|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Supreme Court of New South Wales |
Last Updated: 29 September 2020
|
|
Supreme Court New South Wales
|
|
Case Name:
|
Acciona Infrastructure Australia Pty Ltd v Holcim (Australia) Pty Ltd
|
|
Medium Neutral Citation:
|
|
|
Hearing Date(s):
|
21 September 2020
|
|
Decision Date:
|
29 September 2020
|
|
Jurisdiction:
|
Equity - Technology and Construction List
|
|
Before:
|
Hammerschlag J
|
|
Decision:
|
Adjudication Determination 2020061EA made by the second defendant on 23
July 2020 is void and is quashed.
|
|
Catchwords:
|
BUILDING AND CONSTRUCTION – Building and Construction Industry
Security of Payment Act 1999 (NSW) (the Act) – The plaintiff design &
construct contractor for the Sydney Light Rail Project entered into an agreement
with the first defendant for the production and supply of ready mixed concrete
– The first defendant made a payment claim on
the plaintiff for ready
mixed concrete allegedly supplied to the plaintiff under several purchase orders
but not paid for –
The plaintiff responded with a nil payment schedule
– The claim went to adjudication and the second defendant made a
determination
for $2,953,035.57 in favour of the first defendant – The
plaintiff challenged the jurisdiction of the second defendant on the
grounds
that the payment claim was invalid because it covered work under more than one
contract – The plaintiff also relied
on other grounds, including that the
adjudicator had denied it procedural fairness, as vitiating the determination
– HELD –
The second defendant had no jurisdiction, the
plaintiff had been denied procedural fairness, and the second defendant had not
discharged
the statutory task of satisfying herself that the work claimed for
had been done and of its value
|
|
Legislation Cited:
|
|
|
Cases Cited:
|
Brolton Group Pty Ltd v Hanson Construction Materials Pty Ltd [2020] NSWCA
63
Hossain v Minister for Immigration and Border Protection [2018] HCA 34; (2018) 264 CLR 123 IWD No 2 Pty Ltd v Level Orange Pty Ltd [2012] NSWSC 1394 John Holland Pty Limited v Roads & Traffic Authority of New South Wales & Ors [2007] NSWCA 19 Laing O’Rourke Australia Construction Pty Ltd v Monford Group Pty Ltd [2018] NSWSC 491 Matrix Projects (Qld) Pty Ltd v Luscombe [2013] QSC 4 Minister for Immigration and Border Protection v SZMTA [2019] HCA 3; (2019) 264 CLR 421 Musico v Davenport [2003] NSWSC 977 National Management Group Pty Ltd v Biriel Industries Pty Ltd [2019] QSC 219 Olympia Group (NSW) Pty Ltd v Hansen Yuncken Pty Ltd [2011] NSWSC 165 Pacific General Securities Ltd v Soliman & Sons [2006] NSWSC 13 Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151; (2017) 95 NSWLR 82 Rail Corporation of NSW v Nebax Constructions [2012] NSWSC 6 SHA Premier Constructions Pty Ltd v Lanskey Constructions [2019] QSC 81 Trinco (NSW) Pty Ltd v Alpha A Group Pty Ltd [2018] NSWSC 239 |
|
Category:
|
Principal judgment
|
|
Parties:
|
Acciona Infrastructure Australia Pty Ltd - Plaintiff
Holcim (Australia) Pty Ltd - First Defendant Helen Durham - Second Defendant |
|
Representation:
|
Counsel:
D Hume - Plaintiff D Robertson - First Defendant Solicitors: Vincent Young - Plaintiff Marque Lawyers - First Defendant |
|
File Number(s):
|
2020/223830
|
JUDGMENT
INTRODUCTION
THE ACT
THE GROUNDS OF ATTACK
(1) the Adjudicator had no jurisdiction because there was not a valid payment claim or valid adjudication application, in that the payment claim the subject of the determination impermissibly claimed for work done under two or more contracts.
(2) the Adjudicator failed to consider Acciona’s contention that she lacked jurisdiction.
(3) the Adjudicator failed to afford Acciona procedural fairness by finding a contractual basis for valuing progress payments upon which Holcim had not relied and which had not been the subject of submissions.
(4) the Adjudicator misapprehended the nature of her task by relying on payment schedules which had previously passed between the parties rather than the Payment Schedule (the subject of adjudication application) and, in doing so, failed to afford Acciona procedural fairness by not giving it advance notice of her intention of so doing.
(5) the Adjudicator failed to afford Acciona procedural fairness by rejecting a contention by Acciona that it was not in a position properly to assess Holcim’s claims because Holcim had not provided delivery dockets establishing that it had delivered what it was claiming it delivered, for reasons not advanced by Holcim, and by making credit findings against Acciona’s witness, Mr Li, on bases not put by Holcim and not the subject of submissions or advance notice.
(6) the Adjudicator failed to discharge the statutory task of satisfying herself that Holcim had substantiated its claims.
THE FACTS
The Goods Supply Agreement
2 TERM AND PURCHASE ORDERS
(a) The Agreement commences on the Commencement Date and continues for the Term.
(b) The Agreement constitutes a commitment by the Supplier to supply to the D&C Contractor the Goods in accordance with the Agreement and the SLR Documentation.
(c) If the D&C Contractor wishes to order Goods it will issue a Purchase Order. Upon the issue of a Purchase Order a separate contract will come into existence between the D&C Contractor and the Supplier on the terms set out in this Agreement. [emphasis added]
(d) Not used
(e) Purchase orders shall include:
(i) description of the particular Goods and Related Services to be provided by the Supplier to the D&C Contractor;
(ii) the Time or Times for Delivery which must comply with the lead times specified in Annexure B of this Agreement; and
(iii) the Delivery Location.
(f) The Agreement sets out the terms and conditions governing the provision of the Goods the subject of a Purchase Order, which will be read as incorporating the terms of this Agreement to the exclusion of all other terms and conditions set out in the Purchase Order or incorporated by reference into the Purchase Order.
...
3 PRIMARY OBLIGATIONS, RISKS, INDEMNITIES AND WARRANTIES
3.1 Primary Obligations
...
(b) The D&C Contractor must pay the Contract Sum in accordance with the Agreement and otherwise comply with the Agreement.
...
23.2 Payment Claims
(a) The Supplier may deliver a payment claim at the later of the times specified or milestones described in Item 20 of Schedule A. ...
(b) A payment claim must:
(i) include (and only include) amounts in respect of Goods which:
(A) are the subject of a Purchase Order;
(B) comply with the Agreement; and
(C) [Not used]
(ii) evidence the amount claimed to be due to the Supplier in respect of 23.2(b)(i) and otherwise under the Agreement, calculated in accordance with the Agreement;
(iii ) deduct amounts due from the Supplier to the D&C Contractor under the Agreement, including the amount of liquidated damages for which the Supplier is indebted to the D&C Contractor under clause 19; and
(iv) be accompanied by:
(A) delivery dockets signed by the D&C Contractor in respect of Goods the subject of a payment claim. Provided that there is a D&C Contractor representative present at the Delivery Location for every delivery and is available to sign the delivery dockets, any delivery docket claimed that is not signed by the D&C Contractor may be rejected; and
(B) such further information as the D&C Contractor reasonably requires.
(c) A payment claim which does not comply with the requirements of clause 23.2(b) or which is delivered earlier than is permitted by this clause 23.2(a) is invalid. An invalid payment claim must be resubmitted, in a valid form, on the next occasion that a payment claim can be submitted under clause 23.2(a).
23.3 Payment certificates
(a) Within 14 days of the receipt of a valid payment claim, the D&C Contractor’s Representative must:
(i) assess the payment claim and determine:
(A) the value of the Goods which comply with the Agreement and which were delivered by the Supplier in a calendar month which precedes the month of the payment claim;
(B) other amounts owing between the parties, under the Agreement; and
(C) amounts previously paid under the Agreement; and
(ii) issue to the Supplier a payment certificate stating the amounts determined under clause 23.3(a)(i) and, having regard to those amounts, the amount of the payment which is to be made by the D&C Contractor to the Supplier or by the Supplier to the D&C Contractor.
(b) The D&C Contractor’s Representative must set out, in any payment certificate, the calculations employed to arrive at the amount and, if the amount is more or less than the amount claimed by the Supplier, the reasons for the difference.
Payment Claims and Payment Schedules 30 to 34
Payment Claim 36
(1) $1,021,330.81 for newly claimed measured works, $323,830.81 which was for works from October 2019 to April 2020, and $697,500 was for plant opening charges from 26 March 2016 to 16 February 2020 which had not previously been charged by Holcim.
(2) $1,718,246.80 for works in payment claims 30 to 34.
The reasons as to why the scheduled amount is less than the claimed amount are set out in the attached Schedules (which are part of and incorporated into this Payment Schedule).
In addition to the matters raised in this payment schedule, the D&C Contractor refers to, and relies upon the Payment Schedules dated: 8th August 2019, 9th September 2019, 11th October 2019, 8th November 2019, 28 April 2020...
GROUND 1
12. In the adjudication response, the respondent submits for the first time that the payment claim is invalid because it relates to more than one construction contract and, further and in the alternative, that the adjudication application is invalid because it relates to more than one payment claim.
