Olympia Group Pty Ltd v Tyrenian Group Pty Ltd [2010] NSWSC 319 | Case summary

2010/46881 OLYMPIA GROUP PTY LIMITED & ANOR -V- TYRENIAN GROUP PTY LIMITED EX TEMPORE JUDGMENT 1 HIS HONOUR: The first plaintiff was incorporated on 13 May 2002. Olympia Group (NSW) Pty Limited, to which I shall refer as "Olympia NSW", was incorporated on 2 January 2008. Both are associated with the second plaintiff, Mr Davidson. 2 According to Mr Davidson, the first plaintiff is in the business of property development but presently does not carry on any business activities. He says it has no place of business, as such, beyond its registered office (which is at a firm of accountants) and that it keeps all of its records and accounts there. 3 Olympia NSW is in the business of building and construction. According to Mr Davidson, it operates only at sites at which it is undertaking construction activity. It maintains a serviced office at Level 23, Tower 1, 520 Oxford Street, Bondi Junction for the receipt of correspondence and telephone calls, and as a place to convene meetings. 4 From about March 2009 Olympia NSW was engaged in quoting for work to be carried out for the Australian Government in relation to the upgrade of certain naval defence works, which it is not necessary for present purposes to describe ("the works" or "the project" as the case may be). This involved, amongst others, obtaining quotes from potential subcontractors. 5 The defendant is a company associated with Mr Robert Carzo. He is its sole director. He is also associated with a company called TQM Pty Limited ("TQM"). At some point he was associated with a company called Ozrac Engineering (NSW) Pty Limited ("Ozrac") which had dealings with Olympia NSW in 2008, and which was placed into receivership on 28 May 2009. 6 On 16 April 2009 TQM, represented by Mr Carzo, gave a quote to "Olympia Group" at a PO box number in Bondi Junction to carry out mechanical works which Olympia NSW was to carry out under its head contract with the Government ("the head contract"). The price for the work quoted was $489,700 plus GST, and $10,460 plus GST per annum was quoted for annual maintenance. 7 On 30 April 2009 Mr Carzo, this time on behalf of MPM Pty Limited ("MPM"), provided a quotation for the same work covered by the earlier TQM quotation but with a reduced price of $449,700 plus GST. 8 Mr Davidson says he was called by Mr Carzo on 1 June 2009 and told that he was forming a new company called the Tyrenian Group ("Tyrenian"). On 4 May 2009 the company called Tyrenian Group Pty Limited was formed with Mr Carzo as sole shareholder and director. Tyrenian is the defendant in these proceedings. 9 Mr Davidson says he was told that Tyrenian was going to take over from Ozrac, which was in administration. He says Mr Carzo conveyed to him that Ozrac's demise had been the reason why he had originally quoted under the name TQM. Mr Davidson says he asked who MPM was and that Mr Carzo told him that it was a company he had been managing until he could set up his own and that his own had now been set up. 10 On or about 22 June 2009 Olympia NSW entered into a written contract with the Australian Government to carry out the works. On about 23 June 2009 Mr Davidson told Mr Carzo that the head contract had been awarded and that he was happy to award the subcontract for the mechanical works (forming part of the works) to the "Tyrenian Group". 11 The defendant commenced work on the project on 24 June 2009. In August 2009 Mr Carzo received $5,000 drawn by Olympia NSW in favour of him personally. 12 The mechanical works were completed in October 2009 by Tyrenian (except perhaps for omissions and defects). The defendant left the site at that time and has not returned. 13 On 10 August 2009, perhaps because he envisaged that there might be a dispute, Mr Davidson procured the sending of an invoice to the defendant reflecting that monies were owed by the defendant to Olympia NSW. 14 On 17 December 2009 the defendant directed tax invoices (described as claims for payment under the Building and Construction Industry Security of Payment Act 1999 (NSW)) to "Mr Viv Davidson and Olympia Group Pty Limited". This spawned a response on behalf of the first plaintiff from an organisation called Contract Administration and Management Services Pty Limited ("CA & MS") by way of a letter dated 25 December 2009. In the letter CA & MS asserted that there was no contract or other arrangement under which the defendant undertook to carry out construction work or to supply related goods and services to the first plaintiff, and that the entity, with which the defendant agreed, was not the first plaintiff but rather Olympia NSW. 15 On 27 December 2009 a further tax invoice directed to the first plaintiff and Mr Davidson was presented by the defendant. That brought a response again, by CA & MS, dated 15 January 2009 which repeated the assertion that the contracting party was not the first plaintiff but rather Olympia NSW. 16 The defendant says that at 10.01pm on 31 January 2010 it sent a facsimile to the facsimile number of the first plaintiff a payment claim under the Act claiming $240,988.83. Evidence was given by Mr Joseph Lombardo, who describes himself as a forensic accountant, that he prepared and served the claim by facsimile, and he produced what he described as a true and correct copy of the facsimile transmission advice generated by his facsimile machine confirming successful transmission to the first plaintiff's facsimile at the time and date concerned. 