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County Court of Victoria |
Last Updated: 24 September 2020
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Revised
Not Restricted Suitable for Publication |
Case No. CI-20-01533
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JUDGE:
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WHERE HELD:
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DATE OF HEARING:
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CASE MAY BE CITED AS:
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REASONS FOR JUDGMENT
Subject: CONTRACTS
Catchwords: Building contract – payment claims – whether payment claim sufficiently stated that it was made under the Act
Legislation Cited: Building and Construction Industry Security of Payment Act 2002 (Vic) 14(2)(e)
Cases Cited: Southern Motors Pty Ltd v Australian Guarantee Corporation Ltd [1980] VicRp 23; [1980] VR 187; Jemzone v Trytan [2002] NSWSC 395; John Beever (Aust) Pty Ltd v Paper Australia Pty Ltd [2019] VSC 126; Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd [2020] VSC 570; Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd [2009] VSC 156; (2009) 26 VR 112; Pyneboard Pty Ltd v Trade Practices Commission [1982] FCA 18; (1982) 39 ALR 565; Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) [2005] NSWCA 409; (2005) 64 NSWLR 462
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APPEARANCES:
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Counsel
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Solicitors
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For the plaintiff
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Level Playing Field Lawyers Pty Ltd
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For the defendant
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McMahon Fearnley Lawyers Pty Ltd
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Parties and application
1 In this proceeding, the plaintiff (“BSL”) applies for judgment against the defendant (“K&K”) pursuant to s16(2) of the Building and Construction Industry Security of Payment Act 2002 (Vic) (“Act”) in relation to concreting works that BSL performed at 24 Cubbitt Street, Cremorne between 27 June 2019 and 30 August 2019. The proceeding comes before me as an application by K&K under s17V of the County Court Act 1958 (Vic) and r84.03 of the County Court Civil Procedure Rules 2018 (Vic), for review by the court, constituted by a Judge, of the orders contained in the reasons for judgment of Judicial Registrar Tran dated 1 September 2020 (“JR Reasons”). The Judicial Registrar made the orders foreshadowed in the JR Reasons on 3 September 2020.
2 A review of a decision of a Judicial Registrar is a hearing de novo, subject to the limitation on further evidence under r84.03(6)(a). The Judicial Registrar determined the matter on the papers and without an oral hearing, relying on the affidavits and written submissions filed on behalf of each party. While neither party has sought to file additional evidence on the review, K&K’s counsel Mr Andreou provided written submissions dated 16 September 2020 advancing an argument that had not been raised before the Judicial Registrar. Further, the submissions were apparently not seeking to reagitate the arguments (by a different counsel) before the Judicial Registrar. At the commencement of the hearing on 22 September 2020, Mr Andreou confirmed that the single argument referred to in his written submissions was the only basis upon which K&K was seeking to review the Judicial Registrar’s order.
3 After considering the written submissions of both parties and hearing oral argument from Mr Andreou, I made orders that the decision of the Judicial Registrar dated 3 September is confirmed and that K&K is to pay BSL’s costs of and incidental to the review application on a standard basis, to be taxed in default of agreement. I observed that Mr Andreou had raised a number of important issues in the course of his submissions and it was therefore appropriate that I deliver written reasons for those orders, which I would endeavour to publish as soon as practicable. These are those reasons.
