Re Radair Pty Ltd

[1998] QCA 10

IN THE COURT OF APPEAL	[1998] QCA 010
SUPREME COURT OF QUEENSLAND	Appeal No. 2545 of 1997
Brisbane
[Radair P/L v. Long-Airdox (Aust.) P/L & Ors.]
BETWEEN:

RADAIR PTY LTD
A.C.N. 010 824 076

(Applicant) Appellant

AND

LONG-AIRDOX (AUSTRALIA) PTY LTD
A.C.N. 000 133 595

(Plaintiff) First Respondent

AND

AUSTRALIAN COAL TECHNOLOGY PTY LTD
A.C.N. 064 080 039

(First Defendant) Second Respondent

AND

THIESS CONTRACTORS PTY LTD
A.C.N. 010 221 486

(Second Defendant) Third Respondent

AND

RESOURCE RECLAMATION PTY LTD

A.C.N. 071 332 753 Fourth Respondent

AND

POWER SCREEN PACIFIC PTY LTD

A.C.N. 003 585 118 Fifth Respondent

AND

BHP AUSTRALIA COAL PTY LTD

A.C.N. 010 221 486 Sixth Respondent

AND

KCE EXCAVATORS PTY LTD

A.C.N. 073 066 118 Seventh Respondent

McPherson J.A.
Thomas J.
Dowsett J.

APPEAL ALLOWED

CATCHWORDS:	BUILDING AND ENGINEEERING CONTRACTS - sub-contractor’s charges - construction of ss. 5,8,10, 11,12, 13,15 of the Subcontractor’s Charges Act 1974, and of the Act as a whole - whether s 13 of the Act authorises consolidation of actions commenced in separate courts - whether only sub-contractors who have given notice to the person by which money is payable under a charge, are entitled to distribution of monies paid into court by that person - Hewitt Nominees P/L v. The Commissioner for Railways [1979] Qd.R. 256
Counsel:	Mr D Gore Q.C, with him Mr M Williams for the appellant. Mr S Doyle, with him Mr M. Daubney for the first respondent
Solicitors:	Macrossan & Amiet for the appellant Russell & Co. for the first respondent Duells for the second respondent McCullough Robertson for the third respondent Fourth respondent - unrepresented Fifth respondent - unrepresented Allen Allen & Hemsley for the sixth respondent Grant & Simpson for the seventh respondent
Hearing date:	4December1997

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 2545 of 1997

Brisbane

Before McPherson J.A.

Thomas J. Dowsett J.

[Radair P/L. v. Long-Airdox (Aust.) P/L & Ors.]

BETWEEN:

RADAIR PTY LTD A.C.N. 010 824 076

(Applicant) Appellant

AND:

LONG-AIRDOX (AUSTRALIA) PTY. LTD.
A.C.N. 000 133 595

(Plaintiff) First Respondent

AND:

AUSTRALIAN COAL TECHNOLOGY PTY. LTD.
A.C.N. 064 080 039

(First Defendant) Second Respondent

AND:

THIESS CONTRACTORS PTY. LTD.
A.C.N. 010 221 486

(Second Defendant) Third Respondent

AND:

RESOURCE RECLAMATION PTY. LTD.

A.C.N. 071 332 753 Fourth Respondent

AND:

POWER SCREEN PACIFIC PTY. LTD.

A.C.N. 003 585 118 Fifth Respondent

AND:

BHP AUSTRALIA COAL PTY. LTD.

A.C.N. 010 221 486 Sixth Respondent

AND:

KCE EXCAVATORS PTY. LTD.

A.C.N. 073 066 118 Seventh Respondent

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered 17 February 1998

I agree that, for the reasons given by Dowsett J., this appeal should be allowed with costs, and

that the respondent should pay the costs of the proceedings below. I also concur in the course

proposed by Dowsett J. for disposing of this appeal and of the pending actions. To that extent, the

parties should have leave to make the written submissions envisaged in those reasons.

I agree that there should be a certificate under the Appeal Costs Fund Act 1973.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 2545 of 1997
Brisbane
Before McPherson JA

Thomas J Dowsett J

[Radair P/L v. Long-Airdox (Aust.) P/L & Ors.]

