- Unreported Judgment
- Appeal Determined (QCA)
SUPREME COURT OF QUEENSLAND
Gambaro Pty Ltd v Rohrig (Qld) Pty Ltd  QSC 170
GAMBARO PTY LTD as Trustee for the Gambaro Holdings Trust (ABN 42 938 456 099)
ROHRIG (QLD) PTY LTD (ABN 67 093 753 970)
No 8579 of 2014
Application for summary judgment
Supreme Court at Brisbane
19 June 2015
25 February 2015
PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SUMMARY JUDGMENT – PLEADING – STATEMENT OF CLAIM JUDGMENT – where the plaintiff and defendant entered into a construction contract – where the defendant made a number of claims for progress payments under the contract prior to practical completion – where the defendant issued a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) (‘BCIPA’) after practical completion had been reached, seeking further payment for all works completed to that point – where that payment claim was adjudicated under BCIPA – where the plaintiff paid the adjudicated amount – where the plaintiff then commenced proceedings seeking restitution of the amount owed – where the defendant argued that the plaintiff’s claim had been brought pre-emptively, while the statutory regime had yet to complete running its course, contrary to the intention of BCIPA s 99 – whether the plaintiff’s claim and statement of claim should therefore be struck out in full – alternatively, whether certain paragraphs of the plaintiff’s statement of claim should be struck out under Uniform Civil Procedure Rules 1999 (Qld) r 171.
PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER THE UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SUMMARY JUDGMENT – where the plaintiff and defendant entered into a construction contract – where the defendant had made a number of claims for progress payments under the contract prior to practical completion – where the defendant issued a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) (‘BCIPA’) after practical completion had been reached, seeking further payment for all works completed to that point – where that payment claim was adjudicated under BCIPA – where the plaintiff paid the adjudicated amount – where the plaintiff then commenced proceedings seeking restitution of the amount owed – whether, on failure of the defendant’s strike-out application, summary judgment should be granted.
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – where the plaintiff and defendant entered into a construction contract – where the defendant had made a number of claims for progress payments under the contract prior to practical completion – where the defendant issued a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) (‘BCIPA’) after practical completion had been reached, seeking further payment for all works completed to that point – where that payment claim was adjudicated under BCIPA – where the plaintiff paid the adjudicated amount – where the plaintiff then commenced proceedings seeking restitution of the amount owed – whether the effect of BCIPA s 99 is to oust the supervisory jurisdiction of the Supreme Court and prevent the enforcement of a party’s contractual rights during the operation of the statutory progress payment regime.
Acts Interpretation Act 1954 (Qld) s 14A
Building and Construction Industry Payments Act 2004 (Qld) s 99, s 100
Building and Construction Industry Security of Payment Act 1999 (NSW) s 32
Judicial Review Act 1991 (Qld)
Uniform Civil Procedure Rules 1999 (Qld) r 292
Caltex Refineries (Qld) Pty Ltd v Allstate Access (Australia) Pty Ltd  QSC 223, cited
Capricorn Quarries Pty Ltd v Inline Communication Construction Pty Ltd  QSC 388, cited
Deputy Commissioner of Taxation v Salcedo  2 Qd R 232, cited
Dey v Victorian Railway Commissioners (1949) 78 CLR 62, cited
Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd  NSWCA 49, cited
Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421, cited
Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd  QCA 329, cited
Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd  Qd R 525, cited
Plaintiff S157/2000 v Commonwealth of Australia (2003) 211 CLR 476, cited
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, referred to
Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328, cited
Re Totalisator Administration Board of Qld  1 Qd R 215, cited
R J Neller Building Pty Ltd v Ainsworth  1 Qd R 390, cited
T Matthews QC with D Keane for the plaintiff
P Dunning QC with T Pincus for the defendant
NR Barbi for the plaintiff
McCullough Robertson for the defendant
- The plaintiff, Gambaro Pty Ltd as trustee for the Gambaro Holdings Trust (“Gambaro”), and the defendant, Rohrig (Qld) Pty Ltd (“Rohrig”), were parties to a construction contract which was executed in September 2012 (“the contract”). The contract required Rohrig to carry out construction of a 68 room hotel and refurbishment of portions of existing premises in Caxton Street, Petrie Terrace (“the project”) for Gambaro.