4 As this is a hearing de novo, it is appropriate that I note that I have considered the affidavits and submissions filed by both parties and relied on before (and by) the Judicial Registrar. I have also had the considerable additional advantage of reading the comprehensive JR Reasons. I am satisfied that the JR Reasons accurately summarise the facts and I therefore gratefully adopt that summary, which is as follows:
“K&K was undertaking a development project at 24 Cubbitt Street, Cremorne. It initially engaged Conc-Create as a subcontractor to undertake concreting works. On 3 June 2019, at a meeting between representatives of K&K, Conc-Create and BSL, BSL was engaged by Conc-Create to rectify works of Conc-Create. The parties agreed that those works would take approximately 2-3 days.Mr Tomarchio [a director of BSL] says that in a telephone call on 24 June 2019, Kieran Gonzalez of K&K requested that BSL complete additional concreting works for K&K which comprised rectification of the works of subcontractors other than Conc-Create. Mr Tomarchio agreed on behalf of BSL to keep its workers on site and undertake the works and said that he would send him a copy of BSL Group’s rates and terms and conditions. Mr Ktori [a director of K&K] admits that K&K requested BSL to undertake specific works but denies that Mr Tomarchio’s description of the telephone call is “what [Mr Gonzalez] agreed to, or what was discussed”. Mr Ktori does not say what was discussed in the telephone call. If it were necessary, I would prefer Mr Tomarchio’s account of the telephone conversation, given the lack of any evidence beyond a denial. It would have been a simple matter for Mr Ktori to explain what was said in that telephone call, to the extent that it differed from Mr Tomarchio’s version of events.
On 25 June 2019, a representative of BSL sent a representative of K&K the following email:
‘Further to your discussion with my director Giuseppe yesterday, please see the following documents attached:
As Giuseppe mentioned, we have a previous agreement with Henry [of Conc- Create] to provide him with 2 days work.Therefore you will not be charged for the first 2 days as we will invoice Henry directly.
From that point forward we will charge for our time at an hourly rate. Please send me your invoicing details for our records.’
Among other things, the Rates Sheet stated:
‘Authorised customer purchase order to be provided. In the case where no purchase order has been provided, commencement of works will constitute as the client’s agreement to these terms, as well as the standard BSL rates schedule.’
On 25 June 2019, a representative of K&K replied: ‘Thanks... I’ve forwarded these documents to my head office.’
On 2 July 2019, a representative of K&K sent an email to BSL providing an email address for provision of invoices.
On 6 August 2019, BSL emailed K&K, at the email address provided on 2 July 2019, an invoice in the sum of $25,658.60 (GST inclusive)
...
On 31 August 2019, BSL emailed K&K, at the email address provided on 2 July 2019, a payment claim for the sum of $15,439.60 (GST inclusive)
...
K&K did not issue a payment schedule or make any payment on these invoices.”
5 As the JR Reasons explain, each of BSL’s payment claims dated 6 and 31 August 2019 referred to above included a due date followed by these words:
Payment terms are 7 Days unless negotiated beforehand. Due date is on Tax Invoice along with postal address and bank transfer details....
THIS DOCUMENT TOGETHER WITH ANY OTHERS RELATING TO SUPPLY OF PRODUCT TO THIS SITE DURING THIS PERIOD CONSTITUTES A PAYMENT CLAIM UNDER THE BUILDING AND CONSTRUCTION INDUSTRY PAYMENTS ACT 2004 E.&O.E. SUBJECT TO TERMS, CONDITIONS OF SALE AVAILABLE ON REQUEST.”
6 K&K’s submissions to the Judicial Registrar advanced three grounds in opposition to BSL’s payment claims, as follows:
• the court cannot be satisfied of the construction contract alleged by BSL;
• the payment claims failed to identify the construction work to which they related; and
• the payment claims were not calculated in accordance with the terms of the actual or alleged construction contract.
7 The Judicial Registrar rejected each of these grounds, giving detailed reasons for doing so. In a decision of the Full Court of the Victorian Supreme Court in Southern Motors Pty Ltd v Australian Guarantee Corporation Ltd [1980] VicRp 23; [1980] VR 187, Starke, Murphy and Brooking JJ at 190 (in which the judgment of the court was delivered by Brooking J) the court held (emphasis added):
“...the application is to be heard de novo in the sense that the party who was applicant before the Master is the party to begin, the appeal is determined on the evidence placed before the judge, no regard being had to the evidence placed before the Master, and the judge determines the appeal without being in any way fettered by the decision of the Master, but giving such weight to the decision of the Master as appears proper.”
8 Had it been necessary for me to consider the three grounds relied on before the Judicial Registrar, I am satisfied that this is a case where it would have been proper for me to give considerable weight to the JR Reasons for rejecting those grounds, and confirmed the JR Reasons on those grounds. The fact that K&K has not sought to reagitate any of those grounds reinforces that view.
