Watpac Constructions (NSW) Pty Limited v Charter Hall Funds Management Limited

Supreme Court of NSW|2017-06-30|Before: McDougall J

Solicitors: Maddocks Lawyers (Plaintiff) Allens (Defendants) File Number(s): 2017/40207

Judgment

HIS HONOUR: The plaintiff (Watpac) says that the defendant (Charter Hall) owes it in excess of $13.55 million. The debt is said to be owed because Watpac served on Charter Hall a payment claim pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Security of Payment Act), and Charter Hall did not provide a payment schedule in response. Watpac seeks judgment accordingly.
Charter Hall denies that it owes anything to Watpac. It says that the document on which Watpac relies was not a valid payment claim for the purposes of the Security of Payment Act. Alternatively, Charter Hall says, there are estoppels arising out of what it calls "the Common Assumption", "the Defendant's Assumption", and "the Aconex Convention", by reason of which Watpac cannot be heard to say that the document was a valid payment claim. Alternatively again, Charter Hall says, Watpac has engaged in misleading or deceptive conduct, by reason of which Charter Hall did not serve a payment schedule. In those circumstances, Charter Hall says, it is entitled to relief effectively refusing to enforce such rights as Watpac otherwise might have arising out of the service of the payment claim.
The parties agreed on the real issues for decision. However, I do not propose to set out their statement of the issues. That is in part because it is not a self-contained document, but requires reference to other documents for the issues therein stated to have any real comprehensible content. The other reason is that, in the course of his submissions, Mr Donaldson of Senior Counsel, who appeared with Mr Richardson of Counsel for Charter Hall, organised Charter Hall's defence of the claim by reference to three substantial themes: 1. the validity of the disputed payment claim; 2. the estoppel defence (itself including several varieties of estoppel); and 3. the misleading or deceptive conduct defence (which overlapped to a considerable extent with the estoppel defence).

The contract

On 19 December 2013, Charter Hall Funds Management Limited (CHFM) as Principal and Watpac as Contractor made a written contract under which Watpac agreed to undertake the design and construction of a building at 331 to 333 George Street, Sydney. CHFM contracted as manager of a registered scheme. It was the responsible entity of that scheme until, on 17 October 2014, Charter Hall Investment Management Limited (CHIM), which was the active defendant, became the registered entity. In those circumstances, the parties agreed, CHIM succeeded to the rights, obligations and liabilities of CHFM and the contract had effect as if CHIM and not CHFM were a party to and referred to in it. Those agreed matters are plainly correct. See ss 601FS and 601FT of the Corporations Act 2001 (Cth).
It is unnecessary to distinguish between the two Charter Hall entities, and I shall use the abbreviation "Charter Hall" to apply to them indifferently.
The contract was varied by a deed of settlement and amendment made, it appears, on 9 June 2015. Nothing of present significance turns on that amending deed.
Clause 9 of the contract concerned "Payment and Security". So far as cl 9 was relevant (and debated between the parties), it provided as follows: 9.1 Contractor's acknowledgment The Contractor acknowledges that (subject to the terms of this Deed): (a) the Contract Sum is a fixed lump sum price for the carrying out of all the Contractor's obligations under this Deed; (b) the Contractor accepts the risk that the actual cost of carrying out of all the Contractor's obligations under this Deed may be greater than the Contract Sum; (c) not used; (d) for the purposes of contractually defining the rights of the parties to this Deed under the SOP Act (insofar only as this is permitted by the SOP Act), the Contractor acknowledges and agrees: (i) the reference date in respect of monthly progress claims is the date for submission of a Tax Invoice in clause 9.5(a) or in respect of a final payment claim, it is the date for submission of a Tax Invoice referred to in clause 9.13(b); (ii) the amount of each progress payment to which the Contractor is entitled is to be determined strictly in accordance with this Deed; (iii) the valuation of construction work carried out or undertaken to be carried out, or related goods and services supplied or undertaken to be supplied, under this Deed is to be determined strictly in accordance with this Deed; (iv) the due date for payment of any progress payments is the date for payment of progress claims under clause 9.5(b) or in respect of any final payment claim it is the date for payment of the final payment claim under clause 9.13(c); (v) that all payment claims served under the SOP Act in respect of this Deed must be made at the same time as, and together with a Tax Invoice under clause 9.5(a) or under clause 9.13(b) of this Deed; (vi) that a copy of all payment claims served under the SOP Act will be sent on the same day to the Superintendent; and (vii) all terms used in this clause shall have the same meaning in this Deed as they are defined to have under the SOP Act. 9.2 Monthly progress claim (a) Up to the Date of Practical Completion, on the day nominated in Schedule 1, the Contractor must give the Superintendent and the Quantity Surveyor a draft of its proposed progress claim for each month in a format approved by the Superintendent with a copy to the Quantity Surveyor showing the amount that is proposed to be claimed by the Contractor and also showing: (i) a detailed breakdown of the estimated contract value of work executed; (ii) a detailed breakdown of the estimated costs to complete the Works; (iii) a detailed breakdown of the estimated value of unfixed goods, materials or equipment intended for and delivered on or adjacent to the Site; (iv) the amount previously paid to the Contractor; and (v) the amount of GST. (b) At the time of submitting a progress claim in accordance with clause 9.2(a), the Contractor must also give the Superintendent and the Quantity Surveyor:- (i) copies of all relevant invoices and any similar information reasonably required by the Superintendent (but in the case of subcontractor invoices such requests may only be made in respect of provisional sums and Contract Sum adjustments arising under clauses 5.3 and 5.3A) and originals of reports in the form set out in Annexure H in respect of all Consultants engaged by the Contractor; (ii) evidence in such form as is acceptable to the Superintendent confirming that all payments have been made in respect of all invoices claimed in the last progress claim application; (iii) a statutory declaration by the Contractor (in a form approved by the Principal) that all subcontractors, Consultants and suppliers have been paid all amounts due to them; (iv) a certified copy of its audited financial accounts as soon as reasonably possible after they become available; (v) a certified board minute on the date of this Deed and on each of 1 August, 1 November, 2 February and 1 May thereafter until Practical Completion is achieved in the form annexed at Schedule 19; and (vi) a signed written statement in accordance with Schedule 20. (c) The Contractor must immediately notify the Principal if it becomes aware of any reasons for suspecting that it will not be able to pay all or any of its debts as and when they become due and payable. (d) Notwithstanding the provisions of clauses 9.2(b)(iv),9.2(b)(v) and 9.2(c) above, if the Principal reasonably suspects that the Contractor may be unable to pay all or any of its debts as and when they fall due and payable, the Principal may request, and the Contractor must provide, such further information regarding its financial affairs as the Principal reasonably requests. … 9.4 Assessment of progress claim (a) The Superintendent will: (i) receive the advice of the Quantity Surveyor as to the contract value of the Works in relation to which the claim is made within five (5) Business Days after receipt of the proposed progress claim referred to in 9.2; and (ii) determine the approved amount of the progress claim and advise the Contractor and Principal of its determination in writing by issuing a payment certificate within two (2) Business Days of receipt of the advice from the Quantity Surveyor in subclause (a)(i) above. (b) The Superintendent must set out in the payment certificate the calculation employed to agree or determine the amount for payment. 9.5 Payment (a) Within two (2) Business Days of the date set out in clause 9.4(a)(ii), the Contractor must provide the Principal with a Tax Invoice, which is to be dated the month of the draft claim provided in accordance with clause 9.2(a), setting out the amount advised to the Contractor by the Superintendent of its determination of the progress claim. (b) By no later than the 30th day of the month of receipt of the Tax Invoice pursuant to clause 9.5(a), the Principal must, subject to clause 9.7, pay the Contractor the amount determined in accordance with clause 9.4 less any amount due from the Contractor to the Principal in respect of this Deed. (c) Any payment of money in accordance with clause 9.5(b) is a payment on account only and is not evidence of the value of work or that work has been executed satisfactorily. …
Clause 14.1 authorised the use of an electronic messaging system known as Aconex. Describing Aconex simply as an "electronic messaging system" understates its range of functions, but no further description is needed at present. Clause 14.1 provided: 14.1 Written Notices Any notice, consent, offer, demand, request or other document required by this Deed to be given in writing must be given via Aconex, post or hand to the relevant party at the address in Schedule 1 or the address advised by each party in writing. Any notice, consent, offer, demand, request or other document required by clauses 11 or 12 of this Deed are to be served on both the address in Schedule 1 and on the head office address of the Contractor and the Principal.
Clause 6.9 provided for the appointment of a Superintendent, who should be Charter Hall's agent. Mr Peter of CPM Consultants Services Pty Ltd, was appointed as Superintendent.
It is not necessary to set out any details of the Superintendent's powers and functions.
The contract also contemplated the appointment of a Quantity Surveyor, and nominated Slattery Australia Pty Ltd (Slattery) to fulfil that role.

