Plaintiff v First Defendant Second Defendant Third Defendant

Plaintiff v First Defendant Second Defendant Third Defendant - [2010] VSC 199 - VSC 2010 case summary — Zoe

[71]

(a) An inferior court falls into jurisdictional error if it mistakenly asserts or denies the existence of jurisdiction or if it misapprehends or disregards the nature or limits of its functions or powers in a case where it correctly recognises that jurisdiction does exist.

(b) Such jurisdictional error can infect either a positive act or a refusal or failure to act.

(c) Since certiorari goes only to quash a decision or order, an inferior court will fall into jurisdictional error for the purposes of the writ where it makes an order or decision (including an order or decision to the effect that it lacks, or refuses to exercise, jurisdiction) which is based upon a mistaken assumption or denial of jurisdiction or a misconception or disregard of the nature or limits of jurisdiction.

(d) Jurisdictional error is at its most obvious where the inferior court purports to act wholly or partly outside the general area of its jurisdiction in the sense of entertaining a matter or making a decision or order of a kind which wholly or partly lies outside the theoretical limits of its functions and powers. An inferior court would, for example, act wholly outside the general area of its jurisdiction in that sense if, having jurisdiction strictly limited to civil matters, it purported to hear and determine a criminal charge.

(e) Such a court would act partly outside the general area of its jurisdiction if, in a matter coming within the categories of civil cases which it had authority to hear and determine, it purported to make an order of a kind which it lacked power to make, such as an order for specific performance of a contract when its remedial powers were strictly limited to awarding damages for breach.

(f) Less obviously, an inferior court can, while acting wholly within the general area of its jurisdiction, fall into jurisdictional error by doing something which it lacks authority to do. If, for example, it is an essential condition of the existence of jurisdiction with respect to a particular matter that a certain event or requirement has in fact occurred or been satisfied, as distinct from the inferior court's own conclusion that it has, there will be jurisdictional error if the court or tribunal purports to act in circumstances where that event has not in fact occurred or that requirement has not in fact been satisfied even though the matter is the kind of matter which the court has jurisdiction to entertain.

(g) Similarly, jurisdictional error will occur where an inferior court disregards or takes account of some matter in circumstances where the statute or other instrument establishing it and conferring its jurisdiction requires that that particular matter be taken into account or ignored as a pre-condition of the existence of any authority to make an order or decision in the circumstances of the particular case.

(h) Again, an inferior court will exceed its authority and fall into jurisdictional error if it misconstrues that statute or other instrument and thereby misconceives the nature of the function which it is performing or the extent of its powers in the circumstances of the particular case. In the last-mentioned category of case, the line between jurisdictional error and mere error in the exercise of jurisdiction may be particularly difficult to discern.

[86]

(1) On and from each reference date under a construction contract, a person-

(a) who has undertaken to carry out construction work under the contract; or

(b) who has undertaken to supply related goods and services under the contract-

is entitled to a progress payment under this Act, calculated by reference to that date.

(2) In this section, reference date, in relation to a construction contract, means-

(a) a date determined by or in accordance with the terms of the contract as-

(i) a date on which a claim for a progress payment may be made; or

(ii) a date by reference to which the amount of a progress payment is to be calculated- in relation to a specific item of construction work carried out or to be carried out or a specific item of related goods and services supplied or to be supplied under the contract; or

(b) subject to paragraphs (c) and (d), if the contract makes no express provision with respect to the matter, the date occurring 20 business days after the previous reference date or (in the case of the first reference date) the date occurring 20 business days after-

(i) construction work was first carried out under the contract; or

(ii) related goods and services were first supplied under the contract; or

(c) in the case of a single or one-off payment, if the contract makes no express provision with respect to the matter, the date immediately following the day that-

(i) construction work was last carried out under the contract; or

(ii) related goods and services were last supplied under the contract; or

(d) in the case of a final payment, if the contract makes no express provision with respect to the matter, the date immediately following-

(i) the expiry of any period provided in the contract for the rectification of defects or omissions in the construction work carried out under the contract or in related goods and services supplied under the contract, unless subparagraph (ii) applies; or

(ii) the issue under the contract of a certificate specifying the final amount payable under the contract a final certificate; or

(iii) if neither subparagraph (i) nor subparagraph (ii) applies, the day that-

(A) construction work was last carried out under the contract; or

(B) related goods and services were last supplied under the contract.

[250]

(1) A progress payment under a construction contract becomes due and payable-

(a) on the date on which the payment becomes due and payable in accordance with the terms of the contract; or

(b) if the contract makes no express provision with respect to the matter, on the date occurring 10 business days after a payment claim is made under Part 3 in relation to the payment.

(b) Here the Contract did make express provision as to when a progress claim became payable.

(c) Clause 42.3 of the Contract provided:

Subject to the provisions of the Contract within 14 days after the issue by the Superintendent of the Superintendent's payment schedule, the Principal shall pay to the Contractor or the Contractor to the Principal, as the case may be, an amount not less than the amount shown in the payment schedule as due ...

(d) One of the provisions dealing with when payment is to be made is Clause 43(b) and (c) of the Contract which provided:

(b) Not earlier than 14 days after the Contractor has made each claim for payment under Clause 42.1 and before the Principal makes that payment to the Contractor, the Contractor shall give to the Superintendent a statutory declaration by the Contractor, or where the Contractor is a corporation, by a representative of the Contractor who is in a position to know the facts declared, that all subcontractors have been paid all moneys due and payable to them in respect of work under the Contract.

(c) If the Contractor fails -

(i) within five days after a request by the Superintendent under Clause 43(a), to provide the statutory declaration, or the documentary evidence (as the case may be) required by Clause 43; or

(ii) to comply with Clause 43(b),

Notwithstanding Clause 42.1, but subject to the next paragraph, the Contractor is not entitled to payment and the Principal is not obliged to make payment of moneys to the Contractor until the statutory declaration or documentary evidence (as the case may be) is received by the Superintendent.

If the Contractor provides to the Superintendent satisfactory proof of the maximum amount due and payable to workers and subcontractors by the Contractor, the Principal shall pay to the Contractor the amount in excess of the maximum amount.`

(e) It was submitted that the Contractor failed to provide a statutory declaration as is required by Clause 43(b) of the Contract. It was submitted that, although Andeco provided statutory declarations purportedly in compliance with clause 43, it failed to comply with the clause because it provided statutory declarations in relation to payment of subcontractors that were contradicted by the statutory declarations provided by the subcontractors themselves.

(f) Accordingly, it was contended that no payment was due.

[273]

PROGRESS PAYMENT CERTIFICATE No. 15

MIXED USE DEVELOPMENT

16-28 WRECKYN STREET NORTH MELBOURNE

Statutory Declarations from a number of subcontractors have been sent to the Principal, Metacorp Australia Pty Ltd, and have been forwarded on to us. These declarations outline in detail the amounts outstanding of subcontractor payments extending back over some months and highlight the gross misrepresentation of the situation presented in Andeco's own Statutory Declaration (attached to Claim No. 15 and dated 5 November 2009) and in previous declarations.

Whilst we acknowledge that details of each of the subcontracts remain between Andeco and the subcontractors, it is clear from the subcontractor's declarations that substantial amounts have not been paid from previous payments to Andeco.

Earlier assurances by Andeco to our office that subcontractors have been paid in accordance with what they were due now appear to be without foundation as some subcontractors have not received any payment for three or more months.

The only dispute raised by Andeco in the Statutory Declarations attached to the Progress Claim No. 14 and No. 15 was with the Mechanical Contractor, which infers that there were no other issues prevailing to preclude payments to any other subcontractors.

The statutory declaration required in Clause 42.1(i) of the Contract is an important pre-condition of any payment certificate being issued by our office.

The evidence presented by the subcontractors' declarations makes it abundantly clear that this pre-condition fro the issue by our office of the payment certificate has been abrogated or not complied with under the terms of the contract.

Accordingly, until a compliant statutory declaration is submitted by Andeco properly and truthfully recording that all previous required payments to subcontractors have been made, we are unable to provide a progress claim certificate for anything other than for zero payment due to this non-compliance.

We further advise that Progress Claim Certificate No. 15 (REVISED) was therefore issued in error on the basis that the submitted Statutory Declaration was true and correct.

In accordance with Clause 42.12, we now correct this error and enclose our Progress Claim Certificate No. 15 for your records. We will review the current claim when a true and correct statutory declaration is received.

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Judgment (442 paragraphs)

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Cases Cited (12)