out the percentage completed, the total money claimed to date, the monetary total of prior claims, and the amount sought in this particular claim.
27 The “Assessment” section of the payment schedule comprised columns for Buxton to set out its assessment of the percentage completed, the total amount assessed to date, the total of previous payments, and the amounts allowed in this assessment.
28 Also, the page included a column for comments where Buxton could write anything applicable to a claim.
29 Examination of the schedule revealed that the difference between the parties and their respective views was normally attributable to conflicting assessments about the extent to which the work was complete.
30 NewGrow disputed the August payment schedule had the effect alleged. In its submissions, NewGrow referred at some length to the Court of Appeal decision in Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd[2] and the Queensland Supreme Court in Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd.[3]
[2][2016] VSCA 247.
[3][2007] QSC 333.
31 These cases made several points relevant to the present dispute:
· the reasons for withholding payment must be indicated with sufficient particularity to enable the claimant to understand, at least in broad outline, the issue between it and the respondent.
· in a context where the parties are under time constraints, absolute precision is not required.
· the claimant is entitled to information sufficient to enable it to decide whether or not to pursue the claim.
· the whole purpose of a payment schedule is to identify the amounts in dispute and why – the delivery of the payment claim and responding payment schedule are meant to identify quickly the parameters of a dispute about payment for prompt determination in the adjudication process.
· if a respondent to a claim wants to take advantage of the Act to dispute a claim, it must comply with its provisions and respond in the manner required by the legislation.
32 NewGrow pointed to a number of aspects of the payment schedule which it contended showed that the payment schedule did not comply with the requirements of the Act.
33 First, the August payment claim requested a total of $234,102.32 (CB 131). The payment schedule stated that the amount of the claim was $280,133.58 (CB 170).
34 Secondly, the front page of the payment schedule referred to progress claim 6. This was correct. However, the document said that the claim was dated and received on 25 July 2018 and was due for payment on 3 September 2018. Those assertions were incorrect because the claim was dated 25 August 2018 and was due for payment on about 5 October 2018.
35 Thirdly, the payment schedule showed the rectification amount to which Buxton claimed entitlement was $65,078.47 (CB 174). In the payment claim, the retention amount claimed to date was $82,947.70 (CB 129).
36 Finally, there were the inconsistencies in the details of the payment schedule in responding to the payment claim. There was a series of discrepancies in the line items for the August payment claim as follows:
Subcontract works line item Payment claim Payment schedule Planting $47,450.30 (CB 130) $65,874.37 (CB 169) Irrigation $0 ($5,593.60) Paving $41,631.72 $48,036.60 Soft fall rubber $10,064.30 $609.70 Clothesline $0 $825.00 Garden sheds $0 $3,800.00 Pergolas $0 $30,325.00
37 In relation to variations, Buxton’s payment schedule included $1,304 for a concrete plinth, $6,929 for screen fence changes, and $13,100.23 for day labour and Sunday E/O hours. There was $0 claimed for each of these items in the August payment claim.
38 I accept that the payment schedule is to be assessed on an objective basis. The evidence, objectively assessed, shows that some figures are identical in the claim and the schedule, the reference to claim 6 in the schedule is correct and there is email correspondence which is consistent with the payment schedule responding to the August payment claim. Buxton acknowledges that its totals had gone awry in places, but maintained many of the details were nonetheless correct. However, the number of basic, unexplained errors and inconsistencies concerns me.
39 Given the context of the Act, where documents are required quickly, a reasonable person standing in the shoes of the claimant could be justifiably confused about whether the August payment schedule was addressing the August payment claim. Whilst perfect precision is not required, there are, in my view, too many discrepancies. Some are substantial. This unsatisfactory situation is exacerbated by the absence of any proper explanation in the affidavit material.
40 Accordingly, even though the August payment schedule sets out a proposed payment of $59,811.57, and I infer from the percentage assessment made that the scheduled amount is less than the amount claimed (at least partly) for that reason, I do not consider that the August payment schedule satisfies section 15 of the Act. Thus, the application by NewGrow is to proceed as if Buxton failed to serve a payment schedule.
