Dart Holdings Pty Ltd v Total Concept Group Pty Ltd and Ors [2012] QSC 158 (22 June 2012)
Last Updated: 29 June 2012
SUPREME COURT OF QUEENSLAND
CITATION: Dart Holdings Pty Ltd v Total Concept Group Pty Ltd and Ors
[2012] QSC 158
PARTIES: DART HOLDINGS PTY LTD TRADING AS A DART & CO (ABN 85 009 848 122)
(Plaintiff)
v
TOTAL CONCEPT GROUP PTY LTD (ACN 114 572 486)
(First Defendant)
and
RICS DISPUTE RESOLUTION SERVICE (ABN 18 089 973 067)
(Second Defendant)
and
ALAN STAPLETON
(Third Defendant) FILE NO/S: BS 4631 of 2010
DIVISION: Trial Division
PROCEEDING: Trial
ORIGINATING COURT:
Supreme Court
DELIVERED ON: 22 June 2012
DELIVERED AT: Brisbane
HEARING DATE: 13 and 14 June 2012
JUDGE: McMurdo J ORDER: It is declared that:
1. When entering into the contract pleaded in paragraph 3 of
the statement of claim and paragraph 4 of the defence, the first defendant was not the holder of a contractor’s licence of an appropriate class under the Queensland Building Services Authority Act 1991 (Qld) in order to carry out the building work described in cl 13.30 of the Schedule to that contract.
2. At no time was the first defendant the holder of a licence under that Act entitling it to perform the work the subject of its claimed variation 50 as pleaded in paragraph 6(b)(iv) of the statement of claim.
3. The first defendant entered into the Contract in breach of s
42(1) of that Act.
4. The first defendant had no contractual entitlement to be paid any consideration for any of the work the subject of the Contract (as originally made or as varied).
5. The first defendant was not entitled to make a payment claim under the Building and Construction Industry Payments Act 2004 Qld) for any of the work the subject of the Contract (as originally made or as varied).
CATCHWORDS: CONTRACTS – BUILDING , ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – LEGALITY
– where the plaintiff engaged the first defendant as a
subcontractor to supply and install certain items, largely made of glass – where an adjudicator decided that the plaintiff was to pay the first defendant the money it claimed under the Building and Construction Industry Payments Act 2004 – where the plaintiff challenges that adjudication on the basis that the Contact was not enforceable because it required the first defendant to perform work for which it was not duly licensed under the Queensland Building Services Authority Act
1991 – whether the first defendant was duly licensed to perform the work it was required to perform by the Contract CONTRACTS – BUILDING , ENGINEERING AND RELATED CONTRACTS – REMUNERATION – RECOVERY – where the plaintiff claims that if any part of the work which the first defendant was required to perform under the Contact was work for which it was unlicensed, then none of the Contact is enforceable by it and it is unable to claim the lump sum price of the Contact – where the first defendant relies upon the severability clause of the Contract to sever the clause requiring the work to be performed for which it is unlicensed –
whether the clause requiring the first defendant to perform work for which it is unlicensed can be severed from the remainder of the Contract, allowing it to recover the moneys owing to it for the work lawfully performed under its licence
Building and Construction Industry Payments Act 2004
(Qld) s 31
Queensland Building Services Authority Act 1991
(Qld),s 42
Queensland Building Services Authority Regulation
2003 (Qld)
The Australian Concise Oxford Dictionary
The Macquarie Dictionary
Cant Contracting Pty Ltd v Casella [2006] QCA 538 ; [2007] 2
Qd R 13 , cited
GEC Marconi Systems Pty Ltd v BHP Information Technology
Pty Ltd [2003] FCA 50 , cited
Hopkins v Prescott [1847] EngR 573 ; 4 CB 578 , cited
McFarlane v Daniell (1938) 38 SR (NSW) 337 , considered
Sutton v Zullo Enterprises Pty Ltd [2000] 2 Qd R 196 , considered
COUNSEL: G Beacham for the applicant
M H Hindman for the first respondent
No appearance from the second respondent
No appearance from the third respondent
SOLICITORS: Holding Redlich for the applicant
Saal and Associates for the first respondent
[1] The plaintiff was engaged to perform some of the construction of a building on the corner of Turbot and George Streets, Brisbane. In turn, the plaintiff engaged the first defendant (which I will call the defendant) as its subcontractor. The plaintiff and the defendant thereby made a contract in September 2008, under which the defendant was to supply and install certain items, largely made of glass, for a lump sum of $1,377,410
(“the Contract”).
