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Ed Ahern Plumbing (Gold Coast) Pty Ltd v J M Kelly (Project Builders) Pty Ltd[2007] QCA 452

Reported at [2008] 2 Qd R 123

Ed Ahern Plumbing (Gold Coast) Pty Ltd v J M Kelly (Project Builders) Pty Ltd[2007] QCA 452

Reported at [2008] 2 Qd R 123

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO/S:

SC No 5141 of 2006

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

DELIVERED ON:

21 December 2007

DELIVERED AT:

Brisbane

HEARING DATE:

9 November 2007

JUDGES:

Keane, Holmes and Muir JJA

Separate reasons for judgment of each member of the Court, each concurring as to the order made

ORDER:

Appeal dismissed with costs

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – SUBCONTRACTORS’ CHARGES ACT (QLD) – where the appellant sent a notice of claim of charge to the second respondent on 18 May 2006 – where the appellant omitted to attach an annexure containing a statement of account  – where the second respondent received the notice of claim of charge on 19 May 2006 – whether the particulars as provided in the notice of claim of charge served on the second respondent on 19 May 2006 were wanting in form or accuracy under s 10(5) of the Subcontractors’ Charges Act 1974 (Qld) (the Act) – whether service as effected on 19 May 2006 constituted a valid notice of claim of charge under s 10(1)(a) of the Act

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER RULES OF COURT – SERVICE – where the appellant gave the first respondent notice of the claim of charge having been made – where this notice was given before completing service of the notice of claim of charge on the second respondent – whether, under s 10 of the Act, notice of claim of charge must be given to the second respondent before notice of having made the claim is given to the first respondent – whether the charge attached

Subcontractors’ Charges Act 1974 (Qld), s 10, s 10(1)(a), s 10(1)(b), s 10(4), s 10(5), s 11(1)

Ex parte Austco Pty Ltd [1985] 2 Qd R 1, applied

Bock v Don-Rex Furniture (Qld) [1981] Qd R 326, distinguished

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, applied

Re Dallyn Investments Pty Ltd [1989] 1 Qd R 121, distinguished

Verra v Lane [2002] QSC 121, distinguished

Walter Construction Group Ltd v J & L Schmider Investments Pty Ltd [2001] QSC 124, distinguished

COUNSEL:

P R Franco for the appellant

J K Bond SC, with T P Sullivan, for the first respondent

No appearance for the second respondent

SOLICITORS:

Shand Taylor Lawyers for the appellant

Hopgood Ganim Lawyers for the first respondent

No appearance for the second respondent

[1] KEANE JA:  I agree with the reasons given by Holmes JA and with the orders proposed by her Honour.  Because of the divergence of approach between Holmes JA and Muir JA, I should briefly state my reasons for agreeing with the approach taken by Holmes JA.  Her Honour's statement of the facts and material provisions of the legislation allows me to go directly to a discussion of the contentions of the parties.

The appellant's argument

[2] The appellant points out that s 10(1)(a) of the Act contemplates that what is to be given to an employer is a claim certified by a qualified person, and that what must be certified by the qualified person are "the amount and particulars of the claim".  The absence from the document given to the second respondent on 19 May 2006 of "the particulars of the claim" certified by a qualified person means that the document actually sent was not a "notice … specifying the … particulars of the claim certified as prescribed", and that this deficiency was not "any inaccuracy or want of form" which s 10(5) provides does not affect the validity of the notice.

[3] It is necessary to bear steadily in mind that the Act permits a subcontractor to interfere with the rights and obligations of the contractor and employer.  A subcontractor which wishes to avail itself of the rights conferred by the Act must comply with the conditions on which interference with the contractual rights and obligations is permitted.  Once one puts to one side the oddity of reliance by a subcontractor upon its own failure to comply with the requirements of the Act, and focuses upon the language of s 10(1)(a) of the Act, it does, I think, become clear that the document received by the second respondent on 19 May 2006 was not the appellant's notice of claim.  Once annexure "A" was provided, the document so completed was the notice which the appellant gave in accordance with s 10(1)(a) of the Act. 

[4] This conclusion turns, not upon the proper construction of s 10(1)(a) in relation to the requirements of a sufficient notice, but upon the fact that the very terms of the document actually sent by the appellant to the second respondent on 19 May showed that it was not the appellant's notice of claim of charge.  On its face it was plainly incomplete in that it signalled that the appellant's notice of claim of charge included further documents which had not yet been given by the appellant. 

[5] Section 15(1)(b) cannot be speaking of a notice which is incomplete on its face.  It can only be speaking of the entirety of the document actually put forward by the subcontractor as constituting its notice of claim of charge.  It is from the date when the complete document constituting the notice has been given that time runs.  The second respondent was not obliged to depart from its contractual obligation to the first respondent on the basis of speculation as to what the terms of the notice of the appellant's claim might be.  It was entitled to ignore the plainly incomplete document which it had received.  It was not obliged to engage in its own assessment of whether the material contained in the incomplete documents given to it served to satisfy the requirements of s 10(1)(a) of the Act.  The Act does not suggest an intention to subject an employer to the burden of making such an assessment at its peril.  The Act confers special rights on subcontractors who comply with its provisions; the risks of non-compliance must lie with the subcontractor. 

[6] In my respectful opinion, the appellant's argument that the notice of claim of charge was not "given" to the first respondent until 25 May 2006 must be accepted.  Until then the notice which had been given was, on its face, incomplete.  It was only on 25 May 2006 that the notice on which the appellant relied was actually given by it to the first respondent.  It should be emphasised here that while this conclusion is to the advantage of the appellant in this case, it is based on the proposition that a subcontractor's failure to ensure that the documents given to an employer constitute the complete notice of claim of charge means that the employer is at liberty to ignore an obviously incomplete notice on the basis that the obligation imposed on an employer by s 11(1) has not been engaged. 

