Cromi Investments Limited v CMP Construction Limited
[2019] NZHC 2142
•29 August 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-001748
[2019] NZHC 2142
UNDER section 290 of the Companies Act 1993 BETWEEN
CROMI INVESTMENTS LIMITED
Plaintiff
AND
CMP CONSTRUCTION LIMITED
Defendant
Hearing: 13 November 2018 Appearances:
J R J Knight and J Hayashi for the Applicant N Gillies and R McStay for the Respondent
Judgment:
29 August 2019
JUDGMENT OF ASSOCIATE JUDGE SARGISSON
This judgment was delivered by me on 29 August 2019 at 3.30 pm pursuant to Rule 11.5 of the High Court Rules.
…………………………………
Deputy Registrar
Solicitors:
Simpson Grierson, Auckland Hesketh Henry, Auckland
CROMI INVESTMENTS LTD v CMP CONSTRUCTION LTD [2019] NZHC 2142 [29 August 2019]
Introduction
[1] This proceeding is for an order setting aside a statutory demand. It arises out of a contract for a large development involving the construction of Nexus Apartments at Vinegar Lane, Ponsonby, Auckland. The principal, Cromi Investments Limited, and its contractor, CMP Construction Ltd, have been engaged in a prolonged debate over remedial works – invariably required towards end of such a development – and the release of the second and final tranche of retention monies of $155,274.61 plus GST held by the principal under the contract. According to Cromi, CMP simply failed to attend to all the notified defects and the cost to remedy the outstanding defects is (arguably) more than the amount of the retention monies. CMP disputes Cromi’s account.
[2] The contract commenced on 15 May 2015. It incorporates the Standard Terms contained in the NZS 3915:2005 General Conditions of Contract for Building and Civil Engineers Construction, as amended by the Special Conditions of Contract. It is statutorily governed by the Construction Contracts Act 2002 (the Act).
[3] Under cl 12.3 of the contract CMP is entitled to recover the second tranche of retention monies upon completion of the remedial works and the issue of a Defects Liability Certificate. But on 1 February 2018, before CMP reached the point of issuing a Defects Liability Certificate, Cromi issued written notice under cl 11.2.3 of its intention to engage others to complete the remedial work on the basis that all the remedial work had not been completed within a reasonable time (within and after the expiry of the Period of Defects Liability). A Defects Liability Certificate was never issued. Instead, a series of communications took place between the parties over the following months. Notably:
(a)On 3 July 2018, CMP, having supposedly fulfilled its obligations for remedial work, served a document called a Final Payment Claim for the retention money of $155,274.61 plus GST (Payment Claim 33). CMP contends this was a valid Payment Claim under the Act and that Cromi failed to provide a Payment Schedule in response within the time
allowed under the Act. It also says that Payment Claim 33 was its Final Payment Claim under cl 12.4.1 of the contract and that Cromi failed to provide a Payment Schedule under cl 12.5 of the contract.
(b)On 9 July 2018, Cromi, re-presented a document entitled “Proposed Final Account Certificate” – first presented at a meeting of the parties’ principals on 27 June 2018 – for the claimed value of the incomplete remedial work of $207,961.71 plus GST. The amount certified exceeds CMP’s claimed retentions by a sizeable margin of $52,688.10 plus GST. Cromi contends the Proposed Final Account Certificate was its final Payment Schedule under cl 12.5.3(b), and that no response was received within the allowable 15 working days in cl 12.5.3.
[4] Against this backdrop, CMP served Cromi with a statutory demand under s 289 of the Companies Act 1993 for $184,631.60, being the amount of the unpaid retention money deliverable on completion of the contract inclusive of GST plus costs, claiming it as a debt due under the Construction Contracts Act.
[5] Cromi has applied to set aside the statutory demand under s 290 of the Companies Act. The application is opposed.
[6] I am satisfied the application should be granted, principally on the grounds that the Payment Claim is not a valid Payment Claim under the provisions of the Act and there is a substantial dispute about whether the remedial works have been completed.
The parties’ positions
[7]The dispute has the hallmarks of many a building dispute.
[8] The parties agree that in terms of the contract, Practical Completion occurred on 26 June 2017; and with that, the Period of Defects Liability commenced. But there their agreement ends.
[9] The dispute appears to have begun in earnest in late November 2017 when Cromi indicated it required all defects listed in its defects list of 27 November 2017 to
be completed by 8 December 2017. It issued a final list on Christmas Day, the eve of the day it claims the Period of Defects Liability expired. The list shows that most of the items on the earlier list were “closed off” but a number that are significant in value remained as “un-remedied”. There were also some additions, which new owners of units within the development had apparently drawn to Cromi’s attention.