9 However, as noted above, in his written and oral submissions before me, Mr Andreou for K&K raised a single new ground for rejecting BSL’s payment claims. That ground is that each of the payment claims fails to comply with the requirement under s14(2)(e) of the Act, which states that a payment claim “must state that it is made under this Act”. K&K argued that each payment claim instead states that it is made under the “BUILDING AND CONSTRUCTION INDUSTRY PAYMENTS ACT 2004”.
10 Mr Andreou began his written submissions by noting that the requirement to state that a payment claim was made under the Act is a jurisdictional fact, which must exist before the statutory regime set out under the Act is engaged. That is undoubtedly correct. He next cited Jemzone v Trytan [2002] NSWSC 395 (“Jemzone”) in which Austin J (dealing with the equivalent provision of the New South Wales Act) held at [46] that:
“...the issuing of a proper payment claim has the serious consequences for the recipient of requiring full payment regardless of any genuine dispute or offsetting claim, unless a payment schedule is lodged within time, it must be clear on the face of the document that it purports to be a payment claim made under the Act. The defect on the face of the document is not overcome by evidence that the recipient was not misled.”
11 Mr Andreou continued:
Similarly, in John Beever (Aust) Pty Ltd v Paper Australia Pty Ltd [2019] VSC 126 (“John Beever”)], Lyons J noted at [93], in respect of s.14(2)(e):...it is important to acknowledge the significance of the statement requirement. It is of critical importance that the recipient of a claim is aware that the claim is a payment claim for the purposes of the Act. This is so that the recipient may comply with the time requirements imposed on them in respect of the service of any payment schedule under s 15 of the Act.
12 Finally, Mr Andreou submitted that the payment claims in this case on their face do not draw a recipient’s attention to the Act, but to an entirely different piece of legislation, being the “Building and Construction Industry Payments Act 2004”. He concluded:
“This is not a matter of a typographical error, abbreviation or mis-description, as was the case in Hawkins Construction v Macs Industrial Pipework [2001] NSWSC 815; (2001) 163 FLR 18. The plaintiff did not simply omit by error the words ‘Security of’ from the legislation cited. Rather, when regard is given to the citation ‘Building and Construction Industry Payments Act 2004’, which deliberately included the year 2004, it is clear that the legislation identified in the payment claims was the Building and Construction Industry Payments Act 2004 (Qld) (‘former Queensland Act’). The former Queensland Act was repealed in 2018 and replaced by Building Industry Fairness (Security of Payment) Act 2017 (Qld). No other State or Territory equivalent legislation has the same or a substantially similar title.Accordingly, Payment Claims 1 and 2 were not made pursuant to ‘this Act’, being the SOP Act, as the express provision of s.14(2)(e) requires.”
13 In oral submissions, Mr Andreou took me in some detail to the very recent decision of Justice Riordan in Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd [2020] VSC 570 (“Façade Designs”). Façade Designs primarily concerned the construction and application of s14(2)(c) of the Act and the provisions of the Act concerning excluded amounts. Section 14(2)(c) provides that “A payment claim...must identify the construction work or related goods and services to which the progress payment relates”. Relevantly, for present purposes, his Honour carefully examined whether a court should have regard to evidence of surrounding circumstances in determining whether a payment claim complied with this provision.
14 Mr Andreou referred me first to his Honour’s summary of the principles of statutory construction (commencing at [23]). He emphasised that the focus is on the text and the legislative purpose, and primacy is given to the text. In particular, if the literal meaning of the text is consistent with the identified legislative purpose, the literal meaning will be accepted as the legal meaning (at [26]). Mr Andreou submitted that in the case of s14(2)(e), there is no warrant to look beyond the literal meaning of the text – the payment claim must state that it is made under the Act. This, he said, required that attention be given to the face of the payment claim alone, not the surrounding circumstances of the payment claim or questions of subjective understanding.