If the answer to issue (a) is yes, is the revised August payment schedule a payment schedule within section 15 of the Act?
41 As noted already, on 11 September 2018, Buxton served the revised August payment schedule for $140,279.29. Plainly, this was a substantial increase on the amount set out in the August payment schedule. In his affidavit, Stephen Baker, a commercial manager at Buxton, refers to an email from Andrew O’Brien of Buxton in which he said that the revised August payment schedule was the “RCTI and payment schedule for the month of August” and “the previous draft had an error with previous payment which has resulted in a net increase”.[4] The covering document to the revised August payment schedule erroneously said that it responded to payment claim 7. This payment claim had not yet been issued.
[4]Affidavit of Stephen Baker filed 7 February 2019 at paragraph 26.
42 While Baker sought to explain this difference and also a change in the retention figure between the August payment schedule and the revised August payment schedule, the discrepancies confirmed, in my opinion, the lack of attention devoted to preparing an appropriately supported and accurate payment schedule in response to NewGrow’s claims.
43 There was some debate before me about Buxton’s entitlement to forward a revised payment schedule. Neither counsel found any authority directly on point. Section 14(8) of the Act provides that:
“A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract.”
44 Thus, the position is clear in relation to payment claims. However, there is no equivalent provision in relation to payment schedules.
45 The short response to this issue is that the revised August payment schedule is not a payment schedule within section 15 of the Act[5] because:
[5]I infer from the issues drafted by the parties, as set out in paragraph 17 above, that they appreciated the revised August payment schedule would not satisfy section 15 of the Act if the original August payment schedule did not.
(a) for it to be a revised payment schedule, the August payment schedule itself would need to be a payment schedule within the meaning of section 15 of the Act. I have found that it was not;
(b) the revised August payment schedule was served late – that is, more than 10 business days after NewGrow served the payment claim.
46 I note in passing that although the RCTI referred to PC7, the front page of the revised August payment schedule referred to PC6, but still had the incorrect dates for the claim, its receipt by Buxton, and the due date for payment. Further, the line item errors identified in paragraph 36 above were also found in the revised document. Accordingly, the revised August payment schedule was afflicted with many of the same discrepancies which bedevilled the initial August payment schedule.
If the answer to issue (b) is yes, did the September payment claim include a claim for the outstanding amount?
47 Because the answer to issue (b) was “no”, I do not need to further address this issue.
If the answer to (b) is yes, was the outstanding amount paid?;
48 Because the answer to issue (b) was “no”, I do not need to further address this issue.
Do the documents at court book 218, 251 and 253 constitute an agreement to vary the September payment claim?
49 While Buxton accepts that it late-served the September payment schedule, it contends that NewGrow expressly agreed to revise its September payment claim in order “to reflect the amount in the September payment schedule” and that NewGrow should not be able to resile from that agreement.
50 The parties appeared not to dispute the documents constituting the relevant correspondence with respect to this issue.
51 On 5 October 2018 at 3.50pm, Kenan Huric of NewGrow sent to Andrew O’Brien of Buxton the revised September payment claim.
52 On 20 October 2018 at 4.21pm, Alex Lane of NewGrow sent an email to Andrew O’Brien stating:
“Andy,
I’m just trying to close out end of last quarter books.
Can you issue the payment schedule please. If we’re not able to close out Box Hill last month can you let me know either way.”
53 On 25 October 2018 at 12.14pm, Alex Lane sent Andrew O’Brien another email saying:
“Andy,
I’m assuming I don’t need to submit another claim for October and we’ll settle it through the September claim, is that correct?”
54 On 25 October 2018 at 5.54pm, Andrew O’Brien sent the September payment schedule to Alex Lane and Kenan Huric with a covering email in the following terms:
“Apologies for late lengthy assessment of your revised September claim dated 5th October 2018. Even after speaking with you in regards to the original payment claim, the revised payment claim submitted still had similar issues which I struggled to understand. These relate to differences in variation claims, credits and works not completed in the September period.