The respondent's notice of contention 

[7] The first respondent contends that the appellant's notice to the first respondent was not "notice of having made the claim" because, on the appellant's argument, it had not made the claim on the employer when it purported to give notice of having made the claim to the contractor.  The first respondent contends that absent the due giving of the notice required by s 10(1)(b) of the Act, s 10(4) of the Act operates to prevent the charge from attaching.

[8] The appellant argues that one cannot read the language used in s 10(1)(b), having "made the claim", as if it meant, having "given notice of claim of charge".  The appellant argues that the respondents' contention ignores the distinction, recognised in the authorities, between the claim and notice of the claim.[1]

[9] The fundamental problem with the appellant's argument is that, while there is a distinction between a claim, and the notice of claim, s 10(1)(b) of the Act is not concerned with that distinction; rather, it is concerned with whether the claim has been made.  Having regard to the collocation and sequence of s 10(1)(a) and (b) and the absence of any other provision in the Act which deals with the subject matter of the making of a claim, it is impossible not to regard s 10(1)(a) as a statement of what is involved in the making of a claim for the purpose of s 10(1)(b).  The authorities to which the appellant refers do not suggest a contrary view. 

[10]  Next the appellant seeks to give a highly artificial meaning to the following passage from the reasons of Thomas J in Ex parte Austco Pty Ltd:[2]

"In some cases the builder's address may be in a different place to that of the owner, and it may be reasonable that his notice be given a day or so later than the notice to the employer … I can think of no particular difficulty in the preparation of a notice of having made the claim.  Once the notice of claim of charge has been prepared, there can be no difficulty in preparing a document that gives notice of having made the claim."

[11]  The appellant argues that the observations of Thomas J "are consistent with an assumption that the s 10(1)(b) notice is made once it is prepared, and the two notices can be sent simultaneously."  To the extent that the appellant invokes the observations of Thomas J to support the argument that a notice of claim which is prepared, in the sense of being drafted but not communicated, is a claim which has been made, the observations of Thomas J, when read as a whole, afford the appellant no support.  It is obviously impossible to accept the appellant's argument which leads to the absurd conclusion that a notice of claim which is prepared and then put in a drawer is a claim which has been made. 

[12]  In my respectful opinion, the making of a claim must involve, at the least, putting in train the communication of the claim to the party to be affected by it. 

[13]  An employer can be affected by a claim by a subcontractor only pursuant to s 11 of the Act.  Under s 11(1) of the Act the employer's obligation to retain money which otherwise might be paid to the contractor arises upon a notice of claim of charge being "given pursuant to section 10".

[14]  A literal reading of s 10(1)(b) supports the respondents' contention that the notice to the contractor must inform the contractor that the claim on the employer contemplated by s 10(1)(a) has been made, and, therefore, that the giving of the notice to the contractor must follow in time the making of the claim on the employer.  The appellant argues that it would be commercially inconvenient if the notice required by s 10(1)(b) of the Act could not be sent to the contractor until the notice of claim required by s 10(1)(a) had actually been given to, that is, actually received by, the employer.  Accordingly, so the appellant says, a literal construction of s 10(1)(b) is to be resisted. 

[15]  It may be noted in this regard that s 10(1), s 11(1) and s 15(1)(b) observe a distinction between being "given notice" and "making the claim".  It may well be that this distinction was drawn advisedly, in order to recognise that the sending of a notice of claim to the employer means that the claim is "made" at that point, rather than at the point when it is actually received by the employer at which point it can be said to have been "given pursuant to section 10".  On this view, the notice required by s 10(1)(b) could be sent as soon as the notice required by s 10(1)(a) has been sent.  The Act is notorious for its loose and awkward drafting.  One may, therefore, be sceptical of the likelihood that such a nice distinction was actually intended by the legislature.  Nevertheless, acceptance of this distinction enables one to give these provisions an operation which is internally harmonious and commercially convenient.  There is no good reason not to give effect to it. 

[16]  I am, therefore, respectfully in agreement with Holmes JA that the argument advanced by the respondent pursuant to its notice of contention must be accepted, and that the decision of the learned primary judge should be sustained on this ground.

[17]  HOLMES JA:  This appeal concerns the validity of a notice of claim of charge given pursuant to s 10(1)(a) of the Subcontractors’ Charges Act 1974 (Qld).  The appellant, first respondent and second respondent are, respectively, a subcontractor which performed plumbing work at a construction site, the building contractor with whom the subcontract was made and the principal, or employer, in respect of the construction.  (The employer did not take any part in the argument below or in this appeal.)  On 18 May 2006, the appellant subcontractor sent a notice of claim of charge to the employer, but omitted to forward an annexure, which was a statement of account.  The employer received the notice in that form on 19 May 2006.  The question was whether its service constituted giving notice of claim of charge under s 10(1)(a).  If it did, s 15(1)(b) of the Subcontractors’ Charges Act required that any proceeding in respect of the charge be commenced within one month, i.e. by 19 June 2006. If that did not occur, s 15(3) operated to deem the charge extinguished.

[18]  The contractor successfully argued at first instance that the notice given on 19 May was valid and that the charge was extinguished because proceedings were not brought to enforce it until 21 June 2006.  It accordingly obtained summary judgment on the subcontractor’s claim in respect of the charge.  It was unnecessary for the learned judge to rule on an alternative argument, made in the event of a finding that the notice was served later, which was that the charge had not attached at all, because the employer was served after the contractor.

The legislation

[19] Section 10 of the Subcontractors’ Charges Act sets out the requirements for a valid notice of claim of charge.  These are the relevant subsections: 

10Notice of claim of charge

(1)A subcontractor who intends to claim a charge on money payable under the contract to the subcontractor’s contractor or to a superior contractor—

(a)must give notice to the employer or superior contractor by whom the money is payable, specifying the amount and particulars of the claim certified as prescribed by a qualified person and stating that the subcontractor requires the employer or superior contractor, as the case may be, to take the necessary steps to see that it is paid or secured to the subcontractor; and

….

(b)must give notice of having made the claim to the contractor to whom the money is payable.

(1A)The claim is in respect of—

(a)money payable to the subcontractor at the date of the notice; and

(b)money to become payable to the subcontractor after the date of the notice for work done by the subcontractor prior to that date.

(1B)A notice of claim of charge must be supported by a statutory declaration of the subcontractor, or, if the subcontractor is a corporation, of an officer of the corporation, about the correctness of the claim, including the correctness of the amount of the claim.

(1C)The statutory declaration must be in the approved form.

….

(1D)(4) If notice is not given pursuant to this section, the charge does not attach.

…..

(5) A notice of claim of charge may be in the approved form, but the validity of the notice is not affected by any inaccuracy or want of form if the money sought to be charged and the amount of the claim can be ascertained with reasonable certainty from the notice.

(6) A claim—

(a)that is not certified as required under subsection (1)(a), and supported by a statutory declaration under subsection (1B); or

(b)that is supported by a certificate given by a person in contravention of section 10A(2);

is not a valid claim for the purposes of this section and a notice of claim of charge based on such a claim is of no force or effect.”

[20]  Section 25 of the Subcontractors’ Charges Act provides that the Chief Executive may approve forms.  Among the forms approved and gazetted pursuant to that power are Form 1, “Notice of Claim of Charge” and Form 2, “Notice to Contractor of Claim of Charge Being Given”.

[21]  Section 11 sets out the consequences of a notice of claim of charge:

“(1)If a notice of claim of charge is given pursuant to section 10, the person to whom it is given must retain, until the court in which the claim is heard directs to whom and in what manner the same is to be paid, a sufficient part of the money that is or is to become payable by the person under the contract to satisfy the claim.

(2)A person who fails to retain the amount that the person is required to retain is personally liable to pay to the subcontractor the amount of the claim not exceeding the amount that the person is required by this section to retain.

(3)Within 14 days after the notice of the claim of charge mentioned in subsection (1) is given under section 10(1)(b) to the contractor to whom the money is payable, the contractor must give to the employer or superior subcontractor by whom the money is payable, and to the subcontractor giving notice of the claim of charge, a notice (contractor’s notice) in the approved form that the contractor—

(a)accepts liability to pay the amount claimed; or

(b)disputes the claim; or

(c)accepts liability to pay the amount (the stated amount) stated in the contractor’s notice, but otherwise disputes the claim.

(4)If the contractor’s notice is given under subsection (3)(a), the employer or superior contractor by whom the money is payable must pay to the subcontractor the amount the employer or superior contractor is required to retain.

(4A)If the contractor’s notice is given under subsection (3)(c), the employer or superior contractor by whom money is payable must pay to the subcontractor the amount the employer or superior contractor is required to retain, up to the stated amount.

(4B)However, the employer or superior contractor is required to comply with subsection (4) or (4A) only if, after payment is made under the subsection, the retained amount will be equal to or more than the unsatisfied amount.

(5)An employer or superior contractor may, at any time after notice of claim of charge has been given to the employer or superior contractor, pay into court the amount that the employer or superior contractor is required to retain under this section.

(6)A payment made pursuant to this section discharges the employer or superior contractor, as the case may be, of all further liability in respect of the amount paid and of the costs of any proceeding in relation to the amount paid.”

The factual background

[22] The notice of claim of charge forwarded in the approved and gazetted form by the subcontractor on 19 May 2006 identified Toga Developments (No 31) Pty Ltd as employer, the subcontractor as claimant and J M Kelly (Project Builders) Pty Ltd as the contractor to whom money was payable by the employer and by whom money was payable to the claimant.  It gave notice that the charge was claimed on money payable by the employer to the contractor and was for “the Amount and concerning Particulars of Claim” for work done by the claimant subcontractor under its subcontract with the contractor; and that the subcontractor required the employer to take the necessary steps to see that the money payable to the contractor was paid or secured to the subcontractor.  These details were given:

Contract:

(Identify contract between Employer and Contractor)

Address where Claimant’s work was done

Contract for the construction of Swell Apartments Burleigh described by the superintendent as project 1064-01

1638 Tweed Street

Burleigh Heads, QLD

Amount Claimed:

$1,435,237.30 (incl. GST) calculated in accordance with the statement of account annexed and marked “A”

Particulars of Claim:

(Give particulars of work done by Claimant)

The installation of Hydraulic Services as per the subcontract dated 1 July 2004

Dates between which the work was carried out:

June 2004 – April 2006

  

[23]  As the approved form requires, the claim was supported by statutory declaration, made by an officer of the claimant, Mr Ahern; he declared that the “information in this claim including the amount of the claim is correct.”  A qualified person, Mr Hamilton, identified his qualification and certified (in the terms used in the approved form) that he had examined the claim and it was “prima facie a proper claim to proceed pursuant to the provisions of the Subcontractors’ Charges Act 1974.”  The evidence was that at the time the statutory declaration and certification were completed, the “statement of account annexed and marked ‘A’”, referred to under “Amount Claimed” (Annexure A), was part of the notice.

[24]  Annexure A set out the amount said to be owed by reference to invoice number, date, amount invoiced and amount certified, together with details of payments in terms of date paid, amount paid, GST retention and cheque amount.  Those figures were totalled to give an amount invoiced to date, an amount paid to date and the balance, which, adding GST back in, was $1,436,237.30.  But Annexure A (which was the fourth and last page of the document certified and declared) did not accompany the notice of claim of charge when it was first sent to the employer.  The employer’s solicitors responded by pointing out the absence of the annexure, asserting that the notice was invalid in consequence, and requiring its withdrawal.  Meanwhile a copy of the complete document was served on the contractor under cover of a letter dated 19 May 2006, received on 22 May 2006.  On 25 May 2006 the subcontractor sent the missing annexure by facsimile to the employer and on the same date posted a complete copy of the executed notice.  It was received on 29 May 2006. No further attempt was made to serve the contractor.

