Christie v Seventh Day Adventist Schools (South Queensland) Ltd [2012] QDC 32

DISTRICT COURT OF QUEENSLAND CITATION: Christie v Seventh Day Adventist Schools (South Queensland) Ltd [2012] QDC 32 PARTIES: ALAN JOHN CHRISTIE (Applicant) AND SEVENTH DAY ADVENTIST SCHOOLS (SOUTH QUEENSLAND) LIMITED (Respondent) FILE NO/S: OA390/12 DIVISION: PROCEEDING: Originating Application ORIGINATING COURT: District Court, Brisbane DELIVERED ON: 24 February 2012 DELIVERED AT: Brisbane HEARING DATE: 24 February 2012 JUDGE: McGill DCJ ORDER: Judgment that the respondent pay the applicant $20,271.74, including $397.49 interest. Application otherwise dismissed. Order that the respondent pay the applicant’s costs of and incidental to the application fixed at $2,232. CATCHWORDS: BUILDING AND ENGINEERING CONTRACTS – Recovery of monies – statutory entitlement to payment – unlicensed contractor – progress claim valid only so far as it did not involve building work Queensland Building Services Authority Act 1991 s 42(3), (4) Building and Construction Industry Payments Act 2004 ss 12, 13, 17 Cant Contracting Pty Ltd v Casella [2007] 2 Qd R 13 - followed COUNSEL: M.A. Taylor (Solicitor) for the applicant M. Hindman for the respondent SOLICITORS: -- 1 of 5 -- 2 [1] This is an application for judgment under the Building and Construction Industry Payments Act 2004. [2] The respondent in 2011 entered into a contract with the applicant for the applicant to do work which included the removal of asbestos and, no doubt, the safe disposal of it at certain premises owned by the respondent. [3] The contract also provided for the applicant to replace the asbestos material with functionally equivalent material and to do some further things by way of making good such as painting the new material, so that no doubt at the end of the day all the necessary work to fix the premises up would have been done. [4] The contract provided for progress payments and ordinarily there would have been no difficulty about the application of the Payments Act. [5] One progress claim was put in and was, I gather, paid. Subsequently some issue arose between the parties, the contract was terminated by the respondent and under the contract that gave rise to an entitlement to a progress payment in respect of the balance of the work. Such a progress claim was made and no payment schedule was provided in response and accordingly the applicant says that he is entitled to judgment under the Building and Construction Industry Payments Act in respect of the amount of that progress claim. That will be the case unless the progress claim was invalid. [6] The respondent’s answer to the applicant’s submission is that the applicant was not licensed to perform building work at the relevant time, and pursuant to s 42 of the Queensland Building Services Authority Act 1991 the applicant is not entitled to any monetary or other consideration for carrying out building work. [7] In response to that the applicant says that the work done under the Workplace Health and Safety Regulation 2008 part 13 division 13 to comply with the Asbestos Management Code was expressly excluded from building work by paragraph (za) of s 5 of the Queensland Building Services Authority Regulations 2003, and that seems to be accepted by the respondent. [8] However, the Asbestos Management Code talks about what has to be done or ought to be done or can be done by way of getting rid of asbestos. It does not deal with the process of making the premises satisfactory or workable once the asbestos has been removed. It does not, in particular, deal with the process of what has to be done by way of replacing, in a functional sense, the asbestos material which has been removed. [9] It was therefore conceded, and I think quite correctly conceded, on behalf of the applicant that the work that was done in terms of putting in new sheeting and panelling to replace the asbestos sheeting, and painting and so on, fixing the premises up, was not within the exclusions from building work. [10] It follows that in so far as that work was work that the applicant had undertaken to carry out that undertaking was in breach of s 42(1), because that, not being excluded from the definition of building work, was still building work. [11] The further point was made that there was no class of licence covering asbestos removal and that may well be right, but that again would only refer to the work -- 2 of 5 -- 3 which would be excluded from building work anyway on the basis that I have just indicated. [12] Accordingly, in so far as the applicant has carried out building work then he is not entitled to any monetary or other consideration for doing so. That is subject to s 42(4), which contains a mechanism that might be described as statutory restitution under which some categories of remuneration can be obtained. Essentially it seems that the legislative intention behind subsection (4) is to ensure that the inability of an unlicensed contractor to recover remuneration does not have a flow-on effect in preventing licensed sub-contractors from obtaining remuneration from the unlicensed contractor for work that they did in fact do. [13] However, subject to the effect which it might have on an amount payable under subsection (4) the fact that the work is actually undertaken by a licensed subcontractor does not, it seems to me, affect the operation of s 42(1) and (3). The issue is whether the applicant is entitled to recover remuneration and the answer given by the section is no, except as provided in subsection (4). [14] It was, however, submitted on behalf of the applicant that this did not have the effect of invalidating the claim. Even if the applicant was not entitled to the contractual amount or an amount calculated under the contract in respect of the building work which had been undertaken because he was not licensed to do it, he was still entitled to recover a payment under subsection (4) in respect of that work, so that the issue was one of quantum and did not go to the validity of the payment claim. [15] In those circumstances the applicant’s submission was that it ought to have been an issue raised by the respondent