Could you please review the attached and advise acceptance to enable a prompt issue of RCTI and payment next week and also to highlight items still requiring mutual acceptance.
Please also submit a misc (sic) variation for topsoil delivered yesterday, say 2 cubic metres of tanbark when advised and make good of Clota Avenue nature strip. For the latter please allow labour to rake and dispose of debris and residual crushed rock, topsoil and seed to approximately 35 lineal metres of strip and to water in.”
55 On 25 October 2018 at 5.58pm, Andrew O’Brien emailed Alex Lane as follows:
“Sorry Alex
Wasn’t able to completely close out today. Refer Aconex sent this evening. Please make sure the rubber clowns are on track for next week. They have not helped our cause.”
56 On 25 October 2018 at 6.18pm, Alex Lane emailed Andrew O’Brien as follows:
“No worries, I’ll match our claim with your schedule and put an October claim through shortly to close out the project.”
57 On 26 October 2018 at 3.13pm, Andrew O’Brien sent Alex Lane and Kenan Huric the RCTI with a covering email in the following terms:
“Please find attached PC8 Certification and RCTI for your records and info. PC9 will be dealt with shortly (before end of next week) given there should be only a few certification queries and works are largely complete.
There are some additional purchases of plants, mulch and works to nature strip I’ll detail on separate correspondence. Could you please price when received for inclusion in the October claim which you will obviously need to revise.”
58 On 1 November 2018, Buxton paid NewGrow the scheduled amount in the RCTI in the sum of $138,395.64.
59 In the context of those documents, Buxton’s contention appeared to be that the parties reached an agreement whereby NewGrow revised its September payment claim and decided to permanently forego part of it so that it coincided with the September payment schedule produced by Buxton. Part of the agreement, or a consequence of it, was that NewGrow could not make any future claim in respect of any part of its claim which it agreed to forego. Buxton argued that Andrew O’Brien communicated an offer to a representative of NewGrow, who accepted the offer. To the extent that Alex Lane expressed in his affidavit subjective views about his intention or understanding, Buxton contended that such matters were irrelevant and inadmissible.
60 NewGrow denied that it agreed to compromise its September payment claim in the manner alleged by Buxton. NewGrow submitted that:
(a) while usually it was NewGrow’s practice to issue its own tax invoices, the subcontract with Buxton required, under clause 5.8, that Buxton issue the invoices on behalf of NewGrow – hence, the recipient created tax invoice (“RCTI”).
(b) the correspondence relied upon by Buxton with respect to the September payment claim concerned the generation of the RCTI by Buxton.
(c) what occurred was that the RCTI generated by Buxton matched Buxton’s purported payment schedule given on 25 October 2018. This in turn enabled Buxton to effect payment to NewGrow.
(d) the unpaid portion of the September payment claim was claimed, in accordance with section 14(9) of the Act, in October, being the next reference date. This was part of the accounting matching procedure employed by the NewGrow software.
61 Relevant to NewGrow’s argument was section 48 of the Act. In essence, this stated that a provision of any agreement, whether written or not, was void where it either did, or purported to, exclude, modify or restrict the operation of the Act or had that effect; or the provision could reasonably be construed as an attempt to deter a person from taking action under the Act. The provisions of the Act have effect despite any provision to the contrary in any contract.[6] So, if there were some agreement to exclude or restrict a claim by NewGrow under the Act, such provision was void (subject to my later comments about resolving genuine disputes).
[6]Section 48(1)
62 As I understood NewGrow’s argument, the agreement alleged by Buxton would have the effect of excluding, modifying or restricting the operation of the Act by reducing the amount to which NewGrow claimed entitlement under the Act. This was because, on Buxton’s argument, NewGrow had foregone its rights under the Act in relation to the September payment claim (or part thereof) and accepted a lesser sum for that claim without obtaining any consideration in return.
