Q: What is a mortgage?

A: Contrary to popular belief, a “mortgage” is not a loan from a bank to buy a house. Although the term mortgage has become eponymous with these loans, a mortgage is more precisely defined as a charge or encumbrance registered on a property title to secure an interest.

Q: If I have a bank mortgage, does the bank own my property?

A: No. This is a common misconception that stems from the historical way mortgages were created. A mortgage is a charge or debt on the property. While it gives the mortgagee (the person lending the money) certain powers over the property, it does not give the mortgagee ownership of the property.

Q: Can the mortgagee sell my house?

Yes. Mortgagees can exercise something known as the “power of sale” if the mortgagor (the person borrowing the money and usually the owner of the property) fails to comply with their obligations under a mortgage. However, this does not mean that the bank can show up at your front door with a real estate agent and a “for sale” sign just because you fall behind on a repayment. The power of sale can only be exercised in very specific circumstances and through very strict procedures.

Q: Can a mortgage be registered over personal property?

A: Generally not. Mortgages by definition can only be registered over real property. There is however something called the Personal Property Securities Register, which is managed by the Treasury and which permits people to register encumbrances or charges over personal property, even intangible personal property. This functions similarly to a mortgage in some ways, but is quite distinct.

Q: Will the mortgage be removed once I pay it off?

A: No. This is a common question which highlights the importance of distinguishing between the loan, being the money advanced, and the mortgage, which is an interest registered over the property (basically just a two page form submitted at the Land Titles Office). While you may have paid off the loan, unless the bank submits a discharge of mortgage, the mortgage will remain on title even though the loan is repaid.

If you have more questions in regard to mortgage, get in touch with our property lawyers.

You might have heard the phrase “no-win no-fee” in the media, especially in relation to personal injury claims, but what does it actually mean?

Each costs agreement may be slightly different, but we have set our below what ‘no-win no-fee means in general terms.

What does “no win-no fee’ mean?

‘No win no fee’ means that your professional legal fees are only payable in the event of a successful outcome. A successful outcome means that you have achieved a resolution of your claim through either a settlement or a Court decision, whereby compensation or damages are paid to you.

This type of costs agreement gives everyone access to legal representation in a personal injury matter and ensures everyone has a fair chance of seeking compensation for injuries they have suffered at no fault of their own. Most of our clients are not in a position to pay for legal costs upfront, particularly in circumstances where they are injured and not able to work.

How much do I pay if my claim is successful?

If your claim is successful, depending on the terms of the settlement, the defendant may pay a large portion of your legal fees. Your lawyer may then recover the remaining legal fees associated with your case from your settlement sum. This should agreed between you and your solicitor prior to accepting any settlement amount and should be reasonable within the scope of your case.

What if my claim is not successful?

If your claim is not successful, i.e there is “no win”, then under your ‘no win no fee’ agreement you will not be required to pay your solicitor’s professional legal fees.

However you should also be aware, depending on the terms of your agreement, if your claim is not successful you may still be required to pay for any disbursements incurred by your solicitor on your behalf. Disbursements may include expenses such as court fees, requests for medical records and expert reports.

If you lose your case, in some circumstances you may also be required to pay the other side’s costs. You should consult your solicitor to discuss these terms in detail and what it can mean if you are not successful.

How can Chamberlains Help?

At Chamberlains we can provide assistance with making personal injury claims and offer ‘no win – no free’ arrangements for your claim. Contact us today for an obligation free appointment with our experienced team.

 

***Assisted by Anna Halpin***

In the decision of Global Pacific Aerospace Pty Limited [2012] VSC 291, The Supreme Court of Victoria considered a dispute between directors of a company, and whether it was just and equitable that the company should be wound up.

W and B were 50/50 shareholders in a company that bought a helicopter for $1.6m. W and B were also the company’s sole directors.

$1.12m of the purchase price was borrowed and secured by a mortgage. W and some related entities gave a guarantee in respect of that loan.

The company couldn’t make the payments. The lender caused the helicopter to be sold for a shortfall of around $457,000.00.

The lender sued W and their related entities for the shortfall pursuant to the guarantee.

Interestingly, the purchaser of the helicopter was a different company wholly owned and controlled by B, who had not given a guarantee.

W says B used his position as director of the company to negotiate a lower price for the helicopter, breaching his directors duties. W sought to bring derivative proceedings to pursue this claim.

B applied to wind up the company on the basis that it would be just and equitable to do so.

B claimed that W excluded them, treated the company as their own, breached duties in buying the helicopter for an inflated price and then failed to maintain it, and failed to manage the company’s obligations to its lender.

W said B’s claim was an attempt by B to protect themselves from the derivative claim and, as there was no money, a liquidator would not chase B for B’s breach of their directors duties.

