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Panel Concepts Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd[2021] QDC 322

Panel Concepts Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd[2021] QDC 322

DISTRICT COURT OF QUEENSLAND

CITATION:

Panel Concepts Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd [2021] QDC 322

PARTIES:

PANEL CONCEPTS PTY LTD (ACN 095 944 175)

(Applicant)

v

TOMKINS COMMERCIAL & INDUSTRIAL BUILDERS PTY LTD (ACN 061 732 778)

(Respondent)

FILE NO:

2848/21

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

14 December 2021 (ex tempore)

DELIVERED AT:

Brisbane

HEARING DATE:

14 December 2021

JUDGE:

Porter QC DCJ

ORDER:

  1. The originating application filed 2 November 2021 be dismissed; and
  2. The applicant to pay the respondent’s costs on a standard basis.

LEGISLATION:

Acts Interpretation Act 1954 (Qld), s. 35C

Building Industry Fairness (Security of Payment) Act 2017 (Qld), ss. 68, 75, 78, 99

Queensland Building and Construction Commission Act 1991 (Qld), ss. 42, 67, ss. 2, 4,5, 8 of Schedule 1A

CASES:

Clarence Street Pty Ltd v Isis Projects Pty Ltd [2005] NSWCA 391

KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd & Ors [2019] QSC 178

T & M Buckley P/L v 57 Moss Road P/L [2010] QCA 381

Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1

COUNSEL:

P. Somers for the Applicant 

T. McKillop for the Respondent

SOLICITORS:

Robinson Locke Litigation Lawyers for the Applicant

Thomson Geer for the Respondent

Introduction

  1. [1]
    This is the hearing of an originating application for final determination of a claim, pursuant to s. 78 Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIFA) for judgment in favour of the applicant, Panel Concepts (Panel), against the respondent, Tomkins Commercial & Industrial Builders Pty Ltd (Tomkins), for the amount of $99,915.20, together with interest under s. 67 Queensland Building and Construction Commission Act 1991 (Qld) (QBCC Act).
  2. [2]
    The application, as one under s. 78 BIFA, necessarily requires, for its legal foundation, that the following matters be shown:
    1. (a)
      that Panel made a payment claim under s. 75 BIFA;
    2. (b)
      that Tomkins failed to respond with a payment claim within the relevant period (which I note has been made an offence in this version of security for payment legislation); and
    3. (c)
      that Panel has given notice under s. 99 BIFA. 
  3. [3]
    If those matters are established, and the necessary threshold conditions for the application of s. 75 exist, Panel is entitled to judgment for the amount claimed in the payment claim. 
  4. [4]
    Those provisions are the current manifestation of the general arrangement of this legislation for many years, which is that if a payment schedule is not provided in response to a valid payment claim within time, the claimant is entitled to judgment for the amount claimed as an unpaid debt in Court proceedings. Mr McKillop, who appeared for Tomkins, did not cavil with the proposition that the preconditions to the entitlement to judgment arose, so long as Panel was able to establish that the document which he, on behalf of his client, accepts was served as required by the Act, and was not responded to as required by the Act, was in fact a payment claim under the Act.
  5. [5]
    Section 68 BIFA is the current location of the definition of payment claim, which differs a little from the definition in the previous version of the regime.  It provides that a payment claim for a progress payment is a written document that:
    1. (a)
      identifies the construction work…to which the progress payment relates; and
    2. (b)
      states the amount (the claimed amount) of the progress payment that the claimant claims is payable by the respondent; and
    3. (c)
      requests payment of the claimed amount; and
    4. (d)
      includes the other information prescribed by regulation.
  6. [6]
    Tomkins does not cavil with the proposition that the payment claim in question met the requirements of subparagraphs (b), (c), and (to the extent they are relevant) (d) of s. 68(1).  With admirable focus on what is truly in issue, Tomkins challenges only whether the payment claim served in this case, or the document that is contended by Panel to be the payment claim, is a payment claim that meets the requirements of s. 68(1)(a): that is, that it “identifies the construction work…to which the progress payment relates”.
  7. [7]
    Tomkins raises one argument as to why the payment claim does not: that is, that the payment claim fails to identify the construction work to which the progress payment relates. 