17 The first plaintiff denies receipt of any such facsimile at that time. The first plaintiff says that a facsimile of the claim was first received by it at about 10.31am on 2 February 2010. Internal material of the first plaintiff indicates that such a document was on-emailed within the first plaintiff's own organisation on 2 February 2010. The document which it says it received has a fax header in the following terms: "01/01/2006 00:01 83457289 page01/02". 18 The position accordingly is that the defendant has led evidence that the payment claim was served by facsimile and the first plaintiff denies receipt of it at that time. The significance of this is that if the claim was received by the first plaintiff on 31 January 2010 it had to serve its payment schedule under the Act by 12 February 2010. It served its payment schedule on 15 February 2010. If service took place on 2 February 2010 it had until 16 February 2010 to serve its payment schedule. 19 Section 8 of the Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Act") provides that a person who has undertaken to carry out construction work under a construction contract is entitled to a progress payment. Section 13(1) provides that such a person may serve a payment claim on the person who under the construction contract concerned, is or may be liable to make the payment. Section 14(1) provides that a person upon whom a payment claim is served may reply to the claim by providing a payment schedule to the claim. Section 14(4) provides that: 14 Payment schedules (4) If: (a) a claimant serves a payment claim on a respondent, and (b) the respondent does not provide a payment schedule to the claimant: (i) within the time required by the relevant construction contract, or (ii) within 10 business days after the payment claim is served, whichever time expires earlier,

the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates. 20 Under s 4 construction contract is defined to mean: a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party. 21 By Summons sued out of this Court on 19 February 2010 the plaintiffs claim a declaration that they are not parties to a construction contract with the defendant within the meaning of the Act, a declaration that the claim dated 31 January 2010 is not a payment claim within the meaning of that expression under the Act and an order that the defendant be restrained from taking any steps to recover the unpaid portion of the scheduled amount noted in the plaintiffs' payment schedule dated 15 February 2010 or from making any adjudication application as permitted under the Act. 22 The defendant has sued out a cross-summons for judgment in the amount of $240,988.93. 23 The issues which have arisen for determination in these proceedings are as follows: a firstly, who is the party to the contract with it for the works? The defendant says the first plaintiff. The first plaintiff says that it is not party but that Olympia NSW is; b secondly, when was the payment claim ("the claim") of 31 January 2010 received? The first plaintiff says, and the defendant disputes, that the payment was only received on 2 February; c thirdly, even if the claim was received on 31 January 2010 by facsimile was that effective service on the first plaintiff? The plaintiffs say that service was not effective because the address to which it was sent was not a facsimile addressed to the first plaintiff's ordinary place of business because the first plaintiff did not carry on business and therefore did not have an ordinary place of business at which service could have been effected. The plaintiffs also put that the claim was directed indivisibly to both plaintiffs, together they are one person on whom a payment claim may be served under s 14(1) of the Act and that service under the Act of the claim only took place when it occurred on both, that is when it came to the attention of Mr Davidson, (which it is not disputed occurred on 2 February 2010); d fourthly, is the claim an abuse of the processes of the Act because it repeats, at least in part, monies which had been claimed under earlier claims by the defendant? 24 I shall deal firstly with the questions relating to service. 25 Mr Lombardo's evidence that he sent the claim by facsimile on 31 January 2010 was not directly challenged other than it being put to him that the facsimile was sent at another time. The plaintiffs' evidence that there was not physical receipt of a printed out document until 2 February 2010 was, by the same token, not directly challenged by the defendant. 26 Reference was made to the judgment of McDougall J in Zebicon Pty Ltd v Remo Constructions Pty Ltd [2008] NSWSC 1408 in which his Honour held that receipt into the memory of a fax machine constituted receipt under the Act of a claim by the respondent. Mr Lombardo produced a facsimile confirmation document indicating that the facsimile had been transmitted as he says. 27 There are some anomalies about the material which the defendant has produced. The original facsimile transmission report has not been found. The document (which is the only document according to the first plaintiff's evidence which was received) has a header which is anomalous. The date on it is some 4 years prior to 31 January 2010. 28 Nevertheless, in all of these circumstances I accept that the facsimile was sent as Mr Lombardo says, although I equally accept that the physical emanation of it was not received by the first plaintiff until 2 February 2010. It follows that the first plaintiff's submission that it did not receive the claim on 31 January 2010 is rejected. 