The company had no ongoing business. Its sole assets were claims against B, W, and the lender.

The Court considered it would be just and equitable to wind up the company because: (i) it was being sued by a secured creditor, (ii) the directors’ relationship had broken down, (iii) each director alleges the other has breached their directors duties with evidence from both showing neither’s claim is frivolous.

The Court considered preferable course was for an independent liquidator to be appointed to investigate all claims and noted “liquidators commonly find a way to obtain funding if there is a potentially good cause of action available to the company”.

The company was wound up on the just and equitable ground.

Poor corporate governance can put a company’s existence at risk.

If you have any legal questions about commercial and corporate law, reach out to our specialists at Chamberlains Law Firm!

The case for fixed vs ordinary costs

The federal system has an array of alternatives available to litigants seeking to avoid the traditional costs assessment process.

Reflective of a broader approach to streamlined, accessible and efficient litigation in the federal system, the ability of litigants to seek lump-sum costs orders is designed to avoid the expense, delay and aggravation involved in protracted litigation.

Careful consideration is given by judicial officers to ensure any lump-sum order meets the requirements to achieve procedural fairness and natural justice in the circumstances. Various criteria must be met to ensure a fixed costs order is the appropriate mechanism to redress the successful party in the circumstances of the particular matter.

This article will take a brief look at the rules allowing for fixed costs orders in the Federal Circuit Court and the Federal Court, and when they might be applied.

Rule 21.10 of the Federal Circuit Court Rules 2001 (Cth)

Unless the Court otherwise orders, a party entitled to costs in a proceeding (other than a proceeding to which the Bankruptcy Act applies) is entitled to:

  • costs in accordance with Parts 1 and 2 of Schedule 1; and
  • disbursements properly incurred.
Note: For costs in a proceeding to which the Bankruptcy Act 1966 applies, see Part 13 of the Federal Circuit Court (Bankruptcy) Rules 2016.

Discussion

Rule 21.10 provides that costs are to be awarded in fixed sums for certain events, unless the court orders otherwise. Costs are calculated by reference to different stages of proceedings, with attendances at hearings charged at daily hearing fee rates. Distinction is made between family law matters and other federal laws, with the allowable amount for each stage set as a fixed sum (see Table 1 below).

Click to view table 1: Fixed costs schedule (Federal Circuit Court)

The Court has a general discretion to depart from the fixed event-based scale. Sometimes the court may order that a specific amount of costs be paid. In these situations, the judge may assess the costs by using departure from the event-based scale of costs:

  • the costs rules of the Federal Court, or
  • another method for determining the amount of costs.

Federal Court

The Federal Court is conferred the power to award a fixed sum for costs pursuant to s43(3)(d) of the Federal Court of Australia Act 1976 (Cth).

Section 43

The Court or a Judge has jurisdiction to award costs in all proceedings before the Court (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which this or any other Act provides that costs must not be awarded. This is subject to:

  • subsection (1A); and
  • section 570 of the Fair Work Act 2009 ; and
  • section 18 of the Public Interest Disclosure Act 2013 .

In a representative proceeding commenced under Part IVA or a proceeding of a representative character commenced under any other Act that authorises the commencement of a proceeding of that character, the Court or Judge may not award costs against a person on whose behalf the proceeding has been commenced (other than a party to the proceeding who is representing such a person) except as authorised by:

  • in the case of a representative proceeding commenced under Part IVA–section 33Q or 33R; or
  • in the case of a proceeding of a representative character commenced under another Act–any provision in that Act.
  • except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.
  • without limiting the discretion of the Court or a Judge in relation to costs, the Court or Judge may do any of the following:
  • make an award of costs at any stage in a proceeding, whether before, during or after any hearing or trial;
  • make different awards of costs in relation to different parts of the proceeding;
  • order the parties to bear costs in specified proportions;
  • award a party costs in a specified sum;
  • award costs in favour of or against a party whether or not the party is successful in the proceeding;
  • order a party’s lawyer to bear costs personally;
  • order that costs awarded against a party are to be assessed on an indemnity basis or otherwise;
  • do any of the following in proceedings in relation to discovery:
  • order the party requesting discovery to pay in advance for some or all of the estimated costs of discovery;
  • order the party requesting discovery to give security for the payment of the cost of discovery;
  • make an order specifying the maximum cost that may be recovered for giving discovery or taking inspection.

Note: For further provision about the award of costs, see subsections 37N(4) and (5) and paragraphs 37P(6)(d) and (e).

Further, rule 40.02 of the Federal Court Rules 2011 (Cth) provides:

A party or a person who is entitled to costs may apply to the Court for an order that costs:

  • awarded in their favour be paid other than as between party and party; or
  • be awarded in a lump sum, instead of, or in addition to, any taxed costs; or
  • be determined otherwise than by taxation.

