VK Constructions Pty Ltd v Waverley Pde Pty Ltd
[2025] VCC 1463
•8 October 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-24-07295
| VK CONSTRUCTIONS PTY LTD (ACN 616 649 462) | Plaintiff |
| v | |
| WAVERLEY PDE PTY LTD (ACN 090 600 874) | Defendant |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24 September 2025 | |
DATE OF JUDGMENT: | 8 October 2025 | |
CASE MAY BE CITED AS: | VK Constructions Pty Ltd v Waverley Pde Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 1463 | |
REASONS FOR JUDGMENT
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Subject:APPLICATION UNDER SECTION 16 OF THE BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 2002
Catchwords: Application for judgment pursuant to s16 of the Building and Construction Industry Security of Payment Act 2002 – Whether precluded by serving of payment schedule pursuant to s15 of that Act – Whether email meeting requirements of a valid payment schedule – Whether previous email correspondence may be considered as to validity of alleged payment schedule, either as incorporated by reference or as knowledge and information within joint contemplation of parties – Email denying liability for payment claim as to 100 per cent attaching “back invoice” for 30 per cent only of amount claimed – Whether invalidated alleged payment schedule.
Payment claim – Whether invalidated as contained excluded item.
Legislation Cited: Building and Construction Industry Security of Payment Act 2002
Cases Cited:Barclay Mowlem Construction Ltd v Tesrol Walsh Bay Pty Ltd [2004] NSWSC 716;
BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd [2020] VSC 739;
Diako Builders Pty Ltd v Compfam Pty Ltd [2021] VCC 784;
Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247;
John Beever v Roads Corporation [2018] VSC 635;
Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333;
Samco Steel & Precast Pty Ltd v Roxton Commercial Builders Pty Ltd [2024] VCC 783;
Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171;
Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305;
Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44.
Judgment: 1. Within 14 days the parties must bring in short minutes to give effect to these reasons.
2.Costs reserved.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr N Gallina | Mahl Lawyers Pty Ltd |
| For the Defendant | Mr A Morrison | Ward & Co Legal Consultants Pty Ltd |
HIS HONOUR:
Background
1According to Mr Davinder Randhawa, a director of the plaintiff, VK Constructions Australia Pty Ltd (“VK Constructions”), in early 2024 he received a call from Mr Chris Taxiarhopoulos responding to an online advertisement which Mr Randhawa’s company had published offering to undertake domestic building works “on a subcontract basis”. The query related to building work at 80 John Street, Brunswick.
2During an onsite meeting, according to Mr Randhawa, he was told that Mr Taxiarhopoulos was “the managing director of … Waverley Pde Pty Ltd” (the defendant in this proceeding, “Waverley”), and that Waverley had been retained to carry out building work at 60 John Street, Brunswick East involving the construction of eight townhouse-style dwellings.
3Mr Randhawa said that Waverley “sought a contractor to carry out various excavation and foundation related works at the Site, consisting primarily of the construction of 52 bored piers and related works”. Mr Randhawa said his company would be able to undertake these works, and Mr Taxiarhopoulos sent him an SMS message on 17 February 2024 requesting VK Constructions to quote for this work. Mr Randhawa was furnished with “a copy of the plans (comprised of working and structural drawings) … dated 15 December 2023”. (Affidavit of Davinder Randhawa, 10 December 2024, paragraphs 1, 4-12)
4VK Constructions gave a quotation for the works costing them at $541,012.30 dated 2 March 2024. Following a delay, “updated” and final plans dated 30 July 2024 were provided to VK Constructions by Mr Taxiarhopoulos which provided, according to Mr Randhawa, for “construction of 50 bored piers”.
5This led to VK Constructions issuing an amended quote for the work in the sum of $566,158.30, which included $118,872 “with respect to the construction of 52 bored piers at the Site, including incidental work, such as the supply of necessary materials and labour”. The quotation provided for payment relative to the bored piers as follows:
“-50% Bored piers approval
-30% on Footing Approval
30% on Steel approval
20% on Concrete finish
10% Completion” (Mr Randhawa affidavit, paragraphs 13-20)
6Mr Randhawa said that VK Constructions’ quotation was accepted when “Mr Taxiarhopoulos called me and said that Waverley Pde wished to proceed with the Pier Works, as set out in the Site Works Quote”. (Mr Randhawa affidavit, paragraph 21)
7VK Constructions commenced work “in or around early August 2024”. (Ibid, paragraph 22)
8Mr Randhawa said:
“Shortly thereafter, Mr Taxiarhopoulos contacted me by phone and stated that he required a quote for the conduct of further excavation works at the Site, as well as the construction of capping beams (including the supply of all related materials and labour) …” (Ibid, paragraph 23)
9With VK Constructions issuing a quotation dated 19 August 2024 “in the sum of $29,200”. (Ibid, paragraph 24)
10The same day, Mr Randhawa said that Mr Taxiarhopoulos accepted this quotation for capping beam works by telephone on behalf of Waverley. (Ibid, paragraphs 24-25)
11Mr Randhawa said that his company completed both the pier works and the capping beam works as quoted for between July and September 2024, issuing an invoice on 16 July 2024 for $119,521.60 relative to the pier works, $3,850 (inclusive of GST) in relation to additional piling works carried out “due to the presence of subterranean stone”, and a reduced sum for the construction of bored piers “due to only 46 bored piers being required, [rather] than the 52 contemplated” in the quotation. (Mr Randhawa affidavit, paragraphs 26-28)
12He said that in August 2024, Waverley paid the sum of $41,318.72, leaving an outstanding balance due and payable of $78,202.88 which, he said, Mr Taxiarhopoulos promised Waverley would pay.
13The email correspondence to which he referred was perhaps less definite.
14On 9 September 2024, Mr Taxiarhopoulos said:
“Hi Davinder
I have not received any payment from the client l have my lawyer involved and issuing the security act for payment l was told that payment issued 48 hours from Thursday.
