Queensland Judgments
Authorised Reports & Unreported Judgments
  • sclq logo
  1. Caselaw
  2. QDC
  3. 2023
  4. Devcon Building Co Pty Ltd v MWB Everton Park Pty Ltd - [2023] QDC 184

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment
  • Appeal Determined (QCA)

Devcon Building Co Pty Ltd v MWB Everton Park Pty Ltd[2023] QDC 184

Devcon Building Co Pty Ltd v MWB Everton Park Pty Ltd[2023] QDC 184

DISTRICT COURT OF QUEENSLAND

CITATION:

Devcon Building Co Pty Ltd v MWB Everton Park Pty Ltd ATF MWB Everton Park Unit Trust; Devcon Building Co Pty Ltd v Zhongyuan Investments Pty Ltd [2023] QDC 184

PARTIES:

DEVCON BUILDING CO PTY LTD

(Applicant)

v

MWB EVERTON PARK PTY LTD ATF MWB EVERTON PARK UNIT TRUST

(Respondent);

DEVCON BUILDING CO PTY LTD

(Applicant)

v

ZHONGYUAN INVESTMENTS PTY LTD

(Respondent)

FILE NO:

2677/23 & 2678/23

DIVISION:

Civil

PROCEEDING:

Application

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

11 October 2023

DELIVERED AT:

District Court at Brisbane

HEARING DATE:

26 September 2023

JUDGE:

Loury KC DCJ

ORDERS:

  1. The respondent, MWB Everton Park Pty Ltd ATF MWB Everton Park Unit Trust, pay to Devcon Building Co Pty Ltd $149,485.60 plus interest in accordance with section 67P of the Queensland Building and Construction Commission Act 1991 (Qld);
  2. The application made by the applicant, Devcon Building Co Pty Ltd, against the respondent, Zhongyuan Investments Pty Ltd is dismissed. 

CATCHWORDS:

CONTRACT – BUILDING, ENGINEERING AND RELATED CONTRACT – REMUNERATION – where the applicant entered into construction contracts with each of the respondents – where the applicant seeks payment from the respondent in relation to a progress claim – whether the progress claim is a payment claim under the Building Industry Fairness (Security of Payment) Act 2017 – where there was an error in the warning notice – whether the warning notice given enlivens the jurisdiction of the court.

LEGISLATION:

Building Industry Fairness (Security of Payment) Act 2017 ss, 3(1),68, 78(2)(a), 99, 100(2)

Queensland Building and Construction Commission Act 1991 s 67P

CASES:

Minimax Fire Fighting Systems v Bremore Engineering (WA Pty Ltd) & Ors [2007] QSC 333

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

Neumann Contractors Pty Ltd v Peet Beachton Syndicate Ltd [2011] 1 Qd R 17

Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248

Project Blue Sky Inc & Others v Australian Broadcasting Authority (1998) 194 CLR 355

Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190

COUNSEL:

S Whitten for the applicant

R Varshney for the respondent in each matter

SOLICITORS:

CDI Lawyers for the applicant

Wallace Weir Lawyers for the respondent in each matter

Introduction

  1. [1]
    On 3 September 2021, Devcon Building Co Pty Ltd (Devcon) entered into a construction contract with Zhongyuan Investments Pty Ltd (Zhongyuan) to design and build 4 townhouses for $1,166,000. 
  2. [2]
    On 12 November 2021, Devcon entered into a construction contract with MWB Everton Park Pty Ltd (MWB) to design and construct 56 townhouses for $17,216,874.
  3. [3]
    Zhongyuan and MWB are related entities and are represented by the same legal representatives.  The development manager for each entity is Bik Kiang Lau who has sworn an affidavit in each of the proceedings.  The applications in each of the matters are the same.  For convenience they were heard together.  Similarly, for convenience this judgement deals with both applications. 
  4. [4]
    Devcon has brought two applications pursuant to section 78(2)(a) of the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act) seeking the payment of $149,485.60 from MWB in relation to a progress claim; and seeking the payment of $54,185.35 from Zhongyuan in relation to a progress claim.   
  5. [5]
    The central issue at the heart of each of the applications is whether the progress claim is a “payment claim” pursuant to the BIF Act.  A secondary issue arises with respect to the application against Zhongyuan as to whether a warning notice pursuant to section 99 of the BIF Act was given enlivening the jurisdiction of this court.   

