Subcontractors' Charges Act 1974 (Qld) (SC Act), sections 10, 12(3A), 12(3B) and 15 – Corporations Act 2001 (Cth) (Corporations Act), section 500 – subcontractor joined to another subcontractor's proceeding
This case is yet another example of the awkwardness of the drafting of the Subcontractors' Charges Act 1974 (Qld).
On or about 25 February 2013, Glenzeil Pty Ltd (first defendant) engaged Marveldale Pty Ltd (applicant) as a subcontractor on the Plaza South Brisbane Project. The principal (and employer for the purposes of the SC Act) was The Plaza South Brisbane Pty Ltd (second defendant).
On 8 September 2014, the creditors of the first defendant passed a resolution to wind up the first defendant. On 23 September 2014, the applicant issued a Notice of Claim of Charge (Form 1) to the second defendant pursuant to section 10 of the SC Act. On or about 23 September 2014, the applicant also issued a Notice to Contractor of Claim of Charge Being Given (Form 2) to the first defendant.
On 23 September 2014, another subcontractor of the first defendant, Diamond Drilling and Cutting Pty Ltd (plaintiff), issued a Form 1 to the second defendant and a Form 2 to the first defendant.
On 17 October 2014, without obtaining leave to commence proceedings against a company which was subject to a resolution for voluntary winding up under section 500 of the Corporations Act, the plaintiff commenced proceedings against the first defendant.
The applicant sought leave under section 500(2) of the Corporations Act to commence proceedings against the first defendant and to be joined to the proceedings commenced by the plaintiff pursuant to section 12(3A) and (3B) of the SC Act.
The court granted leave to the applicant to commence proceedings against the first defendant and ordered that the applicant be joined to the proceedings commenced by the plaintiff.
In reaching this decision, Peter Lyons J held that the 'notice' referred to in section 12(3A) of the SC Act is a reference to the Form 1 given to the 'employer', in this case the second defendant. His Honour noted:
- in order to be joined under section 12(3A) of the SC Act, the subcontractor's charge must not have been extinguished under section 15 of the SC Act (which requires that a proceeding be brought within one month after Form 1 is given);
- at the time that the plaintiff commenced its proceeding, less than a month had passed after Form 1 was given by the applicant to the second defendant; and
- accordingly, the applicant had a reasonable prospect of establishing that its charge had not been extinguished under section 15 of the SC Act, for the purposes of section 12(3A) of the SC Act.
Although the plaintiff had not sought leave to proceed against the first defendant, the court held that the proceedings were otherwise validly commenced and were sufficient to amount to an 'action brought by a subcontractor to enforce a charge' pursuant to section 12(3A) of the SC Act.