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[2009] QSC 345
defendant. The application was dismissed, and the applicant was ordered to pay the respondent’s costs of and incidental to the application.
Reed Constructions sought judgment for an unpaid building claim after Martinek Holdings did not schedule it within the period Reed said applied. The contract required claims to be made on the first day of each month and treated an early claim as made on the contractual claim date. The Court treated the claim served on 3 April as made on 1 May, so Martinek's 14 May payment schedule was timely. The Court also regarded the claim as a final claim because it sought retention monies payable only through a final claim. Reed's application was dismissed and it was ordered to pay Martinek's costs. The Court's separate comments about an agreement and misleading conduct were expressly not necessary to decide the application.
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2,135 words · generated 29/09/2026
Reed Constructions (Qld) Pty Ltd, a builder, applied to the Queensland Supreme Court for judgment against Martinek Holdings Pty Ltd, the developer. Their written Rivage Contract, made on 31 July 2006, was for construction work with a price of $26,955,195.30 including GST. The judgment records that it was not disputed that the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) applied to the contract ([1]).
On 3 April 2009, Reed served Progress Claim 24 under s 17 of the BCIPA, claiming $1,166,289.82 ([2]). Martinek did not provide a payment schedule within the period Reed said applied. Reed therefore sought judgment for the claimed amount as a debt under s 19(2)(a)(i) of the BCIPA and r 658 of the Uniform Civil Procedure Rules 1999 (Qld) ([3]). Martinek served a payment schedule on 14 May 2009, but argued that the claim should be treated as having been made on a later contractual reference date, making that schedule timely ([13]–[15], [28]).
The contract set the first day of each month as the date for making progress claims for work done to the last day of that month. Clause 37.1 also said an early claim was deemed to have been made on the date fixed for making it, and clause 37.1A identified the dates in the payment schedule as BCIPA reference dates ([9]–[11]). The claim was dated and served on 3 April, rather than 1 April ([12]).
There were additional disputes. Martinek contended that Claim 24 was a final claim, and that negotiations concerning another property meant the parties had agreed, or Reed had represented, that payment would be suspended ([29], [39]–[41]). The Court dismissed Reed's application and ordered Reed to pay Martinek's costs ([61]).
The decisive issue for Reed's application was when Claim 24 was treated as served for the contractual and statutory process. The Court rejected Reed's argument that the BCIPA allowed a payment claim to be served at any time after a reference date had accrued. Daubney J reasoned that the contract's specific monthly claim date mattered, and that accepting Reed's interpretation could permit more than one claim in relation to the same reference date, contrary to the restriction in s 17(5) ([17]–[20]).
The Court read the contract and BCIPA together. Item 28 specified the first day of each month as the claim date, and the Court found no evidence that the parties had changed that contractual provision by agreement ([23]). It considered that the BCIPA did not override the contractual provisions governing the claim procedure. In its account, s 12 conferred the right to make a claim, while the contract supplied the relevant timing arrangement; provisions including ss 13 and 14 also referred to calculation and valuation under the contract ([24]).
The Court concluded that only one opportunity to make a progress claim arose each month. A claim not made on the specified date was not lost, but postponed to the next monthly claim date. It interpreted clause 37.1's rule for early claims to mean that a claim made before its date took effect on the next date for making it. On that basis, the 3 April claim was deemed made on 1 May 2009 ([26]–[28]). Martinek's 14 May payment schedule was within the time required, so Reed had no entitlement under s 19(1) on the asserted ground that Martinek had failed to provide a timely schedule ([28]).
The Court also addressed the final-claim argument. Clause 37.4 provided for a written final payment claim, endorsed “Final Payment Claim”, within 28 days after the last defects liability period expired. It provided that the Superintendent was to issue a final certificate within 42 days ([30]). Reed argued that Claim 24 could not be final because it lacked that endorsement, did not seek to finalise all amounts, and excluded $100,000 for external defects ([31]). But the evidence was that Claim 24 included about $500,000 in retention monies that Reed's chief executive knew could only be claimed by making a final claim ([34]–[35]). The Court therefore treated Claim 24 as a final claim and concluded that the Superintendent had 42 days under clause 37.4 to assess it ([37]). The decision does not explain in detail how this finding independently affected the requested judgment; the operative conclusion on the payment schedule issue appears at [28].
The Court's discussion of alleged misleading conduct was expressly not necessary to its decision. It nevertheless considered the evidence concerning the parties' negotiations, including Reed's decision not to pursue the earlier Progress Claim 23 while hoping to secure work connected with the Leichardt Street site ([45]–[50]). The Court accepted that an agreement can be inferred from conduct and found a tacit understanding that payment was suspended during negotiations, continuing as discussions moved from a joint venture to a possible sale ([54]–[59]). It also considered Reed's conduct had reinforced the belief that payment need not be made ([59]). Because the Court said at [38] that it was unnecessary to determine this defence, those views should be distinguished from the reasoning necessary to decide the application.
The judgment describes the statutory framework it applied at the time. It summarises the BCIPA's object as facilitating entitlement to, and recovery of, progress payments, including through payment claims, payment schedules, adjudication and court proceedings ([5]–[7]). It also describes s 19 as allowing a claimant to pursue an unpaid amount as a debt or seek adjudication, while stating that a respondent in the court recovery proceeding could not raise a counterclaim or a defence about matters arising under the contract ([6]–[7]).
The particular issue addressed was how the statutory reference-date mechanism interacted with the claim dates in this contract. The Court treated the contractual monthly date as controlling the timing of the claim, and clause 37.1 as moving an early claim to the next date fixed by the contract ([23]–[28]). In that sense, the judgment records an application of the then BCIPA to this contract, not a general account of every possible payment regime or contractual wording.
The judgment does not provide a before-and-after account of a legislative amendment, nor does it identify a change in the law caused by the decision. It applies and discusses earlier authorities, including F.K. Gardner & Sons Pty Ltd v Dimin Pty Ltd, Doolan v Rubikcon Pty Ltd, and J Hutchinson Pty Ltd v Galform Pty Ltd ([18]–[23], [37]). The material supplied also does not establish the current status of the 2004 Act or how subsequent legislation may affect the present-day position. The judgment should therefore be read as a 2009 decision applying the statute and contract before Daubney J, rather than as a statement of current law without further research.
At [24], the Court said: “There is also nothing in the BCIPA which overrides the contractual provisions. Section 12 merely confers the right to make a claim.” In plain English, the Court considered that the Act gave a right to claim, but did not displace the contractual timetable in this case. That proposition was applied to the specific wording of the Rivage Contract, which expressly tied reference dates to the claim dates ([11], [23]–[24]).
At [26], the Court said there could be “only one opportunity per month to make a progress claim” on its interpretation. The practical meaning was that the 3 April claim did not create a new April claim opportunity. Because it was not served on 1 April, the Court treated it as taking effect on the next monthly claim date ([26]–[28]).
At [28], Daubney J stated that the claim “was deemed to have been made on 1 May 2009” and that the payment schedule was served within the required time. This is the central reasoning for rejecting Reed's asserted basis for judgment: the Court treated the schedule as timely, so the no-schedule consequence Reed relied on did not arise ([28]).
At [37], the Court reasoned that Claim 24 was a final claim because it included retention monies “for which there could be no entitlement unless it was a final claim”. In plain English, the character of the claim turned on the contractual basis for the retention money it sought, even though Reed disputed that the document should be treated as final ([31]–[37]).
At [38], the Court said it was “not necessary” to determine the misleading conduct claim, but would express views for completeness. That qualification matters. The discussion that follows records the judge's assessment of the evidence, but it was not needed for the outcome on the payment-schedule issue ([38]–[59]).
The decision is particularly relevant to the type of fact pattern it considered: a construction contract specifies fixed monthly payment-claim dates, the claimant serves a claim on a different date, and the contract says an early claim is deemed made on the contractual claim date ([9]–[15], [27]–[28]). It demonstrates why the exact wording of the contract and the date of service mattered to the Court's calculation of the response period.
The reasoning may also be relevant where a party argues that a statutory payment regime allows claims to be served independently of the dates agreed in the contract. The Court rejected that interpretation in the setting of the Rivage Contract and its monthly claim mechanism, reasoning that it could otherwise permit multiple claims for the same reference date ([17]–[27]). The judgment does not establish that every contract or statutory regime will produce the same result. Its conclusion depended on the particular clauses and the Court's reading of the BCIPA provisions then before it.
The final-claim discussion may matter where a claim includes retention or another amount that the contract makes payable only through a final claim. Here, the Court relied on evidence that part of the retention was not contractually claimable except as a final claim ([34]–[37]). The decision also records that the claim's label, the missing “Final Payment Claim” endorsement, the excluded $100,000 contingency, and the status of the defects liability period were disputed matters ([31]). It does not supply a comprehensive test for classifying final claims in other contracts.
Finally, the judgment's discussion of inferred agreement concerns evidence of ongoing negotiations, payment being left unpursued, and the parties' commercial reasons for doing so ([45]–[59]). But the Court expressly treated that analysis as unnecessary to the result. It is best understood as an illustration of the Court's view of the evidence in this dispute, not as a necessary step in the ratio.
The supplied judgment does not cite any later decision applying or distinguishing Reed Constructions (Qld) Pty Ltd v Martinek Holdings Pty Ltd. Because the decision was delivered on 4 November 2009 and the supplied text contains no subsequent case history, later judicial treatment cannot be determined from this material.
The judgment itself identifies the authorities it applied, considered or cited. It applied Baxbex v Bickle for the outline of the BCIPA process ([5]); discussed J Hutchinson Pty Ltd v Galform Pty Ltd and Doolan v Rubikcon Pty Ltd in considering the one-claim-per-reference-date issue ([18]–[20]); and applied F.K. Gardner & Sons Pty Ltd v Dimin Pty Ltd in its analysis of the monthly claim date and final claim ([21]–[23], [37]). It also referred to Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd and Bramble Holdings Ltd v Bathurst City Council in discussing the inference of agreement from conduct ([54]–[56]). Those are the authorities discussed within this judgment, not evidence of how later courts treated Reed itself.
The supplied text leaves several matters outside the determination. First, it does not establish how later courts have interpreted the same reference-date issue, or whether later legislative changes altered the statutory context. The judgment's analysis concerns the BCIPA 2004 and the specific terms of the Rivage Contract in 2009 ([1], [8]–[11]).
Second, the Court concluded that Claim 24 was a final claim because it sought final retention monies, despite the arguments that it lacked the required endorsement, did not seek all payments, and excluded a sum for external defects ([31]–[37]). The judgment does not develop a broader rule about how those features should be weighed in other contractual settings.
Third, although the Court expressed views that there was a tacit agreement suspending payment and that the applicant's conduct reinforced the respondent's belief, the reasons do not determine the legal consequences of those findings in a separate proceeding. The Court explicitly said it was unnecessary to determine the misleading conduct defence for this application ([38], [59]). It likewise did not determine the estoppel argument in detail ([60]).
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CONTRACT - BUILDING, ENGINEERING AND RELATED CONTRACT - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - where the applicant served on the respondent a payment claim pursuant to s 17 of the Building and Construction Payments Act 2004 (Qld) - where the respondent did not file a payment schedule within 10 days of receiving the payment claim - where applicant claimed in those circumstances the respondent became liable to pay the amount claimed -whether payment claim served on the correct date - whether the claim served was a final payment claim
TRADE AND COMMERCE - TRADE PRACTICES ACT 1974 (CTH) AND RELATED LEGISLATION - CONSUMER PROTECTION - MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATITIONS - CHARACTER OR ATTRIBUTES OF CONDUCT OR REPRESENTATION - CONDUCT CAUSING UNCERTAINTY OR CONFUSION - where respondent alleged misleading and deceptive conduct - where respondent claimed there was an agreement made or representations by the applicant that it would not pursue the payment claim for a period of time - where it was suggested that payment for a progress claim was not pursued so as not to prejudice joint venture negotiations between the respondent and applicant - whether there was any such agreement
Building and Construction Industry Payments Act 2004 (Qld)
Trade Practices Act 1974 (Cth)
Baxbex v Bickle [2009] QSC 194, applied
Beckhaus Civil Pty Ltd v Council of the Shire of Brewarrina Council [2002] NSWSC 960, cited
Bramble Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153, applied
Doolan v Rubikcon Pty Ltd [2007] QSC 168; [2008] 2 Qd R 117, considered
F.K. Gardner & Sons Pty Lt v Dimin Pty Ltd [2006] 1 Qd R 10, applied
Gemini Nominees Pty Ltd v Queensland Property Partners Pty Ltd ATF The Keith Batt Family Trust [2007] QSC 20, cited
Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11, applied
J Hutchinson Pty Ltd v Galform Pty Ltd [2008] QSC 205, applied
Okaroo Pty Ltd v Vos Construction and Joinery Pty Ltd [2005] NSWSC 45, cited
Salomon Smith Barney Australia Corp Finance Pty Ltd v Allgas Energy Ltd (2001) QSC 72, cited
Tailored Projects Pty Ltd v Jedfire Pty Ltd [2009] QSC 32, considered
[1] On 31 July 2006 the applicant builder and the respondent developer entered into a written agreement for the construction of the Rivage Development ("Rivage Contract"). The contract price was $26,955,195.30 inclusive of GST. It is not in issue the Building and Construction Industry Payments Act 2004 (Qld) ("BCIPA") applied to the Rivage Contract.
[2] On 3 April 2009 the applicant served on the respondent Progress Claim No. 24 ("the payment claim") pursuant to s 17 of the BCIPA, claiming the sum of $1,166,289.82.
[3] The respondent did not file a payment schedule within 10 business days of receiving the payment claim. It was submitted by the applicant that in those circumstances the respondent became liable to pay the amount claimed.[1] The applicant has now applied for judgment pursuant to r 658 of the Uniform Civil Procedure Rules 1999 (Qld) for the sum of $1,166,289.82 as a liquidated debt under s19(2)(a)(i) of the BCIPA.
[4] The respondent opposes the grant of that application on the following bases:
"(a) there was an agreement (independent of the construction contract) to suspend the Applicant's right to pursue a claim under the BCIPA - a forbearance to sue the Respondent - in exchange for being the Respondent's preferred building contractor for a particular development;
(b) misleading or deceptive conduct by the applicant that lead the respondent to believe that the applicant would not pursue a claim against the respondent or in the alternative conduct amounting to estoppel on the same grounds;
(c) invalidity of the payment claim because of the delivery of the second payment claim in respect of the same "reference date" with the effect that section 19(2) BCIPA is not engaged because of the non-compliance with the mechanisms of the BCIPA;
(d) delivery of a payment schedule by the respondent within the time required by the Act such that the Applicant has no entitlement under section 19(1) BCIPA. This issue arises because the Applicant contends that the relevant "reference date" is 1 April 2009 whereas the Respondent contends that on a proper construction of the Building Contract between the Applicant and the Respondent the relevant reference date for a payment claimed issued on 3 April 2009 is 1 May 2009. The Respondent delivered a payment schedule under BCIPA within the time required.
(e) Claim 24 is a final claim under the construction contract (see clause 37.4) and as such there was no entitlement to make a claim under BCIPA in the way such application is made here."
[5] In Baxbex v Bickle[2] I summarised the relevant statutory regime under the BCIPA as follows:
"By s 7 of the BCIPA, its object is to ensure that a person is entitled to receive, and is able to recover, progress payments if the person undertakes to carry out construction work (or undertakes to supply related goods and services) under a construction contract. This objective is achieved:
(a) by granting an entitlement to progress payments, whether or not the relevant contract makes provision for progress payments; and
(b) by establishing a procedure that involves the making of a payment claim, the provision of a payment schedule in response, the referral of a disputed or unpaid claim to an adjudicator for decision and the payment of the progress payment decided by the adjudicator.[3]
Part 2 of the BCIPA confers rights to progress payments. Section 12 provides that from each reference date, a person who has undertaken to carry out construction work, or to supply related goods and services, becomes entitled to a progress payment.
The procedure for recovering progress payments is set out in Part 3 of the BCIPA. Under s 17 a person who is entitled to a progress payment under Part 2 may serve a payment claim on the person who is liable to make the payment. The formal requirements specified in s 17 compel the person making the payment claim to:
(a) identify the construction work or related goods and services to which the progress payment relates;
(c) state that the payment claim is made under the BCIPA.
Section 18 enables the respondent to reply to the claim by providing a payment schedule to the claimant. Details of the content and service of the payment schedule are also dealt with in s 18. If the respondent does not serve a payment schedule on the claimant within the prescribed time, "the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the progress claim relates."[4]
[6] Section 19 of the BCIPA outlines the consequences of not paying the claimant if the respondent does not serve a payment schedule on the claimant within the time allowed under s 18 of the BCIPA or fails to pay the whole or part of any of the amount claimed. In such a case, the claimant may either:
(a) proceed in court to recover the unpaid amount as a debt due and owing, or
(b) pursue an "adjudication application" under the BCIPA.[5]
[7] If the claimant proceeds in court, the respondent is not entitled in those proceedings to bring any counterclaim or raise any defence in relation to matters arising under the contract.[6]
[8] The "reference date" referred to in s 12 of the BCIPA is defined in the Act to mean, inter alia:
"(a) a date stated in, or worked out under the contract as the date on which a claim for a progress payment may be made for construction work carried out or undertaken to be carried out or related goods and services supplied or undertaken to be supplied under a contract..."
[9] In relation to the making of progress payments, clause 37.1 of the Rivage Contract provides:
"The Contractor shall claim payment progressively in accordance with Item 28. An early progress claim shall be deemed to have been made on the date for making that claim.
Each progress claim shall be given in writing to the Superintendent and shall include details of the WUC [Work Under Contract] done and may include details of other moneys then due to the Contractor pursuant to the provisions of the Contract."
[10] Item 28 provides that the time for making progress claims is the "first day of each month for Work Under Contract to the last day of that month to which the claim relates."
[11] By clause 37.1A of the Rivage Contract, "the dates stated in Item 28 for making a progress claim each month is the 'reference date' for the purpose of the BCIP Act."
[12] Payment Claim 24 was dated and served on the respondent on 3 April 2009. It was said by the applicant that this was for work up to 31 March 2009.
[13] The applicant argued that the payment claim met the requirements prescribed in s 17(2) of the BCIPA. Pursuant to s 15(1) of the BCIPA, the due date for responding to that claim on the applicant's calculations was, therefore, 21 April 2009. The payment schedule was not issued by the respondent until 14 May 2009.
[14] It was submitted by the respondent that the payment claim was not issued on the reference date under the Rivage Contract, that is, the first day of the month and was therefore invalid or deemed to be served on the next reference date.
[15] Relevantly, clause 37.1 of the Rivage Contract provides that where a payment claim is served early it is deemed to be served on the next reference date. The question, then, was whether the payment claim served by the applicant on 3 April 2009 was then deemed to be a payment claim served on 1 May 2009.
[16] It was submitted by the applicant that the BCIPA makes it clear that the time for service of a payment claim is not restricted to the date specified in the contract. If it had been intended otherwise, s 12 would have read "On each reference date...". The applicant relied on the decision of Macready AJ in Beckhaus Civil Pty Ltd
v Council of the Shire of Brewarrina Council[7] and Nicholas J in Okaroo Pty Ltd
v Vos Construction and Joinery Pty Ltd[8] to support this proposition, referring to the fact that the BCIPA contemplates a duel system by creating a statutory system alongside any contractual regime.
[17] Counsel for the respondent argued that this reading of s 12 of the BCIPA would or could result in more than one payment claim issuing for the reference date. This would be at odds with s 17(5) of the BCIPA which prohibits more than one payment claim being served in relation to each reference date under the construction contract.
[18] As was said by Chesterman J (as he then was) in J Hutchinson Pty Ltd v Galform Pty Ltd:[9]
"[39] The Act itself contains some indications that a contractor may not make more than one payment claim with respect to the same claim for payment under the contract. Section 17(5) provides:
(5) A claimant cannot serve more than one payment claim in relation to each reference date under the construction contract.
(6) However, subsection (5) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim.
[40] A reference date is a date stated in or worked out under a construction contract as the date on which a claim for a progress payment may be made. The two payment claims in question were obviously in relation to the same reference date. They were for the same work. The claims were identical. The proviso to the prohibition is not, I think, relevant though its meaning is not readily apparent. Subsection (6) is, I think, meant to permit the inclusion in a subsequent payment claim made in relation to a different reference date of an amount previously claimed but disallowed, perhaps on the basis that the work was not completed. When completed the work may be included in a subsequent claim thought it had been asked for earlier."
[19] Further, Fryberg J in Doolan v Rubikcon Pty Ltd,[10] when considering the operation of s 17(5), observed:
"That is not to say that the claim must include all work done up to that date. If something is omitted from a claim, notwithstanding that it could have been claimed on a particular reference date, there is no reason why it cannot be claimed on the next reference date. Likewise anything further which gives rise to a claim after the first of such reference dates, may also be included in the next claim. Subsection 17(6) permits also the inclusion of an amount which has been the subject of a previous claim but that does not mean that a previous claim can be the sole item included in the later claim."
[20] I do not accept the applicant's proposition that the BCIPA allows a payment claim to be served from the accrual of each reference date as distinct from "on" each reference date.
[21] Acceptance of the applicant's contention would mean that more than one progress claim could be served in relation to each reference date. A similar issue was considered by Ann Lyons J in the matter of F.K. Gardner & Sons Pty Ltd v Dimin Pty Ltd.[11] In that case, the contract provided for a payment regime involving the submission of payment claims on the 28th day of each month. No claim was lodged in May 2006 but on or about 20 June 2006 the applicant issued a payment claim. It was submitted by the applicant in that case that it was irrelevant that the progress payment under the contract was submitted late if it was due on 28 May 2006 or early if it was due on 28 June 2006 because whilst it may have been a technical breach of the contract it did not affect the operation of the BCIPA.
[22] The respondent in that case submitted:[12]
"The applicant's purported payment claim is not a valid claim pursuant to the Act. There is no entitlement to make a payment claim prior to the contractual reference day which is 28 June 2006..."
"Under the contract, no claim could have been made for this work until 28 June 2006 and it has not been submitted that there was any agreement between the parties to change this date..."
[23] In all the circumstances, I am not persuaded that the applicant's interpretation is correct. The critical words found in Item 28 of the Schedule provide the time for making progress claims is the "first day of each month for Work Under Contract to the last day of that month to which the claim relates" (emphasis added). There is no evidence to suggest that this contractual provision was altered by agreement between the parties.
[24] There is also nothing in the BCIPA which overrides the contractual provisions. Section 12 merely confers the right to make a claim.[14] The procedure for asserting that entitlement is governed by the terms of the contract and there is nothing inconsistent between the procedure stated in the contract and the provisions of the BCIPA. In fact, later provisions of the BCIPA stress adherence to the terms of the contract. For example, s 13 states that the amount of a progress payment to which the person is entitled is (a) the amount calculated under the contract (emphasis added). Similarly, pursuant to s 14 construction work carried out is to be valued under the contract.
[25] It is, however, primarily s 15 on which the respondent relies to support its argument. The section contemplates that that there will be a progress payment and that progress payment becomes payable on the day on which payment becomes payable under the provisions of the contract.
[26] Accordingly, I consider that the correct interpretation is that of the respondent; that the contract contemplates that the progress claim be made on the first of the month. On this interpretation, there can only be one opportunity per month to make a progress claim. However, as was noted by Fryberg J in the Rubikcon case, where a progress claim is not made on the first of the month, the right to claim has not been lost entirely, but merely postponed until the first day of the following month.
[27] The second paragraph of clause 37.1 of the Rivage Contract reinforces this interpretation:
"An early progress claim shall be deemed to have been made on the date for making that claim."
This must be understood as meaning that an early claim takes effect from the next date and a late claim (that is a claim which does not fall on the first of the month) is an early claim for the next period.
[28] For these reasons I find that the payment claim served on 3 April 2009 was deemed to have been made on 1 May 2009. On 14 May 2009, the respondent served on the applicant a payment schedule pursuant to s18 of the BCIPA in response to Progress Claim No. 24. Accordingly, the respondents delivered a payment schedule under the BCIPA within the time required such that the applicant has no entitlement under s 19(1) of the Act.
[29] It was also argued by the respondent that Progress Claim 24 was not a progress claim but a final claim.
[30] In relation to the making of a final claim, clause 37.4 of the Rivage Contract provided:
"Within 28 days after the expiry of the last defects liability period, the Contractor shall give the Superintendent a written final payment claim endorsed 'Final Payment Claim' being a progress claim together with all other claims whatsoever in connection with the subject matter of the Contract.
Within 42 days after the expiry of the last defects liability period, the Superintendent shall issue both to the Contractor and the Principal a final certificate evidencing the moneys finally due and payable between the Contractor and the Principal on any account whatsoever in connection with the subject matter of the Contract..."
[31] The applicant contended that Payment Claim 24 was not, and could not have been, a final claim for several reasons:
"(a) The Respondent states that the defects liability period does not end until 4 July 2009. The contrary is not asserted by the Applicant;
(b) Payment Claim 24 was not endorsed with the words "Final Payment Claim" as required by clause 37.4 of the Contract;
(c) Payment Claim 24 was not seeking to finalise all payments under the contract and expressly excluded retention in the amount of $100,000.00."
[32] Both Mr Cole (the applicant's Chief Executive) and Mr Horton (the Contract Administrator) agreed in evidence that they understood there to be two retention amounts under the Rivage Contract:
1. One to be released at practical completion; and
2. One to be released upon the making of the final claim.[15]
(a) the applicant claimed and obtained release of the practical completion retention with Progress Claim 23;[18] and
(b) within Payment Claim 24 was approximately $500,000 of the retention monies which were part of the final claim retention monies.[19]
[35] In relation to (b) Mr Cole said that he knew those retention monies were to be released on the making of the final claim[20] and that he knew he had no contractual entitlement to it other than the making of a final claim.[21] It is clear that the contractual regime was one whereby the balance was only to be released on the issuance of a final certificate.[22]
[36] The Rivage Contract Superintendent, Mr Worroll, said that he treated Payment Claim 24 as a final claim[23] on the basis that he believed there was a full release of the retentions[24] and from an email copied to Mr Worroll from John Harris (of Link Project Solutions) to Mr Cole referring to arrangements between them "in order to finalise money under the contract."[25] It was put to him in cross-examination that the document did not in fact, seek a full release of the retention because of the words "Less contingency for external defects, $100,000."
[37] Applying the reasoning of Ann Lyons J in F.K. Gardiner, I am of the view that as Progress Claim 24 sought relief which was part of the final retention monies, for which there could be no entitlement unless it was a final claim, Progress Claim 24 was, in fact, a final claim. As a result, the Superintendent had, pursuant to clause 37.4 of the Rivage Contract, 42 days to make an assessment of the claim.
[38] Having determined that the applicant's claim is deemed to have been served on 1 May 2009, it is not necessary for me to determine the claim of misleading and deceptive conduct raised by the respondent. For the sake of completeness, however, I should express the following views.
[39] The respondents' main defence to the application was an allegation of misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("TPA") namely, that there was an agreement or representations made by the applicant that it would not for a period of time (including the period in which the Payment Claim 23 was served), serve a payment claim. The respondent argued that, in reliance upon that representation, no payment schedule was served.
[40] On 30 May 2008, the applicant served the respondent with Progress Claim 23 for $141,162.39. On 8 May 2009, the respondent paid the applicant the sum of $154,345.16 (including GST) being payment of Progress Certificate No. 23 plus interest in the sum of $12,882.77. The respondent contended that at no time in the interim did the applicant take any step to enforce its rights under the BCIPA in respect of Progress Claim 23. The agreement alleged by the respondent to exist was an understanding that while joint venture negotiations between the parties in respect of another property in Leichardt Street were underway ("Joint Venture Negotiations"), monies otherwise payable by the respondent to the applicant under the Rivage Contract would be suspended.
[41] The respondent's Director, Mr Martinek, deposed to the fact that as a consequence of the negotiations, it was agreed that:
1. "if the Joint Venture Negotiations were agreed and finalised, any money owing by the respondent to the applicant (including the amount certified in Progress Certificate No. 23) under the Rivage Contract would be applied as the applicant's equity contribution to the entity purchasing the Leichardt Site; and
2. while the Joint Venture Negotiations continued no further payments would be required to be made by the respondent to the applicant pursuant to the Rivage Contract."[26]
[42] The applicant argued that these allegations were based on agreements and not representations or identified conduct. It was contended that the respondent had not discharged its onus of proving on the balance of probabilities that the applicant had contravened s 52 of the TPA because the evidence of Mr Martinek was "extraordinarily vague as to how the agreements came to be" and provided no more than "evidence of an ongoing negotiation about a proposed joint venture" as the existence of the agreement was something he "took from" meetings and conversations.
[43] Mr Martinek, under cross examination, said that while such an agreement was in existence at the time of receiving progress claim 23, this was never put in writing.[27] He argued that upon receipt of Progress Claim 23, he did not question why it had been issued, nor did he inform the Superintendent, Red Dog Architects, that no further payments were to be made.[28] It is indeed curious that Mr Martinek, who sought to rely on the alleged agreement, did not notify the Superintendent, being the person who administered the contract and had the power to issue certificates.
1. his desire to secure a contract worth approximately $32,000,000 to build on the Leichardt Street site; and
2. because the contract would be with a principal with which he had already had satisfactory dealings with.
[46] Mr Cole, also agreed that these two factors made the joint venture contract for the Leichardt Street property an attractive project[33] and there was a concern for damaging the commercial relationship needed to enter such a project if the progress claim payment on the Rivage Contract was pursued.[34]
[47] Mr Cole said he had telephone discussions with both Mr Worrell and Mr Harris regarding payment of Progress Claim 23, but he conceded that he did not follow up either of them in writing[35] and that when he became aware in early July 2008 that Mr Martinek was unable to pay he was "happy to put it on hold" in the hope of obtaining the development and building profits if the Leichardt site joint venture was able to proceed.[36]
[48] Mr Reed wrote to Mr Martinek on 23 September 2008 outlining Mr Reed's understanding of the potential joint venture. The letter refers to various discussions between the parties and, after setting out proposed terms of the agreement, states:
"This would effectively see both RCQ and Martinek holding $1 million in "equity" each upon transfer of the land. In return for RCQ's position, I would anticipate retention and variations to the amount of $1 million would be off set from the Rivage project. This proposal is subject to RCQ being provided with appropriate tax advice ensuring they are not materially prejudiced under the proposed arrangement, which we would obtain during the due diligence period..."
[49] There appears to be some disagreement about when these negotiations commenced.[37] Mr Reed in oral evidence agreed that discussions about the proposed joint venture agreement took place in the second half of 2008[38] and into 2009 and neither he nor Mr Cole said to Mr Martinek at any point stated that joint venture negotiations were at an end.[39] It appears that negotiations moved from discussing a joint venture under which the respondent would have had an interest in the development, to the purchase of the site by Mr Reed or the applicant and with/without another company around Christmas 2008/early 2009. The respondent contends that in a conversation between Mr Jim Martinek, Mr Ken Reed and Mr Stephen Cole, it was agreed that, in addition to the joint venture negotiations:
"(a) Reed Construction would be permitted to investigate finding a third party with experience as a hotel operator to purchase the Leichhardt Site from Martinek Holdings; and
(b) in the alternative to Martinek Holdings, Reed Construction would be permitted enter into a joint venture agreement with the third party to develop the Leichhart Site."
[50] It seems to me that there was no 'bright line' between the joint venture negotiations and the purchase of the site negotiations. It was also conceded by
Mr Reed that he did not say to Mr Martinek, either in person, or in writing that the negotiations over the possible purchase of the site were at an end.[40]
[51] The respondent contends that, at the time of entering into the purchase offer negotiations, it was agreed:
"(a) that should they proceed to an agreement, and the Proposed Joint Venture not proceed:
(i) Reed Construction (and the third party) would purchase the Leichhardt Site from Martinek Holdings at a full market value (Purchase Price);
(ii) Reed Construction would rectify all outstanding defects in the Rivage Development;
(iii) following receipt of the Purchase Price by Martinek Holdings, and upon the completion of all outstanding defects in the Rivage Development, Martinek Holdings would pay Reed Construction:
A. the amount of $141,462.39 (including GST) claimed in Progress Claim no. 23;
B. any variations to the Rivage Contract that had been agreed to by Reed Construction and Martinek Holdings and had not already been paid by Martinek Holdings; and
C. Retention monies held under the Rivage Contract;
(b) until both these negotiations and the Joint Venture Negotiation were concluded, the suspension of rights in relation to the Rivage Contract would operate (the Purchase Offer Negotiation Suspension of Payment Claim and Entitlement Agreement)."
[52] It was further asserted by the respondent that, "Alternatively, if for any reason the Purchase Offer Negotiations Suspension of Payment Claim and Entitlement Agreement was not binding on Reed Construction, it represented to Martinek Holdings to the effect that it would act in accordance with the constrains on its entitlement to make claims for the payment (the Purchase Offer Negotiation Suspension of Payment Claim and Entitlement Representation)."
[53] Mr Martinek said that, as at 3 April 2009 he believed that both the Joint Venture Negotiations and the Purchase Offer Negotiations were still proceeding. In a telephone conversation on 30 April 2009 between Mr Cole and Mr Martinek, the respondent was informed by the applicant that it would be pursuing full payment of the amount claimed in Progress Claim 24. Mr Martinek said that in a further conversation with Mr Cole on that same day, he promised to make full payment of the amount in Progress Claim 23 on 8 May 2009 and that Mr Cole stated that the Purchase Offer Negotiations were still underway.[41] It was contended by the respondent that as a result of these telephone conversations it was represented to the respondent, inter alia, that the proposed Joint Venture Negotiations and Purchase Offer Negotiations were ongoing and that the respondent did not have to make payment or take any action under the BCIPA in relation to Progress Claim 24. In essence, that the amount in Progress Claim 24 would "be dealt with either in accordance with the Joint Venture Negotiation Agreement or the Third Party Purchase Offer Negotiation or upon notification that such negotiations were at an end (30 April Representation)." Accordingly, in reliance upon this representation no payment was made for the amount claimed in Progress Claim 24 nor was a payment schedule issued.
[54] In Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd[42] McHugh JA (as he then was) said:
"Nevertheless a contract may be inferred from the acts and conduct of parties as well or in the absence of their words. The question in this class of case is whether the conduct of the parties, viewed in the light of the surrounding circumstances, shows a tacit understanding or agreement. The conduct of the parties, however, must be capable of proving all of the essential elements of an expressed contract." Similarly, Justice Holmes in Salomon Smith Barney Australia Corp Finance Pty Ltd v Allgas Energy Ltd[43] at [54]-[55] referring to Winks v W H Heck & Sons Pty Ltd[44] when considering post-contractual conduct, emphasises that it is not necessary to pinpoint offer and acceptance in a classical sense "unless it affords direct evidence to the formation of the conduct, the conduct of the parties is relevant only where it leads to the necessary inference that somewhere, somehow, the parties must have made a particular agreement."
[55] This passage was quoted with approval by Heydon JA (as he then as) in Bramble Holdings Ltd v Bathurst City Council.[45]
[56] Accepting that contracts may indeed be inferred from the conduct of the parties, I consider that the evidence discloses that in 2008 there was a tacit understanding between the parties that payment was to be suspended while the joint venture negotiations were on foot, and that this understanding continued into 2009 when joint venture negotiations had proceeded into sale negotiations.
[57] In the second half of 2008, when the global financial crisis had taken its toll on the building industry and work was rapidly diminishing because of the economic situation, [46] it is plain to see why, as a matter of commerciality, Reed Constructions would have delayed asking for the outstanding moneys under the Rivage Contract in the hope of securing the joint venture contract.