Progress claims: the contractual process

It is convenient to set out in narrative form the elaborate ritual that cl 9 laid down for the making, assessment and payment of monthly progress claims.
By cl 9.2(a) of the contract read in conjunction with Schedule 1, Watpac was required to give Mr Peter and Slattery, on the 25th day of each month, a draft "proposed progress claim" for that month (or the month preceding that day). The clause made detailed provision for the form and content of draft proposed progress claims, and for the documents that should accompany them.
Although the contract does not say so expressly, it is obvious that Slattery was required to assess each draft proposed progress claim on receipt, and to advise Mr Peter on the contract value of the works in relation to which it was made (see cl 9.4(a)). Thereafter, within a further two business days, Mr Peter was required to "determine the approved amount of the progress claim and advise" Watpac and Charter Hall of that determination.
The next step in the ritual described in cl 9 required Watpac, within two further business days of receipt of Mr Peter's determination, to submit a tax invoice to Charter Hall, in accordance with the requirements of cl 9.5(a).
There was no contractual requirement for Watpac to serve a payment claim under the Security of Payment Act. However, cl 9.1(d)(v) recognised that this could be done. If it were to be done, it was to be served with the tax invoice, and a copy was to be given to Mr Peter. By cl 9.1(d)(i), the reference date was to be the date of submission of a tax invoice.

The first 32 progress claims

Watpac made 36 progress claims over the life of the contract. They fall into two categories. Those in the first category (comprising the first 32 claims) were assessed and paid in a way that is not now contentious. However, for the second category (comprising the last four claims, nos. 33 to 36, for the months of August, September, October and November 2016), Charter Hall sought to set off, against the value of the work that was determined by Slattery and certified by Mr Peter, an equal amount said to be owing to it on account of liquidated damages. Watpac denied that any liquidated damages were payable.
Assessment of the first 32 claims followed a common pattern. That may be illustrated by reference to the first, described as Progress Claim No.1. The claim process was initiated by Aconex on 19 December 2013. It was therefore commenced early, but, presumably, no one particularly wanted to dispatch a proposed progress claim on Christmas Day, or to consider it immediately thereafter.
The claim was described in the covering Aconex message as "our Draft Progress Claim No.1 for the December 2013 period". It went to Mr Peter and to Slattery. Slattery assessed the value of the work described in it, and recommended payment of an amount. Mr Peter considered that recommendation and (subject to a small and irrelevant rounding difference) issued a progress certificate for the amount certified. The progress certificate was sent, apparently by Aconex, under cover of a letter which attached the payment certificate and Slattery's assessment. The letter stated: This is a Payment Schedule made under the Building and Construction Industry Security of Payments [sic] Act NSW (1999).
Watpac then prepared a tax invoice and provided it to Mr Peter and to Charter Hall. Thereafter, Charter Hall paid the certified amount.
Each tax invoice described the project, the claim to which the invoice related, and the value of the claim. It included Watpac's bank details. Each was endorsed prominently with the following words: THIS PAYMENT CLAIM IS MADE UNDER THE NSW BUILDING AND CONSTRUCTION INDUSTRY SECURITY OF PAYMENT ACT 1999.
However, there were no documents sent with any tax invoice to identify the construction work to which it related (see s 13(2)(a) of the Security of Payment Act). The invoices merely referred to "Value of Work completed to date" and to "Variations".
The same pattern was followed for the next 31 progress claims, up until and including progress claim No.32 for the month of July 2016. For the most part, the claims that were sent to Mr Peter and Slattery were described simply as "progress claim", but from time to time were called "draft progress claim" or "the draft of our progress claim", or words to similar effect.
I should note, because it was a matter on which Charter Hall placed some significance, that although the progress claim was described in the Aconex correspondence as a "draft progress claim" or "progress claim", the documents that made the claim and defined the amount sought were described in each case as a "Payment Claim". Thus, they invoked the language of the Security of Payment Act. However, none of them included the endorsement then required by s 13(2)(c) stating that "it is made under" the Security of Payment Act. The parties accepted that the amendments to s 13(2)(c) made by the Building and Construction Industry Security of Payment Amendment Act 2013 (NSW), did not apply to the contract, because it had been made before the commencement of the Amendment Act.
Putting all that together, the process for each of the first 32 progress claims can be summarised as follows: 1. Watpac submitted a claim that, whether it was described as a draft or not, was clearly intended to be the initiating document required by cl 9.2(a) - in the language of that paragraph, "a draft of its proposed progress claim for" the relevant month; 2. the document actually stating the amount of the claim and how that amount was derived was described as a "Payment Claim"; 3. Slattery assessed the value of the work comprised in the claim; 4. Mr Peter assessed and certified the progress payment to be made in respect of the claim; 5. Mr Peter's assessment was given under cover of a letter describing the assessment as a "Payment Schedule"; 6. Watpac provided Charter Hall with a tax invoice for the certified amount; 7. that tax invoice in each case was said to be a payment claim for the purposes of the Security of Payment Act; and 8. Charter Hall, having satisfied itself that the amount claimed by the tax invoice corresponded with Mr Peter's certification, paid the amount claimed.
So far as the formal requirements of s 13 of the Security of Payment Act are concerned, the position for the first 32 claims is that: 1. none of the documents described as a "payment claim" that were sent with what I will call the cl 9.2(a) documentation was in fact a payment claim for the purposes of the Security of Payment Act, if only because none of them contained the statement required by s 13(2)(c); and 2. none of the tax invoices was a payment claim for the purposes of the Security of Payment Act, because none of them described the construction work to which it related.
It would seem to follow that none of Mr Peter's progress certificates for the first 32 claims could be a payment schedule for the purposes of the Security of Payment Act, because none of them responded to a payment claim. However, I need not express, a concluded view on this.

The contentious progress claims

There followed the four contentious progress claims. As I have said, the disputes arose because Charter Hall claimed that it was entitled to many millions of dollars in liquidated damages, and that it was able to offset those liquidated damages against amounts otherwise payable to Watpac for the value of work done from month to month. Mr Peter recognised that claimed right in his progress certificate for each of those four claims.
No doubt because the parties had fallen into dispute (and it is clear that, by August 2016 at the latest, each was well supported by capable legal advisers), the procedure that was followed in relation to the four disputed progress claims differed from that which had been followed in relation to the previous 32.
It is convenient to describe the way in which the last four progress claims were dealt with by considering claim 33, for the month of August 2016. That claim (in the language I have used above, the cl 9.2(a) documentation) was sent by Aconex on 24 August 2016, under cover of a message which described it as "draft progress claim for August 2016".
As before, the document that stated the claim and its amount was described as a "Payment Claim", but did not contain the statement required by s 13(2)(c) of the Security of Payment Act. Slattery assessed the value of the work comprised in the claim, and forwarded its assessment to Mr Peter. Mr Peter issued a progress certificate, as before under cover of a letter. However: 1. the amount certified, and thus in Mr Peter's opinion the value of the progress payment to be made, was "$0.0", because he offset liquidated damages against Slattery's assessment of the value of the work claimed; and 2. neither the covering letter nor the progress certificate itself was described as a payment schedule for the purposes of the Security of Payment Act.
On 5 September 2016 (which was the date Mr Peter sent his progress certificate to, among others, Watpac), Charter Hall itself prepared a document relating to the claim. That document was signed by its employee Mr Hulett, who was (and is) a Development Director employed by Charter Hall. It is clear, and Mr Hulett acknowledged, that the document he described had been prepared by Charter Hall's legal advisers, with input from Mr Peter to the extent necessary (in relation to dates, figures and the like).
The document described itself as a "Payment Schedule". It stated that it was a payment schedule made under the Security of Payment Act. It identified the relevant payment claim as progress claim 33. It stated that the scheduled amount was "$Nil". The reasons for withholding payment were set out in an "attachment" that comprised about 25 pages.
The attachment said, among many other things, that progress claim 33 did not comply with the contract or with the Security of Payment Act and thus was "not valid". It gave reasons, which were express to be stated "(without limitation)". Those reasons included noncompliance with some of the requirements of cl 9.2(b) of the contract. They included also the assertion that the progress claim had not been served with the cl 9.5(a) tax invoice, and thus that it had not been served in respect of the contractually defined reference date (being the date of submission of the cl 9.5(a) tax invoice).
As I point out below [1] , Mr Donaldson submitted that the reference date under the contract was the 25th day of each month (leaving aside, as having no present relevance, the reference date for a final payment claim). Mr Robertson of Counsel, who appeared for Watpac, did not submit that Charter Hall's opportunistic change of position had any dispositive significance.
The reasons given did not suggest that the progress claim was invalid as a payment claim for the purposes of the Security of Payment Act because it did not include the statement required by s 13(2)(c). Whether that omission reflects a failure to appreciate that the statement was required, or some deeper tactical purpose, is a matter on which the evidence is silent and thus, I think, not one on which I should speculate.
With those preliminary remarks out of the way, the payment schedule turned its attention to, and gave many pages of detail in relation to, Watpac's alleged failure to achieve completion by the date for practical completion; its alleged lack of entitlement to the numerous extensions of time that had been claimed; and the alleged right said to be enjoyed by Charter Hall in consequence, to levy liquidated damages and to set them off against amounts otherwise payable to Watpac. Those matters may trouble some unhappy judicial officer, referee or arbitrator in the future, but have no present significance.
On 8 September 2016, Watpac sent by Aconex to Mr Peter, Mr Hulett and others, a document described as a "PCG Report for August 2016". The initialism PCG refers to the Project Control Group that the contract required to be established, and to meet. Mr Donaldson drew attention to a statement in that report that, he submitted, showed that Watpac was at least acquiescing in the "Common Assumption" or "Defendant's Assumption" described below. [2] The statement reads: Charter Hall have issued a Payment Schedule in response to our progress claim indicating Watpac are indebted to Charter Hall for Liquidated Damages. Watpac disagree with this assertion and will respond accordingly.
For the most part, the three subsequent progress claims were dealt with in a similar way. They were the subject of mention in the relevant PCG Report, although the precise wording varied. In one report, Watpac, having stated the contention and its disagreement, requested that the claims be paid. In another, Watpac stated that the dispute "will be a subject of mediation".
There was indeed a mediation. It took place on 29 November 2016. That followed submission of Watpac's claim number 36 on 25 November 2016, but preceded Slattery's assessment of the value of the work, Mr Peter's progress certificate, and Mr Hulett's payment schedule (which was provided to Watpac on 6 December 2016).
For claims 33 to 35, Watpac did not provide a document purporting to be both a tax invoice and a payment claim under the Security of Payment Act following Charter Hall's provision of a payment schedule. However, after the Charter Hall had provided a payment schedule for claim 36, Watpac did serve such a document. It is that document, which I shall call the disputed payment claim, that is the subject of the present dispute.

