AE Smith & Son NQ Pty Ltd v Coastline Constructions Pty Ltd [2006] QDC 510

DISTRICT COURT OF QUEENSLAND CITATION: A E Smith & Son NQ Pty Ltd v Coastline Constructions Pty Ltd [2006] QDC 510 PARTIES: A E SMITH & SON NQ PTY LTD Applicant AND COASTLINE CONSTRUCTIONS PTY LTD Respondent FILE NO/S: BD2504/06 DIVISION: PROCEEDING: Originating application ORIGINATING COURT: District court, Brisbane DELIVERED ON: 8 September 2006 DELIVERED AT: Brisbane HEARING DATE: 8 September 2006 JUDGE: McGill DCJ ORDER: Directions given for pleadings as agreed; costs reserved. CATCHWORDS: BUILDING AND ENGINEERING CONTRACTS – Recovery of Monies – statutory debt – procedure for recovery – whether payment claims made PRACTICE – Originating Application – whether appropriate to recover amount payable as a debt by statute Building and Construction Payments Act 2004 s 19 UCPR r 11(a) Vanbeelen v Blackbird Energy Pty Ltd [2006] QDC 285 – cited. COUNSEL: A. M. Hoare for applicant R. N. Traves SC and N. Andreatides for respondent SOLICITORS: [1] In this matter the applicant has filed an originating application seeking a judgment in respect of an amount said to have been claimed by payment claim under the Building and Construction Payments Act 2004. Under that Act a person such as the -- 1 of 4 -- 2 applicant can serve what is identified as a payment claim on a person for whom the applicant is doing building work under a construction contract. [2] Under s 17(2) a payment claim must identify the construction work or related goods and services to which the progress payment relates, and must state the amount of the progress payment that the claimant claims to be payable (the claimed amount) and must state that it is made under this Act. [3] Two documents purporting to be payment claims were served by the applicant on the respondent. Under s 18 of the Act a respondent served with a payment claim responds by serving a payment schedule on the claimant. If the respondent does not serve a payment schedule on the claimant within the particular time fixed under the contract or by the statute, the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the progress claim relates. [4] There is then a provision in s 19 that the claimant may recover the unpaid portion of the claimed amount from the respondent as a debt owing to the claimant in any Court of competent jurisdiction. If a claimant starts proceedings to recover that amount judgment is not to be given unless the Court is satisfied of certain matters specified in subsection 19(1). But the respondent is not entitled to bring any counterclaim against the claimant or to raise any defence in relation to matters arising under the construction contract. Section 100 reserves the parties’ rights to litigate these matters later at their leisure. [5] I have had reference to the objects and purpose of the statute in ss 7 and 8. It seems to be obvious that the intention of the legislature was that there should be a simple and expeditious way in which a person claiming money payable under a construction contract would be able to recover that money, or at least recover a judgment for it, in circumstances where it has not been paid and the party to whom a claim had been made had not taken the appropriate steps to activate the adjudication process under the Act. [6] In the present case the applicant claims to have served two of these claims and that there was no response by way of a payment schedule. If that is right then subject to proof of the statutory requirements the applicant is entitled to judgment for the amount claimed and the respondent cannot raise any defence in relation to matters arising out of the contract or bring any counterclaim. [7] In these circumstances, although an unpaid party’s claim is to recover an amount payable as a debt, it is an unusual form of debt because it is a statutory debt, and the statute is evidently designed to prevent any sort of detailed argument about the surrounding facts. In view of that and in view of the likelihood that the legislature intended that this be an expeditious process, it seems to me as a matter of principle that an originating application would be likely to be an appropriate vehicle for an application to recover the debt payable under the statute. [8] It is the sort of matter where, as a matter of principle, one would expect that a substantial issue of fact will be unlikely to arise. Ordinarily all the applicant would have to do is show that the claim had been properly made and that there has not been a payment schedule served in response, and that the other requirements of the -- 2 of 4 -- 3 statute have been satisfied, something that one would ordinarily expect to be unlikely to give rise to any substantial issue of fact. [9] In the present case, however, an argument has arisen as to whether the documents served do amount to payment claims for the purposes of the Act. The applicant claims that, with the particular documents which are expressly stated to be payment claims made under the Act, there were other attached documents which should be read