No Problems Just Solutions Pty Ltd v Adcon Contracting Pty Ltd
[2023] VCC 1593
•11 September 2023
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
BUILDING CASES LIST
Case No. CI-23-04350
| No Problems Just Solutions (ACN 121 941 277) t/a Land Surveys | Plaintiff |
| v | |
| Adcon Contracting Pty Ltd (ACN 613 824 150) | Defendant |
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JUDGE: | Her Honour Judge Burchell | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | On the papers written submissions dated 22 August 2023 | |
DATE OF JUDGMENT: | 11 September 2023 | |
CASE MAY BE CITED AS: | No Problems Just Solutions Pty Ltd v Adcon Contracting Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2023] VCC 1593 | |
REASONS FOR JUDGMENT
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Subject: CONTRACTS
Catchwords: Building contract – payment claim – undefended application
Legislation Cited: Building and Construction Industry Security of Payment Act2002 (Vic) ss4, 5, 9, 10A, 10B, 12, 14(2), 15, 16(2) and 48; Civil Procedure Act 2010 (Vic) ss61 and 63
Cases Cited:3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674; SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805; Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; APR Structural Steel Pty Ltd v Devco Project and Construction Pty Ltd [2021] VCC 1048; Fulconstruction Pty Ltd v ABP Consultants Pty Ltd [2016] VCC 1732; Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112; Pearl Hill Pty Ltd v Concorp Construction Group (Vic)Pty Ltd [2011] VSCA 99; Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2005) 62 NSWLR 385; Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449; Best Fab Pty Ltd v Australian High Bay Installations Pty Ltd [2018] VCC 1053; John Beever v Roads Corporation [2018] VSC 635; John Beever (Aust) Pty Limited v Paper Australia Pty Ltd [2019] VSC 126; Clarence Street Pty Ltd v Isis Projects Pty Ltd [2005] NSWCA 391; Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106; Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44; Emag Constructions Pty Limited v Highrise Concrete Contractors (Aust) Pty Limited [2003] NSWSC 903; Emag Constructions Pty Limited v Highrise Concrete Contractors (Aust) Pty Limited [2003] NSWSC 903; Metacorp Pty Ltd v Andeco Construction Group Pty Ltd [2010] VSC 199; (2010) VR 141.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | L J Hogan | Ward & Co Legal Consultants |
| For the Defendant | - | - |
HER HONOUR:
1In this proceeding, the plaintiff (“NPJS”) applies for judgment against the defendant (“Adcon”) under s16(2) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (“SOP Act”). NPJS makes the application by summons on originating motion dated 9 August 2023. The application arises out of land surveying services performed at Domain Boxes Cross Melbourne Metro, 29A Albert Road, Melbourne, Victoria pursuant to a contract with Adcon (“the Project”).
2NPJS asserts that it is entitled to judgment because Adcon failed to issue a payment schedule in response to its payment claim. NPJS relies on the affidavit of Gwilym Conran (“Conran”), Commercial Projects Manager, affirmed on 9 August 2023 and the affidavits of service of Sophie Rullo, Office Administrator, affirmed on 22 August 2023 and Lisa Desler, Paralegal, affirmed on 22 August 2023.
3Adcon has not filed a notice of appearance in this proceeding despite the documents being sent by express post to its registered office on 11 August 2023.
4In my view the Payment Claim is valid, and Adcon has failed to serve a payment schedule in response to any of the claims. Therefore, NPJS is entitled to judgment on the unpaid portion of the claimed amount as a debt due from Adcon. My reasons in respect of each ground are set out below.
5Accordingly, there is judgment for NPJS in the sum of $46,136.09 (including GST), together with interest pursuant to s12(2)(a) of the SOP Act. I also order that Adcon pay NPJS’ costs of and incidental to the proceeding fixed in the amount of $12,045.91 pursuant to r63A.07(2)(c) of the County Court Civil Procedure Rules 2018.
Factual Background
6NPJS conducts a business specialising in the provision of land surveying services.