15 Mr Andreou next took me to the section of his Honour’s reasons under the heading “Is evidence of surrounding circumstances admissible in determining the validity of a payment claim?” (commencing at [36]), where his Honour held as follows (citations omitted):
“In my opinion, in determining whether a payment claim complies with s14(2)(c) of the Act, the Court should not have regard to extrinsic evidence of surrounding circumstances for the following reasons:(a) Compliance with s14(2)(c) of the Act is assessed on an objective basis. Evidence of conversations between parties or the subjective ability of parties to understand a payment claim should not be permitted.
(b) The proposition that the validity of payment claims under s14 of the Act should be determined by reference to the face of the payment claim is supported by the weight of authority, including the following:
(i) In Jemzone Pty Ltd v Trytan Pty Ltd, Austin J held that the claimant was obliged to ensure that the payment claim complied ‘on its face’ with s13(2) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (‘the NSW Act’), being the equivalent of s14(2) of the Act. He observed that extraneous circumstances and previous communications should not be considered, stating:
[T]he payment claim must on its face contain all the ingredients required by the Act. While the court should not take an unduly strict approach to the construction of the claim, it ought not to cure defects in the claim document by reference to extraneous circumstances or previous communications.
(ii) In Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq), Hodgson JA said that a payment claim would not be a nullity unless its failure to comply with s 13(2) of the NSW Act was ‘patent on its face’. His Honour held that the test of validity was whether the payment claim ‘purports in a reasonable way to identify the particular work in respect of which the claim is made’.
(iii) Ipp JA agreed with the reasons of Hodgson JA and formulated the test of validity as being whether the payment claim ‘is made in good faith and purports to comply with s 13(2) of the [NSW] Act’.
(iv) In TFM Epping Land Pty Ltd v Decon Australia Pty Ltd, the New South Wales Court of Appeal held that, for the purposes of the New South Wales equivalent of s 16 of the Act, the question of whether a claim was made for a variation under the NSW Act was resolved by reference to the face of the claim.
In my opinion, the admission of extrinsic evidence of surrounding circumstances would be inconsistent with the assessment of compliance on the basis of the purport of the payment claim document.”
16 Relying in particular on this passage, Mr Andreou argued that the substance of all of the matters relied on in paragraph 4 of BSL’s written submissions (set out in full below) are extrinsic and should not be considered in determining the validity of the payment claims in this case. He said that the requirement under s14(2)(e) that the payment claim must state that it is made under the Act is not very onerous, and yet the consequences of failing to respond to a payment claim under the Act are very significant. The time frames for response are short and a failure to respond gives rise to strict statutory liabilities.
17 Mr Andreou argued that there are only two available interpretations of the words “a payment claim under the Building and Construction Industry Payments Act 2004” used in the payment claims in this case, namely:
• it is a reference to the Victorian Act, with material words omitted and the wrong year; or
• it is a verbatim reference to the former Queensland legislation.
18 He said that neither saves these payments claims. The first does not survive because it is materially different to the proper description of the Victorian Act. The second is clearly a reference to an entirely different Act. Mr Andreou accepted in relation to the first interpretation that some deviation from the proper description of the Victorian Act is permissible. For example, an abbreviation or the omission of a minor word (like “and”) is acceptable, but the deviation in this case goes too far. When I tested Mr Andreou on this, he seemed to agree that the omission of the words “Security of” or the reference to the wrong year alone may not have invalidated the payment claims, but both these errors together put it on the wrong side of the line.
19 In her written submissions, Ms Jones for BSL submitted that neither of the two authorities relied on by K&K in its written submission advance its position. In relation to Jemzone, she argued that Austin J found that the statement requirement was not met because the endorsement failed to include the words “payment claim”, not (as K&K asserted) because the endorsement failed to make proper reference to the New South Wales Act. I agree. Indeed, as Ms Jones notes in the longer extract from the decision in her written submissions, Austin J referenced (with approval) the remarks of Windeyer J in Hawkins Constructions (Australia) Pty Ltd v Mac’s Industries Pipework Pty Ltd [2001] NSWSC 815 which speak against a strict approach to the naming of the Act, as follows:
It was also argued [in Hawkins] that the payment claim did not properly identify the Act because it omitted the word "and" in the title to the Act and it abbreviated the word "Industry" to "Ind". As Windeyer J said, such an argument may have had some weight in 1800 but in 2001 it had no merit, and should not have been put. Acceptance of this argument would have implied a strictness of approach not justifiable by legislative policy or any principle of construction.”
