Construction industry Gold Coast: Carrara-based KDV Sport wins case against builder Muggeridge Constructions

A Gold Coast sports centre won’t have to pay more than $2 million to a construction company for a surprising reason, a judge has found.

A GOLD Coast sports centre won’t have to pay more than $2 million to a construction company because it did not charge for its services correctly, a judge has found.

KDV Sport, the operator of a golf and tennis academy in Carrara, contracted Brisbane-based Muggeridge Constructions to build the three-storey student accommodation in 2017 for $10.627 million.

However, KDV disputed a progress payment for $2.365 million in August 2018.

After the builder applied for adjudication under the Building and Construction Industry Payments Act, KDV was ordered to pay $802,000 due, with interest set at 11.96 per cent.

KDV Sport opened in 2016 and built student accommodation next door under the name Elite Gold Coast. Picture: Jerad Williams

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KDV took the dispute to the Supreme Court where in July last year Justice Susan Brown overturned the adjudicators’ decision.

Justice Brown said Muggeridge, which fell into liquidation in September last year, failed to describe the work for which it was claiming payment and therefore had not submitted a valid claim.

KDV had submitted the Muggeridge claim was “extremely general and offered no meaningful information about the actual work performed from time to time”.

Instead, the work was listed under categories including “concrete supply”, “electrical” and “aluminium doors and windows”.

Golf and tennis academy KDV Sport opened in 2016. Picture Glenn Hampson

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Muggeridge, in response, said no individual descriptions of work were required.

KDV had supplied Muggeridge a “Trade Breakdown Schedule” as part of the contract signed in 2017 that KDV could use to identify the completed work that was part of the claim.

However, Justice Brown said this argument was unconvincing.

She said that served to demonstrate that it has “knowledge overall of the work to be done in each category”.

“It does not, however, serve to demonstrate that KDV was able to identify the construction work (that was) the subject of the claim.”

In her judgment, Justice Brown gives the example of the claim listing for “aluminium doors and windows” in which $97,421 was claimed with work said to be 67 per cent complete.

Muggeridge Constructions went into liquidation last year, partly due to what the director said was “adverse legal decision” including the ruling in favour of client KDV Sport.

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“Based on the amount claimed the construction work is about 12 per cent of the total amount payable, but what that 12 per cent is referable to or how it has been calculated cannot be determined with any certainty.”

Justice Brown, who noted a number of mathematical errors in the payment claim by Muggeridge, ordered the adjudication decision be set aside.

Les Williams, of Subcontractors Alliance, slammed the decision.

“The KDV decision has the effect of invalidating countless payment claims.

“Unless it get appealed or overturned … this is how identifying construction work and related goods and services is going to be interpreted by the courts and adjudicators.”

He said the decision would cause “chaos” due to companies having different payment processes.

“It is a decision that is arrived at by a judge with no idea of how this industry works.”

KDV Sport declined to comment yesterday and Muggeridge Constructions could not be contacted.