UBM Plastering Pty Ltd v Idevelopment Group Pty Ltd

[2016] VCC 458

IN THE COUNTY COURT OF VICTORIA Revised
Not Restricted
Suitable for publication

AT MELBOURNE

COMMERCIAL DIVISION
BUILDING CASES LIST

Case No. CI-15-05317

UBM PLASTERING PTY LTD & ANOR	Plaintiffs
v.
IDEVELOPMENT GROUP PTY LTD	Defendant

---

JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	22 April 2016
DATE OF JUDGMENT:	22 April 2016 (revised 26 April 2016)
CASE MAY BE CITED AS:	UBM Plastering Pty Ltd & Anor v. Idevelopment Group Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VCC 458

REASONS FOR JUDGMENT

---

Catchwords:              Building contract – Payment claims – Conflicting evidence as to the identity of the parties to the “construction contract” to whom the claims related – Building and Construction Industry Security of Payment Act 2002 (Vic) – Grave v Blazevic Holdings Pty Ltd [2010] NSWCA 324 followed.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J. M. Forrest of Counsel	Smith Leonard Fahey Lawyers
For the Defendant	Mr J. Ribbands of Counsel	Melbourne Legal Chambers

HIS HONOUR:

1This a contested application for judgment pursuant to section 16(2)(a)(i) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (“the Act”).

2At the conclusion of the submissions by plaintiffs’ counsel, Mr Forrest, I informed him that I was not satisfied the plaintiffs were entitled to judgment. At Mr Forrest’s request, I agreed to provide written reasons for my decision and to allow him time to seek instructions as to whether the plaintiffs wished to proceed with the action against the defendant, or other related parties, for claims based in contract.

3The plaintiffs seek judgment as follows:

a.the first plaintiff, UBM Plastering Pty Ltd (“UBM Plastering”), against the defendant, Idevelopment Group Pty Ltd (“Idevelopment”) in respect of the following progress claims:

Callisteman contract payment claim:

i.by invoice dated 24 September 2014 served on 24 September 2014 for $25,850 including $2,000 plus GST for variations. A replacement invoice was issued on 1 October 2014 directed to “BQH Construction”;

Grevillea contract payment claims:

ii.claim by invoice no. 13014 dated 1 April 2015 served on that day in the name of UBM Plastering directed to “BQH Construction” for $88,550 including $2,500 plus GST for variations. A replacement invoice was issued and served on 12 June 2015 in the name of UBM Plastering directed to “Idevelopment Group Pty Ltd”;

iii.claim by invoice no. 13026 date 12 June 2015 for $218,900 including $19,000 plus GST for variations in the name of UBM Plastering directed to “Idevelopment Group Pty Ltd”;

iv.claim by invoice no. 13045 dated 12 August 2015 for $27,500 including $20,000 plus GST for variations in the name of UBM Plastering directed to “Idevelopment Group Pty Ltd”.

b.the second plaintiff, UBM Corp Pty Ltd (“UBM Corp”), against Idevelopment in respect of the following progress claims for the Grevillea contract:

i.claim by invoice no. 13059 dated 25 May 2015 for $44,000 including no variations in the name of UBM Corp directed to “Idevelopment Group Pty Ltd”;

ii.claim by invoice no. 13066 date 13 August 2015 for $24,200 including no variations in the name of UBM Corp directed to “Idevelopment Group Pty Ltd”.

4UBM Plastering is a plastering contractor. UBM Corp is a contractor which carries out painting and associated work. Mr Armin Shabani was the sole director of the two companies and a director of a related company, UBM Group Pty Ltd (“UBM Group”). Idevelopment and BQH Constructions Vic Pty Ltd (“BQH”) were related companies which were involved in a residential development project in Epping (“the project”). Mr Antonio Randello is the manager of Idevelopment and a director of BQH and the company which owned the land upon which the project was being developed. His son, Maurice was the director of Idevelopment. Another son, Adrian assisted his father with the Epping property and was a “project manager”.

5The Court was informed by Mr Forrest that:

a.certain progress claims included variations which were not claimable under the Act, and these parts of the claims would need to be “severed” before judgment was entered;

b.the relevant “construction contracts” were comprised by written quotations in the name of UBM Group. The quotations were addressed to Idevelopment. The quotations were verbally accepted by Mr Adrian Randello;

c.the progress claim in respect of the Callisteman contract was reissued at the request of Adrian Randello on 1 October 2014 in the name of BQH;

d.the progress claim in respect of the Grevillea contract in invoice no. 13014 was first issued in the name of BQH and was later re-issued to Idevelopment.

