Lean Field Developments Pty Ltd v E & I Global Solutions

The applicant notes that these observations were not necessary for the decision and that Hodgson JA refrained from deciding the appeal on that ground.

[58] Bryson JA did not join in Hodgson JA's observations to the effect that s 34 invalidated some parts of cl 42 of the construction contract in that case. Rulings by McDougall J on the interaction between the construction contract in the case and s 34 were said to be open to question. As the appeal did not turn on that issue, Bryson JA found it unnecessary to pursue the matter further, and did consider the correctness of McDougall J's conclusion that certain parts of cl 42 of the construction contract were ineffective because of s 34 of the NSW Act. However, his Honour did not specifically question the general proposition that s 34 of the NSW Act could apply to a case of the kind hypothesised by Hodgson JA and that the section constrains the freedom of parties to determine whether and when a reference date will arise. The third member of the New South Wales Court of Appeal, Brownie AJA, preferred not to express an opinion about whether s 34 of the NSW Act invalidated the particular parts of the contract.

[59] The observations of Hodgson JA upon which the first respondent relies in this case command respect. Whilst the other two members of the court did not express a view about whether certain parts of the clause in that case were invalidated, they did not contest the general proposition that a provision of a contract which determines a reference dates may be invalidated by provisions similar to s 99 of the Queensland Act.

[60] In State of Queensland v T & M Buckley Pty Ltd,[19] Margaret Wilson J considered a contract which conditioned the delivery of a claim for payment upon the delivery of a statutory declaration. Her Honour concluded that the accrual of the statutory reference date was not conditional upon the prior delivery of the statutory declaration. In the circumstances, the question of whether the condition was void under s 99 did not arise. As a result, the present issue of what conditions are permissible under the Act did not arise for decision.

[61] The parties' submissions referred to the decision of Douglas J in Simcorp Developments and Constructions Pty Ltd v Gold Coast Titans Property Pty Ltd[20] in which a contract provided for a progress claim to be made to a superintendent. The superintendent was then to issue a progress certificate by the 30th day of the month after receiving the claim, failing which the progress claim was deemed to be the progress certificate. The contract provided that a payment claim under the Act could be made upon the certificate being received or being deemed to being received. The contractor sought to rely upon a progress claim lodged with the superintendent as the payment claim under the Act, without having made a further payment claim after the issue or deemed issue of the payment certificate. Douglas J held that there was no valid payment claim under the Act and that the terms which provided for the working out of a period of service of a payment claim were not inconsistent with the Act and did not attract s 99. Douglas J made clear that his conclusion turned upon the specific terms of the contract before him. Subsequent decisions have emphasised that the conclusion that s 99 did not apply in that case turned upon the specific contractual provisions.[21]

[62] The observations of the Court of Appeal in John Holland about the decision in Simcorp Developments and the reservations expressed by Bryson JA in

Minister for Commerce v Contrax Plumbing (NSW) Pty Ltd suggest that the operation of a provision such as s 99 upon contractual provisions which affect the determination of a reference date depend upon the construction and effect of the particular contractual provisions.

[63] John Holland was not concerned with a contractual provision of the present kind. However, both parties understandably referred to the decision and sought to derive support from it for their respective contentions. In John Holland, the construction contract included a number of conditions about payments claims and the subcontractor warranted that if a payment claim did not comply with those conditions, then it was void and that the reference date for the purpose of the Act would be the same day on the following month. The appellant in that case submitted that the proper construction of the contractual definition of a reference date was that its accrual was conditional upon satisfaction of the matters in the clause. Fraser JA observed that the effect of contractual provisions upon the procedure for vindicating the statutory entitlement to progress payments was not an issue in the appeal, and that it was not necessary to attempt "a comprehensive reconciliation of general statements in the cases concerning the relationship between the Act and the contracts with which it is concerned".[22] It was only necessary to deal with the narrow issue about the effect of certain clauses of the contract upon the reference date for the purpose of s 12 of the Act. After referring to relevant sections of the Act, Fraser JA stated:

"19. The Act adopts contractual provisions concerning the amount of a progress payment (s 13(a)), the valuation of construction work and related goods and services (s 14), the date upon which a progress payment under a construction contract becomes payable (s 15(1)(a)), the rate of interest payable on the unpaid amount of a progress payment that has become payable (s 15(2)(a)), the amount held by the respondent which may be included in a payment claim (s 17(3)(b)), the period within which a payment claim may be served (s 17(4)(a)), and the time within which a payment schedule must be served if the respondent is to avoid becoming liable to pay the claimed amount (s 18(4)(b)(i)). None of those provisions bear upon the date upon which the statutory entitlement to progress payments accrues. Bearing in mind the statutory object and the role of s 12 and the definition of 'reference date' in giving effect to that object, those provisions are incapable of justifying an implication that the date upon which the statutory entitlement to a progress payment accrues may be qualified by contractual provisions other than those captured by the unambiguous terms of the definition of 'reference date'."[23]

[64] The applicant correctly submits that implicit in the words I have emphasised is an acceptance of the proposition that contractual provisions captured by the unambiguous terms of the definition of "reference date" can qualify the statutory entitlement to a progress payment. However, the passage does not say, and does not suggest, that there are no limits on the extent to which statutory entitlements to a progress payment may be qualified by a contractual provision which determines whether or not a reference date arises. John Holland was concerned with a different issue and different contractual provisions to those with which I am concerned. In that context, it simply confirmed that contractual provisions may define a reference date. It is authority for the proposition that certain contractual provisions which purport to defer what otherwise would have been a parties' statutory entitlement to a progress payment from a reference date ascertained in accordance with the Act will be void by virtue of s 99 of the Act.[24] The decision does not determine the issue that arises from my determination.

[65] The authorities establish that contractual provisions which require, as it were, a contractor to jump through a number of hoops, failing which, a reference date that has arisen is deferred are invalidated. It might be observed that, on the applicant's argument, whilst the Act does not permit a reference date that has arisen to be deferred until the hoops are jumped through, it permits a contract to provide that a reference date will not arise until the same hoops are jumped through. This curiosity or anomaly may simply be that. It may be, as Mr O'Shea QC who appeared with Mr May for the applicant submitted, that this curiosity follows from the wording of the Act. If this is so, then the curiosity or anomaly must be accepted, since it is not the function of a court to construct its own idea of a desirable policy and impute it to the legislature.

[66] There is a distinction between two categories of case. The first is where a reference date has arisen and the contract purports to require a payment claim to meet certain conditions in making a payment claim or provides that if certain conditions are not met, the payment claim is ineffective and the reference date is deferred. In such a case, the statutory reference date is not conditional upon compliance with the condition, such as the delivery of a statutory declaration.[25] Also the contract is ineffective to defer what would have otherwise been the contractor's statutory entitlement to a progress payment from a reference date.[26] The second category of case, and the one with which I am concerned, is where a reference date has not arisen because the contract purports to provide that no reference date will arise until certain conditions are fulfilled. Authorities about the first category of case do not determine what the position should be in the second category.

[67] Two general propositions may be stated as a result of the Act's recognition that the parties may agree upon a contractual provision which permits a reference date to be worked out, and the constraint imposed by s 99 of the Act upon such a provision.

[68] The first proposition is that not every provision which conditions when a reference date arises (and therefore potentially affects whether or not a reference date will arise) could be said to be inimical to the Act and void as a result of s 99. There is nothing explicit in the statutory definition of "reference date" which prevents parties from agreeing that a reference date will arise when a party does something, for example, the completion by the contractor of a defined part of the work.

[69] The second proposition is that not every provision which conditions whether or when a reference date arises can be said to be immune from the operation of s 99. For example, a provision which stated that a reference date only arose once the principal was of the opinion that it should pay a progress payment might have the practical effect of making the existence of a reference date dependant upon a subjective state of mind which might never exist. It might make the existence of a reference date and the statutory entitlement to a progress payment illusory.

