In the recent County Court decision of APS Industrial Services Pty Ltd v Adcon Contracting Pty Ltd [2023] VCC 400, the Court dismissed the applicant’s application for judgment on the basis that the payment claims did not correctly identify the contracting party to the construction contract.
As a result, the respondent was not liable to make payment under the construction contract and/or the Building and Construction Industry Security of Payment Act 2002 (Vic) (SOPA).
What happened?
In the proceeding, APS Industrial Services Pty Ltd (APS) applied for a judgment against Adcon Contracting Pty Ltd (Adcon Contracting) pursuant to section 16(2)(a)(i) of the Act.
APS submitted that it was entitled to judgment because:
- Adcon Contracting failed to make payment in response to payment claims for $1,101,417.33 incl GST for the hiring of scaffolding together with the provision of labour associated for the services of erecting and dismantling scaffolding allegedly provided by APS to Adcon Contracting (the Construction Works);
- APS had submitted the payment claims in accordance with each of the discrete construction contracts it had with Adcon Contracting; and
- Adcon Contracting did not provide a payment schedule in accordance with the Act.
Adcon Contracting disputed APS’ application on the basis that:
- there was no contract or agreement between APS and Adcon Contracting in relation to the payment claims; and
- the payment claims were addressed to “Adcon” or “Adcon Group” neither of which is Adcon Contracting.
The Decision
The Court dismissed APS’ application for judgment because the payment claims did not correctly identify the contracting party i.e. neither “Adcon” or “Adcon Group” was the respondent with whom APS had entered into a construction contract.
The Court held, based on the evidence provided by the parties in the proceeding, that:
- APS had failed to establish that Adcon Contracting entered into a “construction contract” or was “party” to a construction contract with APS, within the meaning of section 4 of the Act; and
- APS had not satisfied the formal and procedural requirements of section 14(1) and (2) of the Act as Adcon Contracting was not a respondent liable to make payment.
As a result, APS was not entitled to payment from Adcon Contracting.
Key takeaways
When preparing your payment claims it is important to ensure that the other party’s details are identical to those in the construction contract.
If there is no written construction contract, you should confirm the correct details of the contracting party so that you do not inadvertently issue a payment claim on an incorrect entity.
This article was written by Paul Graham, Partner, Tara Nelson, Senior Associate and Nick Jarrett, Solicitor.
