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[2013] NSWSC 1676
Supreme Court of NSW
2013-11-07
Stevenson J
Original judgment source is linked above.
Judgment 1These proceedings relate to a dispute under the Building and Construction Industry Security of Payment Act 1999 ("the Act"). 2The plaintiff, Draybi One Pty Ltd, seeks a declaration that a determination made on 6 September 2013 ("the Determination") by the second defendant, Ms Renee Spencer, an adjudicator appointed under the Act ("the Adjudicator"), is void because it was made without jurisdiction. 3The Adjudicator determined that Draybi should pay to the first defendant, Norms Carpentry & Joinery Pty Ltd, $39,328. 4Draybi commenced these proceedings on 15 October 2013 and, on the same day, filed a notice of motion seeking summary judgment. 5That notice of motion was listed for hearing before me on 7 November 2013. 6The parties agreed that, rather than deal with the matter summarily, I should decide certain questions separately pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005. 7Those separate questions are as follows: (1)Whether, on the proper construction of the subject contract, a reference date after 31 August 2012 was determined under the contract (as provided in s 8(2)(a) of the Act). (2)If, on its proper construction, the subject contract made no express provision with respect to the matter of reference dates such that the provisions of s 8(2)(b) of the Act apply, whether pursuant to those provisions, there was a reference date after 31 August 2012. (3)Whether the first defendant was precluded under s 13(5) of the Act from serving its payment claim dated 23 July 2013.
Background 8In about June 2012, Draybi, as principal, engaged Norms, as contractor, to supply and install kitchens in a residential development in Castle Hill. 9On 10 August 2012, Draybi terminated its contract with Norms alleging that the work that Norms had performed was defective and not completed in a timely manner. 10Draybi claims that the last occasion on which Norms did work was 17 July 2012. Norms contends that the last occasion on which it did work was 6 August 2012. 11On 31 October 2012, Norms served a payment claim on Draybi pursuant to s 13 of the Act ("the First Payment Claim"). 12On 9 December 2012, an adjudicator under the Act made a determination in respect of the First Payment Claim ("the First Determination"). 13On 27 June 2013, Draybi commenced proceedings in this Court to set aside the First Determination. 14On 11 July 2013, the Court made orders, by consent, declaring the First Determination void. 15On 25 July 2013, Norms served on Draybi the payment claim that was the subject of the Determination ("the Second Payment Claim"). 16The Second Payment Claim is identical to the First Payment Claim. It claims the same amount, for the same work. Both claim payment for the work last done by Norms on the development.
The reference date issue 17Section 8(1) of the Act provides that "on and from each reference date" under a construction contract, a person who has undertaken to carry out construction work "is entitled to a progress payment". 18Section 8(2) of the Act is in the following terms: - "In this section, reference date, in relation to a construction contract, means: (a) a date determined by or in accordance with the terms of the contract as the date on which a claim for a progress payment may be made in relation to work carried out or undertaken to be carried out (or related goods and services supplied or undertaken to be supplied) under the contract, or (b) if the contract makes no express provision with respect to the matter - the last date of the named month in which the construction work was first carried out (or the related goods and services were first supplied) under the contract and the last day of each subsequent named month." (emphasis in original). 19Although s 8(2) states what "reference date" means "in this section", my opinion is that, on the proper construction of the Act, "reference date" has the same meaning wherever referred to in the Act: see Grid Projects NSW Pty Ltd v Proyalbi Organic Set Plaster Pty Ltd [2012] NSWSC 1571 at [15]. 20Section 8(2) contemplates two different circumstances. One is where a date can be determined "in accordance with the terms of the contract" as "the date on which a claim for a progress payment may be made in relation to work carried... under the contract". The other is where "the contract makes no express provision with respect to" the date on which such a payment claim can be made. 21Section 13(5) of the Act provides: - "A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract." 22The issue in this case is whether the Second Payment Claim was in respect of the same reference date as the First Payment Claim and was thus served contrary to s 13(5). 