The unlicensed work issue

  1. [8]
    I said earlier that Tomkins does not cavil with the application of the statutory provisions that leads to the entitlement to judgment, subject to whether the relevant document is a payment claim.  That did not quite properly reflect their submissions, because the second point they raise is that there is no entitlement to a payment claim under the statute, because the contract relied upon by Panel involved a breach of s. 42(1) QBCC, because by that contract, it is alleged by Tomkins that Panel undertook to carry out construction work which it was not licensed to perform in breach of the prohibition in that section.
  2. [9]
    On that point, Panel accepts that the subcontract in question required it to carry out work for which it was not licensed.  It is not in dispute the subcontract called for the performance by Panel of fire rate sealant works.  It is not in dispute that they are building works for the purpose under the QBCC Act.  It is not in dispute that Panel did not have a licence to do that sort of work.  Panel counters, though with reliance on an exculpatory provision from the prohibition of s. 42(1) QBCC Act, which appears in Schedule 1A to that Act, which was introduced in or about 2013.  It relies, in particular, on s. 8 of Schedule 1A, which provides:

8 Head contracts to carry out building work

  1. (1)
    An unlicensed person who enters into a contract to carry out building work does not contravene section 42(1) merely because the person entered into the contract if the building work---
    1. is not residential construction work or domestic building work; and
    2. is to be carried out by a person (an appropriately licensed contractor) who is licensed to carry out building work of the relevant class.
  1. [10]
    Panel’s argument is that it can take advantage of that exception and contends it can do so because the work was, at all times, to be carried out by an appropriately licensed contractor, because Panel was in the invariable habit of retaining an appropriately licensed contractor to do that work.  Tomkins counters with the proposition that, on the proper construction of s. 8 of Schedule 1A, Panel cannot take advantage of that provision because it is concerned with head contractors only: that is, contractors who contract directly with principals for building work.  That is the shape of the dispute before me.
  2. [11]
    I want to deal firstly with the QBCC point, because if there was unlicensed work that was not excused by s. 8 of Schedule 1A, the payment claim will fall because the contract will be unenforceable at the suit of Panel.  The argument about the proper construction of the section is a narrow one.  The heading of the section (which is part of the section pursuant to s. 35C(1) Acts Interpretation Act 1954 (Qld)) contains the expression head contracts to carry out building work” (underlining added).
  3. [12]
    Mr McKillop, for Tomkins, says that meaning must be given to those underlined words, and that when they refer to head contracts, that should be construed as referring to contracts between principals and building contractors.  Mr Somers, who appeared for Panel, on the other hand, focusses on the language of the section proper which contains the most plenary possible language in the terms in which it creates the exception.  It refers, in particular, to an unlicensed person as the person who can take the benefit of this exemption without any limitation anywhere in the provision.
  4. [13]
    The heading of the section and the language of the substantive section are therefore, frankly, inconsistent.  Tomkins contends that the plenary language in subsection (1) and (2) should be read down in favour of the title of the provision by reliance primarily (but not only) on the Explanatory Notes to the Bill.  The Explanatory Notes have quite a lot to say about this amendment:[1]

Queensland Building and Construction Commission Act 1991

Section 42 of the QBCC Act provides that a person must not carry out, or undertake to carry out building work unless that person holds a contractor’s licence of the appropriate class under the Act.

Submissions were made to the Parliamentary Committee inquiry raising concerns about what was perceived as the unintended consequences of section 42. The Parliamentary Committee, at Recommendation 33 of its report, recommended that section 42 be revised to make it clear that there is no breach of the QBCC Act if an appropriately licensed builder carries out the building work.