[25]  On 21 June 2006 the subcontractor commenced proceedings, claiming, as against the contractor, monies due under the subcontract or alternatively payment for work completed, with a further claim against both contractor and employer for the same monies pursuant to the Subcontractors’ Charges Act.  Subsequently, the employer paid the amount of the claim into court.  The contractor then applied for a declaration that the charge was extinguished and an order for payment to it of the amount paid into court by the employer.  At the hearing of its application, it sought an amendment to claim a declaration that no charge attached at all. 

The judgment at first instance

[26]  At first instance, the subcontractor was in the odd position of having to argue that the notice of claim of charge it served on 19 May 2006 was invalid.  It did so by contending that the notice was given only when the whole of the notice as executed was served, with a further argument that the notice was invalid because it did not contain “particulars of the claim” as s 10(1)(a) required.  As to the latter, the subcontractor relied on Walter Construction Group Ltd v J&L Schmider Investments Pty Ltd.[3]In that case, Muir J held that a notice of claim of charge from which it was impossible to ascertain how the claim was made up, the basis of it and whether it was a claim for money payable or to become payable, was not adequately particularised to meet the requirements of s 10(1)(a) and was not valid.

[27]  The learned judge at first instance held that the notice relevant when considering questions of validity under s 10 was the notice as received by the employer, not the document as it was executed or as the subcontractor intended to serve it.  She distinguished Walter Construction, noting that there had been significant changes in the forms approved under the Act since Muir J had given his decision.  Prior to 2002, the relevant form had required the subcontractor to claim specified amounts “calculated as follows”.  In addition, the difficulty identified by Muir J in ascertaining whether the claim was one for money payable or to become payable no longer existed, because the Act now referred to “money that is or is to become payable to a subcontractor”. 

[28]  Notwithstanding, her Honour found that the notice of claim of charge served on the employer on 19 May 2006 did not provide particulars of the work done, as the form required.  That was a “want of form” within the meaning of s 10(5).  The monies sought to be charged and the amount of the claim could be ascertained with reasonable certainty from the notice.  Consequently, by virtue of s 10(5), its validity was unaffected by the deficiency in provision of particulars of work done. Having found that it was a valid notice under s 10(1)(a), she gave judgement for the contractor in respect of that aspect of the subcontractor’s claim.  In the absence of any argument to the contrary by the employer, she made the order sought, for payment of the funds held in court to the contractor. 

The subcontractor’s arguments on appeal

[29]  The subcontractor advanced three arguments: firstly, that s 10 required the service of the notice of claim of charge as executed (that is, as certified and declared), which, in the absence of the annexure, had not occurred on 19 May 2006; alternatively, that the document which it forwarded to the employer on 19 May was manifestly incomplete, and service did not take place until the annexure was sent on 25 May 2006; and thirdly, and once again in the alternative, that the notice lacked sufficient particularity for validity, and the failure to supply the annexure was not merely an “inaccuracy or want of form” of the kind with which s 10(5) was concerned.

[30]  The subcontractor argued that s 10 set up a series of steps required before notice could be given under sub-s (1)(a).  It required the particulars of the claim (not merely its amount) to be specified in the notice, certified by a qualified person, and declared to be correct by the claimant or its officer.  It was only when the document as certified and declared was delivered that notice was given, and that was not a question of subjective intention but of whether, objectively speaking, the document which was served was that which had been certified and declared correct.  In the present case, the relevant document was the document with the annexure, in which the particulars of the claim were to be found.

[31]  In the alternative, the subcontractor submitted that the document served on 19 May 2006 was on its face incomplete, because it incorporated the annexure by its reference to it.  It was obvious to any recipient that part was yet to be provided. Thus notice had not been given until the annexure was provided at the end of May 2006.

[32]  In any event, the subcontractor said, the notice of claim of charge sent to the employer without the annexure was invalid, because it did not specify “the amount and particulars of the claim” as s 10(1)(a) required.  Construing the provision in context, as Project Blue Sky[4] prescribes, it was vital that it be plain to both the principal and the contractor how the claim was made out.  Section 11 required the employer to make a decision as to whether there was a properly given notice of claim; if there were, it was obliged to retain money to satisfy it.   The consequences of the decision, whichever way it was made, were serious: if the employer failed to retain the amounts required it became personally liable to pay the subcontractor; if it did retain the amount, it meant refusing to pay the contractor, with possible implications for its solvency.  The contractor had also, under s 11(3), to give a notice indicating whether it accepted liability or disputed the claim.  Both contractor and employer needed, then, in order to fulfil their obligations under s 11, particulars enabling them to know how the claim was constituted.  Those imperatives were relevant in construing what was meant by the s 10(1)(a) requirement of “specifying the amount and particulars of the claim”.

[33]  The claim here provided even less information than that under consideration in Walter Construction Group Ltd v J & L Schmider Investments Pty Ltd, and there had been no change in the requirements of s 10(1)(a) since that decision was given. Section 10(5) could not cure departures from s 10(1)(a); it simply cured departures from the approved form.  Here the failure to attach the annexure was unrelated to the approved form.  In any case that failure was not a want of form; it was a want of substance. 

The contractor’s arguments on appeal

[34]  In answer, the contractor contended that s 10 created three requirements going to validity: the ascertainability, with reasonable certainty, of the money sought to be charged and the amount of the claim; certification of the claim by a qualified person; and a statutory declaration by the subcontractor about the correctness of the claim.  As to the first, the existence and terms of s 10(5) were clear indications of the legislature’s intention: that want of particularity would not invalidate a notice unless it meant that the money sought to be charged and the amount of the claim could not be ascertained with reasonable certainty.  No greater particularity than that was required, because protection against the possibility that a subcontractor might make an unjustified claim was afforded by the further conditions of validity, certification and statutory declaration.