The disputed payment claim

The parties made liberal use of words such as "purported" to describe each other's documents. No doubt, that was done to avoid any impression that some concession might be inferred were the word to be omitted. In the interests of economy and legibility, I shall not take the same course.
The disputed payment claim was dated 7 December 2016. It comprised the following documents: 1. a tax invoice of that date, said to be referable to claim number 36, claiming the amount to which I have referred in excess of $13.55 million (described as the "Claimed Amount"), and stating that it was a payment claim under the Security of Payment Act; 2. copies of the documents that had comprised "payment claim 36 - November 2016" submitted by Aconex on 25 November 2016; and 3. a further 255 pages described as "Attachment A", which in turn comprised copies of "proposed Progress Claims" 32, 33, 34 and 35.
Attachment A requires a little more description, because the attachment of that document to the tax invoice of 7 December 2016 formed the basis for Mr Donaldson's principal attack on the formal validity of that tax invoice as a payment claim under the Security of Payment Act.
The tax invoice did not refer to Attachment A (nor, for that matter, did it refer to the November claim). However, it is common ground that Attachment A (and the November claim) were included with the tax invoice when it was hand delivered [3] in hard copy to Mr Hulett at Charter Hall's place of business (and registered office) and to Mr Peter. Attachment A stated: This Attachment A (and the documents included in this attachment) forms part of the Tax Invoice/Payment Claim dated 7 December 2016. [4]
The attachment described the documents that were included in it: the four earlier "Proposed Progress claims" to which I have referred. It said that those documents would be "referred to in their totality in the remainder of this Attachment A as Proposed Progress Claims." [5]
The attachment then stated: The amounts claimed in the Proposed Progress Claims are included in the Claimed Amount in the Tax Invoice / Payment Claim dated 7 December 2016 and are, for the purpose of this Tax Invoice, deemed to be set out in full.
Finally (before the reader came to the documents themselves), Attachment A asserted that Watpac was entitled to the full amount claimed, and that Charter Hall was not entitled to set off liquidated damages. It referred to reasons earlier given as to why Charter Hall was said to lack that entitlement.
Somewhat unemphasised in what I have just said is the fact, crucial to Charter Hall's case on the estoppel and misleading or deceptive conduct defences, that the tax invoice and accompanying documents were served only in hard copy and by hand at the relevant addresses of the recipient. So far as I understand it, the tax invoice and those documents were the only documents served by Watpac (at least, up until 7 December 2016) other than by Aconex. However, they were not the only documents so served during the life of the contract. Each of Mr Hulett's four payment schedules had been served in hard copy, although each had been served by Aconex as well.

The parties' submissions

Mr Donaldson's principal submission was that the disputed payment claim did not comply with s 13(2)(a) of the Security of Payment Act, because it did not identify the construction work to which it related. That was so, he submitted, because the inclusion of Attachment A and the more than 250 documents it contained, being the four previous progress claims, did not indicate what work had been paid for and what, for which payment had not been made, was the subject of the claim. He referred to numerous decided cases, in which the requirements of s 13(2)(a) [6] had been analysed and applied.
Mr Donaldson noted, correctly, that the tax invoice itself did not identify the construction work to which it related. It followed, he submitted, that the work could be identified only by reference to the documents that were sent with it. He accepted that this could be sufficient, and indeed that if the attachments had stopped at the end of the documents forming part of the November claim (that is to say, if they did not include Attachment A and the following pages), this ground of objection would fall away.
Charter Hall's Amended Technology and Construction List response made other complaints about the form of the payment claim. They were not addressed in Mr Donaldson's written or oral submissions. However as they have not been formally withdrawn, I should deal with them; but I shall give them only slightly more consideration than Mr Donaldson did.
Mr Robertson submitted that the disputed payment claim did sufficiently identify the construction work to which it related. That was so, he submitted, because Charter Hall had been able to consider and respond to that claim, in its guise as claim 36 (which, of course, had not included Attachment A and the following 254 pages of documents). He submitted, by reference to Mr Hulett's payment schedule responding to that claim, that it was clear that Charter Hall had understood what was the work to which it related, and had been able to respond to it. Mr Robertson, too, referred to authorities that, he said, supported his client's position.
Mr Robertson submitted that Attachment A did not alter the position. He submitted that it served at least two purposes: 1. to make it clear that the construction work for which payment was claimed included all the construction work, the subject of the previous claims 32 to 35, to the extent that payment had not been made for them (claim 32 had been substantially but not wholly paid; claims 33, 34 and 35 had not been paid at all). He submitted that Charter Hall must have known what that work was, because of Mr Peter's payment certificates. 2. The second purpose, Mr Robertson submitted, was to respond to the case advanced by Charter Hall in the payment schedule as to its entitlement to set off liquidated damages.