with those documents in order to enable the construction work, or related goods and services, to which the progress payment relates to be properly identified in compliance with the requirements of s 17(2). [10] Just what those requirements are, has been the subject of considerable authority in New South Wales, which were reviewed by Judge Brabazon QC in the matter of Vanbeelen v Blackbird Energy Pty Ltd [2006] QDC 285. His Honour there ultimately gave judgment for an applicant in a proceeding started by originating application. His Honour noted that it was necessary for the Court to deal with such a claim as soon as practicable. [11] It is now accepted, on behalf of the applicant, that if factual matters which have been deposed to on behalf of the respondent were made out, then it may well be that there was not a valid payment claim, one or other, or perhaps both, of the payment claims were not valid, and on that basis the applicant’s claim would fail. [12] The parties have therefore agreed that directions be given for an exchange of pleadings. I strongly suspect that if there is any deficiency in the payment claim, it would be quicker and cheaper to issue a new payment claim which overcame that deficiency rather than go through the rigmarole of having pleadings and a trial on evidence. But, that is a matter for the parties. [13] In any event, what is proposed today is not contentious. The matter was originally made returnable on Wednesday. The documentation was served by post somewhat earlier than that. But there is evidence that the documents were not actually received at the registered office of the respondent company until Monday this week. It was submitted that this material is inadmissible as hearsay. [14] However, the affidavit was read, not in relation to the granting of final relief, but in support of an application for an adjournment, and I think that hearsay is admissible under the rules in support of an application for an adjournment, because that is not an application for final relief. I therefore overrule the objections to the admissibility of paragraph 3 of the affidavit of Mr Hick. [15] The affidavit indicates that the material was received on Monday. Their response was to send the documents by post, although it was sent by express post, from New South Wales where they were received to someone in Townsville. It occurs to me that there might have been more expeditious ways of dealing with the matter. Again, it ought to have been obvious that there was some urgency about the matter. [16] When the matter came on on Wednesday, counsel had been briefed, but he really had no instructions in relation to the matter, or nothing very much. There was an affidavit filed which, really, just said that nobody had been able to be contacted, and they had only found out about the matter that morning. -- 3 of 4 -- 4 [17] I think that it does suggest that the documentation took a long time to be delivered to the registered office of the respondent, and it may be that this is part of the problem. It may be that there was an assumption that the material would be provided more quickly. [18] The matter is slightly complicated by the fact that, according to the applicant’s material, the material was served by ordinary post, by posting it on 28 August 2006 to the registered office, and that on the same day a copy was sent to the place of business of the respondent in Townsville. Nothing has been said about the fate of that copy, but one would have expected that it would have been received in Townsville on or before 4 September. It does seem to take forever for Australia Post to get mail to and from Townsville, but it would be surprising if that letter did not arrive before the on-forwarded mail, which had not arrived until the morning of 6 August. Nothing has been said on behalf of the respondent in relation to that advice. [19] I am inclined to think that, in view of the nature of the application and the provisions of the statute, it was reasonable enough for the applicant to bring the proceedings by way of an originating application, and to serve by post at the time when it did. To some extent, there have been problems with Australia Post, but to some extent I am a little wary about the proposition that the respondent did not really have enough time to get organised by last Wednesday. [20] I am not prepared, at this stage, to make any order in relation to the costs of last Wednesday. It may be that at the end of the day a trial judge will be in a position to take a different view about the attitude of both parties, and it may be that, if a trial judge takes the view that the applicant’s claim was wholly misconceived, it would be appropriate for the applicant to pay all the costs, including the costs of last Wednesday. [21] I think, in those circumstances, the appropriate course is simply for, at this stage, the costs, including the costs reserved from Wednesday, to be reserved. [22] So, I will just make an order in terms of the draft with the further date for 5 November inserted in paragraph 5. -- 4 of 4 --