Civex Pty Ltd v Fredon (Qld) Pty Ltd [2018] QDC 208

DISTRICT COURT OF QUEENSLAND CITATION: Civex Pty Ltd v Fredon (Qld) Pty Ltd [2018] QDC 208 PARTIES: Civex Pty Ltd (Plaintiff/Respondent) v Fredon (Qld) Pty Ltd (First defendant/Applicant) & Lend Lease Building Pty Ltd (Second defendant) FILE NO/S: BD4802/17 DIVISION: Civil PROCEEDING: Application ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 6 November 2018 DELIVERED AT: Brisbane HEARING DATE: 6 August 2018 JUDGE: Horneman-Wren SC DCJ ORDER: 1. The first defendant’s application filed on 18 July 2018 is dismissed. 2. Costs reserved. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – SUBCONTRACTORS’ CHARGES ACT (QLD) – APPLICATIONS TO COURT – where the applicant is the contracted party to a superior subcontract with the second defendant – where the respondent was subcontracted by the applicant to perform construction works – where the respondent served notices of claim of charge on both the applicant and second defendant for works carried out – where the second defendant paid charged monies into court – whether each of the charges notified by the respondent are void or invalid – whether parts of the respondent’s claim relating to the notified charges should be amended and/or struck out. -- 1 of 27 -- 2 SUBCONTRACTORS’ CHARGES ACT – APPLICATION OF STATUTORY REGIME – where the statement of claim exhibits an absence of explicit reference to s 15 of the Subcontractors’ Charges Act – whether s 15(2) mandates a pleading of fact to establish that monies charged were payable at the time of pleading – whether failure to reference s 15 in the statement of claim exposes the charge to extinguishment under s 15(4). LEGISLATION: Subcontractors’ Charges Act 1974 (Qld) ss 3, 5, 10, 11, 12, 14, 15, 21 Uniform Civil Procedure Rules r 149, r 171 CASES: Ed Ahern Plumbing (Gold Coast) Pty Ltd v J M Kelly (Project Builders) Pty Ltd [2008] 2 Qd R 123 Hamilton Australia Pty Ltd v Milson Projects Pty Ltd [1997] 2 Qd R 355 Hewitt Nominees Pty Ltd v The Commissioner for Railways [1978] Qd R 256 Hewitt Nominees Pty Ltd v The Commissioner for Railways [1979] Qd R 256 Mulherin Rigging & Cranes Australia Pty Ltd v Roberts & Schaefer Australia Pty Ltd [2011] 1 Qd R 139 Re Bird [1993] 2 Qd R 130 Re Galaxy Investments Pty Ltd (in liq) (Unreported, Supreme Court of Queensland, White J, 17 August 1993, BC9303424) Re: University of Queensland; Baulderstone Hornibrook Pty Ltd v Broen Australia Pty Ltd [2003] QSC 158 Road Surfaces Group Pty Ltd v Brown [1987] 2 Qd R 792 Walter Construction Group Ltd v J & L Schmider Investments Pty Ltd T/as Schmider Engineering Group (Unreported, Supreme Court of Queensland, Muir J, 5 April 2001, BC200102628) COUNSEL: PA Hastie QC for the plaintiff/respondent MJ Harris for the first defendant/applicant SOLICITORS: Frampton Legal for the plaintiff/respondent CDI Lawyers for the second defendant/applicant [1] The plaintiff, Civex Pty Ltd (Civex) commenced proceedings on 13 December 2017 against the first defendant, Fredon (Qld) Pty Ltd (Fredon) and the second defendant, -- 2 of 27 -- 3 Lend Lease Building Pty Ltd (Lend Lease). Against Fredon, it claims the following relief: A An amount owing under the contract of $484,418.41. Further and in the alternative: B Damages for breach of contract in an amount of $484,418.41. Further and in the alternative: C An order that the first defendant pay the plaintiff the sum of $484,418.41 by way of restitution. And: D Such further or other relief as the court thinks fit. E Interest up to judgment pursuant to the operation of s 58 of the Civil Proceedings Act 2011 in an amount to be calculated. F Costs. [2] By an order made on 23 July 2018 the proceeding was discontinued as against Lend Lease. On this application, Fredon has applied for the following orders: 1. Pursuant to s 15(1) of the Subcontractors’ Charges Act 1974 (Qld), the claim in paragraphs 32 to 34 of the Statement of Claim relating to the notice of claim of charge dated 14 November issued by the plaintiff under that Act is extinguished. 2. Pursuant to s 15(1) of the Subcontractors’ Charges Act 1974 (Qld), the claim in paragraphs 35 to 37 of the Statement of Claim relating to the notice of claim of charge dated 16 November issued by the plaintiff under that Act is extinguished. 3. Pursuant to s 21(1)(a) of the Subcontractors’ Charges Act 1974 (Qld), the cancellation of: (a) The notice of claim of charge dated 14 November issued by the plaintiff under that Act; and (b) The notice of claim of charge dated 16 November 2016 issued by the plaintiff under that Act. 4. The sum of $484,418.41 paid into court by the second defendant on 10 April 2018 together with any interest accrued on that amount be paid to: (a) The first defendant; or (b) The second defendant. 5. Pursuant to UCPR 171, paragraphs 9, 12 and 32 to 37 of the Statement of Claim be struck out. 6. Pursuant to UCPR 171, paragraph 10 of the Statement of Claim be struck out so far as it pleads “being work within the meaning of that term as defined in s 3 of the Subcontractors’ Charges Act 1974”. 7. The plaintiff pay the first defendant’s costs of the application on the indemnity basis, or alternatively, on the standard basis. [3] For the reasons which follow, the application should be dismissed. -- 3 of 27 -- 4 A summary of the proceedings [4] The following summary of the proceedings is taken from paragraphs 1 to 13 of the written submissions of Civex filed by leave on 6 August 2018. In submissions in reply (also filed by leave on 6 August 2018) Fredon said that it had no issue with those paragraphs of Civex’s submissions. (1) The plaintiff had a written contract with the first defendant to carry out works associated with installation of cables for the air traffic control precinct project at the RAAF base Amberley. (2) The first defendant had a contract with the second defendant to complete construction work at the base. (3) The plaintiff performed the works between on or about January 2017 and 22 August 2017. On 17 August 2017 the first defendant terminated the contract for convenience. (4) Under clauses 21 of the general conditions of the contract, the first defendant