BETWEEN:

RADAIR PTY LTD A.C.N. 010 824 076

(Applicant) Appellant

AND:

LONG-AIRDOX (AUSTRALIA) PTY LTD
A.C.N. 000 133 595

(Plaintiff) First Respondent

AND:

AUSTRALIAN COAL TECHNOLOGY PTY LTD
A.C.N. 064 080 039

(First Defendant) Second Respondent

AND:

THIESS CONTRACTORS PTY LTD
A.C.N. 010 221 486

(Second Defendant) Third Respondent

AND:

RESOURCE RECLAMATION PTY LTD
A.C.N. 071 332 753

Fourth Respondent

AND:

POWER SCREEN PACIFIC PTY LTD
A.C.N. 003 585 118

Fifth Respondent

AND:

BHP AUSTRALIA COAL PTY LTD
A.C.N. 010 221 486

Sixth Respondent

AND:

KCE EXCAVATORS PTY LTD
A.C.N. 073 066 118

Seventh Respondent

REASONS FOR JUDGMENT - THOMAS J

Judgment delivered 17 February 1998

I agree with the reasons of Dowsett J which I have had the advantage of reading.

The case raises a point which is not settled by any previous court decision. When a

subcontractor has given a valid claim of charge to a party who retains the necessary money and pays

it into court (“the paying party”), must that subcontractor share the proceeds with another subcontractor

who did not give notice of charge to the paying party, but who did give such a notice to an intermediate

contractor in the chain?

In my view, on the correct construction of the Subcontractors' Charges Act, the following

propositions may be taken as established.

1.          The term “every subcontractor” (in s.5(1)) includes every subcontractor in the line of

subcontracts.

2.          The term “superior contractor” (in s.5(1)) means a contractor or subcontractor further up the

line than the immediate contractor or subcontractor with whom the lower claimant subcontractor

has a contract (Hewitt Nominees Pty Ltd v. The Commissioner for Railways [1979] Qd R

256, 262).

3.          Section 10(1) requires a subcontractor who intends to claim a charge to give notice to the

employer or superior contractor by whom the money is payable. Section 10(4) provides that

if notice is not given pursuant to those requirements, the charge shall not attach.

4.          The amount to be “retained” by the recipient of the charge is the amount of the claim of which

notice has been given.

5.          A subcontractor may give notice of claim of charge to any contractor superior to the contractor

who owes money to that claimant. In other words “leapfrogging” is permitted (s.5(1);

Hamilton Australia Pty Ltd v. Milson Projects Pty Ltd [1997] 2 Qd R 355). However

there is no authority recognising any rights on the part of such a claimant to moneys other than

that that the recipient of the notice is obliged to retain.

Section 10 prevents attachment of a claimant’s charge unless notice is given by that claimant to

the party by whom the money is payable. The question is, once the charge has attached, for whose

benefit is the money held?

Mr Doyle SC (for the respondent) submitted that the operation of the Act requires the adding

up, in effect, of all charges created by anyone in the line, followed by an apportionment in favour of the

various claimants under s.8. It would have been possible for the Act to have been drawn in such a way

as to produce that result, but in my view the Act does not do this. Nothing in the Act suggests that the

fund the subject of a charge creates a representative claim for a class of persons, and Mr Doyle did not

rely upon any such suggestion. There is in my view nothing in the Act to support his submission that the

fund so created was intended to be for the benefit of persons other than the claimant. To the extent to

which s.8 recognises that there are occasions apportionment is necessary, it must be taken that this will

occur only when multiple claims are made against the same person.

In my view it is impossible to sustain the argument that this respondent should participate in

distribution of the money that has been paid into court in response to the notice of claim of charge given

by the appellant.

The appeal should be allowed, and the orders proposed by Dowsett J should be made.

COSTS

Mr Doyle applied for an appeal costs fund certificate in the event of allowance of the appeal.

The appeal concerns a question of law of general application and of some importance to the community

particularly to those involved in the building industry. It raised a question which was not readily

answered by the terms of the Subcontractors’ Charges Act, which unfortunately is notorious for raising

difficult problems in practice. Certainly it was not unreasonable for the respondent to raise the point

below and to endeavour to sustain it in the present appeal.