[2] On 2 February 2010, the defendant served on the plaintiff a payment claim under the
Building and Construction Industry Payments Act 2004 (Qld) (“the Payments
Act”). The amount claimed was $208,767.74 which was calculated by adding to the lump sum price an amount of $816,049 for variations and subtracting an amount for retentions of $55,211.89 and the amount of previous payments made to the defendant which totalled
$1,963,474.90. This left a balance of $189,788.86 which became the amount claimed
with the addition of GST.
[3] The plaintiff delivered a payment schedule which disputed the whole of this claim. The defendant made an adjudication application to the second defendant and the third defendant became the adjudicator. On 23 March 2010, the adjudicator decided that the plaintiff should pay the defendant the sum of $141,174.44 inclusive of GST.
[4] On 7 April 2010, the defendant obtained a judgment under s 31 of the Payments Act in reliance upon that adjudication decision. On 7 May 2010, the plaintiff commenced these proceedings, seeking a declaration that the adjudicator’s decision was void and orders for the setting aside of his decision and the repayment of any sums paid by the plaintiff by reason of it. The plaintiff did not prosecute these proceedings until about May
2011. By the defendant’s counterclaim, the issues now extend beyond the question raised by the plaintiff, that is to say the validity of the adjudication.
[5] The adjudication is challenged by the plaintiff upon the basis that the Contract was not enforceable, at least by the defendant, because the Contract required the defendant to perform building work for which it was not duly licensed under the Queensland Building Services Authority Act 1991 (Qld) (“the QBSA Act”). In
Sutton v Zullo Enterprises Pty Ltd, McPherson JA, with whom Jones J agreed, held that a contract made in contravention of s 42(1) is unenforceable, at least by the person not appropriately licensed. [1] If the Contract is unenforceable by the defendant for that reason, it follows that the Payments Act did not apply and the adjudicator’s decision was made beyond power and should be given no effect: Cant Contracting Pty Ltd v
Casella. [2]
[6] At all material times the defendant held two licences under the QBSA Act. It held a “ Building -low Rise” licence and a “Carpentry” licence. Before the adjudicator, the plaintiff argued that neither licence authorised the performance of all of the work
required by the Contract. The adjudicator upheld that argument as to the Carpentry licence but decided that the work was authorised under the other licence. The defendant now concedes that the adjudicator was wrong in that respect. It relies only upon its Carpentry licence.
[7] With the consent of the parties, it was ordered that there be a preliminary trial of the questions defined by certain paragraphs of the statement of claim and the defence. This judgment determines those questions. They concern whether any item of work required by the Contract was not within the scope of what was authorised by the defendant’s Carpentry licence.
[8] The Contract required the defendant to supply and install various items within the ground floor and the three levels above it within this building . The work was
described in cl 13 of a schedule to the Contract, where the relevant items, that is to say the work for which the defendant was unlicensed, were described as follows:
“ 13. Shopfronts, Windows, Doors & Screens Specific Requirements
The extent of the subcontract work shall include, but not limited to the following:
...
13.3 Allow for the supply and installation of aluminium framed & glazed window and door systems, including all necessary angles, fixings and fittings, flashings, sills and sub- sills, sub-frames, trimmings, caulking and sealing on completion to the specified areas.
...
13.19 Frameless glazed automatic sliding doors to Entry Foyer including supply and installation of auto door operators.
...
13.21 Glazed shopfronts to George Street ground level tenancies.
...
13.23 Full height glazing to Ground Floor light box.
13.24 Glazed shopfronts to Turbot Street ground level foyer and café area.
13.25 Full height framed glazed windows and doors to Level 3 terrace.
...
13.28 Level 1 Food Hall multi-fold doors with glazing over with S/S patch fittings.
...
13.30 Glazing to George and Turbot Street steel frame awnings (frame by others).
...
13.32 All other aluminium framed and glazed windows, doors and shopfronts as may be documented in the tender documents.
...”
