CPB Contractors Pty Ltd & Ors v MSS Projects

CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - ADJUDICATION OF PAYMENT CLAIMS - where the first respondent submitted a payment claim on 1 August 2024 - where the applicant submitted a response to the payment claim on 21 August, which it contends was a payment schedule - where the adjudicator determined the payment schedule had failed to comply with the requirements of s 69(c) of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) - whether the applicant's response was a payment schedule

Building Industry Fairness (Security of Payment) Act 2017 (Qld), s 69, s 75, s 76, s 77, s 78, s 79, s 82, s 88

Building and Construction Industry Payments Act 2004, s 18

Northbuild Constructions Pty Ltd v Central Interior Linings Pty Ltd [2011] QCA 22; [2012] 1 Qd R 525

Melaluca View Pty Ltd v Sutton Constructions Pty Ltd & Ors [2019] QSC 226

Kirk v Industrial Court (NSW) (2010) 239 CLR 531

Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190

Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 179

Ausipile Pty Ltd v Bothar Boring and Tunnelling (Australia) Pty Ltd [2021] QCA 223

Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd & Ors [2007] QSC 333

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

State Water Corporation and Civil Team Engineering Pty Ltd [2013] NSWSC 1879N

Acciona Agua Australia Pty Ltd & Monadelphous Engineering Pty Ltd [2020] QSC 133; [2020] 4 QR 410

Multiplex Constructions Pty Ltd v Luikens [2003] NSW SC 1140

Clarence Street Pty Ltd v Isis Projects Pty Ltd [2005] NSWCA 391; (2005) 64 NSWLR 448

Mr DJ Butler KC and Ms FJ Chen for the first respondent

• [1] The applicant is an unincorporated joint venture engaged in the construction of the certain underground sections of the Cross River Rail station at Roma Street in Brisbane.
• [2] On 25 May 2023 the joint venture entered into a written supply contract for steel in relation to the project with the first respondent, MSS Projects.
• [3] On 1 August 2024 MSS Projects submitted payment claim number 21 for works under the subcontract in the sum of $2,557,707.59 (inclusive of GST) (the payment claim). The payment claim comprised sums for original contract works (OCW) and Approved Variations. There is no dispute that the payment claim met the requirements of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act).
• [4] On 21 August 2024, the joint venture issued a response to the payment claim to MSS Projects which it contends was a payment schedule under the BIF Act. Pursuant to that response, the joint venture proposed to pay the sum of $227,925.58 (inclusive of GST). On 2 October 2024, MSS Projects lodged an adjudication application under s 79 of the BIF Act.
• [5] On 18 November 2024, the joint venture lodged an adjudication response pursuant to s 82 of the BIF Act.
• [6] On 17 December 2024, the adjudicator, who is the second respondent to the application (but against whom no relief is sought), provided the joint venture and MSS Projects with his adjudication decision (adjudication decision number 2658135) dated 17 December 2024.
• [7] On 16 January 2025 the adjudicator provided an amended adjudication decision and determined that $2,671,393.13 (including interest and fees) was payable.
• [8] The adjudicator determined that the payment schedule failed to comply with the requirements of s 69(c) of the BIF Act. The consequence being that by operation of s 77 of the BIF Act, the joint venture became liable to pay the full amount claimed under the payment claim.
• [9] The applicant has paid $2,744,070.20 to the first respondent on account of this adjudication decision in two payments, $2,682,554.91 on 14 January 2025 and $61,515.30 on 22 January 2025. The total amount, I presume includes additional interest, however it is not in dispute that the applicant paid these sums.

• [14] Part 3 of Chapter 3 of the BIF Act deals with how a payment claim is to be progressed. Section 75(1) provides:

(1) A person (the claimant) who is, or who claims to be, entitled to a progress payment may give a payment claim to the person (the respondent) who, under the relevant construction contract, is or may be liable to make the payment."

• [15] Section 76 prescribes the only manner in which a respondent to a payment claim may validly respond. It provides:

(1) If given a payment claim, a respondent must respond to the payment claim by giving the claimant a payment schedule within whichever of the following periods ends first -

(a) the period, if any, within which the respondent must give the payment schedule under the relevant construction contract;

(b) 15 business days after the payment claim is given to the respondent."