The payment claims

  1. [6]
    Section 78(2) provides:
  1. 78
    Consequences of failing to pay claimant
  1. (1)
    This section applies if a respondent given a payment claim for a progress payment does not pay the amount owed to the claimant in full on or before the due date for the progress payment.
  1. (2)
    The claimant may either—
  1. (a)
    recover the unpaid portion of the amount owed from the respondent, as a debt owing to the claimant, in a court of competent jurisdiction; or
  1. (b)
    …
  1. [7]
    “Payment claim” is defined in section 68 which states:
  1. (1)
    A payment claim, for a progress payment, is a written document that—
  1. (a)
    identifies the construction work or related goods and services to which the progress payment relates; and
  1. (b)
    states the amount (the claimed amount) of the progress payment that the claimant claims is payable by the respondent; and
  1. (c)
    requests payment of the claimed amount; and
  1. (d)
    includes the other information prescribed by regulation.
  1. [8]
    The respondents’ principal argument in each application is that the payment claim upon which Devcon relies in each application does not meet the requirements of section 68. It is therefore not a payment claim pursuant to the BIF Act and Devcon is not entitled to judgment. 

The application against MWB Everton Park Pty Ltd ATF MWB Everton Park Unit Trust

  1. [9]
    Clause 37.1 of the Contract provides that the Contractor (Devcon) shall claim payment progressively in accordance with Item 28, which provides for the timing of a progress claim to be the 21st of each month for work done to the 21st of each month.  Clause 37.1 also provides that a progress claim is to include details of the value of the work done under the contract and may include details of other moneys then due to the Contractor pursuant to the provisions of the contract. 
  2. [10]
    The authorities that deal with the question of whether a payment claim identifies the construction work provide that: a court should not adopt an unduly critical viewpoint;[1] the relevant construction work should be “sufficiently identified” such that the basis for the claim is “reasonably comprehensible”;[2] and, in determining the sufficiency of the identification, the court should take into account the background knowledge of each of the parties derived from their past dealings and exchanges of documentation.[3]
  3. [11]
    On 30 June 2023, Devcon sent to MWB by email a document titled “Progress Claim”.  The document is in the nature of a spreadsheet which sets out the “Project Summary”.  It is dated Friday, 30 June 2023.  The reference date for the work is 21 June 2023 and the claim number is 17. The spreadsheet identifies the project. The spreadsheet contains 42 line entries for various types of trades. The project appears to have been broken down by reference to each of the 42 types of work to be completed. Beside each trade are columns setting out details including: the contract value for that trade; the amount previously claimed; the percentage of work completed; and, the current claim for that trade. The spreadsheet also includes a claim summary which sets out the “amount due this claim”. The amount due by virtue of progress claim number 17 was $149,485.60. Also sent to MWB with this progress claim were spreadsheets titled “Civil Works” and “Stage 1”.  
  4. [12]
    Mr Lau has deposed that he was not able to ascertain from the progress claim spreadsheet what specific works had been completed as part of the progress claim.  He has not provided any explanation for why he was not able to ascertain what specific works had been completed in circumstances where the spreadsheet is in the same format as 16 earlier progress claims that were paid. As the authorities indicate, a payment claim does not have to identify what “specific works” have been completed, but rather sufficiently identify the construction work completed such that the claim is reasonably comprehensible.  
  5. [13]
    The evidence before me demonstrates that claim number 17 is substantially in the same form as claim numbers 1 through 16.  The same 42 line entries for the various trades are included in each of the progress claims that were sent.  Each of those progress claims were paid without any concerns being expressed as to what the works related to. 
  6. [14]
    MWB argues that in the earlier claims, there appears in relation to some of the entries, further references in a column titled “Summary of work complete this claim”.  Those references, it is argued, allowed for MWB to know what work was done.  The entries in the “Summary of work complete this claim” column provide such little information that I do not accept that it allowed for any greater understanding of what work was done. Indeed, for many of the trades claimed there is no corresponding entry in the “Summary of work complete this claim” column. 
  7. [15]
    MWB further argues that the amounts set out in the further spreadsheets titled “Civil Works” and “Stage 1” sent with progress claim number 17 contain different amounts which are unable to be reconciled with some of the amounts in progress claim number 17.  Those further spreadsheets, however, relate to different areas of work and do not fall within the description of “payment claim” in the BIF Act. 
  8. [16]
    MWB further argues that in the email sent to Mr Lau attaching claim 17, there was no request made in the email for the amount to be paid.  Given that there were three spreadsheets attached to the email to Mr Lau, with different amounts in each, he could not have known what amount was being claimed.  I do not accept that Mr Lau did not know or could not know what amount was being claimed as a progress payment.  Many of the 16 earlier progress payments attached further spreadsheets marked “Civil Works” and “Stage 1”.  There is no suggestion in the material filed that Mr Lau did not understand what amounts needed to be paid with respect to any of those earlier progress claims. 
  9. [17]
    The payment of the 16 earlier progress claims without dispute informs my determination that the progress claim number 17 identified the construction work to which it related such that the basis of the claim was reasonably comprehensible to MWB. 
  10. [18]
    I am further satisfied that the progress claim number 17 states the amount of the progress payment that is said to be payable by MWB and requests payment of the claimed amount. 
  11. [19]
    Progress claim number 17 sent on 30 June 2023 to MWB is a payment claim within the BIF Act. 
  12. [20]
    In response to the receipt of tax invoices for progress claim number 17 on 17 July 2023, MWB’s legal representatives sent payment schedules to Devcon on 20 July 2023.  It has not been argued that if I find that the spreadsheet titled “Progress claim” sent on 30 June 2023 is a payment claim within the BIF Act, that the payment schedules were sent within the time provided for in the legislation. 
  13. [21]
    I am therefore satisfied pursuant to section 100(2) of the BIF Act that MWB did not pay the amount in progress claim number 17 to Devcon on or before the due date for the progress payment and that MWB did not give Devcon a payment schedule within the time required to do so under the Act. Given that MWB is not entitled to bring any counterclaim or to raise a defence in relation to matters arising under the construction contract, I order that MWB pay Devcon $149,485.60 plus interest in accordance with section 67P of the Queensland Building and Construction Commission Act 1991 (Qld). 

