A & M Telecommunications Pty Ltd trading as SAWWA ACN 146873289 v WCED Pty Ltd

Background

1. The factual background to the matter is set out in the affidavit of Mr Ross Iannello dated 26 July 2024 and filed in the plaintiff's case, and the affidavit of Mr Naeem Hindaoui, a director of the defendant.
2. On 29 April 2024, Kabling Solutions wrote to the defendant submitting a fee proposal on behalf of the plaintiff for the Demolition Consultancy Services required for demolition at 111 Crown Street, Wollongong. The proposal included a scope of works at Attachment A and a schedule of rates at Attachment B.
3. On 7 May 2024, the defendant raised Purchase Order ENG2404-02. Both parties say that a contract came into existence on 7 May 2024 in which the plaintiff was engaged by the defendant to perform construction works and services between 6 May 2024 and 17 June 2024.
4. On 9 July 2024, the plaintiff prepared a payment claim for $139,309.50, inclusive of GST ('the payment claim'). The payment claim cited reference number SW_W2425 and gave a due date of 23 July 2024. Timesheets for Robert Brady from 6 May 2024 to 4 June 2024 and for Ondrej Krpalek from 6 May 2024 to 17 June 2024 were attached to the payment claim. The payment claim is a one page document with annexures, and the last line of the page, under the signature, says: This is a payment claim under the Building & Construction Industry Security of Payment Act 1999 (NSW).
5. The payment claim was served on the defendant on 10 July 2024.
6. On 17 July 2024, an email was sent from the defendant to Mr Abdul Ali, the signatory to the payment claim. A series of time sheets and invoices from the plaintiff were annexed to the email, and it is stated, in the email, that these have been sent to Mr Ali on a previous occasion. The time sheets and invoices have been marked in red to indicate the defendant's position as to what is due to the plaintiff. Some of the time sheets have an explanation for the deletion of an item, such as "we didn't request 2 persons to be on site, we required 1 supervisor only" (Saturday 26/6/24). Beside the figures on the invoices which have been deleted, the defendant's assertion as to what is payable, expressed numerically, has been added (see the annexure to the affidavit of Mr Hindaoui of 4 September 2024). The email says: Dear Abdul Hope this finds you well. We received an invoice from yourself by express post with a time sheet attach to it. Kindly find attached again all corrected invoices and time sheet. Should you have any enquiries please don't hesitate to contact me thank you. Kind Regards, Omar Hassan Estimating.
7. On 25 July 2024, the plaintiff issued a letter of demand to the defendant, seeking payment in full of the amount of the payment claim. No payment was forthcoming.

Summary Judgment

1. The Uniform Civil Procedure Rules 2005 ('the UCPR') give the Court power to give summary judgment in rule 13.1: 13.1 Summary judgment (1) If, on application by the plaintiff in relation to the plaintiff's claim for relief or any part of the plaintiff's claim for relief - (a) there is evidence of the facts on which the claim or part of the claim is based, and (b) there is evidence, given by the plaintiff or by some responsible person, that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part of the claim, or no defence except as to the amount of any damages claimed, the court may give such judgment for the plaintiff, or make such order on the claim or that part of the claim, as the case requires. (2) Without limiting subrule (1), the court may give judgment for the plaintiff for damages to be assessed. (3) In this rule, a reference to damages includes a reference to the value of goods.
2. It is well established that the test for the obtaining of summary judgment is that the plaintiff must show that the defendant's defence to the action is, in the words of Barwick J in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at [8]: …"so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense".
3. In Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at [27] the High Court said: …The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried: see Clarke v. Union Bank of Australia Ltd. [1917] HCA 19; (1917) 23 CLR 5 ; Jones v. Stone (1894) AC 122 ; Jacobs v. Booth's Distillery Co. (1901) 85 LT 262.

The Plaintiff's argument

1. The plaintiff stressed the strictness of the requirements of the Building and Construction Industry Security of Payment Act 1999 ('the Act'). The plaintiff argued, (to summarise it briefly), that the payment claim served by it upon the defendant on 10 July 2024 was compliant with the requirements of s 13 of the Act. Further, it was argued that the defendant had failed to provide a payments schedule to the plaintiff under s 14 of the Act, and had thus become liable to pay the claimed amount on the due date specified in the payment claim, and the claimed amount could therefore be recovered in this action by the plaintiff from the defendant as a debt under s 15(2) of the Act.
2. The plaintiff argued that the email sent by Mr Hassan to Mr Ali on 17 July 2024 could not be characterised as a payment schedule. Mr Bambagiotti acknowledged the flexibility given in the exercise of characterisation, and said that three characteristics are critical. Firstly, the email (in this matter) must identify the payment claim to which it relates (s 14(2)(a)). Secondly, the email must indicate what portion of the claim the defendant proposes to pay (s 14(2)(b)). Thirdly, in the event that the email indicates that the defendant proposes to pay less than the amount claimed, a reason or reasons must be given in the email as to why the defendant has formed that intention (s 14(3)). Mr Bambagiotti argued that each of the requirements must be present for the email to be a payment schedule. Compliance with s 14(3) would not be sufficient if the requirements of s 14(2)(a) and (b) of the Act had not been fulfilled.
3. As to the first requirement, the plaintiff argued that the email did not identify the payment claim to which it relates. There is reference in the email to receipt of the 10 July 2024 document, but there is no acknowledgement that the 10 July 2024 document is a payment claim under the Act.
4. As to the second requirement, the plaintiff argued that the email did not indicate the amount of the payment that the defendant proposed to make. It was argued that the amendments in red to the time sheets and the invoices were akin to a "formula" for working out what the defendant says is payable, and do not amount to an indication of what the defendant agrees to pay. It was properly conceded, however, that it was possible to calculate, from the red markings and figures, what the defendant proposed to pay. The plaintiff argued that, in the absence of a clear statement as to what the defendant proposed to pay, no "scheduled amount" emerged, as contemplated by s 14(2)(b) of the Act.
5. The plaintiff further argued that the defendant could not succeed in a defence of res judicata or issue estoppel based upon Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69 ('Dualcorp'), because the statements in the judgments in that matter on that topic are confined to payment claims which have been the subject of adjudication under the Act, and the payment claim in this matter has not been the subject of an adjudication or any judicial determination.
6. As to the possibility of a defence of misleading and deceptive conduct under the Australian Consumer Law, the plaintiff agreed that such a defence is not precluded by s 15(4)(b) of the Act. The plaintiff argued that such a defence would have to relate to misleading and deceptive conduct which goes to the effectiveness of the payment claim as a payment claim under the Act. The plaintiff relied upon the following statement by Macfarlan J in Dualcorp at [41]: 41. …The defence may thus be raised, as may one that service of a payment claim was not effective because it involved misleading or deceptive conduct (Bitannia Pty Ltd v Parkline Constructions Pty Ltd (2006) 67 NSWLR 9 especially at [96] per Basten JA).

