ii) whether the court is satisfied that money is owed by Austin to DMG
30 By s 14(3) the court is not to make an attachment order unless it is satisfied "on the basis of the application" that the defendant to the proceedings for recovery of money (Austin) owes the claimant for an attachment order (DMG) money for work carried out or materials supplied, and that the work or materials are, or are part of or incidental to, work or materials for which the defendant is to be paid under a contract with the person against whom the order is sought (that is, in the present case, Energy Australia).
31 Austin's argument in this respect was that, on the evidence adduced, the most of which I could be satisfied is that DMG claims to be owed money by Austin, but that the evidence is insufficient to permit a conclusion that DMG is in fact owed such money.
32 The words "on the basis of the application" in sub-s (3) are significant. They convey that a conclusion that money is owed does not amount to a final determination of the dispute between the parties, but is, rather, a preliminary assessment based on the limited evidence that would ordinarily be adduced on an application for an attachment order.
33 Even so, substantial difficulties lie in the path of DMG (upon whom the onus of proof lies) in establishing that money is in fact owing by Austin to it. It is clear that there is a genuine dispute between the parties as to DMG's claim, and Austin's liabilities. This can, I think, be shortly outlined.
34 DMG's claim is, in substance, for payment for work carried out and materials supplied under the sub-contract. Austin's response to the claim is a denial of liability. It bases its denial on certain additional provisions of the sub-contract conditions.
35 Clause 35.6 provides that where a sub-contractor (in the position of DMG) fails to reach substantial completion by the due date, it will be liable to pay liquidated damages at a specified rate. Austin asserts that delays were caused by DMG in the course of the work, for which Austin is entitled to reimbursement under cl 35.6, and that it was entitled to make deductions from the amount claimed by DMG, or to set off its own claims against DMG's claims.
36 Mr McQueen, Austin's project manager, deposed that he had assessed DMG's claims of payment and had responded by itemising (as required by cl 42) the basis for Austin's counter claims.
37 Each party sought to have inferences adverse to the other drawn from certain facts and circumstances which emerged. For example, Austin urged (though with little conviction) that an inference adverse to DMG could be drawn from the fact that virtually all of the disputed amounts claimed by DMG were claimed in the closing stages of DMG's work, suggesting that the claims represented an attempt to squeeze every last dollar from Austin. I decline to draw any such inference. The circumstance that the matters in dispute related to accounts rendered in the final stages of the sub-contract is equally consistent with DMG drawing together the threads of its claim and presenting a final account. Moreover, the resistance of Austin to making the payments could equally give rise to an inference that, DMG having completed its part of the work, Austin had nothing to lose by challenging its final claims. I draw no inferences at all from the timing of the disputed claims.
38 DMG, in turn, urged that a different inference adverse to Austin be drawn. This was to do with the nature and quantification of Austin's claim against DMG. It comes about in this way. The stated value of the sub-contract, as initially agreed, was $366 million. Agreed and approved variations amounted to $483,000. Of these Austin had paid DMG $183,000, leaving an amount of $300,000 claimed and approved but unpaid. Coincidentally (or otherwise, according to DMG's argument) the amount claimed by way of set-off by Austin amounted almost precisely to $300,000, leaving (if Austin were to succeed in its claim for a set-off for delays) an even balance. DMG suggested that the claim ought to be seen as a sham designed to protect it against its otherwise admitted liability to DMG.
39 I do not think the evidence entitles me to draw this inference. Austin's claim for delays was comprehensively detailed in materials contained in six lever-arch folders (which, mercifully, the parties refrained from putting into evidence).
40 The upshot of all this is that the evidence establishes no more than that DMG has made a claim for payment on Austin; that Austin denies liability to pay the amount claimed; and that a genuine dispute exists (or genuine disputes exist) between the parties. Even bearing in mind the limited nature of the exercise contemplated by s 14(3)(a), I am unable to be satisfied that Austin does in fact owe money to DMG.
41 That conclusion makes it unnecessary to consider some further matters raised by Austin, which may, however, be briefly noted. Among these was that a substantial part of the amount claimed by DMG could be taken to be claimed in respect of wages paid to employees, but that s 7 of the Act places a (relatively low) cap on amounts that can be recovered for wages. I do not find it necessary to determine this argument, but merely note that there was no indication in the materials that identified what proportion of the amount claimed by DMG was referable to wages and certainly nothing to identify amounts that would encompass wages for a specified number of days.
iii) were the amounts claimed for "work carried out and materials supplied"?
42 Having regard to the conclusions I have reached in relation to the question of whether money is owed by Austin to DMG, it is unnecessary to take too much time considering this question. The argument put by Austin was that the vast bulk of the amounts claimed by DMG was for delay and prolongation, said to have been occasioned by directions given by Austin in circumstances which would entitle DMG to compensation pursuant to cl 33 of the sub-contract. Austin argued that claims for delay and prolongation could not reasonably fall within the expression "work carried out or materials supplied". The response made on behalf of DMG to this argument was short and to the point. It was that, to the extent that DMG's disputed claim can be identified as a claim for additional remuneration by reason of delays caused by Austin, it is nevertheless a claim for the extra cost of doing work and providing material by reason of the passing of time.
43 A claim for additional payment related specifically to delays does not fit easily into the phrase "for work carried out or materials supplied". On the other hand, there is no reason to think that the legislature intended to treat a claim for payment under a clause such as cl 33 differently from a claim which may be more precisely related to the contract sum. When one bears in mind the purpose of the legislation it is difficult to see why the two should be treated differently. There is a level of artificiality in the position adopted by Austin. The purpose of the legislation was to protect an unpaid person and to secure the rights of such a person by restraining the payment of other funds to the contractor.
44 In my opinion s 14(3) ought to be read as including money which may be payable to "the unpaid person" for delays and prolongation associated with the performance of the work contemplated by the sub-contract.
45 On behalf of Austin it was also argued that, by reason of s 14(3)(b), the amounts payable by Energy Australia to Austin were not sums which may be attached pursuant to s 14(1). This, it was put, was because s 14(3)(b) requires that the work or materials for which DMG claims to be paid were not work or materials for which Austin was to be paid under a contract with Energy Australia. I reject this argument, and for similar reasons as I rejected the earlier argument. This legislation was intended to encompass moneys payable under construction contracts and the legislature did not seek or intend to differentiate between different aspects of the contracts. Certainly, the works or materials for which DMG claims are incidental to work or materials for which Austin is to be paid under the contract with Energy Australia.
46 I am therefore satisfied that there is no reason, as a result of the construction of sub-s(3), by which DMG would be disentitled to an attachment order to which it was otherwise entitled.