The application against Zhongyuan Investments Pty Ltd

  1. [22]
    Clause 37.1 of the contract is in the same terms as clause 37.1 of the contract between Devcon and MWB. The time for the progress claims was the 21st of each month for work completed up to the 21st of each month. 
  2. [23]
    Devcon sent by email to Zhongyuan on 23 June 2023 a spreadsheet (in similar terms to those sent to MWB) which stated “please see attached claim 16 for the townhouse project at 21 Somervell St, Annerley”.  Likewise, as with MWB, two other documents detailing other works done were also sent by email on the same date. 
  3. [24]
    Mr Lau again deposes that he was not able to ascertain from the document titled “Progress Claim” what specific works had been completed as part of the progress claim. A payment claim does not have to set out the specific works completed.  It need only identify the construction work or related goods and services to which the progress payment relates.  Mr Lau provides no indication as to why he could not ascertain what works had been completed when the progress claim was in the same terms as 15 earlier progress claims which had been paid without dispute.  
  4. [25]
    Progress claim number 16 is dated 23 June 2023.  The reference date for the claim is 21 June 2023.  It identifies the project and, similar to the progress claims sent to MWB, contains 42 line entries in relation to various trades; the contract value for each of those trades; the percentage completed and the current claim.  The claim summary indicates that the amount due is $54,184.35. 
  5. [26]
    I am satisfied that progress claim number 16 identified the construction work to which it related such that the basis of the claim was reasonably comprehensible to Zhongyuan.
  6. [27]
    I am further satisfied that progress claim number 16 states the amount of the progress payment that is said to be payable by Zhongyuan and requests payment of the claimed amount. 
  7. [28]
    Progress claim number 16 is a payment claim within the BIF Act. 