Note 1: The Court may order that costs be paid on an indemnity basis.

Note 2: The Court may order that the costs be determined by reference to a cost assessment scheme operating under the law of a State or Territory.

Discussion

Section 43(2) provides that “except as provided by any other Act, the award of costs is in the discretion of the Court or Judge.” The discretion is absolute and unfettered subject to the requirement that it be exercised judicially: Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR151 at 152

In the leading case of Beach Petroleum NL v Johnson (No 2) [1995] FCA 350, Von Doussa J considered the Court’s discretion to award lump sum costs instead of ordering a taxation. Key principles include:

  • it is no impediment to the granting of a lump sum costs order that an earlier order has been made ordering a taxation of costs,
  • the chief purpose awarding lump sum costs is to avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation of costs,
  • It is a power which may be exercised whenever the particular circumstances of the case warrant it,
  • where the financial capacity of the unsuccessful party is such that the successful party is unlikely to recover the costs of a taxation, where the unsuccessful party’s assets are outside the jurisdiction, or where the unsuccessful party has a tendency not to comply with costs orders, the case for a lump sum costs order is more compelling,
  • a lump sum approach may be appropriate where one party has a tendency to litigate (generally without basis) and would likely abuse the taxation process,
  • the Court may take into account that the costs should bear some relationship to the size of the applicant’s victory and should be proportionate to the nature and importance of the case,
  • to ensure that a weaker party is not disadvantaged by a lump sum costs order the Court may adopt a careful and conservative approach to fixing the costs,
  • exercise of the discretion carries the duty to accord procedural fairness (or natural justice) to the litigants,
  • the Court must be confident that the approach taken to estimate costs is logical, fair and reasonable,
  • evidence from an independent costs consultant may prove useful for the purpose of fixing lump sum costs, although a judge is by no means bound by it. Evidence of the charges rendered to the party awarded costs is also highly relevant.

The cases also show some of the considerations found to be relevant when the court has refused to order lump sum costs. These include:

  • the evidence relating to costs must be sufficiently detailed and must clearly identify the components of the costs incurred and how they have been calculated, and
  • the court must arrive in an appropriate sum on a logical and reasonable basis and with sufficient confidence, as opposed to selecting figures at random on the basis of an arbitrary preference for one experts view over another’s.

Making the application

  • No formal application for a lump-sum costs order is required.
  • However, in cases where a lump-sum costs procedure is to take place, the costs applicant should file an affidavit in support of the lump-sum claim (Costs Summary) in accordance with the timetable set by the judge.

We’re here to help

We at Chamberlains understand the emotional and financial stress that come with litigation. Should you require further information about how costs can be recoverable in matters before the Federal Court and Federal Circuit Court, please do not hesitate to contact our office for a consultation with our construction law team.

NSW Court of Appeal Clarifies Strict Requirements for Valid Payment Schedules

Case note on Joye Group Pty Ltd v Cemco Projects Pty Ltd [2021] NSWCA 211

Executive Summary

The Supreme Court of New South Wales has overturned part of the decision in Joye Group Pty Limited v Cemco Projects Pty Limited [2021] NSWDC 151. The decision in Joye Group Pty Ltd v Cemco Projects Pty Ltd [2021] NSWCA 211 is a timely reminder that whilst payment schedules do not need to be extensive documents, they do need to comply with the requirements of s14 of the Building and Construction Industry (Security of Payment) Act 1999 (NSW) (Act) (or the equivalent legislation in the state or territory where the work is performed.

Particularly, the payment schedule needs to indicate any reasons for non-payment of a payment claim, in the document itself. Simply relying on earlier correspondence about outstanding or defective work might not be enough to justify non-payment.

Any reference in a payment schedule to earlier correspondence or reasons as to why payment might be withheld should be made clear within the payment schedule itself, as the court will likely be reluctant to read in any reasons for withholding payment.

When issuing a payment schedule, if a respondent intends to rely upon a document or piece of correspondence that they previously provided to the claimant, they should ensure the reference to that document is specific, or include a further copy, so as to avoid their payment schedule potentially being invalid.

Background

The parties entered into two written subcontracts, being for the supply and installation of tiling, and the supply and installation of timber, for a project in Alexandria. Joye Group Pty Ltd (Joye Group) issued four invoices endorsed as payment claims in March and April 2020 for tile and timber flooring work pursuant to the subcontracts.

Cemco Projects Pty Ltd (Cemco) failed to pay those tax invoices.