[70] By contrast, it is possible to imagine a condition which may facilitate the prompt payment of claims made under the Act, not unjustifiably inhibit a reference date arising and thereby be consistent with the purpose of the Act. For example, it is possible to imagine a condition which provided that a reference date arises a few days after a contractor has provided a basic document which simply estimates what work will have been done by the time of the reference date and its expected value. Such a condition might be said to reduce the element of surprise in the payment claim that is delivered after the reference date arises and enable the principal to prepare for its payment.

[71] The two general propositions that I have advanced, and these examples, suggest that it is impossible to say that provisions which condition the timing of a reference date for the purpose of the Act are necessarily valid or necessarily invalid.

[72] It might seem somewhat unsatisfactory that there is no hard and fast rule about the validity of such conditions. But this is the consequence of an Act which provides some freedom to the parties to determine when a reference date arises, and which does not automatically impose the default position of monthly reference dates if the agreed condition is not met.

[73] As unsatisfactory as it may be to have an ill-defined dividing line between those conditions for the working out of a reference date that are effective and those which are not, other alternatives are no more satisfactory:

(a) A position whereby no conditions on reference dates are effective would preclude parties from agreeing conditions which suit their needs and facilitate the timely payment of progress payments. Such a position would be inconsistent with the limited freedom given to parties by the Act to agree how reference dates are worked out.

(b) A position whereby all conditions on reference dates arising are effective is contrary to the Act's objective. It would allow a contract to include a condition which in practice prevents a reference date from arising and thereby effectively denies a contractor the statutory entitlement to a progress payment which would accrue in the absence of that condition.

Rather than adopt either of these two positions with their undesirable consequences, the Act provides some scope to impose conditions.

[74] The purpose of the Act and the role which s 99 plays in constraining the contractual freedom of parties to modify the entitlements which the Act confers means that the parties do not have an unconstrained freedom to contract about when a reference date will arise. The Act does not allow the contract to impose onerous conditions which make a reference date more of a theoretical possibility than an actuality. Likewise, the example given by Hodgson JA, of a contract which provides for an annual reference date, would seem to be inimical to the purpose of the Act and invalidated by s 99.

[75] The extent to which a particular condition is contrary to the Act or purports to change the effect of the Act depends upon its content and practical consequences. In assessing the validity of such a condition a useful inquiry is whether it facilitates or impedes the purpose of the Act. A provision which has the purpose of regulating contractual rights to progress payments may not be appropriate to condition a statutory right to a progress payment. A condition is likely to be contrary to the Act or unjustifiably change the effect of the Act's provisions where it does not facilitate a statutory entitlement to progress payments or the resolution of payment claims made under the Act. This is likely to be the case where the condition impedes the making of a payment claim with no corresponding benefit in achieving the Act's purpose.

[76] The inquiry into validity requires the identification of the condition or conditions in the absence of which there would be a statutory entitlement to a progress payment. Even a condition which has some utility in a contractor making a payment claim and receiving a progress payment may be excessively onerous and be invalid because of its unjustified effect in denying a party what otherwise would be a statutory entitlement. A condition which has no significant utility in terms of the scheme created by the Act may be invalid, not because it is particularly onerous, but because it impedes a statutory entitlement without any corresponding benefit.

[77] If the Act allowed an unlimited freedom to include conditions that had to be fulfilled before a progress payment claim could be made, even conditions which were practically impossible to fulfil, then the applicant's circularity argument would have some force. The unfulfilled condition would prevent a reference date from arising, and there is no statutory entitlement until there is a reference date. It would not make sense to speak of an entitlement under the Act being changed because until the reference date arises, there is no entitlement. However, for the reasons given above, there are limits upon the freedom of parties to provide whether and when a reference date arises for the purposes of the Act.