7Adcon is a commercial construction business.
8On 12 February 2021, NPJS and Adcon entered into a Construction Contract (“the Contract”) for NPJS to carry out surveying works at the property situated at Domain Boxes Cross Melbourne Metro (“the Works”).
9The Contract is comprised of the following documents:
(a) Adcon’s purchase order dated 27 January 2021 (“Purchase Order”);
(b) A Trade Application Form executed by Adcon dated 12 February 2021 (“Trade Application Form”); and
(c) Trade Terms published on landsurveys.net.au/trade-terms/ which are specifically referred to in the Trade Application Form (“Trade Terms”).
10The Contract includes the following terms:
(a) pursuant to the Trade Application Form and the Purchase Order, the email address for Adcon in respect of the Construction Contract, the Works and for the issuing of progress claims is [email protected];
(b) pursuant to the Purchase Order, the Works would be charged at an ordinary rate of $115 per hour plus GST, including for offsite drafting works when required;
(c) pursuant to the Purchase Order, due date for payment of progress claims is 45 days; and
(d) pursuant to clause 10 of the of the General Conditions of the Trade Terms which form part of the Construction Contract, the interest rate on overdue payments is 12% per annum simple.
11On 15 February 2021, NPJS commenced the Works under the Contract.
12The Contract does not provide for the calculation of reference dates.
13On 16 March 2023, NPJS issued an alleged Payment Claim (“the Payment Claim”), to Adcon being invoice no. 60991 with a claimed amount of $46,136.09 (GST inclusive), which was sent to Adcon by way of email to [email protected].
14The Works claimed under the Payment Claim is in respect of:
(a) Works performed by the plaintiff at the Site pursuant to the Construction Contract up to the Relevant Reference Date, being a Site call out of 4-hours on 24 February 2023 in the sum of $460.00 ($506.00 inclusive of GST); and
(b) a previously claimed and unpaid amount in the sum of $41,481.90 ($45,630.09 inclusive of GST).
15The due date provided for payment from Adcon pursuant to the Payment Claim was 30 April 2023.
16Conran deposes that no payment schedule was received in response to the Payment Claim.
17Conran further says that despite demand, Adcon has failed, refused and/or neglected to pay the Payment Claim.
18NPJS argues that by reason of the matters above, the claimed amount of $46,136.09 (GST inclusive) remains unpaid and outstanding as a debt due by Adcon to NPJS.
The legal context
19The SOP Act seeks to ensure that people who undertake to carry out construction work can recover progress payments for the performance of that work.[1]
[1]Building and Construction Industry Security of Payment Act 2002 (Vic), s 3
20Section 4 defines construction contract as a “contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services for another party”. The SOP Act applies to any construction contract whether written or oral, or partly written and partly oral.[2] It applies even if the contract is governed by the law of a jurisdiction other than Victoria.[3]
[2] Ibid s 7
[3] Ibid
21Section 16(2)(a) provides that a claimant may recover the unpaid portion of an amount claimed (as a debt due) where the defendant fails to provide a payment schedule.
22Section 14 outlines the requirements of a payment claim:
(a) it must be in the relevant form;
(b) it must contain the prescribed information (if any);
(c) it must identify the construction work to which it relates;
(d) it must indicate the amount of progress payment claimed; and
(e) it must not contain excluded amounts.
23The court must read s14 with the reference date provisions in s9. Section 9(1) stipulates that on or from a reference date, the claimant is entitled to a progress payment calculated by reference to that date. Section 9(2)(a)(i) provides that the reference date is a date on which a claim for a progress payment may be made in relation to a specific item of construction work or related goods and services and which is determined by or in accordance with the terms of the contract.