13. The first submission is predicated on the notion that the various amounts claimed are not payable under the Agreement, but are instead payable under:
(a) one of the 12,500 or so separate contracts said to arise by virtue of the Agreement and, in particular, by virtue of cl 2(c), which relevantly provides that “[u]pon the issue of a Purchase Order a separate contract will come into existence”; or
(b) “an earlier agreement or earlier agreements”.
As such, the first submission is made in support of a reason or reasons not included in the payment schedule. Quite apart from the fact that the respondent is precluded from including reasons in its adjudication response that it did not include in its payment schedule – see s 20(2B) of the Act, it follows that the first submission is not duly made in support of the payment schedule and cannot be considered by me – see s 22(2) of the Act.
14. The respondent’s second submission simply mischaracterises the claimant’s submissions in respect of amounts in the payment claim that were also the subject of earlier claims as the claimant making an application in respect of multiple payment claims. However, the claimant was entitled to include amounts that had been the subject of previous claims in the subject payment claim – see s 13(6) of the Act, and to make submissions in support of same, and those things does not make the application one that concerns multiple payment claims.
GROUND 2
GROUND 3
38. In the payment schedule, the respondent asserts the following, ostensibly as reasons why the scheduled amount is less than the claimed amount:
(a) the respondent “is entitled to assess the amounts claimed... [by] reference to the Agreement and accompanying documentation i.e. delivery dockets”;
(b) the respondent has “historically conducted assessments... in accordance with Clause 23 of the Agreement”; and
(c) the respondent “has assessed the... claims against limited site records and made deductions accordingly”.
39. To the extent these matters are pressed at all in the adjudication response, it is in the submissions that:
(a) the claimant was required to provide sufficient information in the payment claim for the respondent to be able to verify or reject it;
(b) the claimant provided limited information in support of its claim; and
(c) the respondent, assessed the claim on the basis of the information provided by the claimant in the payment claim.
40. However, even if I were to accept all three of those propositions, I would not be satisfied that anything turns on that because the claimant provided enough information in the payment claim for the respondent to be able to verify or reject it (as already determined above) and because, even if the respondent is ‘entitled’ to assess claims as it says or implies it is (which is to say, by reference to accompanying documentation or as it has done historically or against limited site records), the claimant is nevertheless entitled to an amount determined in accordance with s 9(a) or (b) of the Act, which is to say, to the amount calculated in accordance with the terms of the Agreement or, if the Agreement makes no express provision for the matter, to the amount calculated on the basis of the value of goods supplied under the Agreement.
41. Although the respondent does not appear to address the application of s 9 of the Act to the instant case, the claimant submits that sub-clause (a) applies but then only refers to cl 3.1(b) of the Agreement, which doesn’t deal with the calculation of the amount of progress payments at all.
42. Doing the best that I can in these circumstances, it seem to me that cl 23.3(a) of the Agreement impliedly provides that the claimant is entitled to an amount that reflects:
(A) the value of Goods which comply with the Agreement and which were delivered by the Supplier in a calendar month which precedes the month of the payment claim;
(B) other amounts owing between the parties, under the Agreement; and
(C) amounts previously paid under the Agreement.
43. So long as the respondent has sufficient information to be able to verify or reject claimed amounts, the real issues arising are therefore whether the claimant has supplied the goods it says it has supplied, whether those goods have the value the claimant says they have, and whether there are other amounts owing to one party or the other.
44. In the adjudication response, the respondent argues that “the claimant bears the onus of proving the facts, the existence of which would give the claimant the right to its claim or the civil remedy sought”. However, it seems to me to be only partly true and, at the very least, to apply only to disputed facts.
GROUND 4
GROUND 5
33. The respondent also refers to paragraphs 44 to 48 of Mr Firmin Li’s statement and submits that they confirm that:
a. Mr Li was unable to ascertain the amount claimed... pursuant to the information provided by the Claimant...;
b. to Mr Li’s knowledge, a representative of [the respondent] was available on site to receive a delivery and sign the relevant docket on each delivery made by the Claimant; and
c. it was Mr Li’s understanding and reasonable expectation that, if a representative of [the respondent] was not present on site, the Claimant would raise this with [the respondent] given the Clause 23 Requirements.
34. Although it is true that Mr Li says he would have expected the claimant to notify the respondent if a representative were not available to sign delivery dockets, and appears to say that he couldn’t verify the amounts claimed because the claimant failed to provide copies of the delivery dockets with its payment claims (albeit at [52] and not at [44] to [48]), he does not confirm that a representative was available to sign each delivery docket (as he simply states that he was unaware of any specific instances of that occurring).
35. Mr Li’s evidence is also notable in establishing that he is a junior (or very junior) employee of the respondent (he was first employed by the respondent while also enrolled in two degree courses, which he completed over the six years between 2014 and 2019), that his “approximately 3 years of experience in the civil construction industry” therefore cannot have all been full-time, that the respondent had “reliable”, “intermittent” and “unreliable” access to the claimant’s on-line platform until about 21 October 2019 and that he had formed the view that the claimant was relying on Reconciliation Meetings for the purpose of evading its contractual obligation to corroborate the amounts it claimed in payment claims, and in failing to address, let alone establish, the full extent of records, knowledge and other materials the respondent had or had access to, or required, to be able to verify or reject claimed amounts and what, if anything, delivery dockets would add to that.
36. On this last issue, which really is the nub of the matter, it cannot in my view, reasonably be suggested that a party which orders concrete by way of purchase order requires a delivery docket, let alone a signed delivery docket, to be able to verify or reject a claim to be paid for it. While the situation is obviously considerably more complicated on a project like the Sydney Light Rail project, which involved many thousands of deliveries over a number of years, I am still not satisfied that the failure to include the copies of delivery dockets in the payment claim caused the respondent to be unable to verify or reject claimed amounts because:
(a) the respondent previously assessed many payment claims that did not include copies of delivery dockets;
(b) the respondent does not deny that it was given, and therefore had, a physical copy of many delivery dockets;
(c) the respondent does not explain how it dealt with those dockets, including whether, for example, they were available on the respondent’s own systems (Mr Li’s evidence is only to the effect that the respondent was not contractually obliged to upload delivery dockets to the respondent’s own system);
(d) the respondent had access to delivery dockets via the claimant’s on-line platform until sometime in late October 2019;
(e) lack of access to the claimant’s on-line system could therefore only have impacted the respondent’s assessment of IPC SLR 33 and 34 and, in each of those cases, the respondent was nevertheless content to certify the vast bulk of line item amounts (the respondent routinely notes that such certification is “on account only” but there is nothing unusual in that);
(f) Mr Li provides no basis for his assessment of the quality of the respondent’s access to the claimant’s on-line platform, and his various statements on that point are, at best, contradictory;
(g) the respondent’s Mr Bridgwood “typically had available Holcim’s delivery dockets” – see Mr Dorling’s statement at [52], which the respondent does not dispute;
(h) Mr Li exaggerates the effort involved in assessing IPC SLR30 to 34 as the value (and, by implication, number) of goods and other charges claimed therein was relatively low compared to the value (and number) of goods and other charges claimed in previous periods;
(i) each payment claim included a table for setting out the invoice number, delivery docket number, date, address and zone, material code and description (including the relevant purchase order number), units of measurements, quantities, rates and amounts claimed; and
(j) the respondent had access to other corroborating information (including purchase orders, site diaries, daywork dockets etc.);
(k) the respondent’s own assessment of IPC SLR30 to 32 included many references to the contents of delivery dockets; and
(l) the claimant’s assessments of the abovementioned assessments included copies of disputed delivery dockets; and
(m) although Mr Li is happy to infer from his experience assessing daywork dockets, that “it is extremely rare and highly irregular that dockets are left unsigned... [and] it would not make sense for representatives to sign the subcontractor’s daywork docket and not the Claimant’s delivery dockets”, I have not been provided with enough information to conclude that inference is reasonably drawn.
37. In summary, it is abundantly clear that the claimant is not required to include supporting information in a payment claim made under the Act and that the failure to include delivery dockets or other unspecified supporting information did not prevent the respondent from verifying or rejecting any particular line item claim – in fact or otherwise find.
GROUND 6
44. In the adjudication response, the respondent argues that “the claimant bears the onus of proving the facts, the existence of which would give the claimant the right to its claim or the civil remedy sought”. However, it seems to me to be only partly true and, at the very least, to apply only to disputed facts.
The mere absence of material adduced on behalf of a respondent to an adjudication application does not, without more, mean that an adjudicator can simply award the amount of the claim without addressing its merits.
...the absence of [material put forward by the respondent] does not entitle the adjudicator simply to award the amount of the claim without addressing its merits, which as a minimum will involve determining whether the construction work identified in the payment claim has been carried out, and what is its value.
CONCLUSION
(1) Declare that Adjudication Determination 2020061EA made by the second defendant on 23 July 2020 is void.
(2) Order that the said Adjudication Determination be quashed.
(3) Order that the money paid into Court by the plaintiff and any interest be paid out to it or, on direction, to its solicitors.
(4) Provisionally order that the first defendant is to pay the plaintiff’s costs. This order will solidify 7 business days after delivery of this judgment unless a party notifies my Associate in writing that some other order is sought, briefly stating the grounds, in which event the order will be vacated and arrangements will be made to determine costs.
**********
[1] See s 8(2)(a).
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/nsw/NSWSC/2020/1330.html