Sempac Pty Ltd v Stockport (Qld) Pty Ltd
[2004] QDC 87
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- Sempac Pty Ltd v Stockport (Qld) Pty Ltd[2004] QDC 87
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Sempac Pty Ltd v Stockport (Qld) Pty Ltd[2004] QDC 87
Sempac Pty Ltd v Stockport (Qld) Pty Ltd[2004] QDC 87
DISTRICT COURT OF QUEENSLAND
CITATION: | Sempac Pty Ltd v Stockport (Qld) Pty Ltd and the State of Queensland [2004] QDC 087 |
PARTIES: | SEMPAC PTY LTD Plaintiff (Applicant) Against STOCKPORT (NQ) PTY LTD First Defendant (Respondent) & STATE OF QUEENSLAND Second Defendant |
FILE NO: | 66/04 |
PROCEEDINGS: | Application for summary judgement |
DELIVERED ON: | 28 April 2004 |
DELIVERED AT: | Townsville |
HEARING DATE: | 22 March 2004 |
JUDGE: | CF Wall QC |
ORDERS: | Application dismissed with costs |
CATCHWORDS: | CONTRACT – Subcontractors – PRACTICE – summary Judgement – Subcontractors’ Charges Act – wh. charge attaches to money payable to sub-contractor for work unrelated to head contract and performed for different employer – wh. pl performed “work” within the meaning of Act – unresolved questions of fact. Legislation cited: Rule 292 Uniform Civil Procedure Rules Subcontractors’ Charges Act ss. 5(1)(a), 5(2), 3, 3AA, 8, 9A(1), 10(1)(a), 10(1D), 11, 13, and Forms 1 and 2 Cases Cited: Project Sky Blue and Ors v ABA (1998) 194 C.L.R 355 (FAA) Sun Engineering (Qld) Pty Ltd v Dynac Pty Ltd (Unreported No. S10105 of 1999, Brisbane, 9 May 2000) (FAA) R & R Leach Pty Ltd v Dynac Pty Ltd (Unreported No. 10484, Brisbane, 23 August 2000) (DIS) Caldow Properties Ltd & Anor v H J G Low & Associates Ltd (1971) NZ.L.R 311 (CON) Re Leighton Contractors Pty Ltd (1985) 2 Qd. R 377 (DIS) |
COUNSEL: | Mr A. Moon – Plaintiff Mr R. Quirk – 1st Defendant |
SOLICITORS: | Mr Humphries (Connolly Suthers)- Plaintiff Mr Mosch (Suthers Taylor)- 1st Defendant |
DISTRICT COURT
REVISED COPIES ISSUED
State Reporting Bureau
Date: 29 April, 2004
CIVIL JURISDICTION
JUDGE C.F. WALL QC
No D66 of 2004
SEMPAC PTY LTD (ACN 095 080 738) | Plaintiff |
and | |
STOCKPORT (NQ) PTY LTD (ACN 008 015 834) (Administrators Appointed) and STATE OF QUEENSLAND | First Defendant Second Defendant |
TOWNSVILLE
DATE 28/04/2004
JUDGMENT
HIS HONOUR: This is an application by the plaintiff for summary judgment under rule 292 of the Uniform Civil Procedure Rules.
In April 2002 the first defendant as contractor and the second defendant as employer entered into a contract, (the head contract), whereby the first defendant was to perform road construction works for the second defendant at Gatton (the head contract works).
On the 12th of December 2002 the plaintiff and the first defendant entered into a subcontract (the subcontract or the consultant services agreement, CSA) whereby the plaintiff was to provide estimating and tendering services to the first defendant for the Gatton road works and perform other work for the first defendant unrelated to the Gatton work. It will be less confusing if I refer to the subcontract as the CSA.
The plaintiff carried out the Gatton subcontract work for the first defendant between the 1st of March 2003 and the 14th of May 2003 at a cost of $25,331.45. The plaintiff also performed other work for the first defendant unrelated to the Gatton work.
On the 20th of May 2003 the plaintiff, pursuant to the Subcontractors' Charges Act 1974 (the Act), gave to the second defendant a notice of claim of charge for $42,621.17 and gave to the first defendant a notice of claim of charge being given.
The difference between $42,621.17 and $25,331.45, namely $17,289.72, relates to work performed by the plaintiff under the CSA other than the Gatton work. The plaintiff alleges that the Gatton work performed by the plaintiff for the first defendant was "work" within the meaning of the Act. The first defendant denies that it was. The application involves the interpretation of certain provisions of the Act.
