- Notable Unreported Decision
SUPREME COURT OF QUEENSLAND
15 August 2014
1 August 2014
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – PAYMENT CLAIMS – whether the Payment Claim was validly made – whether the Payment Claim was made under a relevant construction contract – whether the Adjudication Application sought adjudication of a claim under a relevant construction contract – whether the Payment Claim related to more than one construction contract
Building and Construction Industry Payments Act 2004 (Qld), s 30, s 31
Grid Projects NSW Pty Ltd v Proyalbi Organic Set Plaster Pty Ltd  NSWSC 1571
Matrix Projects (Qld) Pty Ltd v Luscombe  QSC 4
G D Beacham for the applicant
A R Lonergan for the first respondent
Creevey Russell Lawyers for the applicant
Usher Levi Lawyers for the first respondent
 The applicant, Kaycee Trucking Pty Ltd (Kaycee Trucking), seeks a declaration that a decision made by the adjudicator pursuant to the Building and Construction Industry Payments Act 2004 (BCIPA) in favour of the first respondent, M and C Rogers Transport Pty Ltd (Rogers Transport), is void.
 The adjudicator’s decision concerns a Payment Claim given on 24 March 2014 to Kaycee Trucking by Rogers Transport pursuant to the BCIPA which sought payment from Kaycee Trucking in the amount of $100,113.27 (including GST) plus interest. Kaycee Trucking responded on 3 April 2014 providing Rogers Transport with a payment schedule pursuant to the BCIPA which stated that the scheduled amount was $0.00. On 15 April 2014 Rogers Transport applied for adjudication of the Payment Claim, with Kaycee Trucking duly providing a response to the Adjudication Application. On 12 May 2014, the adjudicator made a decision in relation to the Adjudication Application determining that the amount of $99,813.27 (including GST) was payable by Kaycee Trucking to Rogers Transport. The adjudication amount was not paid to Rogers Transport, who obtained an adjudication certificate under s 30 of the BCIPA, which was filed as a judgment for a debt pursuant to s 31 of the BCIPA.
 The present application was commenced on 6 June 2014. Orders were obtained on 18 June 2014 essentially restraining Rogers Transport from taking further steps to enforce payment of the adjudication amount.
 In its written submissions, Kaycee Trucking stated that the application was made on the following grounds:
“(a)the payment claim is not a valid payment claim under the BCIPA as:
(i)the payment claim relates to works performed by an entity different from the First Respondent;
(ii)the payment claim relates to more than one construction contract.
(b)the adjudicator did not adjudicate the payment claim made by the First Respondent as required by the BCIPA; and
(c)the adjudicator denied the Applicant natural justice in that the adjudicator made a decision on a basis that neither party contended.”
 At the hearing of the matter, the natural justice ground was not pursued and the other grounds raised in the written submissions were distilled to the following three arguments:
(a) A requirement of a valid payment claim is that it is made by a party to a relevant construction contract as that term is defined in BCIPA. The Payment Claim was not a valid payment claim because it was not made by a party to a relevant construction contract. The basis for the invalidity was that the Payment Claim identified the construction contract, in respect of which the Payment Claim was made, as a contract entered into in July 2012. But as a matter of law, there could have been no contract with Rogers Transport in July 2012, since it was not incorporated until 16 January 2013 and the July 2012 construction contract was one with M & C Rogers Transport (a partnership). The Payment Claim being invalid, the adjudicator lacked jurisdiction: Grid Projects NSW Pty Ltd v Proyalbi Organic Set Plaster Pty Ltd  NSWSC 1571.
(b) The Adjudication Application sought adjudication of claims in respect of a different construction contract from the construction contract in respect of which the Payment Claim was made, and thus did not seek to adjudicate the Payment Claim. (That is, it sought adjudication of a contract made in 2013 and not in 2012.)