It now 11 days overdue from tomorrow” (Mr Randhawa affidavit, Exhibit DR1, page 34)
15Mr Randhawa said that on 30 September 2024, VK Constructions issued a further invoice to Waverley for $32,120 by email dated 4 October 2024.
16Mr Taxiarhopoulos sent a two-page letter beginning
“I regret to inform you that the services you have provided to CSN Building Group will no longer be required as of 4/10/2024.
I told you last Wednesday that we had to cancel for Saturday.
We were expected to pour on last Monday, but that didn’t happen, as boxing was never completed.
Steel caging has been sitting around, exposed to the weather for over 4 weeks.
Throughout the project you’ve been constantly asking for money. Your invoices are set at a 2-day terms, which doesn’t make sense. You know that I’ve got a 30-day payment term, as I get paid at the end of each month.
I’ve repeatedly asked you to put your invoices in at the end of the month, so you can get paid accordingly, and I’ve asked you for statements.
First inspection works failed, bored piers, spacer for pier were not installed correctly. My 4-year apprentice had to explain to your trades how to install rollers for the pier caging. This is a first sign that your trades lack experience in this kind of work.
Second inspection failed, once again. This delayed me by 2 weeks.
Capping beams failed twice.
Z bars and L bars were not installed correctly as directed by the building inspector, for the second time.
I supplied all the boxing and materials for the caping beam to help you out. Which was not installed to standard? and I still don’t understand why shutters weren’t used in the first place . I had the building inspector come out with a concreter, to inspect your work, and it’s not to building standard practice, and this all needs to be removed and install correctly .
The last 2 week of August and the whole of September there’s been very little progress on site.
You have created a problem on site with unsightly condition. Mud was all over the road from trunks going in and out of the site, which I had to clean up.
Merri-bek council are very meticulous with developments, and l to have to have a clean site, or I’ll be fined.
The invoice you sent is incorrect.
Payments made to date are as follows:
25th July $ 3,850.00
30th July $ 20,000.00
15th August $ 22,000.00
12th September $45,760.00
14th September $9,900.00
Total received $101,510.00
Material paid by CSN Building:
Cost of material supplied on site $ 1,700.00.
Core flute $140.00
Labour cost $800.00
Damage temp Fence x2 $ 100
You have substantially breached and repudiated the agreement between CSN Building Group and VK Homes Construction by drilling more piers than the plans, charging more for drilling, and by producing defective work.
I told you on Sunday that I was unwell and bedridden for two days, you were constantly calling me and sending me insulting text messages.
I will pay you what is owed, and will calculate the cost to rectify your defects, and all the back charges for the failed inspections and delays.” (Exhibit DR1, pages 37-39)
17Mr Randhawa said that VK Constructions therefore issued its final claim on 18 October 2024 under cover of an email of that date, which attached two invoices: INV-0870 for $78,202.88 “for the completion of bored piers and all related works”; and INV-0884 for $28,930 “for the completion of all capping, excavation and related works, excluding any concrete pouring …”. Each of those invoices included a printed statement “This is a claim under the Building & Construction Industry Security of Payment Act 2002”. (Mr Randhawa affidavit, Exhibit DR1, pages 40-44)
18That same day, Mr Taxiarhopoulos responded to Mr Randhawa. This response, as will appear, is of crucial significance in the present proceeding so I set it out in full:
“Hi Davinder,
As per my previous emails, I’m rejecting these invoices.
Invoice – 0884
Capping beam was never completed and defective works.
I’ve got messages from the building inspector stipulating that your work was defective and didn’t pass on 3 occasions. I’ve sent you text messages and photos as proof.
Invoice – 0870
There were 40 piers on the plan, and you’ve drilled 46, which is an overcharge.
The piling was completed in late August. I’ve paid you over $100K for works completed to date, and you are yet to pay Tom from ST Pilling his invoice of $46,000 for his work.
TOM form St Pilling was on my site on Wednesday, blocking access to my driveway and screaming for money. He mentioned that you told him that the Builder “me” hasn’t paid VK Homes any money, and therefore he wasn’t paid. What have you done with the $100K?
I’ve sent Tom copies of the statement showing that I have paid more than enough for his work. I don’t appreciate your subcontractors coming on my site disrupting work when you are ignoring his calls and not paying them.
Please find tax invoice for over charge, I need this invoice paid with in [sic] 7 Days or the matter will be passed on to my lawyer to take further action.
In future, please don’t call me at 4.50am or send me any threatening text messages.” (Mr Randhawa affidavit, Exhibit DR 1, page 45)
19The email covered a tax invoice from Waverley (trading as CSM Building Group) and addressed to “Davinder VK Homes” for “Back Charge”. Once again, this tax invoice is significant in the proceeding and so I set it out in full:
“Description: Back Charge Amount
__________________________________________________________
Piling Piers - over charge
46 piers drilled out, plans layout show 40 piers.
Back charge of 6 piers @ $2,286 per pier $13,716.00
3 failed inspections charge $ 750.00
Soil Removal Invoice – 0869
Overcharge on 6 loads of soil @ $1,500 per load
Back charge of $750.00 per load $ 4,500.00
Capping Beam Defective work
List of required extra work - between grid A&B cages and piles need to drop approximately 100 – 125mm.
-Length of capping beam needs to be jackhammered on the outside to accommodate blinging layer.
-Builder to be made aware with existing cage heights, block will need to be cut as present cage height don’t work out in block increments.
-Cages need to be ripped out from grid A-B, and piles jackhammered down approximately 100mm.
-Please note cage will need to be dismantled to get out.
-Please note additional n16 z bars will be required for the extra depth in new step to accommodate FFL 40.500 and allowing a 225mm thick suspended slab to sit directly on the capping beam.