• [16] Section 76(2) provides that a respondent is not required to give the claimant a payment schedule if the amount claimed in the payment claim is paid in full.
• [17] Section 76(3) provides that if the respondent gives the claimant a payment schedule then the amount proposed in the payment schedule must be paid no later than the due date for the progress payment to which the payment schedule relates.
• [18] Pursuant to s 77(2), if the respondent does not give to the claimant a payment schedule as required under s 76, then the respondent is liable to pay the amount claimed under the payment claim on the due date for the progress payment.
• [19] The factual elements required to be present for a response to constitute a "payment schedule" are set out in s 69 of the BIF Act. That section provides:

A payment schedule, responding to a payment claim, is a written document that -

(a) identifies the payment claim to which it responds; and

(b) states the amount of the payment, if any, that the respondent proposes to make; and

(c) if the amount proposed to be paid is less than the amount stated in the payment claim - states why the amount proposed to be paid is less, including the respondent's reasons for withholding any payment; and

(d) includes the other information prescribed by regulation."

• [20] Pursuant to s 78(2), where a respondent who is given a payment claim does not pay the amount owed to the claimant in full on or before the due date for that progress payment, the claimant may apply for adjudication of the payment claim under Part 4 of the BIF Act.
• [21] That is what happened in the present case.
• [22] Section 82 provides for the provision by a respondent to an adjudicator of an adjudication response after an adjudicator has accepted their appointment pursuant to s 81.
• [23] Relevantly, s 82(2) is in these terms:

(2) However, the respondent must not give an adjudication response if the respondent failed to give the claimant a payment schedule as required under section 76."

• [24] Section 88 prescribes those matters than an adjudicator may decide. Relevantly it provides:

(2) In deciding an adjudication application, the adjudicator is to consider the following matters only -

(a) ... ;

(d) the payment schedule, if any, to which the application relates, together with all submissions, including relevant documents, that have been properly made by the respondent in support of the schedule;

(3) However, the adjudicator must not consider any of the following -

(a) an adjudication response, to which the adjudication application relates, that was not given to the adjudicator within the time required under section 83;

(b) a reason included in an adjudication response to the adjudication application, if the reason is prohibited from being included in the response under section 82.

• [25] As I have already observed, the existence of a valid payment schedule was essential to the creation of the jurisdiction of the adjudicator to proceed under the Act. This is because section 88(3)(b) has the effect of removing from an adjudicator's consideration, an adjudication response, if the respondent failed to give a payment schedule.
• [26] In Melaleuca View Pty Ltd v Sutton Constructions Pty Ltd & Ors [2019] QSC 226, Brown J said:

"[43] Section 88(2) of the Act provides that the adjudicator is to consider, amongst other things, the payment schedule and an adjudication response, unless it is prohibited from being taken into account by the operation of s.82. The determination of whether or not there is a payment schedule as provided for under the Act determines the scope of the adjudicator's jurisdiction, since its existence or absence determines what the adjudicator may have regard to when making a determination.

[44] The language of s 88, which prescribes the "only" matters the adjudicator is to consider in making a decision and excludes consideration of an adjudication response in the absence of a payment schedule having been given in accordance with s 76, supports the contention that the determination of whether or not a document constitutes a "payment schedule" is a jurisdictional fact. That fact is one that must be determined prior to considering the matters provided under s 88(2) of the Act and the making of any decision. While an adjudication can still proceed in the absence of a payment schedule, the scope of the decision-making process that is undertaken by the adjudicator is determined by the presence or absence of a payment schedule. The effect of a finding that no payment schedule has been provided is that the respondent is precluded from making any response in opposition to the claimant before an adjudication is made. Unlike the 2004 Act, there is not a further opportunity to provide a payment schedule after notice has been given of the claimant's intention to apply for adjudication of the payment claim. The language of s 88 and the legislative scheme whereby a party is precluded from having its adjudication response considered as part of the adjudication support the conclusion that the existence of a payment schedule is a jurisdictional fact. I find that the determination of whether the 19 February email constitutes a payment schedule is a jurisdictional fact. The Court may therefore determine whether the jurisdictional fact exists or not."