Decision

I start by setting out s 13 of the Security of Payment Act, in the form applicable to the contract (that is to say, before the Amending Act took effect): 13 Payment claims (1) A person referred to in section 8 (1) who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment. (2) A payment claim: (a) must identify the construction work (or related goods and services) to which the progress payment relates, and (b) must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount), and (c) must state that it is made under this Act. (3) The claimed amount may include any amount: (a) that the respondent is liable to pay the claimant under section 27 (2A), or (b) that is held under the construction contract by the respondent and that the claimant claims is due for release. (4) A payment claim may be served only within: (a) the period determined by or in accordance with the terms of the construction contract, or (b) the period of 12 months after the construction work to which the claim relates was last carried out (or the related goods and services to which the claim relates were last supplied), whichever is the later. (5) A claimant cannot serve more than one payment claim in respect of 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.
Section 13, and for that matter the whole of the Security of Payment Act, is to be read by reference to the object of the Act as set out in s 3, and the means by which it seeks to achieve that object. I set out s 3: 3 Object of Act (1) The object of this Act is to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services. (2) The means by which this Act ensures that a person is entitled to receive a progress payment is by granting a statutory entitlement to such a payment regardless of whether the relevant construction contract makes provision for progress payments. (3) The means by which this Act ensures that a person is able to recover a progress payment is by establishing a procedure that involves: (a) the making of a payment claim by the person claiming payment, and (b) the provision of a payment schedule by the person by whom the payment is payable, and (c) the referral of any disputed claim to an adjudicator for determination, and (d) the payment of the progress payment so determined. (4) It is intended that this Act does not limit: (a) any other entitlement that a claimant may have under a construction contract, or (b) any other remedy that a claimant may have for recovering any such other entitlement.
As Basten JA said in Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [7] , the overall purpose of the Act may be seen to be "to provide a speedy and effective means of ensuring that progress payments are made during the course of the administration of a construction contract, without undue formality or resort to the law".
The requirements of s 13(2)(c) have been considered in a number of cases. A study of those cases could suggest that an increasingly technical approach has been taken to the requirements of the paragraph, and its application in particular cases. If that impression were correct (and this is neither the time nor the place for a detailed analysis of the very many decided cases both in this State and in others with similar legislation), it would be unfortunate.
In my view, a convenient and apt starting point for analysis is found in the judgment of Nicholas J in Walter Construction Group Ltd v CPL (Surry Hills) Pty Ltd [8] . Nicholas J [9] cited Pyneboard Pty Ltd v Trade Practices Commission [10] (which was not a case involving the Security of Payment Act or equivalent legislation) in support of the proposition that: [T]he mere fact that parsing and analysis in the artificial atmosphere of the court room can lead to the identification of a number of latent ambiguities will not invalidate what, as a matter of common sense, is reasonably clear.
A similar approach was taken by Palmer J in Multiplex Constructions Pty Ltd v Luikens [11] . His Honour said (and I paraphrase) that payment claims and payment schedules given and received by parties experienced in the building industry and familiar with the particular contract and the history of work done under it "should not… be required to be as precise and as particularised as a pleading in the Supreme Court". [12]
Palmer J made it plain, both at [76] and in the following paragraphs, that a payment claim (and, although it is irrelevant here, a payment schedule) must contain sufficient detail to advise the recipient of the real issues in dispute. However, his Honour said, neither full particulars nor absolute precision were necessary, as long as the basic objective, of apprising the other side of the issues in dispute, was achieved.
In an earlier case, Hawkins Construction (Australia) Pty Ltd v Mac's Industrial Pipework Pty Ltd [13] , Davies AJA (with whom Handley and Stein JJA agreed) said at [20] that s 13 should not be approached in an unduly technical manner. His Honour pointed out that the words used were well understood in the English language, should be given their normal and natural meaning, and, "[a]s the words are used in relation to events occurring in the construction industry, they should be applied in a common sense practical manner".
The observations of Nicholas J in Walter Construction Group, Palmer J in Luikens and Davis AJA in Hawkins Construction were quoted and approved by Mason P (with whom Giles and Santow JJA agreed) in Clarence Street Pty Ltd v ISIS Projects Pty Ltd [14] .
In Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (In Liq) [15] , Hodgson JA (with whom Ipp JA agreed) said [16] at [34]: In my opinion, a document which purports to be a payment claim does not fail to be a payment claim, within the meaning of the Act, merely because it can be seen, after a full investigation of all the facts and circumstances, not to successfully identify all the construction work for which payment is claimed.This could be the case, for example, if there is some typographical omission or other error in relation to one of a large number of items included in the claim; and the question whether or not the other party, by reason of its knowledge of the project, would have been able to fill in or correct that error could be one depending on a great deal of evidence concerning the circumstances of the case. In my opinion, it is inconceivable that it was the intention of the legislature that the existence of a payment claim under the Act should depend on that kind of consideration.
As Hodgson JA pointed out thereafter [17] , if a respondent could not sufficiently identify the construction work to which the payment claim related, it could say so in its payment schedule, and say that it was disputing its obligation to make payment "because it cannot identify the work, and because for that reason it disputes that the work was done or done to a standard justifying payment, or was within the contract or within any variation of it, and that any pre-condition to payment was satisfied".
In my view, the application of the requirements of s 13(2)(c) to the facts of a particular case must be guided by the approach to construction set out in the authorities to which I have referred. However, and importantly, it must also be done consistently with the overall purpose of the Security of Payment Act, as stated in s 3 and as described by Basten JA in Climatech at [45] (see at [58] above). It would be inconsistent with both that approach to construction and the stated object of the Act to introduce formality and technicality into the process, and to treat the requirements of pt 3 of the Security of Payment Act as though they were rules of court designed to govern civil litigation, where the Act itself does not require that to be done.
It may be accepted that the requirements of s 13(2)(c) are to be determined, objectively, by the ordinary process of statutory construction. It may be accepted also, that in considering the application of s 13(2)(c) to particular facts arising in a particular contractual context, "the focus must remain on the objective circumstances, not the subjective intentions or perceptions of one of the parties" [18] . Nonetheless, as Palmer J recognised in Luikins, the particular context is a matter of great importance. A consideration of whether the requirements of s 13(2)(c) have been satisfied in a particular case must take into account, as his Honour recognised [19] , the knowledge, as to the particular contract, its history and its administration, to be imputed to both the parties. Mason P recognised the validity of that approach in Clarence Street [20] when his Honour said: I do not suggest that it was wrong to examine the issue from the vantage points of the parties to the particular contract, including the way the recipient would have viewed the later claims in light of the pattern of earlier ones.
I think that a similar approach can be discerned from a passage in the reasons of Basten JA in Climatech. His Honour said [21] that: 1. the requirement to identify the construction work to which the payment claim relates should be given a purposive construction; 2. that approach leads to the conclusion that "what must be done must be sufficient to draw the attention of the principal to the fact that an entitlement to a payment is asserted…" 3. for that to happen, "the claim, to be valid, must be reasonably comprehensible to the other party"; and 4. the claim should set out the factual basis upon which it is made, including the provision of necessary documents, but not necessarily the contract terms themselves.
Mr Donaldson's submissions called in aid passages in Climatech, in the judgment of Einstein J in Leighton Contractors Pty Limited v Campbelltown Catholic Club Limited [22] and in the judgment of White J in Neumann Contractors Pty Ltd v Peet Beachton Syndicate Limited [23] .
I do not think it is necessary to say anything more about the decision in Climatech. Nor, with respect, do I wish to say anything about the decision of Einstein J in Leighton. If the approach described by his Honour in that case were inconsistent with the approach set out in the appellate authorities to which I have referred (and I am not for a minute to be taken as suggesting that this is the case), it cannot stand in the light of those authorities; and if it is consistent with them, then further analysis is not required.
Before I turn to the decision of White J in Neumann, I should say that whilst valuable guidance as to the construction of s 13 may be derived from a consideration of decided cases (as I have said, both on that section and on its equivalents interstate), decisions as to the application of the section in particular factual circumstances are less likely to be instructive. Those decisions inevitably reflect the court's application of the section, properly construed, to the particular facts that are proved. It involves an evaluative assessment of those facts, in some cases requiring the balancing of matters that tend one way with matters that tend the other. As Einstein J said in Leighton [24] , the question may often be "a close one".
The relevant facts in Neumann were simple. A payment claim sought payment of an amount which included something described as "previously unclaimed and unpaid", said to be valued at more than $467,000.00. As her Honour pointed out, that item was not otherwise explained or particularised.
At [29], White J adopted the proposition (which her Honour derived from earlier judgments including that of Palmer J in Luikens and the decision of Daubney J in Baxbex Pty Ltd v Bickle [25] that there should be sufficient precision and particularity "to a degree reasonably sufficient to apprise the parties of the real issues in dispute". In the present case, her Honour said, that test was not satisfied. I would respectfully agree, and for the very reasons given by her Honour [26] In order for Peet to decide whether it should respond it would need to engage in a careful analysis of the schedule exhibited to the summary [setting] out the work which was undertaken under the contract over some 25 pages and marry the work with the amounts paid on the progress certificates and arrive at the outstanding items.
As her Honour said [27] , a requirement that a respondent to a payment claim should undertake a task of that nature would invite error, particularly bearing in mind the close time constraints within which a respondent must furnish a payment schedule.
If I may say so with respect, I do not see anything in her Honour's application of the requirements of s 17(2)(c) of the Queensland Act (the equivalent provision to s 13(2)(c) of the Security of Payment Act) that is inconsistent with the approach to the construction of s 13(2)(c) as I have set it out above. Her Honour's conclusion reflects her Honour's analysis of the requirements of the section applied to the particular facts proved before her. It does not follow that the same conclusion should be reached on facts that bear some incidental, or even substantial, similarity to those considered by her Honour.
With that regrettably lengthy exegesis concluded (and the noun is not inappropriate, given the tendency of many advocates to attribute near-scriptural authority to prior decisions that are perceived to support the conclusion for which they contend), I turn to the facts.
I start with the proposition that the tax invoice was clearly intended to be read in conjunction with the documents that accompanied it.
The next point is that the tax invoice identified the claim to which it related as claim number 36. The first group of attached documents related to that very claim; they were the documents that had been submitted to, among others, Mr Peter and Charter Hall, on 25 November 2016 as "Head Claim 36". It is self-evident that the tax invoice (and, to the extent that it was characterised as a payment claim under the Security of Payment Act, that payment claim) required payment of the claim described in those documents. As I have noted, Mr Donaldson accepted that if the disputed payment claim went no further, and did not include Attachment A, this aspect of Charter Hall's case as to formal invalidity must fail. That concession was rightly made, including for the reasons explained by Palmer J in Luikens.
The amount claimed by the tax invoice corresponds precisely with the amount stated as "This Claim (Incl GST)" in the November payment claim. That amount is described in the tax invoice as the "Claimed Amount". I divert slightly at this point to note that to the extent that Charter Hall pressed its pleaded defence that the disputed payment claim did not identify unambiguously the amount of the claimed progress payment, that is incorrect. The statement of the claimed amount was clear and unambiguous. It corresponds exactly to the amount claimed by the November claim.
Returning to the principal theme, the key to Charter Hall's case - that the tax invoice did not sufficiently identify the construction work to which it related - must be found in Attachment A. I accept that Attachment A is somewhat confusing, in particular because of the statement that it and the documents following it "form part of the Tax Invoice/Payment Claim dated 7 December 2016". Again, the statement that the amounts of the four preceding claims (nos. 32 to 35) "are included in the Claimed Amount in the Tax Invoice/Payment Claim" is not entirely easy to follow.
However, the obvious fact is, as the parties must have understood, that progress claims are made monthly (again, final payment claims may be put to one side), for the value of work completed in the month to which they relate. Further, and again as the parties must have understood, the value of the claim made by the November claim included, as an integer, the "Project Value of Work to Date". When the documents are read together, it is quite clear, in my view, that Watpac was asserting an entitlement to be paid not only for work done in the month to 25 November 2016, but also for work done in previous months to the extent that it had not been paid for that work.
There can be no doubt that both Charter Hall and Mr Peter knew what that work was, because: 1. they had received each of the progress claims, which identified the work to which they related; 2. those progress claims had been analysed by Slattery, who reported on the value of the construction work to which each referred; 3. those progress claims and Slattery's recommendation had been further considered by Mr Peter; and 4. Charter Hall had decided, and apparently instructed Mr Peter, that an amount for liquidated damages should be applied so as to eliminate its liability to pay that amount.
In my view, considering the disputed payment claim as a whole, there is no ambiguity and no confusion. Each party knew what was the work done for which payment had not been made, and what was the assessed value of that work (that is, assessed by Slattery and adopted by Mr Peter before he applied liquidated damages). The clear meaning of Attachment A is that Watpac was doing no more than remind Charter Hall (who, I am quite certain, needed no reminder) that the value of the amount claimed in the tax invoice included not only the value of work done in November but also the value of work done in previous months for which payment had not been made.
I conclude that the disputed payment claim of 7 December 2016 does not fail to comply with s 13(2)(a) of the Security of Payment Act.
It is scarcely necessary to repeat that none of the cl 9.2(a) documents submitted by Watpac to Mr Peter (and Charter Hall) could stand as valid payment claims for the purposes of the Security of Payment Act. That is so, despite the fact that those documents included a document styled "Payment Claim", because none of them contained the notation required by s 13(2)(c).
I have dealt already with one of the other objections to the formal validity of the tax invoice - that it did not identify unambiguously the amount claimed.
As I have noted, Mr Donaldson did not address the remaining suggested grounds of invalidity. Accordingly I propose to do no more than say that his failure to attempt to support them reflects their underlying substance. In circumstances where the party raising the allegations did not see fit to address them in submissions, I do not think that the obligation to give reasons requires me to say anything more.

