Winterton Constructions Pty Ltd v Hambros Australia Ltd

[1992] FCA 384

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY)	NO G 733 of 1990
GENERAL DIVISION	1

BETWEEN WINTERTON CONSTRUCTIONS

PTY LIMITED

Applicant

AND HAMBROS AUSTRALIA LIMITED

First Respondent

PAN PROPERTIES PTY

LIMITED

Second Respondent

REASONS FOR JUDGMENT

EINFELD J SYDNEY 7 MAY 1992

There is before the Court a notice of motion brought by Winterton Constructions Pty Limited (the applicant) seeking summary judgment against Pan Properties Pty Limited (the second respondent) for damages.

respondent.

The evidence brought by the applicant is as follows. In August 1989 the applicant and the second respondent entered into a building works contract. The applicant agreed that in consideration of the payment of certain sums by the second respondent, calculated in accordance with the provisions of the contract, it would carry out the construction of a commercial building on property owned by the second

The applicant entered into the building contract in reliance on the representation by the second respondent that it had, by virtue of a financial agreement with Hambros Australia Limited (the first respondent), secured sufficient sums to enable the second respondent to pay to the applicant all the amounts due to it under the building contract.

The applicant has carried out and completed the building work in accordance with the contract. It has been paid sums totalling $1,314,785.15 by the second respondent. However, two progress claims remain unpaid for the following amounts on the following dates:

No. 12	30 October 1990	$258,569.48
No. 13	7 November 1990	$112,858.04 $371,427.52

In the statement of claim the applicant says that the non- payment was due to a decision by the first respondent, prior

the unpaid claims, not to advance any further moneys to the	to the carrying out of the final work which was the subject of
second respondent. This decision was not communicated to the applicant, as a consequence of which the applicant went on to complete the work in the belief that the original representations as to payment were still in effect. The statement of claim alleges that the applicant thereby effected an improvement in the value of the property at least equal to the sum of the unpaid claims. The applicant says that the
first respondent had a duty to inform it of the second respondent's decision and that by failing to do so engaged in misleading or deceptive conduct in contravention of section 52 of the Trade Practices Act 1974.
In accordance with clause 10 of the contract, on 9 October L990 the applicant issued a certificate for payment in relation to progress claim No. 12 in the amount of $258,569.48. The certificate was due for payment on or before 30 October 1990. The period for payment of progress certificates is set out in clause 10.07:

On the Builder presenting to the Proprietor any Progress Certificate issued under Clauses 10.02 and

10.06 the Builder shall be paid by the Proprietor

the amount specified by that Certificate within the period stated in Item J of the Appendix to this Agreement or otherwise within five (5) days.

Item J fixes a period of 14 days.

The second respondent has failed to pay the amount due in

accordance with the certificate.

The certificate for payment in relation to progress claim no. 13 in the amount of $112,858.04 was issued on 22 October 1990. This certificate was due for payment on or before 7 November 1990. The second respondent has also failed to pay this amount.

Clause 10.08 sets out the applicant's entitlement to interest upon failure to pay progress certificates:

Should the Architect fail to issue a Progress Certificate to the Builder according to and within the period stated in Clause 10.02 or should the Proprietor fail to pay to the Builder the amount of any Progress Certificate as provided in Clause 10.07 the Builder shall be entitled to interest at the rate stated in Item K.l of the Appendix on the amount to which he was entitled from a date fifteen

(15) days after the receipt by the Architect of a

claim for such Progress Certificate properly made in accordance with Clause 10.01 until the date of payment of the same to the Builder by the Proprietor provided that where in respect of Clause 10.07 a period of more or less than five (5) days is stated in Item J of the Appendix and/or where the Builder holds such Progress Certificate for more than one day before presenting it to the Proprietor such fifteen (15) days shall be increased or decreased accordingly.

Item K, the Rate of Interest, is specified as "AMBA 90 day Bill". As at 20 June 1991 the applicant claimed interest of $29,552.55. Therefore, the total amount claimed as at 20 June 1991 was $400,980.07. Since that date interest has continued to accrue so that at the hearing the total claimed was

$427,579.10.

On 24 December 1990 the applicant served copies of the application and statement of claim on the second respondent by security post to its registered office, 257 Eastern Valley Way, Middle Cove NSW 2068. On 16 July 1991 the applicant filed and served a notice of motion seeking summary judgment against the second respondent and costs. This motion was returnable on 2 August 1991 at 9.30 am. Service on the second

respondent was effected by the despatch by prepaid security post to its registered office of a sealed copy of the notice of motion, an affidavit of William Winterton sworn on 16 July 1991 in support of the motion and a sealed copy of the amended statement of claim.

After what appears to have been a somewhat tortuous passage through the Court, it was ordered on 17 February 1992 that any interlocutory motions were to be returnable on 18 March 1992. This order was conveyed by the applicant to the second respondent by a letter of 6 March 1992 together with an affidavit of Gavin Robert Duncan sworn 4 March 1992 claiming the total amount owed to the applicant as $427,579.10. These documents were served personally at the registered office of the second respondent.

However, since the commencement of these proceedings the second respondent has changed its registered office from the family home of its directors to the office of its accountant.

respondent telephoned the solicitor for the applicant to	On 11 March 1992 the principal director of the second
advise that he had received the letter and affidavit served at the second respondent's registered office, and to inform him of the change of address of the registered office. He also said that the company would "not be opposing it (presumably meaning the motion for judgment) in any way". No one attended the hearing on behalf of the second respondent.
I am satisfied that the second respondent has a liability, and has failed, to pay the two progress claims in accordance with the building contract. I therefore pronounce judgment in favour of the applicant against the second respondent in the sum of $427,579.10 plus interest as prescribed by the contract from 4 March 1992. The second respondent must pay the applicant's costs.

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