63 NewGrow contended that there were authorities[7] which held that an agreement made between parties reflecting a genuine resolution of a dispute between them, did not offend section 48 of the Act. Specific reference was made to the decision of his Honour Judge Anderson in Fitzroy Shopfitting and Building Pty Ltd v Solene Investments Pty Ltd, where his Honour said:[8]
“… if the parties by their words and conduct have shown that their agreement was not directed to the exclusion, modification or restriction of the operation of the Act but rather the genuine resolution of a dispute, the parties should be bound by their agreement and section 48 [of the Act] would have no application.”
[7]Simtec Group Pty Ltd v Ascot Building Pty Ltd [2016] VCC 1127 and Fitzroy Shopfitting and Building Pty Ltd v Solene Investments Pty Ltd [2016] VCC 1352.
[8][2016] VCC 1352 at [28].
64 NewGrow submitted that in the present case there was no agreement or settlement reached between NewGrow and Buxton. First, there was no dispute identified by Buxton as the subject of any agreement. Secondly, in circumstances where Buxton, on its own case, did not provide a payment schedule within the time stipulated in the Act, it identified no consideration given for the alleged agreement. Finally, there was said to be no genuine resolution of any dispute because the amount alleged to have been foregone by the plaintiff was in fact claimed again in its October payment claim.
65 In response, Buxton argued that there was good consideration for the agreement because, if NewGrow accepted the offer made, Buxton would promptly issue the RCTI and make payment in the following week. By doing this, Buxton claimed to be paying before the timetable contemplated in clause 5.5 of the subcontract with NewGrow. The subcontract required payment within 35 days of the end of the calendar month in which the payment claim was made. Buxton contended that paying the money due approximately five weeks early constituted valuable consideration.
66 This issue of a possible agreement between the parties arose in the context of the payment provisions of the subcontract between them. Clause 5.8 of the contract provided as follows:
“To the extent that the consideration to be paid or provided under the Subcontract is not expressed to be GST inclusive, a party must also pay the GST payable on a taxable supply made to it. The Subcontractor and the Head Contractor each warrant that they are registered for GST and will notify the other if they cease to be registered. The Head Contractor warrants that it is eligible to issue recipient created tax invoices (“RCTI”). The Subcontractor must notify the Head Contractor if it does not satisfy any Tax Office rulings relating to RCTI. Terms used in this clause have the meanings given to them in the A New Tax System (Goods and Services Tax) Act 1999 (Cth).”
Thus, Buxton warranted it was eligible to issue the RCTI. NewGrow was obliged to notify Buxton if it did not satisfy any tax office rulings in relation to the RCTI.
67 Under clause 13 of the ruling produced by the ATO in respect of recipient created tax invoices, namely GSTR 2000/10, the ATO spelt out the requirements integral to the classes of invoices which recipients might issue. The requirements were to be satisfied respectively by recipients and suppliers. NewGrow drew attention to clause 13(c), which provided that the recipient must have either a written agreement with the supplier specifying the supplies to which it related and agreeing upon four specific matters (none of which explicitly required agreement as to amount); or an agreement with the supplier embedded in an RCTI it issued which contained a specific statement stipulated by the ATO (which again did not explicitly require agreement as to amount).
68 The documents do not appear to me to obviously support NewGrow’s contention that, in order to be paid by Buxton, the parties must actually agree upon the amount in the RCTI. I see no basis in the subcontract to find that the RCTI cannot be issued until the parties have formally agreed upon the amount to be specified in the RCTI.