• [27] Further, the applicant in its written submission said:

"It is accepted that non-compliance with the requirements of s 69 would result in the Payment Schedule being invalid, with the consequence that none of the "reasons" for paying less than the claimed amount would be permitted to be relied upon in any subsequent adjudication (see s 82(2) and 88(4)).[2]

• [28] The BIF Act is part of a national legislation scheme, although the legislation is not entirely consistent. In Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 179; (2019) 100 NSW LR 133 at [44] and [45], Leeming JA considered the statutory regime under the NSW equivalent of the BIF Act. Relevantly Leeming JA said:

"[44] Thirdly, whether or not a compliant "payment schedule" has been provided in response to a payment claim falls to be determined in the context of the statutory provisions consequent upon doing so. Whether or not a document is a payment schedule must be something which is capable of ascertainment readily, and (at least ordinarily) without the assistance of a lawyer. The large majority of the cases which have arisen under this Act have not involved dispute as to whether a response was or was not a complaint payment schedule.

[45] Fourthly, and perhaps most importantly for present purposes, the payment schedule serves two important functions under the Act. The first is to inform the claimant as to the metes and bounds of its dispute with the respondent, so that it can make an informed choice as to whether to engage the expedited pro tem adjudication procedures under Div 2. The second is to articulate the respondent's case which will then be determined by the adjudicator. It will also enable adjudicators to assess whether to accept appointment as an adjudicator to a dispute. At the time an adjudication application is made, all that the claimant and the prospective adjudicator will know of the nature of the respondent's side of the case is what is contained in its payment schedule."

• [29] It is important to note the legislative intent manifest in the regime to which Leeming JA was referring. His Honour emphasised at [26] that "the provisions [of the Act] are characterised by strict fast-past time constraints, and a deal of informality. It is to be born steadily in mind that (enforceable albeit not conclusive) determinations for hundreds of thousands or millions of dollars result from the fast paced regime for non-curial adjudication."
• [30] In Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393 McDougall JA observed at [208] that the mandatory regime imposed by the NSW Act had been described as "rough and ready" and, even "draconian". A similar view was expressed by Morrison JA in Ausipile Pty Ltd v Bothar Boring and Tunnelling (Australia) Pty Ltd [2021] QCA 223; 9 QdR 2020 at [100]
• [31] In Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd & Ors [2007] QSC 333, Chesterman J said:

"[20] The Act emphasises speed and informality. Accordingly, one should not approach the question of whether a document satisfies the description of a payment schedule (or payment claim for that matter) from an unduly critical viewpoint. No particular form is required, one is concerned only with whether the content of the document in question satisfies the statutory description."

• [32] After discussing the response relevant to that case Chesterman J said:

"[27] If the applicant had no objection to paying those amounts the Act required it to say so in its payment schedule. The whole purpose of such a document is to identify what amounts are in dispute and why. The delivery of a payment claim and a payment schedule is meant to identify, at an early stage, the parameters of a dispute about payment for the quick and informal adjudication process for which the Act provides. If a builder wishes to take advantage of the Act to dispute the claim it must comply with its provisions and must, relevantly, take the trouble to respond to a payment claim in the manner required by the Act. The process is not difficult. The applicant was required to identify those parts of the claim which it objected to paying and to say what the grounds of its objection were."

• [33] Chesterman J was concerned with the predecessor legislation being the Building and Construction Industry Payments Act 2004 (BCIPA). The same legislative intent exists in the present legislation: Melaleuca at [55].
• [34] In Witron Australia Pty Ltd v Against Turnkey Innovative Engineering Pty Ltd [2023] NSWCA 305 at [17]- [21] Kurt JA, with whom Leeming and Payne JJA approved of the above passage from Minimax and said:

"[35] ... in general a failure to provide any reason or reason directed to a distinct and substantial component of a payment claim will constitute a failure sufficiently to indicate why the schedule amount is less than the amount claimed for the purposes or s.14(3) of the Act. Such an omission would fail to identify the parameters of the dispute, impeding the claimant being able to make an informed decision as to how to proceed and impeded in the adjudicator in being able to identify what reasons could be raised in the adjudication response."

