Nitram Group Pty Ltd v Boston Building Group Pty Ltd - [2021] SADC 19

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Interlocutory Application)
NITRAM GROUP PTY LTD v BOSTON BUILDING GROUP PTY LTD
[2021] SADC 19
Decision of his Honour Judge O'Sullivan
5 March 2021
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - PAYMENT CLAIMS
Application for summary judgment. The applicant (Nitram) applies for judgment pursuant to section 15(1) and (2)(a)(i) of the Building and Construction Industry Security of Payment Act 2009 (SA) (the Act).
Nitram was engaged by the respondent (Boston) to carry out construction work. Nitram rendered three invoices totalling $119,512.83 (including GST). The respondent paid part of the invoices such that Nitram claims the remaining balance of the first and third invoices in the sum of $72,108.56 (including GST).
Nitram submits that Boston did not provide payment schedules within the required time, or at all in relation to the two invoices on which it alleges money is still owing. Initially, Boston conceded that no payment schedules had been provided. During oral submissions, this concession was withdrawn by counsel, who submitted that there was in fact a payment schedule provided by email from Boston to Nitram. Nitram submitted this email did not meet the requirements of a payment schedule, as defined by section 14 of the Act.

Held:
1. The applicant is entitled to judgment pursuant to s 15(2)(a)(i) of the Act in the sum of $72,108.56 (including GST) comprising the following amounts:
1.1.      $42,951.95 in respect of invoice 8436, dated 19 February 2020; and
1.2.      $29,156.60 in respect of invoice 8561, dated 18 May 2020.
2.The applicant is entitled to interest pursuant to s 11(2)(a) of the Act at the rate prescribed under the Supreme Court Act 1935 (SA) in respect of judgment debts of the Supreme Court of South Australia:
2.1.      From 22 March 2020 in respect of invoice 8436; and
2.2.      From 19 April 2020 in respect of invoice 8561.

Building and Construction Industry Security of Payment Act 2009 (SA) s 11(2)(a), 14, 14(4), 15(1), 15(2)(a)(i); Supreme Court Act 1935 (SA), referred to.
Built Environs Pty Ltd v Tali Engineering [2013] SASC 84; Ausenco Operations Pty Ltd v Anor v Ferretti International Ottoway Pty Ltd & Anor [2020] SASC 46, considered.