20 Turning next to the decision of Lyons J in John Beever, Ms Jones pointed out that his Honour found in that case that the statement requirement was not met in respect of a particular payment claim (the July claim) because it failed to include any endorsement which could be said to meet the statement requirement. Ms Jones argued that the authorities establish that:
• the manner in which compliance with s14 is tested is not overly demanding;
• the statement requirement prescribed by s 14(2)(e), should not be approached in an overly technical manner;
• a payment claim is valid if it purports in a reasonable way to state that it is made under the Act; and
• in determining whether a payment claim meets the requirements of s14 of the Act, the focus must remain on the objective circumstances, not the subjective intentions or perception of one of the parties.
21 Ms Jones also observed that the authorities reveal a generally permissive attitude towards errors in the form of the statement endorsed on a payment claim. Such errors typically are not held to invalidate a claim. In support of this submission she cites the well-known passage from Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd [2009] VSC 156; (2009) 26 VR 112 (“Hickory”), where Vickery J held at [46] (citations omitted):
“The Act also manifests another central aspiration, that of freedom from excessive legal formality. The provisions demonstrate a pragmatic concern to provide a dispute resolution process which is not bedevilled with unnecessary technicality. The Building and Construction Industry Security of Payment Act 1999 (NSW) has led to a spate of litigation in its relatively short life. If the Victorian Act became prone to challenges founded on fine legal points, an important object of the Act would be defeated by the twin adversaries of cost and time.”
22 Ms Jones also referred to where Vickery J in Hickory endorses the remarks of Finkelstein J as follows:
“The requirements of s14 of the Act should not be approached in an overly technical manner. Finkelstein J in Protectavale Pty Ltd v K2K Pty Ltd said [citation omitted]:It is necessary to decide whether the invoice meets the requirements of s14. The test is an objective one; that is, it must be clear from the terms of the document that it contains the required information: Walter Construction Group Ltd v CPL (Surry Hills) Pty Ltd [2003] NSWSC 266 at [82]. But the terms must be read in context. Payment claims are usually given and received by parties experienced in the building industry who are familiar with the particular construction contract, the history of the Project and any issues which may have arisen between them regarding payment. Those matters are part of the context: Multiplex Constructions [2003] NSWSC 1140 at [76].
The manner in which compliance with s14 is tested is not overly demanding: Leighton Contractors Pty Ltd v Campbelltown Catholic Club Ltd [2003] NSWSC 1103 at [54] citing Hawkins Construction (Aust) Pty Ltd v Mac’s Industrial Pipework Pty Ltd [2002] NSWCA 136 at [20] (‘[The requirements for a payment claim] should not be approached in an unduly technical manner ... As the words are used in relation to events occurring in the construction industry, they should be applied in a commonsense practical manner’); Multiplex Constructions [2003] NSWSC 1140 at [76] (‘[A] payment claim and a payment schedule must be produced quickly; much that is contained therein in an abbreviated form which would be meaningless to the uninformed reader will be understood readily by the parties themselves’); Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333 at [20] (‘The Act emphasises speed and informality. Accordingly one should not approach the question whether a document satisfies the description of a payment schedule (or payment claim for that matter) from an unduly critical viewpoint’).”
23 Ms Jones then provided six examples of where courts have concluded that, despite inexact expressions, the Act has been sufficiently described to satisfy s14(2)(e) (and its interstate counterparts). These include, in this court, “Securities of Payment Act” (South City Plaster Pty Ltd v Modscape Pty Ltd [2018] VCC 1576 at [94]) and “Building & Construction Guarantee of Payment Act 2002” (LH Blue Pty Ltd v AXF Construction Pty Ltd [2010] VCC 485).
