Leighton Contractors Pty Limited v Campbelltown Catholic Club Limited, Campbelltown Catholic Club Limited v Leighton Contractors Pty Limited - [2003] NSWSC 1103 - NSWSC 2003 case summary — Zoe

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Leighton Contractors Pty Limited v Campbelltown Catholic Club Limited, Campbelltown Catholic Club Limited v Leighton Contractors Pty Limited

[2003] NSWSC 1103

Supreme Court of NSW|2003-12-03|Before: Einstein J, Dixon Constructions P

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Source facts

Court

Supreme Court of NSW

Decision date

2003-12-03

Before

Einstein J, Dixon Constructions P

Source

Original judgment source is linked above.

Judgment (173 paragraphs)

[1]

CITATION : Leighton Contractors Pty Limited v Campbelltown Catholic Club Limited, Campbelltown Catholic Club Limited v Leighton Contractors Pty Limited [2003] NSWSC 1103 HEARING DATE(S) : 27/11/03, 28/11/03 JUDGMENT DATE : 3 December 2003

[2]

JURISDICTION: Equity Division Technology and Construction List JUDGMENT OF : Einstein J DECISION : Summary judgment to be entered for Leighton Contractors Pty Limited.

[3]

CATCHWORDS : Contract - building and construction - Building and Construction Industry Security of Payment Act 1999 (NSW) - Consideration of interrelationship of sundry provisions and analysis of principal's claimed entitlement to commence separate proceedings and/or to avoid summary judgment by invoking discretionary considerations - Progress claim submitted to Superintendent on same date as document purporting to be payment claim under the Act submitted to principal - Principal fails to serve payment schedule complying with sections 14(1) and (2) - Contractor commences proceedings and seeks summary judgment - Principal commences separate proceedings and seeks declaration that it does not owe any amount to contractor in respect of specific progress claim in excess of the amount specified in progress certificate issued by Superintendent and order that principal pay to the contractor such sum as it might recover against principal in the first proceedings - second proceedings held to be an abuse of process - Principal in first proceedings contends (as defendant) - That alleged payment claim was not a valid payment claim within s.13(2) of the Act because: (i) it did not identify construction work (or related goods and services) as required by s.13(2)(a) - (ii) there was no progress payment claimed as required by s.13(2)(b) - (iii) it did not bear the endorsement required by s. 13(2) (c) - - That contractor was and is not a person entitled or who claims to be entitled to a progress payment within s. 13(1) because: (i) it was not a person entitled to a progress payment under s. 8(1) - (ii) as at the date of the Alleged Payment Claim there was no reference date as and from which contractor was entitled to a progress payment within s. 8(1) and (2) - (iii) there was no amount calculated in accordance with the terms of the Contract which constituted a progress payment to which contractor was entitled under s. 9(a) - (iv) as at the date of the Alleged Payment Claim there was no progress payment under the Contract which had become due and payable within the meaning of s. 11(1) - - That Alleged Payment Claim was not a valid payment claim (in whole or in part) under s. 13 of the Act: (i) to the extent that it claimed for rock excavation, because it was not served within 12 months after such work was last carried out as required by s. 13(4)(b) - (ii) to the extent that it claimed for Delay Costs, because such claim was not permitted by the Act, the Delay Costs not being construction work to which the progress payment claimed by contractor related. - Alternatively, that if the Alleged Payment Claim were a valid payment claim, defendant was not liable to pay the amount claimed by contractor by reason that defendant served on plaintiff a payment schedule within the meaning of s. 14 of the Act, being the Certificate issued by Superintendent. Building and Construction Industry Security of Payment Amendment Act 2002 Building and Construction Industry Security of Payment Act 1999 (NSW) LEGISLATION CITED : Evidence Act 1995 (NSW) Interpretation Act 1987 (NSW) Supreme Court Act 1970 (NSW) Abacus v Davenport [2003] NSWSC 1027 Beckhaus v Brewarrina Council [2002] NSWSC 960 Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2003] NSWCA 4 De Martin and Gasparini Pty Limited v Energy Australia (2002) 55 NSWLR 577 Dixon v South Australian Railways Commissioner (1923) 34 CLR 71 Emag Constructions Pty Limited v Highrise Concrete Contractors (Aust) Pty Limited [2003] NSWSC 903 Fyntray Constructions Pty Ltd v Macind Drainage & Hydraulic Services Pty Ltd [2002] NSWCA 238 Hawkins Construction (Australia) Pty Ltd v Mac's Industrial Pipework Pty Ltd [2002] NSWCA 136 Jemzone Pty Limited v Trytan Pty Limited (2002) 42 ACSR 42 CASES CITED : Karimbla Construction v Alliance Group Building [2003] NSWSC 617 London Borough of Merton v Stanley Hugh Leach Ltd (1985) 32 BLR 51 Marra Developments Ltd v B W Rofe Pty Ltd [1977] 2 NSWLR 616 Parist Holdings Ltd v WT Partnership Australia Pty Ltd [2003] NSWSC 365 Paynter Dixon Constructions Pty Ltd v JF & CG Tilston Pty Ltd [2003] NSWSC 869 Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd [2002] NSWCA 211 Perini Corporation v Commonwealth [1969] 2 NSWR 530 Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355 South Australian Railways Commissioner v Egan (1973) 130 CLR 506 Sutcliffe v Thackrah [1974] AC 727 Walter Construction Group Limited v CPL (Surry Hills) Pty Limited [2003] NSWSC 266 PARTIES : Leighton Contractors Pty Limited (Plaintiff in 55030/02, Defendant in 55033/02) Campbelltown Catholic Club Limited (Plaintiff in 55033/02, Defendant in 55030/02) FILE NUMBER(S) : SC 55030/02; 55033/02 COUNSEL : Mr GE Underwood (Plaintiff 55030/02, Defendant 55033/02) Mr MLD Einfeld QC, Mr TD Castle (Plaintiff 55033/02, Defendant 55030/02) SOLICITORS : Mallesons Stephen Jaques (Plaintiff 55030/02, Defendant 55033/02) Dibbs Barker Gosling ((Plaintiff 55033/02, Defendant 55030/02)

