Turnkey Innovative Engineering Pty Ltd v Witron Australia Pty Ltd - [2023] NSWSC 981

Supreme Court

New South Wales

Medium Neutral Citation: Turnkey Innovative Engineering Pty Ltd v Witron Australia Pty Ltd [2023] NSWSC 981
Hearing dates: 16 August 2023
Date of orders: 18 August 2023
Decision date: 18 August 2023
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision:
The purported payment schedule is not a valid payment schedule for the purpose of s 14 of the Building and Construction Industry Security of Payment Act 1999 (NSW)

Catchwords:
BUILDING AND CONSTRUCTION – contract – whether email constitutes a valid payment schedule for purpose of s 14 of the Building and Construction Industry Security of Payment Act 1999 (NSW) – whether email indicated the amount the respondent to the payment claim proposed to pay – whether email indicated the reasons the respondent to the payment claim withheld payment

Legislation Cited:
Building and Construction Industry Security of Payment Act 1999 (NSW)

Cases Cited:
Barclay Mowlem v Tesrol Walsh Bay [2004] NSWSC 1232
Clarence Street Pty Ltd v Isis Projects Pty Ltd (2005) 64 NSWLR 448; [2005] NSWCA 391
Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247
Joye Group Pty Ltd v Cemco Projects Pty Ltd [2021] NSWCA 211
Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd & Ors [2007] QSC 333
Multiplex Constructions Pty Ltd v Luikens and Anor [2003] NSWSC 1140
Style Timber Floor Pty Ltd v Krivosudsky (2019) 100 NSWLR 133; [2019] NSWCA 171
Vannella Pty Limited atf Capitalist Family Trust v TFM Epping Land Pty Ltd; Decon Australia Pty Limited v TFM Epping Land Pty Ltd; Vannella Pty Limited v TFM Epping Land Pty Ltd [2019] NSWSC 1379

Category: Principal judgment
Parties: Turnkey Innovative Engineering Pty Ltd (Plaintiff)
Witron Australia Pty Ltd (Defendant)
Representation:
Counsel:
S Robertson SC and D P Hume (Plaintiff)
D S Weinberger and J Y Li (Defendant)
Solicitors:
Thomson Geer Lawyers (Plaintiff)
Lander & Rogers (Defendant)

File Number(s): 2023/213782

JUDGMENT

The sole question in this case is whether an email sent by the defendant, Witron Australia Pty Ltd (“the Principal”), to the plaintiff, Turnkey Innovative Engineering Pty Ltd (“the Contractor”), is a valid payment schedule for the purpose of s 14 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (“the Act”).
For the reasons that follow, my opinion is that it was not.
On 8 September 2022, the Principal and the Contractor entered into a contract (“the Contract”) to carry out electrical installation works at an automated distribution centre to be constructed for Coles Group Limited at Kemps Creek.
The Contract provided for a “flat rate fixed price” of $11.4 million “subject to any increase or decrease arising from variations as mutually agreed by the parties”.
The works were delayed, and on 22 March 2023, the Principal sent the Contractor an email removing from the scope of works under the Contract a number of “Group Control” areas.
Thereafter, the Contractor sought to re-price the works at $14,141,951.32 on…

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: [2023] NSWSC 981
Decision Date: 18 August 2023

CaseChat Overview and Summary

Turnkey Innovative Engineering Pty Ltd sought a declaration that a payment schedule issued by Witron Australia Pty Ltd was invalid, as it did not comply with section 14 of the Building and Construction Industry Security of Payment Act 1999 (NSW). The dispute arose from a building and construction contract, and the core issue was whether the email issued by Witron constituted a valid payment schedule under the Act. Specifically, the court had to determine if the email indicated the amount Witron proposed to pay and the reasons for withholding payment.

The court examined the statutory provisions and previous case law to assess whether the email met the requirements of section 14. It found that for a payment schedule to be valid, it must clearly state the amount the respondent proposes to pay and the reasons for withholding payment. The court scrutinised the content of the email and concluded that it did not sufficiently indicate the amount Witron proposed to pay, nor did it provide adequate reasons for withholding payment. As a result, the court found the email to be an invalid payment schedule.

Given the invalidity of the payment schedule, the court granted Turnkey's application for a declaration that the payment schedule was invalid. The court also ordered Witron to pay Turnkey's costs of the proceeding. This decision reinforces the importance of compliance with the statutory requirements for payment schedules under the Act, highlighting the necessity for clarity and specificity in the communication of payment details and withholding reasons.

Orders