24The SOP Act permits only limited defences, which include that:
(a) the payment claim does not relate to a “construction contract”;
(b) the payment claim fails to satisfy the formal requirements of the SOP Act (s14(2));
(c) the claim was made prematurely, before the applicable reference date;
(d) the variations were not claimable variations;
(e) the payment claim included excluded amounts; and
(f) the timing and sufficiency of the payment schedule failed to comply with the SOP Act.[4]
[4]Fulconstruction Pty Ltd v ABP Consultants Pty Ltd [2016] VCC 1732 [8] (Anderson J)
25By reason of s47 of the SOP Act, a judgment under s16 is a provisional judgment in what it grants and what it refuses. [5] The statutory context both contemplates and allows inconsistent judgments.[6]
[5] Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd & Anor (2009) 26 VR 112 [2] and [43]-[46] (Vickery J), cited with approval in Pearl Hill Pty Ltd v Concorp Construction Group (Vic)Pty Ltd [2011] VSCA 99 [11]
[6] Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2005) 62 NSWLR 385 [22] (Handley JA, with whom Santow JA and Pearlman AJA agreed)
26This court has endorsed the hearing of security of payment applications on a summary basis by summons on originating motion with affidavit evidence.[7] Such claims are properly assessed on the balance of probabilities.[8]
[7] 3D Flow Solutions Pty Ltd v LTP Armstrong Creek Pty Ltd [2018] VCC 674 [39]-[54]. See also SJ Higgins v The Bays Healthcare Group Inc [2018] VCC 805 [26]
[8] Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449, 449-450 (Mason CJ, Brennan, Deane and Gaudron JJ)
27Where the plaintiff applies for summary judgment under s16, it may be appropriate to apply the test in s61 of the Civil Procedure Act 2010 (Vic) (“CPA”).[9] However, in the present case, I will adopt the approach taken in 3D Flow Solutions and recommended in SJ Higgins.
[9] John Beever v Roads Corporation [2018] VSC 635; see also Best Fab Pty Ltd v Australian High Bay Installations Pty Ltd [2018] VCC 1053
Are the requirements of the SOP Act satisfied?
Construction contract
28I am satisfied that land surveying services are within the ambit of construction work as identified in s5 of the SOP Act, and therefore the Contract under which NPJS undertook to carry out land surveying service for Adcon amounts to a Construction Contract for the purposes of s4 of the SOP Act.
Reference dates
29The starting point for an analysis of reference dates is s9 of the SOP Act. Section 9(1) stipulates that on and from each reference date under the construction contract, the claimant is entitled to a progress payment calculated by reference to that date.
30Section 9(2)(a)(i) of the SOP Act provides that the reference date is a date on which a claim for a progress payment may be made in relation to a specific item of construction work or related goods and services and which is determined by or in accordance with the terms of the contract.
31The authorities indicate that a payment claim must be submitted on or after a reference date.
32In Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (“Southern Han”), the High Court held that a reference date is the “precondition” to a valid payment claim.[10]
[10] (2016) 260 CLR 340 [61]-[62]
33In All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd,[11] the majority applied Southern Han and held that:
“[A] statutory payment claim served before the relevant reference date is not served ‘on or from’ that reference date for the purpose of the NSW SOP Act, the effect being that the phrase ‘on or from’ when properly construed, is to be understood as meaning ‘on or after’ the relevant reference date.”[12]
[11][2017] NSWCA 289
[12] Ibid [14]
34Finally, in MKA Bowen v Carelli Constructions (“MKA Bowen”)[13] Digby J held that:
“In my view … it is sufficiently clear in light of Southern Han and All Seasons that s 9 and s 14 of the SoP Act (Vic) do not operate so as to permit the valid service of a payment claim prior to the relevant reference date which itself establishes a valid foundation for that payment claim to be made under the SoP Act (Vic) ….”
[13][2019] VSC 436
35Where the contract does not provide a reference date, the default reference date provisions in s9(2)(b), (c) and (d) of the SOP Act apply as follows:
“(b)subject to paragraphs (c) and (d), if the contract makes no express provision with respect to the matter, the date occurring 20 business days after the previous reference date or (in the case of the first reference date) the date occurring 20 business days after—
(i)construction work was first carried out under the contract; or
(ii)related goods and services were first supplied under the contract; or … “
36In the present case, the Contract does not make express provision for reference dates. Under s9(2)(b) of the SOP Act, the first reference date in respect of the Contract arises 20 business days after the Commencement Date and subsequent reference dates arise every 20 business days thereafter.
37The first reference date arises 20 business days after the construction works were first carried out (s9(2)(b)(i) of the SOP Act). On the evidence, the Works were first carried out on 15 February 2021. Accordingly, the first reference arose on about 16 March 2021. I accept the calculation of the refence dates as set out in Conran’s affidavit.
38The Payment Claim (invoice no. 60991) was served on 16 March 2023. Accordingly, invoice no. 60991 has a reference date.
Identification of the construction work
39NPJS submits that the alleged Payment Claim adequately identifies the construction works to which it relates.
40Whether a payment claim sufficiently identifies the construction work is an objective test.[14] The test is whether a reasonable person in the position of Adcon can comprehend the basis of the claim.[15] The test is not overly stringent, the court must not adopt an unduly technical or pedantic approach.[16] The context of the payment claim is relevant, including industry conventions and earlier contractual dealings.[17] The background knowledge of the parties from their past dealings and prior exchanges of information (including correspondence) are also relevant.[18] Thus the court may look beyond the face of the payment claim.
[14]John Beever (Aust) Pty Limited v Paper Australia Pty Ltd [2019] VSC 126, Lyons J at [83]
[15] Ibid
[16] Ibid; Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106, Vickery J at [51]
[17]Clarence Street Pty Ltd v Isis Projects Pty Ltd [2005] NSWCA 391 [40]
[18] John Beever (Aust) Pty Limited v Paper Australia Pty Ltd [2019] VSC 126, Lyons J [83]; Gantley Pty Ltd v Phoenix International Group Pty Ltd [2010] VSC 106 Vickery J, at [51]
41The amount claimed by NPJS is in relation to a call-out performed on 24 February 2023 and work previously performed and invoiced that remained unpaid.
42However, having regard to the past dealings and background knowledge of the parties and applying the principles in Gantly Pty Ltd[19], I am satisfied that the Payment Claim adequately identifies the Construction Work. The descriptions of services on the Payment Claim is consistent with the descriptions on the previous Payment Claim. A reasonable person in the position of Adcon would understand the works to which the claims at issue relate.
[19] Ibid and at [117]
43Accordingly, the Payment Claim adequately identifies the construction work to which it relates.
Excluded amounts
44A plaintiff must also satisfy the court that a Payment Claim does not contain excluded amounts (s14(3)(b) of the SOP Act). The onus is on the plaintiff to negate the fact of excluded amounts.[20]
[20]John Beever v Road Corporation [2018] VSC 635 [44], [131] and [132]
45In assessing whether a payment claim contains excluded amounts, the court may only examine “the face of the payment claim”.[21] The face of the payment claim comprises the claim itself, any supporting documents, and any references to those documents.
[21] Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44 [44] (McLeish and Niall JJA), [120] (Sifris JA)
46If the court is not satisfied that a claim does not contain excluded amounts, the entire payment claim is invalid, and the court cannot award judgment. The court cannot sever any offending portion of the claim.[22]
[22] Ibid [36] (Sifris JA), [143] (McLeish and Niall JJA)
47In this proceeding, the alleged Payment Claim does not contain variations, or any other indication of separate works that may relate to excluded amounts.
48Accordingly, I am satisfied that the Payment Claim does not contain excluded amounts.
Other formal requirements
49The Payment Claim indicates the amount of the progress payment which NPJS claims is due (s14(2)(d) of the SOP Act).
50The claim meets the format requirements of the SOP Act as it includes the following: “This Claim is being made under the Building and Construction Industry Security of Payment Act 2002 (Vic)” (s14(2)(e) of the SOP Act).
Service
51A procedural issue in the proceeding is whether the Payment Claim was validly served.
52The authorities indicate the critical importance of service in accordance with s14 of the SOP Act, as it governs the commencement of the time limitations. The consequences of non-compliance with these time limitations are harsh.[23]
[23] Metacorp Pty Ltd v Andeco Construction Group Pty Ltd [2010] VSC 199; (2010) VR 141 [123]-[125] and Emag Constructions Pty Limited v Highrise Concrete Contractors (Aust) Pty Limited [2003] NSWSC 903 [38]
53As Sifris J held in In the Matter of Kornucopia Pty Ltd (No 1),[24]
“In Newsnet Pty Ltd v Patching, White J considered that service would be effective when the email is received, but not necessarily ‘when the document is brought to the attention of a responsible officer.’[49] Recently, in SGR Pastoral Pty Ltd v GJ, LE & JN Christensen (SGR Pastoral),[50] Bowskill J reviewed the varying lines of authority, and preferred the view of White J. Her Honour concluded:[51]
In the case of service by email, in my view, what must be shown is that the electronic copy of the application and supporting affidavit was received, in a complete and legible form, at the address for service, within the prescribed time. That is, that the email was sent to an email address that bellows to the nominated agent for service….that the email attaching the documents to be served actually arrived at the email address; and that the email and attached documents were capable of being opened and read (even if they were not opened and read until later).”
[24] [2019] VSC 756 [51]
54In this proceeding, the issue is whether the email was sent to the email specified in the contract and “an email address that bellows to the nominated agent for service”.
55NPJS served the Payment Claim upon Adcon by email to [email protected] and [email protected] . The first email address is the email address specified in the Contract. The second email address was used by Adcon for previous correspondence relating to the Contract and the Works.
56In my view, the fact that the second email was copied into the emails attaching the Payment Claim, suggests that the Payment Claim was also served to “an email address that bellows to the nominated agent for service”.
57Accordingly, the Payment Claim was validly served.
Failure to issue payment schedule
58Conran confirms that Adcon has not received a payment schedule in response to the Payment Claim. Pursuant to s15(4) of the SOP Act, Adcon was required to provide a payment schedule within 10 business days after the Payment Claim was served on 16 March 2023. No payment schedule was provided to NPJS on or before 30 March 2023.
59Because no payment schedule was provided within 10 business days of the Payment Claim, pursuant to s16(4) of the SOP Act NPJS is entitled to recover the unpaid, claimed amount.
Costs
60The Practice Note provides that there will not be any costs consequences under r63A.24 if a plaintiff issues a SOP application in the Court if they seek to recover less than half the jurisdictional limit of the Magistrates Court.[25]
[25] See also APR Structural Steel Pty Ltd v Devco Project & Construction Management Pty Ltd [2021] VCC 1577 at [26].
61NPJS seeks to fix its costs in the sum of $12,045.91 to avoid the further expense of taxation. Justice Riordan in Titcher v Marcelis[26] made observations regarding the desirability of fixing fees to avoid the inconvenience and expense of taxation.
[26] [2015] VSC 578 at [12]
62Given that the amount claimed by NPJS is modest, in my view, it is in the interests of the administration of justice and the just, efficient, timely and cost effective resolution of the issues in dispute to have costs fixed than subject to taxation. The Court will fix NPJS’s costs in the sum of $12,045.91 under r63A.07 of the Rules, representing the gross sum of the schedule of the costs incurred by NPJS on Supreme Court Scale discounted by 20% to the County Court Scale, to avoid the inconvenience and expense of having costs formally taxed.
Conclusion
63For the foregoing reasons, there is judgment for NPJS in the sum of $46,136.09 (including GST), together with interest, and costs fixed in the amount of $12,045.91.
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Certificate
I certify that these 11 pages are a true copy of the judgment of her Honour Judge Burchell delivered on 11 September 2023.
Dated: 11 September 2023
Gideon Lipinski
Associate to her Honour Judge Burchell
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