Hawkins Construction v Mac's Industrial Pipework [2001] NSWSC 815

New South Wales Supreme Court

CITATION : Hawkins Construction v Mac's Industrial Pipework [2001] NSWSC 815 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 2186/01 HEARING DATE(S) : 31 August 2001 JUDGMENT DATE : 18 September 2001

PARTIES : Hawkins Construction (Australia) Pty Limited (Plaintiff) Mac's Industrial Pipework Pty Limited (Defendant) JUDGMENT OF : Windeyer J at 1

COUNSEL : Mr V Gray (Plaintiff) Mr R D Marshall (Defendant) SOLICITORS : Albert A Marci Partners (Plaintiff) Turnball Hill (Defendant) CATCHWORDS : STATUTES - interpretation - Building and Construction Industry (Security of Payments) Act 1999 NSW - whether Act applies to sub-contracts when head contracts procede the Act - CORPORATIONS - statutory demands - demand signed by employed solicitor of firm acting for creditors - whether effective Building and Constructions Industry (Security of Payments) Act 1999 (NSW) s5, s6, s13(2)(a)&(c), Schedule 2 LEGISLATION CITED : Companies (New South Wales) Code Corporations Law s459E(2)(f), s459H(2),(3) & (5) CASES CITED : Metropolian Waste Disposal Authority v Willoughby Waste Disposals Pty Ltd (1987) 9 NSWLR 7 DECISION : Paragraph 16

1 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WINDEYER J

TUESDAY 18 SEPTEMBER 2001

2186/01 Hawkins Constructions (Australia) P/L v Mac's Industries Pipework Pty Ltd

JUDGMENT

Facts:

1 This is an application by the plaintiff to set aside a statutory demand served on it by the defendant. 2 The plaintiff is the head contractor on the construction of Singleton Abattoir. The defendant was initially subcontracted to install plumbing and fire services on 15 February 2000 ("the first contract"). During the course of this contract, the plaintiff invited tenders from the defendant, another plumber contracted to work on the construction and two other contractors to install the hot and cold water reticulation system on the site. The defendant was successful and the plaintiff and the defendant entered into a second contract in July 2000 ("the second contract"). There were some irregularities in the formal signing of the contract but nothing turns on this. The defendant signed the contract, but it appears that the plaintiff did not. I am satisfied that the acceptance of the defendant's tender brought into existence a contract incorporating the same general terms as the first contract. One of these terms was a "pay when paid" provision, which would have meant that the plaintiff only had to pay the defendant as and when it itself was paid. There is evidence that around $105,000 remains to be paid to the plaintiff as head contractor for the work done by the defendant under this second subcontract. 3 The statutory demand relates to invoices issued in relation to this second contract by the defendant seeking progress payments. These payments were sought under the Building and Construction Industry (Security of Payments) Act 1999 (NSW) ("the Act"). This Act came into force on 26 March 2000, that is between the date of the first and second contract. So far as this case is concerned its effect was to make "pay when paid" provisions invalid and require progress payments such as those sought. 4 By summons the plaintiff seeks a declaration that the Act does not apply to the second contract and an order setting aside the statutory demand. As well as arguing that the Act should not apply, Mr Gray for the plaintiff also contended that the defendant's invoices did not comply with it, that the statutory demand was invalid because it was improperly signed, and that the plaintiff had an offsetting claim against the statutory demand if it were upheld. The existence and amount of the offsetting claim were both conceded by the defendant at the hearing. Issues: 5 The issues are: