Security of payment claim – whether payment claim is valid – default judgment – whether default judgment irregularly entered
Geotech Pty Ltd (claimant) entered into a contract with Premier Developments Pty Ltd (respondent) for construction work at 416 Smith Street, Collingwood (contract).
On or about 24 March 2017, the claimant issued a payment claim to the respondent for the amount of $215,457.90 under the contract and pursuant to the Building and Construction Industry Security Payment Act 2002 (Vic) (Act). The respondent failed to serve a payment schedule within 10 business days of service, as required by section 15 of the Act. Consequently, the claimant sought to recover the full amount of the payment claim by commencing proceedings under section 16 of the Act.
The claimant considered that the respondent failed to file a notice of appearance within the time required and applied for default judgment on that basis. Deputy Registrar Malone ordered that the respondent pay the full amount of the payment claim, interest and costs. The respondent appealed the decision in the Victorian County Court.
The court set aside the default judgment because:
- entry of default judgment was premature as the evidence did not establish that delivery and service of the writ was effected at the respondent's address, service was deemed to be effected by post and accordingly the time for filing a notice of appearance had not expired when default judgment was entered; and
- there was a defence on the merits (discussed below).
The court observed that there were two reasons for the requirement in section 14(2)(c) of the Act that a payment claim must identify the construction work/ related goods or services to which it relates:
- to enable the respondent to consider and respond to the payment claim by either accepting it in its entirety or in part or disputing it; and
- to define the issues in dispute if the matter is adjudicated.
Burchell JR ultimately found that, because the payment claim did not provide any breakdown or explanation for the claim for $215,457.90, there was an arguable defence on the merits that the payment claim insufficiently identified the work to which it related. The claimant's submissions—that the respondent, due to background circumstances, was nonetheless able to understand the payment claim—gave rise to triable issues which were not to be determined at an interlocutory stage.