The Department of State Development, Infrastructure and Planning (DSDIP) has advised that section 42 of the QBCC Act has a potential adverse impact on delivery of the Commonwealth Games Village, which is being facilitated within DSDIP by Economic Development Queensland (EDQ). EDQ has advised that the most prospective development partner entities for the project will not hold a builder’s licence, being development entities (not contractors) and/or special purpose vehicles. Projects Queensland, Queensland Treasury and Trade has raised similar concerns with respect to PPP projects.

It is proposed that section 42 be amended to provide that a contractor’s licence is not required for a person who agrees with a principal under a building contract (any contract which includes building work) to cause commercial building work to be carried out by an appropriately licensed building contractor and the licensed building contractor carries out the commercial building work.

The amendment (other than for PPPs and prescribed government projects) will not apply to contracts for domestic building work as this may result in substantive detriment to consumers, who would be unable to access cover under the Queensland Home Warranty Scheme for incomplete work associated with insolvency of an unlicensed contractor.

The amendment will remove a regulatory impediment for commercial development in Queensland, including for businesses seeking to tender for public infrastructure projects to be carried out under a PPP or similar arrangement. The main benefit of the amendment is that it removes a regulatory impediment for businesses seeking to tender for public infrastructure projects to be carried out under a PPP or similar arrangement. Significantly, the amendment will reduce administrative burden, contractual costs and contractual complexity in PPP projects.

Projects undertaken under a PPP arrangement often involve a building work component which is contractually agreed to be carried out by a special purpose entity, typically referred to as a “special purpose vehicle” (SPV). Currently, a contract between an SPV and a building contractor is treated as a subcontract arrangement under the QBCC Act. Accordingly, the SPV is not able to enter into a building contract for work to be carried out for the purpose of a PPP whereby the retentions or securities held are more than 5 percent. This causes significant difficulties in PPP arrangements as financiers commonly require SPVs to hold retentions and securities for an amount in excess of 5 percent. To address this issue it is proposed to amend the QBCC Act to treat SPVs on the same basis as if they were a principal. This would have the consequence that section 67K of the QBCC Act would apply. This would allow the SPV to enter into a building contract whereby the parties may agree that the retentions and securities under their contract can exceed 5 percent.