[10] CMP accepts that there were some outstanding items that it had to deal with; one being the “GL leaking wall and drain”. But it contends it had already been agreed that it could do this work when the weather became dry, and it assumed it was reasonable to complete the remaining legitimate items (all in its assessment minor) at the same time. It says, in effect, that other items had been deleted by agreement or were not its responsibility under the contract; and that yet others had in fact been fixed. It also relies on an overarching argument that the Period of Defects Liability did not end until 26 June 2018 and that it was contractually entitled to a reasonable amount of time after the expiry of the Period of Defects Liability to complete the remedial work.
[11] Cromi accepts it agreed to allow time for the wall and drain repair but claims that CMP dragged out the time beyond what was reasonable; and that there was no agreement to delay other work. It says the required repair work simply did not happen. In sum, it firmly rejects CMP’s other contentions.
[12] CMP seeks to cut through the arguments (hoping to secure payment and to avoid what Cromi says is the inescapable reality of the parties’ dispute) by relying on what it says was a proper Payment Claim under the Act, unchallenged in the necessary way by a Payment Schedule. It submits the claim must therefore be treated as a debt due under the strict “pay now and argue later” regime laid out in the Act. It also submits that if it is wrong about that (which it does not concede) there can be no substantial and genuine dispute that might provide Cromi with grounds for having the statutory demand set aside under s 290 of the Companies Act. It contends Cromi has inflated the magnitude of the dispute with demands relating to spurious “defects” and complaints and that if there is a dispute it is for a significantly lesser amount than the total retention monies.
[13] Cromi has the onus. It seeks to deflate CMP’s arguments on a broadly two-fold basis:
(a)First, that it is not caught by the “sudden death” regime under the Act. CMP’s Payment claim is invalid as it does not satisfy mandatory technical requirements laid out in s 20 of the Act. But if that is wrong in fact it did issue a Payment Schedule within the statutory time frame;
(b)Secondly, that it has a genuinely arguable case that CMP simply failed to attend to all the notified genuine defects within a reasonable time of receiving notice, either within the Period of Defects Liability or a reasonable time after the Period expired; and that there is a genuine dispute about the entire amount claimed by CMP in its statutory demand. Further, that having validly terminated CMP’s right to complete the work, it was entitled to offset the assessed cost of the uncompleted remedial work under cl 11.2.3 of the contract; and it issued a valid Proposed Final Payment Certificate under the contract which CMP failed to challenge. Lastly, and for good measure, it says CMP’s “purported” Final Payment Claim was not issued within two months of the expiry of the Period of Defects Liability and was therefore out of time under cl 12.4.1 of the contract.
The legal framework
[14] Under s 290 of the Companies Act the Court may grant an application to set aside a statutory demand if it is satisfied that:1
(a)there is a substantial dispute as to whether or not the debt is owing or due; or
(b)the company appears to have a counterclaim, set-off, or cross-demand and the amount specified in the demand less the amount of the
1 Companies Act 1993, s 290(4) (reprint as at 1 May 2015). This was the Act as it applied at the time of the contract being formed.
counterclaim, set-off, or cross-demand is less than the prescribed amount; or
(c)the demand ought to be set aside on other grounds.
[15] The applicant “must show that it has a fairly arguable basis upon which it is not liable for the amount claimed”.2 This calls for the Court to determine the existence of such a genuine and substantial dispute, but not to resolve it.3
[16] It is quite palpable, at first blush, that it is arguable that at least some of the required remedial work was neglected by CMP and that there is a genuine and substantial dispute between the parties in relation to it. CMP’s own evidence indicates that it was obliged to remedy the wall and the drain, but that it took a “long view” of what a reasonable time would be to complete that work. Its evidence also suggests that it took the same view in relation to other remedial work it was responsible for; but it suggests that the other work was so minor as to be of no real consequence. Cromi disagrees with CMP’s assessment.
[17] However, in a construction context the s 290 test first must first be viewed through the lens of the payment regime established by the Construction Contracts Act. Part 2 of the Act provides a regime to facilitate regular and timely payments between the parties to a construction contract. Sections 19–24 outline a procedure for the payee to recover payment: the payee makes a Payment Claim and the payer must respond by means of a Payment Schedule within the prescribed time.4
[18] The Act establishes a draconian regime if its payment procedures are not complied with. If the payer does not pay the claimed amount before the due date or else provide a Payment Schedule within the specified time, the payee may recover from the payer, as a debt due, any unpaid portion and the costs of recovery.5 In short, the payer must simply ‘pay up’, and pursue the dispute later.
2 Forge Holding Ltd v Kearney Finance (NZ) Ltd HC Christchurch M149/95, 20 June 1995.
3 Industrial Group Ltd v Jan Dirk Bakker [2011] NZCA 142 at [24].
4 CJ Parker Construction Ltd (in liq) v Ketan [2017] NZCA at [1].
5 At [2], [16].
[19] CMP contends it presented a valid Payment Claim and Cromi has failed to provide a valid Payment Schedule in response. If this is the case it will mean “sudden death” for Cromi’s case and CMP will be automatically entitled to recover the claimed debt. No dispute, however tenable or substantial can stand in the way of its entitlement to be paid.
[20] If, on the other hand, Cromi crosses these hurdles and its right to argue does not suffer a sudden death, CMP contends that Cromi’s challenge falls foul of the test in s 290 of the Companies Act for a successful challenge to a statutory demand. This is because CMP says no amount is legitimately claimed by Cromi under cl 11.2.3 of the contract for incomplete remedial work. But if any amount were found to be the subject of a legitimate claim, it would nonetheless be significantly smaller than the amount claimed in the statutory demand.
[21] I will first address the validity of CMP’s Payment Claim for the purposes of the Act, before considering whether there is a substantial dispute for the purposes of s 290 of the Companies Act.
Was the Payment Claim invalid for the purposes of the Act?
[22] Ordinarily a court is not entitled to interrogate the merits of a Payment Claim that has crystallised as an enforceable debt under the Act. If the payee has provided a Payment Claim and a payer does not respond by providing a Payment Schedule in time, the Court will not (and cannot) interfere by reason of a dispute over the amounts claimed. But, as I have noted, Cromi’s challenge to the validity of Payment Claim 33 relates to the mandatory technical requirements of the notice as laid out in s 20 of the Act. These requirements are mandatory and cumulative, and non-compliance will invalidate an otherwise compliant payment claim.
[23]Section 20 sets out the formal requirements for payment claims:6
20 Payment claims
(1)A payee may serve a payment claim on the payer for each progress payment,—
6 Reproduced here as it applied on 5 May 2015, when the parties formed their contract.
(a)if the contract provides for the matter, at the end of the relevant period that is specified in, or is determined in accordance with the terms of, the contract; or
(b)if the contract does not provide for the matter, at the end of the relevant period referred to in section 17(2).
A payment claim must—
(a)be in writing; and
(b)contain sufficient details to identify the construction contract to which the progress payment relates; and
(c)identify the construction work and the relevant period to which the progress payment relates; and
(d)indicate a claimed amount and the due date for payment; and
(e)indicate the manner in which the payee calculated the claimed amount; and
(f)state that it is made under this Act.
[24] Cromi says Payment Claim 33 failed to specify a due date for payment as mandated by s 20(2)(d) of the Act. As such, it was only ever a purported Payment Claim. Further, Cromi says it was provided hopelessly outside of the time limit fixed in the contract for making a final claim for retentions and also falls foul of s 20(1)(a).
[25] I am satisfied that Payment Claim 33 does not satisfy the technical requirements for a Payment Claim laid out in s 20(2)(d). The provision clearly requires a claim must indicate a claimed amount as well as the due date for payment.
[26]Payment Claim 33 is a document comprised of two pages:
(a)On its first page it is entitled “PAYMENT CLAIM – This is a Payment Claim made under the Construction Contracts Act”. It is dated 30 June 2018. It states it is “for the period 1 July 2017 to 31 June 2018”; and it is numbered “33 – Final”. The first page does not itself state or otherwise indicate a due date for payment.
(b)Overleaf is attached (as part of the payment claim) a copy of Cromi’s Proposed Final Account Certificate which contains (as part of the
original printed text of the certificate) the note “certified payment is due as per contract terms”. There are also CMP’s handwritten amendments showing how the claimed final sum was calculated.
[27] CMP appears to recognise that nowhere in the two-page document is there stated a date by which payment is due. But it argues that the printed text “certified payment is due as per contract terms” is sufficient to indicate a due date.
