Tantallon Constructions Pty Ltd (in liq) v Santos GLNG & Anor [2016] QDC 324

Significance

This decision affirms the position that a company in liquidation cannot make or progress a claim under the Building and Construction Industry Payments Act 2004 (Qld). The liquidator was ordered to pay costs on an indemnity basis.

Read on for the analysis by Petrina Macpherson and Alexandria Hammerton.

In November 2013 the plaintiff, Tantallon Constructions Pty Ltd (supplier) entered into two contracts for the supply and installation of white goods into a building at Roma and for the supply of furniture and joinery works into buildings and mines at Roma and Injune with either or both defendants, Santos GLNG and Santos Qld Upstream Developments Pty Ltd (together, principals). Work was subsequently performed under the contracts.

The supplier alleged it served payment claims under the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA). No payment schedules were served in response. Consequently, the supplier claimed that it was entitled to judgement in the amount of the payment claims and filed an application for summary judgement for such amount. In the meantime, the supplier had gone into administration and soon after went into liquidation.

The principals extended multiple offers of settlement in the weeks leading up to the hearing, with the initial offer providing for no order as to costs against the supplier if it abandoned its summary judgement application. The principals relied on authorities which held that an insolvent party could not be a claimant under BCIPA and encouraged the supplier to reframe its claim as one for the amount it contended was finally due and owing to it by the principals.

The Victorian Court of Appeal delivered judgment in Facade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 24 (Facade) only days before this application was heard. The principals brought this decision to the attention of the supplier in one of their settlement offers.

In this application the supplier sought orders dismissing its application for summary judgment and that there be no order as to costs. The principals sought orders that the application for summary judgment be dismissed, the proceedings be permanently stayed and the supplier's liquidator pay the principals' costs on an indemnity basis.

Decision

The District Court of Queensland confirmed that a company in liquidation such as the supplier, is unable to make and progress a claim under BCIPA as the effect would be to turn an interim payment into an irrecoverable final payment. Reid DCJ relied on the decision in Facade, but rejected the supplier's contentions that it had not had time to consider the case.

His Honour held the attempts of the principals to settle the dispute were reasonable and correspondingly the failure of the supplier's liquidator to accept the offers was unreasonable, awarding costs against the liquidator on an indemnity basis.