The meaning of “the claimed amount”

Those who follow the Byzantine ways of the Victorian security of payment legislation may have noticed, last month, the decision of Justice Riordan in Façade v Yuanda concerning the prohibition on the court giving judgment under section 16 (the “no payment schedule” section) of the Building and Construction Industry Security of Payment Act 2002 (Vic) in cases where the claimed amount includes an excluded amount.

These people may or may not have noticed that there have been a couple of further developments in this case since then:

  • on 1st October, the trial judge extended the stay of execution in order to allow time for Yuanda to apply for a full stay pending appeal to the Court of Appeal
  • on 9th October, the Court of Appeal granted that stay. The court proposes to publish its reasons this coming week.

The appeal itself is likely to be heard sometime in late November.

I did not appear at the trial, but was instructed as leading counsel for Yuanda in both the successful applications for these stays (both vehemently opposed), and benefited from the helpful support of Laura Mills of the Victorian bar as my very able junior. We are likewise briefed for the appeal. Being so briefed, I will not comment further until the appeal is heard, save to say that Continue reading

A Leading Question

Some time ago, my old friend John Marrin (now a colleague at Keating Chambers) told me that he had cited my first book – Building Contract Litigation – to the Court of Appeal as the only authority on a particular point. The court apparently enquired as to whether I was dead. I am not sure why. It seems this is no longer a necessary criterion for authority.

No such problem in the UK Supreme Court decision this week in Bresco Electrical Services Ltd (in liquidation) (Appellant) v Michael J Lonsdale (Electrical) Ltd (Respondent). In the course of its finding that Continue reading

Security, but no Master Key

By far the majority of my work, these days, is either interstate or international. In even a dispute arising under the biggest South Australian project with which I am currently dealing (no names, no pack drill, but it is a very large project) is being dealt with in New South Wales (I am pretty much the only lawyer based in South Australia involved in the dispute).

Also, the majority of my work (not all of it, of course) deals with the adjudication of disputes under what is known, in Australia, as the security of payment legislation[1]. I do not think I have dealt with any security of payment issues in the ACT. But I have been instructed, and have acted, in security of payment disputes in every other state and territory. And of course New Zealand.

It is utterly bizarre that there is a different statutory regime in every State and Territory. I have particular sympathy for the specialist Continue reading

Fiocco on Queen of Hearts Clauses

I am delighted to be able to say that I was not, this year, interrupted over the Christmas holiday by a security of payment claim served on Christmas eve. And so, happily, I was able to enjoy a couple of weeks off.

But before and since then I have been “heads down” on a number of fronts, which means that I have not reported as fully as I might have done on some recent developments.

One of them was the issue of the report late last year in Western Australia of John Fiocco  Security of Payment Reform in the WA Building and Construction Industry. This made a number of detailed recommendations about the way that the security of payment issue should be dealt with in Western Australia. Such State-By-State consideration may well turn out to be pretty much irrelevant in the event that the Federal Government enacts some legislation which applies throughout the country, and pretty much everyone agrees that that would be sensible. The Federal Government is still considering the Murray Report as to such federal legislation.

Diligent readers of these pages might recall that the Murray report includes a suggested treatment of Queen of Hearts clauses, and in particular adopts a suggestion of mine as to how such clauses might be prohibited. The Fiocco Report takes the same line, albeit with a small suggested tweak as to how the prohibition should be worded.

The relevant section Continue reading

Murray Colour-Coded

I have now had the opportunity of a further look at the recently released Murray Review, which I briefly mentioned the other day in my post Queen of Hearts – A Good Idea Endorsed.

The Review is a lengthy document, and overall it is a substantial and admirable piece of work. Some of it reaches conclusions that I would not have reached, but I need to be careful here, since it includes quite a bit that I wrote, or which has been redrafted from suggestions that I have made[1], in particular:

  • The phrase “Pay now, argue later”, now widely used around the world to describe the fundamental nature of an excessive adjudication determination (page 82);
  • The Queen of Hearts clause, quoted at page 289 and recommended at Recommendation 84;
  • Several of the extracts from the 2014 SoCLA Report;
  • The “Red card, yellow card” formula to be found in the South Australian Code of Conduct at pages 244 and 245 (Recommendations 67 and 68), which I had originally suggested to Alan Moss for the purpose of the Moss Review;
  • Several of the extracts from SoCLA’s submission to the Murray review, including the recommendation of that system (page 63) and the summation of the June 2017 SocLA event (page 287).