was obliged to pay the plaintiff for work executed prior to the date of termination. (5) The plaintiff and the first defendant are in dispute as to the proper amount to be paid for the work executed: the plaintiff claims that the proper amount is $1,081,217.14 inclusive of GST, the first defendant alleges that it was only obliged to pay not more than $871,553.34. The parties are agreed that to date the first defendant was paid $596,798.74 inclusive of GST and withheld $62,112.13 by way of retentions. (6) The plaintiff accordingly claims the unpaid balance of $484,418.40. (7) The first defendant says the unpaid balance is only $212,642.47 inclusive of GST but alleges that it is entitled to set off against this amount damages for claims for breaches by the plaintiff of another contract. The plaintiff denies the defendant is entitled to set off any damages under a different contract, or that it was in breach. (8) On 15 November 2017 the plaintiff alleges it served a notice of claim of charge upon the second defendant. This is a fact not admitted by the first defendant in paragraph 35 of the defence, but it is a fact clear from the affidavit filed on behalf of the second defendant. (9) On 15 November 2017 the plaintiff served a notice to the first defendant of a claim of charge in the amount of $486,850.66. (10) On 16 November 2017 the plaintiff alleges it served a second notice of claim of charge upon the second defendant. This is a fact not admitted in paragraph 38 of the defence. It is a fact sworn to by Mr Boardman of the second defendant. (11) On 16 November 2017 the plaintiff served a second notice to the first defendant of a claim of charge. This time it was for an amount of $484,418.41. -- 4 of 27 -- 5 (12) On 10 April 2018 the second defendant paid the sum of $484,418.41 into court. (13) This application relates to these notices and the moneys paid into court. [5] Fredon’s written submissions, as expanded upon in oral submissions, state seven contentions as to why each of the charges notified by Civex are void or invalid under the SCA with the consequence that the claim should be amended to remove the claims in respect of the charges, and those parts of the Statement of Claim relevant to them, struck out. Each will be addressed in turn. Contention 1: The claim and Statement of Claim are not proceedings constituted under s 15(3) of the SCA [6] Much of Fredon’s reasoning in respect of this contention, and indeed others, was based upon the judgment of White J in Re Galaxy Investments Pty Ltd (in liq).1 Because of its centrality to a number of the contentions advanced by Fredon, an analysis of that case should be undertaken. [7] That case concerned an application to the Supreme Court by the applicant for leave to procced nunc pro tunc against the defendant, it being a company in liquidation, in proceedings commenced in the District Court. The applicant was the plaintiff in those proceedings and the respondent, Galaxy Constructions (Qld) Pty Ltd, the first defendant. Another company, LOF Investments Pty Ltd, was the second defendant. The plaintiff’s claim against Galaxy was for moneys due under a subcontract agreement. LOF had paid money into court and the plaintiff claimed a charge over those moneys in the amount claimed against Galaxy pursuant to the SCA. Galaxy opposed leave being granted because, on the case as pleaded, there was no action to enforce the charge and, on the further basis, that no valid notice of charge had been given pursuant to the SCA. 1 Unreported, Supreme Court of Queensland, 17 August 1993. -- 5 of 27 -- 6 [8] The contractual chain between the various parties was that LOF had contracted Galaxy to carry out a development. Galaxy had entered into a subcontract with the applicant for the latter to do certain works on the development. The applicant’s claim against Galaxy was for retention moneys. [9] The applicant purported to give notices to each of Galaxy and LOF under, respectively, s 10(1)(a) and (b) of the SCA. The notices were given on 24 November 1992. The notice to LOF gave notice that the applicant claimed under the SCA “a charge upon the money and retention money that is now or will be payable.” Stated in that way, the notice did not conform to the standard form which, by use of an asterisk and a footnote, directed the person completing the form if appropriate to delete “retention” from the composite expression “*retention money” as it appeared in the form. If the person considered and applied that direction, the claim of charge being notified would be for either “retention money” (if the deletion was not made) and for “money” (if the deletion was made). Of this direction White J observed: “The form thus directs the user to consider if the charge is to attach to “retention money” or “money”, but not both, as has occurred.” Her Honour, citing earlier authority,2 said that there appeared to be no doubt that if the expression “money” was used, it could include retention money. The corollary of that observation is that if the expression “retention money” was used, it would exclude any money which was payable or which would become payable other than retention money. [10] The issue upon which White J determined the application was that the time limited for claiming a charge upon “retention money only” was longer than the time limited for claiming a charge upon money which was or would become payable to the 2 Road Surfaces Group Pty Ltd v Brown [1987] 2 Qd R 792. -- 6 of 27 -- 7 contractor. The former, by s 10(3), required the notice to be given within three months after the expiration of the period of maintenance provided for in the contract. The latter, by operation of s 10(2), required notice to be given within three months after the completion of the work. A notice claiming a charge which would attach to retention money only could have been given as late as 13 May 1993, whereas a claim for money was required to have been given one year earlier; by 13 May 1992. The notices purported to be given on 24 November 1992 would, therefore, have been given within time if they claimed a charge on retention money only, but out of time if they claimed a