If the work is not "work" under the Act the plaintiff concedes that it cannot succeed on this application for any of its claim based on the Subcontractors' Charges Act.
The first defendant is in liquidation and if the plaintiff cannot succeed on its claim under the Act and was paid the money claimed on its general contractual claim, which the first defendant frankly concedes is owing to the plaintiff, the plaintiff would be required, as an unsecured creditor, to account for it as a preferential payment.
The work performed by the plaintiff for the first defendant under the CSA unrelated to the Gatton work was in respect of a different employer, not the second defendant.
Under the Act the second defendant paid $42,621.17 into Court as owing by it to the first defendant under the head contract, that is, as related to the Gatton work performed by the first defendant.
The plaintiff claims this amount, pursuant to the Act, as owing under the CSA even though only $25,331.45 relates to the Gatton work and the balance, $17,289.72, to other work performed by the plaintiff for the first defendant, but in respect of a different employer, not the second defendant. This latter work had nothing to do with the head contract. The argument as to why the plaintiff could do this was conceded by Mr Moon for the plaintiff to be a "cute point."
If this point fails the claim under the Act is reduced to $25,331.45. If the work performed by the plaintiff under the subcontract was not "work" under the Act the plaintiff's claim, based on the Act, fails and it is left to its general law claim.
This application relates to the claim under the Act. That claim was put in the following way by Mr Moon during argument:
"On the reading of the Act if you have this situation, that there is a subcontractor who has a contract with a contractor and does work under it and the contractor is owed money by an employer with respect to a contract between it and the employer then the subcontractor may maintain a charge on the money owed by the employer to the contractor, even though the amount claimed by the subcontractor is not necessarily associated with the head contract work, so long as it's work done under the subcontract.
This is a bit of an unusual case, your Honour, because most of them normally deal with a claim where all of the work claimed by the subcontractor, all the money claimed by the subcontractor, arises out of the subcontract with respect to work done in the furtherance of the specific head contract."
The first defendant does not dispute that all of the work performed for it by the plaintiff was performed under the CSA.
Mr Moon contends that the construction he submits should be placed on certain provisions of the Act, would allow the plaintiff, as a subcontractor for the Gatton work, to also obtain payment for work unrelated to the Gatton work, notwithstanding that the money owing by the second defendant was only for the Gatton work. He submits that the plaintiff's charge fixes on the total amount owing by the employer to the contractor (here, the amount paid into Court) even including money owing for other work performed by the plaintiff under the CSA for the contractor unrelated to the amount owing by the employer to the contractor. The required nexus is that there be the one contract between the contractor and the subcontractor.
Mr Moon's argument involved the construction of section 5(1)(a) and (2) of the Act which are in the following terms:
"5 Charges in favour of subcontractors
(1) If an employer contracts with a contractor for the performance of work upon or in respect of land or a building, or other structure or permanent improvement upon land or a chattel, every subcontractor of the contractor is entitled to -
- (a)a charge on the money payable to the contractor or a superior contractor under the contractor's, or superior contractor's, contract or subcontract;
(2) The charge of a subcontractor secures payment in accordance with the subcontract of all money that is payable or is to become payable to the subcontractor for work done by the subcontractor under the subcontract."
Section 3 defines "Contractor" and "Subcontractor" as follows:
""contractor" as regards an employer, means a person who contracts directly with the employer to perform work and, as regards a subcontractor, means a person with whom the subcontractor contracts to perform work.
"subcontractor" means a person who contracts with a contractor or with another subcontractor for the performance of work."
Mr Moon submits that there is a subcontract (the CSA) between the first defendant and the plaintiff and that by section 5(2) the plaintiff is entitled to a charge with respect to all the money that is or becomes payable to it under the subcontract whether that work relates to the head contract or not. He submits that section 5(1) and (2) do not limit the subcontractor's entitlement to the head contract, that is, to moneys owing only pursuant to the head contract; had the legislature intended to do that it should or would have said in section 5(1), words to the effect:
"...every subcontractor of the contractor who enters into a contract with the contractor with respect to that work is entitled to..."
In my view Mr Moon's adventurous and ambitious argument cannot succeed when considered in the light of the provisions of the Act as a whole and in this respect it is necessary only that reference be made, for example, to sections 8, 9A(1), 10(1)(a) and (1D), 11 and 13, as well as form 1 (Notice of Claim of Charge) and form 2 (Notice to Contractor of Claim of Charge Being Given). The notices given in the present case are Exhibits DT5 and DT6 to the affidavit of Daniel Tregenza filed on the 22nd of July 2003.
