Joye Group Pty Limited v Cemco Projects Pty Limited

THE REQUIREMENTS OF A PAYMENT SCHEDULE

1. Section 14 of the Act provides: 1. (2) A payment schedule - 2. (a) must identify the payment claim to which it relates, and 3. (b) must indicate the amount of the payment (if any) that the respondent proposes make (the 'scheduled amount'). 4. (3) If the scheduled amount is less than the claimed amount, the schedule must indicate why the scheduled amount is less and (if it is less because the respondent is withholding payment for any reason) the respondent's reasons for withholding payment.
2. Thus, by virtue of s 14 of the Act: 1. the defendant could reply to the payment claim by providing a payment schedule to the claimant: s 14(1); 2. any payment schedule provided by the defendant was required to: 1. identify the payment claim to which it relates, and 2. indicate the amount of the payment (if any) that the defendant proposes to make: s 14(2); 1. if the scheduled amount was less than the claimed amount, the schedule must indicate why that is so … including the defendant's reasons for withholding payment; 2. the defendant has 10 business days from the service of the payment schedule of the payment claims to provide to the plaintiff a payment schedule: s 14(4); and 3. failure to provide to the plaintiff a valid payment schedule within this timeframe would result in the defendant becoming liable to pay the full amount claimed: s 14(4).
3. It is common ground that Invoice JSA19293 was emailed to the defendant on 27 April 2020, and that Invoice JS19794 was emailed to the defendant on 28 April 2020.
4. On 8 May 2020 the defendant sent an email to the plaintiff which read: 'Please be advised that no payment for the above Invoices, until all works been completed'.
5. Attached to this email were the two relevant invoices detailed above. It is this email that the defendant asserts is a payment schedule provided to the plaintiff with respect of Invoice JSA19293 and Invoice JS19794 for the purposes of the Act, which, in response to both claims certified a scheduled amount of $Nil.
6. The plaintiff submits however that the defendant's email fails both of the requirements of ss 14(2) and (3) of the Act, as it has been said that 'the whole purpose of a payment schedule is to identify what amounts are in dispute and why': Minimax Fire Fighting Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333 at [27]. The plaintiff further submits that the defendant's email does neither of these things with sufficient clarity to meet the requirements of s 14 of the Act.

DISCUSSION

1. The requirements for a valid payment schedule have been set out in a number of authorities. Notably, the function of a payment schedule is to set 'the parameters for the matters that may be contested if an adjudication under the Act ensues': Clarence Street Pty Ltd v Isis Projects Pty Ltd (2005) 64 NSWLR 448 at [30] (Mason P) - as opposed to being a detailed and precise document that is particularised as a pleading.

IDENTIFICATION OF PAYMENT CLAIMS

1. The defendant submits that in accordance with s 14(2)(a) of the Act, the email of 8 May 2020 identifies the payment claims to which it relates. They submit that the wording 'the above Invoices' is clearly a reference to payment claims JS19794 and JSA19293 as both of those invoices were attached to the email.
2. The plaintiff submits that it is far from clear which payments the email relates to, as the phrase 'the above invoices' is non-specific, vague and confusing in circumstances where no invoices are identified 'above' in either the body or the subject heading of the email.
3. The plaintiff acknowledges that whilst the two relevant invoices were attached to the defendant's email, that does not by itself create sufficient certainty to constitute compliance with s 14(2)(a) of the Act in circumstances where: 1. the subject heading of the defendant's email merely reads 'Claim 7 for Alexandria job' with no mention of specific invoices; 2. no invoices or payment claims are identified in the body of the email; 3. it is not apparent from the defendant's email whether it is written in reply to the plaintiff's email dated 27 April 2020 serving Payment Claim JSA19293 which appears immediately below it; and 4. the plaintiff's email dated 27 April 2020 which appears immediately below the defendants email attached payment claim JSA19293 only (not invoices pleural).
4. In Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 at [76], [78]-[79] ('Multiplex') the Court examined the requirements of a payment claim and a payment schedule as follows: '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 are familiar with the particular building contract, the history of construction of the project and the broad issues which have produced the dispute as o 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. … 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. 79 … Cryptic though the statements in the Payment Schedule were in respect of BCI, I think that they were sufficient to indicate to Lahey the reason for non-payment of that claim for the purposes of s 14(3).'