charge on money. If the notice was not given in accordance with s 10, then pursuant to s 10(4) the charge did not attach. [11] Her Honour concluded that it was plain that the notice issued did not claim a charge upon retention money only because of the use of the compound expression “money and retention money.” Her Honour considered that the fact that the only moneys which remained payable under a contract were retention moneys did not mean that in order to charge those moneys the notice needed to be read restrictively. Rather, her Honour concluded that having referred to both money and retention money, the notice had to be given by the earlier date; which it had not. [12] Her Honour observed: “Subcontractors are put in a favoured position by the provision of the Act, per Lucas J in re Castley (O.S. No.44 of 1980, 18 August 1980) referred to by Thomas J in KGK Constructions Pty Ltd v Tabray Pty Ltd [1985] 2 Qd R 173 at p 176 and the whole tenor of decisions interpreting its sometimes elusive meaning is to require strict compliance with its terms, re Stuman v Spansteel Engineering Pty Ltd [1986] 2 Qd 471 at p 477. I conclude that notice was not given pursuant to s 10 and accordingly the charge does not attach.” [13] Her Honour’s conclusion on that issue was sufficient to dispose of the application before her. However, White J went on to address another basis upon which the application would fail. That concerned whether the proceedings pursuant to the SCA -- 7 of 27 -- 8 to recover the amount of the charge the subject of the notice had been commenced in accordance with s 15 of the SCA. On the pleadings, her Honour concluded that they had not. [14] Having referred to the terms of s 15, her Honour turned to consider the pleadings and, on an analysis of those pleadings, concluded the proceedings had not been commenced in accordance with the statutory regime. Her Honour said: “If contrary to my finding above the notice falls within s 10(3) (retention money only) the proceedings have been commenced in time. It is pleaded that Galaxy and LOF entered into a contract for the performance of works (para 2). Paragraph 5 pleads that retention moneys were provided for under the subcontract (between the applicant and Galaxy) and that they became due and owing by 12 February 1993. However, paragraph 7 goes on to allege that: “The retention moneys now being due and payable by [LOF] to the [applicant], [LOF] has… failed to effect payment…” Since no other retention money is referred to in the pleading that must refer to the retention money mentioned in paragraphs 5 and 6. Nowhere are there facts pleaded to support an allegation that LOF is liable to pay retention money under the subcontract. If paragraph 7 is a reference to different retention money there are no facts pleaded to support that allegation. Paragraph 11 pleads: “In the premises, the plaintiff is entitled to a charge on the moneys payable by [LOF] to [Galaxy] under the Head Contract, at all times from 24 November 1992.” There is nothing pleaded to support that conclusion. If it is a reference to money other than retention money even had the notice been given within time the proceedings to enforce such a charge are out of time (s 15(b)).” No facts are pleaded to show that retention money is owing by LOF to Galaxy pursuant to the contract and that is fatal. It is pivotal to any claim against LOF by the applicant, for example, s 10(1) “…a subcontractor who intends to claim a charge on money payable under a contract to his contractor…” or s 15(2) “…that the charge attached to money payable…” [15] Having concluded that no proceeding had been commenced to enforce the charge the subject of the notice in accordance with s 15, her Honour observed: “This may seem a harsh result but the right and remedy are entirely the creature of the legislation and unless there has been compliance with the Act amendment cannot be allowed for it would have the effect of reviving the cause of action. This is not a case of minor amendments to tidy up the pleadings.” -- 8 of 27 -- 9 [16] The applicability of the conclusions of White J to the present matter will be considered in respect of the various contentions of Fredon based upon them. [17] In its written submissions Fredon contends that the causes of action under the Claim and Statement of Claim have not been brought under s 15 of the SCA. It submits that there is no pleading, as a material fact or particular, or any relief sought, in respect of s 15. Submitting that the pleadings are silent as to s 15, it submits that Civex’s proceedings against it cannot be an action under s 15(1)(c) of the SCA if s 15 has not been referred to. It submits that reference to s 15 within the pleading is mandatory and that a failure to meet what it asserts as the express statutory requirements required to keep the second (and the first) alternative charge alive extinguishes a legal and enforceable right. This, it submitted, was fatal to Civex’s claim. [18] In both written and oral submissions Fredon submitted that the “elements” of s 15(2) needed to be pleaded. [19] Fredon further submitted that these omissions could not be remedied by amending the Statement of Claim to meet the requirement of r 149(e) of the Uniform Civil Procedure Rules that if a claim under an Act is relied on, the pleading must identify the specific provision of the Act. This, it submitted, was because such an amendment could not reinstate an extinguished right. [20] In my opinion Fredon’s contention that Civex’s Statement of Claim is deficient, and fatally so, because it does not refer to s 15 misconstrues the nature and effect of that section. Section 15 does not, of itself, create a right of action or any remedy. [21] The structure of the SCA is that s 5(1)(a) confers an entitlement upon a subcontractor of a contractor to a charge on the money payable to the contractor, or superior contractor, under their respective contracts or subcontracts. -- 9 of 27 -- 10 [22] Section 5(2) prescribes the effect of a subcontractor’s charge: it secures payment of all money that is payable or is to become payable to that subcontractor for work done by the subcontractor