The tax invoices issued, and the Cemo’s responses, were as follows:

  • Invoice JS19774 was issued on 9 April 2020 as a payment claim. No payment schedule was served;
  • Invoice JSA19284 was issued on 9 April 2020 as a payment claim. A payment schedule was served scheduling an amount less than the amount claimed; and
  • Invoices JSA19293 & JS19794 were issued on 27 April 2020 and 28 April 2020 respectively as payment claims. On 8 May 2020, Cemco emailed Joye Group saying: “Please be advised that no payment for the above Invoices [will be made], until all works have been completed.”

At First Instance

The matter was heard in the District Court before Strathdee DCJ. By way of amended statement of claim filed 22 June 2020, Joye Group sought payment of the four payment claims from Cemco.

It was conceded by Cemco that invoices JS19774 and SJA19284 were valid payment claims and should have been paid. Judgment was subsequently entered against Cemco with respect to those invoices (Order 1). The issue before her Honour was whether the email sent by Cemco to Joye Group on 8 May 2020 was a payment schedule for the purposes of the Act.

Whilst the parties held different views as to the clarity of the 8 May 2020 email and whether it sufficiently identified the invoices for which Cemco purported to make no payment, Her Honour found at [21] that “It is hard to imagine how much clearer the defendant could make their position, that there will be no payment, thus the plaintiff must fail on this argument.”

Further, and noting the Act requires that a payment schedule must discuss the reasons for withholding payment, Her Honour’s view was that the use of the word indicate in s14 supports the proposition that full particulars are not required [at 24].

Her Honour’s finding was that prior correspondence between the parties gave sufficient context as to the reasons for withholding payment, and that the 8 May 2020 email complied with the requirements for a valid payment schedule. Accordingly, judgment was not entered with regard to invoices JSA19293 and JS19794 (Order 2).

The decision on appeal

Joye Group appealed the decision as it related to Order 2, with the matter being heard before Basten JA, Macfarlan JA and Emmett AJA. Basten JA gave the leading judgment. His Honour noted that the adequacy of the payment schedule turned on whether or not it indicated why the amount agreed to be paid was less than the amount claimed, as required by s14(3) of the Act [at 11].

The decision in Multiplex Constructions Pty Ltd v Luikens and Anor [2003] NSWSC 114 was cited as authoritative with regard to the contents of a payment schedule, particularly the explanation given by Palmer J as follows:

“[67] … The evident purpose of s 13(1) and (2), s 14(1), (2) and (3), and s 20(2B) is to require the parties to define clearly, expressly and as early as possible what are the issues in dispute between them; the issues so defined are the only issues which the parties are entitled to agitate in their dispute and they are the only issues which the adjudicator is entitled to determine under s 22. It would be entirely inimical to the quick and efficient adjudication of disputes which the scheme of the Act envisages if a respondent were able to reject a payment claim, serve a payment schedule which said nothing except that the claim was rejected, and then ‘ambush’ the claimant by disclosing for the first time in its adjudication response that the reasons for the rejection were founded upon a certain construction of the contractual terms or upon a variety of calculations, valuations and assessments said to be made in accordance with the contractual terms but which the claimant has had no prior opportunity of checking or disputing. In my opinion, the express words of s 14(3) and s 20(2B) are designed to prevent this from happening.

[76] A payment claim and a payment schedule are, in many cases, given and received by parties who are experienced in the building industry and are familiar with the particular building contract, the history of construction of the project and the broad issues which have produced the dispute as to the claimant’s payment claim. a payment claim and a payment schedule must be produced quickly; much that is contained therein in an abbreviated form which would be meaningless to the uninformed reader will be understood readily by the parties themselves. A payment claim and a payment schedule should not, therefore, be required to be as precise and as particularised as a pleading in the Supreme Court. Nevertheless, precision and particularity must be required to a degree reasonably sufficient to apprise the parties of the real issues in the dispute.”

Further, His Honour considered the judgment of Leeming JA in Style Timber Floor Pty Ltd v Krivosudsky [2019] NSWCA 171, which endorsed the reasoning in Multiplex Constructions Pty Ltd v Luikens & Anor:

“[45] Fourthly, and perhaps most importantly for present purposes, the payment schedule serves two important functions under the Act. The first is to inform the claimant as to the metes and bounds of its dispute with the respondent, so that it can make an informed choice as to whether to engage the expedited pro tem adjudication procedures under Division 2. The second is to articulate the respondent’s case which will then be determined by the adjudicator. It will also enable adjudicators to assess whether to accept appointment as an adjudicator to a dispute. At the time an adjudication application is made, all that the claimant and the prospective adjudicator will know of the nature of the respondent’s side of the case is what is contained in its payment schedule.”