[7]

JUDGMENT The proceedings 1 The two sets of proceedings before the Court concern a dispute under a building contract dated 13 February 2002 ["the contract"] between Leighton Contractors Pty Ltd ["Leighton"] and Campbelltown Catholic Club Ltd ["the Club"] for the carrying on of works at certain premises at Campbelltown. The general conditions of contract were in the form AS 4000-1997. Leighton was the "Contractor" and the Club was the "Principal" under the contract. 2 The Club's architect, Scott Carver Pty Ltd ["Carver"] was appointed as the Superintendent under the contract. 3 In proceedings 55030 of 2003 ["the first proceedings"] Leighton as plaintiff, seeks summary judgment against the Club in respect of a payment claim [referred to during the proceedings as "progress claim 18"] for an amount of $3,068,468.70 which Leighton asserts complied with the Building and Construction Industry Security of Payment Act 1999 (NSW) ["the Act"] and was served pursuant to section 13 (1) of the Act. 4 In proceedings 55033 of 2003 ["the second proceedings"] the Club as plaintiff seeks: · a declaration that the Club does not owe any amount to Leighton in respect of progress claim 18 in excess of the amount specified in progress certificate 00188.18 issued by Carver on 6 August 2003; and · an order that Leighton pay to the Club such sum as it might recover against the Club in the first proceedings. 5 Leighton by Notice of Motion seeks orders dismissing the Summons as disclosing no reasonable cause of action or as an abuse of process. 6 The essence of the competing positions taken by the parties requires close analysis of the Act and its application to the communications between the parties. It is appropriate to note that the Act which has been amended once, has been the subject of recent curial examination and remains a source of difficulty, there having been a number of sometimes consistent and sometimes inconsistent judicial pronouncements in relation to aspects of its interpretation and application.

