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Fancy putting your home on the line?
The Federal Court in 470 St Kilda Road Pty Ltd v Robinson1 has found that the declarant of a statutory declaration as to a contractor’s payment of subcontractors, workmen and insurances personally liable under the Australian Consumer Law for the amount of the payment claim.
In the course of preparing and issuing a payment claim by Reed Constructions Australia Pty Ltd (Reed) to the principal 470 St Kilda Road Pty Ltd (Payment Claim), Glenn Roy Robinson, the Chief Operating Officer of Reed Constructions Australia Pty Ltd, swore a statutory declaration in relatively standard terms as to the payment of workers, subcontractors, suppliers and insurances (Statutory Declaration). The Statutory Declaration included the statement that:
‘to the best of my knowledge and belief having made all reasonable enquiries… all sub-contractors or suppliers of materials who are or at any time have been engaged on the work under the Contract have been paid in full all monies which have become payable to the sub-contractor under terms of the sub-contract or to the supplier of materials under the terms of agreement for supply’.
Reed subsequently went into liquidation under which the principal, like the other unsecured creditors, recovered nothing. No doubt motivated by this, the principal has successfully pursued a claim against Mr Robinson that untrue statements in the Statutory Declaration contravened section 18 of the Australian Consumer Law, i.e. “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”, Justice O’Callaghan finding that Robinson was personally liable for the amount of the payment made in respect of the Payment Claim, being AU$1.49 million.
One of the key issues was whether Mr Robinson had made all reasonable enquiries, O’Callaghan J finding on the evidence presented to that he had not done so. It was found that Mr Robinson:
Another key contested issue was whether the Statutory Declaration was an ‘absolute statement’ that all subcontractors and suppliers had been paid. The Court found that it was, and because there were unpaid sums due and payable to subcontractors and suppliers at the time it was made, found that the Statutory Declaration was materially untrue and as such misleading or deceptive.
Previously the courts have seemed reluctant to make adverse findings against declarants – the NSW Supreme Court decision in J Hutchinson Pty Ltd v Glavcom Pty Ltd2 typifying the approach. However 470 St Kilda Road Pty Ltd v Robinson turns up the heat. It demonstrates that, given the exposure to claims under the Australian Consumer Law, declarants can no longer take statutory declarations required to accompany payment claims for granted.
1 FCA 597
2 NSWSC 126
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