- On 27 May 2014, a claim for payment was made by Rohrig under the Building and Construction Industry Payments Act 2004 (Qld) (“BCIPA”) which was later paid in part by Gambaro. Gambaro then commenced proceedings “for a declaration that [it] is not liable to [Rohrig] for $913,014.23, including GST, of the amount of monies claimed under the Payment Claim issued on 27 May 2014” and “an order that [Rohrig] make restitution to [Gambaro] of $913,014.23 paid by [it] pursuant to the Payment Claim…”.
- The Claim and Statement of Claim were filed on 11 September 2014. Rohrig filed a Defence on 16 October 2014 and pleadings closed with a Reply being filed by Gambaro on 2 December 2014. Each party filed competing applications which both came before the Court for decision on 25 February 2015.
- The defendant, Rohrig, applied for the plaintiff’s Claim and Statement of Claim to be struck out in whole or in part, while the plaintiff, Gambaro, applied for summary judgment and consequent repayment of the $913,014.23 paid by it to Rohrig.
- The determination of each application depends upon an interpretation of provisions of BCIPA against the factual background which explains the context in which these applications arose.
The Building and Construction Industry Payments Act 2004
- The object of BCIPA is found in s 7: that is, “to ensure that a person is entitled to receive, and is able to recover, progress payments if the person undertakes to carry out construction work under a construction contract”. The reasons for this legislation and the mischief it was designed to address were set out by White JA in Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd:
“The purpose of [BCIPA] is to ensure that a person undertaking to carry out construction work or provide goods and services under a construction contract will be able to recover progress payments whether or not the construction contract makes provision for payments of that kind. The explanatory note to the Bill explained that security of payment had been an issue in the building and construction industry over many decades. The Royal Commission into the Building and Construction Industry called for legislative intervention because traditional remedies in contract law were considered insufficient to address concerns. As the explanatory note mentioned, the failure of any one party in the contractual chain to honour its obligations would often cause a domino effect on other parties, resulting in restricted cash flow and, in some cases, insolvency. This would occur in many cases long before rights under the relevant contract or subcontract could be litigated and determined.”
- A “progress payment” is defined in Schedule 2 to mean:
“a payment to which a person is entitled under s 12, and includes, without affecting any entitlement under the section –
(a)the final payment for construction work carried out, or for related goods and services supplied, under a construction contract; or
(b)a single or one-off payment for carrying out construction work, or for supplying related goods and services, under a construction contract; or
(c)a payment that is based on an event or date, known in the building and construction industry as a ‘milestone payment’.”
- Section 8 of BCIPA sets out how the object of the Act is to be achieved. It is said that this is by:
“(a)granting an entitlement to progress payments whether or not the relevant contract makes provision for progress payments; and
(b)establishing a procedure that involves –
(i)the making of a payment claim by the person claiming payment; and
(ii)the provision of a payment schedule by the person by whom the payment is payable; and
(iii)the referral of a disputed claim, or a claim that is not paid, to an adjudicator for decision; and
(iv)the payment of the progress payment decided by the adjudicator.”
- Part 2 of BCIPA sets out the statutory right to progress payments and Part 3, the procedure for recovering progress payments. This right is said by s 5 of BCIPA to be in addition to any other entitlement a claimant may have under a construction contract or any other remedy a claimant may have for recovering that entitlement.
- The statutory right to progress payments in Part 2 of BCIPA is found in s 12, which provides that, “from each reference date under a construction contract, a person is entitled to a progress payment if the person has undertaken to carry out construction work… under the contract”. A reference date is defined in Schedule 2 to mean either
“(a)a date stated in, or worked out under, the contract as the date on which a claim for a progress payment may be made for construction work carried out or undertaken to be carried out … under the contract; or
(b)if the contract does not provide for the matter–
(i)the last day of the named month in which the construction work was first carried out … under the contract; and
(ii)the last day of each later named month.”