24 In relation to K&K’s submission to the effect that the payment claims were not made under the Act and that BSL “deliberately” included the year 2004 and thus identified the repealed Queensland Act, Ms Jones argued that this submission should fail. She concluded that, viewed objectively from the perspective of a reasonable recipient in the shoes of K&K, there are several factors that make it clear that the payment claims were payment claims under the Act. Those factors are:
• the payment claims did not make reference to ‘QLD’;
25 I note that these are the factors that Mr Andreou described as being almost entirely extrinsic matters, of the kind that Riordan J held in Façade Designs are not relevant to considering compliance with s14(2) of the Act. I disagree. In my opinion, these are not matters of extrinsic evidence. Rather, they are matters of context that are central to any objective assessment of the payment claims in this case, as discussed below.
26 There can be no doubt that the question of compliance with s14(2)(e) of the Act should be determined by reference to the face of the payment claim. Indeed, it might be said that the need to avoid straying beyond the face of the payment claim is even more acute when examining compliance with s14(2)(e), than it is with s14(2)(c). For example, as Riordan J recognised in Façade Designs, supporting documents can assist in identifying the construction work as required by s14(2)(c) (see at [40(a)]). But a supporting document (except perhaps a covering email – see John Beever at [94] below) may not save a payment claim that failed on its face to state that it is made under the Act. However, reliance on extrinsic evidence is one thing. Evidence of context is a very different matter.
27 In Façade Designs, Riordan J went on to make a number of further points to those referenced by Mr Andreou that in my view are relevant to the determination of this proceeding. In particular, his Honour (at [36(d)(ii)]) cited with approval the passage from Hickory extracted above and confirmed that:
• (at [37]) compliance is “not overly demanding and should not be approached in an unduly technical manner or from an unduly critical point of view” (citing from John Beever at [83]);
• (at [38(e)] the fact that there may be typographical omissions or other errors does not invalidate a payment claim, referring to what was said by the Full Federal Court in Pyneboard Pty Ltd v Trade Practices Commission [1982] FCA 18; (1982) 39 ALR 565, 571:
[T]he mere fact that parsing and analysis in the artificial atmosphere of the courtroom can lead to the identification of a number of latent ambiguities will not invalidate what, as a matter of commonsense, is reasonably clear.
• (at [38(f)]) to interpret the identification requirement under s14(2)(c) as imposing a more exacting standard would encourage challenges to the validity of purported payment claims in the courts: “The words of s14(2)(c) do not mandate such an approach. I consider that a more exacting standard would not accord with the legislative intention”;
• (at [40(a)]) a payment claim is construed objectively: “A payment claim will comply with s14(2)(c) if a reasonable building practitioner in the position of the recipient would have understood the payment claim to be bona fide and to purport in a reasonable way to identify the particular work in respect of which the claim is made” (citing Nepean Engineering [2005] NSWCA 409; (2005) 64 NSWLR 462, 475 [36] (Hodgson JA), 484 [76] (Ipp JA));
• (at [41]) the objective approach requires reference to the context, being the construction contract and the entire payment claim, together with documentation expressly or impliedly referred to in the payment claim (citing Mount Bruce [2015] HCA 37; (2015) 256 CLR 104, 116 [46] (French CJ, Nettle and Gordon JJ); and
• (at [41]) the courts should nevertheless be wary to ensure that the exception allowing for evidence of context is not used as a Trojan horse to admit extrinsic evidence of surrounding circumstances, including prior dealings and the subjective intentions or understanding of parties, which is irrelevant.
28 I am satisfied that the findings of Riordan J in Façade Designs concerning the construction and application of s14(2)(c) summarised above, apply equally to s14(2)(e). In particular, I agree with Lyons J’s observation in John Beever at [91] that “the general principle that compliance with s 14(2)(c) is not to be approached in an unduly technical manner also applies to the statement requirement in s 14(2)(e)”. Further, in my view, the objective approach discussed by Riordan J requires:
• reference to the context, and this includes (as Ms Jones submitted) that the construction contract governing the relationship between the parties was entered into in Victoria in respect of construction work to be performed solely in Victoria;
• consideration of the entire payment claim, and notably that both contain the phrases “payment claim under” and “Building and Construction Industry Payments Act”; and
• that compliance with s14(2)(e) be determined by reference to the standard of a reasonable building practitioner in the position of the recipient of the payment claims.