[35]  The Act had been amended since the decision in Walter Construction was given: those amendments included the requirement for a statutory declaration as to the correctness of the claim, steps which, it was said in Abigroup Contractors Pty Ltd v Multiplex Constructions Pty Ltd,[5] were designed to limit the potential for abuse.[6]  At the same time Form 1 had changed: the “particulars of claim” portion now merely required identification of the work done.  So far as the second and third requirements of validity were concerned, neither the Act nor the approved form in either case required the certifier or the declarant to set out the evidence relied on in forming his or her opinion.  The notice as provided to the employer on 19 May met each of the conditions for validity.

The Notice of Contention

[36]  By Notice of Contention, the contractor argued that if the notice given on 19 May 2006 was not valid, s 10(1) had not been complied with because notice of having made the claim (required by s 10(1)(b)) had been given to the contractor, on 22 May 2006, before the notice of claim of charge was given to the employer.  Whether that occurred on 25 or 29 May 2006, s 10(4) made it clear that in the absence of compliance with s 10, the charge would not attach. In Ex parte Austco Pty Ltd,[7] Thomas J held that s 10(4), in providing the charge does not attach “if notice is not given pursuant to this section”, referred to both of the notices: that is, the notice to the employer of the claim and the notice to the contractor of having made the claim.

[37]  The subcontractor responded to the Notice of Contention by saying that s 10(1)(b) merely required that it give notice of having made the claim to the contractor. The claim was made when it had been certified by the independent qualified person and executed by the completion of the statutory declaration.  It was irrelevant that the fact that the claim had been made was unknown to anyone else.

[38]  Alternatively, the subcontractor relied on Bock v Don-Rex Furniture (Qld),[8] arguing that the statutory provision in that case concerning the timing of service was identical in its effect to s 10(1)(b).  Section 9(A)(2) of the Workers’ Compensation Act 1916 (Qld) required a worker suing his employer to serve the Workers’ Compensation Board with a copy of the process “within seven days after service [of it] upon the employer”.  The plaintiff had issued a writ and served it on the employer, but failed to serve a copy on the Workers’ Compensation Board until two months later.  Immediately after it served the Board, it re-served the writ on the employer.  The question for the court was whether service on the defendant after service on the Board was good service.  Sheahan J accepted that the words “within seven days after” set only the limit beyond which service could not be effected and did not fix the first point in time in which it might be effected.  Thus it was legitimate for service on the Board to precede service on the defendant.

[39] Bock v Don-Rex Furniture was applied in Re Dallyn Investments Pty Ltd[9] and Verra v Lane.[10]Both were cases concerning statutory prescriptions that certain events (respectively, lodgement of a caveat, sale of a property) take place within a specified time of another event (obtaining judgment, arrival at a new centre). In each case it was held that the requirement that the second event occur within the specified period merely fixed a time limit beyond which it could not occur but did not prescribe the point in time before which it could not occur.

Was the Notice of Claim of Charge valid?

[40]  The Subcontractors’ Charges Act is, as has been observed elsewhere,[11] a difficult piece of legislation to navigate.  One can only try to construe s 10 by reading the provision in the context of the regime in which it appears and endeavouring to discern the statutory intention behind it.  There is, accordingly, considerable force to the subcontractor’s submissions about the purpose of the notice of claim of charge and the particulars of claim, in giving the employer and the contractor sufficient information to decide, in each case, what course they should take in response to the notice.  Recognising that the employer must be in a position to make the necessary judgement on receipt of the notice, it seems to me improbable that the legislative intention was that the notice as executed must be delivered in order to constitute service of a valid notice.  The employer has, in the ordinary course, no means of knowing whether the notice of claim of charge as received is identical with the notice as certified and declared.  It follows that I agree with the learned judge at first instance that the question of validity must be determined by reference to the notice as given to the employer, not by reference to the notice as executed. 

[41]  On the other hand, given the position in which the employer is placed by the requirements of s 11(1), it is reasonable to construe s 10(1)(a) as requiring the delivery of a notice of claim of charge which on its face is a valid notice, in the sense that it does not purport to be otherwise.  Thus, where the notice as delivered is expressed to be incomplete in a material respect - as here, because particulars of how the claim was calculated were said to be attached, but were missing - an employer is entitled to regard the notice as incomplete and invalid until the missing part is served.  In this case, what was served was manifestly not the entire notice. The subcontractor is correct to say that service of it was not complete without the missing annexure.

[42]  It is not necessary, then, to address the argument as to whether the particulars in the notice were, in the absence of the annexure, sufficient.  I would simply say that, in my view, the argument that s 10(5) identifies the minimum particulars required under s 10(1)(a) by reference to the money sought to be charged and the amount of the claim, is flawed.  Section 10(5) identifies two aspects in which a want of form or inaccuracy will be fatal: where it is not possible to ascertain the monies to be charged and where it is not possible to ascertain the amount of claim with reasonable certainty.  It has nothing to say about the particulars of claim required under s 10(1)(a).  If the particulars s 10(1)(a) requires are not provided, that is not a matter of form or inaccuracy, but a matter of substance.  Section 10(5) will not excuse the lack.

Did the charge attach?

[43]  That leads me, then, to the argument on the Notice of Contention.  Nothing turns on whether one regards service as having taken place on 25 May (when Annexure A was provided) or 29 May (when the complete notice was re-served).  The question is whether giving the contractor notice of the claim’s having been made before completing service of the notice of claim of charge on the employer, constituted the giving of notice pursuant to s 10.  Austco[12] should, in my view, be accepted as correct on this point: both notices had to be given in accordance with the section in order for the charge to attach. 