[28] It points to Winslow Properties Ltd v Wooding Construction Ltd.7 In that case a payment claim was held to consist of both a letter marked as a claim under the Act and various attached documents. While no specific date was provided, the letter clarified a process for determining one:8
In accordance with the terms and conditions of our contract and the provisions of the Construction Contracts Act 2002 we anticipate the issue of your corresponding Payment Schedule within 10 Working Days of receipt of this payment claim. Payment becomes due within seven Working Days of the date of the Payment Schedule.
[29] The Court accepted that because a specific due date would depend upon the date of the Payment Schedule being served it was not possible to name a specific due date. Instead, the due date was ascertainable from the text of the letter. This was sufficient to qualify as an indication of the due date for the Act’s purposes.9
[30] CMP submits that Payment Claim 33 should be treated similarly. It submits that the attached and hand-annotated copy of the Proposed Final Account Certificate should be read as the second page of the Payment Claim. On that page, the printed text “due as per contract terms” should be understood as directing Cromi to the timeframes provided within the contract. By that method, CMP argues Payment Claim 33 provides a process for determining the due date.
[31]CMP submits this differentiates its claim from one deemed invalid in
Loveridge Ltd v Watts & Hughes Construction Ltd, which Cromi relies on in its
7 Winslow Properties Ltd v Wooding Construction Ltd [2007] DCR 408 (HC).
8 At [6].
9 At [30].
submissions.10 There the Court observed it was not to take an overly technical interpretation of the Act’s provisions where non-compliance is alleged, and that it will generally look to whether compliance has occurred in substance.11 However, the Judge went on to say “the requirement that the notice of claim must indicate ‘the due date for payment’ could hardly be more obvious, and there can be little argument that the wording of the legislation is mandatory”.
[32] There is no doubt that if the requirements of s 20(2)(d) are strictly applied Payment Claim 33 is non-compliant. It gives no clue as to the relevant due date for payment. Nor does it identify a specific formula for identifying the due date for payment. The situation is further obscured by the fact that CMP acknowledges that there is a wider dispute about the procedure to be followed by the parties under the contract in relation to the claimed outstanding defects, and whether the principal has in fact engaged others to remedy them in place of itself.
[33] CMP is correct that the Act does not require a rigid approach to compliance with all the requirements in s 20 and it will not allow its payment regime to be derailed by trifling irregularities.12 Moreover, the use of the word “indicate” in s 20(2)(d) makes plain that some flexibility is allowed. CMP notes in its submissions that s 20(2)(d) of the Act has subsequently been amended to require the claim “state” the due date for payment rather than merely “indicate” it – suggesting that the requirement as it applies here is comparatively lax. But there must be a clear indication of the “route” for determining unambiguously what the due date is. Otherwise the defects in the claim will unfairly prejudice the payer.
[34] Tellingly, in its evidence and submissions, CMP did not disclose, by reference to any discussion relating to the provisions of the contract, what in fact it had identified as the due date for payment. Unlike Winslow it did not reproduce a contractual formula for determining a due date in the body of the claim. There is simply an overarching reference to the “terms of the contract”, which was not given a place of prominence in Mr Crowley’s email or the first page of the claim.
10 Loveridge Ltd v Watts & Hughes Construction Ltd HC Tauranga CIV-2011-470-275, 29 September 11.
11 At [17].
12 Herbert Construction Co Ltd v Reinforcing Steel & Mesh Ltd [2013] NZHC 376.
[35] Instead the purported indication is present on an attached document, initially provided by Cromi itself, which has been hand-annotated with CMP’s own calculations. The annotations served to outline the reasons why CMP rejected the proposals contained in the Proposed Final Account. It seems nominally possible to read the hand-annotations on the document as disputing the specific figures and their tabulation, but otherwise accepting the framework it presented, but I am not convinced a recipient could reasonably be expected to identify the reference to contractual terms as part of CMP’s own message, nor take it as indication of the claimed payment’s due date.
[36] As such, I find that Payment Claim 33 fails to satisfy the requirement in s 20(2)(d) of indicating a due date for the payment claimed. As all the requirements are mandatory and cumulative, Payment Claim 33 cannot be a valid Payment Claim for the Act’s purposes and does not trigger corresponding obligations on Cromi.
Time bar and Payment Schedule
[37] Given the finding made on the first ground for challenging the validity of the Payment Claim, it is unnecessary to deal with the further ground of claimed invalidity based on a contractual time limit for the Final Payment Claim.
[38] Having disposed of the Act’s sudden death regime, I turn to the question of whether there is a substantial dispute sufficient to justify setting aside the statutory demand under s 290 of the Companies Act 1993.
Should Payment Claim 33 be set aside under s 290 of the Companies Act?
