Riteway Constructions P/L v Multiplex Constructions P/L

[1996] QSC 252

IN THE SUPREME COURT

OF QUEENSLAND

No. 4191 of 1996

Brisbane

Before the Hon. Mr Justice Mackenzie

[Riteway Constructions P/L v Multiplex Constructions P/L]

BETWEEN:

RITEWAY CONSTRUCTIONS PTY LTD
  (ACN 067 537 651)
  Plaintiff/Respondent

AND:  

MULTIPLEX CONSTRUCTIONS PTY LTD
  (ACN 008 687 063)
  Defendant/Applicant

JUDGMENT - MACKENZIE J.

Judgment delivered 17 December, 1996

CATCHWORDS: Subcontractors' Charges Act 1974 s.5 - whether charges relating to certain scaffolding equipment are charges for work done under a sub-contract - whether the claim for the charges should be modified.

Counsel:G. Newton for the applicant.

D. Logan for the respondent.

Solicitors:Clayton Utz for the applicant.

McCullough Robertson for the respondent.

Hearing date:               28 November, 1996

IN THE SUPREME COURT

OF QUEENSLAND

No. 4191 of 1996

Brisbane

Before the Hon. Mr Justice Mackenzie

[Riteway Constructions P/L v Multiplex Constructions P/L]

BETWEEN:

RITEWAY CONSTRUCTIONS PTY LTD
  (ACN 067 537 651)
  Plaintiff/Respondent

AND:  

MULTIPLEX CONSTRUCTIONS PTY LTD
  (ACN 008 687 063)
  Defendant/Applicant

JUDGMENT - MACKENZIE J.

Judgment delivered 17 December, 1996

This is an application to modify charges pursuant to s.21 of the Subcontractors' Charges Act 1974. It is conceded that two items in the charge cannot be sustained. They are the claims relating to hire of a J C B Loadall and bins ($86,400) and an acceleration claim ($280,000). These sums total $366,400. The other disputed amount, which is the only one with which I am concerned in view of that concession, is a claim for additional scaffolding in the sum of $46,721.17.

Multiplex Constructions Pty Ltd ("Multiplex") was head contractor in the construction of the Queensland Conservatorium of Music building.  Riteway Constructions Pty Ltd ("Riteway") was a subcontractor employed to execute woodwork, partitions, plastering and suspended ceilings.  Multiplex became dissatisfied with the progress of Riteway's subcontract and took over part of the work by a notice dated 28 February 1996.  Still being dissatisfied, Multiplex took over the remainder of the work by a notice dated 18 March 1996.  These events post‑date the work upon which the disputed item in the claim of charge was based.  It is alleged in the notice to have been done between December 1995 and February 1996. 

The question of Riteway's entitlement to recover anything from Multiplex is complicated by the allegation that any of Riteway's claims are exceeded by the cost to Multiplex of having to take over the works and by the fact that Riteway disputes the validity of Multiplex's actions in taking over the works. 

Notice of the claim was given on 22 March 1996.  The claim for "additional scaffolding" coincides in amount with the value of work claimed by Waco Kwikform Ltd ("Waco") in respect of work done for Riteway and scaffolding hired by Riteway from it between 19 October 1995 and 12 February 1996.  Judgment was given for Waco for a sum representing the unpaid balance of that amount.  The plaint alleged that the contract between Waco and Riteway was one to deliver, erect, hire, dismantle, retrieve and remove the scaffolding.

Having set out that background, the question raised in the summons is whether the charge in respect of additional scaffolding is valid. That is determined by reference to s.5 of the Subcontractors' Charges Act 1974 which enables a charge of a subcontractor to secure payment of money payable to the subcontractor for work done by him under a subcontract. It is therefore necessary to determine firstly what the subcontract obliged the subcontractor to do. Secondly, it must be determined whether the work to be done under it is "work" within the meaning of the definition of that term in s.3(1). The definition for present purposes includes work or labour done in connection with the construction or decoration of a building or the placement, fixation or erection of material, plant or machinery used for a purpose of constructing or decorating a building. Excluded from the definition is the supply under a contract of hire of materials, plant or machinery not intended to be incorporated in the work.

The affidavit of Mr Rosengren sets out Riteway's version of the way in which its obligations in respect of the supply of scaffolding altered at various times during the currency of the subcontract with Multiplex.  In particular, para.2(vii) of his affidavit shows that Riteway contends that its obligation to provide scaffolding during the relevant period arose from a letter of 31 October 1995.  It also appears from that paragraph that there was a dispute about responsibility for the cost of scaffolding which was settled in April 1996.  The basis upon which the dispute was resolved does not appear from the material.

If there was a subcontract which obliged Riteway to provide scaffolding for the purpose of enabling it to carry out construction or decoration of the building or the placement, fixation or erection of material used or intended for the purpose of construction or decoration of the building, it is my opinion that hiring scaffolding and paying to have it erected would not take the obligation outside the definition of "work".  It would be otherwise if the only obligation under the contract was to supply scaffolding for the use of other contractors.

The present case is complicated by the uncertainty, on the material presently before the Court, as to the precise nature of the respective roles of Riteway and Multiplex under the arrangement asserted in the letter of 31 October, 1995 and the fact that it appears to provide for use of scaffolding by other subcontractors, at a cost to be arranged between Riteway and that subcontractor.  The lack of precision in the evidence means that it cannot be determined with confidence whether, or to what extent, the charge asserted is valid.  That depends on findings as to the construction of the relationship between Multiplex and Riteway, and it is therefore appropriate that that issue be determined in the action rather than in these proceedings.  It is not established that the charge is not partially valid in so far as it relates to the additional scaffolding.  The summons to modify the charge to the extent that it relates to the scaffolding must be dismissed.  The other two items are conceded not to be a valid basis for a charge.  Therefore, to that extent the charge is for a larger sum than can be sustained, it should be reduced by the sum of the items of the hire of the J C B Loadall and bins and the acceleration claim.  If the claim is reduced by $366,400, it should be for $862,273.83.  The summons asks for a reduction of the monetary amount and a variation in the amount of guarantees lodged with the Registrar.  A further guarantee in the sum of $109,181.82 would represent the amount necessary to provide for the whole of the sum currently in dispute.  The orders are the following:

1. That the notice of intention to claim charge dated 22 March 1996 delivered by Riteway Constructions Pty Ltd be modified pursuant to s.21 of the Subcontractors' Charges Act 1974 in the following respects

   (a)That the monetary amount subject to the charge be reduced to the sum of $862,273.83;

   (b)That upon the applicant lodging with the Registrar of the Supreme Court at Brisbane ("the Registrar") an unconditional bank guarantee a draft of which is annexed to the summons filed herein on 8 November 1996 in the sum of $109,181.82 ("the new bank guarantee") the property charged shall be the unconditional bank guarantee No 1559 currently lodged with the Registrar in the amount of $753,092.11 duly executed by Australia and New Zealand Banking Group Limited dated 20 March 1996 ("the first bank guarantee") together with the new bank guarantee, and bank guarantee No 1563 in the amount of $475,581.82 duly executed by Australia and New Zealand Banking Group Limited, dated 1 April 1996, currently held by the Registrar shall cease to be part of the property charged.

2. That upon lodgment of the new bank guarantee by the applicant with the Registrar the Registrar release to the applicant the unconditional bank guarantee No 1563 in the amount of $475,581.82 duly executed by Australia and New Zealand Banking Group Limited dated 1 April 1996.

3. That the respondent pay two-thirds of the costs of and incidental to the application to be taxed.  The remaining one-third of the costs shall be costs in the cause.