[44] Bock v Don-Rex Furniture is distinguishable, as are Re Dallyn Investments Pty Ltd and Verra v Lane.  Each of those cases concerned the period within which something had to take place, that period being limited by the lapse of time after a given event.  Here, the statute requires specifically that the contractor be informed that an event has taken place: that the claim has been made.  That cannot occur before the point at which the claim is made.  Subsection 10(1) is not capable of any reading other than that the events must occur in order: that notice of claim of charge must be given to the employer before notice of having made the claim is given to the contractor. 

[45]  As to what “having made the claim” means, the subcontractor took the position, as already recorded, that it meant the execution of the statutory declaration and certification.  The respondent, on the other hand, contended that the claim was made when the employer was given notice of claim of charge.  Both of those approaches have, in my view, unfortunate results.  There seems little point in giving a contractor notice that a claim has been made if nothing more has happened than that the form has been completed.  On the other hand, if it were necessary that the employer had received the claim before the subcontractor could give notice of having made it, the latter would be prevented from proceeding until and unless he could establish the fact of receipt.

[46]  The proper construction of the section turns, in my view, on the difference in expression as between sub-ss 10(1)(a)  and (1)(b); between giving notice and having made the claim.  It is implicit in the requirement that the subcontractor “give notice to the employer” that the employer receives the notice.  “Having made the claim” does not imply receipt; it entails that the subcontractor has done what it needs to in order to communicate the claim to the employer - by completing the necessary form and sending it by whatever means is adopted - but not necessarily that the claim has reached its intended recipient.  Thus, once a subcontractor has taken the necessary steps to transmit the claim to the employer he has made his claim and must give notice of having done so to the contractor.  That notice, since the statute specifies no time limit, must be given as soon as possible.[13]

[47]  In the present case, the employer was not given a complete notice of claim of charge until, on the more benevolent view, 25 May 2006.  The contractor had been given notice of the subcontractor’s having made the claim on 22 May 2006, before it was made; it was not therefore a notice within the meaning of s 10(1)(b).  It follows that the charge did not attach and that the contractor was entitled to summary judgment (although not for the reasons given at first instance).

Costs

[48]  The subcontractor argued that if this court concluded the appeal should be dismissed on the basis that the charge did not attach, rather than that it was extinguished, it should be given its costs up to the day of hearing at first instance, when the contractor was granted leave to amend its application to include the Notice of Contention point. 

[49]  But an examination of the subcontractor’s approach does not support that argument. The sequence of events begins with the subcontractor’s correspondence, which asserted that the notice was given on 19 May 2006.  The statement of claim did not suggest a second attempt at service, or service in a staggered form; it rather cagily referred to service of the employer “on or about 22 May 2006”; not a date on which the employer received anything, on anyone’s version of events.  On the day before the hearing of the contractor’s summary judgment application, the parties exchanged written submissions.  The contractor in its outline, having made its primary point that the 19 May notice was valid, went on to deal with the consequences if service occurred later.  It contended, as it has done here, that the charge would not in that event have attached at all.  The subcontractor, it seems in advance of and in anticipation of receiving the contractor’s submissions, made the contrary argument.  In submissions in reply, the contractor repeated its contention and foreshadowed an application to amend to seek a declaration that no charge was created.  At the hearing itself, the application for the amendment was formally made and was granted unopposed. 

[50]  Given that prior to the exchange of written submissions, the subcontractor does not seem to have taken a positive position that service of the notice of claim of charge occurred with the provision of the annexure, it is unremarkable that the contractor had not previously sought orders on the basis of a finding to that effect.  There seems to have been no element of surprise or disadvantage to the subcontractor in the amendment.  It did not abandon its resistance to summary judgment once the contractor advanced the argument, and it is difficult to see how the course of events would have been any different had the declaration that the charge did not attach been sought earlier.  I do not think that the late amendment justifies a departure from the usual costs order.

Order

[51]  The appeal should be dismissed with costs.

[52]  MUIR JA:  I agree with the orders proposed by Holmes JA. Her recitation of relevant facts, contentions of the parties and provisions of the Subcontractors’ Charges Act 1974 (Qld), which I gratefully adopt, makes it possible for me state my reasons briefly.

The appellant’s contention that s 10 of the Act requires service of the notice of claim of charge in the form in which it was executed.

[53]  I agree with Holmes JA that this argument should be rejected. I agree also with her Honour’s reasons in this regard. I would add that the argument derives no support from the wording of s 10.  The section requires merely that the notice referred to in s 10(1)(a) specify “the amount and particulars of the claim certified as prescribed” and contain the statement required by subsection (1)(a).  In addition it must be “supported” by a statutory declaration of the subcontractor in the approved form.[14]

[54]  If a notice given by a claimant meets these requirements it will be good irrespective of whether part of the notice initially signed by the claimant is omitted from the document served.

The appellant’s contention that the document served by the appellant on the second respondent under cover of a letter from the appellant’s solicitors dated 18 May 2006 and received on 19 May 2006, was so manifestly deficient, through the absence of Annexure “A”, that it was not a notice within the meaning of s 10. 

[55]  The submission is to the following effect.  Even if what is relevant for the purposes of s 10 is not the document executed by the claimant but the document the claimant purported to serve, that document is “still the executed notice”.  Page 2 of the document served referred to “the statement of account annexed and marked ‘A’”.  This incorporated the annexure so that it formed part of the document purported to be served.  A person reading the document provided on 19 May 2006 (“the Notice”) would be under no doubt that part of the document “purportedly served” had yet to be provided. Consequently, service was not effected until the completed document was provided.

[56]  The annexure formed part of the Notice when signed and was intended to be served together with the balance of the Notice.  But, the focus of s 10 is on what is done by way of the giving of notice rather than on the intention of the claimant giving the notice or the historical form and content of the document by which notice is given.  If what was given, although incomplete, meets the requirements of s 10 there can be no invalidity.