[94]

3.8 Austin J's view was not shared by Nicholas J in Walter Construction Group Limited v CPL (Surry Hills) Pty Limited [2003] NSWSC 266 where it was said at [63]-[66] that it was sufficient if the claim document merely identified the construction work in terms of the contract and location with respect to which it was undertaken. The principles enunciated by Austin J are, the Club submits, those which would satisfy the ordinary expectations of the construction industry and the community generally, and which give purpose and effect to the statutory provisions." Holding 51 In my view the following submissions of Leighton on this issue are of substance. In short: · Section 13(2)(a) requires to be construed in a manner which facilitates the operation of the Act. · By section 9(a), the amount of a progress payment is "the amount calculated in accordance with the terms of the contract". The requirement in section 13(2)(a) to "identify the construction work … to which the progress payment relates" requires to be construed in a manner which facilitates this calculation. · Under clause 37.1 of the Contract, each progress claim "shall include details of the value of WUC done and may include details of other moneys then due to the Contractor pursuant to the provisions of the Contract". Clause 37.2(a) of the Contract then requires the Superintendent to issue "a progress certificate payment schedule evidencing the Superintendent's opinion of the moneys due from the Principal to the Contractor". · The contractual scheme contemplates a claim for, and an assessment of, inter alia, "the value of WUC done" and a credit for the amount previously certified. · Accordingly, it is necessary to assess the value of the relevant work done and to give an appropriate credit for the purposes of both the Contract and the Act. It follows that the Payment Claim will not fail to comply with section 13(2)(a) merely because it has been prepared on this basis. 52 I would respectfully agree with the view taken by Nicholas J in Walter at [65] that a purpose of the Section 13(2)(a) requirement is that a respondent served with a payment claim be provided with adequate information to enable it to provide a payment schedule under section 14. 53 Nicholas J was in that case satisfied that the subject payment claim adequately identified the work (or related goods and services) to which the progress payment related. This was essentially a question of fact and it is somewhat difficult from the description (given at [13], [14] and [15] ) in that judgment to follow the precise detail which would have appeared in the documents giving particulars identifying the items of work claimed to have been carried out under the Contract [the documents appear to have been included in Exhibit A before his Honour]. It does not seem to me to be a proper reading of the judgment (at [66] and in particular the last sentence of that paragraph) to regard it as a holding that all that was necessary was to state in a payment claim that it covered work and related goods and services provided under a particular contract in respect of a named project. 54 I am further in agreement with the following view taken by Davies AJA in Hawkins Construction (Aust) Pty Ltd v Mac's Industrial Pipework Pty Ltd [2002] NSWCA 136, paragraph 20: "However, subs (2) of s13 of the Act should not be approached in an unduly technical manner keeping in mind the considerations to which counsel pointed. The terms used in subs (2) of s13 are well understood words of the English language. They should be given their normal and natural meanings. As the words are used in relation to events occurring in the construction industry, they should be applied in a common sense practical manner." 55 To the extent that the authorities disclose a difference of approach in this regard, my view is that the analyses and expressions of opinion by Nicholas J in both Walter Construction Group Ltd v CPL (Surry Hills) Pty Ltd [2003] NSWSC 266 ("Walter"), paragraphs 63-66 and 81-85, and in Parist Holdings Ltd v WT Partnership Australia Pty Ltd [2003] NSWSC 365 ("Parist"), paragraphs 27-29 adopted by Bergin J in Paynter Dixon Constructions Pty Ltd v JF & CG Tilston Pty Ltd [2003] NSWSC 869, paragraphs 30-34, should be preferred to the views expressed as obiter by Austin J in Jemzone Pty Ltd v Trytan Pty Ltd [2002] NSWSC 395 ("Jemzone"), generally for the reasons set out above. 56 In the result each of the Club's submissions in respect of the proposition that the subject Payment Claim was invalid for the reason that it failed to identify the construction work (or related goods and services) to which the progress payment relates is rejected. In the present case I am satisfied that the payment claim identified the construction work (or related goods and services) to which it related. The Payment Claim complied with section 13(2)(a), the salient considerations being that it: (i) identified the Contract and the Campbelltown Catholic Club project (TB 838, 845);

[103]

"The principles relevant to the question of compliance with s13(2) were discussed in Hawkins Construction (Aust) Pty Ltd v Mac's Industrial Pipework Pty Ltd [2002] NSWCA 136 par 20; Beckhaus v Brewarrina Council [2002] NSWSC 960 para 73-76; Walter Construction Group Ltd v CPL (Surry Hills) Pty Ltd [2003] NSWSC 266 paras 63-65; 81-85. It must be clear on the face of the document(s) which constitute the statutory payment claim that the information conveyed meets the requirements of s13(2). 'The test is an objective one. In deciding the meaning conveyed by a notice a court will ask whether a reasonable person who had considered the notice as a whole and given fair and proper consideration would be left in any doubt as to its meaning" [ Walter Construction Group Pty Ltd para 82] 59 The question is a close one in terms of the document here claimed to have constituted the relevant payment claim. The so-called progress claim is in fact enclosed as an attachment to the covering letter. The covering letter which uses the words "This is a payment claim made under the [Act] ". The attached document does not use those words. Whilst in other fields of discourse this may be regarded as a matter of no moment, it must be appreciated that one could have a circumstance where a covering letter may enclose a number of documents, yet still itself purporting to be the vehicle conveying the section 13(2)(c) endorsement. It would not be appropriate to hold that the endorsement provision had been complied with if, for example, only some of those enclosed documents were claimed to be the relevant payment claim. This is not an area in which the recipient of the payment claim should be in any doubt from its terms as to what it is and as to the fact that it is made under the Act. 60 The covering letter of the document in question in fact attaches as the last sheet, what is referred to in the covering letter as "the statutory declaration for this claim". Those words are meaningless in this context, having no part to play in relation to the procedure under the Act which purports to be engaged by the last sentence of the covering letter. The statutory declaration would be relevant where a progress claim was made to the Superintendent, but is not relevant where the Act is sought to be engaged and forms no part of a payment claim. 61 For those reasons the attachment of the statutory declaration was otiose. Further the words "for this claim" which appear in the sentence "the statutory declaration for this claim is also attached", suggest quite incorrectly, that the attachment is an attachment by way of a document forming part of the payment claim made under the Act. These are matters which are calculated to lead to confusion to the recipient of the covering letter and of its enclosures. They are calculated to logically put the recipient in mind of the progress claim procedure generally adopted under the contract condition. 62 Then there is the question concerning the tail end of the first paragraph of the covering letter. It will be recalled that this paragraph was in the following terms:

[104]

" We attach Progress Claim No. 18 for work complete on the above Project for the period ending 28 July 2003 for the sum of $2,789,517.00 (excluding GST) for your review and subsequent certification." 63 The words "for your review and subsequent certification" are unnecessary and otiose. They could and should have been left out. There is no particular occasion for comment once the necessary section 13(2)(c) endorsement appears. What might, in place of these tail end words, have been unexceptional, but would be neither necessary nor particularly desirable, could have been words such as: "your attention is drawn to the provisions of section 14 (1) of the Act in this regard". Even that form of wording could cause difficulty because it is no part of the role of the sender of a payment claim to endeavour to inform the recipient of any particular provisions of the Act. 64 What then is to be made of the tail end words to this paragraph? The sending of a payment claim is a formal act so that if the words "for your review" are to be read as no more than as synonymous with "for your attention", there would not, it seems to me, be any particular problem raised by those words. However the words "for your review and subsequent certification" are the very words used and to be expected to be used when the contractor submits progress claims to the Superintendent under contract condition 37.1. So that arguably the recipient of the covering letter could be expected to find the full phrase curious, and the more so because of the reference to the anticipated "subsequent certification" by the recipient of the claim. These words are not particularly apt at all to describe the entitlement of a person on whom a payment claim is served, to reply to the claim by providing a payment schedule to the claimant. Here again they are apt to cause confusion and in an environment where the statutory scheme requires strict compliance to the letter with the codified procedures. 65 Ultimately I have come to the conclusion that notwithstanding the above described anomalies in the unnecessary use of the tail end words in the first paragraph of the covering letter and the attachment of the so-called "Statutory Declaration for this claim", a reasonable person reading the covering letter and the attachments as a whole would have been left in no material doubt as to its meaning essentially conveyed by the last sentence in the covering letter. 66 There is no, it seems to me, substance in the Club's submission that the reference in the first paragraph of the covering letter to the claim being "for the sum of $2,789,517 (excluding GST)" is problematic in the circumstances. The page which follows makes plain that the total amount due and the subject of the claim was $3,068,468. 67 For those reasons the Club's submissions on the section 13 (2) (b) "No Progress Payment Claimed" issues are rejected. The Endorsement [section 13(2)(c)] The Club's submission

[119]

[55] "Thus, in the present circumstances as the contract has the relevant provisions a contractor is entitled under s8 to a statutory 'progress payment' under the Act on the date the progress claim may be made under the contract. Such a statutory progress payment becomes due and payable under s11 on the date when the contractual payment becomes due and payable. In this case it is 14 days after the submission of the contractual progress claim." [60] "The Act obviously endeavours to cover a multitude of different contractual situations. It gives rights to progress payments when the contract is silent and gives remedies for non-payment. One thing the Act does not do is affect the parties' existing contractual rights. See ss3(1), 3(4)(a) and 32. The parties cannot contract out of the Act (see s34) and thus the Act contemplates a dual system. The framework of the Act is to create a statutory system alongside any contractual regime. It does not purport to create a statutory liability by altering the parties' contractual regime. There is only a limited modification in s12 of some contractual provisions. Unfortunately, the Act uses language, when creating the statutory liabilities, which comes from the contractual scene. This causes confusion and hence the defendant's submission that the words "person who is entitled to a progress payment under a construction contract" in s13(1) refers to a contractual entitlement. [61] The trigger that commences the process that leads to the statutory rights in s15(2) is the service of the claim under s13. That can only be done by a person who 'is entitled to a progress payment under a construction contract'. The words 'progress payment' are a defined term in the Act. It means a payment to which a person is entitled under s8. That section fixes the time of the 'entitlement' given by the section by reference to the contractual dates for making claims or, if there is no contractual provision, for making claims by reference to a four week period. Section 9 deals with the amount of such a statutory progress payment. Importantly, s9 uses similar words to s13 in that it refers to 'a progress payment to which a person is entitled in respect of a construction contract' and then directs determination of that amount by reference to both contractual amounts or if no contractual amount on the basis of the value of the work done. [62] Section 11 then deals with the due date for payment in respect of 'a progress payment under a construction contract'. It does it also by reference to contractual due dates and if no such provision then by reference to a two-week period. One thus has a series of sections which create a statutory right to a progress payment by fixing entitlement, the date for making claims, amount of claims and due date for payment of claims. The statutory right to claim is for both situations, namely, where a contract provides for such claims and where it does not. [63] Thus s13 merely continues on the statutory procedure and the opening words must be a reference to the statutory entitlement created in the previous sections not the contractual entitlement submitted by the defendant. If the defendant's submission were correct it would mean that in respect of contracts which do not provide for progress payments there is no ability to recover the statutory right to progress claims in Division 3. This consequence makes otiose the earlier provisions of the Act and defeats its express object which is to:- 'ensure that any person who carries out construction work (or who supplies related goods and services) under a construction contract is entitled to receive, and is able to recover, specified progress payments in relation to the carrying out of such work and the supplying of such goods and services.' [64] In my view the submissions of the defendant are simply not arguable. [65] As under 42.1 the plaintiff is entitled to progress payments there is no reason why he cannot make the statutory claim at the same time as his contractual claim. The statutory claim must comply with Section 13(2). On its face the document appears to do this and there was no submission to the contrary." Walter Construction Group Ltd v CPL (Surry Hills) Pty Ltd [2003] NSWSC 266, paragraphs 28-32 and 52-55:

[121]

[31] It was then submitted that, absent proof of entitlement to an amount calculated in accordance with the terms of the contract, the amount of a progress payment to which a person was entitled would not be established within the meaning of s9(a). It followed that the requirement of s13(2)(b) would not be met. It was argued that the expression in this sub-para "the amount of the progress payment that the claimant claims to be due for the construction work done" refers to the amount which has actually been determined under the contract to be due and payable to the claimant. In this case, therefore, there having been no determination as at 20 December 2002, of an amount pursuant to cl 42.1 of the contract, no amount could properly be indicated in the payment claim "to be due" and, consequentially, it was not a valid claim within the meaning of s13(1). [32] Reference was made to Beckhaus v Brewarrina Council [2002] NSWSC 960 in which the court considered a submission to similar effect, namely that unless a progress payment under a contract is due and payable in accordance with the terms of the contract there is no statutory entitlement under the Act, that is to say the words "person who is entitled to a progress payment under a construction contract" in s13(1) refers to a contractual entitlement. It was submitted that Macready, AJ, erred in rejecting the submission when he held (para 63) that the opening words of s13(1) must be a reference to the statutory entitlement created in the previous sections and not to the entitlement under the contract…. [52] In Beckhaus v Brewarrina Council , Macready, AJ, considered a submission with reference to s13(1) of the Act that unless a progress payment under a contract is due and payable in accordance with the terms of the contract there is no statutory entitlement under the Act. After detailing relevant provisions of the Act he expressed his conclusions as follows: [At this point, Justice Nicholas set out paragraphs 60-65 of Beckhau s which are set out above] (There was no challenge to these findings in the appeal from His Honour's order for summary judgment: Brewarrina Shire Council v Beckhaus Civil Pty Ltd [2003] NSWCA 4). [53] I respectfully agree with his Honour's analysis and conclusion. They are consistent with the opinion of Heydon JA in Fyntray Constructions Pty Ltd v Macind Drainage and Hydraulic Services Pty Ltd [2002] NSWCA 238 at para51). '51 Fourthly, the two limbs of that part of the definition of "reference date" appearing in section 8(2)(a) reveal a legislative intention to permit payment claims to be made either by reference to a contractual date for making a claim (that is, under cl 42.1) or by reference to a contractual date by reference to which the amount of the progress payment is to be calculated (that is, taking into account cl 42.2). .... While cl 42.1 compels monthly claims, section 8 contemplates entitlements to progress payments arising not only by reason of the dates for making claims under cl 42.1, but by reason of a date by reference to which the amount of the progress payment is to be calculated under cl 42.2, and the latter date includes periods which may be greater than the preceding month'. (See also Hodgson, JA paras 74, 75). [54] As has been found, it was agreed that the contract date for making the claim for December was 20 December 2002. That being so, in my opinion the Plaintiff, on that date, was a person entitled to a progress payment within the meaning of s13(1).

[131]

40 I therefore reject the fundamental proposition on which Abacus' case was based. Nonetheless, it is necessary to examine each of the errors of law to see whether jurisdictional error is demonstrated." 74 Whilst there is some substance in the Club's submission concerning the circularity where section 4 defines "progress payment" as meaning "a payment to which a person is entitled under section 8", when section 8 then merely uses the same term "progress payment", it is plainly necessary to make sense of the statutory scheme. And it is also necessary to endeavour to keep in mind the terms of [and reason for] the amendment to section 13 (1) which inter alia added the words "or who claims to be", hence expanding the description of persons having the right to serve a payment claim as provided for under the anterior form of wording. In that regard the legislature clearly intended to broaden the scope of section 13(1). 75 The particular focus placed by the Club on the meaning of the words "claim for a progress payment may be made" appearing in section 8(2)(a) is shortly answered in the present context by the fact that Leighton was entitled under the subject contract to make a progress claim by a procedure, the first stage of which involved written notification to the superintendent. [Contract clause 37.1] Hence the section 8(2)(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", was the date when Leighton was entitled to give its progress claim to the Superintendent. 76 I note in passing that the 2nd sentence of clause 37.1 appears to mean that if a progress claim is lodged with the Superintendent on a date earlier than the 28th day of a particular month, it is deemed to have been made on the 28th day of the month. 77 For those reasons the Club's broader submission that Leighton was not as at 28 July a person entitled to make a claim for a progress payment within the meaning of section 8(2)(a) is rejected.