The Defendant's argument

1. The defendant argued that summary judgment should not be given. The defendant argued that the Court could not find that there is no real question to be tried, or that the defence was untenable or manifestly groundless.
2. In its submissions, the defendant said: 28. The Defendant has, respectfully, met the relevant tests to resist the application for summary judgment because the above submissions and its evidence have proven or met: (a) The threshold to establish a reasonable cause of action is a low one, where it has been held that reasonable prospects of success means more than "Fanciful prospects" Spencer v Commonwealth (2010) 241 CLR 118; 84 ALJR 612; [2010] HCA 28 at 128 - 132, per French CJ and Gummow J. The Defendant's defences are reasonable causes of action. (b) The assessment of these tests are to be made by taking the case at its highest, in which there should be acceptance of the truth of the allegations in the pleading or the evidence, as an order can be made on the pleadings alone. Agius v New South Wales [2002] Aust Tort Reports 81-656: [2001] NSWCA 371 at 24; and (c) There is a clear public interest in allowing this case to be fully heard on its merits. If consumer protection is avoided, ignored or not considered then there can be no true balancing of rights and protections of the parties. Steve Karamihos v Aristea Karamihos v Bendigo and Adelaide Bank Limited, Bendigo and Adelaide Bank Limited v Stave Karamihos and Aristea Karamihos [2013] NSWSC 172, per Pembroke J at [37]-[42]. The Defendant raises valid arguments under the ACL and they should be entitled to be heard on those claims.
3. The defendant relied upon s 13(5) of the Act, which says: (5) Except as otherwise provided for in the construction contract, a claimant may only serve one payment claim in any particular named month for construction work carried out or undertaken to be carried out (or for related goods and services supplied or undertaken to be supplied) in that month.
4. The defendant argued that the invoices interspersed with time sheets at pp 24 - 56 of the affidavit of Mr Hindaoui overlap with the payment claim and, themselves, constitute payment claims and are therefore in breach of s 13(5) of the Act. It was pointed out that most of those invoices state on their face that they are payment claims under the Act. It was argued that the payment claim is therefore invalid.
5. It was further argued that no supporting statement was served with the payment claim on 10 July 2024. The defendant argued that, although this does not invalidate the payment claim, it invalidates service or renders service ineffective (see Kitchen Xchange v Formacon Building Services [2014] NSWSC 1602 at [36]-[46], [49]-[50]).
6. In the alternative, the defendant argued that, if the payment claim is valid, then a payment schedule has been served in response to it within the 10 day time limit provided for in s 14(4)(b)(ii) of the Act, being the email of 17 July 2024 together with its attachments. It was argued that the email complied with s 14(2) and (3) of the Act. It identified the payment claim to which it related by referring to having received "an invoice from yourself by express post with a time sheet attach to it". On the invoices attached to it, marked in red, were the amounts the defendant proposed to pay in response to the payment claim. Arriving at the total figure requires simple addition. A previous email of 8 July 2024 to Mr Ali set out the total. The reasons were clear by inference from the red markings on the time sheets and were made express in red writing on some of those time sheets. The plaintiff relied upon Witron Australia Pty Ltd v Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305 at [40], where Kirk JA, with whom Leeming JA and Payne JA agreed, rejected the argument that a payment schedule must "identify some particular numeric figure".
7. The defendant referred to its defence, filed on 17 October 2024, which sets out, in some detail, defences under s 18 and s 21 of the Australian Consumer Law.

Consideration

1. The question to be decided on this application is whether the plaintiff has shown that the defence is obviously untenable or manifestly groundless, or whether, to the contrary, it is apparent that there is a question to be tried.
2. I am satisfied, on the basis of the material before me, and having regard to the arguments on both sides summarised above, that the matters raised by the defendant are all arguable to, at least, the extent necessary to defeat the application for summary judgment. I need not assess the relative strengths of the different issues or make any findings in relation to them. All that is necessary is that it be apparent that they are not obviously untenable or manifestly groundless, and that threshold has been reached or exceeded in relation to each issue.

Orders

1. The following orders will issue: 1. The plaintiff's Notice of Motion filed on 26 July 2024 is dismissed. 2. This matter is to proceed by way of pleadings. 3. The plaintiff is to pay the defendant's costs of and incidental to the Notice of Motion within 14 days of the date of this order. 4. The matter is listed for directions before the Judicial Registrar on 21 February 2025.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 February 2025