-Capping beam failed inspection x 3 $ 750.00
-Cost of rectification works. $ 7,749.50
__________________________________________________________
Subtotal $ 27,465.50
GST 10% $ 2,746.55
_________________________________
TOTAL $30,212.05
This is a payment claim made under the Building and Construction Industry Security of Payment Act 2002
Due Date: 25th October 2024
Terms Net 7 Days
Bank Details:
CSN Building Group
National Australia Bank
BSB 083 376
ACC 472326359” (Mr Randhawa affidavit DR1, pages 47-48)20No payment has been made.
This proceeding
21Solicitors acting for VK Constructions sent a letter of demand to Waverley dated 8 November 2024. With no payment having been made, solicitors acting for VK Constructions commenced this proceeding by Originating Motion.
22A judicial registrar published reasons on 4 August 2025 and authenticated a judgment on 5 August 2025, giving VK Constructions judgment against Waverley “pursuant to s16(2)(a)(i) of the Building and Construction Industry Security of Payment Act 2002 …” in the sum of $107,328.88 plus interest pursuant to s12(2)(a) of the Act to the date of judgment fixed in the sum of $8,629.33. His Honour ordered Waverley to pay VK Constructions’ costs “on the standard basis”.
23Mr Taxiarhopoulos had sworn an affidavit in opposition to VK Constructions’ claim dated 26 February 2025, setting out the narrative of events as Waverley saw them. At paragraph 30 of the affidavit, commenting on the rendering of Invoice 0870, Mr Taxiarhopoulos said:
“I was surprised to receive this email as:
a.In the days prior, I had been disputing the quality of the works and when the works would be rectified and completed by VK Homes;
b.the Final Plans and Drawings only calls for construction of 39 piers, not the 41 piers claimed by VK Homes;
c.no version of the plans or drawings, past or present, original or final, ever called for 46 piers and CSN Building had never requested or approved any variation or additional works for any additional piers; and
d.the invoice description encompasses the entirety of the Pier Works, despite my prior payments for the Piers Works.” (Affidavit of Mr Taxiarhopoulos, pages 6-7)
24Mr Taxiarhopoulos said that the “back charge invoice” included a claim for the overcharge for six piers at $2,286 each, totalling $13,716, and the charge for the pier works failing three inspections for $750. A similar claim relative to the capping beam works and the cost of rectifying defective capping beam works totalling $7,749.50.
Statutory framework
25This proceeding is brought under the terms of the Building and Construction Industry Security of Payment Act 2002 (“the Act”).
26In enacting the Building and Construction Industry Security of Payment Act, on the basis of which the present proceeding has been brought, the Victorian Parliament stated:
“1The main purpose of this Act is to provide for entitlements to progress payments for persons who carry out construction work or who supply related goods and services under construction contracts.”
27In establishing its own special regime for the recovery of progress payments, the statute enacts:
“47(2)Nothing done under or for the purposes of this Part affects any proceedings arising under a construction contract (including any arbitration proceedings or other dispute resolution proceedings), whether under this Part or otherwise, except as provided by subsections (3) and (4).”
28This section is found within Part 3 of the Act “Procedure for Recovering Progress Payments”. Determinations made under the Act may be revisited in ordinary contractual proceedings between the parties, with amounts awarded under the statute susceptible of restitutionary reversal. The statute establishes a regime of “pay now, litigate later”.
29Section 47(3) provides:
“In any proceedings before a court or tribunal in relation to any matter arising under a construction contract, the court or tribunal –
(a)must allow for any amount paid to a party to the contract under or for the purposes of this Part in any order, determination or award it makes in those proceedings; and
(b)may make such orders as it considers appropriate for the restitution of any amount so paid, and such other orders as it considers appropriate, having regard to its decision in those proceedings.”
30Section 5 of the Act provides a detailed definition by way both of inclusions and exclusions of the phrase “construction work”. Neither party suggested that the work in question here did not fall within that phrase as defined.
31The entitlement to progress payments referred to in the introductory purpose section of the Act is provided for in s9, which states as follows:
“(1) On and from each reference date under a construction contract, a person—
(a)who has undertaken to carry out construction work under the contract; or
(b)who has undertaken to supply related goods and services under the contract—
is entitled to a progress payment under this Act, calculated by reference to that date.
(2) In this section, "reference date", in relation to a construction contract, means—
(a)a date determined by or in accordance with the terms of the contract as—
(i)a date on which a claim for a progress payment may be made; or
(ii)a date by reference to which the amount of a progress payment is to be calculated—
in relation to a specific item of construction work carried out or to be carried out or a specific item of related goods and services supplied or to be supplied under the contract; or
(b)subject to paragraphs (c) and (d), if the contract makes no express provision with respect to the matter, the date occurring 20 business days after the previous reference date or (in the case of the first reference date) the date occurring 20 business days after—
(i)construction work was first carried out under the contract; or
(ii)related goods and services were first supplied under the contract; or
(c)in the case of a single or one-off payment, if the contract makes no express provision with respect to the matter, the date immediately following the day that—
(i)construction work was last carried out under the contract; or
(ii)related goods and services were last supplied under the contract; or
(d)in the case of a final payment, if the contract makes no express provision with respect to the matter, the date immediately following—
(i)the expiry of any period provided in the contract for the rectification of defects or omissions in the construction work carried out under the contract or in related goods and services supplied under the contract, unless subparagraph (ii) applies; or
(ii)the issue under the contract of a certificate specifying the final amount payable under the contract a final certificate; or
(iii)if neither subparagraph (i) nor subparagraph (ii) applies, the day that—
(A)construction work was last carried out under the contract; or
(B)related goods and services were last supplied under the contract.”
32Section 10 headed “Amount of progress payment” provides inter alia:
“(1) The amount of a progress payment to which a person is entitled in respect of a construction contract is to be—
(a)the amount calculated in accordance with the terms of the contract; or
(b)if the contract makes no express provision with respect to the matter, the amount calculated on the basis of the value of—
(i)construction work carried out or undertaken to be carried out by the person under the contract; or
(ii)related goods and services supplied or undertaken to be supplied by the person under the contract—
as the case requires.