[78] Because the parties' freedom to contractually provide whether or not a reference date actually occurs is constrained by s 99, it is possible to say that, absent a particular condition that is invalidated by s 99, the effect of the Act would be to confer a statutory right to a progress payment. Section 99(2)(b) might be invoked in such a case because:

(a) in the absence of the relevant condition the effect of the Act is to give an entitlement to a progress payment from a reference date;

(b) the condition purports to change or changes the effect of the Act.

There is nothing circular in identifying a statutory entitlement which would exist in the absence of a particular condition and saying that the condition changes the effect of the Act.

[79] This meets the applicant's circularity argument. But reliance upon s 99(2)(b) would permit, in theory, any condition which purports to change what otherwise would be a statutory entitlement to be invalidated, and accord no real scope to the parties to agree conditions for the working out of a reference date which are consistent with the Act's purpose.

[80] The limit on the parties' freedom to include conditions which are inimical to the Act's purpose, which unjustifiably impede the making of a payment claim under the Act or which make the statutory entitlement practically illusory is derived from the Act's purpose, its terms and particularly s 99 which invalidates certain contractual provisions. Contractual conditions which are inimical to the Act's purpose, which unjustifiably impede the making of a payment claim under the Act or which otherwise make the statutory entitlement practically illusory are contrary to the Act and invalidated by s 99(2)(a).

Are the conditions imposed by clauses 33.7 and 33.8 of no effect insofar as they unjustifiably prevent a reference date from arising?

[81] The applicant submits that, even if there is a limit on what the parties can specify in relation to reference dates, that limit is not engaged in this case. It submits that the limit might perhaps be engaged where the power to bring into existence a reference date is given solely to the proprietor or where only one reference date is specified, at some distant point in the future. In this case the clause is said to leave it entirely within the first respondent's power to bring about a reference date. Also, the thing that had to be done to bring about the reference date was not onerous: all the first respondent needed to do was to submit its payment claim in draft form before submitting it formally as a claim under the Act.

[82] The first respondent contests this. First, it submits that it is erroneous to characterise the draft payment claim as consisting of a draft of the matters which would be contained in the actual payment claim. Each relates to different work done during different periods. Secondly, the requirement to provide a draft claim for payment supported by evidence of the kind required by cl 33.7(a) on a particular day, failing which the right to make a claim for payment is extinguished, is said to be onerous. If no draft claim for payment is provided on the specified date, no reference date arises. The contract is said to provide for the possibility of a reference date, not its actuality.

[83] The first respondent makes the additional submission that if the draft claim for payment is provided within the narrow window of opportunity, but is defective in its form so as to not constitute a draft payment claim of the kind envisaged by cl 33.7, then the possibility of a reference date accruing is also extinguished. Contests over whether the draft claim for payment complies with the requirements of cl 33.7 might only be resolvable by litigation, a result which is submitted by the first respondent to be another factor which attracts the operation of s 99.

[84] In response to this last submission, namely that a reference date might not come into existence because of the form of the draft claim for payment, the applicant submits that the contract distinguishes between "a draft payment claim which complies with the requirements of Clause 33.7(a)", which engages the obligation to issue a preliminary assessment in accordance with cl 33.7(c), and a "draft claim for payment" which does not necessarily have to comply with the requirements of cl 33.7(a) in terms of its form or content.

[85] There is force in this submission, but if it is correct then it operates to reduce the utility of any draft claim for payment, and begs the question of what the point would be in requiring the respondent to provide a piece of paper styled draft payment claim which did not comply with the requirements of cl 33.7(a) on a particular date. Such a requirement would seem to have no utility in terms of advancing the purpose of the Act, and whilst less onerous than being required to deliver a draft payment claim which complies with the requirements of cl 33.7(a), would jeopardise an entitlement to a statutory progress payment in the event the document was not delivered on the required date. It is hard to see the utility of being required to deliver a non-compliant piece of paper.