[9] The plaintiff also alleges that some of the work within the variations, as claimed by the defendant, was outside the defendant’s licence. Those items, as described in the statement of claim, [3] are as follows:
“(i) Variation 114 – additional costs for smoke baffles, brackets where window extend under the slab and additional brackets to support mullions at top of windows;
(ii) Variation 106 – reinforcing mullions to create structural glazed element to support jamb between window frame and column;
(iii) Variation 49 – changing window to frameless structural glazing and stiffening aluminium mullions to create structural window support frame;
(iv) Variation 50 – supply and install glass awning including design, engineering, fabrication, etc;
(v) Variation 21 – changing window to frameless structural glazing; and
(vi) Variation 121 – supply and install smoke baffles, custom window head and sill brackets and additional engineering and drafting to design support for the stiffened window mullions.”
[10] Section 42 of the QBSA Act provides, in part, as follows:
“(1) A person must not carry out, or undertake to carry out, building work unless that person holds a contractor’s licence of the appropriate class under this Act.”
The term “ building work” is defined within Schedule 2 to the QBSA Act as including:
“(a) the erection or construction of a building ; ...” Section 30 of the QBSA Act provides, in part, as follows:
“(1) A licence (a contractor’s licence) may be issued authorising the licensee – (a) to carry out all classes of building work; or
(b) to carry out building work of 1 or more classes specified in the licence.
(2) Contractors’ licences are to be divided into classes by regulation –
(a) according to whether the licence relates to all classes of building work or is limited to a specified class or specified classes of building work; and
(b) if the licence is limited to a specified class, or specified classes, of building
work – according to the class or classes of building work to which it relates.
(3) A contractor’s licence may be issued for any class of licence.”
[11] The Queensland Building Services Authority Regulation 2003 (Qld) provides for some 56 classes of licence and the necessary qualifications for the various classes. A Carpentry licence is the subject of Part 16 of Schedule 2 of Division 3 of the Regulation, which at the relevant time, provided in part as follows:
“ Part 16 Carpentry licence
1 Licence class
Carpentry
2 Scope of work
(1) Construct and erect timber and steel wall framing and roof structures. (2) Construct and erect non-load bearing internal partition walls.
(3) Install windows and doors including framing. (4) Erect ceiling and subfloor framing.
(5) Install timber and sheet flooring.
(6) Install exterior cladding, fascias and soffits. (7) Install metal roofing.
(8) Construct timber stairs.
(9) Fix internal linings, panelling and mouldings. (10) Install door and window locks and furniture.
(11) Restore and renovate doors, windows and frames. (12) Install fitments.
(13) Concreting to simple forms, including install formwork, reinforcement and concrete. (14) Erect and strip formwork, including slip form and jump form formwork.
(15) Incidental work of another class.
3 Technical qualifications
Any 1 of the following –
(a) successful completion of either of the following courses – (i) apprenticeship in carpentry;
(ii) Certificate III in Carpentry BCG30203;
(b) successful completion of a course the authority considers is at least equivalent to a course mentioned in paragraph (a);
(c) a recognition certificate as a qualified carpenter;
(d) a qualification or statement of attainment of required competency issued by an approved authority for the class of licence.”
[12] The plaintiff argues that this work was instead within the scope of that licence described as a “Glass, Glazing and Aluminium licence” (which I will call a “glazing licence”), for which Part 34 within the Regulation provides as follows:
“ Part 34 Glass, glazing and aluminium
1 Licence class
Glass, glazing and aluminium.
2 Scope of work
(1) Glaze and reglaze buildings .
(2) Fabricate and install windows and doors in buildings .
(3) Fabricate and install shower screens and metal framed sliding wardrobe doors whether mirrored or otherwise.
(4) Fabricate and install security screens and doors.
(5) Fabricate, install and reglaze commercial glazing including shopfronts, windows, doors, toughened glass assemblies, aluminium glazing systems, curtain walling systems, balustrading and watertight glazing.
(6) Fabricate and install fixed mirrors.
(7) Fabricate, install and reglaze architectural engineered glazing including suspended and overhead glazing and structural balustrading.
(8) Construct and repair leadlight panels.
(9) Apply film patterns and designs to glass. (10) Incidental work of another class.
3 Technical qualifications
Any 1 of the following -
(a) successful completion of either of the following courses - (i) an apprenticeship in glass and glazing;
(ii) Certificate III in Glass and Glazing LMF30602;
(b) successful completion of a course the authority considers is at least equivalent to a course mentioned in paragraph (a);
(c) a recognition certificate as a qualified glazier;
(d) a qualification or statement of attainment of required competency issued by an approved authority for the class of licence.”
[13] The plaintiff does not suggest that the respective scopes of work for these licences are mutually exclusive. It concedes that in some circumstances, certain work might be authorised by each licence. But it argues that the terms of Part 34 are relevant in the interpretation of Part 16 and that they tend to confirm what the plaintiff suggests is the natural meaning of words and expressions within Part 16.
[14] It is necessary then to consider each item of work against the scope of works authorised by a Carpentry licence. Before doing so, however, I will discuss some more general points raised by the submissions.
[15] The first is the defendant’s argument that it is not what was required by the Contract, but what was the work actually performed by the defendant, which is relevant in the comparison of that work with the scope of what was permitted by the licence. This is said to follow from s 42(3) of the QBSA Act, which provides that subject to s 42(4), a person who carries out building work in contravention of s 42(1) is not entitled to any monetary or other consideration for doing so. Section 42(4) provides for the recovery of some limited remuneration for the performance of unlicensed building work, although in no case more than the amount agreed to, or purportedly agreed to, between
the parties. The defendant is correct in submitting that it is the work actually performed
which is relevant for the purposes of s 42(3) and s 42(4). But the present question, as defined by the pleadings, is whether the Contract required the performance of work for which the defendant was not licensed. If the plaintiff can prove that the defendant, by the Contract, undertook to perform unlicensed work so that the Contract was unenforceable, then it would follow that the Payments Act did not apply and the adjudication was of no effect.
[16] Therefore, the present enquiry concerns the work which was agreed to be performed rather than that which was performed. The difference, however, does not appear to be significant. The defendant’s submissions refer to an item of work within the Contract which was subsequently deleted by the agreement of the parties. [4] The respective arguments did not address that item of work against the Carpentry licence. It is irrelevant because the Contract, as varied, did not require it. Otherwise, the defendant’s submissions did not identify any significant difference between the work agreed to be performed (including by a variation to the Contract) and that which was performed. The evidence of the work as performed, and in particular the photographic evidence of that work as completed, is therefore relevant.
[17] The next of these general issues is the relevance of the prescribed qualifications for a Carpentry licence and the evidence of the content of the course prescribed in Part 16 as a “Certificate III in Carpentry BCG30208”. The defendant led evidence as to the content of that course in order to demonstrate that a person who had completed the course would have received adequate training to perform the work in question. I accept that because
Part 16 must be read as a whole, there is some relevance in its requirements for technical
qualifications to the question of the scope of work authorised by the licence. However, I do not accept that this should affect the meaning of words or expressions within the 15 items which define the scope of the work, if those words have a clear meaning.
[18] The evidence as to these courses was provided within the affidavits of two witnesses and the oral evidence of a third witness, who is Mr Boyle, the Executive Manager of Regulatory and Resolution Services at the Queensland Building Services
Authority. One affidavit was by an apprentice carpenter, who said that during his training he received instruction in and had been required to demonstrate knowledge of and competency in the various types of glass and their suitability for various applications, the manufacturing and installation of doors and windows, the glazing of windows and doors either before or after installation, the safe and proper handling of glass and approved and correct methods for glazing windows, doors, shopfronts and frameless glass installations. The second affidavit was sworn by Mr McGee, a director of the defendant. He completed an apprenticeship in carpentry in 1996 and obtained a Certificate IV in Building in
2001. He said that his training equipped him with a knowledge of various glass types,
procedures for the safe and correct handling of glass and glass products and correct techniques for the glazing of windows, doors, shopfronts and other frameless glass assemblies. I admitted each of those affidavits over the objection of the plaintiff. Neither deponent was required for cross-examination. Mr Boyle qualified as a carpenter under what he said was an equivalent to a Certificate III, before obtaining further qualifications. Through him the defendant tendered a description of the relevant course of training
(which became exhibit 4). Amongst the “core (essential) units”, there is a subject of “install and replace windows and doors” but nothing else of apparent relevance here. Amongst the elective units, there are subjects including that of “glaze/reglaze residential windows and doors”.
[19] From this evidence, I accept that those who have the necessary qualification for a carpentry licence would have some knowledge about working with glass. But this evidence does not establish that completion of this work, regardless of the particular elective subjects studied, would qualify a person to perform the work which is in question. Ultimately then, this evidence as to the content of the required training, has no impact upon the outcome.
[20] The defendant attempted to lead evidence as to the opinion of the Queensland Building Services Authority as to the scope of work authorised by this licence. I upheld the objection to that evidence. The proper interpretation of this regulation is a question of law.
[21] There was also some evidence as to the meaning of certain terms, as appearing in Part 16. This evidence was led in an attempt to prove some meaning in the building and construction industry of these terms. The defendant hoped that by aggregating the testimony of several witnesses in this respect, some general industry usage could be established. Over the plaintiff’s objection, I admitted the evidence for that purpose. However, ultimately the evidence did not appear to demonstrate that any particular term had a meaning different from that which someone outside the industry would attribute to it.
[22] In essence, the plaintiff’s argument is that the various items of work appearing in Part 16 under the heading “Scope of work” must be understood in the context that this is a licence for carpenters. Part 16 describes it as a licence for “carpentry” and the prescribed qualifications are expressed by reference to “carpentry” and “carpenter”. The plaintiff refers to these Dictionary definitions:
“ Carpenter ... A person skilled in woodwork, esp of a structural kind.
Carpentry ... The work or occupation of a carpenter, timber-work constructed by a carpenter.” [5]
To that could be added this definition from the Macquarie Dictionary:
“ Carpenter ... A person who erects and fixes the wooden parts, etc, in the building of houses and other structures.”
So it is said that the essence of carpentry is working with wood, whereas the work required of the defendant involved glass and other materials. At one point the submission seemed to go so far as to say that the various items of work described in Part 16 had to involve working with wood. Of course that could not affect at least the express authority
to “construct and erect ... steel wall framing” and to “install metal roofing”. Ultimately
the plaintiff argued for a less restrictive interpretation of Part 16, which was that the items
of work within a carpentry licence had to be interpreted as work of a kind within the ordinary notion of carpentry. Therefore, it was said that the installation of large glass panels, as a curtain wall should not be understood as falling within the item “(6) install exterior cladding ...”.
[23] That submission became more difficult to develop when considering the item “(3) Install windows and doors including framing”. As counsel for the plaintiff accepted, there is no apparent reason to limit the licensee to the installation of windows in which the
glass is surrounded by timber as distinct from, for example, aluminium. Similarly, the “framing” referred to in that item is unlikely to have been intended to be only timber framing.
[24] The plaintiff then relied upon the scope of work defined for a glazing licence, pointing to differences in some of the terms which there appear. In particular, it referred
to the expressions “shopfronts”, “aluminium glazing systems”, “curtain walling systems”, “architectural engineered glazing” and “suspended and overhead glazing”. It was said
that the inclusion of these items within the glazing licence, in contrast to their non- inclusion for the carpentry licence, shows that the work within these items was not within
the intended scope of a carpentry licence.
[25] However, there is another difference between the respective definitions of the scope of work. The holder of a glazing licence is entitled not only to “install” certain items, such as windows and doors, but to “fabricate” them. But within the scope of work for a carpentry licence, there is a deliberate distinction which is made between “install” and “construct”. The holder of that licence is entitled to construct things such as roof structures and timber stairs but not to construct or fabricate windows or other pieces of glazing.
[26] I turn then to the items of work within the original contract which the plaintiff says were outside the scope of a carpentry licence. The first is that in cl 13.3, which is the installation of aluminium frames and glazed window and door systems and associated work. I conclude that this is within item (3) in the scope of work for a carpentry licence.
[27] Similarly the installation of glass doors, required by cl 13.19, is within (3). In the same way the installation of the doors to the entry foyer (cl 13.19) and the glazed shopfronts to the George Street frontage (cl 13.21) are within item (3). The shopfronts are windows although the glass cannot be opened.
[28] The ground floor light box (cl 13.23) is a fitment and therefore within (12) of the defined scope of work.
[29] The shopfronts to the Turbot Street frontage (cl 13.24) are windows and therefore within (3) of the scope of work.
[30] So too are the “full height framed glazed windows and doors” to the terrace on level
3 (cl 13.25).
[31] The multi-fold doors on level 1, with the glazing above them, are doors and windows within (3).
[32] Clause 13.32 referred to other “aluminium framed and glazed, windows, doors and shopfronts”, which again are within (3) of the scope of works.
[33] The position with respect to the item in cl 13.30 is different. It is described as “glazing to George and Turbot Street steel framed awnings”. This required the defendant to fix horizontal sheets of glass which would act as awnings, extending from outside the exterior face of the building across the footpath. The defendant argued that they were within item (1) of the scope of work, in that they constituted “roof structures”. They do provide shelter but I do not accept that they could be described as part of the roof. Of course commonly the roof of a building will extend beyond the property boundary providing shelter to the footpath. But that does not mean that every part of a
building which extends from the boundary across the footpath is part of the roof. Further, there is an apparent difference between “roof structures”, which are within (1), and “roofing”, which is within item (7). It is only roofing which is metal roofing which the holder of this licence can install. The defendant’s alternative argument was that these awnings were within item (3), on the basis that they could be described as “windows”. That cannot be accepted.
[34] The outcome is that the defendant was licensed to perform the work required by the original contract, save for what was required by cl 13.30. That outcome could be described as curious, because there would appear to be no practical difference in the nature and difficulty of that work and that of the other work required by this contract, much of which involved the installation of even larger pieces of glazing. But it is the result of the drafting of this regulation.
[35] I turn to the work claimed by way of variations. Variations 114 and 106 are in the nature of work concerned with the installation of windows. The work within variation 49 also involved the installation of windows within (3), although it was described as a change from a window to frameless structural glazing. I accept, as Mr Morrison of the defendant said in an affidavit, that this was something of a misdescription in the claimed variation. [6] As he explained, structural glazing is a term referring to a glass panel secured into the window frame using tape and a type of silicone rather than inserting a glass panel into a pocket or channel within the frame. This work was within (3).
Variation 21 was within (3). Similarly variation 121 was work in the nature of the installation of windows.
[36] Variation 50 was for a change to the George Street glass awning. That awning, as originally designed, was deleted and was replaced by one of a different design, which was installed under, rather than on top of, the steel frame. This work was not within the Carpentry licence.
[37] It follows that the defendant breached s 42(1) by undertaking to perform the work of the installation of the glass awning, both within the original contract and by variation 50. The next of the issues to be determined at this stage of the proceedings is the impact of that breach upon the Contract, and in particular, upon the defendant’s entitlement to be paid according to the Contract. [7] In reliance upon Sutton v Zullo Enterprises Pty Ltd, the plaintiff argues that none of the Contract is enforceable, at least by the defendant,
although most of the work which the defendant agreed to perform was work for which it was licensed. That complication did not exist in Sutton. The defendant argues that the term which required the performance of unlicensed work, namely the term requiring the installation of the glass awning, is to be severed and the Contract consisting of the remaining terms is enforceable by it. The defendant says that this follows from cl 43 of the Conditions of Contract which provided:
“43. SEVERABILITY
If any provision in the Subcontract is voidable or unenforceable that provision will be severed and the rest of the Subcontract will remain in full force and effect.”
[38] According to the defendant’s argument, the only provision affected by s 42 of the QBSA Act is cl 13.30 of the Schedule, because it was only by that provision that the defendant undertook to perform unlicensed building work in contravention of s
42(1). Therefore, the defendant argues, cl 43 has the effect of removing that term, but only that term, from the Contract. On this argument, the provisions as to the agreed lump sum price would be unaffected. Now the contribution made by the awning to the lump sum price could be relatively small. But upon this argument, a builder would be entitled to recover the price agreed for both licensed and unlicensed work, regardless of their relative values.
[39] The defendant’s reliance upon cl 43, in my view, misunderstands the effect of s
42(1) of the QBSA Act. Where s 42(1) is engaged, it is not simply the promise by which
the builder undertakes to carry out unlicensed work which is affected. Rather it is the contract by which that promise is made. As McPherson JA said in Sutton, in such a case, s 42(1) “prohibits the very process of formation of a contract”. [8] The consequence of this statutory prohibition is that a court will not enforce the contract, at least in favour of the party which contravened the prohibition. [9] As the agreed price here was a lump sum price, it could not be said that there was a distinct agreement for the performance of and payment for the awning. Therefore nothing could be recovered pursuant to the Contract without enforcing that term which required a payment to be made for work which included unlicensed work. The parties did not within this Contract or otherwise agree to apportion the consideration. Therefore, this was an entire contract in that complete performance by one party was a condition precedent to payment or counter performance by the other. [10] This then is a case of the kind described by Jordan CJ in McFarlane v Daniell as follows:
“If, according to the terms of a contract, a party cannot be called upon to pay money except upon the performance by the other party of the whole consideration, then if any
part of the consideration is illegal the money cannot be recovered: Hopkins v
Prescott .” [11]
Consequently s 42(1) affects the Contract as a whole, rendering it unenforceable at least by the defendant. More particularly, s 42(1) has the consequence of precluding the enforcement of such provision or provisions of the Contract which would otherwise entitle the defendant to payment.
[40] It follows that cl 43 of the Contract cannot assist the defendant because it would extend to those provisions for payment, and the end point of the defendant’s argument would be that the severance to be effected by cl 43 would remove also those provisions. Therefore, the effect of s 42(1) in this case is, as it was in Sutton v Zullo Enterprises, to deny the builder a contractual entitlement to payment. It may be noted that although the entire contractual entitlement to payment is lost, the impact of s 42(3) and (4) is not as extensive in a practical sense. That is because the limitations as to the amount which can be claimed, consistently with s 42(4), applies only to the building work for which the contractor did not have the appropriate licence. They would not affect the defendant’s entitlement to be paid, upon a restitutionary basis, for the work which it lawfully performed under its licence.
[41] At this point it is convenient to set out paragraph 14 of the statement of claim: “14. In the premises:
(a) the entry in to the Contract by the first respondent was in breach of s 42 of the QBSA Act;
(b) the first respondent had:
(i) no entitlement to be paid any monetary or other consideration under the Contract; (ii) only a statutory entitlement to be remunerated in accordance with s 42(4) of the
QBSA Act in respect of such work;
(c) the first respondent was not entitled to make a payment claim under the Payments Act because:
(i) it had no entitlement to be paid any monetary or other consideration pursuant to a construction contract, within the meaning of the Payments Act;
(ii) the statutory entitlement to remuneration, pursuant to s 42(4) of the QBSA Act, did not give rise to, or create an entitlement to make a payment claim under the Payments Act.”
[42] It follows that the plaintiff has proved the allegations in paragraph 14(a) and (b)(i). But it has not proved the allegation in paragraph 14(b)(ii) because, as discussed above at
[41], it has a restitutionary entitlement, unaffected by s 42(4), for most of the items of work which together are described in the statement of claim as “such work”. It also follows, from Cant Contracting Pty Ltd v Casella, [12] that the plaintiff has proved the allegation in paragraph 14(c)(i). The allegation in paragraph 14(c)(ii) is one of law and is correctly stated. It follows from these reasons that the defendant had no entitlement to make a payment claim under the Payments Act.
[43] What I have said determines the questions for separate determination. I should note that amongst the remaining issues in these proceedings, are the discretionary defences pleaded within paragraphs 32 through 47 of the Defence. Without determining those issues, the Court could not grant all of the relief sought by the plaintiff.
[44] The appropriate relief is to make declarations as to the contravention of s 42(1) and its impact upon the Contract and a right to be paid under the Payments Act. Accordingly, there will be declarations as follows:
1. When entering into the contract pleaded in paragraph 3 of the statement of claim and paragraph 4 of the defence, the first defendant was not the holder of a contractor’s licence of an appropriate class under the Queensland Building Services Authority Act
1991 (Qld) in order to carry out the building work described in cl 13.30 of the
Schedule to that contract.
2. At no time was the first defendant the holder of a licence under that Act entitling it to perform the work the subject of its claimed variation 50 as pleaded in paragraph 6(b)(iv) of the statement of claim.
3. The first defendant entered into the Contract in breach of s 42(1) of that Act.
4. The first defendant had no contractual entitlement to be paid any consideration for any of the work the subject of the Contract (as originally made or as varied).
5. The first defendant was not entitled to make a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) for any of the work the subject of the Contract (as originally made or as varied).
[1] [2000] 2 Qd R 196 at 204 [6], 208 [24].
[2] [2006] QCA 538 ; [2007] 2 Qd R 13.
[3] Paragraph 6(b).
[4] Being the work described in paragraph 4(d) of the statement of claim and originally required by cl 13.22 of the Contract.
[5] The Australian Concise Oxford Dictionary.
[6] His supplementary affidavit, paragraph 4(c)(i).
[7] Being the question raised by paragraph 14(a) and (b) of the statement of claim.
[8] [2000] 2 Qd R 196 at 203 [4].
[9] Ibid.
[10] See the discussion of entire contracts in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50 at [702] - [706] ; [2003] FCA 50 ; (2003)
128 FCR 1 at 164-165 per Finn J.
[11] (1938) 38 SR (NSW) 337 at 346, citing Hopkins v Prescott [1847] EngR 573 ; 4 CB
578 at 595-6.
[12] Supra.