MGW Engineering Pty Ltd t/a Forefront Services v CMOC Mining Pty Ltd

1. [1]

   The plaintiff, MGW Engineering Pty Ltd, trading as Forefront Services (“Forefront”) provides services to the construction industry.

2. [2]

   Between 4 February 2020 and 9 August 2020, Forefront entered four contracts (“the Contracts”) with CMOC Mining Services Pty Ltd (“CMOC”) to provide various services at the Northparkes copper and gold mine (“the Mine”) at Goonumbla in central New South Wales.

3. [3]

   CMOC entered the Contracts as a disclosed agent of the first to third defendants, who are members of an unincorporated joint venture known as the Northparkes Joint Venture. That joint venture operates the Mine.

4. [4]

   The Contracts are, relevantly, in the same form. I will refer to the paragraph numbering in Contract SC2019130, being the “Crusher Chamber Crane Installation” contract.

5. [5]

   At 5.15pm on 3 February 2021, an employee of Forefront, Mr Steven Wallder, handed four Payment Claims made under s 13 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the “Act”) to an employee of CMOC, Mr Wayne Sargent, who was then on duty at CMOC’s “Access Control Room” at the Mine.

6. [6]

   The four Payment Claims were for a total amount of $6,161,020.35.

7. [7]

   The following day, 4 February 2021, Forefront delivered the four Payment Claims to CMOC using a software platform known as “Aconex”.

8. [8]

   The question is whether, for the purpose of s 31 of the Act, the Payment Claims were served on CMOC on 3 February 2021, as Forefront contends, or 4 February 2021, as CMOC contends.

9. [9]

   The question is critical because CMOC served its Payment Schedules pursuant to s 14 of the Act on 18 February 2021. That was within 10 business days of 4 February 2021, and thus within the time limit specified in s 14(4)(b)(ii) of the Act; but 11 business days after 3 February 2021 and thus outside that time limit.

10. [10]

    If the Payment Claims were served on 3 February 2021, Forefront is entitled to judgment in the sum of $6,161,020.35 by reason of s 14(4) of the Act.

11. [11]

    If the Payment Claims were served on 4 February 2021, Forefront accepts that it is entitled to no more than $180,912.05. [1] That sum has now been paid.

12. [12]

    Following service of the Payment Claims, Forefront purported to suspend works under the Contracts pursuant to s 15(2)(b) of the Act. Those works comprised fabrication of steel for use in the Mine. CMOC brings a Cross Claim seeking a declaration that Forefront has “invalidly suspended” the works and seeking orders for specific performance requiring Forefront to deliver steel and shop detail and erection drawings to the Mine. CMOC accepts that it is only able to prosecute a Cross Claim if it is correct about the date on which Forefront must be taken to have served the Payment Claims.

13. [13]

    Section 31 of the Act provides:

14. [14]

    Forefront contends that the effect of Mr Wallder’s actions is that it served the Payment Claims on 3 February 2021:

Decision on Forefront’s claim

1. [15]

   I do not accept any of these submissions.

2. [16]

   In my opinion, the effect of Mr Wallder’s actions is that the Payment Claims were served on 4 February 2021.

Were the Payment Claims delivered to CMOC “personally” on 3 February 2021 – s 31(1)(a)

1. [17]

   There appears to be no authority on the question of when a document is delivered “personally” to a corporation for the purposes of s 31(1)(a).

2. [18]

   There is some artificiality in the notion of a document being delivered “personally” to a corporation.

3. [19]

   But section 8 of the Act provides that a “person” who undertakes to carry out construction work under a construction contract is entitled to receive a progress payment and section 13 of the Act provides that such a “person” may serve a payment claim. Those provisions make clear that, for the purpose of the Act, a “person” includes a corporation. So much was common ground before me.

4. [20]

   Section 31(3) provides that the provisions of the section are in addition to any other provisions of law with respect to the service of documents.

5. [21]

   One of those provisions is s 109X of the Corporations Act 2001 (Cth) which provides, relevantly:

6. [22]

   Forefront did not seek to take advantage of this facultative [2] provision as the registered office of CMOC and the other defendants is not at the Mine and the documents were not delivered personally to any director.

7. [23]

   For a document to be served “personally” on a corporation more is required than simply leaving the document with an employee, no matter what that employee’s functions were nor how junior that employee was, at any location within the corporation’s business premises.

8. [24]

   The word “personally” must be given work to do. The word suggests some step must be taken to bring the document to the attention of a relevantly responsible person within the corporation. This reading of the section is consistent with authorities to the effect that if a mode of service other than under s 109X of the Corporations Act is employed:

9. [25]

   That factor is emphasised in this case by clause 47.1(b) of the Contract which provides that any notice served on CMOC or the other defendants “must” be marked with the attention of “the Company Secretary”.