S99 Warning Notice

  1. [29]
    Zhongyuan further argues that Devcon failed to give a warning notice pursuant to section 99 of the BIF Act and therefore is not entitled to bring, and the court does not have jurisdiction to determine, the application. 
  2. [30]
    Section 99 of the BIF Act provides:
  1. Notice required before starting particular proceedings
  1. (1)
    This section applies if—
  1. (a)
    after being given a payment claim, the respondent fails to pay the amount stated in the claim on or before the due date for the progress payment to which the claim relates; and
  1. (b)
    because of the failure to pay, the claimant intends to start proceedings in a court to recover the unpaid portion of the amount owed to the claimant. Note— See section 78 for the claimants right to recover from a respondent an amount owed to the claimant.
  1. (2)
    Before taking the intended action, the claimant must give the respondent written notice (a warning notice), in the approved form, of the claimant’s intention to start the proceedings.
  1. (3)
    The claimant must not give the respondent the warning notice later than 30 business days after the due date for the progress payment.
  1. (4)
    The claimant must not take the intended action before the end of 5 business days after giving the respondent the warning notice.
  1. (5)
    The giving of a warning notice does not—
  1. (a)
    require the claimant to complete the action stated in the notice; or
  1. (b)
    prevent the claimant from taking different action to that stated in the notice.
  1. [31]
    Mr Lau deposes that on 30 June 2023, he received by email, tax invoices for the progress claim number 16. On 10 July 2023, he received by email two Notices to Remedy Breach.  He deposes that, since the email of 23 June 2023 which I have found attached a spreadsheet which amounted to a payment claim within the BIF Act, he did not receive any further information in relation to the details of the works undertaken said by Devcon to be part of the payment claim.  His affidavit is silent on the receipt of a warning notice. 
  2. [32]
    Mr Na for Devcon deposes that, as no payment schedule was issued and no payment was made in relation to progress claim 16, a letter was sent to Zhongyuan enclosing a section 99 warning notice.  That notice is in the approved form, however it appears that it contains two errors. The notice indicates that the payment claim date is 30 June 2023 and that the payment claim due date is 21 June 2023.  The amount claimed was $54,184.35. 
  3. [33]
    The payment claim date should have been 23 June 2023 and the payment claim due date should have been 21 July 2023.  It is accepted by Zhongyuan that the payment claim due date was a typographical error. However, it is argued that the payment claim date is a critical detail that allows for the recipient of the notice to know what proceedings are intended to be brought against which payment claim. 
  4. [34]
    Section 99(2) which provides for the giving of a warning notice is in mandatory terms. It provides that the notice must be given before the claimant commences proceedings.  It is therefore an essential step that must be taken prior to any consideration by a court.  There are numerous time provisions in the legislation, including in relation to when a payment schedule must be given, when an adjudication application is to be made and when a warning notice must be given.  The time limits imposed in the legislation are clearly designed to ensure the prompt resolution of any disputes that arise about payment. 
  5. [35]
    Section 99(1)(a) provides that the section applies if, after being given a payment claim, the respondent fails to pay the amount stated in the claim on or before the due date for the progress payment to which the claim relates and because of the failure to pay the claimant, intends to start proceedings in a court to recover the unpaid portion of the amount owed to the claimant (emphasis added).
  6. [36]
    The reference to “the claim” seems to me to require identification of the particular claim about which proceedings are intended to be taken.  Consistent with that view are the terms of the approved form which requires the insertion of the payment claim date.  The real question, however, is if that payment claim date is incorrect, does that invalidate the warning notice? 
  7. [37]
    In Protectavale Pty Ltd v K2K Pty Ltd[4] Justice Finkelstein in referring to the Payment Act 2002 (Vic), the object of which was to give contractors a statutory right to recover progress payments for construction work performed under a construction contract by the provision of a “payment claim,” said:

“The Payment Act places the claimant in a privileged position in the sense that he acquires rights that go beyond his contractual rights: Jemzone Pty Ltd v Trytan Pty Ltd. The premise that underlies the legislation is that cash flow is the lifeblood of the construction industry (Amflo Constructions Pty Ltd v Jefferies) and that the principal under a construction contract should pay now and argue later (Multiplex Constructions)” (citations omitted)

  1. [38]
    It is contended that because Devcon is in a similarly privileged position in terms of having a statutory right to a progress payment, that in serving the warning notice with an incorrect payment claim date, Zhongyuan did not know what payment claim the proceedings intended to be taken related to. 
  2. [39]
    Consideration of the issue as to whether an incorrect date in the warning notice invalidates it, requires consideration of the principles referred to in Project Blue Sky Inc & Others v Australian Broadcasting Authority[5]. I need to consider the purpose of the requirements in section 99 in relation to the giving of the notice in the context of the Act, having regard to the language of the provision and the scope and object of the whole statute.  
  3. [40]
    The main purpose of the BIF Act is to help people working in the building and construction industry in being paid for the work they do.[6]  The warning notice is designed to put a respondent on notice that unless the payment claim is paid, legal proceedings will commence in circumstances where the respondent is liable to pay the amount if no payment schedule has been given.[7]  The warning notice, in proper form, gives the recipient of it a final warning that if the payment is not made, legal proceedings will be commenced. The warning notice provides a very short time period in which the recipient has to respond, being five business days, before the proceedings can be commenced. 
  4. [41]
    The claimant’s right to recover the monies by this statutory process puts it in a privileged position.  The mandatory nature of the language used in section 99, with respect to identification of the payment claim to which the notice relates, coupled with the very short time period in which the recipient has to respond, suggests to me that it is essential that the payment claim date be properly identified.  Where an entity or related entities have multiple projects and multiple construction contracts and multiple payment claims to process and pay, it is necessary for the payment claim date to be identified so that the recipient is able to respond to the notice within the very short timeframe it is given.  The recipient of the warning notice needs to know what payment claim they are required to pay in order to avoid legal proceedings commencing. 
  5. [42]
    In Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd,[8] McDougal J said of the Building and Construction Industry Security of Payment Act 1999 (NSW), which contains cognate provisions to the BIF Act:

“The Security of Payments Act gives very valuable, and commercially important, advantages to builders and subcontractors. At each stage of the regime for enforcement of the statutory right to progress payments, the Security of Payments Act lays down clear specifications of time and other requirements to be observed. It is not difficult to understand that the availability of those rights should depend on strict observance of the statutory requirements that are involved in their creation.”