by way of a payment schedule and because of the failure to do so then the applicant is entitled to recover the amount of the payment claim. [16] It seems to me, however, that that submission is inconsistent with the decision of the Court of Appeal in Cant Contracting Pty Ltd v Casella [2007] 2 Qd R 13. That was a case where a claim under the Building and Construction Industry Payments Act was made by someone who was not licensed and the issue was whether that meant that the claim was invalid. [17] The matter came before the Court of Appeal on appeal from a summary judgment application and in those circumstances the issue was really whether it was appropriate to be giving summary judgment, and to some extent it seems to me that the terms of the judgment of some of their Honours are limited by reference simply to the question of whether the defendant, the appellant, was entitled to resist summary judgment. [18] However, it does seem to me fairly clear from what was said by the court that, in circumstances where a contractor is unlicensed or a person is claiming remuneration for building work while unlicensed, the fact that an entitlement might exist under subsection (4) will not be a basis capable of supporting a valid payment claim. [19] It seems to me that McMurdo J decided this expressly. He analysed the operation of the Act and the operation of s 42 and referred to some authorities and concluded at -- 3 of 5 -- 4 [61] that the Payments Act operates only when there is a construction contract of which the terms as to payment are enforceable by the builder. [20] Jerrard J also referred to the terms of s 42 and rejected an argument that an unlicensed contractor was entitled to a progress payment in terms of s 12 of the 2004 Act for the work that had been carried out, because the effect of s 42(3) was that there was no entitlement to payment of the kind which gave rise to an entitlement under ss 12 or 13 of the 2004 Act. [21] Sections 12 and 13 both speak in terms of an entitlement to a progress payment under the contract, that is, under the construction contract referred to in each of those sections. A payment under s 42(4) is not a payment under the contract, it is a statutory entitlement to certain remuneration. [22] The only relevance of the contract is that the contract provides a cap beyond which the remuneration calculated in accordance with subsection (4) cannot go. It seems to me necessarily to follow from what was said by Jerrard J that he was of the view that a claim based on s 42(4) could not be validly advanced under the Payments Act. For what it is worth, I would respectfully agree with their Honours’ views on that matter, but I suspect it does not matter, as their Honours’ views as the majority of the Court of Appeal are binding on me. [23] The effect of what was said by a majority of the Court of Appeal in Cant in my opinion is that this is a matter which goes to the validity of the payment claim. Even apart from that, s 17, which deals with a payment claim, depends upon an entitlement to a progress payment and the progress payment is also defined in terms which refer back to s 12 as an entitlement to payment under the contract. [24] Accordingly, the claim in circumstances where there is no entitlement for payment under the contract cannot be a valid claim for the purposes of s 17. I think this is a matter which goes to the validity of the claim rather than giving rise to a defence which could be raised by way of a payment schedule, and accordingly, in so far as the applicant’s claim is in respect of work which was building work, he is not entitled to relief under the Building and Construction Industry Payments Act. However, s 42 does not invalidate the contract, it merely prevents the unlicensed contractor from obtaining any form of remuneration under it. [25] In so far as the applicant has done work which was not building work pursuant to the contract he is still entitled to remuneration for it under the contract. Unfortunately for him, the contract did not differentiate, in terms of entitlement to remuneration, between the work which is building work for which he was required but did not have a licence and work which was not building work and, therefore, work he was entitled to be paid for. [26] In those circumstances it seems to me that, in so far as a claim for payment could relate, even in part, to a claim for remuneration for building work, then it cannot be a valid progress claim for the purposes of the Payments Act. This, I think, follows from the terms of s 42 and what was said about the matter in Cant, as I discussed. [27] There was only one part of the claim that was made, at least one part of one of the three invoices which comprised the payment claim, which the respondent concedes -- 4 of 5 -- 5 was specifically in respect of asbestos removal, an amount of $18,067.50 plus GST in respect of additional work. [28] The argument advanced by the respondent in relation to this part of the claim was simply that the effect of the inclusion in the payment claim of the matters which could not validly be the subject of a payment claim meant that the claim was invalid as a whole, but I do not think that Cant v Casella goes as far as that and it seems to me that, consistently with the reasoning in that decision and the terms of the legislation to which I have referred, in so far as a particular payment claim can be clearly identified as being specific to non-building work in respect of which the contract remained enforceable, then the obligations under the Building and Construction Industry Payments Act 2004 were activated and in those circumstances in the events that happened the applicant is entitled to judgment for that amount. [29] Otherwise, however, it seems to me that in terms of the legislation and on the authority of the Court of Appeal the applicant is not entitled to the balance of the judgment claimed. [30] Judgment that the respondent pay the applicant $20,271.74, including $397.49 interest. The application is otherwise dismissed. [31] I order that the respondent pay the applicant’s costs of and incidental to the application fixed at $2,232. -- 5 of 5 --