Xerri Pty Ltd v Sparks Industrial Park Pty Ltd

[2013] VCC 560

IN THE COUNTY COURT OF VICTORIA Revised
(Not) Restricted

AT MELBOURNE

COMMERCIAL LIST
BUILDING CASES DIVISION

Case No. CI-13-01833

XERRI PTY LTD	Plaintiff
v.
SPARKS INDUSTRIAL PARK PTY LTD	Defendant

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JUDGE:	His Honour Judge Anderson
WHERE HELD:	Melbourne
DATE OF HEARING:	24 May 2013
DATE OF JUDGMENT:	24 May 2013 (revised 27 May 2013)
CASE MAY BE CITED AS:	Xerri Pty Ltd v Sparks Industrial Park Pty Ltd
MEDIUM NEUTRAL CITATION:	[2013] VCC 560

REASONS FOR JUDGMENT

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Catchwords:            Practice and procedure – Claim for a progress claim under a building contract – Whether a “final claim” – Progress claim made in accordance with the building contract – Adjustment of matters between the parties after the defects liability period not precluded – Judgment entered – Building and Construction Industry Security of Payment Act2002 (Vic).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A. Klotz	M.D. Klotz
For the Defendant	Mr D. Triaca	Lovegrove Solicitors

HIS HONOUR:

1The plaintiff is a sub-contractor on a building project. It made a progress claim on 8 February 2013. The progress claim was not paid by the defendant and the plaintiff seeks judgment in respect of the progress claim pursuant to the Building and Construction Industry Security of Payment Act 2002 (Vic) (“the Act”).

2The plaintiff relies upon an affidavit sworn in the proceeding by its project manager. No affidavit material has been filed by the defendant. The defendant submits that the progress claim was in fact a final claim and under the Act could not be made at the time it was. Therefore, the defendant is not liable to pay the claim at this stage.

3The issue for determination is whether the progress claim is in fact a final claim. The contract, which is an exhibit to the plaintiff’s affidavit, provides in clause 37 for both progress claims and final claims. Progress claims are permitted to be made “progressively in accordance with item 28”. Item 28 provides that “progress claims may be made on the last day of each month for WUC [work under the contract] done to the first day of that month”.

4Mr Triaca of Counsel, who appears for the defendant, has submitted that the progress claim is in fact a final claim because, on its face, it appears to claim the balance of the contract sum and the breakdown of the claim indicates that 100% of each of the elements of work has been completed. He submitted that, as the “last of the payment claims” it should be regarded as a final claim and not a progress claim under the contract.

5In the absence of evidence in the form of answering affidavit material, it is not appropriate to go beyond the affidavit material filed in the proceeding. The progress claim is not described as a final claim. The progress claim appears to be in accordance with the contractual provisions for progress claims as relating to work under the contract completed prior to the claim.

6It appears that the period of six months, or alternatively 12 months, allowed by the contract as the defects liability period has not run. Therefore, there would be an opportunity for the superintendant to adjust matters between the parties at the appropriate time for a final claim, which the contract defines as, “within 28 days after the expiry of the last defects liability period”.

7The present progress claim was not considered by the superintendant within the time provided for in the contract and pursuant to clause 37.2, is deemed to be the relevant progress certificate. It therefore forms the basis for the entitlement of the plaintiff to recover payment in respect of that claim from the defendant.

8The progress claim notes at the bottom of the claim, “all figures above exclude GST” and at the head of the relevant column of figures, “amount exc. GST”. Subsequently, the plaintiff sent an invoice to the defendant dated 7 March 2013. The invoice included the GST component which at law would be required to be added to the amounts, excluding GST, referred to in the progress claim, making a total invoice value of $189,766.70. There was no payment schedule served by the defendant in respect of the progress claim. As a consequence, the defendant is limited by the Act in the matters it can raise by way of defence to the claim.

9The contract provides that the defendant is required to pay “the balance of the progress certificate [in this case the deemed progress certificate] after deducting retention monies”. Under the contract, retention monies would ordinarily constitute 10% of the progress certificate up to a maximum of 5% of the contract sum. It is not clear on the material before me what previous amounts have been deducted by way of retention and whether the maximum specified in the contract had been reached. If this were to be a matter properly taken into account by way of defence to the present claim, it should have been raised in a payment schedule served by the defendant.

10In my view, the failure by the defendant to serve a payment schedule in respect of the present claim does not permit it to raise as a defence that some amount in respect of retention should be deducted from the amount claimed by the plaintiff in the proceeding.

11Accordingly I propose to enter judgment for the plaintiff for the amount it seeks together with interest pursuant to the Act. I make the following orders:

1. Judgment for the plaintiff against the defendant that the defendant pay the plaintiff the sum of $189,766.70, together with interest pursuant to the contract at the rate of 18% per annum from 2 March 2013 to today of $5,615.00, total judgment 195,381.70.

2.The defendant must pay the plaintiff’s costs of the proceeding, including the appearance today, fixed at $6,600.

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Certificate

I certify that the preceding 2 pages are a true copy of the reasons for decision of His Honour Judge Anderson delivered on 24 May 2013 and revised on 27 May 2013.

Dated: 27 May 2013

Catherine Kusiak

Associate to His Honour Judge Anderson