Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd - [2023] NSWCA 305

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305
Hearing dates: 6 December 2023
Date of orders: 13 December 2023
Decision date: 13 December 2023
Before: Leeming JA at [1];
Payne JA at [2];
Kirk JA at [3]
Decision:
(1) Appeal dismissed.
(2) Appellant to pay the respondent’s costs.

Catchwords:
BUILDING AND CONSTRUCTION — Payment schedule requirements — Where payment claim had two distinct and substantial components — Where statement for withholding payment failed to provide any reason directed to a distinct and substantial component of a payment claim — Whether statement was sufficient to constitute “reasons” under s 14(3) of the Building and Construction Industry Security of Payment Act 1999 (NSW) — Sufficiency of reasons is to be assessed in a purposive manner

Legislation Cited:
Building and Construction Industry Payment Act 2004 (Qld), s 18
Building and Construction Industry Security of Payment Act 1999 (NSW), ss 8(c), 14, 15(2)(b), 17(3)(b), 19, 20(2B), 22(2)(d), 27

Cases Cited:
Barclay Mowlem v Tesrol Walsh Bay [2004] NSWSC 1232
Ceerose Pty Ltd v A-Civil Aust Pty Ltd [2023] NSWCA 215
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) 337 ALR 452; [2016] VSCA 247
John Holland Pty Ltd v Roads and Traffic Authority of New South Wales (2007) 23 BCL 205; [2007] NSWCA 19
Joye Group Pty Ltd v Cemco Projects Pty Ltd [2021] NSWCA 211
Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333
Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Style Timber Floor Pty Ltd v Krivosudsky (2019) 100 NSWLR 133; [2019] NSWCA 171
Vanella Pty Ltd v TFM Epping Land Pty Ltd [2019] NSWSC 1379
Western Australian Planning Commission v Southregal Pty Ltd (2017) 259 CLR 106; [2017] HCA 7

Category: Principal judgment
Parties: Witron Australia Pty Ltd (Appellant)
Turnkey Innovative Engineering Pty Ltd (Respondent)
Representation:
Counsel:
D S Weinberger (Appellant)
S Robertson SC / D Hume (Respondent)
Solicitors:
Lander & Rogers (Appellant)
Thomson Geer (Respondent)

File Number(s): 2023/275941
Publication restriction: Nil
Decision under appeal

Court or tribunal:

Supreme Court

Jurisdiction:

Equity – Technology and Construction List

Citation:

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

Date of Decision:

16 August 2023

Before:

Stevenson J

File Number(s):

2023/213782

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellant, Witron Australia Pty Ltd, contracted the respondent, Turnkey Innovative Engineering Pty Ltd, to carry out electrical installation works involving a series of “group controls” (GCs). The contract stipulated “a flat fixed price” of $11.4 million (excluding GST) for a defined scope of work, subject to “any increase or decrease arising from variations as mutually agreed by…

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] NSWCA 305
Decision Date: 13 December 2023

CaseChat Overview and Summary

The New South Wales Court of Appeal considered an appeal by Witron Australia Pty Ltd (Witron) against a decision concerning a payment claim made by Turnkey Innovative Engineering Pty Ltd (Turnkey) under the *Building and Construction Industry Security of Payment Act 1999* (NSW). The dispute arose from Turnkey's payment claim, which comprised two distinct and substantial components, and Witron's subsequent statement indicating it would withhold payment.

The central legal issue before the Court of Appeal was whether Witron's statement, which failed to provide reasons specifically directed to one of the distinct and substantial components of Turnkey's payment claim, was sufficient to constitute "reasons" for withholding payment under section 14(3) of the Act. The Court was required to determine the sufficiency of the reasons provided by Witron in light of the statutory requirements.

The Court of Appeal affirmed the lower court's decision, holding that the reasons provided by Witron were insufficient. Applying a purposive approach to the interpretation of section 14(3), the Court reasoned that the purpose of requiring reasons is to enable the claimant to understand the basis of the withholding and to respond accordingly. Where a payment claim has multiple distinct and substantial components, the statement withholding payment must provide reasons that address each of those components. Witron's failure to provide reasons directed to one of the substantial components meant its statement did not satisfy the statutory requirement. Consequently, the appeal was dismissed, and Witron was ordered to pay Turnkey's costs.

Orders

Orders of the court

(1) Appeal dismissed.

(2) Appellant to pay the respondent’s costs.

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.

Medium Neutral Citation:	Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305
Hearing dates:	6 December 2023
Date of orders:	13 December 2023
Decision date:	13 December 2023
Before:	Leeming JA at [1]; Payne JA at [2]; Kirk JA at [3]
Decision:	(1) Appeal dismissed. (2) Appellant to pay the respondent’s costs.
Catchwords:	BUILDING AND CONSTRUCTION — Payment schedule requirements — Where payment claim had two distinct and substantial components — Where statement for withholding payment failed to provide any reason directed to a distinct and substantial component of a payment claim — Whether statement was sufficient to constitute “reasons” under s 14(3) of the Building and Construction Industry Security of Payment Act 1999 (NSW) — Sufficiency of reasons is to be assessed in a purposive manner
Legislation Cited:	Building and Construction Industry Payment Act 2004 (Qld), s 18 Building and Construction Industry Security of Payment Act 1999 (NSW), ss 8(c), 14, 15(2)(b), 17(3)(b), 19, 20(2B), 22(2)(d), 27
Cases Cited:	Barclay Mowlem v Tesrol Walsh Bay [2004] NSWSC 1232 Ceerose Pty Ltd v A-Civil Aust Pty Ltd [2023] NSWCA 215 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) 337 ALR 452; [2016] VSCA 247 John Holland Pty Ltd v Roads and Traffic Authority of New South Wales (2007) 23 BCL 205; [2007] NSWCA 19 Joye Group Pty Ltd v Cemco Projects Pty Ltd [2021] NSWCA 211 Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333 Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Style Timber Floor Pty Ltd v Krivosudsky (2019) 100 NSWLR 133; [2019] NSWCA 171 Vanella Pty Ltd v TFM Epping Land Pty Ltd [2019] NSWSC 1379 Western Australian Planning Commission v Southregal Pty Ltd (2017) 259 CLR 106; [2017] HCA 7
Category:	Principal judgment
Parties:	Witron Australia Pty Ltd (Appellant) Turnkey Innovative Engineering Pty Ltd (Respondent)
Representation:	Counsel: D S Weinberger (Appellant) S Robertson SC / D Hume (Respondent) Solicitors: Lander & Rogers (Appellant) Thomson Geer (Respondent)
File Number(s):	2023/275941
Publication restriction:	Nil
Decision under appeal	Court or tribunal: Supreme Court Jurisdiction: Equity – Technology and Construction List Citation: Turnkey Innovative Engineering Pty Ltd v Witron Australia Pty Ltd [2023] NSWSC 981 Date of Decision: 16 August 2023 Before: Stevenson J File Number(s): 2023/213782