  1. [43]
    The warning notice provided to Zhongyuan did not identify the payment claim to which the notice related.  The two errors in the dates mean that the warning notice did not provide sufficient notice to Zhongyuan as to the payment claim to which the notice related, particularly when Zhongyuan was given a very short time frame within which to respond to the notice. Zhongyuan and its related entity, MWB, were each involved in construction contracts with Devcon which were being managed by Mr Lau.  The payment claims were sent at a similar time.  The privileged position that Devcon is in by virtue of the mandatory regime created under the BIF Act regardless of the parties’ contract, means, in my view, that it was required to properly identify the payment claim date in the warning notice so that Zhongyuan was able to respond to the notice.  The error was of such a nature that I consider it invalidates the warning notice. Such a finding does not mean that Devcon loses its rights to recover monies owing to them. It means only that Devcon have not complied in an essential respect with the notice requirements that are essential to their ability to take advantage of the speedy, effective and mandatory regime created by the BIF Act to preserve their cash flow.  Devcon retains its right as a party to the construction contract to recover monies owing to them under the contract.[9]
  2. [44]
    Devcon’s application against Zhongyuan is dismissed. 

Footnotes

[1] Minimax Fire Fighting Systems v Bremore Engineering (WA Pty Ltd) & Ors [2007] QSC 333 per Chesterman J

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

[3] Neumann Contractors Pty Ltd v Peet Beachton Syndicate Ltd [2011] 1 Qd R 17 per White J

[4] [2008] FCA 1248

[5] (1998) 194 CLR 355

[6] Section 3(1) BIF Act

[7] Section 100 BIF Act

[8] [2010] NSWCA 190

[9] Section 101

Close

Editorial Notes

  • Published Case Name:

    Devcon Building Co Pty Ltd v MWB Everton Park Pty Ltd ATF MWB Everton Park Unit Trust; Devcon Building Co Pty Ltd v Zhongyuan Investments Pty Ltd

  • Shortened Case Name:

    Devcon Building Co Pty Ltd v MWB Everton Park Pty Ltd

  • MNC:

    [2023] QDC 184

  • Court:

    QDC

  • Judge(s):

    Loury KC DCJ

  • Date:

    11 Oct 2023

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2023] QDC 18411 Oct 2023Applications for payment of progress claims pursuant to Building Industry Fairness (Security of Payment) Act 2017 (Qld); order that MWB Everton Park Pty Ltd pay amount of progress claim with interest: Loury KC DCJ.
Appeal Determined (QCA)[2024] QCA 9424 May 2024Application for leave to appeal granted; appeal allowed; decision below set aside; originating application against MWB Everton Park Pty Ltd dismissed: Dalton JA (Brown and Kelly JJ agreeing).

Appeal Status

Appeal Determined (QCA)

Cases Cited

Case NameFull CitationFrequency
Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190
2 citations
Jump To
Cite 1 - [2010] NSWCA 190
Cite 2 - [2010] NSWCA 190
Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333
2 citations
Jump To
Cite 1 - [2007] QSC 333
Cite 2 - [2007] QSC 333
Neumann Contractors Pty Ltd v Peet Beachton Syndicate Ltd[2011] 1 Qd R 17; [2009] QSC 376
2 citations
Jump To
Cite 1 - [2011] 1 Qd R 17
Cite 2 - [2011] 1 Qd R 17
Project Blue Sky v Australian Broadcasting Authority (1998) 194 C.L.R 355
2 citations
Jump To
Cite 1 - (1998) 194 C.L.R 355
Cite 2 - (1998) 194 C.L.R 355
Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248
2 citations
Jump To
Cite 1 - [2008] FCA 1248
Cite 2 - [2008] FCA 1248
T & M Buckley Pty Ltd v 57 Moss Rd Pty Ltd [2010] QCA 381
2 citations
Jump To
Cite 1 - [2010] QCA 381
Cite 2 - [2010] QCA 381

Cases Citing

Case NameFull CitationFrequency
MWB Everton Park Pty Ltd v Devcon Building Co Pty Ltd [2024] QCA 94 1 citation
1

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.