69 On balance, I consider that there was no valid and binding agreement between the parties pursuant to which NewGrow compromised its September payment claim on a permanent basis. It is one thing for NewGrow to agree on a figure for the RCTI in order to obtain payment. It is quite different for NewGrow to agree to permanently forego part of its alleged entitlement. First, Buxton has not satisfied me that the correspondence referred to in the submissions should be interpreted as constituting an agreement by NewGrow to the effect alleged by Buxton. The emails are too vague or uncertain to be treated as giving rise to such an agreement. The documents relied upon would need to be considerably more explicit in order to make good Buxton’s point. Also, the emails passing between the parties set out at paragraphs 53-56 above expressly contemplate that, because Buxton could not close out the accounts at that time, there would be an October claim to deal with the outstanding matters on the project.
70 Secondly, I do not consider that there was any dispute between the parties identified by Buxton, the settlement of which would not offend section 48 of the Act. The case law suggests that the genuine resolution of a dispute would not contravene the section. There are two difficulties in this case:
(a) Buxton has not identified a genuine dispute between the parties. While Buxton contends that NewGrow in effect agreed to reduce an existing debt owed to it by foregoing a sum to which it claimed an entitlement, this seems unlikely in circumstances where it seems that the plaintiff included in its October payment claim the amount alleged to have been foregone.
(b) Buxton did not identify any fresh consideration for the new agreement whereby NewGrow agreed to reduce the existing debt.
71 With respect to the issue of consideration raised in subparagraph (b) above, Buxton contended that the payment of money in advance of the time it is contractually due can constitute good consideration. I accept that proposition as a matter of principle. However, I do not agree that it is applicable in this case. Buxton referred to clause 5.5 of the subcontract, which provides as follows:[9]
“The Head Contractor will pay the scheduled amount under the Payment Schedule within 35 days of the end of the calendar month in which the Payment Claim was made.”
[9]Buxton’s Submissions dated 5 March 2019 at paragraph 15.
72 It then contended that the revised September payment claim was issued on 5 October 2018 and “payment was due according to the subcontract on 5 December 2018”.[10] Buxton drew specific attention to that part of the 25 October 2018 email which said to “review the attached and advise acceptance to enable a prompt issue of RCTI and payment next week”.[11] Buxton, after getting a response from NewGrow, paid NewGrow on 1 November 2018, “around 35 days before it was due”.[12]
[10]Buxton’s Submissions dated 5 March 2019 at paragraph 16.
[11]See email at paragraph 53 above.
[12]Buxton’s Submissions dated 5 March 2019 at paragraph 17.
73 As I read the subcontract, Buxton was obliged to pay the amount in the payment schedule within 35 days of the end of October. Thus, the money was due to be paid to NewGrow at some point between 1 November and 5 December 2018. It is incorrect to assert, as Buxton does, that the money was not due for payment until 5 December 2018. While I accept that Buxton paid NewGrow at an early date within the payment period, that does not mean that Buxton paid the amount in the schedule before it was due. In order for Buxton to have paid the schedule amount before it was due, it would have had to make the payment before 1 November 2018.
74 In circumstances where:
(a) there was no agreement to accept a lesser sum in payment of the amount due under the payment claim because the terms were too vague and uncertain;
(b) even if there were such an agreement, its terms on this issue were void because they contravened section 48 of the Act;
(c) there was no genuine dispute between the parties which could be settled without contravening section 48 of the Act;
(d) even if there were a genuine dispute between the parties which could be settled without contravening section 48 of the Act, Buxton gave no consideration for such agreement,
I find that there was no agreement between the parties of the kind alleged by Buxton regarding the September payment claim.
Conclusion
75
The answers to the issues posed are as follows:
(a) No;
(b) Inapplicable but no;
(c) Inapplicable;
(d) Inapplicable;
(e) No.
76 I direct that the parties confer in order to produce orders giving effect to these reasons. The orders are to be sent to the Court by 4:00pm on 12 April 2019. If there is a dispute about the proposed orders, each party is to file and serve by 4:00pm on 15 April 2019 a written submission setting out the orders it seeks and the reasons therefor. Each party can then file and serve reply submissions by 4:00pm on 17 April 2019. Unless a party specifically requests it, or the Court considers it appropriate, there shall be no further oral hearing with respect to this matter.
0
5
0