[86] If, however, the draft payment claim includes the matters required by cl 33.7(a) then it is of questionable utility. The required draft payment claim relates to work done during a different period to the period covered by the actual payment claim. Any preliminary assessment would be of only some of the work. The sub-contractor might choose to include in the actual payment claim previously unmentioned work which was undertaken prior to the date of the draft payment claim. Even if it does not, the preliminary assessment given under cl 33.7(c) is not binding.

[87] The applicant describes the requirement to submit a draft payment claim and to obtain a preliminary assessment of it in accordance with cl 33.7(c) as a "useful separate step enabling the parties to assess the necessity for a payment claim under the Act before making such a claim." However, in circumstances:

• in which there is no direct nexus between the content of the "draft claim for payment" submitted under cl 33.7 and any payment claim submitted under cl 33.8 because they relate to different periods and different work;

• where the actual payment claim can include additional items; and

• where any preliminary assessment does not bind the applicant in its response to the later payment claim

the mandatory requirement to deliver a draft payment claim on a particular date lacks utility, at least so far as the first respondent is concerned, in making a payment claim under the Act and being paid upon that claim. Its utility, so far as the applicant is concerned, is that a failure to comply with the mandatory requirement prevents a reference date from arising and extinguishes what otherwise would be a statutory entitlement on the first respondent's part to a progress payment.

[88] Clauses 33.7 and 33.8 provide for the possibility of a reference date, not its actuality. Whether or not a reference date arises is contingent upon compliance on a particular day with a condition which has no significant utility in terms of facilitating the payment of a progress payment to which the first respondent would otherwise have a statutory entitlement. The condition thereby amounts to an unnecessary and impermissible constraint on the right to claim for payment under the Act. The requirement that the draft payment claim be delivered on a particular day may have some limited utility to the processing of an actual payment claim, however, that utility is not apparent in circumstances where the actual payment claim relates to different work undertaken during a different period. The requirement to deliver draft payment claim on a particular day may not seem very onerous, depending upon what is required in terms of its form and contents and the potential for dispute about its compliance with cl 33.7(a) and whether it is supported by the information referred to in that provision. However, even if the formal requirements of the draft payment claim are not onerous, the question remains about the point in terms of the Act of such a mandatory requirement in circumstances where a failure to comply with it extinguishes the statutory right to a progress payment.

[89] Whilst the definition of "reference date" means a reference date may be worked out by such a provision, the provision does more than work out when a reference date will arise. It makes a reference date contingent upon compliance with a condition which has little, if any, practical utility in facilitating payment of a statutory entitlement. The condition does little to facilitate such a payment being made, but carries the potential that no statutory progress payment will be made if the condition is not complied with. Given the absence of any direct nexus between the draft claim for payment and the actual claim for payment in terms of the period of work and the actual work that is covered by each document, it is hard to see why, for example, a delay of one day in delivering the required draft payment claim should extinguish what otherwise would be a statutory entitlement to a progress payment. I conclude that the mandatory requirement operates to unjustifiably impede a reference date from arising.

[90] Such a provision, which lacks utility in terms of facilitating the purposes of the Act and which extinguishes what otherwise would be a statutory entitlement to a progress payment, is contrary to the Act. That is because it unjustifiably modifies, restricts or otherwise changes the effect of an Act which contemplates that a progress payment will be made after a reference date arises.

[91] Clauses 33.7 and 33.8 unjustifiably condition the accrual of a reference date. They are ineffective by reason of s 99 of the Act to the extent they affect what would otherwise be a right to make a payment claim under the Act and to be paid a statutory entitlement. They remain effective in respect of a contractual entitlement to a progress payment.

[92] The draft claim for payment which is a mandatory condition for the making of a payment claim under the Act has no direct bearing on the contents or processing of an actual payment claim. This is because:

(a) it relates to a different period and different work to the period and the work covered by the payment claim; and

(b) if, as the applicant contends, the "draft claim for payment" referred to in cl 33.8(a) need not be one which complies with the requirements of cl 33.7(a), it may not necessarily contain any information which is of use with respect to the period covered by the draft payment claim, let alone the period covered by the payment claim.