…”
33As to the valuation of construction work, s11 provides inter alia:
“(1) Construction work carried out or undertaken to be carried out under a construction contract is to be valued—
(a)in accordance with the terms of the contract; or
(b)if the contract makes no express provision with respect to the matter, having regard to—
(i)the contract price for the work; and
(ii)any other rates or prices set out in the contract; and
(iii)if there is a claimable variation, any amount by which the contract price or other rate or price set out in the contract, is to be adjusted as a result of the variation; and
(iv)if any of the work is defective, the estimated cost of rectifying the defect.
…”
34As to the date when such progress payments are due, s12 provides:
“(1) A progress payment under a construction contract becomes due and payable—
(a)on the date on which the payment becomes due and payable in accordance with the terms of the contract; or
(b)if the contract makes no express provision with respect to the matter, on the date occurring 10 business days after a payment claim is made under Part 3 in relation to the payment.
…”
35The statute contemplates that building contractors and others claiming to be remunerated for construction work may serve payment claims which, if served in accordance with the statute, create a liability to pay the amount claimed in the absence of service of, what the statute describes as a “payment schedule”. Section 10B of the Act precludes the inclusion in a payment claim of certain items described as “excluded amounts”. It provides:
“10B Excluded amounts
(1)This section sets out the classes of amounts (excluded amounts) that must not be taken into account in calculating the amount of a progress payment to which a person is entitled under a construction contract.
(2)The excluded amounts are—
(a)any amount that relates to a variation of the construction contract that is not a claimable variation;
(b)any amount (other than a claimable variation) claimed under the construction contract for compensation due to the happening of an event including any amount relating to—
(i) latent conditions; and
(ii) time-related costs; and
(iii) changes in regulatory requirements;
(c)any amount claimed for damages for breach of the construction contract or for any other claim for damages arising under or in connection with the contract;
(d)any amount in relation to a claim arising at law other than under the construction contract;
(e)any amount of a class prescribed by the regulations as an excluded amount.”
36This section depends for its meaning and operation, crucially, upon what matters are designated as “claimable variations”, which is dealt with in s10A, which describes two classes of claimable variations in subsections (2) and (3), which provide:
“10A Claimable variations
...
(2)The first class of variation is a variation where the parties to the construction contract agree—
(a)that work has been carried out or goods and services have been supplied; and
(b)as to the scope of the work that has been carried out or the goods and services that have been supplied; and
(c)that the doing of the work or the supply of the goods and services constitutes a variation to the contract; and
(d)that the person who has undertaken to carry out the work or to supply the goods and services under the contract is entitled to a progress payment that includes an amount in respect of the variation; and
(e)as to the value of that amount or the method of valuing that amount; and
(f)as to the time for payment of that amount.
(3)The second class of variation is a variation where—
(a)the work has been carried out or the goods and services have been supplied under the construction contract; and
(b)the person for whom the work has been carried out or the goods and services supplied or a person acting for that person under the construction contract requested or directed the carrying out of the work or the supply of the goods and services; and
(c)the parties to the construction contract do not agree as to one or more of the following—
(i) that the doing of the work or the supply of goods and services constitutes a variation to the contract;
(ii) that the person who has undertaken to carry out the work or to supply the goods and services under the construction contract is entitled to a progress payment that includes an amount in respect of the work or the goods and services;
(iii) the value of the amount payable in respect of the work or the goods and services;
(iv) the method of valuing the amount payable in respect of the work or the goods and services;
(v) the time for payment of the amount payable in respect of the work or the goods and services; and
(d)subject to subsection (4), the consideration under the construction contract at the time the contract is entered into—
(i) is $5 000 000 or less; or
(ii) exceeds $5 000 000 but the contract does not provide a method of resolving disputes under the contract (including disputes referred to in paragraph (c)).
...”
37Sections 14 and 15 provide:
“14 Payment claims
(1)A person referred to in section 9(1) 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.
(2)A payment claim—
(a)must be in the relevant prescribed form (if any); and
(b)must contain the prescribed information (if any); and
(c)must identify the construction work or related goods and services to which the progress payment relates; and
(d)must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount); and
(e)must state that it is made under this Act.
(3)The claimed amount—
(a)may include any amount that the respondent is liable to pay the claimant under section 29(4);
(b)must not include any excluded amount.
(4)A payment claim in respect of a progress payment (other than a payment claim in respect of a progress payment that is a final, single or one-off payment) may be served only within—
(a)the period determined by or in accordance with the terms of the construction contract in respect of the carrying out of the item of construction work or the supply of the item of related goods and services to which the claim relates; or
(b)the period of 3 months after the reference date referred to in section 9(2) that relates to that progress payment—
whichever is the later.
(5)A payment claim in respect of a progress payment that is a final, single or one-off payment may be served only within—
(a)the period determined by or in accordance with the terms of the construction contract; or
(b)if no such period applies, within 3 months after the reference date referred to in section 9(2) that relates to that progress payment.
(6)Subject to subsection (7), once a payment claim for a claimed amount in respect of a final, single or one-off payment has been served under this Act, no further payment claim can be served under this Act in respect of the construction contract to which the payment claim relates.
(7)Nothing in subsection (6) prevents a payment claim for a claimed amount in respect of a final, single or one-off payment being served under this Act in respect of a construction contract if—
(a)a claim for the payment of that amount has been made in respect of that payment under the contract; and
(b)that amount was not paid by the due date under the contract for the payment to which the claim relates.
(8)A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract.
(9)However, subsection (8) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim if the amount has not been paid.
15 Payment schedules
(1)A person on whom a payment claim is served (the respondent) may reply to the claim by providing a payment schedule to the claimant.
(2)A payment schedule—
(a)must identify the payment claim to which it relates; and
(b)must indicate the amount of the payment (if any) that the respondent proposes to make (the scheduled amount); and
(c)must identify any amount of the claim that the respondent alleges is an excluded amount; and
(d)must be in the relevant prescribed form (if any); and
(e)must contain the prescribed information (if any).
