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[2020] NSWSC 1702

Waco Kwikform Ltd v Complete Access Scaffolding (NSW) Pty Ltd

Summons dismissed with costs; Plaintiff to pay to the First Defendant moneys paid into Court

Catchwords

BUILDING AND CONSTRUCTION – whether adjudication determination under the Building and Construction Industry Security of Payment Act 1989 should be quashed – reference date – whether cl 4.1 of the construction contract was one by or in accordance with which the date for a progress claim was determined – whether term expressly nominates the date by which the claim may be made – whether s8(2)(a) of the Building and Construction Industry Security of Payment Act 1999 enlivened

Cases cited

  • Greenwood Futures v DSD Builders[2018] NSWSC 1407
  • Patrick Stevedores Operations No 2 Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd[2014] NSWSC 1413
  • Quasar Constructions v Demtech Pty Ltd[2004] NSWSC 116

Legislation cited

  • Building and Construction Industry Security of Payment Act 1999 (NSW)

Judgment

  1. [1]

    The plaintiff, Waco Kwikform Ltd, seeks to challenge an adjudication determination made under the Building and Construction Industry Security of Payment Act 1999 (NSW) that it pay the defendant, Complete Access Scaffolding (NSW) Pty Ltd (“CAS”), $301,856.36.

  2. [2]

    The sole basis of the challenge to the adjudication determination is that the relevant payment claim was "not a valid claim as there was no reference date" (para C14 of the List Statement).

  3. [3]

    The parties agree that this question turns on whether or not the construction contract between them made "express provision" with respect to "the date on which a claim for a progress payment may be made" for the purpose of s 8(2)(a) of the Act as it then stood.

  4. [4]

    S 8(2)(a) at the relevant time provided:

  5. [5]

    The relevant provision in the contract is clause 4.1:

  6. [6]

    Mr Le Plastrier, for Waco, accepted that if cl 4.1 was not a "term of the contract" in accordance with which the "date on which a claim for a progress payment may be made" was to be "determined" for the purposes of s 8(2)(a), then Waco's challenge to the determination must fail.

  7. [7]

    For that reason Mr Le Plastrier and Mr Weinberger, who appeared for CAS, directed submissions to that question at the outset of the hearing before me today and agreed that, were I to come to the conclusion that cl 4.1 is not such a term, that would resolve the proceedings.

  8. [8]

    In my opinion in order for a term to be a term of the contract for the purpose of s 8(2)(a), the term must be one which expressly nominates the date by which the claim for a progress payment may be made.

  9. [9]

    That is, the term must be one where a date can be identified from the terms of the contract itself as being "the date on which a claim for a progress payment may be made".

  10. [10]

    In my opinion that calls for a provision in the contract that, by its own terms, determines the date by which the payment claim can be made.

  11. [11]

    Thus, in Quasar Constructions v Demtech Pty Ltd [2004] NSWSC 116 Barrett J said at [21] that what was needed was:

  12. [12]

    Similarly, McDougall J in Greenwood Futures v DSD Builders [2018] NSWSC 1407 said at [61] that what was needed was a provision that:

  13. [13]

    An example of such a provision is was referred to by Ball J in Patrick Stevedores Operations No 2 Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2014] NSWSC 1413 at [5] being a provision that “the Contractor shall be entitled to claim payment progressively in accordance with Item 28” and where “Item 18” provided “The last day of each month for [Work] done to the second last day of the month”.

  14. [14]

    In my opinion cl 4.1 is not such a provision.

  15. [15]

    It does not require CAS to make any claim.

  16. [16]

    It contemplates that CAS may choose if and when to make a claim and makes provision for when payment for that claim would be made, if the claim were made by the twentieth day of the month, and if the claim were approved.

  17. [17]

    The clause contemplates that the date “on which a claim for a progress claim may be made" is at CAS's discretion.

  18. [18]

    That day chosen by CAS would not be determined "by or in accordance" with the “terms of the contract and cl 4.1 in particular; but by CAS itself.

  19. [19]

    As Mr Weinberger pointed out, under cl 4.1 CAS could make any number of claims in the days leading up to the twentieth day of the month and, indeed, could make multiple claims in one day.

  20. [20]

    On Waco's construction, each of those dates would be reference dates.

  21. [21]

    Mr Le Plastrier pointed to s 13(5) of the Act, which provides that a claimant cannot serve more than one payment claim in respect of each reference date.

  22. [22]

    But it would follow from Waco's construction of cl 4.1 that CAS could serve a payment claim for each reference date created by its decision to submit a claim under cl 4.1.

  23. [23]

    That cannot be right.

  24. [24]

    In my opinion cl 4.1 is not a term of the kind contemplated by s 8(2)(a).

  25. [25]

    As s 8(2)(a) is not engaged, the question of reference date is to be determined in accordance with s 8(2)(b).

  26. [26]

    It is common ground that, in that event, there was a reference date for the purpose of the determination.

  27. [27]

    It follows that the challenge to the determination fails.

  28. [28]

    The summons should be dismissed with costs.

  29. [29]

    I order that the plaintiff pay out to the first defendant the moneys paid into Court following the commencement of these proceedings.

Unofficial copy. Source: NSW Caselaw. Refer to the official version for authoritative text.