On the other hand the respondent did take the point and in the end has failed. The fairly

generous approach towards applicants suggested in Lauchlan v Hartley [1980] Qd R 149, 151 has

to some extent been qualified by comments in Vella v Larson [1982] Qd R 298, 301-302. In deciding

an appeal costs fund application the court needs to take a wide view of the litigation and to assess the

various factors which caused the litigation to go astray in the sense that something happened which

required correction by means of an appeal. It may be relevant to consider whether there is fault on the

part of the applicant, the respondent, the court and the law itself.

The present case is perhaps close to the margin, but I regard the respondent as not having acted

unreasonably, and taking into account the public aspect of the case through clarification of an obscure

provision, and the fact that there will be wider benefit than that of the immediate parties, I would grant

a certificate.
IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 2545 of 1997
Brisbane
Before McPherson J.A.

Thomas J. Dowsett J.

[Radair P/L v. Long-Airdox (Aust.) P/L & Ors.]

BETWEEN:

RADAIR PTY LTD
A.C.N. 010 824 076

(Applicant) Appellant

AND

LONG-AIRDOX (AUSTRALIA) PTY LTD
A.C.N. 000 133 595

(Plaintiff) First Respondent

AND

AUSTRALIAN COAL TECHNOLOGY PTY LTD
A.C.N. 064 080 039

(First Defendant) Second Respondent

AND

THIESS CONTRACTORS PTY LTD
A.C.N. 010 221 486

(Second Defendant) Third Respondent

AND

RESOURCE RECLAMATION PTY LTD

A.C.N. 071 332 753 Fourth Respondent

AND

POWER SCREEN PACIFIC PTY LTD

A.C.N. 003 585 118 Fifth Respondent

AND

BHP AUSTRALIA COAL PTY LTD

A.C.N. 010 221 486 Sixth Respondent

AND

KCE EXCAVATORS PTY LTD

A.C.N. 073 066 118 Seventh Respondent

REASONS FOR JUDGMENT - DOWSETT J.

Judgment delivered 17 February 1998

BHP Australia Coal Pty Ltd (“BHP Coal”) entered into a contract with Thiess Contractors Pty

Ltd (“Thiess”) for the construction of coal mining facilities near Mackay. Thiess contracted with

Australian Coal Technology Pty Ltd (“ACT”) for the performance of some or all of the work, and ACT

entered into a number of sub-contracts, including sub-contracts with Radair Pty Ltd (“Radair”),

Resource Reclamation Pty Ltd (“Resource Reclamation”), Long-Airdox Australia Pty Ltd (“Long-

Airdox”) and KCE Excavators Ltd (“KCE”). Each of the four named subcontractors has given notices

of claim of charge to Thiess and ACT pursuant to the Subcontractors’ Charges Act 1974 (the “Act”).

Radair has also given two notices to BHP Coal. One relates to a claim for work done as

subcontractor to Resource Reclamation. The other relates to work done as subcontractor to ACT.

Thiess has paid into court the sum of $295,617.04 in respect of the notices received by it. BHP Coal

has paid into the court the sum of $77,646.58 in respect of Radair’s first notice and $115,828.59 in

respect of the second notice.

There are five different actions on foot, including:-

(i)          Action No. 9384 of 1996 in this court between Long-Airdox as plaintiff and ACT and

Thiess as defendants;

(ii)         Plaint No. 140 of 1996 in the District Court at Mackay between Radair as plaintiff and

Resource Reclamation, ACT, Thiess, BHP Coal and Power Screen Pacific Pty Ltd as

defendants;

(iii)        Plaint No. 145 of 1996 in the District Court at Mackay between Radair as plaintiff and

ACT, Thiess and BHP Coal as defendants;

(iv)        Action No. 8625 of 1996 in this court between Resource Reclamation as Plaintiff and

ACT as defendants; and

(v)         Plaint No. 191 of 1996 in the District Court at Mackay between KCE as plaintiff and

ACT and Thiess as defendants.

In Plaint No. 140 of 1996, Radair has obtained judgment against Resource Reclamation in the

amount of $59,225.82.

On 14 January 1997 Long-Airdox applied for orders consolidating the three District Court

proceedings and Action No. 8625 of 1996 with Action No. 9384 of 1996. On 4 February 1997

Radair sought the following:-

(a)         an order setting aside a purported notice of intention to claim charge served by Long-Airdox

on BHP Coal and a similar notice given to Thiess or alternatively, a declaration that the said

notices were out of time;

(b)        construction of s.8 of the Subcontractors Charges Act;

(c)         a declaration that the applicant is entitled to the sum of $59,225.82, being part of the moneys

in court in connection with Plaint No. 140 of 1996 and an order that such sum be paid out to

Radair.

The applications were heard together. The learned Judge at first instance found against Radair

on the construction points. His Honour ordered that the various actions be consolidated and that all

moneys in court in connection with those actions be paid into this court. He also gave various directions

as to the way in which the subcontractors might go about proving their claims. Whether or not s.13 of

the Act authorizes the consolidation of actions commenced in separate courts may be doubtful, but no

argument was directed towards that question in proceedings on appeal, which concentrated upon the

proper construction of the Act. Given that so many actions are already on foot, one wonders about the

appropriateness of Radair’s conduct in commencing further proceedings, but no point was taken in that respect. It is not entirely clear from the appeal record whether the various respondents to the appeal

appeared before the learned Judge at first instance, but only Long-Airdox appeared to oppose the

appeal. Thiess also appeared but did not make submissions. The other respondents had previously

indicated in writing that they did not intend to appear.

His Honour records that the four subcontractors claim $1,098,958.40 as moneys owing to them

in connection with the project out of which all of the claims arose. The total in court to meet these

claims is $489,092.21. Radair claims to be solely entitled to the amounts paid into court by BHP Coal

as the only claimant having given notice of claim of charge to that company. If that is correct, then the

other claimants will share only the moneys paid into court by Thiess, which are considerably less than

the total of their claims. His Honour held that the Act conferred upon all four subcontractors the right

to participate in the distribution of all moneys in court. The appellant seeks to overturn that decision.

The poor drafting of the Act is notorious. Argument in the present case was made rather more

difficult by the fact that the pamphlet copy of the legislation, said to be as at 13 July 1994, contains a

number of errors which have subsequently been corrected by so-called “Correction Notices” issued

by the Government Printer. Although it cannot be clearly ascertained without more research than is

justified for present purposes, it seems likely that at least some of those errors were the result of

“editorial changes” made pursuant to the Reprints Act 1992. It would be as well if Parliament were

to reconsider the wisdom of permitting such editorial changes. For present purposes, I have adopted

the wording of the relevant sections as agreed in the course of argument.

Section 5 provides:-

“(1)	Where an employer contracts with a contractor for the performance of work upon or in respect of land or a building, or other structure or permanent improvement upon land or a chattel, every subcontractor of the contractor shall be entitled to a charge on the money payable to the contractor or a superior contractor under his contract or subcontract;
(2)	The charge of a subcontractor shall secure payment in accordance with his subcontract of all the money that is payable or is to become payable to the subcontractor for work done by the subcontract or under the subcontract;
(3)	The total amount recoverable under the charges of subcontractors shall not exceed the amount payable to the contractor or subcontractor under his contract or subcontract, as the case may be.”

The following definitions (contained in s.3) are relevant :-

“‘employer’ means a person who contracts with another person for the performance of work by that other person, or at whose request or on whose credit or behalf, with the person’s privity and consent, work is done, and includes all persons claiming under the person whose rights are acquired after the work is commenced, and in relation to a subcontractor includes the contractor or other subcontractor with and under whom the person has contracted, but a mortgagee who advances money to an employer shall not be deemed to be an employer by reason thereof...

‘contractor’ as regards an employer, means a person who contracts directly with the employer to perform work and, as regards a subcontractor, means a person with whom the subcontractor contracts to perform work ...

‘subcontractor’ means a person who contracts with a contractor or with another

subcontractor for the performance of work...”