under the subcontract. [23] Section 5(3) prescribes the extent of the charge: it limits it to the amount payable to the contractor or subcontractor under the relevant contract or subcontract. [24] Section 10(1)(a) imposes a requirement upon a subcontractor intending to claim a charge on money payable under the contract to the subcontractor’s contractor to give notice to the person, whether the employer or superior contractor, by whom the money is payable. Section 10(1)(a) also prescribes the requirements of the notice. [25] Section 10(1)(b) imposes a further requirement upon the subcontractor intending to claim a charge to give notice of having made the claim to the contractor to whom the money is payable. [26] As discussed in Galaxy, ss 10(2) and (3) impose time limits for the giving of those notices. The duration of each period of limitation is the same, three months, but reckoned from different dates depending upon whether the notice of claim of charge is in respect of payment of money, or of retention money only. [27] Section 10(4) then prescribes a consequence for failure to give notice in accordance with s 10: the charge does not attach. [28] Section 11(1) then prescribes the consequence of a notice of claim of charge having been given in accordance with s 10: the person to whom it is given is obliged to retain a sufficient part of the money that is or is to become payable by the person under the contract to satisfy the claim. It prescribes that the person must retain such money -- 10 of 27 -- 11 until the court in which the claim is heard directs to whom and in what manner it is to be paid. [29] Section 11(2) renders a person who fails in their obligation to retain monies personally liable to pay to the subcontractor the amount of the claim limited to the amount the person was required to retain under s 11(1). [30] Section 11(3) requires the contractor to whom the money is payable and to whom notice has been given, to give the employer or superior contractor by whom the money is payable a notice stating that the contractor either accepts liability to pay the claimed amount, disputes the claim or accepts liability to pay some other amount stated in the notice. Sections 11(4), (4A) and (4B) then provide a mechanism for payment if the contractor accepts liability for the amount claimed or some other amount. [31] Section 11(5) provides a mechanism for an employer or superior contractor to pay into court the amount it is required to retain which, if done, by operation of s 11(6) discharges that person of all further liability and the costs of any proceeding in relation to the amount paid. [32] Section 11(7) permits payment out of court of the money paid in only by a court order. [33] Section 12 provides the machinery for enforcement of the charge. [34] Section 12(1) confers a right of recovery on the subcontractor to recover the amount of the charge from the person by whom the money the subject of the charge is payable if the person to whom notice of the charge has been given does not pay or make satisfactory arrangements for the payment. By s 12(1A) payment into court under s 11(5) is deemed to be making satisfactory arrangements for payment. -- 11 of 27 -- 12 [35] Section 12(2) confers jurisdiction on any court of competent civil jurisdiction to hear, determine and enforce claims and other matters arising under the SCA. Section 12(2A) preserves the Supreme Court’s jurisdiction in all matters under the Act. [36] Section 14 applies the practice of the relevant court in its civil jurisdiction to proceedings under the SCA (unless otherwise provided). [37] Section 15(1)(a) prescribes the time limit for bringing a proceeding in respect to the charge. [38] Section 15(1)(c) requires a proceeding to be brought by way of an action. [39] Section 15(3) prescribes the consequences if a subcontractor does not “duly commence a proceeding under this section to enforce it”: the charge is deemed to be extinguished. [40] Section 15(2) also refers to “a proceeding under this section”. It provides that for the purposes of such a proceeding it is sufficient for the subcontractor to prove that the charge in respect of which the proceeding was brought attached to money payable on any date prior to the date of hearing. That provision relates to proof in the hearing of a proceeding brought to enforce the charge. It does not prescribe elements. It does not require a pleading of facts which would establish that such amounts were owing as at the time of pleading. The reasons for judgment of White J in Galaxy do not establish otherwise. [41] The references to “a proceeding under this section” in s 15(2) and to “duly commences a proceeding under this section” in s 15(3), must relate to a proceeding -- 12 of 27 -- 13 commenced in accordance with s 15(1).3 For a proceeding in respect of a charge to be duly commenced under s 15(1) it must simply be one brought by way of action within the relevant applicable time limit. That has occurred here. There is no requirement for the pleadings to recite that it is being commenced under s 15. [42] The Claim and Statement of Claim make plain that one of the causes of action is pursuant to the SCA. [43] Paragraph G of the claim sought, as against Lend Lease: “A declaration that the funds otherwise payable by the second defendant to the first defendant under the head contract or in respect of the construction works are charged in favour of the plaintiff to an amount of $484,418.41.” [44] Paragraph H sought “$484,418.41 pursuant to s 11 of the Subcontractors Charges Act 1974”. [45] Although paragraph H appears in that part of the claim concerning Lend Lease, an order for payment out of court pursuant to s 11(7) is not, strictly speaking, relief against any party. It is an order for payment out of court of some, or all, of the money paid into court by an employer or superior contractor to whom notice under s 10(1)(a) has been given. Although the proceeding has been discontinued against Lend Lease, it having made the payment into court pursuant to s 10(5) with the benefits which flow to it under s 11(6) and s12(14), a finding that the funds were otherwise payable to Fredon by Lend Lease4 is still required for Civex to succeed in obtaining an order for the payment out of court of those monies paid in. 3 Re Bird [1993] 2 Qd R 130 at 131 -132. 