John Murray is an accredited adjudicator in several East Coast jurisdictions, and no doubt one of the very best of them (he is clever, fair and diligent, as well as being good company).  People tend to do what they have done in the past, and to recommend what they know; perhaps it is no surprise that the East Coast model is his preferred starting point for a national system.  An unintended irony lies therein. John Murray includes a revealing graphic about international payment practices on page 14, as follows:[2]

international payment

Australia ranks very porly here. The East Coast model has held most of the field in Australia since its introduction in 1999. It plainly has not worked. And yet John Murray recommends its endorsement, albeit with some useful improvements. Why persist with something which does not work, especially where there are alternatives which do work?  I tried to persuade him to look more closely, not just at security of payment in the region (Australasia and South-East Asia) but the worldwide and particularly UK experiences, but without success – the Review barely mentions the UK or Irish legislative scheme.

Personally, I believe the art of government is best practised with a light hand. The reason I am sceptical of totalitarian solutions – where government imposes rigid Continue reading

Queen of Hearts – A Good Idea Endorsed

The Australian Government has at last released the Report of John Murray Review of Security of Payment Laws – Building Trust and Confidence.

It will take a while to digest this Report – at 407 pages there are inevitably recommendations which are welcome and others which will be less welcome.

QueenAn aspect of the Report that might come as a surprise to some is its treatment of Queen of Hearts clauses.  I posted about this issue last year in a post called Queen of Hearts in the Dock, and discussed it with John Murray. In short, I suggested that it would be a good idea to introduce a statutory benchmark, to more reliably separate reasonable time-barring notice clauses which should be allowed from unreasonable clauses which should not.

John Murray has agreed with me. His commentary in the Report is thus:

Unreasonably onerous time-barring provisions

When conducting a detailed interview with one of the leading lawyers specialising in this field, Mr Fenwick-Elliott, the issue of unreasonably onerous time-barring provision was discussed. Mr Fenwick-Elliott referred me to his website where, under the article Queen of Hearts in the Dock, he sets out the following synopsis of the range of ‘arsenals’ or principles that the courts have developed to relieve a contractor from the harsh consequences of failing to give a required notice: Continue reading

It is OK to be wrong

wrongThe High Court of Australia has today handed down its judgments in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4 and Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5.

The judgments run to some 60 pages, but can be summarised in a few words: adjudicators’ decisions are not subject to judicial review on the ground of non-jurisdictional error of law.

The result makes good common sense. Many (cynics might say most) decisions of adjudicators are riddled with errors, including errors of law. Unsurprising, one might think: most adjudicators are not Continue reading

The South Australian Security of Payment (Summer Holiday) Bill

Stop press: This Bill has passed the House of Assembly but not the Legislative Council and is now out of time. The Government say they propose to reintroduce it next session if re-elected.

Well, it is not called that. It is called the Building and Construction Industry Security of Payment (Review) Amendment Bill 2017.

It is a less radical amendment that those introduced in New South Wales or Queensland in recent years, and less radical also that last year’s amendment Bill (which would have followed Queensland’s lead in abolishing privateer ANAs). Instead, it proposes to clarify the presently murky water of just what is a business day over the Christmas holidays (it will provide that 22 December in any year to 10 January in the following year inclusive are not business days. There is also a proposal to publish determinations and a clear-out of the the present crop of ANAs, with some oversight powers for the Commissioner for Small Business. A more remarkable proposal is to make it a criminal offence to ” directly or indirectly assault, threaten or intimidate, or attempt to assault, threaten or intimidate, a person in relation to an entitlement to, or claim for, a progress payment under this Act.”

It is a government Bill, and so is unlikely to fall by the wayside.  It was tabled last week. The Bill reads as follows Continue reading

Good Service

sundropLatest News: The Full Court has reversed this, giving leave to defend. No reasons as yet.

I am pleased to report another win, this time in the Supreme Court of South Australia in Ottaway Engineering v Aalborg CSP.

It was another case arising out of a failure by a respondent to serve a payment schedule. Each of the respondent’s arguments in opposition to the claimant’s summary judgment application was rejected:

  • Service of the payment claim on the respondent’s registered office was good service; Falgat v Equity Australia followed and Hill v Halo not followed;
  • The claimant was not estopped from asserting good service merely because previous payment claims had not be served on the registered office;
  • Neither was it misleading or deceptive for the claimant to serve on the registered office;
  • Finally, the payment claim was not invalidated merely because it included claims for acceleration and prolongation, which the respondent said should have been framed as damages claims. If the respondent wanted to challenge those claims on that basis, it could have done so in a payment schedule.

According, Master Dart gave judgment on 7th June for the amount claimed of $1,854,635.14 plus Continue reading