These are difficult definitions, partly because of their inter-dependence and partly because of

the attempts to give the terms “employer” and “contractor” different meanings in different contexts. A

further difficulty is caused by the use of the word “person” in the definition of the term “employer”.

Fairly obviously, the word is initially used to refer to the employer and later, to refer to the

subcontractor.

For present purposes, it is sufficient to say that the expression “every subcontractor” in s.5(1)

has been consistently construed to mean “every subcontractor right along, or down, the line of

subcontracts.” Similarly the expression “superior contractor”, which is not defined, means “one who is

further up the line than the subcontractor with whom a claimant subcontractor lower down the line has a contract.” These quotations are taken from the judgment of W.B. Campbell J., as his Honour then

was, in Hewitt Nominees Pty. Ltd. v. The Commissioner for Railways [1979] Qd.R. 256 at p. 262.

The effect of that decision is that a person who can bring himself within the definition of “subcontractor”

is entitled to the benefit of a charge pursuant to s.5 against moneys payable to the head contractor or

to any other subcontractor standing between the employer and the claiming subcontractor in the chain

of contract and subcontracts, assuming that the other requirements of the Act are satisfied. That

proposition was not challenged in these proceedings. The so-called “chain” is the sequence of contract

and subcontracts linking the employer at the “top” to the claiming subcontractor at the “bottom”.

A charge pursuant to s.5 secures payment to the subcontractor in question of moneys payable

or to become payable under its sub-contract. The total amount recoverable under the charges “of

subcontractors” may not exceed the total amount payable by the employer, contractor or superior

subcontractor (who has received notice of claim of charge) to the contractor or subcontractor next

down the chain.

Section 8 provides:-

“Where the money that is or is to become payable under the contract is insufficient to meet the claims of two or more subcontractors any insufficiency shall be borne by them in proportion to the amounts of their claims.”

Again, the drafting is poor in that the section does not clearly identify the contract in question.

However sections 5,6,7 and 7A contain similar usage, and it is reasonable to infer that the sections were

intended to have an inter-related operation. I will return to this matter at a later stage.

Section 10 provides:-

“(1) A subcontractor who intends to claim a charge on money payable under the
contract to the subcontractor’s contractor or to a superior contractor -

(a)         shall give notice to the employer or superior contractor by whom the money is payable, specifying the amount and particulars of his claim certified as prescribed by a qualified person and stating that he requires the employer or superior contractor, as the case may be, to take the necessary steps to see that it is paid or secured to the subcontractor; and

(b)        shall give notice of having made the claim to the contractor to whom the money is payable.

(1A)	...
(2)	A notice of claim of charge may be given although the work is not completed or the time for payment of the money in respect of which the charge is claimed has not arrived, but when the work is completed shall be given within 3 months after such completion.
(3)	A notice of claim of charge in respect of retention money only may be given at any time while the work under the contract is being performed but shall be given within 3 months after the expiration of the period of maintenance provided for by the contract and no later.
(4)	If notice is not given pursuant to this section, the charge shall not attach.
(5)	...
(6)	... ”.

Section 11 provides:-

“(1)

Where a notice of claim of charge is given pursuant to s.10, the person to whom it is given shall retain, until the Court in which the claim is heard directs to whom and in which manner the same is to be paid, a sufficient part of the money that is or is to become payable by him under his contract to satisfy the claim.

(2)

A person who fails to retain the amount that the person is required to retain shall be personally liable to pay to the subcontractor the amount of his claim not exceeding the amount that he is required by this section to retain.

(3)

Where notice of having made the claim is given pursuant to s.10, the contractor to
whom the money is payable within 14 days after the notice is given -

(a)	shall give notice in the prescribed form that he accepts liability to pay the amount claimed; or
(b)	shall give notice in the prescribed form that he disputes the claim -

in either case;

(c)	to the employer or superior contractor by whom the money is payable; and
(d)	to the subcontractor giving notice of claim of charge.

(4)

Where notice is given pursuant to ss.(3)(a), the employer or superior contractor by whom the money is payable shall pay to the subcontractor the amount he is required to retain.

(5)

An employer or superior contractor may, at any time after notice of claim of charge has been given to him, pay into court the amount that he is required to retain under this section.

