MGW Engineering Pty Ltd t/a Forefront Services v CMOC Mining Pty Ltd

Decision on Forefront's claim

1. I do not accept any of these submissions.
2. In my opinion, the effect of Mr Wallder's actions is that the Payment Claims were served on 4 February 2021.

Were the Payment Claims delivered to CMOC "personally" on 3 February 2021 - s 31(1)(a)

1. There appears to be no authority on the question of when a document is delivered "personally" to a corporation for the purposes of s 31(1)(a).
2. There is some artificiality in the notion of a document being delivered "personally" to a corporation.
3. But section 8 of the Act provides that a "person" who undertakes to carry out construction work under a construction contract is entitled to receive a progress payment and section 13 of the Act provides that such a "person" may serve a payment claim. Those provisions make clear that, for the purpose of the Act, a "person" includes a corporation. So much was common ground before me.
4. Section 31(3) provides that the provisions of the section are in addition to any other provisions of law with respect to the service of documents.
5. One of those provisions is s 109X of the Corporations Act 2001 (Cth) which provides, relevantly: "(1) For the purposes of any law, a document may be served on a company by: (a) leaving it at, or posting it to, the company's registered office; or (b) delivering a copy of the document personally to a director of the company who resides in Australia or in an external Territory … ".
6. Forefront did not seek to take advantage of this facultative [2] provision as the registered office of CMOC and the other defendants is not at the Mine and the documents were not delivered personally to any director.
7. For a document to be served "personally" on a corporation more is required than simply leaving the document with an employee, no matter what that employee's functions were nor how junior that employee was, at any location within the corporation's business premises.
8. The word "personally" must be given work to do. The word suggests some step must be taken to bring the document to the attention of a relevantly responsible person within the corporation. This reading of the section is consistent with authorities to the effect that if a mode of service other than under s 109X of the Corporations Act is employed: "… whether it is good service depends upon whether the serving party can prove to the court's satisfaction that the document actually came to the attention of an officer of the company who was either expressly or implicitly authorised by the company to deal directly and responsively with the document, or documents of that nature". [3]
9. That factor is emphasised in this case by clause 47.1(b) of the Contract which provides that any notice served on CMOC or the other defendants "must" be marked with the attention of "the Company Secretary".
10. The Payment Claims were not marked to the attention of "the Company Secretary" but were marked for the attention of the "Company Representative", nominated in three cases to be Mr Richard Plowes, and in one case, Mr Ian Smith.
11. In my opinion, it could not be said that the Payment Claims were served "personally" on CMOC unless and until the documents came to the attention of those persons.
12. Mr Walder said that when he arrived at the Access Control Room he said to Mr Sargent words to the effect: "I have some documents to deliver to Mr Richard Plowes … or, alternatively, if I can give it to one of the project superintendents, serving Wade McConnell or Jeremy Neill".
13. Mr Wallder said that Mr Sargent told him that he would "call someone about it" and left Mr Wallder's presence to make a telephone call. Mr Wallder said that Mr Sargent came back and said that he would accept the documents.
14. Mr Wallder continued: "I then said that I had the envelopes for the four documents open, left open. I said, 'Would you like to view the documents?' He said, then said, 'No'".
15. Mr Walder said that Mr Sargent told him that Mr Plowes was not available. He could not recall whether Mr Sargent said anything about Mr McConnell's and Mr Neill's availability.
16. Mr Sargent's recollection was similar. He said that Mr Walder said to him: "I am from Forefront. These four envelopes need to be given to Richard Plowes. They relate to progress payments. Can you sign for them?"
17. Mr Sargent said the following exchange then took place: "[Mr Sargent]: You should hand the documents to Mr Plowes himself if they need to be personally delivered. [Mr Walder]: I am not allowed on the Northparkes Mine Site so I will have to leave them here. The documents within the envelopes have already been emailed to Mr Plowes. [4] This is just standard procedure. Physical delivery is only necessary as part of the process".
18. Mr Sargent said that Mr Walder added: "You don't need to give the documents to Mr Plowes tonight".
19. Mr Walder denied making the latter comment.
20. However, the fact is that Mr Plowes did not work at the Mine on 3 February 2021 and did not see the Payment Claims until he attended the Mine on 4 February 2021.
21. In those circumstances, I am not satisfied that the Payment Claims were delivered "personally" to CMOC until 4 February 2021. The Payment Claims were addressed to Mr Plowes and Mr Smith. In my opinion they could not be said to have been delivered "personally" to CMOC until the Payment Claims came to the attention of one of Mr Plowes and Mr Smith. That did not occur until 4 February 2021.

Were the Payment Claims "lodged" with CMOC during "normal office hours" at CMOC's "ordinary place of business" on 3 February 2021 - s 31(1)(b)

Lodging

1. There was also no authority on what constitutes the "lodging" of a document at a persons' ordinary place of business.
2. The only other reference in the Act to "lodging" is in section 20 which makes provision for the respondent to "lodge" an adjudication response with the adjudicator.
3. In Bauen Constructions Pty Ltd v Sky General Services Pty Ltd, [5] Sackar J held that, in that context, "lodge" should be given the "primary meaning" in the Oxford English Dictionary to "present, formally to proper authorities". [6]
4. There is controversy as to the extent that the legal meaning of a statutory term can be determined by reference to dictionary definition. [7] Obviously, the meaning of words used in a statute must be determined in accordance with the context in which they are used, and not merely by reference to dictionary definitions.
5. However, in this case, the context in which the word "lodge" is used in both sections 20 and 31(i)(b) of the Act suggests that "primary" dictionary meaning to which Sackar J referred, provides guidance as to the meaning of the word "lodged" when used in the Act.
6. In my opinion, consistently with my opinion about personal delivery to a corporation, in order that a Payment Claim be "lodged" with a corporation, more is required than simply leaving the document with an employee, no matter what that employee's functions were nor how junior the employee was, at any location within the corporation's business premise. Some further step, the effect to which would likely be bringing the Payment Claim to the attention of the relevantly responsible person, is necessary.
7. Mr Wallder's actions in delivery the Payment Claims to Mr Sargent in the circumstances that I have set out do not, in my opinion, constitute "lodging" of the documents with CMOC or, alternatively, could not amount to such "lodging" unless or until the documents came to the attention of the relevant responsible person.
8. That did not occur until 4 February 2021.

Normal business hours

1. As s 31 of the Act is dealing with the manner in which a document authorised or required by the Act "to be served on a person" the reference to "normal office hours at the person's ordinary place of business" must be a reference to "normal office hours" of that "person" at that "ordinary place of business".
2. Thus, the question here is the "normal office hours" at the Mine.
3. I did not understand either party to contend differently.
4. The Mine operates continuously 24 hours a day, 7 days a week and every day of the year.
5. Mr Sargent agreed that between 8am and 6pm on a typical day there would be some 400 people at the Mine.
6. However, s 31(1)(b) speaks of "office" hours and not "operating" hours.
7. In Lane v Arrowcrest Group Pty Ltd [8] von Doussa J stated, in an admittedly different context, that "usual office hours" "would reflect the customary working hours of clerical staff" or the hours during which the administration section of the relevant entity was open.
8. In Sand Excavation Pty Ltd v Nahas Constructions Pty Ltd, [9] Macready AsJ said, speaking of s 31(1)(b) of the Act, that "normal office hours is an expression which refers to the general operation of an office". [10]
9. In my opinion, "office hours" of a person for the purpose of s 31(1)(b) of the Act means the hours that the administrative or clerical staff of the person normally keep.
10. Mr Wallder handed the Payment Claim to Mr Sargent in the Access Control Room at 5.15pm on 3 February 2021.
11. Mr Sargent described the Access Control Room as: "…a building at the entrance to the Northparkes Mine Site (on the south side of the site) with a boom gate that requires personnel to tag a swipe card to gain access to site."
12. In cross-examination, Mr Sargent gave this evidence about the Access Control Room: "Q. Can you describe the access control room to me, its dimension and its constitution? A. Yes sir. It consists of about four rooms so the front room itself has big glass windows going out to the front and the side so you can see who is coming in to the carpark and who is driving through the main gate and who is also walking past the main gate. So that's about 10 metres to the carpark and about 10 metres to the road sir. There's also a drug testing room next door to that and out the back is our first aid room with all our medical supplies where we conduct our medical treatment and out the back is a storeroom sir."
13. Mr Sargent was on duty at the Access Control Room each day between 5pm and 8pm. Between 8am and 5pm Mr Sargent's role was as "Senior Emergency Management Advisor" and managed "emergency response training for CMOC employees and subcontractors".
14. In his affidavit he described his duties as follows: "I would describe my role whilst working in the Access Control Room as a 'door role'. I conduct various tasks including: (a) carrying out drug and alcohol testing on workers entering the Northparkes Mine Site; (b) temperature testing (this was undertaken only for COVID-19 protocols); (c) ensuring everyone who enters has a valid staff card and properly swipes through the gates so their entry is recorded; (d) dealing with any alarms on site which are notified by the systems located in the access control centre; (e) carrying out first aid duties when necessary; and (f) receiving deliveries to the Northparkes Mine Site and storing them at the Access Control Room for collection by intended recipients."
15. I do not see Mr Sargent's role in the Access Control Room between 5pm and 8pm to be "administrative" or "clerical" nor to shed light on what CMOC's "normal office hours" were at the Mine.
16. Mr Plowes gave evidence that the Mine's clerical and administration staff work in the "Admin Building" and in the "E26LIN office".
17. In relation to the "Admin Building", Mr Plowes said that, typically, employees worked there between 7am and 5pm. He mentioned two particular employees, Ms Laura Mansell and Ms Ashley Evans, and said that those employees worked between 7 and 7:30am to around 4pm.
18. Mr Plowes agreed that some employees might "occasionally" work beyond 5pm in an overtime capacity but that the "majority" left earlier than 5pm. Mr Plowes said that although he saw "some staff" in the Admin Building between 5 and 5:30pm, there were very rarely administration staff present after 5pm.
19. In relation to the E26LIN office, Mr Plowes said that an employee, Ms Sandra Phillips, worked there between 7 and 7:30am to 4 and 4:30pm each day.
20. Mr Plowes also said that CMOC contractors, including project supervisors and project engineers, worked from the E26LIN office. Those contractors typically worked a 12-hour shift, often between 6:30am to 6:30pm, or 6:30pm to 6:30am but sometimes on different rosters.
21. But Mr Sargent said that contractors were generally "blue collar workers that work underground". Thus, they were not administrative or clerical staff.
22. Mr Plowes said that meetings at either the Admin Office or the E26LIN office were generally scheduled to commence and conclude between 7:30am and 5pm and that he could not recall any meetings finishing after 5pm.
23. In my opinion, these factors point, overwhelmingly, to the conclusion that CMOC's "normal operating hours" at the mine commenced between 7 and 7:30am and concluded around 4 to 4:30pm.
24. I find that Mr Wallder delivered the Payment Claims to Mr Sargent outside those "normal office hours".

Ordinary place of business

1. In its Payment Schedules, CMOC accepted, indeed asserted, that the Payment Claims were served at CMOC's "ordinary place of business".
2. In opening submissions, CMOC accepted that the Mine was its "ordinary place of business".
3. In closing writing submissions, CMOC submitted that the Access Control Room was not itself CMOC's "ordinary place of business".
4. That submission was not taken up in oral submissions.
5. In any event I do not accept that the Access Control Room is not within CMOC's ordinary place of business.

Were the Payment Claims served "in a manner provided by" the Contracts on 3 February 2021 - 31(1)(e)

1. Section 47.2 of the Contract provided, relevantly: "47.2 Notices deemed given A Notice will be taken to be duly given: (a) in the case of delivery by hand, when delivered; … but if the result is that a Notice would be taken to be given or made on a day that is not a Business Day or the Notice is sent or is [delivered] later than 4.00pm (local time) it will be taken to have been duly given or made at the commencement of business on the next Business Day."
2. I have added in square brackets the word "delivered" in the chasseur [11] to the clause as it appears that "something has gone wrong with language" [12] and that the word has been accidentally omitted.
3. The effect of the proviso in the chasseur to clause 47.2 is that as the Payment Claims were delivered to the Mine later than 4.00pm on 3 February 2021 they are taken to have been given at the commencement of business on 4 February 2021.
4. Mr Weinberger, for Forefront, submitted that this proviso is void by reason of s 34 of the Act as it purports to "modify" the operation of the Act.
5. I do not agree.
6. The provision is cl 47.2 is facultative. It does not require either party to serve a Notice in accordance with its provisions. It does not "modify" any part of s 31. If the Payment Claims had been served in accordance with one or other of ss 31(1)(a), (b), (c) or (d), such service would have been effective notwithstanding the provisions of cl 47.2.
7. Clause 47.2 is only relevant because Forefront contended that it had served the Payment Claims "in the manner provided" by it for the purposes of s 31(1)(e). Assuming it did so because the Payment Claims were delivered "by hand", as such delivery was after 4.00pm, service is taken to have been effected the next day. That does not "modify" the operation of s 31(1) generally or s 31(1)(e) in particular. Indeed, it gives effect to s 31(1)(e).

Conclusion on service

1. For those reasons, my conclusion is that the Payment Claims were served on 4 February 2021.

CMOC's Cross Claim

1. It follows from my conclusions as to the date on which the Payment Claims were served that Forefront was not entitled to suspend works under s15(2)(b) of the Act.
2. CMOC seeks a declaration to that effect and I propose to make such a declaration.
3. CMOC also seeks the following orders: "An order for specific performance requiring [Forefront] to comply with the direction from [CMOC], sent by letter dated 7 March 2021 … pursuant to clause 11.1 of the [contract] to: (a) deliver to [the Mine] the steel that has been fabricated to date and paid for by [CMOC] as identified in Annexure A to the 7 March letter; and (b) deliver electronic copies (PDF and Native) of all shop detailed drawings and erection drawings related to the [relevant Contract]. An order for specific performance requiring [Forefront] to deliver to [the Mine] the steel identified in Annexure B to the 7 March Letter in consideration of payment of the sum of $860.23 (excluding GST) to [Forefront] by [CMOC] …".
4. CMOC's claim arises out of a direction that CMOC gave Forefront on 7 March 2021 which was expressed in the same terms as the proposed order for specific performance.
5. The direction was given pursuant to cl 11.1 of the General Conditions of the Contracts which provided that: The Works must be performed by [Forefront] in accordance with the Contract and in accordance with any directions of [CMOC] pursuant to the provisions of the Contract [Bundle 125].
6. Forefront offered a number of answers to the claim.

The clause 42 Point

1. First, Forefront relied upon a dispute resolution clause contained in clause 42 of the General Conditions.
2. That clause provided that in the event of a dispute: 1. each party must nominate a representative from senior management to resolve the dispute; 2. if the dispute was not resolved within 30 days "then either Party may commence legal proceedings in an appropriate court to resolve the matter"; and 3. during the existence of any dispute the parties "must continue to perform all of their obligations under the Contact".
3. The clause thus did not, in terms, prevent CMOC from commencing proceedings for final relief nor prevent CMOC from bringing a cross claim against Forefront in circumstances where Forefront had already commenced proceedings against CMOC.
4. Further, Forefront did not plead reliance on non-compliance with this clause in its Response to the Cross-Claim List Statement and did not raise the matter until submissions shortly before the hearing.
5. As the matter was only raised at the heel of the hunt, I would not, as a matter of discretion, have restrained CMOC from enforcing the Contract on this account.
6. In Jamac Construction Group Pty Ltd v De Mol Investments Pty Ltd, [13] Kenneth Martin J was faced with a similar circumstance and concluded. [14] "For this court to mandate that process to unfold at this late stage presents to me as pointless in the extreme. I would assess that outcome as a significant triumph of form over substance."