4 The reference in paragraph G of the Claim to funds otherwise payable by Lend Lease to Fredon under the Head Contract or in respect to the construction works is a matter to which I will return later in these reasons. -- 13 of 27 -- 14 [46] Paragraph 6 of the Statement of Claim pleads that Lend Lease contracted5 to complete construction work, described as “the Project” on the site. That contract is given the description of “the Head Contract”. It pleads that the construction works, the Project, which Lend Lease contracted to perform was “work within the meaning of that term as defined in s 3 of the SCA”. [47] Paragraph 7 of the Statement of Claim pleads that the head contract was a contract of a type attracting the operation of the SCA. It references s 5 of the SCA. [48] Paragraph 8 of the Statement of Claim pleads that Fredon contracted, or otherwise agreed, with Lend Lease to complete construction work for Lend Lease on the site. That contract is given the description “the Superior Subcontract”. It pleads that the construction work which Fredon contracted or agreed to perform was “work within the meaning of that term as defined in s 3 of the SCA”. [49] Paragraph 9 of the Statement of Claim, again referencing s 5 of the SCA, pleads that the Superior Subcontract was a contract for type attracting the operation of the SCA. [50] Paragraph 10 of the Statement of Claim pleads that Civex entered into a written contract wherein it undertook to carry out various temporary works associated with an installation of underground high voltage cables for the Project. That contract is given the description of “the Contract” and the works to be carried out under it are given the description “the Works”. It pleads that the Works were work within the meaning of that term as defined in s 3 of the SCA. [51] Paragraph 12 of the Statement of Claim pleads that Civex, Fredon and Lend Lease were, respectively, a “subcontractor”, the “contractor” and the “employer”, as those 5 With whom it contracted is not pleaded. -- 14 of 27 -- 15 terms are used in the SCA. It also pleads that the contract was a contract to which the SCA applied. [52] From paragraph 13 to paragraph 15 of the Statement of Claim Civex pleads: the performance of work by it; that it claimed payment progressively for the work performed: and that on 17 August 2017 Fredon gave notice of termination of the contract effective on 22 August 2017. [53] From paragraph 16 to 21 of the Statement of Claim Civex pleads an entitlement to $484,418.40 (described as “the Claimed Amount”) either as a payment under the contract, or in the alternative as damages for breach of the contact. That claim is based upon Civex’s construction of clause 21 of the contract. It asserts an obligation on Fredon’s part to pay the claimed amount upon termination of the Contract. [54] From paragraph 22 to paragraph 28 of the Statement of Claim Civex pleads an alternative basis for its entitlement to the claimed amount, either as a payment under the Contract or as damages for its breach. [55] From paragraph 29 to paragraph 31 of the Statement of Claim Civex pleads an entitlement to restitution for Fredon’s unjust enrichment. [56] At paragraphs 32 and 33 of the Statement of Claim Civex pleads that it gave notices under s 10 of the SCA to both Fredon and Lend Lease in respect of the amount of $486,850.66 (described as “the First Alternative Charged Amount”). [57] At paragraph 34 of the Statement of Claim Civex pleads: “34 Pursuant to the matters pleaded in paragraphs 5-33 hereof, and section 11 of the SCA: (a) any monies owed by the second defendant to the first defendant in respect to the head contract or the building are charged to the amount of the first alternative charged amount; -- 15 of 27 -- 16 (b) the second defendant is obliged to retain or pay into court the first alternative charged amount; and (c) the plaintiff’s entitled to an order of the court for payment of the First Alternative Charged (sic) from the second defendant or any monies paid into court by the second defendant in respect to the First Alternative Charged Amount pursuant to s 11(5) of the SCA. Particulars (i) Section 11(7) of the SCA.” [58] Similarly, at paragraphs 35 and 36 of the Statement of Claim Civex pleads that it gave notices under s 10 of the SCA to both Fredon and Lend Lease in respect of the amount of $484,418.41 (described as “the Second Alternative Charged Amount”). [59] At paragraph 37 it pleads: “37 Pursuant to the matters pleaded in paragraphs 5-31, and 35 and 36 hereof, and section 11 of the SCA: (a) any monies owed by the second defendant to the first defendant in respect to the Head Contract or the building are charged to the amount of the Second Alternative Charged Amount; (b) the second defendant is obliged to retain or pay into court the Second Alternative Charged Amount; and (c) the plaintiff is entitled to an order of the court for payment of the Claimed Amount from the second defendant or any monies paid into court by the second defendant in respect to the Second Alternative Charged Amount pursuant to s 11(5) of the SCA. Particulars (i) Section 11(7) of the SCA.” [60] The prayer for relief in the Statement of Claim is in the same terms as the relief set out in the Claim. [61] In my view, the pleadings make plain that the proceeding is brought, in part, to enforce a charge under the SCA. As such, if brought by way of action within the time prescribed, it will have been duly commenced under s 15. No recital to that effect is necessary. [62] There is not, as submitted by Fredon, a mandatory requirement to refer to s 15 within the pleading. The absence of any reference to s 15 is not fatal to Civex’s claim. The -- 16 of 27 -- 17 absence of any reference to s 15 in the Statement of Claim does not result in the charge having been extinguished by operation of s 15(4). Contention 2: Both charges have been extinguished by operation of s 15(1) and (2) of the SCA [63] The second contention advanced by