[57]  The requirements of a notice of claim of charge are set out in s 10.  Whether a notice meets those requirements and, if it does not, the consequences of the failure, must be determined by an analysis of the notice in light of the provisions of the Act, and in particular, s 10. The Act contemplates that a recipient of a notice of claim of charge, or of a notice under s 10(1)(b), be able to determine its response by reference to the document served. It does not contemplate that the recipient of such a notice be obliged to undertake a preliminary enquiry into whether, viewed objectively, the document served was in fact the document the claimant intended to serve. Nor does it contemplate that an incomplete or deficient document served by a claimant which intended to serve the document in that form, should not be treated as a notice under s 10(1)(a).

[58]  A contrary conclusion would be productive of undesirable uncertainty, if not confusion. The facts under consideration illustrate the point.  On one view of it, the absence of Annexure “A” from the Notice may have indicated to a reasonable recipient that the notice was incomplete and was not intended to be the appellant’s notice of claim of charge. But the contrary is clearly arguable. The Notice was sent under cover of a solicitor’s letter asserting service of “a notice of claim of charge under the Subcontractor’s Act 1974” and a requirement “under section 11(1) of the Act … to retain … money”.  The Notice itself contained a certificate by a qualified person and a statutory declaration on behalf of the claimant.  Moreover, the appellant’s solicitors in a facsimile of 25 May 2006 to the second respondent’s solicitors claimed that the Notice, in the form initially served, was a valid notice of claim of charge.  The letter also stated that the particulars of claim were in the section of the Notice “marked ‘Particulars of Claim’” and that “Annexure ‘A’ merely sets out how the amount claimed has been calculated.”

[59]  The omission of a schedule, clause or annexure from a document is not necessarily the product of accident or inadvertence.  It would not be remarkable if the drafter of a notice in the form of the Notice, in reliance on a precedent, included an unnecessary reference to an annexure.  Alternatively, such a drafter may intend initially to have an annexure but undergo a change of mind.  There will be cases in which the intention of the claimant in relation to the notice, objectively ascertained, is even more obscure.  But, whatever the circumstances, it is unlikely, in my view, that the Act contemplates that the recipient of a document identifiable as a purported notice of claim of charge not be entitled to act on the basis that the document is what it purports to be.

[60]  The giving of a notice under s 10 is a serious act which may have a significant impact on the rights and finances of persons or corporations affected by it.  It may be inferred from the Act’s provisions that a purpose of the Act was to provide a relatively simple and expeditious mechanism for establishing and processing subcontractors’ charges. Consequently, there is much to be said for an approach which enables the efficacy of a purported notice of claim of charge to be determined merely by an assessment of whether it meets the Act’s requirements. And there is good reason, in my view, why a claimant which serves a document purporting to be a notice under s 10(1)(a) should be fixed with the consequences of its actions.

[61]  If the question to be determined in relation to an apparently incomplete notice is not one of statutory construction, but is merely a factual determination of whether the notice, on its face, is to be regarded properly as a notice of claim of charge, I would answer in the affirmative generally for the reasons given above. The document was: in the prescribed form; described as a notice of claim of charge on its face; held out as a notice of claim of charge in the covering letter and was accompanied by due certification and confirmation.

The appellant’s contention that the Notice was invalid for failing to specify the amount and particulars of the claim as required by s 10(1)(a).

[62]  The appellant’s argument relies heavily on Walter Construction Group Ltd v J & L Schmider Investments Pty Ltd.[15] The report of the decision suggests that the arguments relied on by the parties in these proceedings were not advanced in that case. As the learned primary judge observed, the wording of s 10 and of the relevant statutory forms at the time relevant to this proceeding is materially different from that considered in Walter Construction. Also, it was common ground in Walter Construction that nothing recognisable as the required particulars had been given. The case is thus of little assistance for present purposes.

[63]  The word “claim” in s 10(1)(a) means the claim made by the notice of claim of charge:  namely, a claim by the claimant subcontractor of a charge against an employer or superior contractor on moneys allegedly payable or to become payable under the contract between the employer and the contractor.  It is of some significance for present purposes that “claim” is not synonymous with “the amount claimed”. If that were the case s 10(1)(a) would need to be construed as if it provided, “specifying the amount claimed and particulars of the amount”.

[64]  The nature of the obligation to particularise a claim must be understood in the light of the statutory context in which the provision containing the obligation appears[16] and of the purpose served by the obligation.[17] An obviously relevant consideration is the consequences of making the claim.  The person to whom the notice of claim of charge is given under s 10(1)(a) must retain the moneys described in s 11(1) and the contactor must give the “contractor’s notice in the approved form”[18] to the subcontractor stating whether the contractor:

“(a)       accepts liability to pay the amount claimed; or

  (b)       disputes the claim; or

  (c)    accepts liability to pay the amount…stated in the contractor’s notice, but otherwise disputes the claim.”

[65]  It seems likely that the purpose of providing the particulars of claim is to enable those affected by the claim of charge to determine the moneys to be retained under s 11(1) and to enable the contractor to determine what course to take under s 11(3).  The prescribed notice of claim of charge form provides for identification of:

(a) the contract in respect of which the claim is made including the parties to it;

(b) the nature and extent of the work done;

(c) the place at which the work was done;

(d) the dates between which the work was done;

(e) the names of the claimant, contractor and employer or superior contractor; and

(f) the amount claimed.

[66]  The statutory form does not appear to contemplate further particularisation of the amount of the claim. It treats the “particulars of claim” as synonymous with “particulars of work done by claimant”.  Whether that is what subsection (1)(a) has in mind may be doubted. The words of the Act, however, do not elaborate on the degree of particularity required and it may have been the intention that the prescribed form or the prescribed certification would offer appropriate guidance in this regard.