- The amount of any progress payment to which a person is entitled is set out under s 13 as either the amount calculated under the contract, or if that amount is not provided for in the contract, the amount calculated on the basis of the value of construction work carried out or undertaken to be carried out by the person under the contract. Section 14(1) provides that such construction work is to be valued either:
“(a) under the contract; or
(b)if the contract does not provide for the matter, having regard to
(i)the contract price for the work; and
(ii) any other rates or prices stated in the contract; and
(iii) any variation agreed to by the parties to the contract by which the contract price… is to be adjusted by a specific amount; and
(iv) if any of the work is defective, the estimated cost of rectifying the defect.”
- Section 15 provides that a progress payment becomes payable on the date provided under the contract, or if the contract does not contain a provision about the date for payment or contains a provision that is void, 10 business days after a payment claim for the progress payment is made under Part 3.
- As mentioned earlier, Part 3 of BCIPA sets out the procedure by which progress payments are recovered. Under s 17, a person who has undertaken to carry out construction work under a construction contract who claims to be entitled to a progress payment “may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment (the respondent)”. The payment claim must identify the work to which it relates and the amount of the progress payment claimed to be payable, and explicitly state that it is made under BCIPA. A claimant cannot serve more than one payment claim in relation to each reference date under the construction contract, although a claimant may include an amount that has been the subject of a previous claim.
- In response, the person served with the payment claim may serve a payment schedule upon the claimant stating the amount, if any, that it proposes to pay (“the scheduled amount”). If the scheduled amount is less than the claimed amount, the schedule must state why the respondent is withholding payment. If no payment schedule is served within the relevant period, the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates. If the payment is not made then the claimant is able to recover that amount as a debt or refer it to adjudication. The same applies to any unpaid portion of an amount said to be payable under a payment schedule.
- A central feature of Part 3 of BCIPA is the provision for adjudication of disputes found in Division 2 of that Part. This was described by McMurdo P in Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd as the “speedy, interim only determination by adjudicators of disputed claims under construction contracts.” Under s 21 of BCIPA:
(1) “A claimant may apply for adjudication of a payment claim (an adjudication application) if
(a) the respondent serves a payment schedule… but–
(i)the scheduled amount stated in the payment schedule is less than the claimed amount stated in the payment claim; or
(ii)the respondent fails to pay the whole or any part of the scheduled amount to the claimant by the due date for payment of the amount; or
(b)the respondent fails to serve a payment schedule on the claimant… and fails to pay the whole or any part of the claimed amount by the due date for payment of the amount.”
There are strict time limits for making and responding to an adjudication application, and for the adjudicator to decide the adjudication application.
- Under subsection 26(1) of BCIPA:
“An adjudicator is to decide–
(a)the amount of the progress payment, if any, to be paid by the respondent to the claimant (the adjudicated amount); and
(b)the date on which any amount became or becomes payable…”
In deciding an adjudication application, the adjudicator may only consider the provisions of BCIPA, the provisions of the construction contract, the payment claim together with its documentation, the payment schedule and its documentation, and the results of any inspection carried out by the adjudicator of any matter to which the claim relates.
- Under subsection 29(1) of BCIPA, if an adjudicator decides that the respondent is required to pay an adjudicated amount, the respondent must pay the amount to the claimant on or before the relevant date. The relevant date is the date which is five business days after the date on which the adjudicator’s decision is served on the respondent, unless the adjudicator has determined that it should be a later date.
