Tenix Alliance Pty Ltd v Magaldi Power Pty Ltd - [2010] QSC 7

SUPREME COURT OF QUEENSLAND

CITATION:

Tenix Alliance P/L v Magaldi Power P/L [2010] QSC 7

PARTIES:

TENIX ALLIANCE PTY LTD (ABN 65 075 194 857)
(applicant)
v
MAGALDI POWER PTY LTD (ABN 51 105 805 418)
(respondent)

FILE NO/S:

14104 of 2009

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

12, 15 January 2010

DELIVERED AT:

Brisbane

HEARING DATE:

12, 15 January 2010

JUDGE:

Fryberg J

ORDER:

1. Judgment against the Respondent in the amount of $890,930.26 including $28,788.71 interest.

2. Order that the Respondent pay the Applicant’s costs of and incidental to the Application, including the costs of the appearance on 15 January 2010, to be assessed.

CATCHWORDS:

Contracts – Building, engineering and related contracts – Remuneration – Statutory regulation of entitlement to and recovery of progress payments – Validity of payment claim – Claim made after reference date not invalid

Contracts – Building, engineering and related contracts – Remuneration – Statutory regulation of entitlement to and recovery of progress payments – Prolongation costs for period after payment claim – Not costs of construction work

Contracts – Building, engineering and related contracts – Remuneration – Statutory regulation of entitlement to and recovery of progress payments – Validity of payment schedule – Interpretation of schedule – Statement of amount proposed to be paid – Statement of reasons for withholding part of amount claimed – Non-compliance with statutory requirements

Building and Construction Industry Payments Act 2004 (Qld), s 12, s 15, s 17, s 18(2), s 18(3), s 19(2)

Doolan v Rubikcon Pty Ltd [2008] 2 Qd R 117; [2007] QSC 168, cited
J Hutchinson Pty Ltd v Galform Pty Ltd & Ors[2008] QSC 205, cited
Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA Pty Ltd) & Ors[2007] QSC 333, cited
Quasar Constructions v Demtech Pty Ltd [2004] NSWSC 116, cited
Reed Constructions (Qld) Pty Ltd v Martinek Holdings Pty Ltd[2009] QSC 345, considered

COUNSEL:

M H Hindman for the applicant
R Wensley QC for the respondent

SOLICITORS:

Norton Rose for the applicant
N J Papallo as town agents for Tucker & Cowen Solicitors for the respondent

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

FRYBERG J

No 14104 of 2009

TENIX ALLIANCE	Applicant
and
MAGALDI POWER	Respondent

BRISBANE

..DATE 12/01/2010

JUDGMENT

HIS HONOUR: This is an application for judgment by a
sub-contractor against the head-contractor pursuant to s 19(2)(a)(i) of the Building and Construction Industry Payments Act 2004. The sum claimed is $2,703,149.30. At the outset I was informed that the head-contractor had already paid, before the application was filed, an amount of $872,569.50 inclusive of GST. The sum actually claimed was in fact the difference between those two amounts.

The applicant, Tenix, entered into a contract with the respondent contractor, Magaldi, to dismantle an existing system at the Millmerran Power Station Unit 1 and carry out the mechanical and electrical erection of a MAC system.

The contract price was $2,484,000 and that price was payable under cl…

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: [2010] QSC 7
Decision Date: 15 January 2010

CaseChat Overview and Summary

Tenix Alliance Pty Ltd (Applicant) brought an action against Magaldi Power Pty Ltd (Respondent) in relation to the payment of progress claims under a construction contract. The matter was heard in the Supreme Court of New South Wales. The Applicant alleged that the Respondent had failed to make payments due under the contract and sought judgment for the amount claimed, plus interest and costs.

The legal issues before the court involved the validity of payment claims made after a reference date, the recoverability of prolongation costs, and the compliance of the payment schedule with statutory requirements. The Applicant argued that the payment claim was valid and that the Respondent was liable for prolongation costs incurred after the payment claim was made. The Respondent contended that the payment claim was invalid as it was made after the reference date and that prolongation costs incurred after the claim was made were not recoverable.

The court held that the payment claim was not invalid simply because it was made after the reference date. The court found that the payment schedule did not comply with statutory requirements as it did not include a statement of reasons for withholding part of the amount claimed. However, this non-compliance did not affect the validity of the payment claim. The court also found that prolongation costs incurred after the payment claim was made were not costs of construction work and therefore not recoverable.

The court ordered judgment in favour of the Applicant for the amount of $890,930.26 plus interest and costs. The court also ordered that the Respondent pay the Applicant's costs of and incidental to the Application.

Orders

Orders of the court

1. Judgment against the Respondent in the amount of $890,930.26 including $28,788.71 interest.

2. Order that the Respondent pay the Applicant’s costs of and incidental to the Application, including the costs of the appearance on 15 January 2010, to be assessed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Tenix Alliance P/L v Magaldi Power P/L [2010] QSC 7
PARTIES:	TENIX ALLIANCE PTY LTD (ABN 65 075 194 857) (applicant) v MAGALDI POWER PTY LTD (ABN 51 105 805 418) (respondent)
FILE NO/S:	14104 of 2009
DIVISION:	Trial
PROCEEDING:	Application
ORIGINATING COURT:	Supreme Court at Brisbane
DELIVERED ON:	12, 15 January 2010
DELIVERED AT:	Brisbane
HEARING DATE:	12, 15 January 2010
JUDGE:	Fryberg J
ORDER:	1. Judgment against the Respondent in the amount of $890,930.26 including $28,788.71 interest. 2. Order that the Respondent pay the Applicant’s costs of and incidental to the Application, including the costs of the appearance on 15 January 2010, to be assessed.
CATCHWORDS:	Contracts – Building, engineering and related contracts – Remuneration – Statutory regulation of entitlement to and recovery of progress payments – Validity of payment claim – Claim made after reference date not invalid Contracts – Building, engineering and related contracts – Remuneration – Statutory regulation of entitlement to and recovery of progress payments – Prolongation costs for period after payment claim – Not costs of construction work Contracts – Building, engineering and related contracts – Remuneration – Statutory regulation of entitlement to and recovery of progress payments – Validity of payment schedule – Interpretation of schedule – Statement of amount proposed to be paid – Statement of reasons for withholding part of amount claimed – Non-compliance with statutory requirements Building and Construction Industry Payments Act 2004 (Qld), s 12, s 15, s 17, s 18(2), s 18(3), s 19(2) Doolan v Rubikcon Pty Ltd [2008] 2 Qd R 117; [2007] QSC 168, cited J Hutchinson Pty Ltd v Galform Pty Ltd & Ors[2008] QSC 205, cited Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA Pty Ltd) & Ors[2007] QSC 333, cited Quasar Constructions v Demtech Pty Ltd [2004] NSWSC 116, cited Reed Constructions (Qld) Pty Ltd v Martinek Holdings Pty Ltd[2009] QSC 345, considered
COUNSEL:	M H Hindman for the applicant R Wensley QC for the respondent
SOLICITORS:	Norton Rose for the applicant N J Papallo as town agents for Tucker & Cowen Solicitors for the respondent