Fredon is that the pleadings in each of paragraphs 34 and 37 of the Statement of Claim that any monies owned by Lend Lease to Fredon in respect of the Head Contract or the building are charged to the amount of (respectively, the First and Second Alternative Charged Amounts), is deficient. It is contended that the pleading in each of those paragraphs is wrong in fact and law because, first, Fredon was not a party to the Head Contract and there are, therefore, no monies owed by Lend Lease to Fredon under the contract and, secondly, the SCA may permit leapfrogging by way of a charge over monies payable to Lend Lease from the Commonwealth, but not otherwise. [64] It will be necessary to deal only with the first of the alleged deficiencies. [65] Fredon is correct in identifying that “the Head Contract” is a term defined by Civex in its Statement of Claim. Fredon is also correct in identifying that it was not a party to the Head Contract and that, therefore, there are no monies owed by Lend Lease to it under the contract. [66] However, rather than demonstrating that Civex’s pleading suffers from the same deficiencies as the pleading in Galaxy, and therefore should suffer the same fate, it demonstrates why it does not, and should not. There are two fundamental distinctions between Galaxy and this case. [67] First, in Galaxy there was a pleading that LOF (the employer) owed retention money to the applicant subcontractor which it had failed to pay; but it had elsewhere been -- 17 of 27 -- 18 pleaded that the retention monies were payable by Galaxy to the applicant subcontractor under the subcontract between them. There were no pleaded facts to support an allegation that LOF was liable to pay retention money under the subcontract. Nor were there pleaded facts that there was some other retention money payable by LOF to the subcontractor, the only retention monies identified in the pleading being those payable by Galaxy. [68] In this case, Civex’s Statement of Claim correctly identifies the relevant obligation to pay the claimed amount as one owed by Fredon to Civex and as one arising out of the contract between them. [69] Secondly, in Galaxy the pleading that the plaintiff was entitled to a charge on the monies payable from LOF to Galaxy was, because of the earlier identified deficiency in the pleading, unsupported by the pleaded facts. There was a misalignment between the pleaded obligation to pay to the subcontractor and the pleaded charge. The pleading was discordant. It was for these reasons White J concluded that the particular absence of pleaded facts was fatal. Her Honour’s use of s15(2) as an example to demonstrate why that was so must be read and understood in the context of the particular pleading deficiency in that case. Her Honour was not prescribing pleading rules of general or universal application. [70] In this case there is no such misalignment. The pleading at each of paragraphs 34 and 37 alleging that any monies owed by Lend Lease to Fredon are charged to the amount of, respectively, the First and Second Charged Amounts, accords with the pleading of those respective amounts being owed by Fredon to Civex. [71] The relationships between the parties, how monies are alleged to be owed by Fredon to Civex, and how monies owed by Lend Lease to Fredon would be charged, are all -- 18 of 27 -- 19 clearly pleaded. The only aspect of the pleading which is discordant is that the monies said to be charged are those owed by Lend Lease to Fredon “in respect of the Head Contract or the building”. That pleading is discordant because Lend Lease and Fredon were not parties to the Head Contract. As correctly pleaded, the parties to the Head Contract were Lend Lease and another unidentified party. As also correctly pleaded, Lend Lease and Fredon were parties to the Superior Subcontract. It is only under the Superior Subcontract that any monies could be, or become, owed to Fredon by Lend Lease. [72] In my view, as Civex submits, the reference to the Head Contract in each of paras 34 and 37 is simply a pleading error. It is an error of the kind which may be remedied by minor amendment as identified by White J in Galaxy. The effect of allowing such amendment would not be to reinstate an extinguished right because, reading the pleading as a whole, Civex has commenced a proceeding brought by way of action within time to enforce a right under the SCA. That being so, no extinguishment has occurred under s15(4). [73] That the pleading identified in paras 34 and 37 is simply an error is further evident from the reference to “the building” which is not a term otherwise used or defined in the pleading. This is a matter to which I shall return as it is raised separately by Fredon. [74] Amendment of the Statement of Claim to substitute “Superior Subcontract” for “Head Contract” where those words appear in each of paras 34(a) and 37(a) should be allowed. [75] Neither charge has been extinguished by operation of s 15(1) or (2). -- 19 of 27 -- 20 Contention 3: No material facts pleaded to support the legal conclusion that retentions are payable [76] Fredon’s third contention is that neither the First nor Second Alternative Charges are enforceable because of a failure to plead material facts in support of what it characterises as “a bald assertion that as a matter of law, Civex was entitled to the retentions upon termination under clause 21(c) ([21] of the SOC) or clause 16(c) ([26] of the SOC)”.6 The essential deficiency in the pleading asserted by Fredon is an absence of pleading of a legal entitlement on Civex’s part to retentions by reference to clauses 17 and 29 of the contract. Fredon asserts that Galaxy is authority for its contention. [77] Fredon’s contention is misconceived. Civex’s pleading at paragraph 21, particularly subparagraph (a), that by operation of the Contract Fredon is obliged to pay it the amount claimed, is based upon it’s pleading that on a proper construction of the Contract, particularly clause 21, such an obligation arose upon termination. It asserts that clause 21 conferred an entitlement upon Fredon to terminate the Contract for convenience upon five days written notice, but that if Fredon exercised that entitlement it became obliged to pay Civex for the work executed prior to the date of termination. Civex, at paragraph 17 of the Statement of Claim, pleads what it says Fredon was obliged to pay upon a proper construction of the contract.7 There is not an absence of material facts pleaded to support a bald assertion of law. The material facts are the fact of the termination and the terms of the Contract which Civex contends supports its construction. [78] Fredon has, at paragraph 16 of its Defence, admitted that upon termination it was obliged under the Contract to pay Civex for the work executed prior to the date of 6 First defendant’s submissions, 23 July 2018, para 22. 