Key Takeaways

This recent decision brings to light some of the issues that may arise in the absence of an overarching written contract to perform construction work, particularly in less formal arrangements where the claimant is seeking to identify the correct party to the construction contract. The Court refused to make an order for judgment in circumstances where it was not satisfied that the payment claims identified, and were addressed to, the correct entity which was liable to make payment.

Background

APS Industrial Services Pty Ltd (Claimant) had undertaken to perform scaffolding works and related services at the Metro Tunnel Project (Works). Whilst there was no overarching written agreement, the Claimant alleged that it performed the Works pursuant to construction contract/s with Adcon Contracting Pty Ltd (Respondent). The Claimant issued 37 payment claims (Payment Claims) under the SOP Act which it alleged had been issued to the Respondent with respect to the Works it had performed. The Payment Claims were addressed to ‘ADCON Group’ or ‘Adcon’, rather than the Respondent ‘Adcon Contracting Pty Ltd’, and the Respondent put forward evidence to the Court that the Payment Claims were sent to email addresses that did not belong to any of the Respondent’s employees.

The Respondent failed to provide any payment schedules in response to the Payment Claims and the Claimant sought judgment to recover the claimed amounts that had not been paid on all 37 Payment Claims.

Judgment

The Court dismissed the Claimant’s application for judgment on the basis that the Payment Claims did not identify the correct contracting party. The Court held that ‘ADCON Group’ or ‘Adcon’ were not respondents with whom the Claimant had entered into a construction contract.

Further, the Court refused to impose liability on the Respondent with respect to the 37 Payment Claims notwithstanding that there was evidence that the Respondent had made part payment of one of the Payment Claims.

The Court held that by not serving the Payment Claims on a respondent “liable to make the payment” under a construction contract, the Claimant failed to meet the formal and procedural requirements of s14(1) and (2) of the SOP Act. Accordingly, the Respondent was not required to respond to the Payment Claims and was not liable to pay the Claimed Amount. The Claimant was consequently not entitled to claim recovery of the Claimed Amount as a debt against the Respondent.

Conclusion

This decision serves as an important guidance to claimants, to ensure that their payment claims (on their face) are addressed to the party who is liable to make payment under the construction contract.

Further information / assistance regarding the issues raised in this article is available from the author, Bill Papastergiadis, Melbourne Managing Partner, Nathan Cutts, Partner, Phillip Vassiliadis, Partner or your usual contact at Moray & Agnew.