• [35] A similar observation was made by Sackar J in State Water Corporation and Civil Team Engineering Pty Ltd [2013] NSWSC 1879 at [63].
• [36] In Acciona Agua Australia Pty Ltd & Monadelphous Engineering Pty Ltd [2020] QSC 133; [2020] 4 QR 410, at Bond J said:

"[21] ...The language of ss 82(2), 82(4) and 88(3)(b) of the Payment Act (namely "must not" and (prohibited)) represents a clear legislative intention to emphasise the criticality of respondents including in their payment schedules any reasons for withholding payment on which they might wish to rely in any subsequent adjudication. The significance of the statutory intention is only emphasised further when one appreciates that the Payment Act no longer includes any provision for a claimant's reply."

• [37] Bond J emphasised that these provisions represented an important change from the previous legislation. His Honour went on to note at [36(g)] that the evident policy behind the BIF Act was "to alter what had been the status quo under the BCIPA so as to ensure that a respondent includes in its payment schedule any reasons for withholding payment on which it might wish to rely in any subsequent adjudication, thereby permitting a claimant to engage in those submissions in its adjudication application and avoiding the possibility of encountering a surprising new reason in the adjudication response."
• [38] In this respect it is important to observe that section 18(2)(b) to the BICPA Act was in materially similar terms to s 69(b) of the BIF Act, however, that section does not correspond identically with the corresponding sections of the New South Wales and Victorian Acts. The reference to "must state" in the Queensland legislation is not replicated. Rather, the NSW and Victorian Acts require the respondent to a payment claim to "indicate the amount of the payment (if any) that the respondent proposed to make". In commenting on this particular provision, Palmer J in Multiplex Constructions Pty Ltd v Luikens [2003] NSW SC 1140[3] said:

[76] A payment claim and a payment schedule are, in many cases, given and received by parties who are experienced in the building industry and familiar with the particular building contract, the history of construction of the project and the broad issues which have produced the dispute as to the claimant's payment claim. A Payment claim and a payment schedule must be produced quickly; much that is contained therein in an abbreviated form which would be meaningless to the uninformed reader will be understood readily by the parties themselves. A payment claim and a payment schedule should not, therefore be required to be as precise and as particularised as a pleading in the Supreme Court. Nevertheless precision and particularity must be required to a degree reasonably sufficient to apprise the parties of the real issues in the dispute.

[77] A respondent to a payment claim cannot always content itself with cryptic or vague statements in its payment schedule as to its reasons for withholding payment on the assumption that the claimant will know what issue is sought to be raised. Sometimes the issue is so straightforward or has been so expansively agitated in prior correspondence that the briefest reference in the payment schedule will suffice to identify it clearly. More often than not, however, parties to a building dispute see the issues only from their own viewpoint: they may not be equally in possession of all of the facts and they may not equally appreciate the significance of what facts are known to them. This will be so especially where, for instance, the contract is for the construction of a dwelling house and the parties are the owner and a small builder. In such cases, the parties are liable to misunderstand the issues between them unless those issues emerge with sufficient clarity from the payment schedule read in conjunction with the payment claim.

[78] Section 14(3) of the Act, in requiring a respondent to 'indicate' its reasons for withholding payment, does not require that a payment schedule give full particulars of those reasons. The use of the word 'indicate rather than 'state', 'specify' or 'set out', conveys an impression that some want of precision and particularity is permissible as long as the essence of the reason' for withholding payment is made known sufficiently to enable the claimant to make a decision whether or not to pursue the claim and to understand the nature of the case it will have to meet in an adjudication_._"

• [39] In Melaluca, Brown J referred to this passage and noted the legislative difference between the Queensland and NSW legislation and at [48] observed that "the present Act uses the term "state" rather than "indicates", suggesting a greater level of detail then the reasons in required than under the New South Wales Legislation."

