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John Holland Pty Ltd v Walz Marine Services Pty Ltd & Ors

John Holland Pty Ltd v Walz Marine Services Pty Ltd -&- Ors [2011] QSC 39 Queensland Supreme Court 11 March 2011.

FACTS:

John Holland, the main contractor on a new wharf and coal loading facility in North Queensland subcontracted Walz Marine Services to build the extension of the wharf which already extended 1km out to sea. The Contract contained provisions for delays caused by weather. Walz submitted a Payment Claim which included delay costs and the matter went to adjudication. The adjudicator allowed the amount claimed in the Payment Claim. John Holland applied to have the determination set aside arguing the certain contractual requirements had not been met and the adjudicator made an error by not properly valuing the claim.

ISSUES:

Whether the adjudicator erred in valuing the claim, by not considering contractual requirements not raised by John Holland in the Payment Schedule nor considering those contractual requirements himself.

Whether if an error existed was it a jurisdictional error or an error in the interpretation of the contract.

FINDING:

The Court held that the adjudicator had not erred by not considering the reasons outlined in the adjudication response where they were not raised in the Progress Schedule as the dispute is defined by the Payment Claim and Payment Schedule.

QUOTE:

Wilson J at [51 -52]:

Counsel for John Holland submitted that the adjudicator erred in not examining the claim to see if the elements of the claim for delay and disruption had been established…I do not accept that this is what the adjudicator did…he considered whether he could be satisfied that inclement weather events meeting the thresholds had occurred… and whether the costs claims had been calculated correctly

[at 54]

[W]here there is a payment schedule as well as a payment claim, the factual and legal issues… are defined by those documents. If the validity of the claim depends on certain acts… failure expressly to put those facts in issue in the payment schedule may amount to an admission of them.

IMPACT:

Failure to expressly deny facts in the Payment Schedule may amount to an admission that those facts are not disputed. Therefore, Contract Managers must be careful to fully define all their reasons for non-payment in the Payment Schedule to avoid being prevented from raising these reasons later.

This publication is intended to be a topical report on recent cases in the construction, development and engineering industries. This publication is not intended to be a substitute for professional advice, and no liability is accepted. This publication may be reproduced with full acknowledgement.

Jim Doyle

1800 888 783

jdoyle@doylesconstructionlawyers.com
www.doylesconstructionlawyers.com

John Holland Pty Ltd v Coastal Dredging & Construction Pty Ltd & Ors

John Holland Pty Ltd v Coastal Dredging & Construction Pty Ltd & Ors [2012] QCA 150 (8 June 2012)

FACTS

John Holland Pty Ltd (‘John Holland’) contracted Coastal Dredging & Construction Pty Ltd (‘Coastal Dredging’) to provide dredging in Gladstone Harbour.

Coastal Dredging issued a payment claim under the Building and Construction Industry Payments Act 2004 (‘the BCIPA’). John Holland served a payment schedule under the BCIPA for a nil amount. Coastal Dredging had not satisfied the preconditions in the contract in order to establish a valid reference date.

Coastal Dredging lodged an adjudication application under the BCIPA. The adjudicator found in Coastal Dredging’s favour. John Holland appealed the adjudicator’s decision claiming that the adjudication was void as the contractual preconditions for a reference date had not been met

ISSUE

Can parties to a contract qualify the statutory entitlements of the BCIPA by including preconditions in the contract?

FINDINGS

Justice Fraser (with whom Justices White and Lyon agreed). found that the preconditions contained within the contract were inconsistent with the ‘No contracting out’ provisions of s99 of the BCIPA. The BCIPA gives a subcontractor a statutory entitlement to a progress payment for each reference period. Contractual provisions can be used to determine on which date a reference date arises. However, the contract cannot be used as a mechanism for denying a subcontractor’s rights to make a progress claim or require that they meet preconditions prior to establishing an entitlement to a progress payment.

QUOTE

Fraser JA held that:

“…the contractual provisions to which reference may be made for the purpose of ascertaining the “reference date” are those which state, or provide for the working out of, the date on which a progress payment ‘may be made'”. The later expression refers to an entitlement to make a progress claim. It does not comprehend reference to warranties which concern the form and content of the progress claims or the consequences of breaching warranties about the form and content of progress claims”.

IMPACT

The right to a progress claim is established by the BCIPA. Court are likely to hold conditions precedent to the issuing of a payment claim, void. A contractual mechanism can be used to determine the date on which a reference date falls, but cannot be used to impose preconditions to a reference date.

This publication is intended to be a report on recent cases in the construction, development and engineering industries. This publication is not intended to be a substitute for professional advice, and no liability is accepted. This publication may be reproduced with full acknowledgement.

Jim Doyle

1800 888 783

jdoyle@doylesconstructionlawyers.com
www.doylesconstructionlawyers.com