[149]

6.4 Alternatively, if the Alleged Payment Claim is not invalid in its entirety, it is certainly so to the extent of the rock excavation and other time barred claims. Moreover, in the exercise of it's discretion, the Court ought not give judgment, whether a summary or otherwise, in respect of a payment claim, the substantial portion of which offends the Act's requirements. S.15(4) does not, in terms, eliminate all judicial discretion in awarding judgment under the Act. The present case is an appropriate case for the refusal of judgment." 82 There is no issue but that some of the rock excavation work the subject of the payment claim was carried out earlier than twelve months prior to 28 July 2003. 83 It is appropriate as a general matter to note the holdings (at [67] and [68]) by Nicholas J in Walter Construction: · that to demonstrate compliance with section 13 (2) (a) it is irrelevant that an item which is a component of a payment claim may be disputed, albeit on the ground that such item cannot be categorised as either work or goods and services within the meaning of section 5 or section 6 respectively; and · that in a challenge which raises the question of compliance with section 13 (2) (a), the question is not whether an item of the payment claim relates to construction work or related goods and services within section 5 and section 6 respectively, but whether the payment claim adequately identified such work will goods and services [68]. 84 As is accepted by the Club that line of reasoning was expressly followed by Bergin J in Paynter. In my view that line of reasoning was correct. The matter is clearly relevant to the proper approach to be taken to the similar but by no means identical question albeit now raised in the context of the prohibition to be found in section 13 (4) (b). 85 No previous decision appears to have dealt with the requirements of section 13 (4) (b). 86 It seems necessary to stand back from the issue and to seek to place it into context. 87 Construction work involves as the norm, work which may be expected to be carried out over a period of time. The laying of foundations is an example. This is unlikely to take one hour and may take days or weeks or even longer. 88 Presumably the same may be said in relation to the provision of related goods and services. 89 The legislature appears to have had to cope with these realities in determining how to describe the period of time within which a payment claim could be served. 90 By definition or real world practice it would be likely that a payment claim would cover disparate forms of construction work carried out over the same or different periods/brackets of time and would similarly likely cover the provision of related goods and services over the same or different periods/brackets of time. 91 It would seem unlikely that the legislature would have intended that a payment claim in respect of any particular item of construction work [as for example the laying of a particular brick] could only be served within the period of 12 months after completion of the work comprising that particular item. 92 Possibly the same may also be said in relation to it being unlikely that the legislature would have intended that a payment claim in respect of a particular unit of construction work [as for example the laying of a brick course or concourse] could only be served within the period of 12 months after completion of the work comprising that unit of construction work. On the other hand perhaps it is arguable that the legislature may have so intended. 93 The legislature in fact enacted section 13 (4) in the following terms:

[165]