“[47] When dealing with the requirements of a payment claim, Palmer J’s analysis was endorsed by this Court in Clarence Street … at [31]. While it is clear that an abbreviated description, falling short of a pleading, will suffice, the passages emphasised indicate that the payment schedule must sufficiently describe the dispute so as to enable the claimant to determine whether to proceed in the knowledge of the nature of the case it will have to meet.

[48] It is established that even where a respondent proposes to pay no part of a payment claim, it is still required to indicate reasons in accordance with s 14(3). [7] That, with respect, must be so having regard to, inter alia, the limiting effect of s 20(2B). It was not suggested in this Court that s 14(3) did not apply to Style Timber Floor on the basis that it refused to pay the entirety of the claim.”

His Honour found that a statement to the effect of “we do not intend to pay your claim” does not provide a reason for non-payment, much the same as a statement along the lines of “we will not pay your claim until…” does not confirm that some or all of the claim will not be paid, as it leaves open the possibility that there is no dispute that the work subject to the claim has been carried out [at 19].

As to the primary judge’s reasoning, His Honour found that the inferences drawn from background of communications were not properly open for the purpose upon which it was relied [at 21]. There was no attempt by Cemco, either expressly or by necessary inference, to make refence to any of the supporting documents or prior correspondence in the 8 May 2020 email.

His Honour gave a useful insight into how the court views the content of a payment schedule at [24], stating that:

In principle, it may be accepted that not only communications but other contextual evidence may be necessary and relevant to allow an adjudicator (or the court) to understand the scope of terms used in a payment schedule (or in a payment claim). That is not this case: there was no term used in the 8 May 2020 email which required interpretation. Rather, what was sought to be achieved by reference to extraneous documents was to create a sufficient degree of particularly in the absence of incorporation. That course is not available. A payment schedule is not to be reconstructed by reference to external materials, so as to give it a degree of particularity which it simply did not enjoy.

Ultimately, His Honour formed the view that the 8 May 2020 email did not satisfy the purpose behind the statutory scheme that the Act was designed to implement, and did not conform with the requirements of a valid payment schedule. Judgment was entered for Joye Group with respect to invoices JSA19293 & JS19794.

Key takeaways

It is critical that a payment schedule makes abundantly clear any reasons for non-payment of a payment claim. Any assertions relied upon as to reasons for withholding payment should be express and any issues in dispute (such as outstanding work) clarified at the time of issuing the payment schedule.

We’re here to help

We at Chamberlains understand the emotional and financial stress that come with litigation. Should you require further information about how costs can be recoverable in matters before the Federal Court and Federal Circuit Court, please do not hesitate to contact our office for a consultation with our construction law team.

Discretion under the Civil Procedure Act 2005 (NSW)

The power of courts in NSW to award costs to litigants is conferred by the Civil Procedure Act 2005 (NSW) (Act), which gives the court full power to determine by whom, to whom and to what extent costs are to be paid, and the basis on which they are to be paid, regardless of how advanced the litigation is (subject to any statutory provisions to the contrary).

There are various statutory provisions providing for lump sum or fixed costs events, such as in matters before the Small Claims Division of the Local Court, in undefended recoveries of liquidated debts and when enforcing judgment debts. These costs are provided in schedule 1 of the relevant Local, District and Supreme Court Acts.

The Supreme Court provides the mechanism for the costs assessment process for all costs orders made in inferior courts and tribunals.

Whilst an important tool in the litigation spectrum, costs assessment does necessarily require further time and expenditure. Happily, the Act provides an alternative to the often protracted and expensive costs assessment process.

Section 98 Civil Procedure Act 2005 (NSW)

Section 98(4)(c) of the Act permits a court to make a gross sum costs order instead of referring the matter for assessment.

CIVIL PROCEDURE ACT 2005 – SECT 98

Courts powers as to costs:

  • Subject to rules of court and to this or any other Act-
  • costs are in the discretion of the court, and
  • the court has full power to determine by whom, to whom and to what extent costs are to be paid, and,
  • the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.

In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:

  • costs up to, or from, a specified stage of the proceedings, or
  • a specified proportion of the assessed costs, or
  • a specified gross sum instead of assessed costs, or
  • such proportion of the assessed costs as does not exceed a specified amount.

The powers of the court under this section apply in relation to a married woman, whether as party, tutor, relator or otherwise, and this section has effect in addition to, and despite anything in, the Married Persons (Equality of Status) Act 1996.

“costs” include:

  • the costs of the administration of any estate or trust, and
  • in the case of an appeal to the court, the costs of the proceedings giving rise to the appeal, and
  • in the case of proceedings transferred or removed into the court, the costs of the proceedings before they were transferred or removed.

This power “should only be exercised when the Court considered that it can do so fairly between the parties, and this includes sufficient confidence in arriving at an appropriate sum on the materials available”: Harrison v Schipp (2002) 54 NSWLR at [22].