• [40] In its submissions to the adjudicator, MSS Steel contended that the payment schedule received by it from the applicant was invalid because it failed to comply with each of s 69(a), (b) or (c).
• [41] The adjudicator concluded that the payment schedule was invalid for noncompliance with s 69(c) only. In the present application, MSS Steel initially sought to advance a similar argument in its written submissions, but ultimately did not advance any argument in reliance on s 69(a) and (b) and only relied on s 69(c) to contend that the payment schedule was invalid. This meant that the only issue is whether payment schedule identified the payment claim to which it responded and whether it stated the amount of the payment that the joint venture proposed to make.
• [42] In particular, MSS Steel submitted that the joint venture failed in the payment schedule to state why the amount it proposed was to be paid is less, and failed to include its reasons for withholding any payment by reference to two particular items in the payment claim.
• [43] Despite the acceptance by MSS Steel that requirements of s69(a) and (b), even this aspect of the payment schedule delivered by the applicant was not without its difficulties. The first page contained a summary of the payment schedule and whilst it correctly referred to the relevant payment claim, being number 21, the total amount of the payment claim (excluding GST) was stated to be $2,792,912.09 excluding GST.[4]
• [44] Payment claim 21 was in fact issued by MSS Steel in the amount of $2,557,707.59 inclusive of GST.[5]
• [45] There is also an unfortunate though minor error in the schedule in that it identifies the date upon which the claim was received as being 2 July 2024. Although it is common ground that the payment claim was not issued until 1 August 2024.
• [46] Returning to the divergence between the two documents of the stated amount of the payment claim, the manner in which the total claimed by MSS Steel was calculated the payment claim is set out on page 2[6]. It is the sum of $637,087.00 on account of original contract works for the month, and $1,709,792.34 for the month on account of approved variations both amounts being exclusive of GST. The total of these amounts being $2,346,879.34. When a cash retention of $21,690.62 was applied that gave a pre-GST figure of $2,325,188.72 being $2,557,606.59 including GST.

• [50] Those amounts of $1,687,469.84 and $898,237.18 total $2,585,707.02 and appear in a separate table at the bottom of Schedule 2 to the payment schedule.
• [51] I return to this aspect of schedule 2 below, but for the sake of completeness I observe here that in the Detailed Summary in Schedule 2 of the payment schedule, the figure of $2,792,912.09 is included with the line entry "Total Revised Contract Sum Payable". It has been calculated by adding the total amounts in the "Claimed this Month" column appearing under the three separate table headings of "1.0 Original Contract Works" ($326,067.35), "2.0 Variations" ($1,835,356.14) and "3.0 Amounts Set Off" ($631,488.60) in that document.
• [52] Mr Butler KC who appeared with Ms Chen for MSS Steel, drew my attention to the fact that those figures did not bear any resemblance to those in the payment claim. That submission was made principally in furtherance of the submission which ultimately was not pursued based on s 69(b) of the BIF Act. However, for the purposes of MSS Steel's contention that the payment schedule did not comply with s 69(c) of the BIF Act, it is the case that there is more than a $400,000 differential (once GST was applied equally) between the amount the joint venture recorded the payment schedule as being the amount claimed by MSS steel, and the amount actually claimed in the payment claim. This disparity in the amounts between the payment claim and the payment schedule also included a difference of more than $300,000 between the amount the Joint Venture recorded MSS Steel claimed on account of original contract works and the amount actually stated as being claimed in the payment schedule.
• [53] As I have noted, the focus of the dispute between the parties was, in essence the manner in which two particular payment claims had been addressed (or on MSS Steel's case, not addressed) in the payment schedule; being item 3.16 (Roof purlins) and variation claims V-012 and V-014.
• [54] I will discuss each of these below, but before doing so it is worth bearing firmly in mind that all that s 69(c) of the BIF Act requires is that where the recipient to a payment claim proposes to pay less than the sum claimed, it state the reason or reasons with sufficient clarity to define the parameters of any dispute. There is no particular way in which a respondent must respond; the respondent need not provide a detailed spreadsheet in response to a payment claim, though where, as here a payment claim comprises a number of individual items, it may be the simplest way in which particular a reason can be given.

• [55] The first disputed claim is the claim for item 3.16 for contract works in the sum of $399,400.14. This claim was identified in this manner in the payment claim[9]:

Roof Purlins inclusive of all fixings and consumable - Supply

• [56] In Schedule 3 to the payment schedule[10], the joint venture's response to the claim for item 3.16 was expressed as follows (excluding irrelevant columns):

Roof Purlins inclusive of all fixings and consumables - supply

• [57] An additional column to the right of this table was included and headed "Comments". The corresponding comment was "Goods not supplied by Supplier. CBGU refer to teambinder reference #TSD-SC-SBGU-005012.00 and attached Direction number #TSD-SC-SBGU-005012.00. The same amount has been deducted under SO03."
• [58] MSS Steel points to a number of obvious inconsistencies between these two tables, being:

(a) the joint venture records the sum claimed as $0, not $399,400.14;

(b) the joint venture records the quantity and amount previously claimed as 97.54 tonnes and $438,442.89 whereas MSS Steel has an amount of 8.69 tonnes and an amount of $39,042.75.