(c) Alternatively, the Payment Claim should be characterised as seeking payment under or relating to two contracts (one made in 2012 and one made in 2013) and for that reason was invalid. On that basis, there was more than one construction contract to which the Payment Claim related and the Payment Claim was not a valid Payment Claim for the purposes of the BCIPA: see Matrix Projects (Qld) Pty Ltd v Luscombe  QSC 4, Douglas J, at -.
 In its written submissions, Kaycee Trucking set out its position in respect of the contractual relationship between the parties as follows. Relying inter alia on the affidavit of Mr Casey, it stated that in July or August 2012, it entered into a subcontract with M & C Rogers Transport (a partnership) to provide rig moving and rig support around the Surat Basin, under a head contract between Kaycee Trucking and ITAC Services (Aust) Pty Ltd (referred to as the first contract). Thereafter, on 16 January 2013, Rogers Transport was incorporated and, it was contended, on 7 April 2013, the first contract ended. It was further contended that in March or April 2013, Kaycee Trucking contacted Michael Rogers and discussed “an opportunity that may come up with T&W Earthmoving Pty Ltd”. Kaycee Trucking commenced gravel cartage works under a subcontract from T&W Earthmoving Pty Ltd in April 2013 and Rogers Transport provided services to T&W Earthmoving Pty Ltd or to Kaycee Trucking (referred to as the second contract). The works that were to be performed under the second contract were known by Kaycee Trucking and Rogers Transport to be pursuant to a contract with T&W Earthmoving Pty Ltd and were for the supply of goods and services including the cartage of gravel in connection with road construction works. When the second contract was entered into, the discussions between the director of Kaycee Trucking and Michael Rogers (the director of Rogers Transport) took place without Michael Rogers ever making reference to Rogers Transport. On around 12 August 2013, Mr Harvey, the director of Kaycee Trucking, received a telephone call from the director of K & W Transport Pty Ltd to move a campsite from Cockatoo to Wandoan. Kaycee Trucking invoiced K & W Transport Pty Ltd on 14 August 2013 for the work done over 13 and 14 August 2013. The second contract was terminated on 17 September 2013.
 The written submissions reflected the arguments put forward to the adjudicator by Kaycee Trucking that there were either two or three construction contracts, depending on which construction contract period was preferred, because, inter alia, the cartage contract and camp haulage contract were with different companies at different times. Such arguments which went to whether there was a “construction contract” between the parties (for the purposes of the BCIPA) were rejected by the adjudicator.
 The adjudicator found there was a relevant construction contract formed on or around April 2013 whereby Rogers Transport and Kaycee Trucking entered into an arrangement for the supply of goods and services in connection with construction works, including road construction and hauling plant and equipment from Cockatoo to Wandoan. The arrangement between the parties was partly written and partly oral. The effect of the arrangement between the parties was that Rogers Transport would carry out works for Kaycee Trucking which included construction works and the supply of goods and services relating to construction works, including cartage of gravel in connection with road construction. Rates were agreed between the parties for the hire of trailers, road trains, drivers, stand by hours and other service rates.
 In the written submissions made by Rogers Transport, it was accepted that there were two contracts entered into for work undertaken by entities associated with Mr and Mrs Rogers. The first contract was said to have been entered into in or around July 2012 and was entered into between the partnership and Kaycee Trucking (the first contract). Rogers Transport’s position was that the first contract came to an end on or about 7 April 2013. Rogers Transport did not make any claim for payment for work undertaken in relation to the first contract.