(6)

A payment made pursuant to this section shall discharge the employer or superior contractor, as the case may be, of all further liability in respect of the amount paid and of the costs of any proceeding.

(7)

Money paid into court under this section shall not be paid out save under an order of
the Court.

(8)

A subcontractor may at any time withdraw a notice of claim of charge given pursuant
to s.10 by giving a notice in the prescribed form -

(a)	to the employer or superior contractor by whom the money is payable; and
(b)	to the contractor to whom the money is payable.”

Section 12 provides:-

“(1)	Where the person to whom notice of claim of charge has been given does not pay or make satisfactory arrangements for paying to the claimant the amount claimed, the subcontractor may recover the amount of the charge from the person by whom the money subject to the charge is payable.
(2)	Claims and all other matters arising under this Act between a person claiming a charge and any other person alleged to be liable to pay an amount claimed or otherwise interested in money that may be affected by a charge or claim of charge and between persons or classes of person claiming a charge may be heard, determined and enforced by proceedings pursuant to this Act in a court of competent civil jurisdiction.
(2A)	Notwithstanding ss.(2), the Supreme Court shall have jurisdiction in all matters arising under this Act.
(3)	An action to enforce a charge under this Act may be brought by or on behalf of any number of subcontractors claiming charges.
(3A)	Every action brought by a subcontractor to enforce a charge shall be deemed to be brought on behalf also of every other subcontractor who has given notice of claim of charge pursuant to s.10 and who in accordance with rules of the court and this Act become a party to the action.
(3B)	Subject to any rules of the court, every such subcontractor may become a party at any time before the date appointed for the hearing or any adjournment thereof (whether or not he has given a notice of claim of charge) by filing in the court and serving on all other parties in the same manner as if he were commencing the action a statement of claim endorsed with a request that he be joined as a party in the proceedings.”

Section 15 of the Act provides:-

“15.(1) A proceeding in respect of a charge under this Act -

(a) in the case of a claim of charge in respect of retention money only - shall be commenced within 4 months after such retention money or the balance thereof is payable and no later;

(b) in all other cases - shall be commenced within 2 months after

notice of claim of charge has been given pursuant to section 10

and no later;

(c) shall be brought by way of action.

(2) For the purposes of a proceeding under this section, it shall be sufficient if the subcontractor proves that the charge in respect of which the proceeding is brought attached to money payable on any date prior to the date of hearing.

(3) Every charge shall be deemed to be extinguished unless the subcontractor

duly commences a proceeding under this section to enforce it.”

The provisions of s.10(4) appear to be fatal to the respondents in the present case. They have

not given notices to BHP Coal pursuant to s.10 which requires notice to “the employer or superior

contractor by whom the money is payable”. They have, of course, given notices to parties in the chain other than BHP Coal, but s.10 requires notice to the person by whom the money is payable, in this

case, BHP Coal. Failure to give notice results in the relevant charge not “attaching”.

The first respondent, however, urges a quite different construction of the Act as a whole. It

submits that the provision for claiming a charge under the Act does not determine the entitlement to

participate in the distribution of the moneys which are subject to that charge. It is submitted that the

charge mechanism prescribed by s.5 is designed only to hold in suspense such moneys as may be

available until a court decides how they are to be distributed. In other words, a notice pursuant to s.10

maintains the charge for the benefit of the party giving the notice and also for all other persons who might

have given notices to the same recipient pursuant to the section, regardless of whether they have done

so. (I should say that elsewhere in the argument, it was assumed that the class of beneficiaries might be

limited to those subcontractors who had given notice to somebody in the chain.) It is said that ss.5(3),

8, 11(1) and 11(7) then prescribe a code for the disbursement of the funds in question.

An obvious answer to this argument emerges from s.11(1). The recipient of the notice is obliged

only to retain enough money to meet the amount claimed by the claimant. The first respondent submits

that:-

“Where such a notice is given the recipient is to hold enough money to satisfy the claim ‘until the court in which the claim is heard directs to whom and in what manner the same is to be paid.’ The power the court has is not circumscribed to merely directing the payment to the claimant or to subcontractors who have made a claim on the same contractor. Yet that is what the appellant’s case assumes. This is to be compared with the language used in, and the punitive effect of, s.11(2).”