  1. [14]
    Tomkins places particular emphasis on the second and third paragraphs.  They, in effect, identify a purpose of the specific exclusion in paragraph 8, being to facilitate projects at the Commonwealth Games Village for the Gold Coast Games, where the structures used were envisaged as having special purpose vehicles as the parties contracting with the principal, presumably the State or perhaps a Commonwealth Games authority of some kind.  And in that context, the Explanatory Memorandum observed, section 42 be amended to provide that a contractor’s licence is not required for a person who agrees with a principal under a building contract to cause commercial building work to be carried out by an appropriately licensed building contractor.  The balance of the relevant section of the Explanatory Memorandum does reflect a concern with the particular commercial difficulty created by large-scale State infrastructure projects. 
  2. [15]
    Mr Somers, for Panel, relies on the first paragraph which focusses on recommendations to the Parliamentary Committee that the section be revised to make it clear that there is no breach of the Act if an appropriately licensed builder carries out the work. 
  3. [16]
    The Explanatory Memorandum is not the statute.  It seems to me, however, that as an aid to construction, as it is under the Acts Interpretation Act, I find it equivocal in that it may well be that the first paragraph reflects a general purpose of Item 8, and then the balance of the page describes a specific example where it can apply.  It might alternatively have been subjectively intended that after the first paragraph, the balance of that page explains what is meant by the first paragraph, although it does not say as much.
  4. [17]
    To my mind, it does not compel a construction that favours that advanced by Tomkins.  I think it is equivocal as an aid to construction.  Its equivocal nature as an aid to construction is reflected in the terms of the statute itself, but it is to be noted that if the idea was to limit this provision providing exculpatory protection from breach of a prohibition that carries a criminal sanction, one would have expected to see at least the exculpatory provision articulated by reference to an unlicensed person entering into a contract with a principal.
  5. [18]
    As was helpfully pointed out by Tomkins, principal is a defined term in the statute, and if it was Parliament’s intention that the balance at page 4 was the sole objective of this provision, one would expect it to have been limited to unlicensed persons entering into contracts with principals, and it is not. 
  6. [19]
    There are other factors that stand against a construction which would limit this to unlicensed persons entering into contracts with principals. 
  7. [20]
    The first, I think, is that the reference to ‘head contracts’ in the heading to the provision is itself capable of two meanings.  A head contractor, probably more commonly in ordinary parlance in the industry, is used to identify the building contractor who contracts with the principal. However, in my respectful view anyway, it is not the only way that expression is used.  In complex projects, there could be any number of parties who are considered by those down the contractual chain to be, and are accurately described as, head contractors.  It is also to be observed, contrary to the way it is phrased in the Tomkins’ submissions in places, that it does not say “head contractors to carry out building work”.  It just refers to “head contracts to carry out building work”.
  8. [21]
    To my mind, it is not an unusual use of that expression to describe a person who is the person contracting with a subcontractor, or perhaps a number of them, to carry out part of a large project as the head contractor.  I find the reference to “head contracts to carry out building work” to be itself equivocal. 
  9. [22]
    Mr Tomkins also, I should say, sought to deal with Mr Somers’ reliance on the first paragraph, by noting that the Parliament refers to the purpose of the provision to provide that there is no breach if an appropriately licensed builder carries out the building work.  There is, it is true, a distinction in the licensing regime between builder licences and trade licences, and that does provide some support for his contention.
  10. [23]
    However, the difficulty is that the statute does not have that limitation in it either.  It also needs to be kept in mind that this provision was designed to remedy unintended consequences of s. 42.  It is, as articulated in the Explanatory Memorandum, broadly remedial in character, and one would not need the Explanatory Memorandum to reach that conclusion.  Schedule 1A contains a whole series of exemptions from a requirement to hold a contractor’s licence which are self-evidently designed to prevent unintended limitations on commercial activity arising from the plenary and strict terms of s. 42(1).
  11. [24]