23It is common ground that, if it was, the Adjudication was made without jurisdiction and is void. 24So far as concerns s 8(2)(a) of the Act, I was not taken to any term in the contract between Draybi and Norms which determines "the date on which a claim for a progress payment may be made". 25Mr Kalyk, who appeared for Draybi, submitted that the relevant contract was comprised in Draybi's acceptance of Norms' quotation of 24 January 2012, which quotation contained the following provision: "PROGRESS PAYMENT Deposit 10% 1st progress payment is due when we begin work on the above 35% 2nd progress payment is due when job is delivered 40% Final payment is due on Practical Completion of above work 15%". 26Mr Kalyk submitted that it followed from this provision that the contractual date for payment was the date that work was completed; that is, either 17 July 2012 on Draybi's case, or 6 August 2012 on Norms' case. 27Mr Kalyk submitted that a reference date arose on whichever one of those dates that, in truth, Norms last performed work; and that no further reference date could thereafter arise for that same work. 28I do not accept the premise behind Mr Kalyk's submission. I do not see how the provision at [25] leads to the conclusion at [26]. 29Alternatively, Mr Kalyk submitted, if the contract did not specify a date by which the reference date could be determined (for the purpose of s 8(2)(a) of the Act), and if the matter fell to be determined under s 8 (2)(b) of the Act, the relevant reference date was "the last day of [the relevant] subsequent named month". 30It was common ground that the last possible "subsequent named month" was the last month in which work was done by Norms. Mr Salama, who appeared for Norms, accepted that there could be no further "subsequent named month[s]" after work ceased. 31It follows, as Mr Kalyk submitted, that, if the reference date is to be determined under s 8(2)(b) of the Act, it must be the "last day" of July 2012 (if, as Draybi contends, Norms finished work on 17 July 2012), or of August 2012 (if, as Norms contends, it finished work on 6 August 2012). 32Mr Kalyk submitted that, on this hypothesis, the reference date was either 31 July 2012 or 31 August 2012. And, again, that no further reference date could thereafter arise for that same work. 33I accept that submission. 34Mr Salama submitted that, once the First Determination was declared void on 11 July 2013, Norms "had no other option" than to serve a fresh payment claim. I do not find that submission helpful in resolving the question of how it could be that a second reference date could arise under the one contract, now ended, for exactly the same work. 35I asked Mr Salama to point to a provision in the Act that could lead to a second reference date arising. 36Mr Salama referred to s 13(4) of the Act, which is in the following terms: "A payment claim may be served only within: (a) the period determined by or in accordance with the terms of the construction contract, or (b) the period of 12 months after the construction work to which the claim relates was last carried out (or the related goods and services to which the claim relates were last supplied), whichever is the later." 37However, s 13(4) does no more than limit the time during which a payment claim may be served. It does not itself operate to create a reference date; let alone a second reference date for work specified in an earlier payment claim. 38Mr Salama also referred, with little elaboration, to the decision of the Queensland Court of Appeal in Spankie v James Trowse Constructions Pty Ltd [2010] QCA 355. However, I do not find that decision assists in the resolution of the issue before me. 39In that case, a payment claim was referred to adjudication, and the adjudication subsequently held void. The party making that payment claim then served another payment claim which "claimed only an unpaid amount that had been part of the larger amount claimed in [the earlier payment claim] for work done before that payment claim": Spankie v James Trowse Constructions Pty Ltd at [5] per Fraser JA (emphasis added). 40The second payment claim was for work done earlier than the first payment claim, and thus work in respect of which a different (and earlier) reference date would relate. 41That is not this case. Here, the Second Payment Claim is for exactly the same work as the First Payment Claim; and in respect of which the same reference date applies. 42In those circumstances, I answer the separate questions as follows: (1)No. (2)No. (3)Yes. 43I will hear submissions as to the future conduct of the case.
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: 14 November 2013
Draybi One Pty Ltd
Norms Carpentry & Joinery Pty Ltd
[2010] QCA 355