6On the application, Idevelopment asserted that:

a.UBM Corp was the only appropriate party which had been engaged to carry out “construction work” on the project;

b.BQH (now in liquidation) was the only appropriate party which had engaged UBM Corp, or any other company, to carry out construction work on the project.

7From this summary, it can be seen that there are disputes about who were the relevant parties to the contracts pursuant to which construction work was carried out at the project, including:

a.the party who agreed to carry out the works, and whether it was:

i.UBM Group, which prepared the quotations;

ii.UBM Plastering, which carried out some of the works and submitted payment claims for that work;

iii.UBM Corp, which carried out some of the works and submitted payment claims for that work;

b.the party engaging the parties to carry out the works, and whether it was:

i.Idevelopment, to whom most of the invoices were initially addressed;

ii.BQH, to whom some invoices, including a replacement invoice, were addressed and whom the defendant claims was the contracting party.

8There were no formal written contracts for the works. The plaintiffs rely upon written quotations and a verbal acceptance by Mr Adrian Randello. The defendant relies on a discussion at a meeting in mid-July 2014 and a draft contract in the names of BQH and UBM Corp prepared by BQH and executed by it. No contract document was executed by UBM Corp or any related company.

9There were no payment schedules served in response to the payment claims, although in relation to invoice no. 13014, a replacement claim was served in the name of a different company, BQH, at the request of Mr Adrian Randello.

10In Grave v Blazevic Holdings [2010] NSWCA 324 (“Grave”), the New South Wales Court of Appeal considered two claims made under the New South Wales Act, which contained identical relevant provisions to the Victorian Act. Work was carried out by a builder for a dentist, Dr Grave, to renovate his dental surgery. The first claim was paid with a cheque drawn on the account of Dr Grave’s service company, Gradenco Pty Ltd. The second claim was not paid and Dr Grave was sued. A default judgment was entered, which Dr Grave applied to be set aside.

11The Court of Appeal:

a.noted that it was not “untenable” that Gradenco and not Dr Grave was the party to  the construction company with the builder;

b.held that judgment should be set aside;

c.considered that the fact that Dr Grave had not responded to the second payment claim with a payment schedule asserting that the contract was not with him personally, was unnecessary;

d.stated that the defence raised was not a defence “arising under the construction contract” (which was not permitted under the Act), but “a denial of the existence, as between applicant and respondent, of any such contract” (paragraph 36 per McDougall J);

e.stated that for a payment claim to be served, there “must be a construction contract to which the person liable to make progress payments is a party” (paragraph 41 per Macfarlan JA).

12In Baron Gorge Contractors Pty Ltd v Vaughan Constructions Pty Ltd [2015] VCC 1424, His Honour Judge Cosgrave applied the decision in Grave to an application before him under the Victorian Act. In that case, the defendant alleged that the contracting party was not the plaintiff, Baron Forge Contractors Pty Ltd but a related Company, Baron Forge Contractors (Vic) Pty Ltd.

13The written agreement only referred to “Baron Forge” although the ABN number shown was that a Baron Forge Contractors (Vic) Pty Ltd. After discussing the decision of Grave, Judge Cosgrave concluded that, “the assumption underlying the legislation is that the claimant serving the progress payment claim must be a party to a construction contract, as defined” (paragraph 34).

14Mr Forrest submitted that:

a.Judge Cosgrave, and the New South Wales Court of Appeal, did not give sufficient weight to the permitted informality of a “construction contract” under the statutory provisions, and the fact that it encompassed an “other arrangement”, and might be “written or oral, or partly written and partly oral”;

b.Judge Cosgrave was dealing with a party making a claim, who was alleged not to be contracting party whereas, in Grave, the New South Wales Court of Appeal was dealing with a contracting party against whom a claim was made;

c.Judge Cosgrave did not take account of the fact that a contract may be entered into by an agent for an undisclosed principal. In the case of a claimant, this would not prevent an undisclosed principal suing. In the case of a respondent, it would mean that the agent might be sued, if the principal had not been disclosed.

15I consider that, although there may be some force in the latter argument, it does not address the difficulties in relation to the identity of the proposed respondent contracting party in the present case – whether Idevelopment or BQH. In that respect, this case is similar to Grave, and I consider I am bound to follow the clear statement of principle by an appellate court, including:

a.the consideration by that court of the definition of “construction contract” in the Act;

b.how that affects the “context” of the other provisions the Court considered in reaching its decision;

c.the failure by the respondent to serve a payment schedule asserting the lack of a relevant “construction contract” between the claimant and the respondent.

16For these reasons the plaintiffs’ application for judgment must be dismissed.

- - -

Certificate

I certify that these 5 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 22 April 2016, and revised on 26 April 2016.

Dated:       22 April 2016

Mi-Lin Chen Yi Mei    

Associate to His Honour Judge Anderson