NITRAM GROUP PTY LTD v BOSTON BUILDING GROUP PTY LTD
[2021] SADC 19

Introduction

The applicant (“Nitram”) applies for judgment relying on s 15(1) and (2)(a)(i) of the Building and Construction Industry Security of Payment Act 2009 (SA) (The “Act”).
Initially, Nitram sought judgment in the sum of $119,512.83 (including GST) on the basis of three invoices for construction work it carried out at Briar Road, Felixstow and Willingale Avenue, Lockleys being:
1.Invoice 8436 dated 19 February 2020 in the sum of $85,903.91 (“First Briar Road Invoice”);
2.Invoice 8518 dated 22 April 2020 in the sum of $47,404.27; (“Willingale Invoice”); and
3.Invoice 8561 dated 18 May 2020 in the sum of $29,156.60 (“Second Briar Road Invoice”).[1]
[1] First Nguyen Affidavit, Exhibits DN-06, 07, 08.
On or about 25 April 2020, the respondent (Boston) paid the sum of $42,951.96 against the First Briar Road Invoice leaving a balance due of $42,951.95.[2] The Willingale Invoice was paid by Boston on 11 November 2020.[3]
[2] First Nguyen Affidavit [22].
[3] Lenzi Affidavit [6].
Nitram now claims the sum of $72,108.56 (including GST), such sum representing the balance of the First Briar Road Invoice in the sum of $42,951.95 and the amount due under the Second Briar Road Invoice in the sum of $29,156.60.
Documents relied upon
Nitram reads the affidavits of:
1.Duc van Nguyen, sworn 30 October 2020 (“First Nguyen Affidavit”);
2.Duc van Nguyen, sworn 21 January 2021 (“Second Nguyen Affidavit); and
3.Ricky Gordon Martin, sworn 21 January 2021 (“Martin Affidavit”).
Boston reads the affidavit of Anthony Lenzi, sworn 15 December 2020 (“Lenzi Affidavit”).
Both parties rely on their written submissions as supplemented by their oral submissions.
Background
In or about December 2020, Nitram was engaged by Boston to carry out earthworks at 8-14 Briar Road, Felixstow, South Australia.
First Briar Road Payment Claim
On 20 February 2020, it served the First Briar Road Invoice on Boston. That invoice was endorsed with a statement required by s 13(2) of the Act that the invoice was a payment claim under the Act. I find the First Briar Road Invoice was a payment claim under the Act (“First Briar Road Payment Claim”).
I will return to the topic of payment schedules below but I find that no payment schedule within the meaning of s 14 of the Act in response to the First Briar Road Payment Claim was provided by Boston to Nitram within the time required by s 14(4) of the Act, i.e. within 15 days after the First Briar Road Payment Claim was served or at all.
Second Briar Road Payment Claim
On or about 18 May 2020, Nitram served the Second Briar Road Invoice. That invoice was also endorsed with the statement required under s 13(2) of the Act that the invoice was a payment claim under the Act. I find the Second Briar Road Invoice was a payment claim under the Act (“Second Briar Road Payment Claim”).
No payment schedule as required by s 14(4) of the Act was provided by Boston to Nitram in response to the Second Briar Road Payment Claim.
Consideration
In the absence of payment schedules, Nitram seeks judgment pursuant to sections 15(1) and (2)(a)(i) of the Act.
In order to establish an entitlement to judgment, Nitram must satisfy the Court of the existence of the circumstances referred to in s 15(1) of the Act.[4] Those circumstances are that Boston:
(a)becomes liable to pay the claimed amount to the claimant under section 14(4) as a consequence of having failed to provide a payment schedule to the claimant within the time allowed by that section; and
(b)fails to pay the whole or a part of the claimed amount on or before the due date for the progress payment to which the payment claim relates.
Failure to provide a payment schedule
[4] Section 15(4)(a).
As to the first requirement, i.e: that Boston has become liable to pay the claimed amount to Nitram as a consequence of having failed to provide a payment schedule to Nitram within the time allowed by s 14(4), initially Boston conceded that it had not provided any payment schedules. That concession was withdrawn during the course of argument by Boston’s counsel, who submitted that in fact a payment schedule was provided in response to the First Briar Road Payment Claim and referred to Exhibit AL-6 to the Lenzi Affidavit.
That exhibit is an email sent 24 April 2020 from Boston to Mr Martin of Nitram and copied to Mr Lenzi. It is authored by Ms Mazzarino, who has the title of Construction Co-ordinator.
I do not accept that the email sent 24 April 2020 comprises a payment schedule within the meaning of the Act for two reasons.
First, pursuant to clause 14(2) and (3), a payment schedule is required to identify:
a)The payment claim to which it relates; and
b)The amount of the payment (if any) that the respondent proposes to make.[5] If the schedule 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.[6]
[5] Section 14(2)(a)(b).
[6] Section 14(3).
A consideration of the 24 April 2020 email reveals that although the email identifies the payment claim (by invoice number) and the amount of the payment Boston proposed to make, it does not indicate why the amount is less.
Second, pursuant to s 14(4)(b)(ii) the time within which a payment schedule is to be provided is within 15 business days after the payment claim is served. The First Briar Road Payment Claim, to which the email sent 24 April 2020 refers, was served on 20 February 2020. If the 24 April 2020 email is a payment schedule (which I find it is not) it has been provided significantly out of time.
Accordingly, I am satisfied of the existence of the circumstances referred to in s 15(1)(a).
As to s 15(1)(b) there is no dispute between the parties that the amount of $72,108.56 has not been paid on the First and Second Briar Road Payment Claims although Boston submits Nitram has no entitlement to be paid.
Ms Pangallo of counsel, who appeared for Boston, submitted that there were issues between the parties as to the formation of contract, the extent of any contract, whether the work was performed as claimed in the two invoices and whether there had been an accord and satisfaction. She submitted these were all live issues such that Nitram was not entitled to judgment. In summarising Ms Pangallo’s arguments I do not detract from the thoroughness with which she presented her arguments.
Nevertheless, it is well settled that the Act sets out a regime which must be followed.[7] If, Boston withhold payment on the bases set out in Ms Pangallo’s submissions, then pursuant to s 14 of the Act it had to do so in a payment schedule. It failed to do that.
[7] See Built Environs Pty Ltd v Tali Engineering Pty Ltd [2013] SASC 84 at [49]-[50] per Blue J; Ausenco Operations Pty Ltd v Anor v Ferretti International Ottoway Pty Ltd & Anor [2020] SASC 46, [42]-[43] per Doyle J.
I am satisfied of the existence of the circumstances referred to in s 15(1)(b).
Conclusion
In all the circumstances, I am satisfied that Nitram has made two payment claims which have been served on Boston and to which no payment schedules were provided.
I am satisfied that Nitram has established as entitlement to recover the unpaid portion of the claimed amount from Boston as a debt due to it pursuant to s 15(2)(a)(i) of the Act.
Accordingly:
1.The applicant is entitled to judgment in the sum of $72,108.56 (including GST) pursuant to s 15(2)(a)(i) of the Act comprising the following amounts:
1.1.$42,951.95 in respect of invoice 8436, dated 19 February 2020; and
1.2.$29,156.60 in respect of invoice 8561, dated 18 May 2020.
2.The applicant is entitled to interest pursuant to s 11(2)(a) of the Act at the rate prescribed under the Supreme Court Act 1935 (SA) in respect of judgment debts of the Supreme Court of South Australia:
2.2From 20 March 2020 in respect of invoice 8436; and
2.3From 19 April 2020 in respect of invoice 8561.
I will hear the parties as to the quantum of interest and the costs of and incidental to this application.