[39] Under s 290 of the Companies Act 1993 the Court may grant an application to set aside a statutory demand if it is satisfied that:13
(a)there is a substantial dispute as to whether or not the debt is owing or due; or
13 S 290(4) Companies Act 1993 (reprint as at 1 May 2015).
(b)the company appears to have a counterclaim, set-off, or cross-demand and the amount specified in the demand less the amount of the counterclaim, set-off, or cross-demand is less than the prescribed amount; or
(c)the demand ought to be set aside on other grounds.
[40] Whether or not there is a substantial dispute sufficient to set aside CMP’s demand turns on whether Cromi has established that it has a genuinely arguable case for the cost of incomplete remedial works that exceed the amount claimed in the demand.
[41] Plainly, a good deal of the required remedial work had in fact been carried out by CMP when Cromi issued its final defects list on Christmas Day in 2017. There is no dispute that the list also included some new items along with those that Cromi says remained outstanding. CMP understandably complains about the notification occurring on Christmas Day, and the fact that Cromi took the opportunity to add new items.
[42] Cromi’s response is simple and matter of fact. The timing was simply because the Period of Defects Liability was about to expire and there remained significant items on the defects list that CMP had continued to ignore despite being earlier notified. Most notably outstanding (in value terms) were the lack of negative details to the wall/ceiling interfaces and door jambs, and a failure to allow for a Level 5 plaster finish in the apartments. There was also a failure to rectify the “GL 9 leaking wall and drain”. Then there are various other items including incorrect handles; some electrical issues; and more. The new items simply reflected the fact of newly discovered defects reported by the purchasers of recently occupied units.
[43] CMP disagrees with Cromi’s account. On its view the Period of Defects Liability had another 6 months to run and did not expire until 26 June 2018.14 CMP’s
14 This disagreement has to do with cl 11.1.1, which ambiguously states that “the Period of Defects Liability shall be “in respect of the Contract Works Twelve (26) Weeks”. On CMP’s reading this is correctly understood by reference to the surrounding provisions to actually mean the period shall be 12 months. On Cromi’s reading the period is to be 26 weeks.
representative, Mr Moore, says the complaint about the supposedly Level 5 finish – which accounts for approximately $80,000 of the outstanding remedial work – was unjustified (both sides refer in support to having had the quality of the finish independently assessed); and he says it was agreed that the negative details which account for a further approximately $60,000 would be omitted. Cromi disputes this, pointing out that the written instruction that CMP relies upon refer only to the exterior deck soffit. Cromi also challenges Mr Moore’s further contention that the two companies agreed to allow an indefinite time for CMP to repair the leaking wall and the drain. Cromi says CMP had ample time to do the repair and that it was no answer for Mr Moore to say a temporary repair had been done. Nor, it says, was it any answer for Mr Moore to say that he planned to do the other repairs when doing the wall. I note that on the Defects List updated on 27 November 2017 Cromi gave notice that it required the rest of the work on the earlier list to be done by 8 December.
[44] The debate does not end there: CMP says some purported defects could not be remedied because they were mistakes made by other contractors engaged by Cromi; others had been done in fact or were the result of Cromi’s giving details too late to incorporate them; and yet others were completed by Cromi after Practical Completion so were no longer CMP’s responsibility to rectify. Cromi takes a very different view.
[45] Because of these differences between itself and CMP, on 1 February 2018 Cromi gave notice under cl 11.2.3 of the Contract, which states:
If the Contractor fails to complete the remedial works within a reasonable time the Principal shall be entitled, after giving the Contractor notice, to employ others to carry out such remedial work. The Principal shall be entitled to recover the Cost of such work from the Contractor.
[46] Cromi complained that CMP had failed to complete its Period of Defects Liability obligations by failing to remedy the remaining defects within the required period. It advised that it would be engaging others to finish off the work.
[47] There is no dispute that CMP was effectively shut out of the site from that point. CMP contends this was a cynical act, pointing to an internal Cromi email sent in preparation for a 27 June 2018 meeting which refers to two (minor) items on the Proposed Final Account Certificate as “additional leverage”. By CMP’s account,
Cromi’s approach to the dispute was wholly unreasonable. CMP points out that cl
11.2.3 allowed it a “reasonable time” to do the work, which it claims it was denied. It claims that in relation to the wall and the drain, the agreement was the work could be deferred until after the holiday period.