The condition has little, if any, utility in facilitating the making of a payment claim under the Act and in the payment of a progress payment to which the contractor otherwise would be entitled. Failure to deliver a draft payment claim on the one day window of opportunity for delivering such a document extinguishes what would otherwise be a reference date worked out under the contract or a default reference date. The condition unjustifiably impedes rather than facilitates a reference date arising and thereby defeats a statutory entitlement to a progress payment.

[93] There may be circumstances in which it is possible to condition not only when, but whether or not, a reference date will arise. Such a condition may be justified as facilitating the purpose of the Act. Clauses 33.7 and 33.8, however, cannot be justified on this basis. They go beyond the freedom to contract about how a reference date is worked out. Section 99 renders such provisions ineffective.

[94] The adjudicator was correct to conclude that the provisions were ineffective to preclude a reference date from arising. The provisions in the contract working out a reference date being ineffective, a reference date arose in accordance with the statutory default position. The result is that the adjudicator had jurisdiction to determine the application before him. The application should be dismissed.

[95] The first respondent raised other issues in connection with the validity of these clauses. One was that the additional constraint in cl 33.7(a) of "such information as the Sub-contractor Representative may reasonably require" injects uncertainty as to the formation of a "reference date" by allowing the sub-contractor's representative to interfere by adding requirements and rendering the task of making a compliant "draft payment claim" something quite different from that contemplated at the time the contract was formed. I do not agree. Strictly speaking, it is the delivery of the "draft claim for payment", not any information which the Subcontractor Representative may reasonably require that is the event from which the reference date is worked out.

[96] Next, to the extent that the clauses impose manner and form conditions upon the making of a compliant draft payment claim and a valid payment claim, such a manner and form precondition may be ineffective to prevent a reference date from arising or a valid payment claim being made under the Act, irrespective of their effect upon a contractual entitlement to a progress payment. This conclusion follows from the cases earlier discussed in which manner and form conditions have been held to be ineffective. However, the critical issue in this case is not about a manner and form condition. It concerns a condition about the timing of a reference date.

[97] Finally, the first respondent submits that the requirement for a "draft claim for payment" as a precondition to the existence of a "reference date" has the effect of circumventing the 10 business days for the provision of a payment schedule under the Act, so as to give the applicant more time in which to prepare the payment schedule than is prescribed. I do not agree. For the reasons earlier given, the payment claim that is made may bear little resemblance to the draft payment claim. In any case, the applicant still only has the 10 business day period provided for under the Act to respond to an actual payment claim.

[98] My conclusion that the adjudication decision was not affected by jurisdictional error makes it unnecessary to address the first respondent's third substantial argument which relied upon waiver and estoppel. For completeness, I shall do so relatively briefly.

[99] The first respondent contends that the applicant:

(a) waived its entitlement to insist upon compliance with clauses 33.7 and 33.8 as a ground for resisting a claim for payment; or

(b) is estopped from relying on such non-compliance.

Its case on waiver acknowledges that "waiver by election" requires actual knowledge of facts which gave rise to alternative and inconsistent rights and an election between those rights.[27] The election which gives rise to a waiver in this case is said to be that the applicant did not, at any stage prior to the adjudication response, and notwithstanding numerous previous claims for payment, insist upon the delivery of a "draft claim for payment" and instead elected to pay upon those claims.

[100] As for estoppel, the first respondent claims that it relied upon the applicant's conduct in receiving and paying claims for payment without recourse to the requirements contained in clauses 33.7 and 33.8. It also says that it relied upon the absence of any complaint in the payment schedule as to non-compliance in preparing and making the adjudication application.