- If the adjudicated amount is not paid, then the claimant may ask for an adjudication certificate under s 30 of BCIPA. Such certificate may be filed as a judgment for a debt and may be enforced in a Court of competent jurisdiction. Under subsection 31(4), if the respondent commences proceedings to have the judgment set aside the respondent in those proceedings is not entitled to bring any counterclaim, to raise any defence in relation to matters arising under the construction contract, or to challenge the adjudicator’s decision. The respondent is required to pay into the Court as security the unpaid portion of the adjudicated amount pending the final decision in those proceedings.
- Prior to an amendment to the Judicial Review Act 1991 (Qld) (“JR Act”) made in 2007, such an adjudication was subject to review under the JR Act. Notwithstanding the inclusion in 2007 of adjudication decisions under BCIPA in the list of decisions excluded from the operation of the JR Act, adjudication decisions remain subject to the supervisory jurisdiction of the Supreme Court: see Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd.
- Part 6 of BCIPA contains two sections which are said to be of critical importance in deciding whether or not the action brought by Gambaro is maintainable and therefore whether either application should succeed. Section 99 provides for the statute to prevail over any conflicting contractual provision. Section 99 is in the following terms:
“99No contracting out
- The provisions of this Act have effect despite any provision to the contrary in any contract, agreement or arrangement.
- A provision of any contract, agreement or arrangement (whether in writing or not) is void to the extent to which it –
(a)is contrary to this Act; or
(b)purports to annul, exclude, modify, restrict or otherwise change the effect of a provision of this Act, or would otherwise have the effect of excluding, modifying, restricting or otherwise changing the effect of a provision of this Act; or
(c)may reasonably be construed as an attempt to deter a person from taking action under this Act.”
- Section 100 of BCIPA, which is said to be subject to s 99, sets out the effect of the procedure for recovering progress payments on civil proceedings. It provides as follows:
“100Effect of pt 3 on civil proceedings
- Subject to section 99, nothing in part 3 affects any right that a party to a construction contract –
(a)may have under the contract; or
(b)may have under part 2 in relation to the contract; or
(c)may have apart from this Act in relation to anything done or omitted to be done under the contract.
- Nothing done under or for part 3 affects any civil proceedings arising under a construction contract, whether under part 3 or otherwise, except as provided by subsection (3).
- In any proceedings before a court or tribunal in relation to any matter arising under a construction contract, the court or tribunal –
(a)must allow for any amount paid to a party to the contract under or for part 3 in any order or award it makes in those proceedings; and
(b)may make the orders it considers appropriate for the restitution of any amount so paid, and any other orders it considers appropriate, having regard to its decision in the proceedings.”
- The parties entered into a construction contract in September 2012 for an agreed contract price of more than $14,000,000. The contract remains on foot. Clause 37.1 of the general conditions of the contract provided for claims for progress payments (“progress claims”) to be made to the superintendent.
- Between 27 November 2012 and 24 April 2014, Rohrig made 18 progress claims under cl 37.1 of the contract. Each of those progress claims was assessed by the superintendent who certified the amount of payment and issued a progress certificate. The amount owing on account under each progress certificate was paid by Gambaro. In late April 2014, the contract reached practical completion. Clause 37.4 provided that the final payment claim could be made by Rohrig “within 28 days after the expiry of the last defects liability period”, which was 12 months after practical completion.
- On 27 May 2014, Rohrig served a payment claim on Gambaro which was made pursuant to s 17 of BCIPA. The amount claimed was $2,050,166.52 (excluding GST), for works carried out up to and including 25 May 2014. On 10 June 2014, Gambaro issued a payment schedule to Rohrig in response to the payment claim, assessing the amount payable as $57,593.08, and paid that money to Rohrig. On 24 June 2014, Rohrig made an adjudication application pursuant to s 21 of BCIPA. On 31 July 2014, the adjudicator appointed pursuant to BCIPA handed down a decision in which he determined that the amount to be paid by Gambaro to Rohrig was $956,788.25. Gambaro did not seek review of that decision in this Court. An amount representing the sum still owing from the adjudicated amount, taking into account the payment of 10 June 2014, plus interest, was paid by Gambaro to Rohrig on 7 August 2014. Gambaro then commenced this proceeding by Claim and Statement of Claim.