Section 5 must be construed so that it is consistent with the language and purpose of the other provisions of the Act and by reference to the language of the Act viewed as a whole. In this respect Mr Quirk, for the first defendant, referred to Project Sky Blue and Ors-v-ABA (1998) 194 C.L.R. 355 at 381 paragraph [69].
To interpret section 5, as Mr Moon submits, would completely ignore the other provisions of the Act suggesting a contrary interpretation and would lead to unintended and illogical consequences. In my view section 5(2) must be read as referring to a subcontract relating to the employer's contract with the contractor and section 5(1) must be read as meaning every subcontractor of the contractor under the contractor's contract with the employer. The whole scheme of the Act requires that the subcontract be one related to the head contract between the contractor and the employer.
The claim in the form 1 notice, which is given to the employer, is expressed to be given in accordance with section 10 of the Act and is for work done in respect of the contract which clearly means the contract between the employer and the contractor. No like notice was also given by the plaintiff to any other employer, in particular the employer for whom indirectly the work valued at $17,289.72 was or may have been performed.
The section 10 notices (forms 1 and 2) are expressed by section 10 to be given by a subcontractor who intends to claim a charge on money payable under the contract to the subcontractor's contractor. In the present case $42,621.17 was payable by the employer to the contractor under the Gatton contract. The charge can only attach to that money and not also to money payable under another contract between the contractor and another employer more so in circumstances where no form 1 notice is given to that other employer. Further, the charge cannot be for an amount greater than the amount owing by the contractor to a subcontractor.
The contract which gave rise to the right in the subcontractor to claim a charge was the Gatton contract and the charge can only attach in respect of work performed by the subcontractor in respect of that contract.
This is sufficient to dispose of Mr Moon's argument. At best for the plaintiff the claim under the Act can only be for $25,331.45 and the form 1 notice is not a valid claim for any amount exceeding that sum. In fact, it should not have been certified as prescribed by a qualified person for an amount greater than $25,331.45.
The remaining issue is whether the work performed by the plaintiff under the CSA was "work" as defined in the Act. If it clearly is and if an argument to the contrary is "hopeless" or "bound to fail" the plaintiff would be entitled to summary judgment on its claim under the Act for $25,331.45.
Under the CSA (Exhibit DT1 to Mr Tregenza's affidavit) the work which the plaintiff contracted with the first defendant to perform is described as follows in schedules 2 and 3:
"SCHEDULE 2
THE SCOPE OF SERVICES
Scope of work
Sempac is to provide estimating and tendering service including the following as appropriate,
. Tender Identification
. Quantity Take off/verification
. Subcontractor/Supplier Quotation Request and Comparison
. Cost Estimating
. Review and Negotiation
. Client Presentation Preparation
. Handover to construction including report generation
. Input to management/quality systems and related reports
The estimating work is undertaken in the Adelaide office with travel to site for inspections/meetings as required.
Submission of information
Tender information will be available for inspection and review at all times during the tender period at the office of Sempac, or will be provided electronically where so available. Upon completion of the tender a complete file including all relevant calculations, quotes, correspondence, drawings and specifications will be provided to Stockport (NQ) for use."
"SCHEDULE 3
FEE
The contract payments due will be based upon the following
Weekly Rate - $3,650.00 per week (ex GST) pro-rata where applicable.
Includes
. Provision of estimating service as above
. General Consumables (fax, printing, photocopying, files, communications etc)
. Local Travel (by car)
. Supply & use of Estimating Software and Hardware
. Provision of offices including all outgoings
Does not include
. Travel expenses
. Accommodation expenses (as required)
. Document copying (plan printing of drawings and specifications etc)
. Any other expense not specifically included above
Stockport (NQ) is to provide free of charge for business and reasonable personal use
. Mobile Phone
. Fuel Card
All other expenses (not included in hourly rate) will attract a 10% administration charge.
It is noted that the payment scheme may be varied by agreement by both parties prior to or during the execution of the works.
Invoices will be submitted monthly in advance and payment terms are 14 days from the end of the month in which the invoice is submitted (ie. payment for the month in the middle of the next month). Invoices will include a charge register detailing the weekly rate and "other expenses" incurred."
The plaintiff's tax invoices describe the work performed as "contract estimating services". Forms 1 and 2 describe it as "contract engineering/estimating."