(b) in Karimbla , paragraph 11, Justice Barrett found that a payment schedule could be provided by an agent of the principal. However, in issuing progress certificates pursuant to clause 37.2 of the Contract the Superintendent was acting as an independent certifier and not as an agent of the Defendant. This clear from: (i) His Honour Hodgson JA (with whom Mason P and Stein JA agreed) who said in Abigroup Contractors Pty Ltd v Peninsula Balmain Pty Ltd ("Abigroup") [2002] NSWCA 211, paragraph 50: "The authorities … are not altogether clear as to whether a person in the position of a superintendent of a building contract is the owner's agent in exercising all the functions of the superintendent. However, in my opinion the better view (supported by Perini, Dixon, Egan and London Borough of Merton and not refuted by Sutcliffe) is that the superintendent is the owner's agent in all matters only in a very loose sense, and that, when exercising certifying functions in respect of which the superintendent must act honestly and impartially, the superintendent is not acting as the owner's agent, in the strict legal sense . In my opinion, this is confirmed by the consideration that the issue of a certificate by the superintendent does not bind the owner to any extent beyond what is prescribed in the building contract itself, so that the owner can challenge such certificates. If the superintendent was acting as the owner's agent in the strict sense, the issue of the certificate would be an act done by the owner through its agent, which the owner could not then challenge." (emphasis added). The authorities referred to by His Honour Hodgson JA were: Perini Corporation v Commonwealth of Australia [1969] 2 NSWLR 530; Dixon v South Australian Railways Commissioner (1923) 34 CLR 71; South Australian Railways Commissioner v Egan (1973) 130 CLR 506; London Borough of Merton v Stanley Hugh Leach Ltd (1985) 32 BLR 51; and Sutcliffe v Thackrah [1974] AC 727. The contract in question in Abigroup was AS2124-1992 which is the immediate predecessor to AS4000-1997 which forms part of the Contract. The Superintendent's role under both contracts is identical for present purposes; and (ii) Dorter and Sharkey who consider it "…almost unreasonable and unrealistic to expect a person in such a situation to wear two hats simultaneously and be a professional contortionist" at paragraph 7.520; and (c) the Defendant has made it clear in correspondence to the Plaintiff that the Superintendent was acting independently when issuing the Certificate. The Defendant's facsimiles of 14 and 19 August 2003 (paragraphs 15 and 18 and Exhibits "MEB7" and "MEB9" to the First Bouton Affidavit") both provide relevantly "…evidencing the Superintendent's opinion…" and "…the payment that the Superintendent proposes to make and the Superintendent's reasons for withholding payment." (emphasis added)" Dealing with the second set of proceedings 108 In my view the second set of proceedings require to be summarily dismissed. The reasons are as follows: · Clearly enough the proceedings are brought only to frustrate the application for summary judgment in the first proceedings.

[167]

· The proceedings amount to an abuse of process, being a backdoor route to in substance, outflank section 15 of the Act. · The overriding purpose rule [Part 1, Rule 3 (1), (2)] may be mobilised where as here the forensic tactic in commencing the second proceedings is antithetic to the facilitation of the just, quick and cheap resolution of the real issues in the proceedings. In the present context the reference to "real issues in the proceedings" translates into the issues which will be determinative of the parties final rights against one another. · Section 63 of the Supreme Court Act expresses a fundamental principle of the Act which is the avoidance of multiplicity of proceedings. The second set of proceedings flies in the face of that principle. 109 These reasons are sufficient to justify the summary dismissal of the second proceedings. There are disparate other reasons to the same end. Declarations of right are final and not interlocutory orders having the effect of creating a res judicata or an issue estoppel: Marra Developments Ltd v B W Rofe Pty Ltd [1977] 2 NSWLR 616 per Hutley JA at 626. The subject declaration sought in the second proceedings fails to comply with this criterion. 110 Further as a general rule the power to make a declaration will not be exercised when the Court is called upon to answer a question that is purely hypothetical. In its submission in relation to this principle, the Club contended that "[t]here would appear to be a genuine dispute between Leighton and the Club as to the amount which was owing under the contract at the time progress claim No. 18 was served". The purpose of the Act is to permit a contractor to sidestep curial proceedings concerning resolution of that form of genuine dispute by utilising the payment claim and other provisions of the Act with the expressed aim that in so doing, the contractor may have the benefit of the peremptory interim determination of such issue. That purpose would be turned on its head if proceedings in the nature of the second proceedings were permitted to go forward. 111 During the hearing, reference was made to the entitlement of the Club to commence substantive proceedings for relief concerning the parties rights under the contract, which relief would be final in character and would upon final determination have the effect of creating a res judicata or an issue estoppel. The entitlement of parties to commence proceedings of this type at an appropriate time is recognised in section 32 of the Act.