RE Oakey Pty Ltd v Canadian Solar Construction (Australia) Pty Ltd [2024] QCA 202

Sarah Ferrett  |  Matt Hammond  |  Jazmin Sherrington

Key takeouts

• The Queensland Court of Appeal has confirmed that if a contract does not specify an exclusive method of service, a payment claim is validly served if it has actually been received and come to the attention of a person to be served or provided with the document.  

• If a payment claim is emailed to several recipients and one recipient’s email bounces back, it does not affect the validity of service, provided the other recipients, who are actively involved in evaluating and assessing payment claims, have received the email.
  
  
• Parties seeking to recover GST on amounts claimed must specify the GST payable in their originating application and statement of claim.

Facts

This is an appeal by Oakley against the decision in Canadian Solar Construction Pty Ltd v Re Oakey Pty Ltd [2023] QSC 288 (original proceedings). We covered the primary decision here: Effective service viewed practically in the case of a bounced email    – Construction Law Made Easy. This case also concerns an appeal by Canadian Solar Construction Pty Ltd (CSC) against the decision in Canadian Solar Construction (Australia) Pty Ltd v Re Oakey Pty Ltd [No 2] [2024] QSC 27, in which Freeburn J found that GST was not payable the as it was not claimed in the original proceedings.

CSC served a payment claim on Re Oakey Pty Ltd’s (Oakey) representative, Mr Wang, under the Building Industry Fairness (Security of Payment) Act 2017 (BIF Act). The email to Mr Wang bounced, however it was successfully delivered to other members of the Project Manager’s team. CSC did not notice the bounce notification. Oakey did not serve a payment schedule within the relevant time period under the contract. CSC commenced proceedings on the basis that Oakey was liable to pay CSC the full amount of the payment claim under section 77 of the BIF Act due to its failure to respond to a payment claim within the required timeframe.

The court found that Oakey was liable to pay the full $4 million claimed by CSC in its payment claim. CSC then began separate proceedings, seeking an order that Oakey was liable to pay the GST claimed as part of the payment claim. The court found that GST was not payable.

Decision

The appeal was dismissed with costs. The Court of Appeal held that Oakey failed to establish any error on the part of the primary judge. Oakey’s five grounds of appeal (all dismissed) were:

Ground 1 – Validity of service

The primary judge erred in holding that:

• the contract did not require payment claims to be sent in a specified way, and
• the other recipients of the email enclosing the payment claim had authority to receive or accept payment claims on behalf of the appellant.

The court considered that a commercial interpretation of the particular contractual provisions in the context means that there was no specific mode required for service of a payment claim. Whether payment claims need to be sent in a specified way will turn on the particular contract and facts of a case.

The Court also held that in the absence of a provision that states that documents must be provided in a certain manner and any other mode of service will be ineffective, a document is taken to have been given if it has been ‘received and come to the attention of a person with authority to deal with that document under the Contract‘. In this case, the Project Manager acted as agent for the principal under the contract and there was evidence that the recipients were people who, at the relevant time, had responsibility for considering aspects of the payment claim.  Accordingly adding them to the ‘cc’ field was not a mere formality. Therefore, in the absence of a contractual provision to the contrary, a payment claim may be taken to be served if a person with relevant authority receives the document.

Ground 2 – Response within timeframe

Oakey submitted that it had 15 business days to respond to payment claims in accordance with section 76(1)(b) of the BIF Act, because the contract did not provide a time for giving a ‘payment schedule’. The Court rejected this submission given that the contract required Oakey to provide a ‘valuation certificate’ which is in substance, a payment schedule because it meets the requirements of section 69 of the BIF Act. The question of whether a document is a payment certificate turns on whether it meets the requirements under the BIF Act, rather than the contractual terminology adopted. Under the contract, Oakey had 10 business days to provide a valuation certificate, and became liable for the full amount of the payment claim in failing to respond.

Ground 3 – Estoppel

Oakey alleged that the parties had a common assumption that payment claims are not given unless provided to Mr Wang. The Court found that the primary judge’s finding that there was no such assumption was a finding of fact and could not be set aside by an appellate court unless it was glaringly improbable or contrary to the evidence.

Ground 4 – Misleading or deceptive conduct

The Court rejected Oakey’s contention that the primary judge erred in finding that CSC did not engage in misleading and deceptive conduct by the appearance of names within a ‘To’ and ‘cc’ field of an email representing that the email had in fact been delivered to the listed names. There was no evidence demonstrating an error, and it would be unfair to permit Oakley to contend that CSC knew about the bounce-back notification and deliberately chose not to disclose it, as this was not alleged at trial.

Ground 5 – Unconscionable conduct

Oakey also contended that CSC acted unconscionably by failing to take steps to inquire whether the payment claim had been received by Mr Wang given his prior email issues. The Court determined that after the primary judge had justifiably dismissed Oakey’s claims – specifically the belief that a payment claim was only valid if emailed to Mr. Wang, and the allegation that CSC’s behaviour was misleading or deceptive – there was no obligation for the primary judge to offer an extensive rationale concerning these elements of Oakey’s claim.

GST Claim Appeal

CSC appealed the costs order arguing that Oakey was liable to pay GST on the $4,037,714.74 awarded. The primary judge ruled that the court’s order did not mandate the payment of GST, as it was not claimed in the Statement of Claim and no order for it had been requested in the proceedings. On appeal, it was affirmed that the primary judge made no error and no GST was payable. The sum of ‘$4,037,714.74 (excluding GST)’ claimed was to make clear the value of the claim, rather than to indicate that GST must be added. Consequently, the appeal was dismissed, and CSC was ordered to pay Oakey’s costs.

If there is not an express claim for GST in the originating application or proceedings, a contractor is not entitled to GST on amounts awarded. A claim for an amount ‘excluding GST’ and references to GST in payment claims are not sufficient to demonstrate that GST is being claimed