- It is convenient to deal first with Rohrig’s application to strike out the whole of the plaintiff’s claim.
Submissions made by Rohrig as to striking out
- Counsel for Rohrig submitted that BCIPA creates a statutory entitlement to interim, or on account, payments during the life of a building contract, which run concurrently with any contractual mechanism providing for interim, or on account, payments. To that extent, BCIPA gives rise to a dual contractual and statutory regime in respect of interim payments during the life of a building contract. However, where those concurrent regimes come into conflict, by necessary statutory intendment, the contractual regime for interim payments yields to the statutory regime for such payments. To the extent that a contractual regime may purport to have a contrary effect, it will offend s 99 of BCIPA. However, the consequence is not that the rights so created under the contract are forever lost. Rather, they are suspended, but preserved by s 100 of BCIPA, so that at the completion of the building contract, all contractual entitlements may be taken into account in arriving at a final, as opposed to an interim or on account, figure payable under the contract, with appropriate allowance being made for whatever assessments and payments were made in accordance with the statutory interim payment regime during the life of the completed contract.
- The difficulty in accepting Rohrig’s argument lies in the gloss it attempts to put on the wording of s 100. In the present case, s 99 has applied according to its terms. There has been no attempt to contract out of the provisions of BCIPA by the parties. Rohrig exercised its contractual rights by its progress claims and Gambaro complied with its contractual obligations by paying them as assessed by the superintendent. Rohrig also exercised its statutory right to make a payment claim under BCIPA and to refer the unsatisfied part of that claim to adjudication. Gambaro complied with its statutory duty by paying the adjudicated amount.
- Once the rights under Parts 2 and 3 have been exercised, BCIPA does not seek to exclude the parties from enforcing their rights by civil litigation. This was recognised by the New South Wales Court of Appeal in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd. There, Handley JA held in relation to s 32 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the NSW equivalent of s 100 of BCIPA):
“Subsection 1 provides that Part 3 of the Act … does not affect the rights of any party under a construction contract. Subsection 2 is particularly important because it relevantly provides that nothing done under, or for the purposes of Part 3, affects any civil proceedings arising under a construction contract. Finally, subs 3(b) makes a judgment entered under s 25 [equivalent to s 31 of BCIPA] on an adjudication certificate provisional only, both in what it grants and in what it refuses. A builder can pursue a claim in the courts although it was rejected by the adjudicator and the proprietor may challenge the builder’s right to the amount awarded by the adjudicator and obtain restitution of any amount it has overpaid.”
- This is consistent with, and an illustration of, the principle that legislation is presumed not to oust the jurisdiction of Courts except by clear words to that effect.
- Parts 2 and 3 provide an expeditious method for the cash-flow problems which have traditionally beset the building industry to be addressed. That is presumably why the regime under Parts 2 and 3 is unable to be excluded.
- Having complied with the requirements of that regime by payment of the adjudicated amount under BCIPA, Gambaro wishes to exercise its right to litigate in civil proceedings the entitlements of the parties under the contract. Under s 100(2) of BCIPA, the payment of an adjudicated amount does not affect the right of a party to take civil proceedings to enforce rights and obligations arising out of a construction contract. The enforcement of contractual rights by civil litigation may give rise to a requirement on one party under s 100(3)(a) to make an additional payment to that paid under Part 3, or it may give rise to a requirement under s 100(3)(b) for the other party to repay some or all of the payments made under Part 3. There is no other express limitation upon the rights recognised by s 100, nor is there any justification for implying any limitation on the rights so recognised.
- There is no reason why a purposive rather than a literal reading of s 100 would lead to any different result. The purpose of Part 3 is to provide a quick method for the amount of disputed payment claim being determined and then paid. This ensures cash-flow to the builder. However, it is not intended to exclude the parties’ rights to litigate in a Court to determine their rights inter se, so long as amounts paid under Part 3 are taken into account. Nothing in s 100 or in the objects of BCIPA mandates that this may only happen on completion of the construction contract. The defendant’s argument as to striking out the whole of the plaintiff’s Claim and Statement of Claim must fail.