    Reference to those other provisions tends to support Panel’s contention. Sections 2 (dealing with subcontractors), 4 (dealing with owner/builders) and 5 each involve identifying that the benefit applies to an unlicensed person who has another characteristic.  The drafters of the Schedule do not hesitate in other sections to identify specific limits on plenary provisions, and in s. 8, they did not.  Mr McKillop did not press this point on construction (I do not think), but in any event, I know that Item 2 refers to subcontractors, but Item 2 is concerned with a quite different situation where a subcontractor is an unlicensed person taking advantage of the licence of a trade contractor.  It is not concerned with this situation.
  12. [25]
    Finally, I note that the effect of these provisions is to create an exception to conduct which would otherwise be an offence, and that is another reason why one would not, with alacrity at least, read down the scope of the protection the provision provides, at least where the language in the section itself (which I think, on balance, must carry more weight than the heading in construction of the provision) is in plenary terms. 
  13. [26]
    There are two other points about that.  One is that it does not seem to me to work any mischief for the plenary terms to be given effect.  This case is itself a good example.  This is a case where someone who is licensed to do whatever the licence is that allows you to do prefabricated tilt-ups, enters into a contract that involves relatively minor amounts of fire sealant work and does so, as will be seen, in circumstances where it is the contractor’s practice to get someone qualified to do so.  This seems like the kind of situation where the remedial provision should work.  It advances economic efficiency in the industry by permitting someone to undertake responsibility for the whole of a task, in this case manufacturing tilt-ups and standing them up, which contain components work which they are not licensed to carry out, but which are relatively minor components.  This case is an example of whether a remedial provision seems to be consistent with economic efficiency in the industry. 
  14. [27]
    The second point was an inventive argument from Mr McKillop, who suggested that if it was possible that anyone other than the ultimate contractor could take advantage of the section, then there could be a whole series of unlicensed people entering into chains of contracts.  That, of course, would not be in the public interest, and certainly would not be consistent with the overall objective and policy of the QBCC Act.
  15. [28]
    However, it seems to me that that is not a situation which is likely to arise, because in circumstances like that, it would be difficult, bordering on impossible, to make out that an unlicensed person in a chain of such unlicensed persons entering into contracts for building work intended the work to be carried out by a licensed person.
  16. [29]
    The use of the word “head contracts” in Item 8, along with the language of the Explanatory Memorandum, means there is some question about it.  But for the reasons I have articulated, in my view, the better view is that the proper construction of the language of the statute is the plenary one contended for by Panel. 
  17. [30]
    Having got to that point, the next question is whether Panel has made out that they can take advantage of the exculpatory provision.  In this case, that requires Panel to establish that, on my view (at least of the proper construction of the section at the time of entry into the contract to carry out the unlicensed building work), Panel entered into that contract on the basis that it intended the unlicensed work to be carried out by a licensed person. 
  18. [31]
    The statute is not in those exact terms, but I do not see how else one can give effect to the precise statutory language: that is, the unlicensed person does not contravene the Act merely because they entered into the contract if the building work is to be carried out by a person who is licensed.  To me, that must be read “is intended by the unlicensed person to be carried out by a person who is licensed”.  I cannot see any other sensible meaning to give it.
  19. [32]
    In those circumstances, what the Court is called on to do is to identify the intention of Panel. There was not any challenge to the proposition (and rightly so, in my view) that Mr Hennessey is the guiding mind and will of Panel.  In more complicated cases, there might be Tesco Supermarkets-type arguments[2] about who, in a corporate structure, has to have the relevant state of mind, but that need not trouble us here.  Intention, as Judges frequently tell juries, is a question of state of mind.  It always has to be determined by inference from other facts.  It can be determined from statements by the person and from events that happened before, at the time of, and after an act, which are relevant to the determination of that matter by inference.
  20. [33]
    To my mind, the evidence overwhelmingly supports the conclusion that at the time of entry into the contract, Panel, by Mr Hennessey, intended the fire sealant work to be carried out by a licensed person, more particularly to be carried out by the company which had been carrying out that kind of work for Panel for many years.  This point was not really challenged in evidence at the trial, and I think in light of the evidence that was led, rightly so.  I therefore conclude that the subcontract between Panel and Tomkins is not unenforceable at the instance of Panel, because it involved a breach of s. 42(1).