The suspension of works point

1. Next, Forefront contended that the effect of a number of letters from CMOC to Forefront was to suspend services under the Contract in their entirety, whether those services were being performed on site at the Mine or not.
2. I do not see that the letters in question had this effect.
3. On 25 January 2021, CMOC wrote to Forefront asserting that Forefront was in breach of a number of "safety obligations" and stating that as a result of those alleged breaches: "[Forefront] is required to suspend all Works at the Site. All tasks currently underway must be completed or wound up in a safe and timely manner."
4. CMOC was clearly referring to "Site" as defined in the Contract. That is to say, CMOC's premises at the Mine.
5. The letter did not purport to require Forefront to suspend works at its own steel manufacturing workshops in Orange or Parkes.
6. On 15 February 2021, CMOC wrote to Forefront purporting to exercise its rights under clause 18.1 of the Contract to "source any or all of the Works … from third parties" by stating that it would source "all remaining site installation scope of works" under the Contract from third parties.
7. But CMOC did not purport to source all other works from third parties and thereby abrogate the means by which Forefront could perform the works now the subject of CMOC's claim for specific performance.
8. Thus, CMOC stated: [V]ery shortly, and under cover of separate letter, [CMOC] will clarify the scope of work which will remain with [Forefront] so far is it relates to material supply, fabrication and delivery to [the Mine]."
9. The next day, 16 February 2021, CMOC wrote to Forefront: [CMOC] confirms that [Forefront's] scope of work, so far as it relates to material supply, fabrication and delivery of steel, remains with [Forefront] to complete in accordance with the terms of the [Contract]. To this end, [Forefront] is directed to issue to [CMOC] a bill of materials with relevant technical data sheets for all structural steel and associated materials fabricated (or to be fabricated), together with updated fabrication and delivery schedule.
10. This made clear that fabrication of steel, together with its delivery, was not taken out of Forefront's hands.

Offer not accepted point

1. Finally, Forefront contended that an "offer" made by CMOC in its 7 March 2021 letter had not been accepted by Forefront and that there was "no juridical basis to foist offer and acceptance upon [Forefront]".
2. But this misreads CMOC's 7 March 2021 letter. In in that letter CMOC directed Forefront to deliver the steel and drawings referred to in CMOC's prayers for relief on the cross Claim and concluded that there was still an amount of $860.23 due by CMOC to Forefront for the steel (out of a total amount of $10,608).
3. CMOC stated: [CMOC] will pay [Forefront] that amount upon delivery of this steel to [the Mine]. Please confirm whether [Forefront] accepts that offer by no later than COB on Monday, 8 March 2021.
4. Thus, the "offer" was merely about payment of the small balance due for the steel.
5. It did not in any way qualify the direction given in the body of the letter.

Conclusion on the cross claim

1. For those reason I propose to make the orders sought on the cross claim.

Conclusion

1. The parties should confer and agree on the orders necessary to give effect to these reasons.
2. If there is any dispute as to costs, the parties should confer and agree on a timetable for short submissions on that question.
3. I will deal with that matter on the papers.

Endnotes

1. Because one of the four Payment Claims specified a Scheduled Amount at that figure. The other Payment Claims specified a Scheduled Amount of "nil".
2. Howship Holdings Pty Limited v Leslie (1996) 41 NSWLR 542; [1996] NSWSC 314 at p 544 (Young J).
3. Woodgate v Garard Pty Ltd [2010] NSWSC 508 at [42] and [44] (Palmer J).
4. There is no evidence before me that this occurred.
5. [2012] NSWSC 1123.
6. At [71].
7. P Herzfeld and T Prince, Interpretation, (2nd ed, 2020, Thomson Reuters) at [2.140]; South Western Sydney Local Health District v Gould (2018) 97 NSWLR 513; [2018] NSWCA 69 at [78] (Leeming JA, Basten and Meagher JJA agreeing); Tal Life Limited v Shuetrim; Metlife Insurance Ltd v Shuetrim (2016) 91 NSWLR 439; (2016) NSWCA 68 (Leeming JA; Beazley P and Emmett AJA agreeing).
8. (1990) 27 FCR 427; 99 ALR 45 at p 57.
9. [2011] NSWSC 184.
10. At [53].
11. SMA Solar Technology AG v Beyond Building Systems Pty Limited (No 5) [2012] FCA 1483 at [79] per Perram J; cf "chaussure" per Parker J in Viljoen v Hayes [2017] NSWSC 801 at [26]
12. Per Lord Hoffman in Chartbrook Ltd v Persimmons Homes Ltd [2009] 1 AC 1101 at [25]; and see Lewison and Hughes supra at [9.01] and [9.02] and the cases there cited, including Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53 at 426-427 (Dixon CJ and Fullagar J); see also the recent discussion by Leeming JA in Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In Liq) (2019) 99 NSWLR 317; [2019] NSWCA 11 at [6] to [11].
13. [2014] WASC 273.
14. At [82]. 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: 11 May 2021