 The second contract was entered into between Rogers Transport and Kaycee Trucking in or around March 2013 or April 2013 (the second contract). It was submitted that any uncertainty about the date of commencement of the second contract was immaterial since the work claimed for in the Payment Claim was undertaken between June 2013 and August 2013, well after March 2013 or April 2013. There were no further contracts entered into between Rogers Transport and Kaycee Trucking. As such, the work claimed for in the Payment Claim was completed under one construction contract, and consistent with the findings of the adjudicator, the parties did not enter into multiple construction contracts for the performance of the relevant works. The scope of the works contemplated by the second contract was wide and anticipated that Rogers Transport would be engaged in “full time” work for Kaycee Trucking and that the work would continue for a period of five years. All of the work performed by Rogers Transport under the second contract was performed before the second contract was terminated. On the evidence before the adjudicator it was open for him to make the finding that he did, namely that there was a relevant construction contract between Rogers Transport and Kaycee Trucking and that the relevant construction contract was entered into in or around April 2013.
 Although Kaycee Trucking appeared to take issue in its written submissions with the findings made by the adjudicator, namely that there was one construction contract which was a contract between Rogers Transport and Kaycee Trucking (and the written submissions in response by Rogers Transport were in turn framed on that basis), in oral submissions counsel for Kaycee Trucking stated that no issue was taken as to the correctness of the adjudicator’s decision. The challenge was focused rather on the validity of the Payment Claim and concerned how the relevant construction contract should be characterised.
Validity of the Payment Claim/Adjudication Application
 The first argument focuses on how the Payment Claim characterises the relevant construction contract.
The Payment Claim
 The Payment Claim provided under the heading “claim details”:
“ProjectThe supply of goods and services in connection with construction works including road construction for Berwyndale roads and leases, McNulty roads and leases and J/W roads and leases and hauling plant and equipment to Cockatoo and Wandoan.
SubcontractThe Respondent and Claimant entered into a subcontract arrangement on or about 15 July 2012 and the Respondent from on or about 27 February 2013 to 14 September 2013 further agreed to and made representations that it would pay the Claimant certain rates (including standby rates) in connection with various works (Subcontract)
Total amount$100,113.27 (incl GST) [plus applicable interest,
of this claimwhich is $2,303.96 as at the date of this Payment Claim]”
 Under the heading “amount of payment claim” it stated:
“1.1The amount of this payment claim is the amount that relates to that portion of the Works completed up until and including 17 September 2013.
1.2The Respondent has paid for a portion of the Works (as detailed in the latest Statement of Account and Tax Invoices included as Attachment 1) therefore the amount of this Payment Claim is the balance of the agreed costs of the Works undertaken in accordance with the Subcontract including the directions and instructions of the Respondent i.e. $100,113.27 (incl GST) plus interest.”
 The Payment Claim then provided “a detailed breakdown of the amounts under this payment claim”. This detail referred in item 1 to “costs of the subcontract works” as totalling $699,238.20. In item 2 there was under the “paid to date” heading a further sub-heading “subcontract works” and various invoices from the period 5 April 2013 to 22 November 2013 were listed, followed by the words “total paid to date” and the amount of $599,124.93. (That amount did not correspond to the total of the invoices listed however).
 In item 3 under the heading “works completed” was the sub-heading “subcontract works” and the following description:
“Summary of works carried out including goods and services supplied:
Gravel cartage, gravel cartage standby, cartage of side loader, water cart hire, driver hire, road-train hire, cartage of water cart, hauling of other plant and equipment
(For further particulars of the works completed please see Attachment 1 tax invoices numbers 96, 98, 99, 100, 101, 102, 103, 104 and 148)
Total value of this Payment Claim (including GST) $100,113.27.”
 Paragraph 2 of the Payment Claim headed “Subcontract” provided as follows:
“2.1On or about 15 July 2012 the Claimant and the Respondent entered into a subcontract whereby the Claimant would subcontract to the Respondent for various construction works including works related to road construction and the Claimant and the Respondent, from on or about 27 February 2013 to 14 September 2013 further agreed to certain hourly rates (including standby rates) in connection with the supply of goods and services including construction works for road construction (the Subcontract).
2.2The Subcontract required the Claimant to undertake a scope of work that included the supply of gravel cartage, gravel cartage standby, cartage of side loader, water cart hire, driver hire, road-train hire and cartage of water cart in connection with the subcontract works (the Works).