[101] The applicant responds that the evidence does not support a finding of waiver or estoppel. As to the elements of estoppel where a party seeks to prevent another from relying on its legal rights, the applicant points to the statement of principle of Brennan J in Waltons Stores (Interstate) Ltd v Maher that to establish an equitable estoppel it is necessary for the plaintiff to prove that:

"(1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship;

(2) the defendant has induced the plaintiff to adopt that assumption or expectation;

(3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation;

(5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and

(6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise."[28]

[102] A number of tax invoices were delivered by the first respondent and payments were made on an informal basis. An initial tax invoice (number 396) was sent pursuant to a purchase order and before the work under the contract commenced. The evidence shows that tax invoices and payments did not occur in accordance with contractual arrangements. For example, all issued invoices sought payment within a 14 day period, which was known not to be in accordance with the contract. None of the invoices, prior to the one the subject of this proceeding, was endorsed with a reference to it being a payment claim under the Act, and none of them had attached a "proforma invoice" in the form of attachment 5 to exhibit B to the contract.

[103] Representatives of the parties met on 22 January 2014 and there was discussion about the use of a spreadsheet to calculate the amount to be claimed. The evidence indicates that there was no discussion at that meeting about draft payment claims.

[104] The evidence supports the applicant's position that what occurred prior to the making of the payment claim that led to the adjudication is that the first respondent submitted informal invoices and the applicant was content to pay them. This course of conduct does not bespeak of an election by the applicant between inconsistent rights. In addition, its conduct was not such as to represent that a different legal relationship then existed between the parties, or that the applicant expected that a particular legal relationship would exist between the parties other than the legal relationship embodied in the contract. The conduct of the applicant in receiving tax invoices and paying them in circumstances in which it was not legally obliged to pay them was simply an informal arrangement. The evidence of Mr Bond did not bear out that the first respondent assumed that a new and different legal relationship existed such that the first respondent was not required to comply with the terms of the contract. The conduct of the first respondent in submitting a payment claim under the Act which was endorsed in a form that accorded with the contract's requirements shows that the first respondent did not in fact assume that it was relieved from the requirement to comply with the terms of the original agreement.

[105] Mr Bond, on behalf of the first respondent, acknowledged in his oral evidence that nothing had been said to him by the applicant to the effect that it did not need to deliver a draft payment claim in accordance with the contract. He accepted that submitting the payment claim under the contract without first submitting a draft was not the result of anything said or done by the applicant. He accepted that he embarked on the course of sending a claim without first sending a draft payment claim because that was what he commenced to do at the start of the contract and he never changed.

[106] Because most of the claims for payment were not claims under the contract, it is hard to see how the conduct in question could have induced an assumption on the part of the first respondent that it was not necessary to comply with the contract. The mere payment of invoices which did not purport to be claims under the contract could not reasonably induce reliance.

[107] Another important factor in precluding an estoppel is that there is no evidence that the applicant knew that the first respondent was acting on the basis of an assumption that a different legal relationship existed between them, such that the first respondent was entitled to assert a legal right to payment without compliance with the draft payment claim procedure and the other requirements of the contract.

[108] The evidence tends to establish that prior to the contentious payment claim, the first respondent simply submitted informal tax invoices, the applicant agreed to pay those amounts and that neither the applicant nor the first respondent assumed that the other was relieved from the requirements of the contract if it wished to assert its legal rights.

[109] The applicant did not raise issues concerning compliance with clauses 33.7 and 33.8 in its payment schedule. Instead, the issue was raised in its response to the adjudication application. Whilst the failure to initially raise the issue in the payment schedule may have influenced the first respondent to make the adjudication application, there is no satisfactory evidence that the first respondent would have acted any differently if the issue had been raised in the payment schedule. The adjudicator gave the parties the opportunity to make submissions about the reference date point. The adjudicator was required to be satisfied that there was a reference date irrespective of the parties' submissions. The adjudicator was required to determine the relevant terms of the contract, and if certain terms of the contract had been waived by the applicant or the applicant was estopped from relying upon them, then this would have had implications for the adjudication. However, the first respondent has not established that the applicant waived its entitlement to insist upon compliance with clauses 33.7 and 33.8 or that the applicant is estopped from relying on non-compliance with these provisions as a ground for resisting a claim for payment.