If a gross sum costs order is made at the conclusion of the proceeding then the whole costs assessment task can be avoided and secondly, as there is an order in a fixed amount it can be entered as a judgment if payment does not occur.

When will such an order be appropriate:

Gross sum costs order are regularly advanced in the following situations:

  • where the subject matter of the litigation concerns modest sums of money;
  • where costs assessment would be “protracted and expensive”: see Hamod v New South Wales [2011] NSWCA 375, [29];
  • where there is a risk of “satellite litigation” if costs are assessed: see Pritchard v Fryer (No 2) [2018] NSWSC 261, [2];
  • where the evidence reveals that the party awarded costs is unlikely, due to the financial position of the unsuccessful party, to be able to recover all its taxed costs in due course: see Dye v Commonwealth Securities Ltd (No. 2) [2012] FCA 407, [10]; and
  • where the expense and delay of taxation is disproportionate to the amount of the costs recoverable: see Ross v Ross (No 5) [2008] WASC 278, [33].

Making the Application

An application for a specific gross sum costs order is made by way of separate motion that requires evidence sufficient to support the application. Any affidavit material relied upon in support of a motion for a gross sum costs order should contain enough information for the court to make a decision as to appropriate quantum.

We’re here to help

We at Chamberlains understand the stresses and expenses that come with running a litigated matter, and additional difficulty that costs assessment can sometimes bring.

Should you require further information about how costs can be recoverable in NSW, please do not hesitate to contact our office for a consultation with our team of construction law experts.

Key takeaways

The NSW government has announced that from Monday 27 September 2021 the 50% capacity limit at construction sites across the state will be scrapped. All construction sites will also be subject to the one person per m2 rule from 27 September 2021.

The announcement is a stark contrast to the developments in Victoria, where the construction industry was today shut down for two weeks amid transmission concerns following consecutive days of protests by construction industry participants.

Construction workers living in or staying within a local government area of concern in NSW are still not permitted to enter or remain at a construction site unless they have any of the following:

  • Had 2 doses of a COVID-19 vaccine or
  • Had 1 dose of a COVID-19 vaccine at least 21 days ago or
  • Had 1 dose of a COVID-19 vaccine within the past 21 days and you have been tested for COVID-19 in the past 72 hours (3 days) or
  • Evidence of a medical exemption and you have been tested for COVID-19 in the past 72 hours.

The rules provide that if a construction work is required to have a COVID-19 test to enter or remain at a construction site, they must do so once every 72 hours. The NSW government has confirmed this can include rapid antigen testing in the manner approved by the Chief Health Officer. Medical exemptions are otherwise available for construction workers who are unable to have a COVID-19 vaccine.

Evidence of vaccination can be in the form of an immunisation history statement or COVID-19 digital certificate issued by the Australia Immunisation Register. Workers must carry evidence of vaccination, a COVID-19 test or medical exemption (whichever applies) at all times.

Further information is available via the NSW government website here.

Site requirements

  • Construction sites must implement a COVID-19 Safety Plan.
  • Safety Plans are mandatory for any site that is not an occupied premises in NSW.
  • The maximum daily workforce otherwise still applies, which is the maximum number of workers on site on any day from the start to the end of the project, and must be calculated from the current resourcing plan for the construction site.
  • Face masks must otherwise be worn where it is safe to do so.

Regional NSW requirements

  • The rules preventing workers from any current local government area of concern within Greater Sydney from working on construction sites in regional and rural NSW, including Shellharbour and the Central Coast, remains in place.
  • Other construction workers living within Greater Sydney and wishing to work in regional or rural NSW must otherwise follow the above testing rules and register for regional travel.

We’re here to help

We at Chamberlains appreciate the difficulties all stakeholders in the construction industry have been facing in recent times, as well as the confusion that comes with progressive amendments to public health orders affecting people from different areas across the state.

Should you or your business need assistance to navigate any legal issues which have arisen during these unprecedented times, please do not hesitate to contact our building and construction law team.

WA Supreme Court Clarifies When Statutory Implied Terms Apply Under the CCA

The Supreme Court of Western Australia has delivered one of the few decisions to shed light on when provisions contained in Schedule 1 to the Construction Contracts Act 2004 (WA) (CCA) will be implied into a construction contract.

Unlike the East Coast security of payment regimes, statutory provisions under the CCA regulating matters such as:

  • the making of claims for payment (s 16),
  • responding to claims for payment (s 17), and
  • the time for payment (s 18)

only apply if the construction contract is silent on those matters.
Where silence exists, the relevant terms contained in the corresponding Division of Schedule 1 are implied.

 

Background: Total Eden Pty Ltd v Charteris [2018] WASC 80

In Total Eden Pty Ltd v Charteris [2018] WASC 80, the WA Supreme Court clarified the limits of when Schedule 1 terms are implied.