This argument seems to imply an absolute and unfettered power in the court to determine how

moneys are to be disbursed, perhaps subject to s.8. It does not come to grips with the fact that the

amount to be retained is the amount of the claim of which notice has been given. It seems most unlikely

that Parliament intended that such a sum be held so that the claimant and other subcontractors could share it. Further, s.5 appears to create a separate charge in favour of each individual subcontractor to

secure payment of the amount owing to it. There is no suggestion that there is to be one charge in

favour of numerous subcontractors. It is true that the Act does not prescribe the way in which charged

funds are to be disbursed, but ss. 5, 10 and 11 strongly suggest that they are held for the benefit of the

person giving notice.

It is pointed out on behalf of the first respondent that s.12(3A) provides that any action brought

to enforce a charge “shall be deemed to be brought on behalf also of every other sub-contractor who

has given notice of claim of charge pursuant to s.10 and who in accordance with Rules of the Court

and this Act becomes a party to the action.” It is submitted that the limitation is not to subcontractors

who have given notice of charge “at the same stage in the hierarchy of contractors”. It is said to follow

that anybody who has given notice of claim of charge to anybody else (presumably in connection with

the same building project) is entitled to share in the benefits of any action brought by a subcontractor

to enforce a charge. As I have pointed out, this would produce a curious result in that an amount

retained sufficient to meet one claim would be available to meet other claims. Section 12 (3A) means,

I think, that once an action has been brought by any subcontractor to enforce a charge, the time

limitation prescribed by s.15 is satisfied, and other subcontractors who have given, or subsequently give

appropriate notices may join in the action, claiming amounts to which they are otherwise entitled. In

other words, the sub-section does not confer any additional entitlement to moneys in court or otherwise

subject to charges. It merely permits subcontractors to take the benefit of the fact that another

subcontractor has an action on foot. After all, the section specifies that the action, not the charge is to

be deemed to be brought on behalf of other subcontractors.

The first respondent submits that s.13 (which authorises consolidation) contemplates actions
against the same person or against several persons “in respect of the whole or any part of the work

specified in the same contract”. It is said that this provision is necessary, “because the division of the

money between the various claimants at the various levels is something in which they all have an interest

and in which they may all share.” Experience suggests that there is a multiplicity of opportunities for

complex and inter-related litigation arising out of this legislation. It is obviously desirable that there be

a power to consolidate, but the conferment of such a power says nothing about the meaning to be

attributed to the other parts of the Act. I am unable to infer that this provision contemplates the

construction of the Act advanced by the first respondent.

Section 8 is also difficult to reconcile with the first respondent’s argument. That section provides

that when the money payable under “the contract” is inadequate to meet the claims of all claiming

subcontractors, it is to be disbursed proportionately. This suggests an identifiable nexus between a

contract under which moneys are payable and the subcontractors entitled to claim charges against those

moneys. Given the entitlement of a subcontractor to claim a charge against the ultimate employer, the

contractor and any subcontractor “above” the claimant, that nexus cannot be found in the status of

subcontractor to a party to the contract in question. The nexus must be that the claimants have given

notices to the party to receive payment under that contract. The first respondent seeks to avoid this

difficulty by arguing that s.8, when it refers to “money that is or is to become payable under the

contract”, should be read as a reference to money becoming payable under more than one contract,

reliance being placed upon s. 32C of the Acts Interpretation Act 1954, which provides that the

singular shall include the plural. One difficulty with this interpretation is that it does not identify the

“contracts” in question. The term might include all of the contracts and subcontracts entered into in

respect of the whole “project” or it might be limited to those contracts, payments under which are subject to claims. In either case, the result would be to create a structure of claims which would be

Byzantine in its complexity. It is more likely that s.8 is to be read in conjunction with ss.5, 6, 7 and 7A.