(3)If the scheduled amount is less than the claimed amount, the schedule must indicate why the scheduled amount is less and (if it is less because the respondent is withholding payment for any reason) the respondent's reasons for withholding payment.
(4)If—
(a)a claimant serves a payment claim on a respondent; and
(b)the respondent does not provide a payment schedule to the claimant—
(i)within the time required by the relevant construction contract; or
(ii)within 10 business days after the payment claim is served;
whichever time expires earlier—
the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates.”
38Section 16 provides that when a payment schedule has been served and payment is not made, the claimant may recover the amount claimed from the respondent “as a debt due to the claimant, in any court of competent jurisdiction”. It is this jurisdiction which VK invokes, or purports to invoke, in this proceeding. Subsection (4) provides that judgment must not be given upon the payment claim:
“unless the court is satisfied—
...
(ii) that the claimed amount does not include any excluded amount;
...”
39The subsection also precludes a respondent from bringing any cross-claim or raising any defence “in relation to matters arising under the construction contract”. The effect is that if any item in the payment claim is an “excluded amount”, the Court must dismiss the claim, and no resort to the doctrine of severance is permissible: Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44 [31] per McLeish and Niall JJA.
40Section 17 says that if payment is not made by a respondent in accordance with the terms of the payment schedule, the unpaid portion may similarly be recovered “in any court of competent jurisdiction”.
41Where a payment schedule indicates a payment less than the amount claimed, the claimant may seek an adjudication from an adjudicator under s18 of the statute. Section 28M and the following sections, make provision for payment by the respondent to the adjudication application of the amount determined by the adjudicator.
Judicial Registrar’s determination
42At paragraph 4 of his determination [2025] VCC 1089, the Judicial Registrar said:
“By its submissions, the defendant opposed the granting of the plaintiff’s application on three grounds:
(a) First, the defendant served a payment schedule within time;
(b) Second, the payment claim contravenes the ‘one contract’ rule’; and
(c) Third, the payment claim includes ‘excluded amounts’.”
43He concluded that Waverley did not serve “a payment schedule” within the time and rejected that portion of its defence. He accepted that Waverley’s email of 18 October 2024 “was offering ‘a nil payment’ in response to the payment claim”. [21]
44He said, however, that the basis for the nil payment was “not clear”. [22] Continuing:
“To get any level of detail the plaintiff would need to refer to the apparent messages from a building inspector, unspecified test [scil text] messages and photos: ...” (Ibid)
45He also noted that the “back invoice” claimed a total of $30,212.05, continuing:
“No attempt has been made to reconcile that amount with a nil payment (in circumstances where the arithmetic suggests that a payment of $76,920.83 ($107,132.88 less $30,212.05) would be the proper amount).” [23]
46At paragraph [25]-[27], he concluded that the payment claim did not contravene what he described as the “one contract rule”.
47Finally, he concluded at [28]-[35] that the payment claim did not include any excluded amount.
48The matter comes before me upon an application on the part of the defendant for review of the Judicial Registrar’s determination pursuant to Rule 84.03 of the court’s rules.
Payment schedule
Defendant’s contentions
49Mr Morrison, counsel for the defendant, contended that the email on behalf of Waverley dated 18 October 2024 should be regarded as a valid payment schedule under the statute excluding the right of VK to bring its claim to court. He said (Outline, [7]):
“Section 15(3) requires a schedule to indicate, not prove, the reasons why the scheduled amount is less than the claimed amount.”
50He said that a schedule:
“did not need to be detailed, nor did it need to say it was a schedule, provided it indicated that no payment would be forthcoming and provided an indication of the objections taken to the claims made.” (Outline, [8])
51He referred to a decision of the Court of Appeal in Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247.
52He said that the payment schedule was adequate because, according to the formulation by Stynes J in BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd [2020] VSC 739, it set out the “metes and bounds” of the dispute to enable the claimant to decide whether to engage in adjudication. [154]
53According to Mr Morrison, the test for sufficiency of a payment schedule was formulated by the New South Wales Court of Appeal in Witron Australia v Turnkey Innovative Engineering [2023] NSWCA 305 at [17]-[35], such that a valid payment schedule must:
(i)identify the payment claim to which it relates;
(ii)indicate the amount of the payment (if any) that the respondent proposes to make;
(iii)indicate why the payment that the respondent proposes to make is less than the amount claimed, that is the reason or reasons for the amount claimed not being payable in whole or in part.
54Mr Morrison said (Outline, [12]) that Waverley’s reply “was informal but sufficient”. According to the Witron test, it indicated the invoice to which it applied and why payment was not being made – defective/incomplete capping, being overcharged for piers, payments already made and plaintiff’s sub-contractor unpaid, referring to the Judicial Registrar’s determination rejecting the email as a valid payment schedule.
55Mr Morrison said that the Judicial Registrar had “set an unduly high bar by requiring fuller particularisation and reconciliation than the statute demands”. He said the email was sufficient to denote the “metes and bounds” of the dispute. (Outline, [14]) It was sufficient, he said, to state that the claim was being rejected to indicate that a nil payment would be made. He referred to BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd [2020] VSC 739 at [161]; Barclay Mowlem Construction Ltd v Tesrol Walsh Bay Pty Ltd [2004] NSWSC 716 at [5]; Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333 at [23]; Façade Treatment Engineering Pty Ltd (in liq) v BrookfieldMultiplex Constructions Pty Ltd [2016] VSCA 247; 337 ALR 452 at [255].
Plaintiff’s contentions
56Mr Gallina of counsel, for the plaintiff, referred to the requirement for a valid payment schedule as formulated by the New South Wales Court of Appeal in Re Witron Australia to the same effect as Mr Morrison’s contentions on this point. He referred to a decision of the New South Wales Court of Appeal in Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171 [1], [4], [5], [10], [73]-[75] and [82].
57In that instance, the author of the alleged payment claim referred to “many emails, photos, videos, back charges from builders and other trades, complains [sic] from my clients”. The court regarded these references as insufficiently specific and found the email generally “opaque” and lacking in information as to the quantum of alleged set-offs.