Key facts

  • The contract did include a term dealing with the time for payment of a payment claim.
  • The contract did not include a written provision about how or when the contractor must “respond” to a payment claim, as required by s 17 of the CCA (i.e., disputation or rejection).
  • The adjudicator concluded that all Division 5 provisions of Schedule 1 should be implied, including clause 7(3), which prescribes the time for payment of a claim.

Adjudicator’s approach

The adjudicator implied the entire Division 5 into the contract, resulting in new, statutory payment timing obligations that conflicted with the parties’ written agreement.

 

The Supreme Court’s Findings

The WA Supreme Court held that the adjudicator erred, quashed the entire determination, and confirmed the following principles:

  1. Only terms addressing matters missing from the contract may be implied

The CCA does not permit the wholesale implication of a full Division of Schedule 1.

Instead, the Court held that:

  • Only the specific terms that address matters not dealt with in the written contract may be implied.
  • This may result in a “bifurcation” of Schedule 1, where only isolated provisions are implied rather than the entire Division.
  1. Wholesale implication creates inconsistency

Implying all of Division 5 created an internal inconsistency with the contract’s existing payment terms.

Clause 7(3) of Division 5 could not be implied because:

  • the contract already had an operative payment term, and
  • the implied clause conflicted with that negotiated provision.
  1. Adjudicators must avoid overriding the parties’ agreed terms

The Court concluded the adjudicator incorrectly implied clause 7(3), and therefore made a jurisdictional error, invalidating the whole determination.

 

Practical Implications for WA Contracting Parties

Contracting parties should ensure that their construction contracts:

  • expressly address
    • how payment claims are made,
    • how payment claims are responded to,
    • the time for payment,
    • dispute processes, and
    • any other procedural requirements contemplated by the CCA.
  • avoid gaps that may trigger the implication of Schedule 1 provisions, even partially.

 

Key Takeaways

  • Only missing subject-matter provisions may be implied, not an entire Division.
  • Implied terms cannot conflict with written terms.
  • Adjudicators cannot expand a contract beyond what is necessary to fill legislative gaps.
  • Careful drafting is essential to prevent unintended statutory terms from being implied.

We’re Here to Help

We at Chamberlains understand the emotional and financial stress that come with litigation. Should you require further information about how costs can be recoverable in matters before the Federal Court and Federal Circuit Court, please do not hesitate to contact our office for a consultation with our construction law team. 

ACT Supreme Court Confirms Strict Compliance for Payment Schedules Under SOP Legislation

Case note on Denham Constructions Pty Ltd v Islamic Republic of Pakistan (No 2) [2016] ACTSC 215

Executive Summary

The Supreme Court of the Australian Capital Territory has confirmed that for a respondent to validly issue a payment schedule under the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (“ACT SOP Act”), the schedule must strictly comply with ss 16(2) – (3).

This case makes clear that:

  • An email with minimal wording will not constitute a payment schedule unless it clearly:
    • identifies the payment claim,
    • states the scheduled amount, and
    • provides reasons for withholding payment.
  • A response directed only to one component of a claim (e.g., a variation) is not enough.
  • The ACT Act operates similarly to the NSW and QLD regimes, but this case is one of the leading ACT authorities confirming strict statutory compliance.

The decision is also significant because the Court confirmed that:

  • The payment claim was not invalid,
  • Repeated variation claims were not an abuse of process, and
  • The ACT legislation does apply even where the work is performed on National Land (in this case, the Pakistani High Commission).

 

Background

  • Denham Constructions performed building works on the High Commission of Pakistan in Canberra.
  • The contractor issued Progress Claim 26 under the ACT SOP Act, seeking more than $1 million, including:
    • 15 previously rejected or partially allowed variations, and
    • A large time-related claim (DCV075).
  • The architects emailed Denham stating that the claim was out of time under the contract.
  • The principal argued that this email was a payment schedule.
  • Denham commenced proceedings under s 16(4) after the respondent failed to issue a valid payment schedule within 10 business days.

Decision:

  1. The Email Was Not a Valid Payment Schedule

The Court held the email failed all key requirements of s 16 because:

It did not identify the payment claim

  • The email responded only to DCV075, not the payment claim itself.
  • Payment Claim 26 was a separate document.

It did not state the scheduled amount

  • The email did not say whether any money would be paid.
  • Only one component of the claim was addressed.

It did not provide reasons for all withheld amounts

  • Reasons were given only for the time-related item, not the other 15 components.
  • As in Minimax (Qld), silence on part of the claim invalidates the entire schedule.

Result:
The Court ruled there was no payment schedule, meaning Denham could recover the claimed amount as a statutory debt.