29 Once the claim had been received, the first plaintiff, responding undoubtedly to the form of the claim which had been made, responded by its payment schedule of 15 February 2010. The document was signed by Mr Davidson "on behalf of Olympia Group Pty Ltd and Viv Davidson". The letterhead is that of Olympia Group Pty Limited. The heading on the letter is "Olympia Group". The irresistible inference is that certainly as at 15 February 2010 the ordinary place of business of both the first plaintiff and Mr Davidson was at the address with the facsimile numbers contained on the letterhead to which the claim was sent. 30 It was put that the first plaintiff had no ordinary place of business because it was not in business. I consider that it was at least in the business of resisting the claim which was being made against it, and the same can be said of Mr Davidson. 31 I reject the submission that service did not take place on 31 January 2010 because the facsimile was received at a place which was not the recipients' ordinary place of business. That finding makes it unnecessary to deal with the contention of the plaintiffs that the claim was made against two persons indivisibly and was only received when the second of those persons received it, namely by Mr Davidson physically, on 2 February 2010. 32 So far as abuse of process point is concerned, I propose to follow what was said by the Court of Appeal in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259. In the judgment of Hodgson JA at par 36 his Honour held that the Act permits successive payment claims to be made for the same work. This disposes of the first plaintiff's submission. 33 There is authority, (see eg Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69), that an abuse of process occurs when repeated claims are made where the first claim has gone to adjudication. That is not this case. 34 I turn then finally to the question of the contracting party. Mr Christie of senior counsel, with whom Mr Shipway appeared, on behalf of the defendant put that Mr Davidson had accepted that documents addressed to "Olympia Group" were received by the first plaintiff and that where "Olympia Group" was used in at least one email by him, that was a reference to the first plaintiff. Reference was made to the fact that there is no document emanating from the first plaintiff's side which discloses that Olympia NSW was the contracting party. 35 Reliance was placed on a document dated 13 June 2009 annexed to the affidavit of Mr Alessandro Lombardo, who from time to time assisted the defendant in office administration duties, which is a quotation, on its face, from the defendant to Mr Davidson as the first plaintiff. Mr Lombardo says that this document was handed to him by Mr Carzo on Saturday 13 June 2009 and that he posted it to the PO box address on it, (which is the PO box address of the first plaintiff), placed it in an envelope and placed a stamp on the envelope and posted it on Monday, 15 June 2009 in a post box on the street outside 85 Bourke Street, Alexandria, New South Wales. The first plaintiff denies receipt of the letter. 36 There was no significant challenge either to the evidence of Mr Alessandro Lombardo or to the evidence of Mr Davidson and, to the extent relevant, Mr Fuller, who also works for Olympia NSW, that the document was not received. Anomalously, the only computer copy of this document presently in the defendant's existence has the watermark "draft" across it for which Mr Carzo could offer no explanation. 37 I am not satisfied that this document was received by the first plaintiff. 38 Mr Kalyk of counsel for the first plaintiff put that the following features objectively supported the conclusion that the contract was not with the first plaintiff but rather with Olympia NSW: a prior to contract, whoever the contracting party, there was no dispute that there was an earlier contract between the defendant and Olympia NSW relating to works at Balmoral Naval Hospital; b Olympia NSW was the contracting party under the head contract; c the payments made to the defendant were by Olympia NSW; d the invoice in August 2009 was sent by Olympia NSW. 39 There was also no challenge to the evidence of Mr Davidson that the first plaintiff does not carry on business (apart from the limited extent to which I have earlier referred to). 40 I am satisfied the contract here was between the defendant and Olympia NSW. Whilst it is true that there are no documents which indicate in writing from the plaintiffs' side of the record that Olympia NSW was at the time of the contract the contracting party, by the same token, there are no such documents indicating that the first plaintiff was. I consider the following as to be compelling considerations in favour of my conclusion that: a Olympia NSW was the head contractor, b Olympia NSW paid for the work; c the unchallenged evidence that the first plaintiff was not carrying on business in the building and construction industry at the time. 41 In circumstances I will make a declaration in terms of par 1 of the Summons and I will make an order in terms of par 3. It follows that the defendant's cross-summons must be dismissed. The defendant is to pay the plaintiffs' costs of the proceedings.

Olympia Group Pty Ltd v Tyrenian Group Pty Ltd

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