• [59] Clearly, as was submitted by Mr Butler KC, it also was not the case that MSS Steel had already claimed the full contract works value for item 3.16.
• [60] Mr Butler KC, in oral submissions referred to the comment included in the payment schedule and posed this question: "The payment schedule proceeds on the footing that we've been paid in full $438,000. But now it's saying the goods haven't been supplied. Well, if the goods haven't been supplied, why have we been paid in full? It's a reason, but it's a nonsensical reason...".[11]
• [61] There is of course nothing in the BIF Act that requires a particular quality to be attached to reason given. Further, this rhetorical question posed belies the fact known by both parties that the goods had not been supplied because, as was recorded in direction TSD-SC-SBGU-005012.00 dated 15 May 2024 attached to the payment schedule[12], the joint venture had directed MSS Steel to "omit the Canopy Stramit (Girt, Bridging and Purlin) supply scope...".
• [62] The effect of this direction was, as Mr Ambrose KC submitted, that this part of the contract works had been removed from the scope of works or "descoped". Mr Ambrose KC submitted that the approach of the joint venture as revealed in the payment schedule was to not include it in its contract works calculation because it no longer was a part of the contract works by the time the payment claim was made.
• [63] Further, the comment by the joint venture that "[t]he same amount has been deducted under SO03" directed MSS Steel to "SO03" which the joint venture included in Schedule 3 to the payment schedule[13]. That particular page of Schedule 3 identified 18 separate items, each with the prefix or identifier of "SO". This was referred to by Mr Ambrose KC, without objection, as the "Set Off Register" and identifies by item and value, the individual amounts which the joint venture treats as being entitled to set off against monies payable. The total amount of these set off items is $898,237.18, being one of the amounts referred to in the payment schedule summary identified above at paragraph [48].
• [64] The line entry for SO03 (reproduced to take account of portrait rather than landscape display with the intention that it be read as one line, and with irrelevant columns excluded) said this:

Not supplied - Roof Purlins inclusive of all fixings and consumables - Supply (item 3.16)

CBGU refer to the attached document TSD-SC-SBGU-005012.00 and Teambinder reference

• [65] The joint venture also included separately[14] in the payment schedule, a summary table of "Monies Set-Off" which included for each item, the item number, the 'Specific Reason' and the amount. In relation to SO03, the 'Specific Reason' was stated as "Not supplied - Roof Purlins inclusive of all fixings and consumables - Supply (item 3.16)", and the stated amount was -$283,696.71.
• [66] As the table in the Set Off Register stated, that amount of $283,696.71 was calculated by subtracting from $438,442.89, being the total amount which, but for the descoping, would be payable on account of item 3.16, the sum of $154,746.18. The source of that figure was MSS Steel. It was included in page 6[15] of the payment claim as an "Approved Variation". The relevant line in the table (excluding irrelevant columns) was as follows:

Deducts Purlin Supply Cost to Complete from Item 3.16

• [67] The rate of "-$1,1776.36" was also expressed as a per tonne rate, but the actual source for that rate was not explained in the evidence beyond the description which distinguishes this rate as a "supply cost" rate rather than the rate applicable to roof purlins "inclusive of all fixings and consumables-supply".
• [68] Some further guidance in the payment claim is given on page 9[16] which contains a table as part of a series of attachments described as "Relevant to Variation". For "VD-001" the explanation given is "Item 3.16 above is claimed in full. 12.98 tonnes of purlins and bridging were delivered to CBGU's Hamilton on 09 May 2024. Variation VD-001 deducts the supply only cost of $154,746.18 for the purlins that will not be supplied (at CBGU D&C JV's direction) by the supplier as part of item 3.16."
• [69] As noted above, the direction TSD-SC-SBGU-005012.00 by which item 3.16 was "descoped" bears the date 15 May 2024. This entry by MSS Steel suggests that it had supplied some purlins and bridging on 09 May 2024 prior to the descoping of this item and that the value of what was yet to supplied was $154,746.18. It also states that MSS Steel otherwise claims for item 3.16 "in full".
• [70] By contrast, the joint venture in the Set Off Register applied this deducted sum to the full contract price value of the descoped item 3.16 to calculate the set off amount of - $283,696.71, and, reduce the amount it proposed to pay for that item to $0 as recorded in Schedule 3 of the payment schedule set out in paragraph [56] of these reasons.
• [71] Whether or not the joint venture is, as a matter of fact entitled, to avoid any liability to pay for item 3.16 is not to the point: Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex constructions Pty Ltd [2016] VSCA 247; (2016) 337 ALR 452 at [258]. What is necessary that the payment schedule state the reason or reasons why the respondent objects to making the payment claimed. Here, both parties knew that item 3.16 at had been the subject of direction TSD-SC-SBGU-005012.00 such that MSS Steel was no longer required to undertake that aspect of the contract. The joint venture expressly stated that it proposed to pay $0 in relation to this claim, and in so doing, referred to this direction and gave as the stated reason "Not supplied - Roof Purlins inclusive of all fixings and consumables - Supply (item 3.16)". Despite the fact that the joint venture did not directly respond to the claimed sum of $399,400.14 for item 3.16, in approaching this item in the manner that it did, the joint venture stated that it objected to pay the claimed sum and proposed to pay $0. By doing so, the joint venture sufficiently apprised MSS Steel of the basis of its objection to making such payment and adequately defined the parameters of the dispute with respect to his aspect of the payment claim. Accordingly, I am satisfied that its response to this aspect of the payment claim met the requirements of s 69(c) of the BIF Act.

• [72] Variation V-012 claimed the sum of $225,360 for "Trial Assembly & 3D Scan -Full Trusses". V-014 claimed the sum of $125,351.22 for "Architectural Cover Plates & Anti Climb Fins". Each of those claims were included in the "Approved Variation" table and appeared on page 7[17] of the payment claim. The relevant entry in the table (excluding irrelevant columns) was:

• [73] The joint venture responded to these variation claims in the table in the summary in Schedule 2 of the payment schedule. The joint venture's response (again excluding irrelevant columns), was:

Horizontal assembly and disassembly of 12 no trusses prior to Hot Dip Galvanising

Fabricate and paint 32 no. semi circular cover plates to the base of CHS610*32 columns

Fabricate and paint 40 no. 'U' shaped cover plates to the SHS 400*400*12.5 lower level wind beams

Fabricate and paint 2 no. x 100 mm anti-climb fins welded to the CHS355* 9.5 lower diagonal bracing

• [74] Whilst this response is obviously more detailed than the relevant claims to which it responds, the first observation that ought be made is that the figures appearing in the "Claimed this Month" and "Claimed Previously" columns corresponding with claims comprising V-012 and V-014 add up to the amounts in the "Total when Complete" and the "Now Paid" columns in the payment claim. It was therefore clear to MSS Steel that the joint venture was responding to the same variations.
• [75] It was also clear that what the joint venture proposed to pay in respect of the claims for the relevant variations was what was set out in the "Certified to Date" column.
• [76] Further, as explained about in relation to the claim for item 3.16, the figures in the "This Month Approved v Claimed" column form part of the amount of the $1,637,469.84 being "Monies Not Due as per Annexure 2" which, together with the "Monies Set off" total $2,585,707.02 being the "TOTAL MONIES WITHHELD/NOT DUE" amount at the bottom of Schedule 2.
• [77] When one turns to Annexure 2 "Monies Not Due" in the payment schedule[18], the joint venture had set out the following:

1. According to CBGU records just one truss was scanned, not the claimed 12

2. Please provide the third-party invoice to verify actual costs incurred by Supplier.

1. According to the CBGU records just one truss was scanned, not the claimed 122.

2. Please provide the third-party invoice to verify actual costs incurred by Supplier.

Please refer to the attached "VO14 Assessment" for Valuation of certified amount.

Please refer to the attached "VO14 Assessment" for Valuation of certified amount.

Please refer to the attached "VO14 Assessment" for Valuation of certified amount.

Please refer to the attached "VO14 Assessment" for Valuation of certified amount.

(a) with respect to V-012, the joint venture recorded its objection to the payment claims on the basis of the numbers of trusses MSS steel claimed were scanned and had calculated the total value of those trusses for which it is not liable as $208,560; and

(b) with respect to V-014, MSS Steel is directed to the V014 attachment.