Identification of the work

  1. [34]
    That brings me to the second issue in the case: that is, whether the payment claim identified the construction work to which it related.  The payment claim was delivered on 25 August 2021.  It is very brief.  It identifies the date (25 August), and contains just these words “claim for completion of tilt panels”, and then an amount, $85,000. It also refers to some minor variation work not relevant to this application.   A very spare description of the work, to say the least.
  2. [35]
    There is, however, no absolute rule that can be applied to every payment claim as to whether it sufficiently identifies the construction work to which the progress payment relates.  With gratitude to Justice Brown, I adopt her Honour’s summary of the relevant principles in KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd [2019] QSC 178: 

[10] KDV contends the payment claim did not satisfy the requirements of s 17(2)(a) of the Payments Act, such that there was no payment claim to enliven the jurisdiction of the adjudicator under the adjudication scheme provided for by the Payments Act.

[11] Section 17(2)(a) of the Payments Act provides:

“(2) A payment claim—

(a) must identify the construction work or related goods and services to which the progress payment relates; …”

[12] There is no jurisdiction for an adjudicator to consider a purported payment claim which does not comply with s 17(2)(a) of the Payments Act.

[13] In T & M Buckley P/L v 57 Moss Road P/L, Philippides J (as her Honour then was) stated at [38] that the Judge had erred in adopting the approach that he did and had set too high a bar in respect of what was required by s 17(2)(a) of the Payments Act:

“The issue for determination was not whether the payment claim explained in every respect the means by which a particular claim item had been calculated, but whether the relevant construction work or related goods and services was sufficiently identified as explained above. That is, whether the payment claim reasonably identified the construction work to which it related such that the basis of the claim was reasonably comprehensible to the applicant.”

[14] Her Honour had regard to the comments of Mason P in Clarence Street Pty Ltd v Isis Projects Pty Ltd and to both the judgments of Hodgson and Santow JJA in Nepean Engineering Pty Ltd v Total Process Services Pty Ltd (in liq) and stated at [36]:

“Santow JA (at [47]-[48]) expressed the view that, in respect of the minimum necessary to satisfy the identification requirement that the payment claim “purport in a reasonable way to identify the work” there must be “sufficient specificity in the payment claim for its recipient actually to be able to identify a ‘payment claim’ for the purpose of determining whether to pay, or to respond by way of a payment schedule indicating the extent of payment, if any.” But having said that, his Honour stated his agreement with what Hodgson JA said in Climatech Pty Ltd that what was required was sufficient identification “to enable the respondent to understand the basis of the claim” and disavowed the notion that there was a legal necessity to include any material directed merely to persuading a respondent to accept a payment claim (at [25]).”

[15] The test to determine whether the payment claim sufficiently identifies the construction work the subject of the claim is an objective one. The assessment is not made only by reference to the terms of the claim itself. As White J commented in Neumann Contractors Pty Ltd v Peet Beachton Syndicate Ltd, “[t]he evaluation of the sufficiency of the identification takes into account the background knowledge of each of the parties derived from their past dealings and exchanges of documentation”. McDougall J in Leighton v Arogen relevantly stated that:

“It may be accepted that payment claims and payment schedules are to be understood as the parties to the relevant construction contract would have understood them. Thus, documents which appear to be extremely summary, or to the uniformed but not unintelligent observer brief to the point of incomprehensibility, may be sufficiently meaningful to the parties to enable them to know, respectively, the bases on which a particular payment claim is advanced and the bases on which it is opposed.

In this context, it may well be appropriate to take into account, in particular factual circumstances, the background knowledge of the parties (for example) by correspondence passing between them before and at the time the payment claim and payment schedule were exchanged. That material might enable the Court to have a more informed understanding of the way that the parties would have perceived, and understood, the real issues sought to be raised…”

[16] The focus must remain on the objective circumstances, not on the subjective intentions of the parties, although it is not wrong to examine the issue from the vantage point of the parties to the particular contract.

[17] The test for whether the payment claim complies with s 17(2) of the Payments Act does not direct the inquiry to whether or not, in hindsight, there has been a successful articulation of the work in the claim: “a document ...does not fail to be a payment claim, within the meaning of the Act, merely because it can be seen, after a full investigation of all the facts and circumstances, not to successfully identify all the construction work for which payment is claimed.” As was stated by the Court of Appeal in T & M Buckley, the test is whether “the claim purports in a reasonable way to identify the particular work in respect of which the claim is made”. Errors or inaccuracies in the payment claim will rarely, if ever, provide a basis for concluding that it is not made in accordance with s 17(2)(a) of the Payments Act.

[18] The above approach accords with the overall purpose of the Act, which was said by Basten JA in Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd to be:

“…to provide a speedy and effective means of ensuring that progress payments are made during the court of the administration of a construction contract, without undue formality or resort to the law.”

  1. [36]
    Her Honour identifies, respectfully correctly, the two principal matters that arise in these cases: 
    1. (a)
      First, what is it that is called for, as a matter of law, by s. 68(1)(a)?; and
    2. (b)
      Second, by reference to what facts can that test be applied?
  2. [37]
    Her Honour referred to the Court of Appeal decision in T & M Buckley P/L v 57 Moss Road P/L [2010] QCA 381 where Justice Philippides who spoke for the Court, articulated the proper approach to the test created by s. 68(1)(a) as being that set out in paragraph 13 of her Honour’s judgment, in effect:[3]

…whether the payment claim reasonably identified the construction work to which it related such that the basis of the claim was reasonably comprehensible to the applicant.