2.3A copy of the various correspondence that forms part of the Subcontract is contained in Attachment 2.
2.4A copy of other various correspondence and documentation that the Claimant submits as supporting material for this Payment Claim is contained in Attachment 3.”
 Attachment 1 included a statement dated 20 March 2014 to Kaycee Trucking setting out nine invoices totalling $100,113.27. The nine individual invoices were also included. Additionally, there was included as pages 26 to 28 a “Sales by customer detail report” for the period from 28 August 2012 to 20 March 2014 totalling $699,238.20. At page 29 there was a “customer payment report” for the period from 6 August 2012 to 22 November 2013 totalling $599,124.93. (These pages were omitted from the copy of the Payment Claim in the Adjudication Application, but that omission is irrelevant.)
 The Payment Claim also stated:
“2 Executive Summary
2.1.1The Date for Commencement of the applicable subcontract works was on 22 April 2013.
2.1.2The Subcontractor was engaged by the Contractor to perform various construction works for the supply of various goods and services including gravel carting in connection with road construction (Works) under rates agreed between the parties by both oral and written correspondence in regard to the Works (Subcontract).
2.1.4The Contractor in written and oral correspondence between the period form [sic] on or about 27 February 2013 to 14 September 2013 agreed to and made representations that the Contractor would pay certain rates (including standby rates) to the Subcontractor in connection with the Works.
2.1.7The Subcontractor issued the applicable detailed tax invoices to the Contractor from 14 July 2013 to 19 September 2013.
2.1.19At or after the date of the Subcontract (on or about 15 July 2012) the Contractor represented to the Subcontractor that (among other things):
(a)the Contractor would engage the Subcontractor including the Subcontractor’s plant and equipment in ‘full-time’ work whereby the Subcontractor would have a leading role and the Contractor would utilise the Subcontractor’s plant and equipment (including 2 prime movers) on a full time basis for a minimum of 5 years;
(b)the Contractor would pay the Subcontractor on the basis of the Subcontractor’s tax invoices for the works undertaken by the Subcontractor without any of the Contractor’s purported pre-conditions; and
(c)the Contractor would pay certain agreed rates to the Subcontractor in connection with the Works and subsequently directed the Subcontractor to carry out such works based on the agreed rates
2.1.20In order to receive payment the Subcontractor was required to carry out the Works as directed by the Subcontractor on the basis of the agreed hourly rates prior to issuing the Subcontractor’s tax invoice to the Contractor for payment.
2.1.21Based on the agreed rates (between the period of 22 April 2013 to 10 September 2013) the Subcontractor carried out, completed and subsequently issued the tax invoices for the completed Works.
2.1.24The Subcontractor’s claim for payment of the outstanding moneys on issued tax invoices is $100,113.27.”
 The Payment Claim also provided as follows:
“3.3 The Subcontract
3.3.1The parties entered into the Subcontract on or about 15 July 2012 whereby the parties agreed that the Subcontractor would carry out the Works for the Contractor, which can be described as a subcontract for works including carrying out construction works and the supply of goods and services relating to construction works including the cartage of gravel in connection with road construction. The Subcontract comprises of oral and written correspondence that is identified in this paragraph 3.3.
3.3.2On the basis of the Contractor’s oral representations, the Subcontractor entered into a subcontract arrangement directly with the Contractor on or about 15 July 2012 where the Contractor represented that it would engage the Subcontractor in ‘full time’ work with the Contractor, whereby the Contractor agreed to place the Subcontractor in a leading role within the Contractor and the Contractor agreed that the Subcontractor’s plant and equipment would be subcontracting for the Contractor but the Subcontractor would be supervising the Subcontractor’s plant and equipment, for a minimum period of 5 years.
3.3.4The Contractor, in written and oral correspondence between the period from on or about 27 February 2013 to 14 September 2013, agreed to and made numerous representations that it would pay certain rates for the works including standby rates in connection with the Subcontract for works relating to various head contractors including, for example, T&W Earthmoving and MCJV (MCJV is a joint venture between McConnell Dowell Constructors (Aust) Pty Ltd and Consolidated Contracting Company Australia Pty Ltd). The Subcontractor, based on the Contractor’s representations of the Works and the requirement for the Subcontractor to provide another prime mover, purchased an additional prime mover on 6 March 2013 to be utilised under the Subcontract and for the Works.
3.3.5The Contractor and the Subcontractor agreed (both orally and in writing) on 5 June 2013 and 14 September 2013 on the following rates in connection with the Works:
•$145.00 per hour for single trailer – Side tipper or Water Cart.
•$220.00 per hour for road-train.
•$72.50 per hour standby hours.
•$45.00 per hour for drive hire.
•$80.00 per hour for truck hire only.
•Expenses: the Contractor and the Subcontractor agreed that it was easier to adjust expenses on invoices for:
○$15.00 for trailer per hour
○$30.00 for dolly hire per hour
3.3.6Based on the agreed rates above, between the period of 22 April 2013 to 10 September 2013 the Contractor directed the Subcontractor and the Subcontractor carried out, and subsequently invoiced the Contractor for the Works.
3.3.7The Subcontractor has maintained detailed records in support of its claims for payment under its tax invoices and the Subcontractor relies on the submissions in this Payment Claim including the information contained in Attachment 1, Attachment 2 and Attachment 3 to substantiate that it carried out the works claimed and to substantiate its claim.”
The Adjudication Application
 Paragraph 3 of the Adjudication Application provided:
“This Adjudication Application relates to construction works performed by the Claimant for Kaycee Trucking Pty Ltd ABN 16 126 465 521 (the Respondent) pursuant to a construction contract between the Claimant and the Respondent entered into in or around March 2013.”
 Under the heading “The Claimant’s synopsis” it was stated:
“9.In or around March 2013, the Respondent and the Claimant entered into a subcontract arrangement for the supply of goods and services in connection with construction works including road construction for Berwyndale roads and leases, McNulty roads and leases and J/W roads and leases and hauling plant and equipment to Cockatoo and Wandoan (the Subcontract).
10.The complete background to the project including the oral representations made by Casey Peter Harvey (Harvey) on behalf of the Respondent and the present dispute is set out in the statutory declarations of Michael Rogers sworn 15 April 2014 contained in Appendix D and the statutory declaration of Chantelle Rogers sworn 15 April 2014 contained in Appendix E.
11.The date for commencement of the applicable subcontract works was 22 April 2013.
12.The Claimant was engaged by the Respondent to perform construction works for the supply of various goods and services including gravel carting in connection with road construction (the Works) under rates agreed between the parties by both oral and written correspondence in regard to the Works (the Agreed Rates).
13.The Respondent from on or about 27 February 2013 to 14 September 2013 further agreed to and made representations that it would pay the Claimant certain rates (including standby rates).
14.Appendix A is a copy of the Subcontract documentation and the Agreed Rates.
15.At or after the date of the Subcontract (in or around March 2013) the Respondent represented to the Claimant that (among other things):
(a)the Respondent would, on a subcontract arrangement basis, engage the Claimant including the Claimant’s plant and equipment in ‘full-time’ work whereby the Claimant would have a leading role and the Respondent would utilise the Claimant’s plant and equipment (including 2 prime movers) on a full time basis for a minimum of 5 years;
(b)the Respondent would pay the Claimant on the basis of the Claimant’s issued tax invoices for the works undertaken by the Claimant (without any reference to the Respondent’s purported pre-conditions); and
(c)the Respondent would pay the Agreed Rates to the Claimant in connection with the Works and subsequently directed the Claimant to carry out such works based on the Agreed Rates.” (footnotes omitted)
 Under the heading “The relevant construction contract” it was stated:
43.In or around March 2013, the Respondent and the Claimant entered into a subcontract for the supply of goods and services in connection with construction works including road construction for Berwyndale roads and leases, McNulty roads and leases and J/W roads and leases and hauling plant and equipment to Cockatoo and Wandoan (the Subcontract).