[48] I accept that there are unanswered questions about the overall genuineness of Cromi’s position. But it is not possible in the context of this proceeding, and on the limited material before the Court, to safely determine what remedial work is legitimately in dispute and what (if any of that work) is not. The dispute over the remedial work relates to almost 20 items, most of which require a technical and potentially expert assessment as to whether or not they were adequately completed. I am satisfied that the value of the genuinely disputed items exceeds that claimed in the statutory demand. The statutory demand procedure does not provide a convenient means of dealing with most, if not all the disputed items on Cromi’s Proposed Final Account Certificate. It is sufficient to say that I am satisfied that Cromi’s position is arguable. What emerges from the evidence is the kind of dispute that ordinarily would be dealt with by the parties pursuant to the disputes procedure under the contract by submission to an agreement expert in the first instance.
[49] I am not required to address counterclaims or the time-bar issue. However, for completeness’ sake I will note that there is an argument about Cromi’s intentions and whether it genuinely intends to undertake the remedial work it claims is required. That is not a complete answer to Cromi’s case. If work contracted for is not done, Cromi is still in principle entitled to recover the cost of that work. There is also an argument about whether Cromi is entitled to recover for the cost of technical consultants advising on the merits of its claims for items of remedial work such as the Level 5 finish. Arguably it is entitled to recover that cost.
[50] I am satisfied that there is a substantial dispute as to the debt sufficient to set the statutory demand aside under s 290.
The disputes procedure under the contract
[51] Much of the disagreement in this case appears to stem from the parties’ different readings of the contractual provisions regarding the deadlines and time
allocated for various steps and the disputes procedure they are to follow. I note that, on Cromi’s reading of the contract, there is a risk that by setting aside CMP’s statutory demand I risk leaving CMP unable to recover due to a time-bar.
[52] However, in my view the parties’ dispute is a genuine one that should appropriately be returned to the disputes resolution procedure set out in part 13 of the contract.
[53] Section 13 of the contract governs disputes between the parties. Clause 13.1.1 states that “No instruction, decision, valuation, or certificate of the Principal shall be questioned or challenged more than three months after it has been given”. Clause
13.1.2 lists certain exceptions which are not subject to the processes in section 13.
[54] In my view, the decision being challenged was Cromi’s notification of CMP on February 1 that it intended to engage another contractor to complete the outstanding remedial works under cl 11.2.3, which allowed it to employ others if the contractor failed to complete remedial works within “a reasonable time”. The email in evidence from Andrew Moore to Luka Obradovic dated 27 March 2018 makes clear that CMP disputed the validity of the steps taken by Cromi, particularly whether it had run out of time to remedy the defects. That email constitutes a challenge and came within three months of the initial notification. As such, it is within section 13’s time limit.
[55] The relevant exceptions to the section 13 process are set out in cl 12.4 and 12.6. Clause 12.4 deals with the Final Payment Claim and cl 12.6 with the effect of the Final Payment Schedule. I do not consider either section works to exclude the present dispute from the procedures under section 13.
[56] First, I consider Payment Claim 33 was no more a valid Payment Claim under the contract itself than under the statutory requirements of the Act. Clause 12.4.1 sets out requirements for the Contractor’s Final Payment Claim. In common with s 20 of the Act, cl 12.4.1(d) requires that the claim shall “indicate the due date for payment which shall be the date of any entitlement of the Contractor to payment under 12.2.5 or 12.3.2”. Payment Claim 33 did not indicate a due date. What was due, and when, is in dispute. Cromi cannot have it both ways, by arguing Payment Claim 33 was
invalid for statutory demand purposes but sufficiently valid to have closed out the contractual process of disputes resolution.
[57] Similarly, I am not satisfied that the purported Final Payment Schedule was actually a Final Payment Schedule for the purposes of the contract. It was in response to a Payment Claim Cromi purportedly regards as invalid. It was headed as a Proposed Final Account Certificate. Despite Cromi’s attempts to frame this as a Payment Schedule, there is a meaningful difference between the two types of document.
[58] The relevance of these observations is that, in my view, the dispute resolution process is still open to the parties to use under section 13 of their contract. In my view that is the appropriate forum for resolving the outstanding disputes as to payment at present.
Order
[59]The application is granted. The statutory demand is set aside.
Costs
[60] As costs follow the event, Cromi is likely entitled to 2B costs plus disbursements as fixed by the Registrar. But I expressly do not determine the matter, as both sides submit that they would like the opportunity to make submissions. If they cannot agree as to costs, Cromi is to provide its memorandum within ten working days, and CMP within five working days.
Associate Judge Sargisson
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