SOP Workshop by Jonathan Miliszewski
Scenario
LendOakey Pty Ltd was engaged by Swiss Solar Construction Pty Ltd to build a Solar Farm. The site address for the Project is within Queensland, and the project is referred to as the Gold Coast Solar Farm, but part of the construction works performed were sited in New South Wales. Some of the construction work that was to be undertaken was to occur in respect of structures which were:
(a) wholly in Queensland;
(b) partly in Queensland and partly in New South Wales; and
(c) wholly in New South Wales.
HHA Pty Ltd is the Project Manager appointed to the Project and receives a payment claim 64 for an amount of $4.6M by email from the Contractor. The email dated 26 June 2024 is sent to 5 recipients representing the Project Manager Company. Among the recipients was Mr Bond who had issued the previous 63 Payment Schedules to the Contractor. Unfortunately, the email address for Mr Bond was incorrectly imputed and was not received by him until 14 July 2024 when it was resent. Upon reading the email Mr Bond responded to the Contractor by email stating:
“Hi Joe
The payment claim of Monday, June 26, 2023 5:10 PM was sent to my EU email address which was cancelled and which you know about – so this is the first time I’m receiving this chain of emails
intentionally sending payment claim documentation and purported invoices to an email which you know is not operative, is in bad faith and misleading and deceptive, and frankly is a new low in what we are seeing on the project, we reserve all rights in relation to this conduct.
As for this invoice, this is not valid and I suggest you retract”
Payment claim 64 was a claim for payment expressly stated to have been given pursuant to cl 39.2 of the Contract. Clause 39.2 specified when the contractor might deliver a payment claim and what the payment claim must include. It did not specify to whom the payment claim must be delivered. However, as cl 39.3 obliged the Project Manager to assess the claim within 10 business days after service, and to issue a valuation certificate stating the amounts determined to be paid, it is appropriate to construe cl 39 as contemplating that the payment claim must be delivered to the Project Manager.
“Project Manager” is a term defined in cl 1 as having the meaning given in cl 26.1. The Project Manager is the person who administers the Contract and exercises some or all of the Principal’s functions under the Contract: cl 26.1(a). When the Project Manager exercises its functions, it does so as the agent of the Principal, the “its” in this contract being a reference to the Project Manager: cl 26.1(b). At the commencement date of the Contract the Project Manager was a company named HHA Pty Ltd (see cl 26.1(c) and Item 1 of Annexure A), but the identity of the Project Manager could be changed by the Principal pursuant to cl 26.1(d). Notably the Project Manager could delegate some or all of its functions by the appointment of a Project Manager’s representative: cl 26.2.
PC64 was 200 pages long, the Payment Schedule was 150 pages long and both the adjudication application and response were more than 100 pages. LendOakey applied for adjudication of the payment claim and the adjudicator reached a decision favourable to it which was only 15 pages. Feeling aggrieved by the decision, Swiss applied to the SC to have it set aside on the basis that the adjudicator did not provide adequate reasons.
Case Insight
Oakey Pty Ltd v Canadian Solar Construction (Australia) Pty Ltd; Canadian Solar Construction (Australia) Pty Ltd v RE Oakey Pty Ltd [2024] QCA 202
Facts:
- Solar Farm – $4m claim.
- PC was sent via email.
- Copied to Director of Principal and 6 reps of the project management company that was nominated as the Principal’s Agent.
- Email bounced back from the Director but was received by all others.
- Principal did not respond within time. Became liable to pay $4m.
- Principal argued that the PC was not given to the Principal.
COA found that the PC had been received by the project manager who had authority for the Principal.
“[49] In a commercial context, absent such a provision, a document is properly to be taken to have been given if it has actually been received and come to the attention of a person with authority to deal with that document under the contract.”[13]
Lendlease Building Pty Ltd v BCS Airport Systems Pty Ltd & Ors [2024] QSC 164
Facts:
- Subcontract for the D&C of baggage handling works at the GC Airport.
- Part of the construction works were to be performed in NSW.
- BCS issued a PC for $1.2m.
- LL used a PS for $59k – arguing the PC was invalid due to cross-border nature of the work.
- Adjudicator awarded $995k.
- LL applied to the SC contending that s61(4) excludes the operation of the Act where work is carried out outside of Qld.
- Justice Sullivan held that s 61(4) of the BIF Act establishes a jurisdictional limit, excluding work carried out “wholly” outside QLD.
- The Court rejected Lendlease’s interpretation that the Act required a detailed analysis of which specific work occurred in each state. Where work straddles the border, an appropriate territorial nexus is maintained by way of the building or structure being situated partly in QLD.
- The BIF Act did not impose an obligation on the claimant to identify which part of the work was performed in each state. The only requirement under the Act was for the claimant to identify the construction work to which the progress claim relates so that the recipient can adequately respond.
The State of Queensland Acting through the Department of Transport and Main Roads v Black Cat Civil Pty Ltd & Ors [2023] QSC 5
Facts:
- Civil Contractor carrying out Peak Downs Highway upgrade for TMR
- $10m PC (103 pages) issued by Black Cat and a $3m PS (24 pages) in response from TMR.
- AA was 856 pages and the AR was 854 pages. The Adjudication Decision was only 19 pages.
- Adjudication Decision appealed on the basis the adjudicator failed to provide reasons.
- Bradley J held that there was a logical basis and intellectual justification for the adjudicator’s conclusion.
- The adjudicator had not overlooked evidence, but rather had rejected the evidence submitted by TMR, and preferred the evidence submitted by Black Cat.
- The reasons in the adjudication decision reflected a genuine consideration of the contract and the parties’ respective submissions.
“[39] The evidence before the adjudicator was capable of leading to the conclusion expressed in paragraph 85 of the decision. The adjudicator explained how the evidence recited in the decision led to that conclusion. In reaching that conclusion the adjudicator did not overlook the principal’s submissions in its adjudication response. Rather, he rejected them because, based on Mr Butler’s evidence of impediments, the adjudicator preferred the opinion of Mr Butler to that expressed by Mr Mostyn. This was a logical basis and the adjudicator’s intellectual justification for the conclusion.”
“[57] The adjudicator may have been wrong in his conclusion. He may have given a meaning to the clause that is not one the court would favour. Such an error would not invalidate the decision. If it is an error, it is one made within jurisdiction.”