10. [26]

    The Payment Claims were not marked to the attention of “the Company Secretary” but were marked for the attention of the “Company Representative”, nominated in three cases to be Mr Richard Plowes, and in one case, Mr Ian Smith.

11. [27]

    In my opinion, it could not be said that the Payment Claims were served “personally” on CMOC unless and until the documents came to the attention of those persons.

12. [28]

    Mr Walder said that when he arrived at the Access Control Room he said to Mr Sargent words to the effect:

13. [29]

    Mr Wallder said that Mr Sargent told him that he would “call someone about it” and left Mr Wallder’s presence to make a telephone call. Mr Wallder said that Mr Sargent came back and said that he would accept the documents.

14. [30]

    Mr Wallder continued:

15. [31]

    Mr Walder said that Mr Sargent told him that Mr Plowes was not available. He could not recall whether Mr Sargent said anything about Mr McConnell’s and Mr Neill’s availability.

16. [32]

    Mr Sargent’s recollection was similar. He said that Mr Walder said to him:

17. [33]

    Mr Sargent said the following exchange then took place:

18. [34]

    Mr Sargent said that Mr Walder added:

19. [35]

    Mr Walder denied making the latter comment.

20. [36]

    However, the fact is that Mr Plowes did not work at the Mine on 3 February 2021 and did not see the Payment Claims until he attended the Mine on 4 February 2021.

21. [37]

    In those circumstances, I am not satisfied that the Payment Claims were delivered “personally” to CMOC until 4 February 2021. The Payment Claims were addressed to Mr Plowes and Mr Smith. In my opinion they could not be said to have been delivered “personally” to CMOC until the Payment Claims came to the attention of one of Mr Plowes and Mr Smith. That did not occur until 4 February 2021.

Were the Payment Claims “lodged” with CMOC during “normal office hours” at CMOC’s “ordinary place of business” on 3 February 2021 – s 31(1)(b)

1. [38]

   There was also no authority on what constitutes the “lodging” of a document at a persons’ ordinary place of business.

2. [39]

   The only other reference in the Act to “lodging” is in section 20 which makes provision for the respondent to “lodge” an adjudication response with the adjudicator.

3. [40]

   In Bauen Constructions Pty Ltd v Sky General Services Pty Ltd, [5] Sackar J held that, in that context, “lodge” should be given the “primary meaning” in the Oxford English Dictionary to “present, formally to proper authorities”. [6]

4. [41]

   There is controversy as to the extent that the legal meaning of a statutory term can be determined by reference to dictionary definition. [7] Obviously, the meaning of words used in a statute must be determined in accordance with the context in which they are used, and not merely by reference to dictionary definitions.

5. [42]

   However, in this case, the context in which the word “lodge” is used in both sections 20 and 31(i)(b) of the Act suggests that “primary” dictionary meaning to which Sackar J referred, provides guidance as to the meaning of the word “lodged” when used in the Act.

6. [43]

   In my opinion, consistently with my opinion about personal delivery to a corporation, in order that a Payment Claim be “lodged” with a corporation, more is required than simply leaving the document with an employee, no matter what that employee’s functions were nor how junior the employee was, at any location within the corporation’s business premise. Some further step, the effect to which would likely be bringing the Payment Claim to the attention of the relevantly responsible person, is necessary.

7. [44]

   Mr Wallder’s actions in delivery the Payment Claims to Mr Sargent in the circumstances that I have set out do not, in my opinion, constitute “lodging” of the documents with CMOC or, alternatively, could not amount to such “lodging” unless or until the documents came to the attention of the relevant responsible person.

8. [45]

   That did not occur until 4 February 2021.

9. [46]

   As s 31 of the Act is dealing with the manner in which a document authorised or required by the Act “to be served on a person” the reference to “normal office hours at the person’s ordinary place of business” must be a reference to “normal office hours” of that “person” at that “ordinary place of business”.

10. [47]

    Thus, the question here is the “normal office hours” at the Mine.

11. [48]

    I did not understand either party to contend differently.

12. [49]

    The Mine operates continuously 24 hours a day, 7 days a week and every day of the year.

13. [50]

    Mr Sargent agreed that between 8am and 6pm on a typical day there would be some 400 people at the Mine.

14. [51]

    However, s 31(1)(b) speaks of “office” hours and not “operating” hours.

15. [52]

    In Lane v Arrowcrest Group Pty Ltd [8] von Doussa J stated, in an admittedly different context, that “usual office hours” “would reflect the customary working hours of clerical staff” or the hours during which the administration section of the relevant entity was open.