58Referring to the Witron case, he relied (Outline, [10]) upon a statement by Kirk JA (with whom Leeming and Payne JA agreed) to the following effect:
“… in general a failure to provide any reason or reasons directed to a distinct and substantial component of a payment claim will constitute a failure sufficiently to indicate why the scheduled amount is less than the amount claimed for the purposes of s 14(3) of the Act. Such an omission would fail to identify the parameters of the dispute, impeding the claimant being able to make an informed decision as to how to proceed, and impeding the adjudicator in being able to identify what reasons could be raised in the adjudication response.” ([2023] NSWCA 305, [35])
59According to Mr Gallina (Outline, [12]), the email of 18 October 2024 failed to meet the second and third criteria stated in the Witron Australia case as essential for a valid payment schedule. The email failed to meet the second criterion indicating the amount of payment, if any, that would be made by, on the one hand, stating a blanket rejection of the invoice (suggesting a nil payment) and, on the other hand, attaching an invoice for $30,212.05 (suggesting that payment of the balance would be made).
60As to the third criterion, as formulated in Witron Australia, he said the ground on which less than full payment was to be made was not adequately disclosed. (Outline, [14])
61He referred to the New South Wales Court of Appeal’s decision in Style Timber where the communication judged by the court to be insufficient as a payment schedule was in the following terms:
“Rasti
Sorry, I was in the hospital in the past few days for my family, so couldn’t reply your email.
If you want, make a appointment with me, come to my office. I will show you the working agreement between Style timber and Rk grinding, many emails, photos, videos, back charges from builders and other trades, complains from my clients. You will understand why I can’t pay you. The damages you done is more than what you claimed.
Then, it’s up to you want you want to do next.
Best regards
Jack Wang” [sic] ([2019] NSWCA 171, [10])
62According to Mr Gallina (Outline, [15]), none of the messages, text messages and photos had been specifically identified in the 18 October 2024 email, nor put into evidence. Therefore, “there is no way of knowing whether any of [them] might live-up to the description given them”.
63Mr Gallina also observed that the complaints made in the email were “general (not specific) in character” (Outline, 17]). He referred to the attachment of “the back invoice” for $30,212.05. He observed (Outline, [21]) that this back invoice “accounts for less than one third of the amount of $107,132.88 claimed in the payment claim”.
64He said the complaint “regarding the plaintiff’s alleged failure to pay its subcontractor (“Tom”) does not concern the completeness and/or quality of the plaintiff’s work”. (Outline, [19])
65He concluded on this point:
“In short, all of the complaints made in the text of the defendant’s 18 October 2024 email and the contents of defendant’s invoice INV-113, when taken together, cannot reasonably be said to respond to all of the works claimed in the plaintiff’s invoices INV-0884 and INV-0870.” (Outline, [23])
Postscript
66In a submission in reply at the close of the oral hearing, Mr Morrison, on behalf of the defendant, contended that, in deciding the adequacy of the 18 October email as a payment schedule, it was proper to consider the mutual knowledge of the parties. I asked him to cite his best authority for the proposition, and permitted him to follow up with an email to my chambers citing such authority. In an email the following day, his instructing solicitors mentioned three authorities, each of which had already been cited in the course of argument. The authorities were as follows:
(a) Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247; 337 ALR 452 at [256]
(b) BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd [2020] VSC 739 at [154(d)]
(c) Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 at [76]-[77].
Conclusions
67The Judicial Registrar, correctly in my respectful opinion, concluded that the 18 October email gave notice of “nil” payment. The statement “I’m rejecting these invoices” is clear. It has not been suggested that the alleged payment schedule failed to identify the payment claim to which it related (Witron Criterion 1). The Judicial Registrar’s conclusion, with which I have respectfully concurred, that the email indicated that no payment would be made, establishes that Witron Criterion 2 has been met. The battlefield therefore lies upon Criterion 3: whether the email indicated why the proposed payment is “less than the amount claimed”.
68The interesting question of whether the payment schedule would be sufficient if it merely denied liability and asserted that the work claimed for was “defective” is not before the Court today. The adequacy of the explanation as to why payment was not being made requires a consideration, as Mr Morrison correctly observed, not of whether the case for non-payment is proven by the alleged payment schedule, but simply whether the ground is adequately described or indicated. The adequacy of the explanation may turn, crucially, upon mutual knowledge possessed by both parties. If, as Mr Morrison contends, it is proper to go beyond the face of the alleged payment schedule to that consideration, this remits us to a consideration of the passages cited by Mr Morrison during his reply contentions and in the email from his instructing solicitors.
69The Façade case raised many interesting questions: notably, a constitutional issue as to the interaction between the State Building Industry Security of Payment legislation on the one hand, and the Commonwealth legislation as to corporate insolvency on the other, and the possible operation of s109 of the Commonwealth Constitution. Independently of the Constitution and “inter se” questions, the Court concluded that the State statute, on its own construction, did “not create an entitlement to progress payments for persons who are in liquidation” [90]. The document relied on in that case as a payment schedule was an email dated 5 October 2012 which concluded:
“Upon FTE remedy of the above and attached Brookfield Multiplex will be in a position to issue FTE with a payment schedule.” [14]
70On the face of it, this concluding sentence might be thought to be fatal to the contention that the email itself was a payment schedule as distinct from a foreshadowing of a later document which would be. Nevertheless, the trial judge concluded that it was a payment schedule [46]. The passage of the Court’s judgment relied on by the defendant was as follows:
“256.Next, it is necessary to consider whether the 5 October 2012 email satisfied the requirement in s 15(3) that it indicate Multiplex’s reasons for withholding payment from Façade. We adopt the observations of Palmer J in Luikens that s 15(3) requires reasons to be indicated ‘with sufficient particularity to enable the claimant to understand, at least in broad outline, what is the issue between it and the respondent’. Absolute precision is not required, and cannot be expected given the reasonably short period within which a respondent is required to prepare a payment schedule (being at most 10 days). Previous dealings between the parties form part of the context relevant to deciding whether the reasons have been indicated with sufficient particularity. The concern is to ensure that the claimant has sufficient information to make a decision whether or not to pursue the claim.”