 

  1. The Payment Claim Was Valid

The respondent argued the payment claim was invalid because:

  • Work had been completed, and
  • The claim repeated amounts previously claimed.

The Court rejected this.

Reference Date Argument

  • The contract permitted monthly progress claims.
  • Reference dates continued even after work was completed.
  • This aligns with NSW and QLD authority (e.g., Broadview, Spankie).

Repeating Variations Is Not an Abuse of Process

  • Repeated claims are allowed unless previously adjudicated (s 15(6)).
  • The contractor had not adjudicated earlier claims, so repetition was lawful.

 

  1. Constitutional Arguments Rejected

The respondent argued the ACT Legislature:

  • Had no power over National Land, and
  • The High Commission site was within the seat of government, giving the Commonwealth exclusive power under s 52(i).

The Court rejected both arguments:

National Land

  • ACT laws apply unless inconsistent with Commonwealth law.
  • SOP Act does not conflict with any Commonwealth law about National Land.

Seat of Government

  • “Exclusive” in s 52(i) excludes State laws, not laws of a self-governing Territory.
  • Parliament intended the ACT to legislate for its whole territory unless specifically restricted.

Result:
The ACT SOP Act validly applied to the project.

 

Key Takeaways

  1. Payment schedules in the ACT must:
  • Identify the specific payment claim,
  • State the scheduled amount (even if $0),
  • Provide reasons for each withheld amount.
  1. Respondents must address the entire claim
  • If even one line item is not addressed, the schedule is invalid.
  • Partial answers will render the schedule invalid, meaning the entire claimed amount becomes immediately recoverable as a statutory debt.
  1. Emails can qualify, but only if they fully comply
  • The ACT regime allows informal documents,
  • But strict statutory content must still appear in the document itself.
  1. Repeating claims is permissible
  • If no adjudication has occurred, previous amounts can be re-claimed.
  1. ACT SOP Act applies even on National Land
  • Including diplomatic missions and federally controlled land.

 

We’re Here to Help

We at Chamberlains understand the emotional and financial stress that come with litigation. Should you require further information about how costs can be recoverable in matters before the Federal Court and Federal Circuit Court, please do not hesitate to contact our office for a consultation with our construction law team.

GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2021] NSWSC 1204 (24 September 2021)

The NSW Supreme Court has rejected an application by the Catholic Church for a permanent stay of a claim alleging that a priest sexually abused a child in 1968.

On 31 January 2020, the plaintiff commenced proceedings against the Catholic Church (The Trustees for the Roman Catholic Church for the Diocese of Lismore) for damages arising out of an allegation of child sexual abuse against her in 1968, when she was then aged 14 years.

The plaintiff alleged that Father Clarence Anderson sexually assaulted her in her home while giving pastoral care to her family after her father was involved in a motorcycle accident.

Father Anderson passed away in 1996, and the Church argued that the passage of time and the death of Father Anderson and other members of the clergy with knowledge of the matter meant a potential trial would be “unjustifiably oppressive”. Due to this, the Church petitioned the Court to order a permanent stay on proceedings.

Arguing that her case should not be stayed, the plaintiff relied on subpoenaed documents from the Brisbane Archdiocese, the NSW/ACT Professional Standards Office, and documents provided in response to a Notice to Produce.

The documents showed that as early as 1965, Father Anderson was observed by other members of the Church to exhibit a sexual interest in children and was ordered to undertake psychiatric treatment after receiving complaints from other children’s parents.

The plaintiff also submitted five unsworn evidentiary statements of five other alleged victims of Father Anderson, and a letter from another member of the Church stating he personally witnessed Father Anderson engage in sexual activities with children.

The defendant submitted evidence that virtually all of the relevant senior persons who could give evidence in the current proceedings have since passed away, and that the Lismore Diocese had not received any complaint relating to the plaintiff’s accusations prior to 2019. The defendant also submitted that there was no evidence for Father Anderson having a sexual interest in young girls.

The Court referred to Moubarak bht Coorey v Holt (2019) 100 NSWLR 218; [2019] NSWCA 102 which stipulates that the Court should only use its inherent power to grant a permanent halt on proceedings in exceptional circumstances, and the onus to prove the Court should grant a halt lies ‘squarely’ on the defendant.

The Court was not satisfied that the Church proved on the balance of probabilities that the continuation of proceedings would be unjustifiably oppressive to the defendant, or that it was impossible for a fair trial to take place. Hence, the Court dismissed the Church’s motion and proceedings will continue.

Chamberlains’ regularly acts in relation to historic abuse claims, if you would like to discuss a claim please contact our experienced team of injury compensation lawyers for a no-obligation chat.

***Assisted by James Carrick***