INDICATION OF THE AMOUNT OF THE PAYMENT

1. The plaintiff submits that the defendant's email fails to indicate with any specificity the amount of the payment (if any) that the respondent proposes to make, as the words 'no payment for invoices' is vague and non-specific in circumstances where multiple invoices are indicated, by the use of the pleural, but none are specified. They further submit that the email does not define whether the defendant is intending to pay nothing at all, or nothing until some later point.
2. The defendant submits that the email identifies the amount of the payment it proposes to make - that is no payment.
3. It is hard to imagine how much clearer the defendant could make their position, that there will be no payment, thus the plaintiff must fail on this argument.

REASONS FOR WITHHOLDING PAYMENT

1. A central requirement of s 14(3) of the Act is that a payment schedule broadly outlines the ambit of the dispute between the parties: Multiplex at [70].
2. It is well established that the nature of payment claims and payment schedules are such that much information contained in them will be abbreviated form that may be readily understood by the parties themselves: Ibid [76]. It must also sufficiently describe the dispute so as to enable the claimant to determine whether to proceed in the knowledge of the nature of the case it will have to meet in an adjudication: Ibid [57].
3. The word 'indicate' in s 14 of the Act to my mind supports the premise that full particulars are not required: Ibid [78].
4. In my view the defendant's email of 8 May 2020 satisfies these requirements and is sufficiently particularised to enable the plaintiff to understand the issues between the parties in broad terms. The email states: "Please be advised that no payment for the above Invoices, until all works completed". That is, in my mind, clear enough terms - it is a statement of the amount that the defendant proposed to be made, namely no payment, and the reason for the defendant withholding payment, namely that the payment was not then owed because the work was incomplete. In Style Timber Flooring Pty Ltd v Krivosudsky [2019] NSWCA 171 at [2], Bell P held that this is: 'not a licence for informality or an excuse for vague, generalised objections to payment'.
5. However, whilst there may be circumstances in which a court would look at the wording encapsulating the reasons for withholding payment and may not understand it exactly because it may be cryptic or abbreviated, those persons within the building industry would understand, as I find that the plaintiff would have understood in these proceedings. The plaintiff's suggestion that it could not understand the issues between the parties is disingenuous in the least.
6. Furthermore, the reason for withholding payment had been expansively agitated in prior correspondence. Between 27 and 28 April 2020 when the defendant issues the payment schedule, the following correspondence was exchanged between the parties: 1. On 6 May 2020, the defendant sent an email to the plaintiff requesting that incomplete and defective works be completed. This email states: 'As discussed today over the phone, please ensure that all incomplete works are completed by COB Friday 8/5/202, this includes rectifying tiles on level 2, all grouting works, missing floor wastes, chipped tiles.' (Tab 5 Stephen Fabrizio Affidavit sworn 13 November 2020, part of Exhibit 1) 1. On 6 May 2020, the plaintiff responded to the above email stating "I sent Alan and two other boys tomorrow I will make sure everything is done by the date": Ibid at Tab 6. This demonstrates that the plaintiff was aware of the incomplete works and defects; 2. On 8 May 2020 (prior to the defendant issuing the payment schedule), the defendant sent another email to the plaintiff following up as the works were still incomplete and no tilers from the plaintiff were on site: Ibid at Tab 7; and 3. On 8 May 2020 (again prior to the defendant issuing the payment schedule), the defendant sent another email to the plaintiff stating: 'As per our phone conversation the project at Alexandria needs to be completed by 15/2/2020, including defects. Please make shore [sic] you have the necessary man power on site each day… No men on site will not be accepted at this stage of the project unless previously arranged with site Supervisors': Ibid at Tab 8.
7. This correspondence between the parties forms the context relevant to my determination as to whether the reasons for withholding payment have been indicated with sufficient particularity: Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd (2016) 337 ALR 452 at [256] (Warren CJ, Tate and McLeish JJA).
8. I find that the defendant's email of 8 May 2020, whilst brief, read in the context of the dealings between the parties prior to that date, complies with the requirements of s 14 of the Act in respect of payment claims JS19794 and JSA192393, and therefore are not currently due and payable simply by virtue of the operation of the Act.

THE PLAINTIFF'S CLAIM FOR INTEREST

1. I note the Statement of Claim seeks interest and costs but this has not been the subject of submissions or argument.

ORDERS

1. I make the following orders: 1. Judgment for the plaintiff against the defendant in the sum of $10,242.36 + $36,080.00 = $46,322.36. 2. Judgment for the defendant against the plaintiff with regard to Invoices JSA 19293 and JS 19794. 3. Allow the parties to contact my associate within 14 days to relist the matter for argument as to any various orders, interest and costs, if the parties cannot agree.

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: 30 April 2021