71Crucial for the contention in reply is the sentence:
“Previous dealings between the parties form part of the context relevant to deciding whether the reasons have been indicated with sufficient particularity.”
72The Court footnoted a reference to Luikens’ case, to which I will turn presently.
73BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd, a decision of Stynes J, raised the question, inter alia, whether a valid payment schedule had been served by the defendant responsively to the plaintiff’s payment claim within the prescribed time. In the passage relied on for the defendant, the learned judge said:
“154.The following principles are relevant in determining whether the Alleged Payment Schedule complies with the requirements under s 15 of the SOP Act:
...
(d)the payment schedule is to be examined objectively, though the interpretation of the document is to be informed by the context, background and prior dealings between the parties”.
74The final authority relied on for this contention was a decision of Palmer J in Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 [76]-[77], where the learned judge said:
“76A payment claim and a payment schedule are, in many cases, given and received by parties who are experienced in the building industry and are familiar with the particular building contract, the history of construction of the project and the broad issues which have produced the dispute as to the claimant’s payment claim. a payment claim and a payment schedule must be produced quickly; much that is contained therein in an abbreviated form which would be meaningless to the uninformed reader will be understood readily by the parties themselves. A payment claim and a payment schedule should not, therefore, be required to be as precise and as particularised as a pleading in the Supreme Court. Nevertheless, precision and particularity must be required to a degree reasonably sufficient to apprise the parties of the real issues in the dispute.
77 A respondent to a payment claim cannot always content itself with cryptic or vague statements in its payment schedule as to its reasons for withholding payment on the assumption that the claimant will know what issue is sought to be raised. Sometimes the issue is so straightforward or has been so expansively agitated in prior correspondence that the briefest reference in the payment schedule will suffice to identify it clearly. More often than not, however, parties to a building dispute see the issues only from their own viewpoint: they may not be equally in possession of all of the facts and they may not equally appreciate the significance of what facts are known to them. This will be so especially where, for instance, the contract is for the construction of a dwelling house and the parties are the owner and a small builder. In such cases, the parties are liable to misunderstand the issues between them unless those issues emerge with sufficient clarity from the payment schedule read in conjunction with the payment claim.”
75As I understood the contention in the present case, it was that whilst the reference to earlier correspondence was not sufficiently precise or specific to have the effect of incorporating that earlier correspondence by reference, the matters raised by Mr Taxiarhopoulos in his email of 4 October 2024, quoted at [16] above, should be regarded as knowledge jointly held by the parties, such that the email of 18 October 2024 could be regarded as sufficiently informative to meet the third Witron criterion.
76The issue is, upon the authoritative formulations to be found in the authorities, finely balanced. Ultimately, however, I am not persuaded that these doctrines and principles can, by a side wind, outflank the effect of the decision of the New South Wales Court of Appeal in Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171, where a communication which referred non-specifically to emails, photos, and so forth, was found insufficient as a payment schedule. In that case, the preceding photographs and emails were put into evidence and summarised by Leeming JA at [58]-[60]. In reaching the conclusion that the alleged payment schedule was insufficient, Leeming JA said:
“71There was nothing in Mr Wang’s response which was directed to any particular invoice. Indeed, there was nothing in Mr Wang’s response which was directed to any particular project.”
77At [74], his Honour asked rhetorically:
“What was the scope of the dispute which might be adjudicated in December 2017? Was there a dispute about all five of the properties throughout Sydney? Or just one property? Or a number of properties? What material would Mr Krivosudsky have to supply to an adjudicator if this email were a valid payment schedule?”
78The Court’s determination against the validity of the payment schedule therefore seems to have turned not so much upon the lack of specificity in the reference to the emails, but rather to the fact that a consideration of the email record remitted one to a consideration of a miscellany of different pieces of work, and indeed different projects.
79My inclination is to think that the purport of the remarks by Palmer J in Luikens quoted above is not so much to a suite of emails which can be regarded as in the joint knowledge of the parties, but rather to shorthand references to particular issues, abbreviations, and so forth.
80Whichever way it goes, I do not believe that the decision of the New South Wales Court of Appeal in Style Timber Floor Pty Ltd v Krivosudsky supports the rigorous approach to incorporation by reference for which it was cited by the plaintiff. Given the lack of complexity of dealings between these parties, and the lack of a multiplicity of projects as existed in the Style Timber Floor Pty Ltd case, either because the email of 4 October 2024 can be regarded as incorporated by reference into the alleged payment schedule or because it should be regarded as information within the joint knowledge and contemplation of the parties, in the circumstances the email of 18 October was adequate to meet the three Witron criteria for the adequacy of a communication as a payment schedule.
81The final matter, being the one which weighed with the learned Judicial Registrar, is whether the attachment of the “back invoice” for approximately $30,000 muddied the waters, and so invalidated what might otherwise have been an effective payment schedule. His Honour rightly accepted that there was no ambiguity in the communication as a 100 per cent denial of liability. I have accepted that interpretation. Once reaching that conclusion, the email cannot be regarded as arguably a claim for only approximately $70,000. With some hesitation, I conclude that, interpreted as a whole, the email and the attached invoice can be seen to have a partial overlap, but not a 100 per cent overlap, one with another. The invoice does not cover every issue raised in the covering email; therefore, it ought not to be regarded as a statement on the part of the defendant that its entire complaint against VK could be adjusted by applying a credit to the account equal to the face value of the “back invoice”.
Excluded items?
Defendant’s contentions
82Mr Morrison noted that by virtue of s10 of the Act there are two classes of claimable variations which may be included in a payment claim.
83First, a fully-agreed variation, in relation to which agreement must have been reached no later than the time of making the payment claim. He referred to Yuanda Vic Pty Ltd v Façade Designs International Pty Ltd [2021] VSCA 44 [24].