29 Mr Andreou accepted that the “reasonable recipient” test did apply to s14(2)(e), but argued that the scope of operation of the test was more confined than when applied to s14(2)(c). He submitted that the statement must still refer to “this Act”, which means the Victorian Act. Minor departures such as abbreviations and omissions could be accommodated but here the departure in the description was too substantial. Further, these departures were exacerbated by the fact that the description in fact referred to the former legislation of a different state.
30 It is clear that the “jurisdictional fact” pre-requisite for the engagement of the Act (and thus the validity of a payment claim) does not require a precisely correct statement of the name of the Act. The authorities discussed above leave no room for argument about this. Once that is accepted, seeking to define the degree of acceptable departure by focussing on the importance or otherwise of particular words, the use of abbreviations or the relevance of the year, is generally unhelpful. In my judgment, the benchmark for assessing the extent of permissible departure is no different from that applying to s14 generally. Namely, it is the reasonable building practitioner in the position of the recipient of the payment claims. As noted above, additional relevant context is supplied in this case by the fact that the contract was entered into in Victoria for construction work to be carried out solely in this state.
31 An equally important consideration in determining where the failure to adequately identify the Act will invalidate a payment claim, is discussed by Lyons J in John Beever, where his Honour observed at [93]-[94] as follows:
Further, it is important to acknowledge the significance of the statement requirement. It is of critical importance that the recipient of a claim is aware that the claim is a payment claim for the purposes of the Act. This is so that the recipient may comply with the time requirements imposed on them in respect of the service of any payment schedule under s15 of the Act. As noted by the Court of Appeal in SSC set out at [47] above, the Act lays down clear specifications of time to be observed, rendering it not difficult to understand that the availability of the rights conferred upon a person seeking payment under the Act should depend upon strict observance of the statutory requirements that are involved in their creation.In the present case, the July claim did not state that it was claim made under the Act. In my view, a purposive and non-technical construction of the statement requirement would authorise a Court to look at the covering correspondence serving the payment claim to determine whether the statement requirement has been met. However, in this case, the 9:47 pm email serving the July claim also did not state that it was claim made under the Act.”
32 Taking all of these matters into consideration, in my opinion, a reasonable building practitioner recipient in the position of K&K reading the capitalised statement at the bottom of the payment claims, would have been in no doubt that they were payment claims under the Act, for the following reasons:
• first, the statement is prefaced by the words “payment claim under” – not only does this expressly reference the opening words of s14(2) of the Act, it is a term that is well known in the building industry for invoking the Act;
• second, the name of the Act that follows is correct, except for the omission of words “Security of” and the use of “Payments” in lieu of “Payment” – in my view these errors are not material, in the sense that a reasonable building practitioner would not be left doubting that the party serving the payment claims was seeking to invoke the provisions of the Act;
• third, in my view the error in the year is similarly not material, whether alone or in combination with the other errors – indeed, I would go so far as to suggest that a reasonable building practitioner recipient would generally pay little or no regard to any reference to the year of the Act;
• fourth, K&K’s submission that the payment claims are in fact invoking the former Queensland legislation, is precisely the kind of technical argument that the authorities warn against—one that is attractive to those operating in the artificial atmosphere of a court room but has no basis in common sense or the real world of the building industry. I am satisfied that no reasonable building practitioner recipient of the payment claims issued in respect of a Victorian building contract, would have been beguiled into thinking that they could disregard the strictures of the Act, because the payment claims were in fact erroneously invoking the former Queensland legislation.
- - -
Certificate
I certify that these15 pages are a true copy of the judgment of his Honour Judge Woodward delivered on 23 September 2020.
Dated: 23 September 2020
Claire Findlay
Associate to His Honour Judge Woodward
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