Part 1
SOP Act - Lessons for Defending Summary Judgment
It is well established in QLD & NSW in relation to SOP Act legislation, that respondents can raise the misleading and deceptive conduct of claimants as a defence to a claimant’s summary judgment application seeking to enforce a payment claim.
These defences are often raised when no payment schedule is served by the respondent within time and a deemed statutory debt in respect of the payment claim arises in favour of the claimant.
In 2021, WA revised its SOP Act and adopted an east coast model. Like NSW & QLD, the new WA SOP Act precludes a respondent from making any cross-claim or raising a defence in relation to matters arising under the construction contract on summary judgment applications.
Defences of misleading and deceptive conduct of claimants are (subject to the facts) broadly not viewed as matters arising under the construction contract.
The WA Supreme Court in OSB Group Pty Ltd v Complete Hire & Sales Pty Ltd [2024] WASC 310 considered that defence where the respondent alleged that the claimant’s misleading and deceptive conduct induced it to enter into the construction contract. The claimant alleged the defence was excluded by the Act because it went to a matter arising under the construction contract.
The Court, with a limited consideration of NSW authorities, agreed and held the defence was excluded by the Act. However, the Court nullified the effect of that finding by holding the SOP Act exclusion is inconsistent with rights under Commonwealth law in relation to misleading and deceptive conduct (Australian Consumer Law), and due that inconsistency, there was a serious constitutional issue to be tried and denied the claimant summary judgment.
The WA Court therefore kept the door ajar for defences of misleading and deceptive conduct under the ACL (including in the narrow sense). Moving forward, respondents should note that if any misleading conduct defence is ultimately excluded on the facts, the fall back of inconsistent rights (State v Commonwealth) will likely serve as a backstop to prevent the claimant from obtaining summary judgment.
Part 2
SOP Act - Lessons for Preparing Payment Claims
In Binah Constructions Pty Ltd v PTMG Pty Ltd [2024] NSWSC 872 the NSW Supreme Court recently considered a declaration sought by the head contractor Binah that an adjudication decision in favour of the contractor PTMG was void on the basis of jurisdictional error, because the Adjudicator awarded an adjudicated amount higher than the claimed amount in the payment claim.
The issue of jurisdictional error arose in circumstances where the amount claimed on the face of the payment claim (PC 26) was approx. $15K and the total contract sum payable (included with the payment claim as the “claimed contract summary”) separately claimed an amount of an earlier undisputed claim (PC 25) of approx. $27K which was unpaid.
The Adjudicator’s interpretation of the claimed amount (in relation to which reasonable minds will differ), was that the earlier undisputed claim PC 25 formed part of the claimed amount in PC 26. The Court held that this interpretation was reasonably open to the Adjudicator and that did not lead to a substantial practical injustice between the parties. As a result, the adjudication decision was upheld and the head contractor’s appeal dismissed.
On one view, the claimant in this instance dodged a bullet because the claimed amount in PC 26 could have been more clearly stated. To avoid this issue entirely, claimants are well advised to clearly state the entire claimed amount on the front of the payment claim.
For further information contact Julian Troy at Troy Legal, julian@troylegal.com.au.
