Seventh issue : w ere progress claims 12 and 13 supported by evidence of the kind required under clause 42.1?
52 The relevant requirements of clause 42.1 are twofold. The payment claim is to be supported by:
(1) "Evidence of the amount due to" ISIS;
(2) "Such evidence as the Superintendent may reasonably require".
53 As to the first matter, each of the progress claims was supported by evidence. It was not suggested that that evidence could not bear upon "the amount due" ISIS. The issue was as to its sufficiency.
54 Mr Barker was of opinion that the payment claims did contain sufficient evidence; Mr Tucker was of opinion that they did not. Neither was cross-examined. I am not able to resolve the apparent conflict between them. Nor, on this particular issue, is the difference between them one that is necessarily capable of resolution by reference to the parties' positions in relation to the previous progress claims. That is because the evidence did not show what (if any) evidence of the amount due was furnished in support of those previous payment claims.
55 As to the second matter, the only evidence of the requirement for further information came from Mr Tucker. He was not the "Superintendent"; neither was his company. There is no evidence that the Superintendent, IPS, required any information in relation to either progress claim. On that basis, I do not think that this issue arises in fact.
56 But even if it did arise in fact, it would afford no defence. That follows from the provisions of ss 14 and 15.
57 By s 14(4), where a claimant (ie, by reference of s 13(1), a person who is or claims to be entitled to a progress payment) serves a payment claim on a respondent (ie, by reference s 14(1), the person on whom the payment claim is served) and where the respondent does not provide a payment schedule within the relevant time limit, "the respondent becomes liable to pay the claimed amount to the claimant on the due date …".
58 Section 15 applies, as sub s (1) makes clear, where a respondent has become liable under s 14(4) and has not paid the whole or part of the claimed amount before its due date. In those circumstances, by sub s 2(a)(i), the claimant may "recover the unpaid portion of the claimed amount from the respondent, as a debt due".
59 Where a claimant commences proceedings under s 15(2)(a)(i) to recover the unpaid portion of the claimed amount as a debt, the respondent is not entitled, among other things, "to raise any defence in relation to matters arising under the construction contract": s 15(4)(b)(ii).
60 In my judgment, the defence raised under issue 7 is a defence of the kind that, by s 15(4)(b)(ii), Clarence Street "is not entitled … to raise".
61 This issue is one that was considered in interlocutory proceedings in this matter by Macready M ([2004] NSWSC 73) and, on appeal, by Einstein J ([2004] NSWSC 222). The Master heard an application by ISIS for summary judgment. He held at [45], in substance, that this issue raised a triable defence. Einstein J upheld the Master's conclusion.
62 Einstein J considered that s 15(4)(b)(ii) only arose "if sub s (1)(a) and (b) are satisfied".
63 His Honour's reasoning was directed to the proposition that ISIS had not shown that it had served a valid payment claim, because it had not shown (bearing in mind that what was before his Honour was an application for summary judgment) that progress claims 12 and 13 were served on or in accordance with reference dates under the contract. His Honour's conclusion at [45] needs to be read accordingly, as his Honour indicated by emphasising that it was expressed "on this particular issue" (his Honour's italics). His Honour was not dealing with the proposition that, quite apart from the "reference date " issue, s 15(4)(b)(ii) could not overcome a defence based on the "clause 42.1 information" issue. Thus, although on one view of things his Honour's decision might be difficult to reconcile with my own decision in Consolidated Constructions Pty Ltd v Ettamogah Pub [2004] NSWSC 110 at [61], it is unnecessary for me to reconcile any conflict that may in fact exist. A defence that there is no relevant reference date (ie, that a statutory requirement has not been satisfied) is conceptually different to a defence that some contractually required information has not been supplied (ie, a defence, arising under the contract, that a contractual requirement has not been satisfied).
64 The reason why a defence of this kind might be excluded by the statute is clear. If in truth a payment claim contained insufficient information to enable the superintendent, acting reasonably, to assist it (and I stress that the evidence does not make this point good in explicit terms) then it would be open to the principal to provide a payment schedule stating that it did not propose to pay any amount, and stating (if necessary) that the reason for withholding payment is, simply, that there was insufficient information given to it to enable it to assess the claim. On that basis, the statutory scheme and the contractual scheme would work hand in hand.
65 The statutory scheme is, undoubtedly, supplementary to the contractual scheme; see for example s 3(4) of the Act. However, one object of the statutory scheme is to provide a swift remedy to a claimant in circumstances where the scheme is engaged. That is why (for example) a respondent that does not raise a contractual defence in its payment schedule cannot raise that defence thereafter: s 15(4)(b)(ii); s 20(2B); s 22(2)(d); s 25(4)(a)(ii). In my judgment, that statutory scheme does not permit a respondent to refrain, upon some contractual basis, from providing a payment schedule but to retain the right, in subsequent proceedings, to rely upon whatever the contractual issue was. The matter may be tested simply. Under s 15(2)(a), a claimant to whom no payment schedule has been provided has two options. One is to recover the unpaid amount as a debt. The other is to make an adjudication application under s 17(1)(b). If the claimant took the latter course, the respondent could not, in its adjudication response, rely upon the contractual issue: s 20(2B). If an adjudication determination were made in the claimant's favour and the claimant sought to register as a judgment a certificate issued consequent upon that determination, the respondent could not rely upon the contractual issue: s 25(4)(a)(ii). It would be anomalous in the extreme if the claimant, by choosing the alternative path of suing for the debt as provided by s 15(2)(a)(i), were placed in a worse situation because, as a result of that choice, the respondent was able to raise an argument that it could not raise had the claimant followed the other path.