• [79] As to V-012, the joint venture also attached[19] a more detailed explanation of its position with respect to this claim as follows (excluding unnecessary columns):

each full assembled truss is circa 50.350 metres long by 4.5 metres

There are 12 no. main canopy trusses each comprising 8 no. assembly's (96 no. total)

Horizontal assembly and disassembly of 12 no trusses prior to Hot Dip Galvanising

1. According to CBGU records just one truss was scanned, not the claimed 12

2. Please provide the third-party invoice to verify actual costs incurred by Supplier

1. According to CBGU records just one truss was scanned, not the claimed 122.

2. Please provide the third-party invoice to verify actual costs incurred by Supplier.

3. The scanning data provided by the Supplier was not usable or in the requested format; also the third-party QA team discovered the 3d scan operator's work is not trained or qualified to operate the scanning equipment; furthermore, CBGU D&C JV cannot use the data sheet provided, a third party certifier was requested to assist and supervise MSS's scanning; therefore the cost claimed is not an accurate representation of the value of the work performed.

• [80] It can be seen that the total amounts the joint venture assessed as payable by it, for the reasons it gave, correspond with the amounts in the "Certified this Month" in Schedule 2 to the payment schedule.
• [81] The attachment in relation to V-014 was similarly expressed with a similar level of detail.[20] Relevantly, in that attachment the joint venture said:

Fabricate and paint 32 no. semi-circular cover plates to the base of CHS610*32 columns

Pursuant to CI34.1 (c) (i) and (ii), assessed rate is selected according to table AH-1, item 5.2; tonnage rate is from ProjectWise model.

Fabricate and paint 36 no. semi-circular cover plates to the CHS355*9.5 bracing

Pursuant to CI34.1 (c) (i) and (ii), assessed rate is selected according to table AH-1, item 5.2; tonnage rate is from ProjectWise model.

Fabricate and paint 40 no. 'U' shaped cover plates to the SHS 400*400*12.5 lower level wind beams

Pursuant to CI34.1 (c) (i) and (ii), assessed rate is selected according to table AH-1, item 5.2; tonnage rate is from ProjectWise model.

Fabricate and paint 2 no. x 100 mm anti-climb fins welded to the CHS355*9.5 lower diagonal bracing

Pursuant to CI34.1 (c) (i) and (ii), assessed rate is selected according to table AH-1, item 5.2; tonnage rate is from ProjectWise model.

• [82] Again, the total amounts the joint venture assessed as payable by it in relation to the V-014 claims, for the reasons it gave, corresponded with the amounts in the "Certified this Month" in Schedule 2 to the payment schedule.
• [83] The joint venture therefore adequately explained how it had calculated its liability for the V-012 and V-014 claims, as well as its reasons for undertaking the calculation in the manner that it did. MSS Steel was also sufficiently able to appreciate the parameters of the dispute with respect to these claims.
• [84] I am therefore satisfied that the joint venture's response to this aspect of the payment claim met the requirements of s 69(c) of the BIF Act

• [85] For these reasons, I am satisfied that the response given by the joint venture to the payment claim in the payment schedule met the requirements of s 69(c) of the BIF Act.
• [86] I will make a declaration to that effect.
• [87] Given the agreed position of the parties as to how the balance of the application should be dealt with should I find that the payment schedule given by the joint venture in response to the payment claim complied with s 69(c) of the BIF Act, I will hear the parties as to the balance of the orders I should make and as to costs.

[1] Affidavit of David John Rodighiero filed 29 April 2025, paragraph 21, pp 945-946 DJR-1.

[2] Applicant's written submissions, [31].

[3] Cited with approval in Clarence Street Pty Ltd v Isis Projects Pty Ltd (2005) 64 NSWLR 448; 2005 NSWCA 391 at [31]; Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171; (2019) 100 NSWLR 133 at [46].

[4] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 191. The payment schedule itself is not separately paginated.

[5] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 168.

[6] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 169.

[7] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 192.

[8] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 192.

[9] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 173.

[10] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 193.

[12] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 223.

[13] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 195.

[14] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 205.

[15] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 176-178.

[16] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 181.

[17] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 178.

[18] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 204.

[19] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 221.

[20] Affidavit of David John Rodighiero filed 29 April 2025 DJR 1, p 222.