In his affidavit filed on the 10th of February 2004 Mr Tregenza, who is the estimating manager for the plaintiff, says:
"6. The "work" performed by the Plaintiff for the First Defendant was work performed by the Plaintiff in respect of the construction of certain road works at Gatton in the State of Queensland, then being undertaken by the First Defendant ("the Gatton sub-contract works"). At material times, the First Defendant was contracted by the Main Roads Department (Queensland) in respect of the construction of certain road works at Gatton ("the Head Contract works").
- At material times, the Gatton sub-contract works performed by the Plaintiff for the First Defendant comprised:-
- (a)Sub-contractor/supplier quotation request and comparison;
- (b)Cost estimating;
- (c)Review and negotiation;
- (d)Client presentation preparation;
- (e)Handover to construction including report generation;
- (f)Input to management/quality systems and related reports.
All of the above functions were undertaken by the Plaintiff in the performance of the generally described items "variation pricing review", "end of month cost review" and "production reviews", a more detailed breakdown of which is exhibited hereto and marked with the letters "DT1".
- All of the Gatton sub-contract works performed by the Plaintiff for the First Defendant, were performed by myself.
- I attended at the site of the Gatton sub-contract works on the following dates:-
- (a)17 January 2003;
- (b)On or about 7 May 2003;
- (c)On or about 15 and 16 May 2003;
- (d)9 June 2003."
Exhibit DT1 is in the following terms:
"The following items are those undertaken on a subcontract basis for the Gatton Project and detailed on the Work Record Job 101.
Variation Pricing Review
. Review of Variation register and identification of costing method
. Collection and review individual variation information
. Review of contractual basis for variation in contract
. Review and correction of contractual basis contained within the claims
. Tabulation and calculation of costs associated with claimed items
. Review against actual cost of construction (where applicable)
. Agreement on overall presentation of claimed amount
End of Month Cost Review
. Collection of relevant documentation including progress claims, cost reports and calculations
. Review of presented costs to date with reference to previous production reviews and tender estimates
. Review of progress claim with reference to indicative progress from cost reports
. Verification of work methods used to obtain costs
. Review and calculation of alternative methods/plant to achieve cost reductions
. Application of reviewed information to cost forecast for individual items within the scope of work
. Comparison of costs to date and forecast costs with tender estimated costs and feedback into estimating library for variation pricing and general records
Production Reviews
. Collection of relevant documentation including production reports and generated costs
. Undertake first principles checking of plant selection/work methods/cycle times to verify (or otherwise) the accuracy of recorded costs.
. Identify job specific conditions that may be contributing to any differences in the anticipated calculated costs and actual obtained costs
. Suggest changes in job specific conditions to reduce overall item cost
. Conduct similar first principles comparisons of differing plant selection/work methods/cycle times to attempt to obtain a more cost effective construction technique
. Sensitivity analysis of costs for each item and the impact upon overall contract value"
The Act provisions defining "work" are contained in sections 3 and 3AA and so far as are relevant they are in the following terms:
"3 Definitions
In this Act -
"work" includes work or labour, whether skilled or unskilled, done or commenced upon the land where the contract or subcontract is being performed by a person of any occupation in connection with -
- (a)the construction, decoration, alteration or repair of a building or other structure upon land; or
- (b)the development or working of a mine, quarry, sandpit, drain, embankment or other excavation in or upon land; or
- (c)the placement, fixation or erection of materials, plant or machinery used or intended to be used for a purpose specified in paragraph (a) or (b); or
- (d)the alteration or improvement of a chattel;
and includes also the supply of materials used or brought on premises to be used by a subcontractor in connection with other work the subject of a contract or subcontract but does not include -
- (e)the mere delivery of goods sold by a vendor under a contract for the sale of goods, to at or upon land; or
- (f)work or labour done or commenced by a person -
(i) under a contract of service; or
- (ii)in connection with the testing of materials or the taking of measurements or quantities; or
- (g)the supply under a contract of hire of materials, plant or machinery not intended to be incorporated in the work."
3AA "Work" to include particular manufacture or fabrication and supply of labour
(1) This section -
- (a)is intended to establish a limited extension of what is work for this Act under section 3, definition "work"; and
- (b)is not intended to have the effect of causing anything that is work under the definition to stop being work.
(2) Under the definition, work includes work or labour, whether skilled or unskilled, done or commenced upon the land where the contract or subcontract is being performed by a person of any occupation in connection with a matter listed in paragraphs (a) to (d) of the definition.
(3) In this Act, "work" also includes the following -
- (a)the manufacture or fabrication, wherever it happens, of project specific components for the contract or subcontract;
- (b)the supply of labour for the contract or subcontract.
