Respondent: Gold Coast Titans (Property) Pty Ltd ATF Gold Coast

Adjudication Application Number: 1057877_1453 Claimant: Simcorp Developments and Constructions Pty Ltd Respondent: Gold Coast Titans (Property) Pty Ltd ATF Gold Coast NRL Property Trust Adjudicator: Andrew Wallace Page 1

Adjudication Application No. 1057877_1453

This is a decision made under the Building and Construction Industry Payments Act 2004 (Qld): Authorised Nominating Authority: Adjudicate Today Pty Limited

Adjudicator: Andrew Bruce Wallace

Registration Number: J47895

Claimant: Simcorp Developments and Constructions

Pty Ltd

ACN: 096 658 776 Respondent: Gold Coast Titans (Property) Pty Ltd ATF

Gold Coast NRL Property Trust

ABN: 51 826 843 853

Project: Construction of Titans Training Facility –

Centre of Excellence, Robina Queensland

Date of Service of Payment Claim: 10 March 2010

Amount of Payment Claim: $5,205,068.13 (including GST)

Date of Payment Schedule: 24 March 2010

Amount of Payment Schedule: -$33,682.00

Date of Section 21(2) Notice (if any): N/A

Date of Adjudication Application: 9 April 2010

Date of Adjudicator’s Acceptance: 15 April 2010

Date of Adjudication Response (if any): 19 April 2010 Date of Adjudication Decision: 14 May 2010

Adjudicated Amount: $2,230,212.991

Due Date for Payment: 24 March 2010

(including GST)

Rate of Interest: Penalty rate prescribed under s.67P(3)(a) of

Queensland Building Services Authority Act

1991

Apportionment of Adjudication Fees: Respondent: 75%

Claimant: 25%

1 The Adjudicated amount must be read subject to my remarks in paragraph 491 herein


Decision This is a decision made under the Building and Construction Industry Payments

Act 2004 (Qld) (“the Act”).

In respect of the Claimant’s Payment Claim, I decide that:

• The amount of the progress payment to be made by the Respondent to

the Claimant is the adjudicated amount referred to on page 1 herein;

• The date upon which the payment became due is the Due Date for

Payment referred to on page 1 herein;

• The rate of interest on the adjudicated amount is the rate referred to on

page 1 herein; and

• The Parties are liable to pay the adjudication fees in accordance with the

details referred to on page 1 herein.

______________________________________________________________

Introduction and Background 1. This is an adjudication application arising from a written AS4000-1997

building contract entered into by the Claimant building contractor (“the

Claimant”) and the Respondent principal (“the Respondent”) on or about 29

June 2009 (“the contract”), whereby the Claimant agreed to complete the

construction of training facilities for the Respondent (“the works”), otherwise

known as “The Titan’s Centre of Excellence” in Robina, Queensland.

2. The contract sum was in the amount of $16,405,394.00 including GST. There

is a very long and complicated history surrounding the contract formation, to

which I shall return below.

3. After what appeared to be a successful relationship between the parties, a

dispute has arisen involving a number of different issues including:


3.1. What I shall call “jurisdictional issues” which if I accept, may preclude me

having the legislative authority to make an adjudication decision pursuant

to the Act;

3.2. The contract sum;

3.3. The monies paid to the Claimant under the contract;

3.4. The Claimant’s entitlement to variations; and

3.5. Various set-off amounts propounded by the Respondent.

Procedural history and jurisdiction 4. I accept the following information details the procedural history of this

application and find that there is jurisdiction for making a decision pursuant to

the Act.

5. The details of the timing of the issue of the relevant documents and work are:

5.1. The relevant contract in respect of this Application was entered into on

or about 29 June 2009.

5.2. A valid Payment Claim was served on the Respondent on or about 10

March 2010. The Payment Claim was in the amount of $5,205,068.13

(“including GST”) (“the claimed amount”).

5.3. The Respondent did serve a Payment Schedule on the Claimant in

accordance with the requirements of s.18(4)(b)(ii) of the Act (“the

Division 1 Payment Schedule”) on 24 March 2010. It provided a

scheduled amount in the sum of -$33,682.00.

5.4. The Claimant made an application for Adjudication (“the Application”) on

9 April 2010 to a Registered Authorised Nominating Authority, Adjudicate

Today. This is within the required 10 business days after the Claimant

received the Payment Schedule.2

2 Section 21(3)(c)(i) of the Act


5.5. I am satisfied that the Claimant also served a copy of the Application on

the Respondent on 12 April 2010 by way of personal service.3

6. The Application was properly made with regard to the time frames stipulated

by the Act. Specifically, I have considered the following:

6.1. Does a construction contract exist between the parties to which the Act

applies?

6.2. Has the Claimant served on the Respondent a valid Payment Claim?

6.3. Has this Application been made to an Authorised Nominating Authority?

6.4. Has the Application been properly referred to me and have I caused a

notice of acceptance to be served on the Parties?

7. I am satisfied that these elements, essential to bring this decision within the

requirements of the Act have all been satisfied.

8. I also find as facts that:

8.1. the work was construction work;

8.2. the work was performed in Queensland;

8.3. there existed at the relevant time a relationship of contract between the

parties;

8.4. a right to a progress claim existed;

8.5. the Payment Claim was properly endorsed;

8.6. the Payment Claim details some element of work undertaken within 12

months of the date of service of the Payment Claim;

8.7. in other regards the Payment Claim and my appointment comply with the

Act;

8.8. the Respondent did serve a valid Payment Schedule under s.18(2) of the

Act;

8.9. the Application:

3 See correspondence from Sawford Voll Lawyers to Adjudicate Today, dated 14 April 2010


8.9.1. identifies the Payment Claim; and

8.9.2. was accompanied with the relevant application fee (if any).

9. In reaching my decision I have considered:

9.1. the requirements of the Act;

9.2. the contract between the parties;

9.3. the Payment Claim and the Application, together with properly made

submissions and documents provided therein;

9.4. the Payment Schedule together with properly made submissions and

documents contained therein; and

9.5. the Adjudication Response.

10. In reaching my decision, I have not taken into consideration:

10.1. Nil.

Reasons for the Decision Jurisdictional Issues 11. The Respondent in the Payment Schedule objected to the validity of the

Payment Claim on the following bases:

11.1. The Claimant failed to follow the contractual requirements for the

delivery of a Payment Claim or final claim pursuant to clause 37.2 or

clause 37.4 of the contract;

11.2. The purported Payment Claim was in breach of the Act as there were

at the time of its issuance, two claims on foot under the Act for the

same works; and

11.3. The purported Payment Claim was in breach of s.17(5) of the Act as

there was more than one payment claim in relation to each reference

date.


Condition Precedent

12. In respect to the Respondent’s allegations that the Claimant has failed to

comply with the requirements of clause 37 of the contract, the Claimant

argues in the Application:

12.1. The terms of the contract must give way to the Act. In that regard, it

seeks to rely on what Hodgson JA remarked in Plaza West Pty

Limited v Simon’s Earthworks (NSW) Pty Limited [2008] NSWCA 279

at 53-54.

12.2. The failure of a party to follow a “condition precedent” does not

prevent or obstruct the operation of the Act, nor does it invalidate

entitlement to either make a claim or receive payment for that claim.

12.3. Or at least appears to argue that clause 37 should be read pursuant

to s.99 of the Act because it purports to annul, exclude, modify,

restrict or otherwise change the effect of a provision of the Act.

13. In the Adjudication Response, the Respondent:

13.1. Sought to distinguish the applicability of Plaza West.

13.2. Argued that as the Payment Claim was not served on the 30th of the

month pursuant to Item 28(b) of the contract Annexure Part A, it was

invalid;

13.3. Sought to rely on the decisions of F.K Gardner & Sons Pty Ltd v

Dimin Pty Ltd [2007] 1 Qld R 10 per Lyons J at [24] and the decisions

of Walter Construction Group Ltd v CPL (Surry Hills) Pty Ltd [2003]

NSWSC 266 at para [59] and Jemzone Pty Ltd v Trytan Pty Ltd

(2002) 42 ACSR 42 at 50 in relation to the statutory regime requiring

strict compliance with the provisions of the Act.

14. It is not entirely clear from the Respondent’s submissions in the Payment

Schedule as to the extent of its complaint about the Claimant’s failure to

comply with clause 37 of the contract.


15. Item 28(b) of Annexure Part A of the contract requires Payment Claims to be

served on the 30th day of each month following the delivery of a progress

claim under Item 27(a).

16. At paragraph 13 of the Adjudication Response, the Respondent submits that

“There is clearly no restriction on the ability to serve a payment claim every

month as the clause sets up a monthly regime. To the extent that the regime

provided for the response (sic) by the 30th day of each month it is clear that

the proper construction of the contract would have provided for the last day of

February as being the reference date.”

17. On balance, I agree with the submissions of the Claimant on this point.

Clearly, the contract does not allow for a reference date of the 30th of

February. The reference date is therefore, according to Schedule 2 of the

Act, taken to be the last day of the relevant month. Both parties appear to

agree (although by different methods of calculation) that the reference date

was in fact 28 February 2010.

18. The fact that the Payment Claim was served on 10 March 2010 and not on 28

February 2010 is of no importance. Section 12 of the Act provides:

‘From each reference date under a construction contract, a person is entitled to a progress payment if the person has undertaken to carry out construction work, or supply related goods and services, under the contract.” [My emphasis].

19. Support for the ongoing entitlement to claim from and not necessarily on

each reference date is obtained from the decision of Fryberg J in Tenix

Alliance Pty Ltd v Magaldi Power Pty Ltd [2010] QSC 7 where his Honour at

pp 8-10 declined to follow the reasoning of Daubney J in Reed Construction

(Qld) Pty Ltd v Martinek Holdings Pty Ltd [2009] QSC 345. Respectfully, I

agree with Fryberg J’s interpretation of when the entitlement arises under

s.12.


20. I also agree with the Claimant’s submissions, relying on what Hodgson JA

said in Plaza West at [54] that a failure to comply with a condition precedent

under the contract, ought not prevent entitlement to make a claim under the

Act.

21. I am in any event not satisfied that the Claimant’s obligation to serve a

progress claim under the contract was a condition precedent to the service of

a payment claim under the Act. Whilst clause 37 of the contract seems to

require the service of a progress claim on the Superintendent prior to the

service of a payment claim, clause 37.2 (as amended by special condition)

seems to allow for the issuing of a certificate by the Superintendent even if a

progress claim has not been issued.

“37.2 Certificates … If the Contractor does not make a progress claim in accordance with Item 33(a), the Superintendent may issue the progress certificate with details of the calculations and shall issue the certificate in paragraph (b).”

22. In addition to this, the service of a progress claim and the resultant

Superintendent’s certificate seems to be duplicitous to the service of a

payment claim and payment schedule under the Act. To prescribe under the

contract (if in fact it does) that such a progress claim must first be issued prior

to the service of a payment claim under the Act is in my view an attempt to

modify, restrict or otherwise change the effect of a provision of the Act and is

therefore void pursuant to s.99 of the Act as submitted by the Claimant in

paragraph 5.4 of the Application.

23. This is not an issue which invalidates the Payment Claim, nor is it a valid

reason for withholding payment.

Abuse of Process

24. In respect of the Respondent’s submission that there were two claims on foot

for the same works, the Claimant relies upon s.17(6) of the Act.


25. The Respondent argues that by the Claimant’s act of issuing the Payment

Claim on 10 April 2010, whilst it had proceedings on foot to recover much of

the same monies under ss.19(2) and 20(2) of the Act was an abuse of

process.

26. This submission of the Respondent’s at first examination has some merit.

27. On or about 5 February 2010, the Claimant filed an application in the

Supreme Court seeking judgment pursuant to ss.19(2) and 20(2) of the Act in

the sum of $4,224,272.50.

28. The contract was terminated by one or the other party between 17 and 19

February 2010. For the purposes of this Application, I neither have

jurisdiction to determine the validity of the termination, nor is it relevant for

present purposes.

29. The Claimant’s Supreme Court application was listed for hearing on 19

February 2010. However, due to some evidentiary matters in relation to

service of the Payment Claims the subject of that application, it appears that

the parties agreed by consent to treat the application as being one started by

way of claim and statement of claim. Certain Orders were made by Byrne

SJA which required the filing and exchange of pleadings and certain

undertakings.

30. In or about 8 March 2010, at the instigation of the Claimant’s solicitors, the

parties via their respective solicitors exchanged correspondence in relation to

the discontinuance of the Claimant’s proceedings.

31. On 10 March 2010, the Claimant’s solicitors served the Payment Claim on the

Respondent’s solicitors.


32. An application for leave to discontinue the Claimant’s proceedings was filed in

the Supreme Court on 11 March 2010.

33. On 18 March 2010, the Respondent filed an originating application seeking

declaratory and injunctive relief in respect of the validity of the Payment

Claim.

34. On 23 March 2010, Douglas J heard both parties’ respective applications.

His Honour’s decision has been reserved. I have confirmed with his Honour’s

associate that no interim injunctive relief preventing me from making my

decision was made by his Honour. It is unknown to me whether the

Respondent sought any such interim relief.

35. The Respondent now complains that the prosecution of the Application before

me, whilst proceedings remain on foot in the Supreme Court is an abuse of

process “where it is clear that Simcorp has an election to proceed with a claim

for a debt in court or to claim the matter through adjudication.”4

36. However, in Senior Counsel’s submissions to the Court on behalf of the

Respondent5

“the court will, normally at any rate, allow a plaintiff to discontinue if he wants to provided that no injustice will be caused to the defendant. It is not desirable that a plaintiff should be compelled to litigate against his will. The court should therefore grant leave, if it can without injustice to the defendant, but in doing so should be careful to see that the defendant is not deprived of some advantage which he has already gained.”

, it appears to be conceded by the Respondent that the Claimant

ought to be given leave to discontinue the proceedings on certain terms. Mr

Dunning SC referred to the decision of Graham J in Covell Matthews &

Partners v French Wools Ltd [1977] 1 WLR 876 at 879, where he said:

37. Whilst not wanting to preempt his Honour’s decision, it is likely, given that it is

not contested, that the Claimant will be given leave to discontinue. The only

matters which appear contested are the Respondent’s entitlement to costs 4 See para 10 of the Adjudication Response 5 See para 12


and whether or not the Claimant ought to be prevented from further

prosecuting its claim under the Act until such time as it pays the

Respondent’s costs of the discontinued proceedings.

38. In my view, given that the application for leave to discontinue was made,

albeit one day after service of the Payment Claim and given that that aspect

of the application appears to be uncontested, it is not an abuse of process to

maintain the Application before me. In hindsight, it would have perhaps been

preferable for leave to have been granted prior to the Payment Claim being

served, but it appears to me on the facts available to me that the result is

likely to be the same. If I am wrong in that regard, then his Honour will no

doubt rule accordingly and the Respondent’s originating application will be

successful and the Payment Claim and the Application will be rendered void.

39. I should add at this point that on 23 April 2010, I wrote to the parties and

invited them to in effect, “suspend” the adjudication process until such time as

his Honour had made his decision. Unfortunately, whilst the Respondent

agreed to that request the Claimant did not. This in effect has placed me in

the rather unenviable position where I have had no choice but to continue

with the making of my decision and the resultant “second guessing” of what

his Honour may ultimately determine. For completeness, I attach and mark

as Annexure “A”, a copy of my correspondence to the parties dated 23 April

2010.

40. If leave of the Court is not so granted and given that as I understand it,

pleadings have not been filed6

6 See para 6 of the Respondent’s Submissions to the Supreme Court

, as there was consent by the parties to treat

the matter as though it had been commenced by way of claim and statement

of claim, there is nothing preventing the Claimant from prosecuting its claim in


the Court under the contract, rather than the Act, and proceeding with parallel

proceedings under Part 3 of the Act pursuant to s.100.



Multiple Payment Claims

42. The Claimant denies the Respondent’s allegations that there were multiple

payment claims in respect of the one reference date.

43. Section 17(5) of the Act provides:

“(5) A claimant can not serve more than 1 payment claim in relation to each reference date under the construction contract.”

44. However, s.17(6) qualifies subsection (5) by the following:

“(6) However, subsection (5) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim.”

45. In my view, the Payment Claim seeks to recover all of the alleged unpaid

amounts of the previous 12 progress claims together with additional claims

made in respect of alleged variations to the contract. That does not in my

view offend s.17(5) of the Act. On the contrary s.17(6) expressly permits

such a course of action.



Further Objection(s)

47. The Respondent in the Adjudication Response raised a further objection to

the Payment Claim as it was amended in the Application. The value of the

amount originally claimed in the Payment Claim was $5,205,068.13 (including

GST). The Claimant in the Application reduced the claimed amount to the


sum of $4,092,328.31. However, in so doing, whilst reducing some aspects,

the Claimant actually increased the claimed amount for certain variations from

$844,692.55 to $915,406.45.

48. The Respondent argues that these amendments constitute an “amended

payment claim” which had never been served on the Respondent. It also

argues that the Act does not permit such an action and that if I were to

consider the “amended payment claim”, it would be denied natural justice.

49. The Respondent’s complaints are to some extent, legitimate but I do not

consider that the actions of the Claimant have resulted in “voiding” either the

Payment Claim or the Application. No authority was provided to me which

has held otherwise. It would be improper of me to allow the Claimant to

amend its Payment Claim if the amendments would lead to the disadvantage

of the Respondent because as the Respondent argues, it has no vehicle

under the Act to respond to those amendments.

50. The amending of a payment claim in my experience, is not an unusual

occurrence. In fact, in complicated matters such as this, it is quite common.

However any amendments should in my view because of the operation of

s.24(4) of the Act, only be considered if they are for the benefit of the

Respondent. Just as a plaintiff in curial proceedings ought not be compelled

to prosecute a proceeding7

7 See Covell Matthews & Partners v French Wools Ltd [1977] 1 WLR 876 at 879 as referred to in para 24 of Dunning SC’s written submissions to the Court dated 23 March 2010

against its will, a claimant in an adjudication

application ought to be entitled to abandon or amend parts of its claim for

whatever reason, but only if those amendments are in the favour of the

Respondent. In such cases, natural justice issues do not arise. If there are

any disadvantages to the Respondent in the abandoning or reduction of

certain aspects of the claim, such as the costs of preparing a detailed

payment schedule which are then “thrown away”, then such disadvantage


may be addressed in appropriate cost orders under ss.34(3)(b) and 35(3) of

the Act.

51. In the premises, I am satisfied that where any amendments made to the

Payment Claim are an increase to the claimed amount for a particular item, I

should disallow that increase and consider the original claimed amount.

Where the Claimant has “revised down” the claimed amount for a particular

item, I am satisfied that because it is to the benefit of the Respondent, I am

able to consider the amended sum. I shall act accordingly.

52. The Respondent further argues in the Adjudication Response that the

Claimant’s failure to comply with clause 37 of the contract, by not serving a

progress claim in accordance with Item 28(a) of Annexure Part A of the

contract, it has been further disadvantaged by having to address the broader

scope of the Payment Claim. The Respondent argues that if the Claimant

had complied with its obligations under clause 37, the adjudication process

may have been streamlined by the intervention of the Superintendent.

53. Whether or not an assessment of a progress claim would have resulted in

less issues being ventilated in the Adjudication process is of course unknown.

There is no evidence upon which I could be satisfied that such an outcome

would result by the Claimant making a progress claim in accordance with Item

28(a) of Annexure Part A of the contract.

54. These are not issues which invalidate the Payment Claim, nor are they valid

reasons for withholding payment.

Valuation of the Claim 55. The parties’ respective positions in relation to many issues surrounding this

dispute are as diverse as they are many. Each party has provided numerous

affidavits in support of their respective submissions. On some issues such as

the contract sum and amounts paid to the Claimant, it is difficult to see how


there can be any explanation other than at least one party not being entirely

honest.

56. It is extremely difficult in this forum, without the benefit of cross examination

and in a “pressure cooker environment” to value a claim when the parties

cannot even agree on the contract sum, how much money has been paid to

the Claimant and how the claim should calculated. However, despite the

disparate submissions and documentary evidence, I must do the best I can

on the evidence and submissions available to me “on the papers”.

57. The value of the Payment Claim is calculated by the following:

Contract Price $14,913,995.00

Variations $ 844,692.55

GST $ 1,575,868.75

Total adjusted contract price $17,334,556.30

Value of work performed (inc GST) $16,667,537.00

Amount paid to date $11,462,468.87

Value of this claim (inc GST) $5,205,068.13

58. The Respondent submits that the amounts owed and paid under the

construction contract are as follows:

Contract Amount paid prior to

entering into fixed price contracts

$ 2,937,343.08

Varied construction contract amount

from March 2009

$10,600,000.00

Variations allowed by the

Superintendent Rob Real from March

2009

$ 437,761.00

GST $ 1,397,510.41

TOTAL $15,372,614.49


Less cash paid by the Respondent $14,201,901.79

Subtotal $ 1,170,712.70

Less Builder’s Equity Payment $ 1,000,000.00

Sub total $ 170,712.70

Less ‘clawback’ amounts still owing $ 447,006.39

Total owing by Respondent -$ 329,293.69 This should be ($276,293.69)

59. It is worthwhile therefore examining the value of the contract sum as a

starting point.

Contract Sum

60. The Claimant alleges that the contract sum was in the amount of

$14,913,995.00 (excluding GST).

61. The Respondent alleges that an agreement was reached between the parties

whereby the Claimant as from March 2009 would complete the works for the

fixed sum of $10.6 million plus GST plus a sum for profit in the amount of $1.6

million payable within 5 years after completion of the works, subject to offsets,

reductions and additions.

62. It is worthwhile at this point examining the relatively complicated contractual

history between the parties in relation to the construction of the works.

63. In or about February 2008, the parties initially entered into a Construction

Management Agreement whereby the Claimant would ostensibly manage and

supervise the construction of the works, whilst the Respondent would contract

with and independently pay all contractors performing work at the site. In

consideration for the Claimant’s services, the Respondent agreed to pay the

Claimant the sum of $520,000.00 plus GST plus bonuses. The construction

of the works continued under the Construction Management contract between


March 2008 and August 2008. At or around September or October 2008, the

works were suspended as the Respondent required additional funding to

complete.

64. At around this time, the Claimant attempted to seek its own finance to

purchase the land on which the works were being constructed and to

complete the works and lease them back to the Respondent. The Claimant

was ultimately unsuccessful in obtaining such finance.

65. As a result of the lending requirements of the Respondent’s financier, the

Commonwealth Bank (“CBA”), the Claimant and Respondent subsequently

entered into an undated Master Builders Association Commercial Building

Contract to complete the construction of the works in the sum of

$16,405,394.50 (including GST) which sum accords with an estimate to

complete the works by independent quantity surveyors GMP Management.

66. Michael Searle a director and controlling mind of the Respondent alleges at

paragraph 10 of his affidavit dated 18 February 2010, that any works

performed by the Claimant between November 2008 and January 2009 were

works done of the Claimant’s own volition in the expectation that it would

receive finance and that in effect it would be progressing its own works. This

allegation was denied by Alexander Simpson, the director and controlling

mind of the Claimant, in his affidavit dated 9 April 2010.

67. During the period of 16 February 2009 and 15 April 2009, it was agreed by

Simpson and Searle that the works should be suspended pending finalisation

of finance approval from the CBA.

68. On or about 19 June 2009, Simpson was advised by the Respondent’s

finance broker that the CBA required a more detailed fixed price commercial

building contract be entered into by the parties. Consequently, on 26 June


2009, the parties agreed to novate8

the Master Builders Association Building

Contract to a fixed price AS4000-1997 building contract in the sum of

$16,405,394.50 (including GST) for the completion of the works.

69. The Claimant submits that the AS4000-1997 building contract is the contract

which governs the parties’ rights and obligations. Whilst acknowledging the

existence of the AS4000-1997 building contract, the Respondent argues that

that contract sum included all of the works performed to date and that an oral

agreement in March 20099 had been entered into between Simpson for the

Claimant and Searle for the Respondent whereby the Claimant had offered to

complete the works for $10,600,000.00 plus GST plus $1,600,000.00 plus

sponsorship plus hospitality for profit, the repayment of which sum was to be

deferred for up to 5 years.10

70. I note that the Claimant’s accountant, Mr Adam Saunders provided an

affidavit dated 19 February 2010 which actually supports the Respondent’s

argument.

71. The Claimant relies upon the parol evidence rule as explained in the seminal

authority of the High Court of Australia in Codelfa Construction Pty Ltd v State

Rail Authority of New South Wales11

in arguing that any pre-contractual

discussions do not form part of the contract. I note in particular that on the

Respondent’s own evidence the discussions as referred to in paragraphs 69

and 70 above are alleged to have occurred between March 2009 and May

2009, whereas the contract is dated 26 June 2009.

72. I note that the Master Builders Association Commercial Building Contract

which was entered into prior to the AS4000-1997 contract described the

works at Item 1(a) of the schedule as: 8 See para 17 of affidavit of Searle and para 3.5 of the Claimant’s submissions 9 See para 24 of affidavit of Searle 10 See paras 21 to 22 of affidavit of Searle 11 (1982) 149 CLR 237 at 352


“To complete Titan’s Training Facility”. [Empahsis added].

73. Although not strictly relevant for the reasons expressed below, it is of some

note that both of the aforementioned contracts have an identical contract

sum.

74. The AS4000-1997 contract is much more detailed about the scope of works

than its predecessor, the QMBA contract. In Annexure Part E of the AS4000-

1997 contract, the parties set out the contract scope of works. On the

Respondent’s own evidence, at 1 September 2008, that is well before the

AS4000-1997 contract was entered into, the Respondent had spent

$2,500,000.00 on construction costs and $1,300,000.00 in preliminary

costs12

. If the contract sum included all works to construct the building “from

scratch”, not just to complete it, I would have expected to see in the scope of

works an allowance for preliminaries and costs for the early stages of

construction. On the contrary, a careful examination of the scope of works

reveals to me that there is a significant quantity of work which appears not to

be included. For example, there is no reference to preliminaries, earthworks,

or what may be called the major components of construction such as

concrete slabs and blockwork etc.

75. It appears to me that the scope of works details an unfinished or partly

completed work. It does not appear to me to have been prepared as a scope

of works which includes all facets of construction for a project of the type

being built.

76. This view is supported by the Initial Bank Report prepared by quantity

surveyors GMP Management dated November 2008. Paragraph 2.3.1 the

report states:

“We have reviewed the architectural, structural and landscape drawings and prepared an estimated construction cost based on the development

12 See para 6 of the affidavit of Searle


being completed in one stage. However, we have inspected the site and understand that the contract sum for the works is for the remaining building work which is predominantly from the underside of the podium slab i.e. the cost of the basement works to date is not included. GMP Management are of the opinion that the proposed Contract Sum of $14,913,995 [excluding GST] is sufficient to complete the proposed development.”

77. Section 26(2) of the Act compels me to consider among other things the

terms of the contract. I note that clause 5.1 of the Formal Instrument of

Agreement is an acknowledgment by the Respondent that:

(a) No representations, promises, guarantees or warranties have been made by or on behalf of the Contractor:

(i) To induce the execution of this agreement; or (ii) In connection with the negotiation or operation of this

Agreement; (iii) Which are not expressly contained in this agreement;

(b) The Principal’s decision to enter into this agreement (and all agreements contemplated by it) was made with a full appreciation of its terms and after taking (or having had the opportunity to take) such independent professional advice in relation to it as the Principal considered necessary, desirable or appropriate.”

78. Clause 8.11 of the Formal Instrument of Agreement also provides an entire

agreement clause which provides the following:

“The parties acknowledge that:

(a) This agreement comprises the whole of the agreement between the

parties in relation to the subject matter of it; and

(b) No further or other covenants are implied or arise between the parties

by way of collateral or other agreement or by reason of any alleged

promise, representation, warranty or undertaking given or made by

either party to the other on or before the execution of this agreement

and the existence of any implied , collateral or other agreement is

negatived.”


79. With the inclusion of clauses 5.1 and 8.11, if the Respondent wanted to

include the terms of previous discussions or terms from oral agreements, it

was incumbent upon it to ensure that such terms were expressly included in

the AS4000-1997 contract. In their absence and based on the parol evidence

rule as explained in Codelfa, I am satisfied that the contract sum was as

described in the contract, namely $16,405,394.00 including GST and that

sum was for the completion of the building rather than its entire construction

from start to finish.

Monies paid under the Construction Management Agreement

80. The Claimant admits to having received payment for its work performed under

the Construction Management Contract in the sum of $1,082,481.50. It is

difficult to ascertain from the material what monies the Respondent alleges it

paid the Claimant under the Construction Management Contract. At

paragraph 27 of the Adjudication Response submissions, the Respondent

does not appear to contest the amount stated. However, as I understand it,

the claimed amount does not include monies paid under the Construction

Management Contract, nor should it. It is a separate contract for a separate

scope of works, namely project management of the works which was

superseded by the QMBA contract for the completion of the construction of

the works. I have in the premises, not taken into account the payment of

monies by the Respondent under the Construction Management Contract in

my calculations.

Monies paid to the Claimant under the QMBA Contract and AS4000 Contract 81. The amount the Claimant alleges it has been paid by the Respondent in

paragraph 10.6 of the Application submissions, namely $12,492,028.95 is

consistent with the payments alleged in respect of GMP1 to GMP13 as

detailed in paragraph 5.23 of its submissions. That is in relation to payments

made under the QMBA Contract which was novated to the AS4000-1997

Contract. This amount is some $1,029,560.08 greater than what the Claimant


alleged it was paid in the Payment Claim. No explanation appears to have

been offered by the Claimant for the discrepancy. However, for the reasons I

have expressed above, I am prepared to accept the Claimant’s concession

because it is in favour of the Respondent. That does not of course mean that

I accept the Claimant was paid the sum of $12,492,028.95 on that basis. The

Claimant must still satisfy me that it has received that amount and no more.

82. The Respondent alleges to have paid the Claimant the sum of

$14,201,901.79 on the following bases:

Payment Allocation Amount of Payment Payments made to or on behalf of the Claimant in January and February 2009

$1,919,772.47

Payments made directly to Suppliers February 2009

$1,017,570.34

Payments made by CBA to Claimant

$8,939,816.88

Payments made by the Respondents GMP 2 to GMP 4

$2,324,742.10

TOTAL $14,201,901.79

83. The amounts listed above appear to have been extracted from Exhibit SG-15

to the Affidavit of Scott Green dated 18 February 2010. However, a closer

inspection of the “Payments made directly to suppliers in February 2009” in

the sum of $1,017,570.34 appear to me to be included in the sum of

$1,919,772.47. This miscalculation or “double dip” therefore reduces the

amount the Respondent can allege it has paid to the Claimant to the sum of

$13,184,331.00. However, the fact that those figures have been provided in a

spreadsheet prepared by Mr Scott does not prove that those amounts were in

fact paid to the Claimant.

84. There are significant difficulties in reconciling the payments which the parties

allege to have been paid by the Respondent. This is in no small part by the

loose manner in which all of the three contracts appear to have been


administered by both parties. Having read all of the material provided by both

parties, I must say that I am left with the distinct impression that neither party

has been entirely frank and honest with each other and more particularly, with

me. There is some evidence throughout the material provided, which

appears to suggest there were a number of “side deals” between the parties

involving sponsorship, hospitality and even the construction of a house13

although in respect of the latter there is insufficient evidence before me to

conclude that the house construction formed part of any such “arrangement”.

85. Notwithstanding those difficulties, I have a statutory function among other

things, to ascertain to the best of my ability on the material before me, what

monies were paid to the Claimant in respect of the contract.

86. In respect to GMP 1:

86.1. The Claimant issued a progress claim # 14 made payable by the

“Jetstar Gold Coast Titans” in the sum of $1,984,483.17 including

GST on or about 7 January 2009.

86.2. Paragraph 5.23 of the Application submissions and paragraph 26 of

the affidavit of Mr Simpson suggests that the Respondent paid the

Claimant the sum of $1,029,560.58.

86.3. However, according to the affidavit of the Claimant’s contract

administrator Paul Botica dated 9 April 2010, the Respondent paid

the sum of $1,018,048.37 which was constituted by a payment in

the sum of $447,699.57 for contractor’s costs under the Trade

Management Contract and $570,348.00 was paid to the Claimant’s

suppliers under the QMBA Contract14

86.4. I have numerous difficulties with both parties’ approach to this part

of the claim.

.

13 See the email dated 9 December 2009 from Alex Simpson to Michael Searle in Exhibit MTS 5 to the affidavit of Michael Searle 14 See para 32 and Exhibit PB-4 of the affidavit of Paul Botica dated 9 April 2010


86.4.1. The amounts alleged to have been paid in satisfaction of

the progress claim are inconsistent between the

evidence of Simpson and Botica.

86.4.2. Unlike subsequent claims, the Claimant has provided no

evidence of GMP’s assessment of the value of this claim.

GMP Management’s letter to the Claimant dated 6

January 200915

86.4.3. The Respondent has provided no satisfactory evidence

upon which I can rely that it has paid any sum in relation

to CM14/GMP1.

, appears to value the overall work that

has been completed to date in the sum of $3,818,191.00

(excluding GST) but it does not specifically ascribe a

value to CM4/GMP1.

86.5. In the premises, doing the best I can with the material before me

and in the absence of any credible evidence from the Respondent, I

am only able to value this part of the claim in the sum that Mr

Simpson attests that the Claimant has been paid, namely in the

sum of $1,029,560.58, being the greater amount than which was

alleged to have been paid by Mr Botica.


87.1. The Claimant issued a progress claim # GMP2 made payable by the

“Jetstar Gold Coast Titans” in the sum of $853,681.02 including GST

on or about 31 January 2009.

87.2. The contents of paragraph 5.23 of the Application submissions and

paragraph 29 of the affidavit of Mr Simpson suggests that the

Respondent paid the Claimant the sum of $853,681.02.

15 See Exhibit AHS-13 to the affidavit of Simpson


87.3. The Claimant provided evidence16

87.4. The Claimant provided evidence

that GMP Management assessed

the value of that stage of the works in the sum of $853,681.02

excluding GST. However, given the identical nature of the sums in

the report (at page 2) I have assumed this to be an error on the part

of GMP Management and shall consider the certified amount as

being $853,681.02 including GST. 17

87.5. The Respondent has provided no evidence which refutes the

Claimant’s material.

by way of a copy of its bank

statement showing payment on 5 May 2009 in the sum of

$853,681.02.

87.6. In the premises, I am satisfied that the Claimant was entitled to claim

the sum of $853,681.02 and did receive the sum of $853,681.02.



“Jetstar Gold Coast Titans” in the sum of $937,925.71 including GST

on or about 22 March 2009.






that GMP Management .assessed


including GST. 19



statement showing payments on 4 May 2009 in the sum of

$852,659.74 and $85,265.97 on 19 May 2009.

17 See Exhibit AHS-12 to the affidavit of Simpson 18 See Exhibit AHS-14 to the affidavit of Simpson 19 See Exhibit AHS-15 to the affidavit of Simpson





the sum of $937,925.71 and did receive the sum of $937,925.71.


that sum and did in fact receive payment for that amount from the

Respondent.




GST on or about 29 May 2009.







the value of that stage of the works in the sum of $1,167,608.20

including GST. 21




statement showing a payment on 2 June 2009 in the sum of

$589,345.79. In the absence of any contradictory evidence, I accept

Mr Simpson’s explanation, as evidenced by the Claimant’s bank

deposit slips that $56,210.40 of this sum was payment by the

Respondent for an unrelated contract.


the sum of $1,167,608.20 but only received the sum of $533,135.39.

20 See Exhibit AHS-17 to the affidavit of Simpson 21 See Exhibit AHS-18 to the affidavit of Simpson





GST on or about 2 July 2009.








including GST. 23




statement showing payment on 20 July 2009 in the sum of

$708,275.56.






GST on or about 30 July 2009.



Respondent paid the Claimant the sum of $1,109,297.70.







including GST. 25




statement showing payment on 31 July 2009 in the sum of

$1,109,297.70 which equates to the claimed amount excluding GST.


the sum of $1,220,227.47 but only received the sum of

$1,109,297.70.




GST on or about 2 September 2009.



Respondent’s financier the CBA paid the Claimant the sum of

$1,621,716.03.

92.3. The Claimant provided evidence26 that GMP Management assessed


including GST whilst the Superintendent valued the claim in the sum

of $1,877,777.00 including GST27


.







statement showing payment on 2 September 2009 in the sum of

$1,621,716.03 which equates to the claimed amount excluding GST.



$1,621,716.03.




GST on or about 30 September 2009.




$965,015.59.




of $1,166,133.00 including GST, less 5% retention30


. 31




statement showing payment on 1 October 2009 in the sum of

$965,015.59.

28 See Exhibit AHS-29 to the affidavit of Simpson 29 See Exhibit AHS-31 to the affidavit of Simpson 30 See Exhibit AHS-32 to the affidavit of Simpson 31 See Exhibit AHS-33 to the affidavit of Simpson







GST on or about 29 October 2009.




$1,494,500.00.




of $1,834,076 including GST, less 5% retention33


. 34




statement showing payment on 2 November 2009 in the sum of

$1,494,500.00.



$1,494,500.00.


95.1. The Claimant issued a progress claim # GMP10 made payable by

the “Jetstar Gold Coast Titans” in the sum of $1,297,334.80 including

GST on or about 1 December 2009.






$1,149,395.00.






. 37




statement showing payment on 3 December 2009 in the sum of

$1,149,395.00.



$1,149,395.00.



the “Jetstar Gold Coast Titans” in the sum of $1,179,429.54 including

GST on or about 21 December 2009.




$1,072,209.00.










. 40




statement showing payment on 22 December 2009 in the sum of

$1,072,209.00.



$1,072,209.00.

97. In respect to “Variation December”:

97.1. The Claimant issued a progress claim on or about 17 December

2009 entitled “Variation December” which Mr Simpson refers to in his

affidavit as “DECVAR”, made payable by the “Gold Coast Titans

(Property) Pty Ltd” in the sum of $307,097.38 including GST.


paragraph 70 of the Affidavit of Mr Simpson suggests that the


$198,000.00.

97.3. Mr Simpson alleges that this claim was for variations to the contract

in addition to those listed in the affidavit of Paul Botica.

97.4. The Claimant did not provide any evidence of the assessment of this

claim by either GMP Management or the Superintendent.




statement showing payment in the sum of $150,000.00 on 13

January 2010 and $48,000.00 on 21 January 2010.

40 See Exhibit AHS-45 to the affidavit of Simpson 41 See Exhibit AHS-47 to the Affidavit of Simpson



Claimant’s material. However, the Respondent submits that this

payment was for the fitout of offices at the site. Neither party

provided any relevant documentary evidence to support their

respective submissions. In the absence of any independent

assessment of the amount claimed and in the absence of any

supporting material, I am not prepared to value the claim in excess of

that which has already been paid by the Respondent.


the sum of $198,000.00 and has been paid that sum.



the “Jetstar Gold Coast Titans” in the sum of $901,249.66 including

GST on or about 27 January 2010.


paragraph 76 of the Affidavit of Mr Simpson suggests that the


$819,318.00.




of $948,682.00 including GST, less 5% retention43


. 44




records showing payment by the Respondent’s financier, the CBA on

1 February 2010 in the sum of $819,318.00.




the sum of $901,249.66 but only received the sum of $819,318.00.

99. In my view there is no impediment to the efficacy of the Payment Claim when

many of the progress claims listed above were made out to the “Jetstar Gold

Coast Titans”. It is clear that although misnamed, the Respondent

considered itself liable for the bulk of the claimed amounts and paid the

Claimant accordingly.

100. Pursuant to the spreadsheet attached to this decision and marked

Annexure B, the claimed amounts are summarised accordingly:

Claimed Amounts for GMP1 – GMP12 $15,903,059.66 Adjudicated Amount $14,839,039.26 Amount Paid by Respondent - $12,492,029.58 Amount owing to Claimant $ 2,347,009.68

Builder’s Equity 101. The Respondent alleges that:

101.1. Pursuant to the finance facility provided by the CBA, the

Respondent was to contribute to the cost of the works the sum of

$4,600,000.00 and the Claimant was to contribute builder’s equity in

the sum of $1,000,000.00.

101.2. By agreement between the parties, the builder’s equity was

contributed by the Claimant agreeing to accept partial payments in

respect of previous claims GMP4 and GMP5.

102. Mr Simpson in his affidavit at paragraph 112 agrees that the CBA required

the Claimant to “put up” $1,000,000.00 in equity into the project. However, Mr

Simpson says that in discussing this bank requirement with Mr Searle, “it was

agreed that the Titans would pay this money to Simcorp so that Simcorp did

not have to, in effect, provide $1,000,000.00 in on site work as ‘equity’ so I

advised Searle that Simcorp could not fund this money together with the


funding of the retentions. I would not have agreed to become a guarantor on

the loan if I thought the Titans and Searle would not pay the $1 million on

behalf of Simcorp.”

103. The “builder’s equity” issue is a prime example of how this contract was

mal-administered by both parties. Mr Simpson admits that it was a

requirement of the bank loan that he put up the $1,000,000.00. Just why the

CBA required that, or indeed for him to guarantee the Respondent’s loan, is

not known. However, Simpson in the extract above raises more allegations of

oral “side agreements” which beggar belief why they were not reduced to

writing.

104. Both parties have provided extremely scant evidence of whose

responsibility it was to pay the “builder’s equity” of $1,000,000.00. Mr

Searle’s letter to Scott Brooks of the CBA could only be described as “self-

serving” and in my view, is not credible evidence of the Claimant’s liability.

The Respondent has provided no evidence in the Adjudication Response to

refute the allegations of Mr Simpson extracted above.

105. Given that it is the Respondent who is claiming the $1,000,000.00 as a

set-off from the claimed amount, it is the Respondent who bears the onus of

proof. Given the amount involved and the prior conduct of the parties, on

balance I simply cannot be satisfied that there was not some other oral

arrangement entered into by Messrs Simpson and Searle whereby the

Respondent would “cover” the builder’s equity, which after all was merely a

bank requirement to fund the loan.

106. I have referred to the “prior conduct of the parties” because it is

abundantly clear that there was some degree of mutual “back scratching”

between Messrs Simpson and Searle on behalf of their respective

organisations. For example, in Exhibit MTS6 to the affidavit of Mr Searle is a


string of emails between Mr Seale and Mr Simpson. A review of those emails

reveals that the parties are attempting to negotiate an on-going sponsorship

arrangement for the Claimant.

Mr Simpson writes on 24 October 2009: “Mate my point is I’m leaving $1.6 million in its not a smart business decision if I was getting full mezz interest rates I would be happy to pay full freight on sponsorship but im not In fact you get a sweet deal on interest I should get a sweet deal on sponsorship Im really doing you a favour which im happy to do but I want to be looked after.” Mr Seale responds on the same date: “I think we both know at 10% profit margin on $16 Million job is a good earner … I stuck solid with you mate as you and I had been through it together … I copped 10% for total job when I had others like Southern Cross coming at me with 2.5% - 3.5%. I think it is fair to say we have both done each other a favour …” “The Claw Back Agreement”

107. Mr Searle in paragraph 26 of his affidavit describes “the claw back

agreement” as:

“At the time of entering into the initial fixed price construction agreement

[the QMBA contract] with Simcorp in late January 2009, GCTP had

already spent in excess of $3,800,000.00 on the project of which

approximately $2,500,000.00 was included in the total costs of

construction detailed in the contract price of $14,913,995.00.”

108. In effect, the clawback agreement was an arrangement which would

enable the Respondent to receive some of those costs back via the CBA

facility.

109. In paragraph 6.5 of the Payment Schedule, the Respondent argued that

the balance held by the Claimant pursuant to the “claw back agreement” is

calculated as follows:


(a) Total Claw back $1,688,827.45 (b) GST refunds received $1,241,821.06 (c) Claw back and GST received $1,241,821.06 (d) Net owing $ 447,006.39.

110. The Claimant in paragraph 5.25 of the Application submissions argues

that there was no concluded agreement reached in relation to the “claw back

agreement”.

111. The Claimant’s submissions on this point are vague and quite non-

responsive. It is clear to me that there must have been some arrangement

between the parties which entitled the Respondent to withhold some of the

GST monies from the progress claims issued by the Claimant.

112. I reject the Claimant’s submissions at paragraph 5.25(d) of the Application

submissions that I cannot take such matters into account because it is a

“separate agreement”. If anything, it is an oral variation to the contract. The

management of the contract and the construction of the works are not

performed in a legal vacuum. I am satisfied that s.26(2) of the Act permits me

to consider the Respondent’s submissions.

113. In the absence of any meaningful submissions from the Claimant on this

point, I prefer the submissions of the Respondent.

114. I am prepared to allow a set-off from the claimed amount in the sum of

$447,006.39.

Variations 115. The Payment Claim includes claims for a number of variations being new

work not previously claimed (being variations 45 to 71).

116. The total value of the variations claimed in the Payment Claim is purported

to be in the sum of $844,692.00 excluding GST. As extrapolated in Annexure

C attached hereto, I calculate the original claimed amount for variations to be


in the sum of $1,039,542.15. The main cause of this discrepancy between

the original claimed amount in Annexure C and the Claimant’s “Variation

Analysis” contained in TAB ‘C’ of the Payment Claim is the omission in the

latter of the claim for Variation 9. I shall return to this point below.

117. Annexure C attached hereto, contains a table which lists the parties’

respective positions in relation to the variations. It should be read in

conjunction with these reasons. All amounts unless otherwise stated are

excluding GST.

118. The contract provides a mechanism for variations pursuant to clause 36. I

express my reasons below as to why in my opinion, the strict terms of clause

36 do not apply.

119. The bases of the Respondent’s challenge to the Claimant’s entitlement to

the variations is provided in the affidavit of Rob Real dated 24 March 2010

who was the contract superintendent. In essence, the Respondent argues

that:

119.1. Some of the variations were approved by Mr Real;

119.2. Others were not;

119.3. Some of the work, the subject of the alleged variations have not

been undertaken;

119.4. Others have not been preceded by a quote; or

119.5. The work was undertaken, but the Claimant failed to comply with its

obligations pursuant to clause 36 of the contract.

120. In addition to that, the Respondent objects to the affidavit of Paul Botica

sworn 9 April 2010 “as it is outside the scope of s.26 of the BCIPA and seeks

to amend Payment Claim 13.”

121. As I have indicated previously, to afford the Respondent procedural

fairness, I will not allow the Claimant to increase the claimed amount in the


Application (from the Payment Claim). Where it has sought to do so, I will

simply assess the value of the variation as it was claimed in the Payment

Claim. Where on the other hand the Claimant has sought to reduce or delete

a variation in the Application, I will allow such conduct because it is of no

disadvantage to the Respondent.

Variation 1 – Structural steel changes to pool roof

122. The Claimant seeks payment in the sum of $26,160.75 in relation to this

item. It has in fact been paid that sum according to the schedule in Tab “C” of

the Payment Claim and as detailed in the schedule attached to Mr Real’s

affidavit. I note that the claimed sum accords with the value ascribed by GMP

Management in their report dated 27 January 201045

.

123. Mr Real, the contract Superintendent values the work at $20,000.00. No

basis is given for that valuation.

124. As GMP Management, an independent quantity surveyor has valued the

works at $26,160.75 and in the absence of any contrary evidence, I am

satisfied the Claimant is entitled to that sum.

Variation 2 – Changes to fitout of Ground Floor and Level 1


item. It has in fact been paid that sum according to the schedule in Tab “C” of

the Payment Claim and as detailed in the schedule attached to Mr Real’s

affidavit. I note that the value ascribed for this item by GMP Management in

their report dated 27 January 201046

is $137,747.12.

126. Mr Real, the contract Superintendent values the work at $120,000.00 in

the schedule attached to his affidavit. No basis is given for that valuation



although in paragraph 5 of his affidavit he considers the valuation of this item

as “unresolved”.

127. The Claimant has provided a number of documents and plans in its

Payment Claim to substantiate the amount claimed. Many of the individual

component costs which make up the claimed amount are PC items and

quotations rather than evidence of actual expenditure.

128. In the Claimant’s Variation Register attached to Mr Real’s progress

certificate dated 28 October 2009, it is alleged that Mr Real has approved the

variation in the sum of $137,747.12 which accords with the valuation of GMP

Management. Although the Variation Register appears to have been

authored by the Claimant, Mr Real in his report states:

“The approved builder’s works variations which are identified on the Simcorp Variation Register, are for additional works which have been required on the project in order to meet statutory standards or revised engineering designs or previously undocumented details, and their total value is included in this recommendation for payment. The Simcorp Variation Register is attached to this certificate for reference.”

129. I am in the premises, satisfied that Mr Real has previously valued the

variation item in the sum of $137,747.12. In addition, GMP Management, an

independent quantity surveyor has valued the works at $137,747.12 and in

the absence of any contrary evidence, I am satisfied the Claimant is entitled

to that sum.


Variation 3 – Tiles to Southern Pool – Mosaic wall

130. There is no dispute between the parties in relation to this item, the

Claimant is entitled to and has been paid the sum of $14,878.50.

Variation 4 – Otis storage costs



Variation 5 – Steel support frames



Variation 6 – Power reticulation to pool equipment


Claimant is entitled to the sum of $7,507.50. It is however, unclear on the

material provided whether the Claimant has been provided this sum.

Variation 7 – Deleted

134. There is no dispute between the parties in relation to this item.

Variation 8 – Metz Pool Tiles


Claimant is entitled to the sum of $64,500.00. It is however, unclear on the

material provided whether the Claimant has been provided this sum.

Variation 9 – Stage 2 Cabinet and Joinery

136. The Claimant did not include a claim for Variation 9 in TAB ‘C’ of the

Payment Claim. Ordinarily, I would not then allow it to be claimed in the

Application. However, in this instance, it is clear from the affidavit of Mr Real

that he was aware of its existence and he has in fact valued the claim in the


sum of $70,205.00 which the Claimant now accepts as its entitlement

according to Exhibit PB-5 to the affidavit of Paul Botica. It is unclear on the

material before me whether the Claimant has already been paid the sum of

$70,205.00.

Variation 10 – Mosaic wall anti graffiti protection


Claimant is entitled to the sum of $1,188.00. It is unclear on the material

whether the Claimant has been paid this sum.



Variation 12 – Roof plant area screen


Claimant accepts the scheduled amount of $3,300.00 but has been paid the

sum of $7,180.00.

Variation 13 – Cage to pool equipment in basement


Claimant is entitled to the sum of $2,200.00. It is unclear on the material

provided whether the Claimant has been paid this sum.



Variation 15 – Deletion to partitions to level 2, 3 & 4


Claimant accepts the Respondent is entitled to a credit in the sum of

($20,235.00).


Variation 16 – Two extra air con units required on Level 4 143. The Claimant seeks payment in the sum of $5,159.00 in relation to this

item. There is some debate by the parties whether the scheduled amount of

$4,690.00 has been paid by the Respondent.

144. It appears from the material contained in Tab 16 of PB-6 to Mr Botica’s

affidavit that the source of the argument between the parties is the Claimant’s

entitlement to claim a 10% margin on its cost of the variation.



variation in the sum of $5,159.00. Although the Variation Register appears to

have been authored by the Claimant, Mr Real in his report states:

“The approved builder’s works variations which are identified on the Simcorp Variation Register, are for additional works which have been required on the project in order to meet statutory standards or revised engineering designs or previously undocumented details, and their total value is included in this recommendation for payment. The Simcorp Variation Register is attached to this certificate for reference.”

146. I am in the premises, satisfied that Mr Real has previously valued the

variation item in the sum of $5,159.00.

147. On balance, I agree with the submissions of the Claimant on this point.

Clause 36.4(d) of the contract allows for the addition of a reasonable amount

for profit and overheads. The express terms of the contract appear to be

silent in relation to the percentage rate of profit on variations.

148. As to what is “reasonable” I refer to the parties “arrangement” as extracted

at paragraph 106 above. In the premises, I am satisfied that the Claimant

was entitled to 10% profit and is therefore entitled to the sum of $5,159.00. It

is unclear on the material provided whether the Claimant has been paid this

amount.


Variation 17 – Extra height to windows on south side 149. The Claimant seeks payment in the sum of $2,486.00 in relation to this

item. It appears to be accepted that the CBA has paid the Claimant the sum

of $2,486.00 for this item.

150. The only detail given by Mr Real is that contained in the schedule attached

to his affidavit where he rejects outright the claimed amount and says

“Rejected. Builder error”.



variation in the sum of $2,113.10 the difference being, according to the

Register, that the work was only 85% complete. For the reasons I have

expressed previously47

, I am satisfied that Mr Real has previously valued the

variation item in the sum of $2,113.10. Whether that work has progressed

since Mr Real last valued it is unknown. However, I am not prepared to allow

Mr Real to resile from his previous position and now argue that it was a

builder’s error without demonstrating reasonable grounds to do so.

152. In the absence of any evidence to confirm that the works have been

completed, I shall value this item in accordance with Mr Real’s assessment

on 28 October 2009, that is in the sum of $2,113.10.

Variation 18 - Pool ceiling flashing




47 See the extract at paragraph 145 herein



to his affidavit where he rejects outright the claimed amount and says

“Rejected”.


certificate dated 18 December 2009, it is alleged that Mr Real has approved

the variation in the sum of $1,064.80. Mr Real had made a comment in the

Register attached to the progress certificate dated 28 October 2009 that “No

details to finish pool ceiling”. That comment is not repeated in the current

Register. In any event, Mr Real appears to have valued the claim in full.

156. For the same reasons I have expressed previously, I am satisfied that Mr

Real has previously valued the variation item in the sum of $1,064.00. In the

absence of any contradictory evidence, I am not prepared to allow Mr Real to

resile from his previous position and now argue that the claim ought to be

rejected.

157. In the premises, I shall value this item in accordance with Mr Real’s

assessment on 18 December 2009, that is in the sum of $1,064.00.

Variation 19 – Window W126 not shown on drawings




159. Mr Real in paragraph 5 of his affidavit considers that this claim is

“unresolved”. Mr Real in the schedule attached to his affidavit states “Value

assessed due to lack of supporting information from Simcorp”. However, it

must be said that Mr Real’s supporting material in response is also lacking

substance. For instance, Mr Real in Exhibit ‘B’ to his affidavit provides no

basis for his costings of $500 square metre whatsoever.



certificate dated 18 December 2009, it is alleged that Mr Real has approved

the variation in full for the sum of $11,462.00. The works are listed as being

100% complete.

161. For the same reasons I have expressed previously, I am satisfied that Mr

Real has previously valued the variation item in the sum of $11,462.00. In the

absence of any contradictory evidence, I am not prepared to allow Mr Real to

resile from his previous position and now argue that the claim ought to be

reduced to $8,000.00.

162. The Claimant has provided evidence of the cost of the windows from Total

Concept Group Pty Ltd and as I have stated previously, I am satisfied that the

Claimant is entitled to claim a 10% profit on its costs of the variation.

163. In the premises, I shall value this item in accordance with Mr Real’s

assessment on 18 December 2009, that is in the sum of $11,462.00.

Variation 20 – Tiled floors to foyer entry 164. According to the schedule at Exhibit PB-5 of the affidavit of Mr Botica, the

Claimant now accepts the scheduled amount of $13,870.00.

165. There appears to be some question whether the Claimant has been paid

the scheduled amount of $13,870.00. Neither party has provided any

evidence one way or the other.

Variation 21 – Plumber’s costs 166. The Claimant originally sought payment for this item in the sum of

$47,433.00. The Claimant has since amended this amount to $38,385.00

which sum the Claimant accepts it has been paid. However, notwithstanding

that the Claimant has been paid $38,385.00, the Respondent maintains that

the value of the variation is only $10,985.00.



to his affidavit where he states “Value assessed due to works not completed.”

In the Variation Register attached to Mr Real’s progress certificate dated 27

January 2010, he values the work at “-“ but comments that the work is 50%

“in progress” which I assume means 50% completed.

168. Mr Real in Exhibit ‘C’ to his affidavit calculates that the value of the

incomplete work is in the sum of $27,400.00, which when subtracted from the

claimed amount leaves the sum of $10,985.00.

169. The Claimant has provided evidence of additional costs charged by H & G

Plumbing for variations arising out of “client changes” and “drawing changes

by the Hydraulics Engineer”. Those costs equate to the sum of $38,385.00

excluding margin. The Claimant also argues that “all of the materials were on

site” when the contract was terminated. Therefore, the Respondent has

obtained or will obtain the benefit of those materials.

170. On balance, I prefer the submissions of the Claimant. The Claimant has

been able to substantiate its costs by referring to its subcontractor’s actual

costs. Mr Real has not demonstrated to me that any of the alleged

incomplete works have in fact been omitted. I note that there are no photos

on Mr Real’s CD of this particular variation. In the premises, I am satisfied

the Claimant is entitled to the sum of $38,385.00.

Variation 22 – Additional power to server room


item. The parties are in dispute as to whether the Claimant has been paid the

sum of $1,160 which is the scheduled amount.

172. The Claimant has provided evidence from its electrician of its costs in the

sum of $1,160.00. For the reasons I have already expressed, the Claimant is


entitled to claim a 10% margin on those costs. In the premises, I am satisfied

that the Claimant is entitled to receive the amount of $1,276.00.

Variation 23 – New aircon to ground floor tenancy - deleted


Variation 24 – Striker plates 174. The Claimant seeks payment in the sum of $1,054.00 in relation to this

item. There is no dispute involving the quantum claimed, however the parties

are in dispute as to whether the Claimant has been paid that sum. Neither

party provided any evidence of payment one way or the other.

175. I accept that the Claimant is entitled to the sum of $1,054.00.

Variation 25 – Coloured Concrete – deleted


Variation 26 – Alterations to kitchen level 1 177. The Claimant originally sought payment for this item in the sum of

$11,605.00. The Claimant has since amended this amount to $10,444.50.

The Respondent alleges to have paid the sum of $6,000.00 for this item but

has provided no evidence of having done so. The Claimant alleges to have

received no monies.

178. The Respondent has valued this item in the sum of $8,124.00. The only

detail given by Mr Real is that contained in the schedule attached to his

affidavit where he states “Value assessed due to works not completed.”

179. The Claimant concedes that the works are incomplete.

180. On balance, I agree with Mr Real’s view that the supporting material

provided by the Claimant in this instance is inadequate. Many details of the


costs provided in Mr Simpson’s email dated 11 November 2009 are

“unconfirmed”. Whilst it is not known to me how Mr Real valued the works in

the sum of $8,124.00 that appears to be a generous amount based on the

Claimant’s documentation.

181. In the premises, as the Respondent has indicated a willingness to pay

$8,124.00, I shall award that sum.

Variation 27 – Café alterations

182. The Claimant originally sought payment for this item in the sum of


183. The Respondent alleges that this item is valued at $11,000.00 and that it

has paid the Claimant the sum of $9,000.00 but has provided no evidence of

having done so.

184. In the schedule attached to his affidavit, Mr Real states “Value assessed

due to works not completed.” In the Variation Register attached to Mr Real’s

progress certificate dated 27 January 2010, he values the work at

“$21,294.00” but comments that the work is 30% “in progress” which I

assume means 30% completed. The Claimant argues that it is 90%

completed.

185. The Respondent has provided no evidence to support its estimated value

in the sum of $11,000.00, nor the estimated completion of 50% for the

partitions and 60% for the electrical and plumbing.

186. I have viewed the relevant photos of this variation on the CD attached to

Mr Real’s affidavit. In my view, the photos do not indicate that the works are

90% complete.


187. The Claimant’s invoices attached to TAB 27 of Exhbit PB-6 indicate that

the Claimant would have incurred additional costs in the sum of $19,614.00.

On the material available to me I am prepared to estimate that the work

appears to be approximately 75% complete. In the premises, I allow the sum

of $14,710.50.

Variation 28 – Power and data to level L5, fibre optic to Level 1 and ground


$23,190.00. The Claimant has since amended this amount to $19,580.00

and then again during the adjudication process sought to amend the claim to

$19,711.50. For the reasons which I have previously expressed, I am not

willing to allow the Claimant the opportunity to increase a particular claimed

amount for a variation. I therefore shall consider the claimed amount to be in

the sum of $19,580.00.

189. The Claimant has provided an estimate for the variation from its electrician

in the sum of $23,190.00. This figure when compared with the claimed

amount makes no allowance for the Claimant’s margin, nor in this instance is

the margin claimed.


has paid that sum to the Claimant but has provided no evidence of having

done so, nor any evidence in support of its valuation. The Claimant alleges

not to have received any payment.


to his affidavit where he states “Value assessed due to works not completed.”

192. Mr Real had previously certified the value of this variation in the sum of

$23,190.00 on basis of it having been 100% complete48

48 See Exhibit RR-1 to the Affidavit of Rob Real dated 24 March 2010

.


193. The Respondent has provided no evidence to support its estimate of a

value in the sum of $11,000.00 apart from some crude costings performed by

Mr Real. Those costings provide no basis upon which Mr Real assessed the

percentage of works complete.

194. I have viewed the relevant photos of this variation on the CD. In my view,

the photos indicate that the works have been “roughed in” and are awaiting fit

off. The Claimant asserts that 85% of the works are complete.

195. The Claimant has not provided any evidence to support its submission

that the works are 85% complete. Having viewed the photos, I am of the view

that 85% is likely to be a little overstated. In my view, the works are likely to

be closer to 75% complete. However, consistent with the Claimant’s

concessions contained in Variation 45 below, I am satisfied that it is

appropriate in the circumstances that the Claimant receive 50% of the

claimed amount.

196. In the premises, I allow the sum of $11,595.00 (being 50% of $23,190.00).

Variation 29 – Reception desk, wall and floor


item. There is no dispute involving the quantum claimed, however the parties

are in dispute as to whether the Claimant has been paid the sum of $3,173.00

as alleged by the Respondent. Neither party provided any evidence of

payment one way or the other.

198. I accept that the Claimant is entitled to the sum of $4,495.00.

Variation 30 – Carpet to Level 5 - Deleted



Variation 31 – Café block work and concrete floors 200. The Claimant originally sought payment for this item in the sum of



has paid the Claimant the sum of $2,700.00 but has provided no evidence of

having done so. The Claimant denies having been paid any amount for this

variation.

202. Mr Real’s “Approved Value” as demonstrated in Exhibit RR-1 is in the sum

$4,700.00. The only detail given by Mr Real is where he states “Value

assessed due to works altered from quote.”

203. The Claimant asserts that it has completed the works.

204. In an email to Mr Botica dated 10 December 2009, Mr Real approved the

cost of the variation in the sum of $4,700.00. Mr Real has at Annexure G to

his affidavit provided some background to the construction of the blockwall

but has provided no evidence of his reduction in the sum of $1,000.00.

Ultimately, Mr Real agreed to the $4,700.00 variation. If he wanted to make a

deduction for the Claimant’s error, that should have been stated and costed in

the variation approval.

205. On balance, I am satisfied that the Claimant is entitled to the sum of

$4,700.00.

Variation 32 – Level 5 Office Furniture - deleted


Variation 33 – Lighting to Level 5 207. The Claimant originally sought payment for this item in the sum of



208. The Respondent alleges that this item is valued at the sum of $5,650.00

but Mr Real is of the view that only 60% of the work has been completed.

Therefore, the Respondent asserts that the Claimant is only entitled to the

sum of $3,390.00. Both parties agree that the Claimant has not been paid for

this variation.

209. According to the estimate provided by the Claimant’s electrician, the value

of the variation is $5,650.00. When a 10% margin is applied, one arrives at

the value of $6,215.00. The Claimant alleges to have completed 85% of that

work.

210. Having viewed Mr Real’s photographs, it appears that the rough in has

been performed but the fit-off is yet to be done. Consistent with the

Claimant’s concessions in Variation 45, I am of the view that approximately

50% of the work has been performed. However, the Respondent has

calculated a figure of 60%, so I will allow the latter amount.

211. In the premises, I am satisfied that the Claimant is entitled to the sum of

$3,729.00 ($6,215.00 x 60%).

Variation 34 – Partitions and flush ceilings to Level 5


$34,004.00 but has since amended the claim to the sum of $29,923.53.

213. The Respondent agrees that this item is valued at the sum of $34,004.00



sum of $22,103.00. Both parties agree that the Claimant has not been paid

for this variation.

214. According to the estimate provided by the Claimant’s plastering contractor,

the value of the variation is $34,004.00. I note that the Claimant is not


claiming for its 10% margin on this item. The Claimant alleges to have

completed 88% of that work.

215. Having viewed Mr Real’s photographs, it appears that in relation to the

areas photographed that external angles have not been set, nor has the top

coat of the ceiling and wall joints been applied nor sanded.

216. Whilst it is difficult to accurately assess the completion stage of this item, I

am of the view that the truth of the matter lays somewhere in between the

competing figures. Doing the best I can, I am satisfied that the work is

approximately 75% complete.


$25,503.00 ($34,004.00 x 75%).

Variation 35 – Media centre power and special cabling


$12,336.50 but has since amended the claim to the sum of $10,979.49. It

has provided a copy of its electrician’s estimate in the sum of $11,215.00

which when the 10% margin is applied, equates to the claimed amount.

219. The Respondent argues that this item, if it was completed would be valued

in the sum of $11,215.00. However, Mr Real is of the view that the work is

incomplete. Consequently, the Respondent asserts that the Claimant is only

entitled to the sum of $6,600.00. Both parties agree that the Claimant has not

been paid for this variation.

220. In an email dated 10 December 2009 to Mr Botica, Mr Real approved the

variation in the sum of $12,336.50. Mr Real’s assessment of the completion

of the works as detailed in Exhibit ‘H’ to his affidavit does not provide any

basis for his calculations and he appears by no means certain of what work

has and has not been completed.


221. In the absence of any meaningful contrary evidence, on balance, I prefer

the submissions of the Claimant on this point. I am satisfied that the 89% of

the work has been completed and that the Claimant is entitled to the sum of

$10,979.49.

Variation 36 – A/C Altitude room

222. The Claimant seeks payment for this item in the sum of $4,380.00.

223. The Respondent agrees that this item is valued in the sum of $4,380.00




this variation.

224. According to the estimate provided by the Claimant’s air conditioning

contractor, the value of the variation is $4,380.00. I note that the Claimant is

not claiming for its 10% margin on this item. The Claimant alleges to have

completed 100% of that work.

225. Having viewed Mr Real’s photograph on the CD, it appears that the work

is 100% complete, although I concede that the external unit has not been

photographed. Having said that, I would have expected that if the external

unit was not installed, Mr Real would have photographed that omission

instead of the internal unit which was installed.


$4,380.00.

Variation 37 – Reception Counter and Café stone - deleted



Variation 38 – Lay café floor tiles 228. The Claimant originally sought payment for this item in the sum of

$1,912.00. However, it concedes that only 95% of the work has been

completed. Therefore it has amended the claimed amount to the sum of

$1,816.40.





this variation.

230. Neither party has provided any independent assessment of the completion

of the work. Mr Real has provided no real justification for arguing that the

work is 30% incomplete. Having viewed Mr Real’s photographs from the CD,

the slab core drilling indicates that some form of joinery and waste is to cover

the bare slab. Noting that the remainder of the work appears to be grouted, I

am satisfied that the works are approximately 95% complete.


$1,816.40 ($1,912.00 x 95%).

Variation 39 – Level 5 Door hardware 232. The Claimant originally sought payment for this item in the sum of

$3,690.75. However, it concedes that it is entitled to only 50% of the claimed

amount because it was prevented from installing the hardware as a result of

the termination of the contract. However, the Claimant asserts that the

hardware was on site. Therefore it has amended the claimed amount to the

sum of $1,845.38.


233. The Respondent argues that the Claimant is entitled to nil because the

works were “not proceeded with”. Both parties agree that the Claimant has

not been paid for this variation.

234. Neither party has provided any independent assessment of whether or not

the goods have or have not been delivered to site. The Claimant provided in

second numbered Tab 9 of Exhibit PB-6 to Mr Botica’s affidavit an internal Bill

of Quantities schedule in the sum of $3,690.75. The difficulty I have with this

Bill of Quantities is that it only refers to materials. If the Claimant had these

goods delivered to site but they were uninstalled, why would it not claim the

full amount instead of reducing the claim by 50% for labour that was not

performed?

235. Given that the Claimant has not provided a delivery docket, or any other

evidence to prove that the materials are in fact on site as alleged, I am

unsatisfied that the Claimant is entitled to this amount. For the purposes of

s.27(2) of the Act, I am not valuing this item at nil, I am simply not satisfied

that the Claimant has made out its entitlement.

Variation 40 – Cut in 2 x electric strikes

236. The Claimant seeks payment for this item in the sum of $363.00.





the goods have or have not been delivered and installed. However, as

distinct from Variation 39, the electric strikes or at least where they should

have been installed could have been photographed by Mr Real. I am

prepared to draw an adverse inference from the fact that he has not provided


photographs of this variation when it would have been quite easy and from an

evidentiary perspective, quite compelling had he done so.


$363.00.

Variation 41 – Sanitary fixture supply to level 5 ensuite - deleted


Variation 42 – Painting to Level 5, media room and ground floor foyer 241. The Claimant originally sought payment for this item in the sum of

$37,300.00. However, it concedes that it is entitled to the scheduled amount

of $3,800.00. Both parties agree that the Claimant has not been paid for this

variation.

242. In the premises, there is no dispute between the parties in relation to this

item.

Variation 43 – Deleted 243. The claim for this item has been deleted.

Variation 44 – Internal windows and door frames L5 244. The Claimant originally sought payment for this item in the sum of

$46,950.00. However, it concedes that only 10% of the work has been

completed. Therefore it has amended the claimed amount to the sum of

$4,695.00.




sum of $940.00. Both parties agree that the Claimant has not been paid for

this variation.


246. Neither party has provided any independent assessment of the extent of

the completion of the work. In this instance as the Claimant bares the onus of

proof, I prefer the submissions of the Respondent.


$940.00.

Variation 45 – New lights in Michael Searle’s office


$990.00. However, it concedes that it is entitled to only 50% of the claimed

amount because only the rough in has been performed. Therefore it has

amended the claimed amount to the sum of $495.00.





the work the subject of this variation has been performed. However, as

distinct from Variation 39, the wiring for the lights or at least where they

should have been roughed in could have been photographed by Mr Real. I

am prepared to draw an adverse inference from the fact that he has not

provided photographs of the absence of this work when it would have been

quite easy and from an evidentiary perspective, quite compelling had he done

so.


$495.00.

Variation 46 – Extra wall over plumber’s pipes (Strapping room)

252. The parties agree that the Claimant is entitled to the sum of $295.00 for

this item.


253. Both parties agree that the Claimant has not been paid for this variation.

Variation 47 – Extra wall over plumber’s pipes (Kitchen Level 1)

254. The parties agree that the Claimant is entitled to the sum of $185.00 for

this item.


Variation 48 – Dwarf wall to cafe 256. The Claimant seeks payment for this item in the sum of $925.00.

257. The Respondent argues that the completed value of the variation would

have been $925.00 but Mr Real asserts that it is only 80% complete.

Therefore, the Respondent submits that the Claimant is only entitled to the

sum of $740.00.


259. The Claimant provided evidence in the way of:

259.1. A direction from Mr Real that the work be performed;

259.2. A variation order from its plastering sub-contractor in the sum of

$925.00;

259.3. A photo evidencing the completed work.

260. The Respondent has provided no bases for the proposed deduction.


$925.00.

Variation 49 – Fire rate columns to Level 5



263. The Respondent argues that the Claimant is entitled to payment for only

one column in the sum of $55.00 as the balance was work that should have

been performed under the contract.


265. The Claimant has been provided with a variation for this work from its

plastering sub-contractor in the sum of $1,295.00 for the fire rating of seven

steel columns on Level 5.

266. The Respondent has not provided me with any supporting material

whatsoever on this point.

267. I accept that there is no evidence that the Claimant has complied with its

obligations pursuant to clause 36 of the contract in relation to this and various

other variations. However, in my view, for the reasons I have previously

expressed, it could not reasonably be argued that the parties, through their

conduct, consistently applied the strict terms of the contract. I accept that the

Superintendent, in what must have been a very challenging role, has sought

to “do his best” under the circumstances. However, given the factual matrix

of the parties’ dealings with one another, I am not prepared to strike out a

variation claim because the Claimant did not comply with the strict terms of

clause 36 of the contract.

268. On balance, on the strength of the subcontractor’s variation, I prefer the

submissions of the Claimant. The Claimant is entitled to receive the sum of

$1,295.00.

Variation 50 – Steel wall fire rating to Level 5



270. The Respondent argues that the Claimant is entitled to nil monies as the

work should have been performed under the contract.


272. The Claimant has been provided with a variation for this work from its

plastering sub-contractor in the sum of $1,325.00 for the framing and fire

rating of a “small steel wall to the opening above Level 5 fire check ceiling.”

273. The Respondent has not provided me with any supporting material

whatsoever on this point.

274. On balance, on the strength of the subcontractor’s variation, I prefer the

submissions of the Claimant. The Claimant is entitled to receive the sum of

$1,325.00.

Variation 51 – Altitude room access panels and light boxes


276. The Respondent argues that the completed value of the variation would

have been $1,490.00 but Mr Real asserts that it is only 50% complete.

Therefore, the Respondent submits that the Claimant is only entitled to the

sum of $745.00.




278.2. A variation order from its plastering sub-contractor in the sum of

$1,490.00;


279. The Respondent has provided no bases for the proposed deduction.



$1,490.00.

Variation 52 – Level 5 kitchen wall, mez L1 air plenum


282. The Respondent argues that the Claimant is entitled to nil because it has

not provided supporting information for the Claim.


284. I have reviewed the Claimant’s subcontractor variation for this item and

compared the amended drawings provided by Mr Rule with the plans

contained in Exhibit PB-7 to the affidavit of Mr Botica. On reflection, I cannot

decipher the variation which is being claimed.

285. On balance, I agree with the Respondent’s submissions. I am of the view

there is insufficient evidence to establish an entitlement to this aspect of the

claim. To be clear, for the purposes of s.27(2) of the Act, I am not valuing this

work at nil or zero, I am simply not satisfied that the Claimant has established

its entitlement.

Variation 53 – Altitude room duct, bulkhead, ply ceiling

286. The Claimant seeks payment for this item in the sum of $550.00, being 4

hours labour for the A/C duct work and 6 hours labour to remove and replace

the ply sheeting in the gym.

287. The Respondent argues that the value of the claim is $55.00 based on 1

hour of work to complete the duct work. It rejected the claim for the bulkhead

and was unable to assess the claim for the ply ceiling.





289.2. A variation order from its plastering sub-contractor in part

evidencing the 10 hours claimed, in the sum of $550.00;


290. The Respondent has provided no supporting material for the proposed

deduction.

291. In the premises, on the strength of the evidence in the subcontractor’s

variation order, I am satisfied that the Claimant is entitled to the sum of

$550.00.

Variation 54 – WG12 highlight panel

292. The Claimant seeks payment for this item in the sum of $1,060.00, being

for aluminium cover plates to match internal window frames.

293. The Respondent rejects the claim and implies that the omission of the

plates was an error by the Claimant.


295. I have reviewed the variation order from Total Concept Group, the

Claimant’s glazing supplier and in my view, the amount claimed in the sum of

$1,060.00 pertains more to the reconfiguration of a window (WG-12) than it

does in relation to the provision of cover plates.

296. On balance, whilst drawing WD 3.02 Rev 6 does indicate the presence of

2 x steel columns to engineer’s details, that does not equate to the claimed

cost in my view. In the premises, I am not satisfied that the claimant has an

entitlement to the claimed amount. To be clear, for the purposes of s.27(2) of


the Act, I am not valuing this work at nil or zero, I am simply not satisfied that

the Claimant has established its entitlement.

Variation 55 – Sauna and steam room doors and highlights 297. The Claimant seeks payment for this item in the sum of $10,026.00, being

for additional doors, side light and highlight windows.

298. The Respondent rejects the claim. Mr Real in the schedule attached to

his affidavit argues that the doors and side light windows were part of the

original documentation and that the highlight panels were amended at the

Claimant’s request.



300.1. A direction dated 18 September 2009 from Mr Real that the

work be performed, together with a sketch diagram for the work.

However, I note that that sketch does not require glazed

highlight panels. Rather it specifies the use of villaboard;

300.2. A variation order from its supplier evidencing the additional cost

in the sum of $10,026.00;


301. The Respondent has provided no supporting material to substantiate its

submissions.

302. In the premises, I am satisfied that the Claimant was directed to supply

and install the amended design for the doors and side lights, however it

appears that the variation did not require the highlight panels to be glazed.

Whilst I have not been provided with a breakdown of the costs of each item, I

am satisfied that when taking into account the credit available for the


villaboard, it is appropriate to deduct a nominal sum for the glazed highlights

in the amount of $1,000.00.

303. In the premises, the Claimant is entitled to the sum of $9,026.00.

Variation 56 – One way film to gym office 304. The Claimant accepts the scheduled amount for this item in the sum of

$600.00.


Variation 57 – Gym storage room door schedule incorrect


$6,357.00, being for an amendment to the design of the doors in the storage

room of the gym. The Claimant has since reduced the claimed amount by

$1,200.00 to credit the cost of the original timber doors. Therefore, the

Claimant now seeks payment in the sum of $5,157.00.


his affidavit argues that the design of the doors was changed at the

Claimant’s request.





309.2. A photo evidencing the completed work;

309.3. But it did not provide a copy of the direction purportedly made

by Mr Real dated 18 September 2009.



submissions.

311. On balance, without evidence of Mr Real’s direction, I have no way of

knowing whether the work was performed at the request of the builder. I

accept that the work as it has been constructed would have been at a greater

cost to the Claimant, although I note that the cost as it has been presented in

the Total Concept Group variation order seems quite high, in my opinion. In

the premises, I am not satisfied that the Claimant has an entitlement to the

claimed amount. To be clear, for the purposes of s.27(2) of the Act, I am not

valuing this work at nil or zero, I am simply not satisfied that the Claimant has

established its entitlement.

Variation 58 – Media/production room double glazing



his affidavit argues that the double glazing has not been installed to the

production and media rooms.





315.2. A string of emails between the parties dated 17 July 2009.

However there is no evidence in those emails of an instruction

for double glazing.


submissions apart from two photographs of the glass which are not helpful.


317. In my view, the Claimant has provided no evidence that the work is a

variation. The fact that its supplier has provided it with a variation order does

not of itself prove that there is a variation to the contract between the

Claimant and the Respondent. In addition to this, the Claimant has not

satisfied me that the work has been performed.

318. In the premises, I am not satisfied that the Claimant has an entitlement to

the claimed amount. To be clear, for the purposes of s.27(2) of the Act, I am

not valuing this work at nil or zero, I am simply not satisfied that the Claimant

has established its entitlement.

Variation 59 – Glazed infills to offices - Deleted

319. The parties agree that this item is to be deleted.

Variation 60 – Walls and partitions - Deleted 320. The parties agree that this item is to be deleted.

Variation 61 – Curtain wall south side elevation (W102) 321. The Claimant seeks payment for this item in the sum of $19,332.00. It

argues that the architectural drawings are inconsistent in the number of

glazing panels to be installed to the south elevation of the works.


his affidavit argues that “where a discrepancy exists between documents, the

greater cost takes precedence.”






324.2. Copies of the relevant architectural drawings highlighting the

discrepancy; and

324.3. A photograph of the completed work showing a glass curtain

wall 11 modules wide.

325. The Claimant seeks to rely on clause 8.1 of the contract which provides

that “Figured [dimensions] are to prevail over scaled dimensions in a

discrepancy.”


submissions.

327. In my view, there is a discrepancy in the architectural drawings. WD10.01

Rev 3 provides figured dimensions showing the curtain wall to be 10 panels

wide whilst WD 10.02 Rev 5 shows 11 panels wide but there are no

dimensions on that elevation.

328. Mr Real’s has not provided me with any contractual basis for his

contention that the drawing (design) which costs greater should prevail.

329. In my view, clause 8.1 of the contract applies. In the premises, the

Claimant is entitled to the claimed amount in the sum of $19,332.00.

Variation 62 – Spa spandrel change

330. The Claimant seeks payment for this item in the sum of $527.00. It argues

that after this work had already been completed, Mr Real directed that the

colour of the spandrel panels be changed to beige royale.


his affidavit argues that the need for the work arose out of builder error.





in the sum of $527.00. However, the variation order also

includes the cost of changing the colour of the glass doors to

the sauna; and

333.2. A photograph of the completed work.


submissions.

335. The Claimant did not provide any documentary evidence of the instruction

purportedly issued by Mr Real. In the premises, I am not satisfied that the

claimant has an entitlement to the claimed amount. To be clear, for the

purposes of s.27(2) of the Act, I am not valuing this work at nil or zero, I am

simply not satisfied that the Claimant has established its entitlement.

Variation 63 – Angle trim to the external side of the altitude room 336. The Claimant seeks payment for this item in the sum of $800.00. It argues

that additional aluminium trim was required when the rehab/physio room was

later changed to become an “altitude room” to enable pressurisation of the

room.


his affidavit argues that the trim was part of the glazing system.




in the sum of $800.00; and

339.2. A photograph of the completed work.



submissions, nor does it challenge the Claimant’s assertion that the use of

the room was changed from being a Rehab/physio room to an “altitude room”

which I assume is akin to a hyperbaric chamber. The Claimant when it

costed the project could not have anticipated the requirement for additional

trim to ensure the pressurisation of the room.

341. In the absence of any meaningful submissions from the Respondent on

this issue, on balance, I agree with the submissions of the Claimant and find

that the Claimant is entitled to the sum of $800.00.

Variation 64 – Glass partitions to walls in level 1 lower offices - Deleted

342. The parties agree that this item is to be deleted.

Variation 65 – Concrete plinth in basement 343. The parties agree that the Claimant is entitled to the sum of $2,392.00.


Variation 66 – Level 5 kitchen changes - Deleted 345. The parties agree that this item is to be deleted.

Variation 67 – Pool fence gate - Deleted 346. The parties agree that this item is to be deleted.

Variation 68 – Joinery changes to player’s cabinets 347. The parties agree that the Claimant is entitled to the sum of $1,800.00.


Variation 69 – Level 5 doors 349. The Claimant originally sought payment for this item in the sum of

$12,229.27, being for an amendment to the design of the doors to the offices


on level 5. The Claimant has since reduced the claimed amount by

$2,966.09 to take into account its assessment that the work is only 76%

complete. Therefore, the Claimant now seeks payment in the sum of

$9,263.18.


his affidavit argues that the doors were not delivered to site.



352.1. An instruction from Mr Real dated 10 December 2009 varying

the size of the doors;

352.2. A quotation from its supplier evidencing the cost for the doors in

the sum of $10,489.87.

353. I accept the Claimant’s submissions that the doors are a special order and

cannot be returned to the supplier. The fact that they were not delivered to

site is immaterial in my view. The Claimant will still be liable to pay its

supplier for the doors.

354. There is no evidence, from either party as to whether there should have

been a credit due to the Respondent for the cost of the original doors. In the

absence of that submission from the Respondent I accept there must have

been some other arrangement in place.

355. On balance, I prefer the submissions of the Claimant. I am satisfied that

the Claimant is entitled to the sum of $9,263.18. However, once paid for, the

doors should be provided to the Respondent.


Additional Plumbing changes

356. The Claimant originally sought payment for this item as a lump sum of

$47,181.82. As I understand the Claimant’s position, it has now itemised this

part of the claim into 6 discrete claims [70(a) to 70(f)] now totaling

$21,666.00.

Variation 70(a) – 600 bend for stormwater 357. The Claimant seeks payment for this item in the sum of $318.00.

358. The Respondent via Mr Real, values the work at $200.00 because he

says the work is incomplete.



360.1. A quotation from its plumbing subcontractor evidencing the cost

for the work in the sum of $318.18.

361. There is no evidence that the work is incomplete. Mr Real’s photographs

on the CD do not, as best I can tell, reveal incomplete work for this item. In

the absence of more detailed submissions from the Respondent and on the

strength of the H & G Plumbing variation request, I accept that the Claimant is

entitled to the sum of $318.00.

Variation 70(b) – Changes to L5 ensuite 362. The Claimant seeks payment for this item in the sum of $1,941.00.

363. The Respondent via Mr Real, values the work at nil because he says it is

a “builder error”.



365. The Claimant provided evidence49


for the work in the sum of $1,940.91;

in the way of:

365.2. Its variation register for H & G Plumbing’s work dated 25

January 2010 indicating that the work was 100% complete.

366. There is no evidence that the work was performed due to an error

performed by the Claimant. If the Respondent wishes to pursue that type of

reasoning, it is incumbent upon it to provide some evidence to justify its

position. It has not.

367. In the absence of more detailed submissions from the Respondent and on

the strength of the H & G Plumbing variation request, I accept that the

Claimant is entitled to the sum of $1,941.00.

Variation 70(c) – Grease trap upgrade - Deleted 368. The parties agree that this item is to be deleted.

Variation 70(d) – Café works - Deleted 369. The parties agree that this item is to be deleted.

Variation 70(e) – Level 5 Kitchen works 370. The Claimant appears to have originally claimed the sum of $15,864.00

for this item but has since amended its claim to the sum of $8,000.00. The

Claimant has assessed its work as being 50% complete.

371. The Respondent via Mr Real, values the work at $5,000.00 because it is

incomplete.


49 Albeit in an unmarked Tab in Exhibit PB-6 to the affidavit of Paul Botica





373.2. Its variation register for G & G Plumbing’s work dated 25


374. Neither party has provided any substantial evidence as to the completion

stage of the work. However, on balance in the absence of more detailed

submissions from the Respondent, I accept that the Claimant is entitled to the

sum of $8,000.00.

Variation 70(f) - Hot water pipe work to Level 1 bar and cafe 375. The Claimant seeks payment for this item in the sum of $11,000.00.

376. The Respondent via Mr Real, values the work at $3,000.00 because he

asserts that there was a lack of supporting documentation and he was unable

to determine if the work was completed.





378.2. Its variation register for H & G Plumbing’s work dated 25


379. Neither party has provided any substantial evidence as to the completion

stage of the work. According to the Claimant’s payment schedule for H & G

Plumbing, the Claimant has approved payment to H & G Plumbing for this

item in the sum of $11,000.00.


380. On balance in the absence of more detailed submissions from the

Respondent, I accept that the Claimant is entitled to the sum of $11,000.00.

Additional pool works

381. The Claimant seeks payment for this item as a lump sum of $35,242.73.

The Respondent in Exhibit RR-1 to the affidavit of Mr Real has itemised this

part of the claim into 19 discrete claims [71(a) to 71(s)] totaling $35,243.00.

Accordingly I shall address each of them in turn.

Variation 71(a) – Extra footing 382. The Claimant seeks payment for this item in the sum of $2,000.00.

383. The Respondent via Mr Real, argues that the claim is unable to be

assessed due to lack of supporting information.



385.1. A tax invoice from its pool subcontractor evidencing the cost for

the work in the sum of $2,000.00.

386. In the absence of more detailed submissions or contrary evidence from

the Respondent and on the strength of the Pool FX invoice dated 18 February

2010, I accept that the Claimant is entitled to the sum of $2,000.00.

Variation 71(b) – Engineer’s Inspection 387. The Claimant seeks payment for this item in the sum of $436.00.

388. The Respondent via Mr Real, rejects the claim and argues that this item

was the Claimant’s responsibility.





the work in the sum of $436.00.

391. The Pool FX invoice dated 18 February 2010 reveals that the engineer’s

inspections were required because of “work stoppages due to no payments”.

In the premises, I agree with the Respondent. The payment of the Claimant’s

subcontractors is the Claimant’s responsibility, even if the Respondent has

not promptly or adequately paid the Claimant its accounts. I reject this claim.

Variation 71(c) – Foam replacement 392. The Claimant seeks payment for this item in the sum of $5,345.00.

393. The Respondent via Mr Real, rejects the claim and argues that this item

was the Claimant’s responsibility.





396. The Pool FX invoice dated 18 February 2010 reveals that the foam

replacement was required because of “work stoppages due to no payments”.

In the premises, I agree with the Respondent. The payment of the Claimant’s

subcontractors is the Claimant’s responsibility, even if the Respondent has

not promptly or adequately paid the Claimant its accounts. I reject this claim.

Variation 71(d) – Extra pipework 397. The Claimant seeks payment for this item in the sum of $636.00.










2010, I accept that the Claimant is entitled to the sum of $636.00.

Variation 71(e) – Extra booster pump 402. The Claimant seeks payment for this item in the sum of $4,000.00.







406. In this instance there has been no explanation for the requirement for the

additional pump. Without more information, it is impossible to determine the

merits of this claim. Without more substantiation, I am of the view that the

Respondent ought not have to pay for this item. To be clear for the purposes

of s.27(2) of the Act, I am not valuing this item at nil, I am simply not satisfied

that the Claimant is entitled to the amount claimed.


Variation 71(f) – Tile transport cost 407. The Claimant seeks payment for this item in the sum of $4,451.00.

408. The Respondent via Mr Real, rejects the claim and argues that the cost

cannot be substantiated.





411. The Pool FX invoice dated 18 February 2010 reveals that the cost arose

out of having to organise delivery from Sydney to Brisbane. On balance, I

agree with the submissions of the Respondent. Without more substantiation,

I am of the view that the Respondent ought not have to pay for this item. To

be clear for the purposes of s.27(2) of the Act, I am not valuing this item at nil,

I am simply not satisfied that the Claimant is entitled to the amount claimed.

Variation 71(g) – Expansion joint 412. The Claimant seeks payment for this item in the sum of $1,000.00.

413. The Respondent via Mr Real, rejects the claim and argues that an

expansion joint would have been required using the original tiles.






416. The Pool FX invoice dated 18 February 2010 reveals that the cost arose

out of having to install an expansion joint every 5 metres to comply with the

manufacturer’s specifications. I am of the view that it is more likely than not

that the original tiles would also have required a similar number of expansion

joints. However, without more information, it is impossible to determine the





Variation 71(h) – Depth marker 417. The parties agree that the Claimant is entitled to receive payment in the

sum of $800.00 for this item.


Variation 71(i) – Colour match grate 419. The Claimant seeks payment for this item in the sum of $773.00.

420. The Respondent via Mr Real, rejects the claim but provides no reason for

doing so.









Variation 71(j) – Cut tiles around lights 424. The Claimant seeks payment for this item in the sum of $391.00.

425. The Respondent via Mr Real, rejects the claim but provides no reason for

doing so.








Variation 71(k) – Extra tiles 429. The Claimant seeks payment for this item in the sum of $1,865.00.







433. In this instance there has been no explanation for the requirement for the

additional tiles. Without more information, it is impossible to determine the






Variation 71(l) – Hot water lines 434. The Claimant seeks payment for this item in the sum of $773.00.







438. The Pool FX invoice dated 18 February 2010 states that the work was

necessary because the heater position was not located on the plans. In the

absence of more detailed submissions or contrary evidence from the

Respondent, I accept that the Claimant is entitled to the sum of $773.00.

Variation 71(m) – Extra non-return valve 439. The Claimant seeks payment for this item in the sum of $527.00.









necessary because the filter position was not located on the plans. In the



Variation 71(n) – Anti flow pipes 444. The Claimant seeks payment for this item in the sum of $364.00.








necessary because these items were not located on the plans. In the



Variation 71(o) – 38 kw heater 449. The Claimant seeks payment for this item in the sum of $1,091.00.








453. In this instance there has been no adequate explanation for the

requirement for the larger size heater. Without more information, it is

impossible to determine the merits of this claim. Without more substantiation,

I am of the view that the Respondent ought not have to pay for this item. To

be clear for the purposes of s.27(2) of the Act, I am not valuing this item at nil,

I am simply not satisfied that the Claimant is entitled to the amount claimed.

Variation 71(p) – Extra core holes 454. The Claimant seeks payment for this item in the sum of $291.00.








requirement for the core holes. The specified heater would also have

required such core holes to have been drilled. Without more information I am

of the view that the Respondent ought not have to pay for this item. To be

clear for the purposes of s.27(2) of the Act, I am not valuing this item at nil, I

am simply not satisfied that the Claimant is entitled to the amount claimed.

Variation 71(q) – Extra Plinth 459. The Claimant seeks payment for this item in the sum of $1,727.00.









requirement for the work. Without more information I am of the view that the




Variation 71(r) – Hydraulic changes 464. The Claimant seeks payment for this item in the sum of $8,182.00.








requirement for the design changes. Without more information I am of the

view that the Respondent ought not have to pay for this item. To be clear for

the purposes of s.27(2) of the Act, I am not valuing this item at nil, I am simply

not satisfied that the Claimant is entitled to the amount claimed.


Variation 71(s) – Raise pool coping 469. The Claimant seeks payment for this item in the sum of $591.00.

470. The Respondent via Mr Real, rejects this claim on the basis that it is the

Claimant’s responsibility.






necessary to suit the tiled surrounds instead of the rubber matting. In the



Variation Summary

474. For the reasons I have expressed above and as detailed in Annexure C

attached hereto, I am satisfied that the Claimant is entitled to the sum of

$573,702.54 (excluding GST) for all of the variations listed therein. In my

view, although the parties are in dispute about whether the Claimant has

received payment for many of the individual variations, it is incumbent upon

the Respondent to provide some evidence that payment has been made.

Obviously, the Claimant cannot prove that it has not been paid, so in

instances where the issue is in dispute and where the Respondent has

provided no or insufficient evidence that the variation has been paid, I prefer

the Claimant’s submissions. In the premises, I am satisfied that the Claimant

has been paid the sum of $273,511.90 (excluding GST) for the variations

listed in Annexure C.


Value of Works Completed 475. I have calculated the value of the works performed to date according to

the following:

475.1. The adjudicated amount contained in $14,839,039.26

Annexure B:

475.2. The value of the variations contained in $ 573,702.54

Annexure C + GST: $ 57,370.25

475.3. Less value of variations paid as detailed $ - 273,511.90

In Annexure C - GST: $ - 27,351.19

Sub-total $15,169,248.96

Costs to complete

476. It is not entirely clear from the Respondent’s submissions whether it is

seeking to claim as a set-off the cost of completion of the works which it

estimates in the sum of $1,976,734.5050

. The Respondent does not

expressly make that submission, nor does it claim such in paragraph 21of the

Adjudication Response.

477. The Claimant in its Application submissions submits that the proper

valuation for the costs to complete is the sum of $1,220,758.41 as determined

in GMP Management’s assessment dated 27 January 2010.51

478. The Claimant also refers me to clause 39.6 of the contract and argues that

it does not apply because the Respondent did not take the work out of the

hands of the Claimant. I have already found that the Respondent did in fact

do as much on 3 February 2010. However, in my view, even if the

Respondent was seeking to set off the costs of completion (and I don’t think it

is), I would not allow it. When clause 39.6 is read in the context of clause

39.4, clause 39.6 does not operate to allow the Respondent to set-off such

50 See the cost estimate provided by the Reed Group at TAB ‘N’ of the Payment Schedule 51 See Exhibit AHS-49 to the affidavit of Simpson


completion costs where the contract has been terminated. No doubt,

assuming the contract was properly terminated, a matter of which I do not

have jurisdiction to determine, damages may flow from any losses incurred by

the Respondent (if any). Any such damages would need to be recovered in

another forum.

Retention Monies 479. Pursuant to Item 13 of Annexure Part A of the Contract, the Respondent is

entitled to retain 5% of each progress certificate until the limit of 5% of the

Contract Sum has been reached.

480. Item 13 (f) of Annexure Part A of the Contract requires that 100% of the

retention held must be released to the Claimant upon the works reaching

practical completion.

481. There is no evidence and I think it would be accepted that practical

completion has not been achieved.

482. The Claimant seeks to rely on s.67J of the Queensland Building Services

Authority Act 1991 (“QBSA Act”) to prevent the Respondent from withholding

the return of the retention monies.

483. However, I agree with the submissions of the Respondent on this point.

The Respondent took the work out of the hands of the Claimant by written

notice on or about 3 February 2010 and terminated the contract on or about

17 February 2010. Therefore, pursuant to s.67J(4)(a) of the QBSA Act, s.67J

does not apply.

484. It is not entirely clear to me just how much money is currently being held in

retention. That may be because of the way the contract has been

administered that not even the parties themselves are fully aware of it (I mean

no disrespect to Mr Real in that regard). However, notwithstanding that, in


my view the contract has not reached practical completion and neither party

has provided me with any authority to support how or when the retention

should be released. I do not consider it my role to assist the parties in that

regard. The Respondent may retain the retention monies held.

485. However, for the purposes of s.27(2) of the Act, I wish to make it clear that

my assessment of the retention monies is purely based on the Claimant’s

present entitlement. Clearly at some stage in the future, presumably when

the works have reached practical completion, the Claimant will be entitled to

their release, less any set-offs the Respondent may be able to justify (if any),

but that is not a matter which concerns me at this point in time.

Withholding payment 486. Both parties agree that pursuant to clause 38 of the contract, the

Respondent may withhold monies payable to the Claimant, until the Claimant

can satisfy the Superintendent of the monies due and payable to the

Claimant’s workers and subcontractors.

487. The Claimant, assumedly pursuant to clause 38.3(c) of the contract,

submits that the Respondent is entitled to withhold the sum of $1,809,688.15

and pay this amount directly to the subcontractors listed in Exhibit A to the

statutory declaration of Alexander Simpson contained in TAB ‘Q’ attached to

the Payment Claim.

488. However, the Respondent argues that there is evidence52

that some of the

Claimant’s subcontractors are owed greater sums than is alleged by the

Claimant and that in the case of Metro Tiles Tweed Heads no allowance has

been made for their alleged debt at all.

52 See the affidavit of Ronald Behlau dated 19 April 2010


489. The fact that a subcontractor of the Claimant has commenced

proceedings against the Claimant and/or the Respondent does not of itself

prove the debt is in fact and in law owing to the subcontractor. For instance,

the Claimant may have a valid set-off against some or even all of the

subcontractor’s claim(s).

490. As the Claimant has expressly authorised the Respondent to withhold the

sum of $1,809,688.15 and to pay its subcontractors directly in accordance

with the details in Mr Simpson’s affidavit attached to the Payment Claim, I am

of the view that it is not open to me to alter the amounts given by that express

authority assumedly made pursuant to clause 38.3(c) of the contract. If those

amounts are inadequate that is a matter to be determined in another forum.

Whilst s.26(2) of the Act permits me to inter alia take into account the

provisions of the contract, it does not53

permit me to take into consideration

the provisions of the Subcontractors’ Charges Act 1974.

491. For these reasons I am satisfied on the express direction of the Claimant54

and pursuant to clause 38.3(c) of the contract, that the Respondent is entitled

to withhold from the Claimant, the sum of $1,809,688.15. Those monies must

be paid directly to the Claimant’s subcontractors in accordance with the

Directions contained in Mr Simpson’s affidavit dated 9 March 2010 attached

to the Payment Claim. I do note however, that I am inclined to the view that

as an adjudicator I have no power to make such Orders under the Act. In the

premises, I have not deducted this sum from the Adjudicated Amount and it

will be incumbent upon the parties to ensure that the Respondent pays the

Claimant’s subcontractors from the withheld amount.

Amount Determined 492. Subject to my reasons above I am satisfied that the Claimant has:

53 Subject to s.4 of the Act, which does not apply in this instance 54 See paragraph 5.46 of the Claimant’s Application submissions


492.1. Performed the work the subject of the Payment Claim; and

492.2. Has not been paid the claimed amount.

493. Based on my reasons above I decide that the amount due to the Claimant

is calculated in the following manner:

Value of contract work performed to date as

detailed in Annexure B (including GST)

$14,839,039.26

Value of variations contained in Annexure C

(including GST)

$ 631,072.79

Less value of variations already paid as detailed

in Annexure C (including GST)

-$ 300,863.09

Sub-total $15,169,248.96

Less amount paid to date as detailed in

Annexure B (including GST)

-$12,492,029.58

Less Builder’s Equity -$ 0.00

Less Clawback Agreement -$ 447,006.39

TOTAL ADJUDICATED AMOUNT $ 2,230,212.9955

Due date for payment and Interest 494. Pursuant to s.26(1)(b) of the Act, I must determine when the adjudicated

amount is payable by the Respondent pursuant to s.15 of the Act.

495. The Claimant submits that the due date for payment was 24 March 2010.

496. The Respondent made no submissions on the matter.

497. Payment terms are contained within clause 37.2 of the contract. However,

for the reasons I have already expressed, clause 37.2 of the contract does

55 The Adjudicated amount must be read subject to my remarks in paragraph 491 herein


not provide for instances where the Superintendent has not issued a progress

certificate. In the premises, I am satisfied that the statutory provisions apply

namely, pursuant to s.15(1)(b) payment was due 10 business days after the

Payment Claim was served.

498. The Payment Claim was served on 10 March 2010. Therefore, the due

date for payment was 24 March 2010.

499. Section 26(1)(c) of the Act provides that I must also decide the rate of

interest payable on any amount.

500. When determining the rate of interest payable on the unpaid amount of a

progress payment that has become payable, reference must be had to

s.15(2) and where applicable s.15(3) of the Act.

501. Those provisions provide:

“(2) Subject to subsection (3), interest for a construction Contract is payable on the unpaid amount of a progress payment that has become payable at the greater of the following rates— (a) the rate prescribed under the Supreme Court Act 1995,

section 48(1) for debts under a judgment or order; (b) the rate specified under the Contract.

(3) For a construction Contract to which Queensland Building Services Authority Act 1991, section 67P applies because it is a building Contract, interest is payable at the penalty rate under that section.”

502. The Claimant submits that the contract was a “building contract” within the

meaning of that term in Part 4A of the QBSA Act.

503. The Respondent made no submissions on the issue.

504. I am satisfied that the contract falls within the definition of a “building

contract” as defined in s.67A of the QBSA Act because the works are


classified as “building work” as defined in Schedule 2 of the QBSA Act.

Therefore, I find that s.67P(3)(a) of the QBSA Act and correspondingly,

s15(3) of the Act applies.

Costs

505. Pursuant to s.34(3)(a) of the Act, the Claimant and Respondent are jointly

and severally liable to pay the fees of the ANA.

506. Pursuant to s.34(3)(b) of the Act, each party is liable to contribute to the

payment of the ANA’s fees in equal proportions unless otherwise decided by

me.

507. Pursuant to s. 35(2) of the Act, the Claimant and Respondent are jointly

and severally liable to pay the adjudicator’s fees and expenses.

508. Pursuant to s.35(3) of the Act, the Claimant and Respondent are each

liable to contribute to the payment of the adjudicator’s fees and expenses in

equal proportions unless otherwise decided by me.

509. Therefore, ss.34(3)(b) and 35(3) of the Act provide me with a discretion to

decide the proportion that the Claimant and the Respondent are liable to

contribute to the payment of the ANA’s fees and my fees and expenses.

510. In this case, the Claimant has been forced to make an application to

recover monies owing under the contract. The Claimant has been relatively

successful in its Application, although the respondent has managed to “claw

back” a not insignificant part of the claimed amount. I was greatly assisted in

my decision of what was a complex and difficult application by the well

prepared material and submissions of both parties’ lawyers for which I am

grateful.


511. On balance however, I believe this is an appropriate matter for me to

exercise my discretion. Taking all of the facts and circumstances surrounding

this Application into account, I decide that the Respondent is 75% liable and

the Claimant is 25% liable for the payment of the ANA’s fees and the

Adjudicator’s fees and expenses pursuant to ss.34 and 35 of the Act.

Mr Andrew Wallace, Adjudicator

14 May 2010

Resoluing Bulldtng and CoflstrucUon l)tsPures

FffiTO:

CC:

TO:

CC:

FROM:

DATE:

SUBJEGT:

NO OF PAGES:

URGENT FAXSawford Voll Lawyers IAttn: Crystal Ray07 323|J Z52S

Simcorp Developments and Constructions Pty LtdAttn: Alex Simpson07 5569 2453

Nyst LawyersAttn: Ashley Tiplady07 s57r 0949

Gold Coast Titans (Property) Pty Ltd as trustee for GoldCoast NRL Propefty TrustAttn: Michael Searle07 5581 0199

' Lorraine Djuricin

23 Apri l 2010

Adjudication Application 1057877 -L453 - SimcorpDevelopments and Constructions Pty Ltd and Gold CbastTitans (Property) Pty Ltd as trustee for Gold Coast NRLProperty Trust

2 (inc cover sheet)

MESSAGE:

Dear Madam and Sir

We refer to the above mentioned matter and acknowledge receipt of correspondencefrom Nyst Lawyers dated 22 April 2010, We confirm the correspondence was forwardedthe Adjudicator, Andrew Wallace.

The Adjudicator makes the following comments: .i

"I am in receipt of correspondence from the Respondent's solicitors dated 22 April2010. In that correspondence, I am advised that an Application for declaratoryand injunctive relief has been made to the Supreme Court seeking certain ordersregarding the validity of the Payment Claim and the Adjudication Application. Iam told that his Honour Douglas J's decision has been reserved.

I am cognisant of the costs involved in such an application and the costs.involvedin the adjudication process and in my view I am satisfied that it is appropriate

ADJUDICATE TODAY PTY LTD ABI{ 39 109 605 O21Level lE, 333 Ann Street BRISBANE QLD 4O0O

"n "" "i l'"?uo i'l%3?i,;'lxaf'""1 7 60 22o

The information Contrlned In thls f!3clmll€ message and any atta€hed docum€nt3 may bc confldcntial lnformation' and may also b€

iir" "uoti.i "f

rccat professionii piiritlge, tf you are_ not the intended re.lplent, any u3e, dlaclotule ol coeviry- ?f_tl{t-f:sclmlle 13-'' - - - 'tjnauthoiisjO. ft you have recelved tli,ls fascimlle In error, please notify the sender lmmedlatcly on 1300 760 297

that the adjudication process be "suspended" unti l such t ime as his Honourmakes a decision on the merits of the application before him, although I note thatno interim injunction appears to have been made which would otherwise restrainme from making my decision. I have made that decision on the basis that theRespondent's solicitors have sought agreement from the solicitors acting for theClaimant and that "they (Sawford Voll Lawyers) have responded that their clientwil l be guided by any request for an extension of t ime made by the adjudicator,"

In that regard and relying on the information contained in the solicitors for theRespondent's correspondence dated 22 April2010, I urgently seek the partiesagreement in writing to the following request for an extension of time to makemy decision, pursuant to s.25(3)(b) of the Building and Construction IndustryPayments Act 2004:

Unless a further extension of time is granted by the parties, which extension shallnot be unreasonably withheld, my decision shall be due on or before 15 businessdays after the date of the Claimant providing me with a copy of Douglas J'sdecision in the application for declaratory and injunctive relief in the event thathis Honour upholds the validity of the Adjudication Application and Payment Claim1 3 .

I have specifically stated "Unless a further extension of time is grant'ed by thepart ies, which extension shall not be unreasonably withheld .. ." because, as I amsure the parties would understand, I cannot lay in wait for his Honour's decisionand immediately drop al l of my other work commitments i f a decision is made infavour of the Claimant. I t is l ikely that I wil l be able to complete the decision inthe 15 business days, but of course I cannot be restrained from accepting otherapplications and briefs in the meantime.

I require the parties' consent to the abovementioned timeframes by no later than12:0O midday 27 APrilzOtO."

Thank you for your cooperation,

ADJUDICATE TODAY PTY LTD ABN 39 109 605 O21Level 18,333 Ann Street BRISBANE QLD 4OO0

Phone: 13OO 760 297' Fax: 13OO 760 22OEmai l : q [email protected]

The informltlon contained h thls fascimile message and any attach€d documents may be confidential Information, and may also be-iir"

"uOi".i of r"gal proressionai piiuii"s.. rf wu_".€_ n?l tlre Intended reclpl€nt, any us€, dlsclosure or copvlng ol this fascimile i8

unauthoris€d, rr yo, tti Je iecejved ttits tascimlle in error, plcase notify the sender immedaately on 1300 760 297

Yours sincere

ANNEXURE BGMP Claim Date of Claim Amount of Claim

Scheduled Amount

Amount Paid by Respondent

Adjudicated Amount

1 7 January 2009 1,984,483.15$ N/A 1,029,560.58$ 1,029,560.58$ 2 30 January 2009 853,681.02$ 853,681.02$ 853,681.02$ 3 22 March 2009 937,925.71$ 937,925.71$ 937,925.71$ 4 29 May 2009 1,167,608.20$ N/A 533,135.39$ 1,167,608.20$ 5 2 July 2009 1,485,257.40$ N/A 708,275.56$ 1,485,257.40$ 6 30 July 2009 1,220,227.47$ N/A 1,109,297.70$ 1,220,227.47$ 7 2 September 2009 1,783,887.63$ 1,877,777.00$ 1,621,716.03$ 1,783,887.63$ 8 30 September 2009 1,107,827.60$ 1,166,133.00$ 965,015.59$ 1,107,827.15$ 9 29 October 2009 1,677,050.10$ 1,834,076.00$ 1,494,500.00$ 1,677,050.10$

10 1 December 2009 1,297,334.80$ 1,391,976.00$ 1,149,395.00$ 1,297,334.80$ 11 21 December 2009 1,179,429.54$ Not known 1,072,209.00$ 1,179,429.54$

DECVAR 17 December 2009 307,097.38$ Not known 198,000.00$ 198,000.00$ 12 27 January 2010 901,249.66$ 948,682.00$ 819,318.00$ 901,249.66$

Totals 15,903,059.66$ 12,492,029.58$ 14,839,039.26$

ANNEXURE C

Original Claimed Amount

Amended Claimed Amount

Scheduled Amount

Amount Allegedly

Paid By CBA

Amount Allegedly Paid By Titans

Adjudicated Amount

Amount found to have been paid to date

1

Structural steel to pool roof $ 26,160.75 26,160.75$ 20,000.00$ 26,160.00$ $26,160.75 $26,160.00

2

Changes to fitout of Ground Floor and Level 1 $ 153,052.35 153,052.35$ 120,000.00$ 153,052.00$ $137,747.12 $153,052.00

3

Mosaic tiles to exterior pool wall $ 14,878.50 14,878.50$ 14,878.00$ 14,878.00$ $14,878.50 $14,878.00

4

Otis lift storage costs $ 14,500.00 14,500.00$ 14,500.00$ 14,500.00$ $14,500.00 $14,500.00

5

Steel support frames to pool sunshading $ 3,444.90 4,345.00$ 4,345.00$ 4,345.00$ $4,345.00 $4,344.90

6

Power reticulation to pool equipment $ 7,507.50 7,507.50$ 7,507.00$ 7,507.00$ $7,507.50 ?

7 deleted

8

Pool tiles upgrade from original allowance $ 80,000.00 64,500.00$ 64,500.00$ 64,500.00$ $64,500.00 ?

Variation

9Cabinet work and joinery $ 171,490.00 70,205.00$ 70,205.00$ 70,205.00$ $70,205.00 ?

10

Anti graffiti coating to mosaic tiles $ 1,188.00 1,188.00$ 1,188.00$ 1,188.00$ $1,188.00 ?

11 deleted

12Roof plant area screen $ 7,109.98 3,300.00$ 3,300.00$ 7,110.00$ $3,300.00 $7,180.00

13Pool plant area fence $ 4,889.50 2,200.00$ 2,200.00$ 2,200.00$ $2,200.00 ?

14 deleted

15

Deletion of partitions to Level 2,3,4 20,235.00-$ 20,235.00-$ -$20,235.00

16

Additional Aircon to Level 4 $ 5,159.00 5,159.00$ 4,690.00$ 4,690.00$ $5,159.00 ?

17

Extra height windows to southside $ 2,486.00 2,486.00$ -$ 2,486.00$ $2,113.10 $2,486.00

18Pool ceiling flashing $ 1,064.80 1,064.00$ -$ 1,065.00$ $1,064.00 $1,064.00

19Window W126 $ 11,462.00 11,462.00$ 8,000.00$ 11,462.00$ $11,462.00 $11,462.00

20 Tiled foyer $ 15,000.00 13,870.00$ 13,870.00$ 13,870.00$ $13,870.00 ?

21

Additional plumbing works $ 47,433.00 38,385.00$ 10,985.00$ 38,385.00$ $38,385.00 $38,385.00

22

Additional power to server room $ 1,403.60 1,403.60$ 1,160.00$ 1,160.00$ $1,276.00 ?

23

New Aircon Ground Floor tenancy $ 29,190.00 -$ -$ -$ $0.00 $0.00

24

Fitting security strikes to door frames Basement and Ground Floor $ 1,054.00 1,054.00$ 1,054.00$ 1,054.00$ $1,054.00 ?

25

Multi coloured concrete to driveway and parking area -$ -$ $0.00 $0.00

26

Alternations to kitchen Level 1 $ 11,605.00 10,444.50$ 8,124.00$ 6,000.00$ $8,124.00 ?

27Cafe alterations $ 21,294.00 17,652.60$ 11,000.00$ 9,000.00$ $14,710.50 ?

28

Power and data to L5, fibre optoic to Level 1 and Ground $ 23,190.00 19,711.50$ 10,753.00$ 10,753.00$ $11,595.00 ?

29

Reception desk, wall and floor $ 4,495.00 4,495.00$ 4,495.00$ 3,173.00$ $4,495.00 ?

30 Carpet to L5 $ 29,100.00 -$ -$ $0.00

31

Cafe wall and concrete floor $ 12,000.00 4,700.00$ 3,700.00$ 2,700.00$ $4,700.00 ?

32 Deleted $0.00

33Lighting to Level 5 $ 6,215.00 5,282.75$ 3,390.00$ $3,729.00 $0.00

34

Partitions and flush ceiling to Level 5 $ 34,004.00 29,923.53$ 22,103.00$ $25,503.00 $0.00

35

Media centre power and special cabling $ 12,336.50 10,979.49$ 6,600.00$ $10,979.49 $0.00

36

Airconditioning to altitude room $ 4,380.00 4,380.00$ 3,504.00$ $4,380.00 $0.00

37

reception and cafe stone facing $ 15,900.00 -$ -$ $0.00 $0.00

38Lay cafe floor tiles $ 1,912.00 1,816.40$ 1,338.00$ $1,816.40 $0.00

39

Door hardware Level 5 $ 3,690.75 1,845.38$ -$ Not Valued

40

Fitting security strikes to door frames Level 5 $ 363.00 363.00$ -$ $363.00 $0.00

41

Sanitary fixture supply to Level 5 ensuite $ 12,917.00 -$ -$ $0.00 $0.00

42

Painting Level 5, media room and Ground Floor foyer $ 37,300.00 3,800.00$ 3,800.00$ $3,800.00 $0.00

43 Deleted

44

Glazed partitions to Level 5 $ 46,950.00 4,695.00$ 940.00$ $940.00 $0.00

45New light to Md office $ 990.00 495.00$ -$ $495.00 $0.00

46

Wall to conceal pipes in strapping room $ 295.00 295.00$ 295.00$ $295.00 $0.00

47

Wall to conceal pipes in Level 1 $ 185.00 185.00$ 185.00$ $185.00 $0.00

48Dwarf wall to cafe $ 925.00 925.00$ 740.00$ $925.00 $0.00

49Fire columns to Level 5 $ 1,295.00 1,295.00$ 55.00$ $1,295.00 $0.00

50

Fire rate steel wall Level 5 $ 1,325.00 1,325.00$ -$ $1,325.00 $0.00

51

Altitude room access panel and light boxes $ 1,490.00 1,490.00$ 745.00$ $1,490.00 $0.00

52

Additional partition works $ 1,905.00 1,905.00$ -$ Not valued

53

Altitude room duct, bulkhead, ply ceiling $ 550.00 550.00$ 55.00$ $550.00 $0.00

54

WG12 highlight panel $ 1,060.00 1,060.00$ -$ Not valued

55

Sauna and steam room doors and highlights $ 10,026.00 10,026.00$ -$ $9,026.00 $0.00

56

Glazing to head trainer office $ 4,260.00 600.00$ 600.00$ $600.00 $0.00

57Gym storage room doors $ 6,357.00 5,157.00$ -$ Not valued

58

Double glazing to media and production rooms $ 7,043.00 7,043.00$ -$ Not valued

59Glazed infills to office $ 500.00 -$ -$ $0.00

60 Deleted61 W102 $ 19,332.00 19,332.00$ -$ $19,332.00 $0.00

62Spa spandrel change $ 527.00 527.00$ -$ Not valued

63Trim to altitude room $ 800.00 800.00$ -$ $800.00

64Glass partition $ 520.00 -$ -$ $0.00 $0.00

65

Concrete plinth in basement $ 2,392.00 2,392.00$ 2,392.00$ $2,392.00 $0.00

66

Level 5 kitchen changes $ 2,770.00 -$ -$ $0.00 $0.00

67 Pool fence $ 2,414.50 -$ -$ $0.00 $0.00

68

Changes to backpack cabinet $ 1,800.00 1,800.00$ 1,800.00$ $1,800.00 $0.00

69Doors for Level 5 $ 12,229.97 9,263.18$ -$ $9,263.18 $0.00

70

Additional plumbing changes $ 47,181.82

70 (a)600 bend for stormwater 318.00$ 200.00$ $318.00 $0.00

70 (b)Changes to L5 ensuite 1,941.00$ -$ $1,941.00 $0.00

70 (c)Greasetrap upgrade -$ -$ $0.00 $0.00

70 (d) Cafe works -$ -$ $0.00 $0.00

70 (e)

Level 5 kitchen works 8,000.00$ 5,000.00$ $8,000.00 $0.00

70 (f)

Hot water pipes to L1 bar and cafe 11,000.00$ 3,000.00$ $11,000.00 $0.00

71Additional pool works $ 35,242.73

71 (a) Extra footing 2,000.00$ -$ $2,000.00 $0.00

71 (b)Engineer inspection 436.00$ -$ $0.00 $0.00

71 (c)Foam replacement 5,345.00$ -$ $0.00 $0.00

71 (d)Extra pipe work 636.00$ -$ $636.00 $0.00

71 (e)

Extra booster pump 4,000.00$ -$ Not valued

71 (f)Tile transport cost 4,451.00$ -$ Not valued

71 (g)Expansion joint 1,000.00$ -$ Not valued

71 (h)Depth marker 800.00$ 800.00$ $800.00 $0.00

71 (i)Colour match grate 773.00$ -$ $773.00 $0.00

71 (j)Cut tiles around lights 391.00$ -$ $391.00 $0.00

71 (k) Extra tiles 1,865.00$ -$ Not valued

71 (l)Hot water lines 773.00$ -$ $773.00 $0.00

71 (m)Extra non return value 527.00$ -$ $527.00 $0.00

71 (n)Anti flow pipes 364.00$ -$ $364.00 $0.00

71 (o)38 KW heater 1,091.00$ -$ Not valued

71 (p)Extra core holes 291.00$ -$ Not valued

71 (q) Extra plinth 1,727.00$ -$ Not valued

71 (r)Hydraulic changes 8,182.00$ -$ Not valued

71 (s)Raise pools coping 591.00$ -$ $591.00 $0.00

$ 1,039,542.15 659,542.03$ 437,761.00$ 273,443.00$ 198,000.00$ $573,702.54 $273,511.90

NOTE "?" DENOTES WHERE THE AMOUNT ALLEGED TO HAVE BEEN PAID IS CONTESTED

Total

Respondent: Gold Coast Titans (Property) Pty Ltd ATF Gold Coast

Documents