Readiplumb Services Pty Ltd v MKM Constructions (Aust) Pty Ltd - [2009] QDC 67

DISTRICT COURT OF QUEENSLAND

CITATION: Readiplumb Services Pty Ltd (ABN 68 614 407 800) v MKM Constructions (Aust) Pty Ltd (ABN 59 127 071 194) [2009] QDC 67

PARTIES:
Readiplumb Services Pty Ltd
(Applicant)

v

MKM Constructions (Aust) Pty Ltd
(Respondent)

FILE NO: 45 of 2009

PROCEEDING: Application for Judgment

DELIVERED ON: 19 March 2009

DELIVERED AT: Southport

HEARING DATE: 13 March 2009

JUDGE: C.F. Wall Q.C.

ORDER: Application dismissed, with costs.

CATCHWORDS: BUILDING AND CONSTRUCTION INDUSTRY PAYMENTS ACT – entitlement to progress payments – where payment claims were not served by the applicant on the respondent – or directed to the respondent in accordance with the Act – application for judgment dismissed.

CASES: Brodyn Pty Ltd trading as Time Cost in Quality v Davenport [2004] NSWLR421 FAA
F K Gardner and Sons Pty Ltd v Dimin Pty Ltd [2007] 1 QR 10 FAA
J Hutchinson Pty Ltd v Galform Pty Ltd [2008] QSC 205 FAA

LEGISLATION: Building and Construction Industry Payments Act 2004, ss. 7, 8, 17, 18, 19.

COUNSEL: Plaintiffs: Mr AM Hoare
Defendant: Mr MA Ambrose

SOLICITORS: Plaintiffs: McKays Solicitors
Defendant: TVP Law

HIS HONOUR:

This is an application by Readiplumb Services Pty Ltd for judgment pursuant to section 19 of the Building and Construction Industry Payments Act in the sum of $100,613.83. The application is opposed.

A valid payment claim is a pre-condition to the entitlement to judgment pursuant to section 19 of the Act.

Statutory provisions

The following are relevant sections or parts of sections of the Act:

"7 Object of Act
The object of this Act is to ensure that a person is entitled to receive, and is able to recover, progress payments if the person -
(a)undertakes to carry out construction work under a construction contract; or
(b)undertakes to supply related goods and services under a construction contract.

8. How object is to be achieved
The object is to be achieved by -
(a)granting an entitlement to progress payments whether or not the relevant contract makes provision for progress payments; and
(b)establishing a procedure that involves -
(i)the making of a payment claim by the person claiming payment; and
(ii)the provision of a payment schedule by the person by whom the payment is payable.

17. Payment claims:
(1)A person mentioned in section 12 who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment (the respondent).

(2) A payment claim -
(a)must identify the construction work or related goods and services to which the progress payment relates; and
(b)must state the amount of the progress payment that the claimant claims to be payable (the claimed amount); and

(c) must state that it is made under the Act.

18. Payment schedules
(1)A respondent served with a payment claim may reply to the claim by serving a payment schedule on the claimant.
(2)A payment schedule:-

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] QDC 67
Decision Date: 19 March 2009

CaseChat Overview and Summary

Readiplumb Services Pty Ltd sought a judgment in the Queensland Civil and Administrative Tribunal (QCAT) for progress payments under the Building and Construction Industry Payments Act 2004 (Qld) against MKM Constructions (Aust) Pty Ltd, the principal contractor on a housing project. The central dispute was whether Readiplumb had validly served its payment claims on MKM Constructions as required by the Act. Readiplumb argued that it had validly served its claims, while MKM Constructions maintained that the payment claims were not properly directed to it and thus were invalid under the Act.

The key legal issue before QCAT was whether Readiplumb's payment claims were properly served on MKM Constructions in accordance with the statutory requirements outlined in the Building and Construction Industry Payments Act 2004. Specifically, QCAT needed to determine if the payment claims, which were addressed to MKM Group of Companies Pty Ltd, a related entity within the MKM Group, were sufficient to comply with the Act's service requirements. The interpretation of the statutory provisions concerning the proper service of payment claims and the applicability of the corporate structure within the MKM Group to the present dispute were pivotal to resolving the case.

QCAT found that the payment claims submitted by Readiplumb were not validly served on MKM Constructions as required by the Act. The Tribunal concluded that the payment claims were addressed to MKM Group of Companies Pty Ltd, an entity within the MKM Group, and not directly to MKM Constructions. Despite the interrelationships within the MKM corporate structure, QCAT held that this did not equate to valid service under the Act. The Tribunal further noted that the payment claims were not served on MKM Constructions, thereby failing to meet the statutory requirements. Consequently, Readiplumb's application for judgment was dismissed.