  1. [38]
    T & M Buckley, as I said, refers to a number of decisions in the New South Wales Court of Appeal where similar statements are made.  Importantly, what those cases identify is that the obligation under s. 68(1)(a) is not to plead facts to apprise the parties of the issues in dispute as if the payment claim was a pleading.  That proposition was specifically rejected in T & M Buckley at paragraph 30.  In that case, Justice Philippides adopted what President Mason said in Clarence Street Pty Ltd v Isis Projects Pty Ltd [2005] NSWCA 391 that:[4]

“…a ‘payment claim’ is no more than a claim. It must comply with s 13, but (unlike a payment schedule) it is not its function to identify the scope of the dispute…

  1. [39]
    With respect to the many learned Judges who have opined on the matter, it really does seem that what is called for is to determine whether, bearing in mind that invalidity is the consequence of concluding there is insufficient identification, and bearing in mind the policy and processes contained in the Act for quick resolution of payment claims (including that these are only payments on account), the payment claim identified the construction work to which the claim relates, sufficiently to enable the recipient to make an assessment of what to pay?
  2. [40]
    Ultimately, these cases depend on the facts, and the other principle that her Honour identified is that one is not limited to the content of the payment claim and the subcontract in determining whether the payment claim identifies the construction work to which the progress payment relates.  One can also have regard to facts known to both parties.  Although that has to be identified objectively, it has to be identified objectively from the perspective of a reasonable person in the position of the recipient.  That allows one to have regard to correspondence between the parties at around the time of the payment claim, previous payment claims, previous payment schedules and anything else which contains objective facts known to both parties which rationally inform the understanding of the payment claim.
  3. [41]
    Here, we have at least the following.  The subcontract, the first payment claim delivered on 25 July 2021, a second payment claim delivered on 8 August 2021, and payment schedules delivered for both of those payment claims.  There is also evidence from Mr Peggie, who was the project manager on the project. 
  4. [42]
    Let us look first at the subcontract.  The subcontract, as is the way with these documents, is long and detailed and, in some respects, conceals a relatively simple scope of work.  However, in my respectful view, it is evident that what it called for was the construction of certain tilt panels, according to plans provided in the subcontract, and their installation.  There was no evidence before me as to how many there were or how big the project was, but since the contract price was only $345,000, I infer that it is not a project of a large scale.
  5. [43]
    Mr McKillop tried to persuade me that there was a great deal more to the contract than the construction of the panels and their installation.  However, with respect to his submissions, I disagree.  The detailed specific scope of works requires site establishment and casting, and provides all sorts of express requirements in clause 3.2 of the specific scope of works document, which are the sorts of things that one would require in an on-site cast tilt-up, then another section on panel lifting and propping, providing various conditions and requirements for doing so, and then a section on finishing and defect rectification.  The rest of the specific provisions are not specific to this task.  That is the subcontract.
  6. [44]
    Let us turn now to the previous payment claims.  The two previous payment claims reflect Panel’s enthusiasm for brevity.  The first is dated 25 July 2021.  It states the claim for fabrication of tilt panels and claims $145,000.  Nothing more is said.  There is a payment schedule which certifies $130,000, with the balance seemingly dealt with in some way.  I do not need to trouble myself with that.  There is a second payment claim on 8 August 2021 in the same terms, but for an amount of $80,000 and a payment schedule.  Again, the payment schedule identifies the contract sum, the amount claimed to date, the amount certified to date, including the amount in this payment claim, an amount previously certified, and an amount due with a description in respect of some amounts retained for an alleged defect.
  7. [45]
    It is notable that the payment schedule tells one no more about how much work had been done and the balance of that work between fabrication and tilt-up and installation than the payment claims, but I do note that both of the previous payment claims are claims for fabrication of the tilt panels. 
  8. [46]
    Thus, we come to the payment claim the subject of the litigation.  I have already described what it said.  It can be said that, on its face, it is, even looked at generously, extremely brief.  It refers to completion of tilt panels in the context where the previous two claims referred to fabrication of tilt panels.
  9. [47]
    It is submitted by Tomkins that the payment claim in that form, by itself or read with the other payment claims and the payment schedule, and indeed the contract, does not identify the construction work to which it relates.  Tomkins submits, with some force, that the claim for completion of tilt panels is entirely ambiguous as to whether it is claiming for completion of the whole of the contract works or completion of some part of the contract works and, if so, which part it is.
  10. [48]
    Panel, for its side, says, “Well, yes, it’s pretty brief”, but in the context of the objective facts, including the facts known to Mr Peggie, it did identify the work to which the progress payment related. 
  11. [49]
    I should turn to Mr Peggie’s evidence in the place of the payment schedules in the resolution of this question.  There is no doubt that Mr Peggie produced a payment schedule in response to this payment claim, and it appears in the material.  It certifies about half the amount claimed, but on its face, it does not identify what part of the work it relates to either. 
  12. [50]
    Mr Peggie, in evidence, accepted that he was capable of assessing how far through the subcontract the work appeared to have progressed.  He said he was frequently at the site.  He said he was able to make that assessment of the work done, the work that had not been done, and the status of work which might have been a variation, and some aspects of work that were not effective, to reach his view as to the value of the work done under the subcontract.
  13. [51]
    Mr Somers sought to rely on that as objective evidence that identified that the payment claim itself was sufficient to identify the construction work to which it related, because Mr Peggie was able to make his assessment of the amount payable and prepared a payment schedule accordingly.  I disagree.  Mr Peggie’s evidence was that he could form a view as to the value of the work done by being on-site and observing what had been occurring on-site.   When he gave evidence about the matters, what he was told in the payment claim did not figure in that assessment.
  14. [52]
    I do not think any weight can be placed on the fact that he produced a payment schedule in light of that evidence.  It is well-known to competent project managers, and probably even to incompetent ones, that they cannot afford to let any payment claim go past unchallenged.  Mr Peggie therefore can produce a payment schedule based on what he saw on the site.  That does not, it seems to me, have any relevant probative weight in identifying whether the payment claim identified the work to which it relates.
  15. [53]
    This is a different situation from that which might exist where there was correspondence between the parties about, for example, what completion meant or how many tilt panels had been completed - matters of that kind.  There is nothing like that here.  I do not think anything that Mr Peggie said assists to reach the conclusion objectively, in these particular circumstances, that the payment claim identifies the construction work to which the progress payment relates.
  16. [54]
    Although Mr Somers resisted conceding this, it seems to me that the only way to give the very brief description used in this payment claim a meaning which objectively identified the contract work to which the payment claim related, in the light of its contract, would be to read it as a claim for completion of fabrication of tilt panels.  That could be read consistently with the first two payment claims that refer to a claim for fabrication of tilt panels, then again for fabrication, and then a claim for completion.
  17. [55]
    Ultimately, I am not persuaded of that submission.  The description, “claim for completion of tilt panels”, begs the question: completion of what?  It was not the completion of the contract, because there was not a claim for the balance of the contract work, but beyond that, one is left really to guess what it means.  That is particularly a difficulty where the subcontract provided for both the construction of the tilt panels on-site and their erection, and in circumstances where, on the evidence, some tilt panels were being erected, I cannot persuade myself that those six words adequately identify any specific work under the contract.  For that reason, I dismiss the application.
  18. [56]
    I order the applicant to pay the respondent’s costs on a standard basis. 

Footnotes

[1] Explanatory Notes to the Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Bill 2013.

[2] See Tesco Supermarkets Ltd v Nattrass [1971] UKHL 1.

[3] T & M Buckley P/L v 57 Moss Road P/L [2010] QCA 381 at [38].

[4] Ibid at [31].

Close

Editorial Notes

  • Published Case Name:

    Panel Concepts Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd

  • Shortened Case Name:

    Panel Concepts Pty Ltd v Tomkins Commercial & Industrial Builders Pty Ltd

  • MNC:

    [2021] QDC 322

  • Court:

    QDC

  • Judge(s):

    Porter QC DCJ

  • Date:

    14 Dec 2021

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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