[58] In my view, the critical point in time was early 2009, when the parties had undoubtedly moved from negotiations as to the joint venture to the sale of the site by the respondent. Counsel for the respondent submitted that while the difference was that the Martinek company was not to have an interest in the purchaser company, the features that were important to the applicant, and had inclined it not to pursue the monies owing under the claim, remained just as germane to the purchase option as it did to the joint venture option. That is, "the drivers remained there to acquire this particular property because of the unique value that Reed saw in it, in terms of its development potential, to be able to build on it and to acquire it from Mr Martinek on terms that were acceptable." I accept this proposition.
[59] Accordingly, I find that as late as 30 April 2009 it was represented to the respondent that money need not be paid under Progress Claim 24. In the absence of any notification by the applicant that the Joint Venture Negotiations or Purchase Offer Negotiations were at an end, I am of the view that:
1. there was a tacit agreement between the parties to suspend the applicant's right to pursue a claim under the BCIPA; and
2. this was reinforced by the applicant's misleading and deceptive conduct which lead the respondent to believe that the applicant would not pursue a claim against the respondent.
[60] It is evident from the affidavit of Mr Martinek that the respondent also raised an estoppel in relation to the delivery of the payment claim. Douglas J in obiter in Tailored Projects Pty Ltd v Jedfire Pty Ltd,[47] when considering a similar defence, commented that he would not consider such a ground as the basis for refusing relief and it was more appropriate for litigation contemplated by s 100 of the BCIPA. I agree with the applicant's contention that, to the extent such an estoppel is raising a point about the proper interpretation and application of the contract, it falls within the exclusion in s 19(4)(b)(ii) of the BCIPA as being "a defence in relation to matters arising under the construction contract." In any event I am of the view that this case has, and should be, determined having regard to purely contractual principles. I do not, therefore, think it necessary to consider this argument in further detail.
[61] In all the circumstances I order that the application be dismissed and the applicant pay the respondent's costs of and incidental to this application.
[1] Section 18(4)(b)(ii) Building and Construction Industry Payments Act 2004 (Qld).
[2] [2009] QSC 194 at [5]- [8]
[3] Section 8 Building and Construction Industry Payments Act 2004 (Qld).
[4] Section 18(5) Building and Construction Industry Payments Act 2004 (Qld).
[5] Section 19(1),(2) Building and Construction Industry Payments Act 2004 (Qld).
[6] Section 19(4) Building and Construction Industry Payments Act 2004 (Qld).
[8] [2005] NSWSC 45 at [47].
[10] [2007] QSC 168; [2008] 2 Qd R 117 at 121.
[15] Mr Cole at page 53 of transcript 29/7/09 at lines 1-20; Mr Horton at page 57 of transcript 29/7/09 at lines 40-60.
[16] Page 40 of transcript 29/7/09 at lines 36-40.
[17] Page 40-41 of transcript 29/7/09 at line 60 & 1.
[18] Page 53 of transcript 29/7/09 at lines 1-10; see Mr Horton page 57 of transcript lines 50-60.
[19] Page 53 of transcript 29/7/09 at lines 10-20.
[20] Page 53 of transcript 29/7/09 at lines 50-60.
[21] Page 54 of transcript 29/7/09 at lines 1-10.
[22] Clause 5.4 of the General Conditions.
[23] Page 3 of transcript 30/7/09 at lines 50-60.
[24] Page 2 of transcript 30/7/09 at lines 22- 30
[25] Affidavit of P Worroll 2/7/09 paras 9-10, ex PW1 (pp1-5).
[26] Affidavit of J Martinek 28/7/09 paras 29 and 30; Affidavit of J Martinek 19/5/09 para 8.
[29] Affidavit of J Martinek 28/7/09 paras 31, 33, 34.
[30] Affidavit of P Worroll 2/7/09 paras 3-5.
[31] Page 24 of transcript 29/7/09 at lines 1-40.
[33] Page 43 of transcript 29/7/09 at lines 6-16.
[34] Affidavit of S Cole 28/7/09 Paras 41, 72-73; page 42 of transcript 29/7/09 lines 18-25 and page 44 of transcript.
[35] Page 45 of transcript 29/7/09 at lines 45-50.
[36] Page 46 of transcript 29/7/09 at lines 20-30.
[37] Points of Claim para 9, Points of defence para 9(a).
[38] Confirmed by Mr Cole Pg 42 transcript 29/7/09 at lines 1-5.
[39] Mr Reed page 28 of transcript 29/7/09 at lines 20-40; Mr Cole page 52 of the transcript at lines 20-25.
[40] Page 30 of transcript 29/7/09 at lines 6-10.
[41] Affidavit of J Martinek 2/7/09 para 95; Affidavit of J Martinek 19/5/09 para 18.
[44] [1986] 1 Qd R 226 at 238.
[45] [2001] NSWCA 61; (2001) 53 NSWLR 153 at 178.
[46] Mr Cole page 41 of transcript 29/7/09 lines 5-9; Mr Reed page 24 of transcript 29/7/09 at lines 45-60.
[47] [2009] QSC 32 at [25].
Reed Constructions (Qld) Pty Ltd
Martinek Holdings Pty Ltd
(2001) 53 NSWLR 153
The application was dismissed, and the applicant was ordered to pay the respondent’s costs of and incidental to the application.