The reference date question

The argument on this question really emerged in the course of the submissions on Charter Hall's estoppel case. However, it is convenient to deal with it separately and now.
The argument arose in the estoppel case when Mr Donaldson submitted, in essence, that because Watpac was estopped from denying that the cl 9.2(a) draft progress claims were payment claims for the purposes of the Security of Payment Act, it followed that the date for their submission - the 25th day of each month - was a reference date. It may be that I have inverted the submission, and that it started with the proposition that the 25th day of each month was a reference date, for the purpose of showing that the proposed progress claims required to be submitted were, therefore, payment claims for the purposes of the Security of Payment Act.

The parties' submissions

Mr Donaldson submitted that the disputed payment claim could not be a valid payment claim under s 13 of the Security of Payment Act because, putting the matter loosely, there was no available reference date to support it. That was so, he submitted, because: 1. the relevant reference date under the contract was the 25th day of each month; and 2. the November progress claim, claim 36, was (or Watpac from estopped from denying that it was) a payment claim given in respect of the reference date 25 November 2016.
It will be noted that the first limb of that submission is inconsistent with one of the reasons that Charter Hall gave, in responding to payment claims 33 to 36, for denying that the claim was a valid payment claim. That reason [28] was that the reference date was the date of submission of the tax invoice.
Mr Donaldson submitted that, since no further reference date had accrued between 25 November and 7 December 2016, the disputed payment claim 2016 was not a valid payment claim.
Mr Robertson submitted that on the proper construction of cl 9 of the contract, either: 1. the reference date was the date determined, by reference to cl 9.1(d)(i), by looking at the actual date when a tax invoice was provided in accordance with cl 9.5(a); or 2. alternatively, if cl 9.1(b)(i) were void for uncertainty, then the contract did not stipulate any reference date and it was the end of each month (see s 8(2)(b) of the Security of Payment Act).
Mr Robertson submitted that the 25th day of each month could not be a reference date, because that was not the date for making a progress claim. It was, he submitted, the date chosen for the first step in the process of formulation of a progress claim. It was only after the process contemplated by cl 9 had been worked through, he submitted, that a progress claim, properly so called, could be made.
Mr Donaldson submitted, in reply, that the definition of reference date in s 8(2)(a), as "the date on which a claim for progress payment may be made…" was sufficient to indicate that the 25th day of each month was the date fixed by the contract for the making of a claim for a progress payment.

Decision

I start by setting out s 8 of the Security of Payment Act: 8 Rights to progress payments (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. (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 the date on which a claim for a progress payment may be made in relation to work carried out or undertaken to be carried out (or related goods and services supplied or undertaken to be supplied) under the contract, or (b) if the contract makes no express provision with respect to the matter - the last day of the named month in which the construction work was first carried out (or the related goods and services were first supplied) under the contract and the last day of each subsequent named month.
Section 8 was considered by the High Court in Southern Han Breakfast Point Pty Ltd (In Liq) v Lewence Construction Pty Ltd [29] . In a joint judgment, the Court (Kiefel, Bell, Gageler, Keane and Gordon JJ) held [30] that "the existence of a reference date under a construction contract within the meaning of s 8(1) is a precondition to the making of a valid payment claim under s 13(1).
Their Honours said [31] that a date determined by or in accordance with the terms of the contract (see s 8(2)(a)) is "a date fixed by operation of one or more express provisions of the construction contract". It was not, their Honours said, a reference to "a date that is determined independently of the operation of a contract merely having regard to the contractual terms".
I do not accept Mr Donaldson's submission that the reference date is the 25th day of each month. That submission, in my view, ignores both the careful and elaborate structure set out in cl 9 and the express contractual stipulation of what is to be the reference date.
Stepping back from the detail for a moment, the obvious (or an obvious) purpose of the clause is to ensure that, so far as possible, Watpac and Charter Hall agree on the value of construction work to be claimed in any given month, and that they do so before a formal demand for payment is made. That purpose appears from: 1. the requirement for submission of a proposed progress claim each month; 2. the detailed stipulation of the material required to accompany or support such a claim; 3. the stipulated process of assessment of that claim; and 4. the contractual conclusion of the process: namely, the issue of a tax invoice (which may also be accompanied by, and for that matter, I think, may also in itself be) a payment claim for the purposes of the Security of Payment Act.
Thus, it is not until the conclusion of the process of submission of a proposed claim and its assessment that any formal demand for payment, enforceable either under the contract or pursuant to the mechanism set out in the Security of Payment Act, is to be given.
It is evident that the amount stated in the proposed progress claim for any month may not be the amount ultimately found to be payable. The amount ultimately agreed to be payable will be settled upon after the process of assessment for which cl 9 provides. It is, I think, reasonably obvious that the parties sought to avoid putting Charter Hall in a position of "fight or flight" before it had had an adequate, although short, opportunity to consider the merits of any proposed progress claim. In that sense, the clause can be seen to be directed at reducing resort either to the courts or to some form of alternative dispute resolution, in respect of progress claims.
Those are what might be called the contextual reasons why I do not accept Mr Donaldson's submission. I turn to the language of cl 9 itself.
First of all, the submission does not deal with the fact that what is to be submitted on the 25th day of each month is in effect a draft (because it is what is "proposed") of the progress claim that Watpac intends to make for that month. The word "proposed" must have some work to do. And for the reasons I have given, it is clear that the parties understood, or foresaw as being, at least, likely, that the proposed claim might not be allowed in full, without any demur on the part of Watpac.
Secondly, and more importantly, the submission does not deal with the fact that the parties stipulated expressly for what was to be the reference date. That stipulation is set out in cl 9.1(d)(i). It is obvious, and cl 9.1(d)(iv) confirms, that in subpara (i) the words "reference date" were intended to have the meaning ascribed to them by the Security of Payment Act. So, bearing in mind that the parties sought by their contract to determine when claims for progress payment should be made, the words "reference date" should be understood as being a date determined in the manner set out in s 8(2)(a).
It is a difficult process of construction to read cl 9 overall in a way that says the parties did not mean what they said, and instead meant that another date, selected for another (although commercially related) purpose, should be the reference date.
It is unnecessary to consider Mr Robertson's alternative submissions - that the contract means what it says, or that what it says is too uncertain to be enforceable. If the former, the reference date is the date of submission of the tax invoice for any month. If the latter, it is the last day of every month.
On either basis, as Mr Robertson submitted, there was an available reference date to support the 7 December 2016 tax invoice in its alternative character as a payment claim for the purposes of the Security of Payment Act. It follows that there was no contravention of s 13(5).
Before I leave the issues as to validity of the asserted payment claim, I should make it clear that I am dealing with those issues by reference to the facts that have been proved. On the application as I see it of the Security of Payment Act to the terms of the contract and to the facts of what happened, the disputed payment claim is a valid payment claim. That says nothing as to whether Watpac should be held estopped from asserting that it is, or prevented from so asserting by relief granted pursuant to s 237 of the Australian Consumer Law. [32] Even if Watpac were so estopped or prevented, that could not require the court to decide the issues that I have looked at so far by reference to the effect of estoppel or s 237. Those matters are the subject of the next two issues.

The estoppel case

The estoppel case is somewhat puzzling. It asserts that large, well-resourced (in terms of both financial resources and legal advice) and commercially experienced parties, undertaking, for many millions of dollars, a significant development in the Sydney CBD, and doing so pursuant to the terms of a lengthy and laboriously drafted contract which spelt out in minute (indeed excruciating) detail their rights and obligations, chose, in respect of a fundamental element of that contract - the machinery by which one party would be paid for work done - to depart from the terms of the contract and to proceed on the conventional basis that their rights and liabilities were to be found, instead, in some assumed state of affairs. That is unlikely, but the fact that it is unlikely does not mean that it cannot be correct. Nonetheless, that it is unlikely suggests the need for close scrutiny.

The pleaded case

Charter Hall's pleading starts with the Aconex Convention. That pleading asserts that: 1. Watpac specified, in its Design Management Plan and Project Quality Plan (both documents required by the contract to be prepared) the compulsory use of Aconex for all project correspondence; 2. Up until November 2016 at least, Watpac communicated all its claims for payment by Aconex; 3. Watpac used Aconex to communicate all other claims affecting the parties' legal rights and obligations; and 4. up until November 2016 at least, Watpac did not communicate any document affecting legal rights or obligations solely by delivery of a hard copy.
In those circumstances, Charter Hall pleads, it and Watpac "each adopted the assumption that all documentary communications which purported to affect the legal rights and obligations of the parties, including in relation to claims for payment, would be communicated using Aconex". Charter Hall pleads that Aconex thereby became the conventional basis for communications in connection with the works. That is what Charter Hall calls the Aconex Convention.
Charter Hall next pleads a "Common Assumption": that what it describes as "the progress claims submitted by [Watpac] on about the 25th day of each month" were in fact payment claims pursuant to s 13 of the Security of Payment Act, and that the payment schedules served in response to them were payment schedules for the purposes of s 14 of that Act. That assumption is pleaded to arise from the facts that each of the so called progress claims sent to Charter Hall included the assertion that what was sent was in terms a "payment claim" bearing a number, and that Mr Peter (for the first 32 claims) or Charter Hall itself (thereafter) sent in response a document that was expressly stated to be a payment schedule for the purposes of the Security of Payment Act.
Further, in relation to the last four claims, the pleading referred to the dual response given to them: Mr Peter's provision of a contractual payment certificate, and Charter Hall's provision of a payment schedule.
Alternatively, and based on the same matters, Charter Hall next pleads the "Defendant's Assumption": that it acted on the assumption that the claims were payment claims pursuant to the Security of Payment Act, and that the responses were payment schedules for the purposes of that Act. It pleads that Watpac was aware of that belief.
Charter Hall then pleads that by reason of various matters, Watpac acquiesced in or induced Charter Hall's adoption of those assumptions.
Charter Hall pleads, in respect of the disputed payment claim, that it had been served at a time and in a form that was inconsistent with those assumptions, and before Charter Hall had been given any notice that Watpac intended to withdraw from those assumptions.
Charter Hall pleads that, by reason of the matters that I have summarised, it was unconscionable of Watpac to depart from the Aconex convention and the Common Assumption (or the Defendant's Assumption, as the case may be) by serving the disputed payment claim when and in the manner that it did.

The parties' submissions

Mr Donaldson submitted that the evidence made it clear that the parties had conducted their contractual relationship on the basis of the Common Assumption. He relied on the use of the term "Payment Claim" in every document Watpac provided pursuant to cl 9.2(a); the provision of a document styled "Payment Schedule" in response; and, until August 2016, Watpac's submission of a tax invoice that stated in terms that it was a payment claim, for the purposes of the Security of Payment Act.
This last matter, Mr Donaldson submitted, showed that Watpac intended that the claims process should involve the Security of Payment Act. However, he submitted (as being a self-supporting conclusion), it could not have been the parties' intention "that the [statutory] process was initiated with a document that post-dated the determination of its progress claim".
Mr Donaldson submitted that the disputed payment claim had been propounded inconsistently with the Common Assumption (that is to say, inconsistently with the alleged conventional estoppel) and before any notice had been given of Watpac's intention to withdraw from the Common Assumption or the conventional state of affairs.
Although not accepting that unconscionability was necessary for the purposes of conventional estoppel, Mr Donaldson submitted that Watpac's actions were relevantly against conscience.
Next, Mr Donaldson submitted, Charter Hall had acted to its detriment in its reliance on the Common Assumption, because otherwise it would have considered and dealt with the disputed payment claim, including by providing a timeous payment schedule in response.
Those submissions were put also in relation to the Defendant's Assumption.
Mr Robertson submitted that there was no Common Assumption as pleaded. The parties' conduct, he submitted, was consistent (so far as consistency could be achieved) with the regime set out in cl 9 of the contract.
Next, Mr Robertson submitted, if Charter Hall had made the pleaded Defendant's Assumption, that was not something that Watpac had induced, or in the making of which it had acquiesced. He relied on evidence given by Mr Peter and by Mr Hulett in cross-examination that their respective understandings of, among other things, the cl 9.2(a) documents was derived from sources other than Watpac.
Mr Robertson submitted, next, that departure from either the Common Assumption or the Defendant's Assumption (if either were found) could not occasion loss. That was so, he submitted, because the disputed payment claim would, nonetheless, remain a valid payment claim for the purposes of the Security of Payment Act.
Mr Robertson submitted that, even if Watpac were estopped from disputing the efficacy of the proposed progress claim number 36 (November 2016) as a payment claim for the purposes of the Security of Payment Act, the document of 7 December 2016 would still be efficacious. That was so, he submitted, because on the proper construction of the contract and in the events that have happened it was given with respect to a reference date that occurred after 25 November 2016. For the reasons I have given already, the latter part of that last proposition is correct.