Those sections clearly contemplate that a charge confers upon the claimant a right to payment from

moneys payable under an identifiable contract. I consider that s.8 uses the expression “under the

contract” in an analogous way and contemplates that the section will operate where the competing

claimants are seeking moneys payable under one contract

The first respondent submits that my preferred construction of the Act leads to uncertainty

because, it is submitted, “... the amount of money that is or is to become payable under one particular

contract will change if money is taken out higher up the hierarchy....” I take this to mean that if a

successful claim is made against, for example, the employer, then the amount payable by the employer

to the head contractor will be reduced by the amount recovered pursuant to the charge. Thus, it is

suggested, the apportionment of moneys pursuant to s.8 for the benefit of persons who have given

notices of claim of charge to the head contractor against moneys payable to its subcontractors could

not be ascertained until proceedings relating to the charges against moneys in the hands of the employer

(and otherwise payable to the head contractor) had been resolved. This submission is based upon a

misconception. Although it is possible that the contractual obligation to pay a subcontractor might

depend upon the contractor having itself been paid by the party for which it is performing the work, that

is by no means necessarily the case. Unless the relevant subcontract otherwise provides, the contractor

would be obliged to pay its subcontractors from its own funds, and whether or not it had been paid by

its employer. Given the notorious cash-flow problems of the building industry, it may often be the case

that the only money available to pay subcontractors will be the amount coming from the employer or

superior contractor, but I find nothing in the legislation to suggest that its operation assumes that
situation.

Finally, it is submitted that a subcontractor “down the line” should be entitled to challenge the

validity of a claim made by another subcontractor against a party “higher in the chain”. I cannot see why

this should be so. A subcontractor who has given a notice of claim to another party is entitled to a

charge as against the amount payable by that party. The source of the funds from which such payment

is to be made is not relevant. As I have previously observed, I can see no justification for the view that

the Act assumes that each contractor or subcontractor is to be paid only from such amounts as are

ultimately payable by the employer at the top of the chain for the whole of the project. Intermediate

contractors may well find that they have to pay more to their own subcontractors than they are to

receive. No doubt they try to avoid this situation, but it will, from time to time, occur.

The first respondent’s construction of the Act is based more upon assumed policy

considerations than upon analysis of the text of the Act which, in fact, offers little or no support for that

construction. The first respondent has sought to conceal this absence of textual support by pointing to

various difficulties arising from the drafting of the Act, but those difficulties offer no support for the first

respondent’s position.

I would allow the appeal and set aside the orders made below. The question then arises as to

what orders ought be made. The notice of appeal seeks orders by way of general construction of s.8

of the Act. It is not appropriate so to construe the Act. It should be construed in its application to the

facts of the case. I propose the following orders:-

(1)	A declaration that Radair Pty. Ltd. is entitled to the sum of $59,225.82 of the moneys presently
in court in the action commenced by Plaint No. 140 of 1996 in the District Court at Mackay;
(2)	A further declaration that as to the balance of moneys in court in that action, only such persons as have given notices of claim of charge pursuant to and in accordance with s.10 of the
Subcontractors Charges Act 1974 to BHP Australia Coal Pty. Ltd. and otherwise have
established or subsequently establish their entitlement thereto, are entitled to charges over such
moneys pursuant to the said Act.
(3)	A further declaration that as to the moneys in court in the action commenced by Plaint No. 145
of 1996 in the District Court at Mackay, only such persons as have given notices of claim of
charge pursuant to and in accordance with s.10 of the Subcontractors Charges Act 1974 to
BHP Australia Coal Pty. Ltd. and otherwise have established or subsequently establish their
entitlement thereto, are entitled to charges over such moneys pursuant to the said Act. As to the future conduct of the various actions, if they are to proceed, I cannot presently see

why they should be consolidated, nor am I sure that such a step is authorized by the Act or otherwise.

In view of the unsatisfactory nature of the appeal record, I would give the parties leave to make further

submissions in writing as to the form of the proposed declarations and as to further directions in the

actions, such submissions to be filed (with responses thereto) within 14 days by any party seeking to

make such submissions.

The first respondent should pay the appellant’s costs of the appeal and of the proceedings

below, but it should have a certificate pursuant to the Appeal Costs Fund Act 1973. Should any party

wish to seek some other order as to costs, it may apply within seven days of this judgment.