16. [53]

    In Sand Excavation Pty Ltd v Nahas Constructions Pty Ltd, [9] Macready AsJ said, speaking of s 31(1)(b) of the Act, that “normal office hours is an expression which refers to the general operation of an office”. [10]

17. [54]

    In my opinion, “office hours” of a person for the purpose of s 31(1)(b) of the Act means the hours that the administrative or clerical staff of the person normally keep.

18. [55]

    Mr Wallder handed the Payment Claim to Mr Sargent in the Access Control Room at 5.15pm on 3 February 2021.

19. [56]

    Mr Sargent described the Access Control Room as:

20. [57]

    In cross-examination, Mr Sargent gave this evidence about the Access Control Room:

21. [58]

    Mr Sargent was on duty at the Access Control Room each day between 5pm and 8pm. Between 8am and 5pm Mr Sargent’s role was as “Senior Emergency Management Advisor” and managed “emergency response training for CMOC employees and subcontractors”.

22. [59]

    In his affidavit he described his duties as follows:

23. [60]

    I do not see Mr Sargent’s role in the Access Control Room between 5pm and 8pm to be “administrative” or “clerical” nor to shed light on what CMOC’s “normal office hours” were at the Mine.

24. [61]

    Mr Plowes gave evidence that the Mine’s clerical and administration staff work in the “Admin Building” and in the “E26LIN office”.

25. [62]

    In relation to the “Admin Building”, Mr Plowes said that, typically, employees worked there between 7am and 5pm. He mentioned two particular employees, Ms Laura Mansell and Ms Ashley Evans, and said that those employees worked between 7 and 7:30am to around 4pm.

26. [63]

    Mr Plowes agreed that some employees might “occasionally” work beyond 5pm in an overtime capacity but that the “majority” left earlier than 5pm. Mr Plowes said that although he saw “some staff” in the Admin Building between 5 and 5:30pm, there were very rarely administration staff present after 5pm.

27. [64]

    In relation to the E26LIN office, Mr Plowes said that an employee, Ms Sandra Phillips, worked there between 7 and 7:30am to 4 and 4:30pm each day.

28. [65]

    Mr Plowes also said that CMOC contractors, including project supervisors and project engineers, worked from the E26LIN office. Those contractors typically worked a 12-hour shift, often between 6:30am to 6:30pm, or 6:30pm to 6:30am but sometimes on different rosters.

29. [66]

    But Mr Sargent said that contractors were generally “blue collar workers that work underground”. Thus, they were not administrative or clerical staff.

30. [67]

    Mr Plowes said that meetings at either the Admin Office or the E26LIN office were generally scheduled to commence and conclude between 7:30am and 5pm and that he could not recall any meetings finishing after 5pm.

31. [68]

    In my opinion, these factors point, overwhelmingly, to the conclusion that CMOC’s “normal operating hours” at the mine commenced between 7 and 7:30am and concluded around 4 to 4:30pm.

32. [69]

    I find that Mr Wallder delivered the Payment Claims to Mr Sargent outside those “normal office hours”.

33. [70]

    In its Payment Schedules, CMOC accepted, indeed asserted, that the Payment Claims were served at CMOC’s “ordinary place of business”.

34. [71]

    In opening submissions, CMOC accepted that the Mine was its “ordinary place of business”.

35. [72]

    In closing writing submissions, CMOC submitted that the Access Control Room was not itself CMOC’s “ordinary place of business”.

36. [73]

    That submission was not taken up in oral submissions.

37. [74]

    In any event I do not accept that the Access Control Room is not within CMOC’s ordinary place of business.

Were the Payment Claims served “in a manner provided by” the Contracts on 3 February 2021 – 31(1)(e)

1. [75]

   Section 47.2 of the Contract provided, relevantly:

2. [76]

   I have added in square brackets the word “delivered” in the chasseur [11] to the clause as it appears that “something has gone wrong with language” [12] and that the word has been accidentally omitted.

3. [77]

   The effect of the proviso in the chasseur to clause 47.2 is that as the Payment Claims were delivered to the Mine later than 4.00pm on 3 February 2021 they are taken to have been given at the commencement of business on 4 February 2021.

4. [78]

   Mr Weinberger, for Forefront, submitted that this proviso is void by reason of s 34 of the Act as it purports to “modify” the operation of the Act.

5. [79]

   I do not agree.

6. [80]

   The provision is cl 47.2 is facultative. It does not require either party to serve a Notice in accordance with its provisions. It does not “modify” any part of s 31. If the Payment Claims had been served in accordance with one or other of ss 31(1)(a), (b), (c) or (d), such service would have been effective notwithstanding the provisions of cl 47.2.