Decision

It is convenient to start by noting that the matters of fact that are pleaded to give rise to the Aconex Convention, the Common Assumption and the Defendant's Assumption, are substantially correct. To the extent that there are discrepancies in the proof, they are irrelevant.
There are, however, two matters to mention in respect of the Aconex Convention. The first is that regardless of the terms of Watpac's Design Management Plan and Project Quality Plan, they did not amend cl 14.1 of the contract. That clause did not make the use of Aconex mandatory (or exclusive) for all communications. On the contrary [33] , it expressly permitted notice etc to be given by Aconex, by post or by hand (and, in the latter two cases, to addresses determined in accordance with cl 14.1 and Schedule 1). I do not suggest that this is a point of decisive significance.
The second point is that the last four documents described as Payment Schedules (that is to say, the ones signed by Mr Hulett rather than by Mr Peter) were provided to Charter Hall both by Aconex and by personal delivery to Watpac's premises. Mr Hulett went so far as to say that, for the fourth (dated 6 December 2016, and relating to the proposed progress claim 36, for November 2016) "was served both via Aconex and personally to Watpac's officers to ensure that the document was brought to Watpac's attention [34] .
It is correct to say that the cl 9.2(a) documents sent to Mr Peter and Charter Hall every month included a document described as a "Payment Claim". However, that document did not include the s 13(2)(c) endorsement. Further, on each occasion, those documents were sent under cover of an Aconex message, which in some but not all cases referred to what was sent as a "draft" progress claim. In my view, it was obvious, and Charter Hall must have understood, that those documents were given to initiate the process of assessment for which cl 9 provides.
I do not accept Mr Donaldson's submission that the way the parties dealt with each other shows that they "conducted their dealings in connection with the making of progress claims on the footing that the claim lodged on about the 25th day of each month was submitted as a payment claim under the [Security of Payment Act]" [35] . On the contrary, in my view, the clear picture that emerges from the evidence is that the parties were seeking to follow the procedure laid down by cl 9 for the making, assessment and payment of progress claims.
The only feature of what they did that is inexplicable by reference to cl 9 is Mr Peter's practice of responding to each "proposed" progress claim by a document sent under cover of a letter that asserted that it (that is to say, the payment certificate) was a payment schedule for the purposes of the Security of Payment Act. Certainly, Watpac's practice of endorsing its cl 9.5(a) tax invoice with a statement to the effect that it was a payment claim for the purposes of the Security of Payment Act, whilst it was inefficacious for the reason I have indicated [36] , was consistent with the recognition implicit in cl 9.1(d)(v) that a payment claim could be served at the same time and together with a tax invoice.
Mr Peters' evidence as to why he included, in each letter forwarding a payment certificate (in respect of claims 1 to 32), the statement that it was a payment schedule, is not easy to follow. He said that he understood each claim submitted by Watpac to be a payment claim for the purposes of the Security of Payment Act. Thus, he said, it was necessary to provide a payment schedule in response. I should note at this point that Mr Peter expressly accepted, in cross-examination, that this understanding predated the making of the contract between Watpac and Charter Hall, and was not induced by anything said or done by Watpac or its representatives [37] .
I have some difficulty in understanding how an experienced contract administrator like Mr Peter, with many years' experience in project management (including for very large construction and infrastructure projects), could have been mistaken as to recent amendments to and the operation of a vital piece of legislation. But it was not suggested that his evidence as to his understanding was false, and his reasons for holding that understanding were not explored in cross-examination.
Whilst I am talking of that aspect of the evidence of understanding, it is convenient to mention that Mr Hulett, who had likewise given evidence of an understanding that Watpac's cl 9.2(a) documents were payment claims for the purposes of the Security of Payment Act, accepted that his understanding had been gathered from people within his "team" [38] . Mr Hulett did not suggest that his understanding of the character of those claims was in any way attributable to Watpac or its representatives.
I do not accept Mr Donaldson's submission, to the effect that it would be surprising that a payment claim for the purposes of the Act would be delivered only after the amount to be claimed had been assessed and agreed. On the contrary, for the reasons I have sought to indicate [39] , that seems to me to be one of the objects that cl 9 seeks to achieve. Thus, in my view, the timing of Watpac's purported but inefficacious payment schedules is consistent with an attempt on its part to perform the manoeuvres prescribed by cl 9 of the contract, so far as they fall to it to be performed.
In summary, in my view, the evidence falls well short of establishing the pleaded Common Assumption that is said to be the foundation of the conventional estoppel case. For the reasons I have given, the evidence, with the exception of Mr Peter's endorsement in the letter accompanying his payment certificates for claims 1 to 32, is consistent with the parties' attempting to perform cl 9 as it is written.
Even if it be assumed that Charter Hall held the Defendant's Assumption (and in the absence of any direct challenge to the veracity of Mr Peter and Mr Hulett, I am prepared to accept that it did), their evidence to which I have referred [40] shows that Watpac did not induce Charter Hall to form or hold that assumption. Nor is there any evidence to suggest that Watpac, knowing that Charter Hall held that assumption, acquiesced in its doing so.
I turn to the Aconex Convention. I am prepared to accept that for reasons of convenience (including the ability to send or provide access to large document files, and other aspects of the functionality of Aconex to which Mr Peter in particular referred), the parties chose to use Aconex as their primary means of communication. I am satisfied that there were significant practical benefits to doing that. However, despite all those advantages, the contract itself did not mandate Aconex as the sole and exclusive means of communication.
It is clear that, before 7 December 2016, Charter Hall regarded itself as being at liberty to serve hard copies of documents on Watpac at Watpac's premises. That was done in respect of the last four payment schedules, although I accept that those payment schedules were provided by Aconex as well. I have referred already to Mr Hulett's evidence as to why he did that in the case of the fourth of those payment schedules: to ensure that the document came to Watpac's attention.
In the present case, there can be no doubt that the disputed payment claim did in fact come to the attention of Charter Hall. Mr Hulett said that he saw the documents on 7 or 8 December 2016, and that he looked at them immediately. He observed, among other things, that they included the tax invoice itself. However, he said, because he saw that that tax invoice appeared to relate to a claim that had already been rejected, and because the other documents appeared to be copies of documents that had already been served on Charter Hall, he gave no further attention to them.
That evidence is somewhat strange. For the first 32 payment claims, Watpac had given Charter Hall a tax invoice (which purported to be also a payment claim) once the amount of its entitlement had been certified by Mr Peter. Mr Hulett said, understandably, that he checked those invoices before authorising payment. However, he knew that for the next three payment claims (numbers 33, 34 and 35), Watpac did not provide a tax invoice to Charter Hall, because the scheduled amount was nil [41] . One might think that it would have been somewhat surprising for Mr Hulett to receive a tax invoice following what was in effect rejection of the 36th progress claim.
More importantly, although Mr Hulett noted that the tax invoice of 7 December 2016 claimed a large amount of money, identical with the last claim made, he did not investigate further to see why, despite that claim's rejection, this was so: why it was that Watpac resubmitted it.
Again, the copy of the tax invoice of 7 December 2016 and its supporting documents that were served personally at Mr Peter's office came to his attention, although I accept that this did not occur for several days. Mr Peter gave an explanation, which I accept, that he had been extremely busy, and out of the office; and that since he had received no notification by Aconex that anything required his attention, he did not return to his office to see what might have arrived.
Nonetheless, the simple fact is that the document that was personally served on Charter Hall at what is agreed to have been its address for service did come to Mr Hulett's attention, on (at the latest) the day following service. Mr Hulett made a conscious decision not to consider it or to respond to it. I accept that he, too, was very busy around this time. Apart from anything else, Mr Peter had certified practical completion of the project the previous week, and Watpac and Charter Hall (and Mr Peter) were working busily to ensure that the building would be ready for handover to Charter Hall.
Nonetheless, Mr Hulett's evidence does not include in direct terms the proposition that he did not consider the documents because they had come personally, not by Aconex. Indeed, as it seems to me, any such proposition would be inconsistent with his reason for ensuring that Watpac was served personally as well as by Aconex with the payment schedule of 6 December 2016 (responding to claim number 36) [42] .
The furthest Mr Hulett's evidence goes is an assertion [43] : It did not occur to me that the Bundle might comprise a new claim for payment that I had not previously received and which required a further response from Charter Hall. The usual monthly process of receiving the progress claim and Charter Hall responding to it had only just finished a day or two before. I had not received any new claim for payment on Aconex, and in light of the practices that had been adopted on the Project to date, I did not expect that a new claim for payment would be sent to me in hard copy only. I also understood that there would be no further claim for payment from Watpac requiring my response until about 25 December 2016 and that I had already done everything necessary to answer the claims for payment received up to November 2016.
That evidence does not explain why Mr Hulett, having seen that the document asserted a right to be paid (in a manner that was totally inconsistent with the practice adopted for the last three payment claims), did not look at it more closely than he did. The very reason he gave - that the claim had been rejected - should, one might think, have alerted him to the need to consider what the documents had been served.
More significantly, his evidence does not suggest that his decision was influenced by anything said or omitted to be done by Watpac. It could perhaps be said that Watpac's retreat from the asserted Aconex Convention played some role in his thought processes. However, if Mr Hulett truly thought that there were such a convention, receipt of a hard copy claim must have disabused him of that notion, or at least conveyed to him that Watpac no longer regarded itself as bound by it.
The evidence fully supports the conclusion that the parties decided to use Aconex as their preferred method of communication. It does not go so far as to show that the parties decided to use Aconex only, and to forswear for all purposes (at least, without giving notice) use of the other means of communication authorised by cl 14.1 of their contract.
Even if I were wrong in what I have just said, it does not mean that Charter Hall should succeed. The true significance of the Aconex Convention (assuming that it had been proved) would be seen where a document was sent in defiance of the convention and did not come to the actual attention of the party to whom it was thus sent. In those circumstances, service having been effected outside the hypothetically proved convention and without notice of any intention to retreat from it, the party effecting service might be estopped from relying on the fact of actual service. Once actual service and actual knowledge of the document served are proved, the convention, so it seems to me, has no further work to do.
The question then becomes: why is it that the party who received and had knowledge of the document thus served chose to ignore it? Whatever Mr Hulett's reasons, they cannot be laid at the feet of Watpac.
In my view, Charter Hall's defence based on the Aconex Convention, considered either on its own or in conjunction with the variant forms of its estoppel defence, cannot succeed.
There were numerous other arguments that Mr Robertson pressed in submissions. It is not necessary to address them.