[110] The first respondent has not established the waiver or estoppel contended for by it.

[111] The first respondent has succeeded upon the second ground of its opposition to the application. Section 99 of the Act renders clauses 33.7 and 33.8 void to the extent they condition a "reference date" under the Act and a statutory entitlement to a progress payment coming into existence. A reference date had arisen at the time the payment claim was made under the Act. As a result, the adjudicator had jurisdiction to determine the adjudication proceeding.

[112] Subject to hearing the parties as to the terms of the orders, the orders will be:

2. The applicant pay the first respondent's costs of and incidental to the application to be assessed on the standard basis.

[1] They include Spankie v James Trowse Constructions Pty Ltd [2010] QCA 355 at [9]- [11]; Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2011] QCA 22; [2012] 1 Qd R 525 at 546-550 [52]- [66]; John Holland Pty Ltd v Coastal Dredging & Construction Pty Ltd [2012] QCA 150; [2012] 2 Qd R 435 at 441-442 [15]- [19] ("John Holland").

[2] Capricorn Quarries Pty Ltd v Inline Communication Construction Pty Ltd [2012] QSC 388; [2013] 2 Qd R 1 at 9 [41].

[4] [2012] QSC 265 ("T & M Buckley").

[5] See the meaning adopted by Wilson J in T & M Buckley at [18] quoted in [25] above.

[7] Minister for Commerce v Contrax Plumbing (NSW) Pty Ltd [2005] NSWCA 142 at [54].

[9] Minister for Commerce v Contrax Plumbing [2004] NSWSC 823 at [40].

[10] T & M Buckley at [41]; BHW Solutions Pty Ltd v Altitude Constructions Pty Ltd [2012] QSC 214 at [17].

[11] John Holland Pty Ltd v Coastal Dredging Construction Pty Ltd [2012] QCA 150; [2012] 2 Qd R 435 at [17]. De Neefe Signs Pty Ltd v Build1 (Qld) Pty Ltd [2010] QSC 279 at [3], [21].

[12] John Holland Pty Ltd v Coastal Dredging Construction Pty Ltd [2012] QCA 150; [2012] 2 Qd R 435 at [21]. McConnell Dowell Constructors (Aust) Pty Ltd v Heavy Plant Leasing Pty Ltd [2013] QSC 269 at [26].

[13] Beckhaus v Brewarrina Council [2002] NSWSC 960 at [59] to [64]; Mansouri and Anor v Aquamist P/L (2011) 27 BCL 194 at [15]; Okaroo Pty Ltd v Vos Construction and Joinery Pty Ltd [2005] NSWSC 45 at [46].

[14] Ibid; Okaroo Pty Ltd v Vos Construction and Joinery Pty Ltd [2005] NSWSC 45 at [52] and [55].

[15] Plaza West Pty Ltd v Simon's Earthworks (NSW) Pty Ltd & Anor [2008] NSWCA 279 at [53] and [54]. Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2003] NSWCA 4; (2003) 56 NSWLR 576 at 582 [20] and [21].

[16] John Holland Pty Ltd v Coastal Dredging Construction Pty Ltd (unrpt) per Dalton J 29 February 2012 at L27 T3.

[17] Quasar Constructions Pty Ltd v Demtech Pty Ltd [2004] NSWSC 116 at [21].

[18] [2005] NSWCA 142 at [51]- [54].

[19] [2012] QSC 265 at [41]- [43].

[20] [2010] QSC 162.

[21] John Holland at 443 [22]; State of Queensland v T & M Buckley Pty Ltd [2012] QSC 265 at [40].

[25] State of Queensland v T & M Buckley Pty Ltd.

[27] Ace Property Holdings Pty Ltd v Australian Postal Corporation [2010] QCA 55; [2011] 1 Qd R 504 at 550-554 [147]- [159].

[28] (1988) 164 CLR 387 at 423.