QCAT ordered that Readiplumb's application for judgment be dismissed, with costs awarded to MKM Constructions. The Tribunal's decision underscored the importance of strictly adhering to the statutory requirements for serving payment claims in the building and construction industry, highlighting that the corporate structure of the respondent did not substitute for the necessary compliance with the Act's provisions.

Orders

Orders of the court

Application dismissed, with costs.

Background

Background to the litigation

Facts The construction contract is dated the 23rd of November 2007, and is between the applicant as sub-contractor and the respondent as builder. Is it described as a housing subcontract agreement. Clause 1 on page 1 of the contract provides (inter alia) as follows: Clause 4 of the general conditions of contract provides as follows: The schedule referred to in clauses 1 and 4 is in the following terms: The contract seems to require that invoices/payment claims be submitted to the respondent by sending them by mail to "MKM Group", who would process them. It does not purport to substitute MKM Group for the respondent. For present purposes though what is important is what the Act, not the contract, requires. The MKM Group consists of a number of related companies. Those companies include (with details of the work performed by each within the group): In relation to the MKM corporate structure and the present contract, Mr Kljaic, the director and secretary of the respondent and the director and secretary of MKM Group of Companies Pty Ltd, deposes: That MKM Group of Companies Pty Ltd performed work for other associated companies in the group is apparent from the letter to the applicant dated 16 November 2007 enclosing the subject contract. The letterhead is that of the respondent, address Unit 11, 76 Township Drive, West Burleigh, Queensland 4219, PO Box 9143, Gold Coast MC 9726, and the letter is signed by Paula Lee, MKM Group of Companies Limited. The applicant's facsimile response dated 23 November 2007 is addressed to Paula Lee, Company "MKM Cons." See Exhibit NRR1 to the first affidavit of Nigel Read. The payment claims submitted by the applicant said to support the present application and its entitlement to judgment under the Act are each addressed to MKM Group of Companies Pty Ltd, Unit 11, 76 Township Drive, West Burleigh, 4219, ABN 850 820 510 634, and were apparently posted. That ABN is the ABN referred to on the letterhead of MKM Group of Companies Pty Ltd, but is in fact, the ABN of MKM Group Pty Ltd. The respondent contends that the payment claims by the applicant are not valid for the purposes of the Act because they are not directed to the respondent and were not served on it. The relevant payment claims are numbers 10, 12, 13, 14, 15 and 16. The Plumbing and Drainage Compliance Permit issued by the City of Ipswich for the contract plumbing works is issued to MKM Group, PO Box 9143, Gold Coast MC 9726. Applicant's CaseThe applicant contends that the payment claims have been validly served. It submits: Conclusion Result

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Conclusion Result

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Readiplumb Services Pty Ltd (ABN 68 614 407 800) v MKM Constructions (Aust) Pty Ltd (ABN 59 127 071 194) [2009] QDC 67
PARTIES:	Readiplumb Services Pty Ltd (Applicant) v MKM Constructions (Aust) Pty Ltd (Respondent)
FILE NO:	45 of 2009
PROCEEDING:	Application for Judgment
DELIVERED ON:	19 March 2009
DELIVERED AT:	Southport
HEARING DATE:	13 March 2009
JUDGE:	C.F. Wall Q.C.
ORDER:	Application dismissed, with costs.
CATCHWORDS:	BUILDING AND CONSTRUCTION INDUSTRY PAYMENTS ACT – entitlement to progress payments – where payment claims were not served by the applicant on the respondent – or directed to the respondent in accordance with the Act – application for judgment dismissed.
CASES:	Brodyn Pty Ltd trading as Time Cost in Quality v Davenport [2004] NSWLR421 FAA F K Gardner and Sons Pty Ltd v Dimin Pty Ltd [2007] 1 QR 10 FAA J Hutchinson Pty Ltd v Galform Pty Ltd [2008] QSC 205 FAA
LEGISLATION:	Building and Construction Industry Payments Act 2004, ss. 7, 8, 17, 18, 19.
COUNSEL:	Plaintiffs: Mr AM Hoare Defendant: Mr MA Ambrose
SOLICITORS:	Plaintiffs: McKays Solicitors Defendant: TVP Law