- The plaintiff submitted that, should Rohrig be unsuccessful in its strike out application, the Court should proceed to give summary judgment to Gambaro. The requirements for summary judgment for a plaintiff are set out in r 292(2) of the Uniform Civil Procedure Rules 1999 (“UCPR”), which states:
“(2)If the court is satisfied that:
(a)the defendant has no real prospect of successfully defending all or a part of the plaintiff’s claim; and
(b)there is no need for a trial of the claim or the part of the claim;
the court may give judgment for the plaintiff against the defendant for all or the part of the plaintiff’s claim and may make any other order the court considers appropriate.”
- The words of r 292 of the UCPR are given their plain meaning: Deputy Commissioner of Taxation v Salcedo. However, as Dixon J observed in Dey v Victorian Railway Commissioners:
“A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court…”
- This is not such a case. The plaintiff’s claims as particularised in the Statement of Claim have either been admitted, not admitted for reasons set out in paragraphs C and D of the Defence, or denied by the defendant. There remains a number of issues which are the subject of factual and legal dispute between the parties that can only be determined on a trial of this matter.
- Similarly, the defendant’s application to strike out various paragraphs or subparagraphs of the Statement of Claim almost invariably concerns issues which need to be determined at trial. Where they involve infelicities of expression, these can be remedied by minor amendment of the Statement of Claim.
- The occasion for striking out the paragraphs of the Statement of Claim listed in paragraphs 1(b) and (c) of the defendant’s application, or for giving summary judgment in accordance with the plaintiff’s application, has not arisen and each of those applications should be dismissed.
- The outcome of these applications is that both should be dismissed. I shall hear the parties as to costs, although in the circumstances, where each party has been equally successful and unsuccessful, there would not appear to be any utility in awarding the costs of the applications.
  Qd R 525 at 546, ; see also the Explanatory Notes to the Building and Construction Industry Payments Bill 2004, pp 1-2, and the second reading speech in Hansard, 18 March 2004, pp 71-72.
 This is subject to the exceptions set out in s 16 of BCIPA and s 67U and s 67W of the Queensland Building Services Authority Act 1991 (Qld) (now the Queensland Building and Construction Commission Act 1991 (Qld)).
 At 537, .
 See Justice and Other Legislation Amendment Act 2007 s 91.
 At 537-538 (McMurdo P), 542-544 (Chesterman JA), 555-556 (White JA).
  NSWCA 49.
 At .
 Forster v Jododex Aust Pty Ltd (1972) 127 CLR 421 at 435-436; Pyneboard Pty Ltd v Trade Practices Commission (1983) 152 CLR 328 at 341; Re Totalisator Administration Board of Qld  1 Qd R 215 at 219-220; Plaintiff S 157/2000 v Commonwealth of Australia (2003) 211 CLR 476 at 492.
 See Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd  QCA 329 at ; Caltex Refineries (Qld) Pty Ltd v Allstate Access (Australia) Pty Ltd  QSC 223 at -.
 See Acts Interpretation Act 1954 s 14A; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at .
 R J Neller Building Pty Ltd v Ainsworth  1 Qd R 390 at ; Capricorn Quarries Pty Ltd v Inline Communication Construction Pty Ltd  QSC 388 at .
  2 Qd R 232.
 (1949) 78 CLR 62 at 91.
- Published Case Name:
Gambaro Pty Ltd v Rohrig (Qld) Pty Ltd
- Shortened Case Name:
Gambaro Pty Ltd v Rohrig (Qld) Pty Ltd
 QSC 170
19 Jun 2015
|Event||Citation or File||Date||Notes|
|Primary Judgment|| QSC 170||19 Jun 2015||-|
|Appeal Determined (QCA)|| QCA 21||12 Feb 2016||-|