Successful Judgment for our Client!

At Level Playing Field Lawyers, we celebrate the success of our clients through the successful use of the Security of Payments Act. We would like to share with you a recent case study and the key takeaway points from the case for your reference.

K&K Industries Ptd Ltd were undertaking a development project. They initially engaged another subcontractor (Conc-create) to undertake concreting works. Our client, BSL Group was engaged by Conc-Create to rectify works of Conc-Create.

K&K later requested that BSL Group complete additional concreting works which comprised of rectification of the works of subcontractors other than Conc-Create.

BSL Group undertook the works and sent a copy of BSL Group’s rates and terms and conditions to K&K.

BSL Group emailed K&K two payment claims. The payment claims provide quantities, unit prices, add GST and amounts due. K&K did not issue a payment schedule or make any payment on these invoices.

Judgment

The Court held that there was a construction contract between K&K and BSL Group to which the Security of Payments Act applies.

K&K submits that the payment claims were not calculated in accordance with the contract (as they added GST)

The Court held that this argument fails at the threshold. BSL Group is not suing on the contract, it is suing on the payment claims.

K&K did not serve a payment schedule. It is not the role of the Court to determine whether the payment claim was calculated in accordance with the contract. Therefore, it is not a defence to a claim under s16(2)(a)(i) of the SOPA that the payment claims were not calculated in accordance with the contract.

Update on Case – K&K Appeal and Lose

K&K appealed the judgment handed down by the Court as they believed the wording on the payment claim to be insufficient. The payment claim served by BSL group included the following reference to the Security of Payments Act.

“Payment Claim under the Building and Construction Industry Payments Act 2004.”

The correct wording is;

“This is a payment claim made under the Building and Construction Industry Security of Payment Act 2002 Victoria.”

His Honour held that the test of validity was whether the payment claim “purports in a reasonable way to identify the particular work in respect of which the claim is made”. Considering the face of the Payment claim and its context, the payment claim reasonably purported to be a payment claim under the Act.

The judge confirmed the original judgment and ordered K&K to pay BSL’s costs of the appeal.

Takeaway Points

1. A well drafted Terms and Conditions document saves costs and reduces uncertainty.
2. Both the contract (or rate schedule) and the payment claim should clarify if the price is inclusive or exclusive of GST.
3. To increase your chances of recovering under the Security of Payments Act, we recommend that you engage us to assist you in preparing payment claims (especially your last payment claim when leaving site). The payment claim is the initiating document to recovery under the Security of Payments Act.

Please call us to discuss any questions or queries relating to your final payment claims before issuing under SOPA on 03 9041 4674.

Please click on the link below to read the full judgment.

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VCC/2020/1341.html