(4) In this section -
"supply of labour" does not include the supply of a person to perform an activity that is only administrative in nature."
Mr Moon submits that a road is a structure upon land but contends that he does not have to go that far because of what he submits is the "inclusive" nature of the definition of "work" in section 3 and in this respect he relies upon an unreported decision of Holmes J in Sun Engineering (Qld) Pty Ltd-v-Dynac Pty Ltd, No S10105 of 1999, Brisbane, 9 May 2000. In that case her Honour said:
"Thirdly, it is argued that what was undertaken was work in the ordinary sense of the term. The s 2 definition of "work" is, for the most part, inclusive so that if it is accepted that what was undertaken was work in the ordinary sense it matters not whether or not it was done or commenced upon the land. The only issue then is whether it was more than "the mere delivery of goods sold by a vendor" so as to fall within the exclusion.
The view I take is that the last approach to the construction of the definition of "work" in s 3 is correct, that is, it is an inclusive definition. The references to work, or labour done, or commenced upon the land and to the supply of materials used or brought on premises are broadening rather than limiting.
In essence, I do not think one can disregard the use of the word "includes" in the definition rather than "means."
With respect, I agree with this interpretation and prefer it to the view expressed by Helman J in R & R Leach Pty Ltd-v-Dynac Pty Ltd, unreported No. 10484, Brisbane, 23 August 2000 paragraph [12]. See also Caldow Properties Ltd and Anor-v-H J G Low and Associates Ltd (1971) NZ.L.R 311 as to the difference between "includes" and "means" in the definition of a word. I am unable to agree with the rest of that decision to the effect that notwithstanding the inclusive nature of the similar definition of "work" in the New Zealand Act it was nevertheless qualified by the words "in connection with." (Curiously, Holmes J, whilst referring to this decision did not do so on this aspect.) Likewise, I find myself unable to agree with the view of de Jersey J in Re Leighton Contractors Pty Ltd (1985) 2 Qd. R 377 to a similar effect. Section 3AA(3), for example, appears to require no land connection. I am unable to agree with Mr Quirk's submission that the work must be in connection with work of the type referred to in paragraphs (a) to (d). It is not, therefore, necessary to decide whether a road is a structure within paragraph (a).
The issue then is whether the work is excluded by reason of paragraph (f) of the definition of "work" in section 3.
Mr Quirk submits that the work performed by the plaintiff comes within paragraph (f)(ii). He also relies on the definition of "supply of labour" in section 3AA(4) which, he submits, reinforces paragraph (f)(ii). He does not rely upon paragraph (f)(i).
Mr Moon submits that paragraph (f)(ii) means "something like the work of a quantity surveyor" which should be regarded as different from "contract estimating services." The absence of any evidence one way or the other is, I think, fatal to this submission as I think its resolution involves questions of fact which can only be determined after evidence is heard. That evidence would be directed towards explaining the nature of the work performed by the plaintiff so that a judgment could be made as to the applicability or otherwise of paragraph (f)(ii) and the definition of "supply of labour".
The first defendant denies that what the plaintiff did was "work" within the meaning of the Act asserting that it is not because it falls within paragraph (f)(ii) and the definition of "supply of labour." The plaintiff counters by referring to the absence of any material contradicting the plaintiff's claim. This, with respect, glosses over the onus on the plaintiff to satisfy me, in any event, that the first defendant has "no real prospect of successfully defending all or part of the plaintiff's claim." In the absence of evidence which more probably than not takes the plaintiff's work out of paragraph (f)(ii) and the definition of "supply of labour" I am unable to be so satisfied. It is not sufficient, I consider, for Mr Tregenza merely to assert that what the plaintiff did was "work" within the meaning of the Act or for Mr Moon to submit, without more, that what the plaintiff did was not within either exclusion. At the end of the day some of the work may be and some may not be. It is not possible simply on the material filed by the plaintiff to reach a definitive conclusion in its favour and such a conclusion would be necessary for the plaintiff to succeed on this application.
For these reasons I am not satisfied that the first defendant has no real prospect of successfully defending all or part of the plaintiff's claim. If only a part, I am unable, in the absence of evidence, to say which part. I am not satisfied that a defence alleging that the work the plaintiff did for the first defendant was not "work" for the purposes of the Act is hopeless or bound to fail. The issue cannot be resolved without more evidence from the plaintiff.
The plaintiff's application, which relates only to its claim based on the Act, will therefore be dismissed with costs.