44.The effect of the Subcontract was that the Claimant would carry out works (the Works) for the Respondent. The Works included carrying out construction works and the supply of goods and services relating to construction works including the cartage of gravel in connection with road construction.
47.The Respondent confirmed these arrangements in written and oral correspondence during the period commencing on or about 27 February 2013 and ending on or about 14 September 2013. During this period, the Respondent agreed to and made representations that the Respondent would pay certain rates (including standby rates) to the Claimant in connection with the Works.” (footnotes omitted)
Was the Payment Claim made in respect of a 2012 construction contract?
 Returning to the first argument advanced by Rogers Transport, and focusing on the question as to how the relevant construction contract in respect of which the Payment Claim was made should be characterised, Kaycee Trucking placed much store on the references in the Payment Claim to the date of 15 July 2012. For example, emphasis was placed on the description of “Subcontract” on page 1 of the document and in para 2.1 of the Payment Claim which made reference to a “subcontract arrangement” made on or about 15 July 2012. But one must not overlook the words which, in both cases, immediately follow and which refer to a further agreement in 2013 to pay at certain rates for various works also included in the description “Subcontract”.
 The amount of the Payment Claim was clearly identified in paras 1.1 and 1.2 as the 2013 works being the invoices set out in Attachment 1 and comprising $100,113.27 plus interest. Likewise, item 3 identified that the Payment Claim concerned those invoices only. The Executive Summary portion of the Payment Claim stated that the date for commencement of the applicable subcontract work was 22 April 2013 (see paras 2.1.1 and 2.1.4). And while there was reference to representations made in respect of the 15 July 2012 subcontract (see para 2.1.19), and to the parties entering into the subcontract of 15 July 2012 (see para 3.3.1), the subcontract was expressed to comprise oral and written correspondence identified in para 3.3. Further, while para 3.3.2 referred to representations made in 2012 to engage “the Subcontractor”, the key terms of the contract were identified at paras 3.3.4, 3.3.5 and 3.3.6. Those paragraphs described an agreement made in 2013 and work performed in 2013.
 Kaycee Trucking’s counsel accepted that no claim was made for any 2012 work in the Payment Claim and could point to no provision of a 2012 contract that was called in aid in terms of Roger Transports’ entitlement to make the Payment Claim. Indeed, the basis for the quantification of the claim was the 2013 invoices calculated in accordance with the rates agreed upon pursuant to the 2013 agreement.
 I do not consider that the references to 2012 should be construed as identifying a 2012 agreement as the relevant construction contract under which the entitlement to the Payment Claim was made.
 I do not consider that the inclusion of references to the 2012 agreement and to invoices issued and paid under that agreement should be seen as anything other than historical background. It was perhaps unnecessary detail, but its inclusion was also perhaps understandable, given that it addressed any argument that the claimed invoices might relate to invoiced work already paid for.
 In my view, it is clear that the Payment Claim was made under and related to a 2013 agreement.
 It follows that, in relation to the second argument advanced, I do not consider the Adjudication Application sought adjudication of a claim other than that made in the Payment Claim.
 Nor does the third argument raise a matter to be considered in this application. The claim for $100,113.27 in the Payment Claim was not made pursuant to or in relation to two contracts.
 The application is dismissed. I shall hear the parties as to costs.
- Published Case Name:
Kaycee Trucking Pty Ltd v M and C Rogers Transport Pty Ltd & Ors
- Shortened Case Name:
Kaycee Trucking Pty Ltd v M and C Rogers Transport Pty Ltd
 QSC 185
15 Aug 2014
- White Star Case:
No Litigation History