[67]  The Notice, being in the prescribed form and lacking annexure “A”, fails to particularise the amount claimed in the sense of identifying the composition of the sum claimed, for example, by reference to invoices rendered, invoices paid, progress claims or by other means. A consequence of the failure is that the first respondent may not have been in a position to make a fully informed decision under s 11(3). But whether these inadequacies cause the Notice to fail to comply with s 10(1)(a) depends on the construction of s 10.

[68]  It is likely that in respect of a significant proportion of notices given under s 10 there will be room for argument about whether the claim has been appropriately, fully or adequately particularised.  It would have been apparent when the Act was drafted and the Bill debated, that time and other constraints would often prevent the giving of detailed particulars of the amount claimed at the time of service of the notice of claim of charge. It is thus unlikely that the Legislature intended that the validity of such notices would depend on the outcome of the arguments about the sufficiency of particulars with all the consequent uncertainty. Once this position is reached, it is difficult to identify a minimum degree of particularity required to meet the requirements of s 10(1)(a) apart, perhaps, from that which may result from the certification and statutory declaration requirements.

[69]  The purpose of certification by a qualified person and of the supporting statutory declaration appears to be to ensure that any claim is both genuine and appropriately worded and particularised. Where particularisation is deficient, these requirements nevertheless assist by providing some assurance as to the bona fides of the claim.

[70]  Section 10(5) provides, implicitly, that notices need not be in the approved form.  The words “or want of form” in the subsection appear applicable only to notices in the approved form but I see no reason why the saving provision relating to inaccuracy should be confined to notices in the approved form. I agree with Holmes JA that subsection 10(5) deals only with “inaccuracy” or “want of form” and that failure to give the particulars required by s 10(1)(a) is not a matter addressed by the subsection. The subsection however is of relevance for present purposes in that it does suggest a robust approach to the determination of whether the Act’s requirements have been met.

[71]  In light of these considerations I conclude that the Notice did not fail for want of particularity. The Notice did not give full or, indeed, any further particularisation of the amount claimed. It did specify, however, “particulars of the claim” by stating the amount of the claim and all of the other matters addressed in the statutory form. For the reasons advanced earlier, “particulars of the claim” does not equate with “full particularisation of the amount of the claim”. What was provided is recognisable as “particulars of the claim” within the meaning of s 10(1)(a). And not without hesitation, I conclude that, in light of the certification of the claim and the accompanying declaration, the particulars were sufficient to effect the legislative purpose earlier identified.[19]

The Notice of Contention

[72]  The foregoing conclusions make it unnecessary for me to address the argument identified in the Notice of Contention. It is nevertheless desirable that I record that I do not hold the view that “having made the claim” in s 10(1)(b) means something different from having given notice under s 10(1)(a). The contrary view, to my mind, attributes to s 10(1)(b) a subtlety of approach which consideration of the Act’s other provisions suggests is unwarranted. Section 10(1)(a) sets out how a notice of claim of charge must be made: by the giving of notice to the employer or superior contractor. Section 10(1)(b) requires the claimant to “give notice of having made the claim”. The natural meaning of those words is that the claimant must give notice of the fact that notice of claim of charge has been given to the employer or superior contractor. It is only by the giving of such notice that a notice of claim of charge may be made. I see no practical problem arising from this construction. Prompt and certain service may be effected nowadays for relatively little cost by a variety of means.

Footnotes

[1] Cf Ronnor Pty Ltd v D & R Fabrications Pty Ltd [1983] 2 Qd R 455 at 458; Baulderstone Hornibrook Pty Ltd v Broen Australia Pty Ltd [2003] 2 Qd R 577 at 583.

[2] [1985] 2 Qd R 1 at 4.

[3] [2001] QSC 124.

[4] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.

[5] [2004] 1 Qd R 470.

[6] At page 476.

[7] [1985] 2 Qd R 1, followed by Williams J in Ex parte Peter Bushnell & Co Pty Ltd [1985] 2 Qd R 383.

[8] [1981] Qd R 326.

[9] [1989] 1 Qd R 121.

[10] [2002] QSC 121.

[11] See, for example, Re Radair Pty Ltd [1998] 2 Qd R 539 at 541.

[12] [1985] 2 Qd R 1.

[13] Acts Interpretation Act 1954 (Qld), s 38(4).

[14] Section10(1C).

[15] [2001] QSC 124, BS No 2867 of 2001, 5 April 2001.

[16] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381.

[17] McRae v Coulton (1986) 7 NSWLR 644 at 660.

[18] Section 11(3) of the Act.

[19] Cf Attorney-General (NSW); ex rel Franklins Stores Pty Ltd v Lizelle Pty Ltd [1977] 2 NSWLR 955 at 968.

Close

Editorial Notes

  • Published Case Name:

    Ed Ahern Plumbing (Gold Coast) P/L v J M Kelly (Project Builders) P/L & Anor

  • Shortened Case Name:

    Ed Ahern Plumbing (Gold Coast) Pty Ltd v J M Kelly (Project Builders) Pty Ltd

  • Reported Citation:

    [2008] 2 Qd R 123

  • MNC:

    [2007] QCA 452

  • Court:

    QCA

  • Judge(s):

    Keane JA, Holmes JA, Muir JA

  • Date:

    21 Dec 2007

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2007] QSC 9903 May 2007Application for summary judgment by defendant that depends on plaintiff's entitlement to a charge under the Subcontractors' Charges Act on money payable; that the notice to principal as served was valid, and proceeding was therefore not commenced within the time period in s 15(1)(b) and the charge is deemed to be extinguished pursuant to s 15(3): Mullins J.
Appeal Determined (QCA)[2007] QCA 452 [2008] 2 Qd R 123; (2010) 26 BCL 11621 Dec 2007Appeal dismissed with costs; concerning the validity of a notice of charge given under s 10(1)(a) Subcontractors' Charges Act; notice required by s 10(1)(b) could be sent as soon as the notice required by s 10(1)(a) has been sent: Keane, Holmes and Muir JJA.

Appeal Status

Appeal Determined (QCA)

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