84The second class of variation permitted to be validly included in a payment claim is one which has been requested or directed by the respondent of the claim, but the parties disagree about one or more aspects of the entitlement to payment. He said the burden of proving that a variation was claimable lay on the plaintiff. He referred to John Beever v Roads Corporation [2018] VSC 635 [44], [131]-[132]. He said the majority of the court in the Yuanda case said that the question as to whether an excluded amount was contained in a payment claim must be determined on the face of the claim ([2021] VSCA 44 [44], [120]). For this purpose, he said, the “face of the document” could be regarded as including those impliedly incorporated, including documents supporting the claim. He referred to the judgment of Riordan J at first instance in Yuanda [2020] VSC 570 [40b], and on appeal McLeish and Niall JJA [2021] VSCA 44 [38]. Therefore, said Mr Morrison (Outline, [24]):
“The face of the payment claim comprises the claim itself, any supporting documents, and any documents incorporated by reference. The Court must not have regard to extrinsic evidence beyond that limited category. If the necessary elements are not shown on the face, the item is an excluded amount under s10B and s16(4) bars the pathway to judgment.”
85He said that this was the approach taken in the County Court as to these matters. He referred to a decision of Judge Woodward (as he then was) in Diako Builders Pty Ltd v Compfam Pty Ltd [2021] VCC 784 [63]-[64]. He said this approach had been adopted in numerous decisions in this court, which he cited (Outline, [26]).
86Mr Morrison said (Outline, [18]):
“Invoice 0870 included an entry claiming $3,500 for:
Original plan have 41 board pier Plus extra piling for stone”
87He said it was admitted that “this was a claim for extra payment for a latent condition”. He referred to paragraph 28 of Mr Randhawa’s affidavit, which stated:
“That sum was comprised of:
(a) an additional sum of $3,850 (including GST), in relation to additional piling works carried out by VK Constructions at the Site, due to the presence of subterranean stone;
(b) a reduced sum for the construction of bored piers, relative to the Site Works Quote, in the amount of $115,671.60, due to only 46 bored piers being required, than the 52 contemplated by the Site Works Quote.”
88Therefore, said Mr Morrison (Outline, [27]), nothing was identified in the payment claim which would bring the variation within the first class of claimable variations, nor was a request or direction to carry out extra piling for stone alleged “so as to satisfy the requirement for a second class variation under s10A(3)(b) of the Act.” He said despite findings by the Judicial Registrar that a request had been made for the extra work, the evidence did not support that. He said (Outline, [30]):
“... there was no evidence before the Court regarding any direction to provide ‘extra piling for stone’ to deal with the latent condition identified by the plaintiff, nor any agreement by the defendant that that work had actually been carried out.”
89He continued (Outline, [31]) that an application under s16 was not the appropriate process to determine such a question, which had to be determined on the face of the payment claim. He said once it was concluded that an excluded amount was part of the payment claim, it was invalid by virtue of s16(4) of the Act. There was no power to sever the inappropriately-claimed excluded amount. He referred to Yuanda’s case [2021] VSCA 44 [36].
Plaintiff’s contentions
90On behalf of the plaintiff, Mr Gallina reviewed the authorities, in particular Yuanda’s case, generally to the same effect. He referred to a decision of Judge Kirton in Samco Steel & Precast Pty Ltd v Roxton Commercial Builders Pty Ltd [2024] VCC 783 [26] and [27], where her Honour said “it is appropriate to take into account the background knowledge of the parties derived from their past dealings and exchanges of information.” Mr Gallina said (Outline, [33]) that VK’s payment claim dated 18 October 2024 referred to two invoices. In the following paragraph he said:
“Hence, the face of the plaintiff’s payment claim also includes those invoices.”
91He said:
“INV-0870 includes a $3,500 charge for ... extra piling for stone”.
92The covering email asserts that the defendant accepted the plaintiff’s quotes and carried out the works in question. He said (Outline, [40]) that Quote No QU-0131 “expressly refers to a scope of work variation in the event of stone being encountered on site”. Therefore, he said, it should be inferred that Waverley requested VK, or directed it, to carry out the work to deal with stone encountered on site, and that work was a scope of work variation and was carried out. He said therefore that the $3,500 charge in INV-0870, whilst relating to a latent condition, related to a variation falling into the second class of claimable variations as per s10A(3) of the Act. Accordingly, this was excluded from the exclusion. He referred to s10B(2)(b)(i) of the Act. Mr Gallina said that the learned Judicial Registrar’s determination that this was not an excluded amount so as to invalidate the payment claim was correct, and ought to be upheld.
93Quote QU-0131 issued by VK on 24 July 2024 included the statement: “If stone removal is required charge will be $165 per meter [sic]”. Presumably the reference is to cubic metres. Tax invoice 0870 charges for some 46 “board [sic] piers”, and also it says that the original plan “have 41 board [sic] piers plus extra piling for stone”. On the face of it, this charge is not merely for removal of stone, but also for extra piers. Assuming, without deciding, that the acceptance of the quote entailed acceptance of additional charges for the removal of stone at the per-metre rate to be found in the quotation, on the face of the invoice there appears to be a claim for additional piers. There is nothing to indicate that this was agreed to or requested or directed by Waverley. The payment claim including an excluded amount was therefore invalid for that reason alone.
One-contract rule
94The “one-contract rule” was dealt with by the Judicial Registrar. Some of the materials make reference to it (the authorities relied on by the parties, for instance). This matter was not pursued at the hearing or comprised in counsel’s outlines.
Disposition
95I will direct the parties to bring in short minutes to give effect to these reasons.
Costs
96I have heard no argument on the question of costs, and so I will reserve them.
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Certificate
I certify that these 30 pages are a true copy of the judgment of his Honour Judge Macnamara delivered on 8 October 2025.
Dated: 8 October 2025
Jodie Daniel
Associate to His Honour Judge Macnamara
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