The pleaded case

Charter Hall pleads that if Watpac deliberately refrained from making payment claims in accordance with the Security of Payment Act then, by remaining silent and not disabusing Charter Hall of the Common Assumption and the Defendant's Assumption, it acquiesced in or induced Charter Hall's continued reliance on those assumptions.
Charter Hall then pleads a summary of the matters relating to: the service of the disputed payment claim; the asserted breach of the Aconex Convention; delivery late in the afternoon on 7 December 2016; the volume of material (358 pages); delivery in duplicate to Mr Hulett; the absence of any letter explaining what it was that Watpac was doing; the fact that all but two of the pages served were repetitions of what had been previously served; the relatively inconspicuous reference to the Security of Payment Act; the surrounding circumstances (namely, that everyone was fully occupied attending to the consequences of practical completion and preparation for handover); and an asserted inconsistency between the time and manner of service and the two assumptions.
Charter Hall then pleads that those matters, in particular Watpac's failure to bring to Charter Hall's the significance of what it was doing in circumstances where the merits of the claim had already been dealt with, was likely to mislead or deceive Charter Hall as to the true nature and status of the claim.
Charter Hall pleads that it acted to its detriment by reason of that conduct, because it did not provide a payment schedule within time.

The parties' submissions

Mr Donaldson's submissions, apart from referring to well-known authorities (it is unnecessary to list them) and following the framework of the pleading, manifested some inconsistency as to the significance of the first matter to which I have referred: the decision not to endorse the cl 9.2(a) documents in accordance with s 13(2)(c) of the Security of Payment Act. On the one hand, he submitted [44] , "[the suggested reason]… is not supported by any evidence… and is not credible". However, when those submissions turned to the question of misleading or deceptive conduct, Mr Donaldson appeared to embrace the proposition that the letter in question should be accepted as stating accurately Watpac's state of mind.
Mr Donaldson submitted that proof of misleading or deceptive conduct did not require proof of any relevant misrepresentation, nor did it require proof of any intention to mislead or deceive. Those propositions are correct. So, too, is his submission that whether conduct is misleading or deceptive is a question of fact to be determined by considering the whole of the relevant conduct.
Mr Robertson submitted that, the disputed payment claim having been served in a manner authorised by the contract, then bearing in mind that they came to the actual attention of Mr Hulett on the day they were served or the following day, and the fact that Charter Hall is "a large, sophisticated and well-advised party", there was no relevant misleading or deception. He submitted, correctly, that nothing in the Australian Consumer Law imposed an obligation to volunteer information simply so as to avoid the consequences of another party's careless disregard of matters that had been brought to its attention.
Mr Robertson submitted, further, that there was no loss. That was so, he submitted, because Charter Hall's failure to act on the 7 December 2016 tax invoice reflected its own misunderstanding (not attributed in any way to Watpac) as to the character of the cl 9.2(a) documents.

Decision

The pleaded statement as to the reason for non-endorsement of the cl 9.2 (a) documents is found in Watpac's letter to Charter Hall and Mr Peter of 3 January 2017. That letter pointed out that the proposed progress claim delivered on 25 November 2016 was not a payment claim for the purposes of the Security of Payment Act. It stated, correctly that the document was the very document contemplated by cl 9.2(a) of the contract, and was deliberately not endorsed as a payment claim. The letter stated, further, that the non-endorsement of the earlier cl 9.2(a) documents was deliberate.
Assuming that the letter can be read as evidence of what is says (despite the first of Mr Donaldson's inconsistent positions on this point), it does not say, as Mr Donaldson submitted, that Watpac was preserving its entitlement to make a later statutory claim. The decision not to endorse those documents as payment claims for the purposes of the Security of Payment Act was entirely justifiable, having regard to the objects sought to be achieved by cl 9, and the way in which its manner of operation seeks to do so, as I have explained them above. A reasonably careful reading of the clause as a whole makes it clear that no statutory claim was to be served until the process of assessment and certification was complete, and a tax invoice was to be issued.
I see nothing sinister in the attitude displayed in Watpac's letter of 3 January 2017. On the contrary, I see its conduct, in relation to the cl 9.2(a) documents and the decision not to endorse them as payment claims, to be entirely consistent with the proper operation of cl 9.
There was nothing in the documents delivered to Charter Hall on 7 December 2016 that obscured, hid, disguised or otherwise sought to prevent a clear understanding of their true character. On Mr Hulett's evidence in cross-examination [45] , the reason why he did not respond to the document was that in his view, "the November 2016 cycle had in effect been closed". That passage is instructive, and I set it out: Q. Now, you said to me before that you thought the November payment cycle had been finalised, correct? A. Yes, that's correct. Q. So in the face of that, you didn't think you needed to respond to any further communications from Watpac regarding that time period because your role had come to an end, correct? A. That's right. Q. So that's why you didn't - having seen this document, you didn't respond to it, correct? A. When I - yes, when I saw the bundle of documents, and thumbed through all the piled bundles that were individual within the broader bundle, that I saw they're all Aconex reprints of progress claims from previous months that we'd responded to payment claims with payment schedules. Q. But all of those documents - you hadn't seen all of those documents before, had you, because you hadn't seen the tax invoice at page 4199, correct? A. No, I hadn't seen this document before. Q. So you saw the tax invoice on 7th or 8th, and you hadn't seen that document before, correct? A. No, that's right; I saw the invoice immediately as my - habit and eye tends to do, is I went straight to the number and recognised the number of 13.5 million as the same amount that had been addressed in the payment schedule the day before. Q. So you were conscious that the November 2016 cycle had in effect been closed, so far as you're concerned, and as a result you didn't provide any response to this document, correct? A. Correct.
There was no equivalent evidence from Mr Peter. However, the respondent to the payment claim was Charter Hall, and the relevant decision-maker (at least, at the front line) was Mr Hulett.
In truth, Charter Hall failed to respond to the 7 December 2016 tax invoice, in its character as a payment claim, because of Mr Hulett's inadequate reading of it and his self-induced misunderstanding of its significance. It is of course clear, as a proposition of fact, that Watpac could have directed Charter Hall's attention to the fact that it was pressing a claim for payment (indeed, one might think, that was the very purpose of the s 13(2)(c) endorsement that it bore), that it was serious in so doing, and that the consequences of ignoring its claim could be significant. However, the question is whether, in all the circumstances, it was required to do so. I do not think that it was.
In Miller and Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited [46] , French CJ and Kiefel J said [47] , of s 52 of the Trade Practices Act 1974 (Cth) that it does not as a general proposition require a party to commercial negotiations to volunteer information. Their Honours added: A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests of another party of equal bargaining power and competence.
Those propositions apply with equal force to s 18 of the Australian Consumer Law. I accept that this case is concerned not with negotiations, but with a hotly raging dispute. However, that does not lessen either the force or the applicability of their Honours' observations; in particular, the second. Where parties are (putting the matter most favourably, from Charter Hall's perspective) of equal bargaining power and equally well resourced and advised, the careless disregard by one of its own interests is an unlikely starting point to trigger the operation, adversely to the other, of s 18 when those parties are in dispute. Of course, where the misleading or deceptive conduct relied upon is based on some active conduct or positive misrepresentation, totally different considerations may apply. But this case does not fall within those categories.
I conclude that the defence based on misleading or deceptive conduct fails.

Conclusion and orders

Watpac is entitled to judgment for the amount claimed by it, together with interest. The parties should calculate interest. As presently advised, I see no reason why costs should not follow the event.
I make the following orders: 1. direct the parties to prepare an agreed calculation of interest, and agreed form of judgment and orders to give effect to these reasons, within 7 days. 2. Stand proceedings over to 7 July 2017 at 10am before me for entry of judgment.

Endnotes

At [93].
At [115] and following.
Two copies in fact were delivered: one for CHFM and one for CIML.
Emphasis in original.
Emphasis in original.
And the equivalent provision under similar legislation, namely the Building and Construction Industry Payments Act 2004 (Qld) (the Queensland Act), s 17(2)(a).
(2005) 21 BCL 364 at [45].
[2003] NSWSC 266.
At [83].
(1982) 57 FLR 368 at 375.
[2003] NSWSC 1140.
At [76].
[2002] NSWCA 136.
(2005) 64 NSWLR 448: see at [27]-[28], [41]-[42].
(2005) 64 NSWLR 462.
At [34].
At [35].
Mason P in Clarence Street at [39].
At [76].
At [39].
At [42].
[2003] NSWSC 1103.
[2009] QSC 376.
At [59].
[2009] QFC 194.
At [29].
At [29].
See at [36] above.
(2016) 91 ALJR 233.
At [61].
At [70].
Competition and Consumer Act 2010 (Cth), Schedule 2.
See at [9] above.
Affidavit sworn 6 April 2017, para 48(c).
Written closing submissions, para 46.
At [27(1)] above.
See generally T31-34, 39-40.
See, generally, T74-75.
At [101]-[103] above.
At [136]-[138] above.
Affidavit sworn 6 April 2017 at para 27(a).
Affidavit at para 48(c); see at [132] above.
Ibid at para 56.
Written closing submissions, para 48.
T86.41-87.22.
(2010) 241 CLR 357.
At [22]. 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: 30 June 2017

Building and Construction Industry Payments Act 2004(Qld)

Building and Construction Industry Security of Payment Amendment Act 2013(NSW)

Trade Practices Act 1974(Cth)

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