7 See paras 11(e) and (f), 16 and 17 of the Statement of Claim . -- 20 of 27 -- 21 termination, but has, at paragraph 17, put in issue the nature and extent of that obligation under what it asserts is a proper construction of the Contract. It is of note that it does so without reference to either clause 17 or clause 29 of the contract. [79] The parties having joined issue as to the proper construction of the Contract, that is a matter for trial. [80] At paragraph 26 of the Statement of Claim, Civex pleads that on a proper construction of the Contract Fredon’s entitlement to continue to hold the retentions ceased upon the termination of the Contract. At paragraph 28 of its Defence, Fredon denies that fact on the basis that, on what it asserts is a proper construction of the Contract, its termination did not bring to an end its entitlement to continue to hold retentions. Again, it does so without reference to either clause 17 or clause 29 of the contract. [81] The parties having joined issue on the proper construction of the Contract in this further regard, that too is a matter to be determined on the trial. [82] Fredon’s contention that the Civex’s pleading is deficient in the way alleged is incorrect. It is not supported by the judgment in Galaxy. Contention 4: No material facts pleaded to support the legal conclusion of a claim for the first alternative charge of $486,850.66 [83] The first charge of which Civex gave notice was for the amount of $486,850.66. That is identified in the pleading as the First Alternative Charged Amount. [84] Fredon’s fourth contention is that the claim is silent about a charge in that amount and no cause of action is pleaded in the Statement of Claim for that amount. On that basis, it contends that the first charge is unenforceable and has been extinguished. It again cites Galaxy as authority for this contention. The contention is again incorrect. -- 21 of 27 -- 22 [85] It is not necessary that the action required to be commenced by s 15 SCA be for the same amount as that for which notice of claim of charge is given pursuant to s 10 of the SCA. As Douglas J accepted in Mulherin Rigging & Cranes Australia Pty Ltd v Roberts & Schaefer Australia Pty Ltd8 the monies secured by a charge can change during the life of the charge. If so, s 21(1)(b) provides a mechanism by which the effect of a claim may be modified. [86] Importantly, Douglas J found that where an action is commenced for an amount less than that secured by the charge, s 15(3) does not operate to effect a partial extinguishment of the balance of the charge. Moreover, the entire first charge is not extinguished by virtue of an action having been commenced for a different, lesser amount. Again, Galaxy is not authority for that contention. Contention 5: There is no pleaded action in respect of “building” [87] Fredon’s fifth contention is that, as already observed, the term “building” used in each of paragraphs 34(a) and 37(a) of the Statement of Claim is not defined or otherwise used in the Statement of Claim . [88] As observed earlier in these reasons when addressing Civex’s pleading of “the Head Contract” rather than “the Superior Subcontract” in each of those subparagraphs, the use of the expression “building” further serves to demonstrate, in my view, that pleading error in those subparagraphs. [89] If amendment of those subparagraphs be permitted, as it should9, to correctly name the contract between Fredon and Lend Lease otherwise properly and substantively identified on the balance of the pleading, the words “or the building” are surplusage. 8 [2011] 1 Qd R 139 at 142[12]-[13]. 9 Although in the course of the hearing of the application Mr Hastie QC informed the court that leave to amend was not required as the respondent has a right to amend under the rules. -- 22 of 27 -- 23 At paragraph 8 of the Statement of Claim it is pleaded that the Superior Subcontract was for the completion of construction work as defined by s 3 of the SCA, on the site. Paragraph 10 of the Statement of Claim pleads the work to be performed by Civex under the contract with Fredon to be work within the meaning of that term in s 3 of the SCA on the Project. Paragraph 6 defines the Project to be construction work, within the meaning of that term within s 3, on the site. [90] Those matters, together with the balance of the pleading, including the references to s 10 and s 11 of the SCA, are sufficient to support the pleading in paragraphs 34(a) and 37(a) that any monies owed by Lend Lease to Fredon in respect of the contract between them are charged. Contention 6: Restitution cannot be a cause of action that supports a charge under the Act [91] Fredon’s sixth contention is that paragraphs 29 to 31 plead a claim for restitution if the Contract is unenforceable. It contends, correctly, that if the Contract is unenforceable the SCA cannot apply. Therefore, it asserts that each of paragraphs 34 and 37 of the Statement of Claim are deficient because paragraphs 29 to 31 cannot support an action to enforce a claim under s 15 SCA, yet each of those paragraphs of the Statement of Claim refer inclusively to the matters pleaded in paras 5 to 33 of the Statement of Claim . [92] Civex concedes that a claim for restitution is not capable of forming a charge under the SCA and, to that extent, paragraphs 34 and 37 of the Statement of Claim should be amended to remove reference to paragraphs 29 to 31. That concession is well made. [93] The inclusion of paragraphs 29 to 31 in paragraphs 34 and 37 of the Statement of Claim does not, however, affect the pleading in those latter paragraphs in respect of -- 23 of 27 -- 24 the charge insofar as it is supported by the matters pleaded in the other identified paragraphs. A proceeding to enforce the charge has nonetheless been commenced under s 15 of the SCA. There has been no extinguishment of the charge. The reference to paragraphs 29 to 31 would not result in paragraphs 32 to 37 of the Statement of Claim being struck out under r 171 of the Uniform Civil Procedure Rules; which is the relief sought in para 5 of the application. Contention 7: Second alternative charge is a duplicate claim for the value of the works [94] The seventh and final contention of Fredon is that the second alternative charge is not valid. It asserts that its invalidity arises from s 10(7) and s 10(8) of the SCA expressly prohibiting Civex from duplicating a claim for a charge for work already claimed in the first alternative charge. It cites as authority for this contention the judgments of Dunn J in Hewitt Nominees Pty Ltd v The Commissioner for Railways10 and of Mullins J in Re: University of Queensland; Baulderstone Hornibrook Pty Ltd v Broen Australia Pty Ltd.11 [95] Fredon’s reliance upon those authorities is misplaced. They ignore that Dunn J’s judgment was overturned on appeal.12 Far from upholding Dunn J’s construction of the Act, in Re: University of Queensland; Baulderstone Hornibrook Pty Ltd, in response to a submission “that Hewitt Nominees remained good authority for restricting a subcontractor to giving one notice of claim of charge, even though Hewitt Nominees (No.2) allowed the appeal from the decision in Hewitt Nominees (No.1)”, Mullins J said: “The construction of the Act which was the basis of the decision in Hewitt Nominees (No.1) was rejected in Hewitt Nominees (No.2). In view of the context in which the statement of Dunn J in Hewitt 10 [1978] Qd R 256. 11 [2003] QSC 158 at [17]. 12 Hewitt Nominees Pty Ltd v The Commissioner for Railways [1979] Qd R 256. -- 24 of 27 -- 25 Nominees (No.1) was made about entitlement to issue only one charge, the statement cannot be transposed to the circumstances where a leapfrogging charge is also recognised as permissible under the Act.13 [96] Her Honour had earlier in her reasons14 referred to the fact that in Hamilton Australia Pty Ltd v Milson Projects Pty Ltd15 the Court of Appeal had refused to overrule Hewitt Nominees (No.2). [97] Hewitt Nominees and Re: Queensland University were both cases in which the issue was whether a subcontractor who had issued a notice of claim of charge to the contractor with whom it had contracted could also issue a second notice of claim of charge to a superior contractor or employer further up the contractual chain. Each stands as authority that this is permissible and does not offend against s 10(7) and s 10 (8). This is not such a case, however, so each of those cases is not of immediate application. [98] Some assistance may be drawn by Fredon from Mullins J’s reasons at paragraph [29] where her Honour said: “There is nothing in the Act to preclude a subcontractor lodges two notices of claim of charge based on the one claim where each of the notices is given to a different contractor or employer. (emphasis added). [99] However, the point here under consideration was not directly decided in that case. [100] For its part, Civex submits that the second alternative charge was issued in circumstances in which there were errors made in the calculations reflected in the first alternative charge. It submits that the effect of those errors is that the first alternative charge may not (without conceding that it does not) satisfy the requirements for a valid notice under s 10(1)(a) of the SCA. It submits that it may be that the first 13 [2003] QSC 158 at [27]-[28]. 14 At [19]. 15 [1997] 2 Qd R 355. -- 25 of 27 -- 26 alternative charge may not sufficiently particularise its claim such that it is not a valid notice under the SCA at all in the sense identified by Muir JA in Walter Construction Group Ltd v J & L Schmider Investments Pty Ltd T/as Schmider Engineering Group16 and by Keane JA and Holmes JA (as their Honours then were) in Ed Ahern Plumbing (Gold Coast) Pty Ltd v J M Kelly (Project Builders) Pty Ltd.17 [101] The essence of Civex’s submission is that if the first alternative charge was not a valid charge, then the second alternative charge will not be a further or subsequent claim in respect of the same work such as might be prohibited by s 10(8). In those circumstances, it will be entitled to rely upon the second alternative charge, it having been issued two days following and all relevant time limits having been complied with. [102] There appears, to me, to be quite some merit in Civex’s submissions. The issue of the validity of the first alternative charge has not been fully argued on this application. An examination of the two charge documents, however, does demonstrate that considerably more particulars are provided in the second than were in the first. In its pleading Fredon does not admit the validity of the first alternative charge. The validity of the first alternative charge, and any consequences flowing from that for the second alternative charge, should be determined at the trial. [103] Fredon in its submissions does not identify the particular relief it seeks in respect of this particular contention. By inference it would seem that it seeks the striking out of those paragraphs of the pleading (paragraphs 32 to 37) under r 171 of the UCPR. The particular basis for striking out the pleading under r 171 is not identified. Again, inferentially, it would seem to be asserted on the basis that those paragraphs disclose 16 Unreported, 5 April 2001 (BC 200102628). 17 [2008] 2 Qd R 123. -- 26 of 27 -- 27 no reasonable cause of action. I would not be prepared to strike out those paragraphs on that basis at this stage of the proceeding and without the issue of validity being fully addressed. Disposition [104] The application is dismissed. Costs are reserved to the trial judge. -- 27 of 27 --