7. [81]

   Clause 47.2 is only relevant because Forefront contended that it had served the Payment Claims “in the manner provided” by it for the purposes of s 31(1)(e). Assuming it did so because the Payment Claims were delivered “by hand”, as such delivery was after 4.00pm, service is taken to have been effected the next day. That does not “modify” the operation of s 31(1) generally or s 31(1)(e) in particular. Indeed, it gives effect to s 31(1)(e).

Conclusion on service

1. [82]

   For those reasons, my conclusion is that the Payment Claims were served on 4 February 2021.

CMOC’s Cross Claim

1. [83]

   It follows from my conclusions as to the date on which the Payment Claims were served that Forefront was not entitled to suspend works under s15(2)(b) of the Act.

2. [84]

   CMOC seeks a declaration to that effect and I propose to make such a declaration.

3. [85]

   CMOC also seeks the following orders:

4. [86]

   CMOC’s claim arises out of a direction that CMOC gave Forefront on 7 March 2021 which was expressed in the same terms as the proposed order for specific performance.

5. [87]

   The direction was given pursuant to cl 11.1 of the General Conditions of the Contracts which provided that:

6. [88]

   Forefront offered a number of answers to the claim.

7. [89]

   First, Forefront relied upon a dispute resolution clause contained in clause 42 of the General Conditions.

8. [90]

   That clause provided that in the event of a dispute:

9. [91]

   The clause thus did not, in terms, prevent CMOC from commencing proceedings for final relief nor prevent CMOC from bringing a cross claim against Forefront in circumstances where Forefront had already commenced proceedings against CMOC.

10. [92]

    Further, Forefront did not plead reliance on non-compliance with this clause in its Response to the Cross-Claim List Statement and did not raise the matter until submissions shortly before the hearing.

11. [93]

    As the matter was only raised at the heel of the hunt, I would not, as a matter of discretion, have restrained CMOC from enforcing the Contract on this account.

12. [94]

    In Jamac Construction Group Pty Ltd v De Mol Investments Pty Ltd, [13] Kenneth Martin J was faced with a similar circumstance and concluded. [14]

13. [95]

    Next, Forefront contended that the effect of a number of letters from CMOC to Forefront was to suspend services under the Contract in their entirety, whether those services were being performed on site at the Mine or not.

14. [96]

    I do not see that the letters in question had this effect.

15. [97]

    On 25 January 2021, CMOC wrote to Forefront asserting that Forefront was in breach of a number of “safety obligations” and stating that as a result of those alleged breaches:

16. [98]

    CMOC was clearly referring to “Site” as defined in the Contract. That is to say, CMOC’s premises at the Mine.

17. [99]

    The letter did not purport to require Forefront to suspend works at its own steel manufacturing workshops in Orange or Parkes.

18. [100]

    On 15 February 2021, CMOC wrote to Forefront purporting to exercise its rights under clause 18.1 of the Contract to “source any or all of the Works … from third parties” by stating that it would source “all remaining site installation scope of works” under the Contract from third parties.

19. [101]

    But CMOC did not purport to source all other works from third parties and thereby abrogate the means by which Forefront could perform the works now the subject of CMOC’s claim for specific performance.

20. [102]

    Thus, CMOC stated:

21. [103]

    The next day, 16 February 2021, CMOC wrote to Forefront:

22. [104]

    This made clear that fabrication of steel, together with its delivery, was not taken out of Forefront’s hands.

23. [105]

    Finally, Forefront contended that an “offer” made by CMOC in its 7 March 2021 letter had not been accepted by Forefront and that there was “no juridical basis to foist offer and acceptance upon [Forefront]”.

24. [106]

    But this misreads CMOC’s 7 March 2021 letter. In in that letter CMOC directed Forefront to deliver the steel and drawings referred to in CMOC’s prayers for relief on the cross Claim and concluded that there was still an amount of $860.23 due by CMOC to Forefront for the steel (out of a total amount of $10,608).

25. [107]

    CMOC stated:

26. [108]

    Thus, the “offer” was merely about payment of the small balance due for the steel.

27. [109]

    It did not in any way qualify the direction given in the body of the letter.

28. [110]

    For those reason I propose to make the orders sought on the cross claim.

Conclusion

1. [111]

   The parties should confer and agree on the orders necessary to give effect to these reasons.

2. [112]

   If there is any dispute as to costs, the parties should confer and agree on a timetable for short submissions on that question.

3. [113]

   I will deal with that matter on the papers.