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Babicka v ASD Corporation Aust Pty Ltd

Babicka v ASD Corporation Aust Pty Ltd

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Case Copied 23 September 2024 55 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2023 06161

ALOIS BABICKA AS TRUSTEE FOR ALOIS BABICKA FIRST TESTAMENTARY TRUST	Plaintiff
v
ASD CORPORATION AUSTRALIA PTY LTD (ACN 167 889 992)	First Defendant
and
WILLIAM TIMOTHY SULLIVAN	Second Defendant

S ECI 2023 06162

NADIA ANNE MARIE BABICKA	Plaintiff
v
ASD CORPORATION AUSTRALIA PTY LTD (ACN 167 889 992)	First Defendant
and
WILLIAM TIMOTHY SULLIVAN	Second Defendant

S ECI 2024 00299

MAZS INVESTMENT GROUP PTY LTD ATF M&A FAMILY TRUST (ABN 843 476 589 34)	Plaintiff
v
ASD CORPORATION AUSTRALIA PTY LTD (ACN 167 889 992)	First Defendant
and
WILLIAM TIMOTHY SULLIVAN	Second Defendant

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JUDGE:	GARDE J
WHERE HELD:	Melbourne
DATES OF HEARING:	5 and 6 August 2024
DATE OF JUDGMENT:	23 September 2024
CASE MAY BE CITED AS:	Babicka v ASD Corporation Aust Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2024] VSC 587

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BUILDING CONTRACTS – Warehouse development – Stages schedule – Reference dates – Structure stage – Lock Up stage – Payment claims – Adjudication – Judicial review – Construction of the contracts – Building’s structural steel frame – Whether metal steel framing for offices and mezzanines part of a building’s structural steel frame – Whether structural steel frame and concrete panel works were approved by a building surveyor – Whether completion of an earlier stage is a prerequisite for the completion of a later stage – Scope of exceptions in Cardona v Brown (2012) 35 VR 538 – Whether Court should grant relief – Exercise of discretion - Effect of privative clauses – Building and Construction Industry Security of Payments Act 2002 (Vic) ss 1, 3, 9, 28R(5)(a)(iii); Building Act 1993 (Vic) s 238(1)-(2); County Court Act 1958 (Vic) ss 49, 77 – Building Regulations (Vic) r 167(c) – Kirk v Industrial Court of New South Wales (2010) 239 CLR 531 – Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr R Andrew KC with Mr A Blunt	Best Hooper
For the First Defendant	Mr A Morrison	Ward & Co
For the Second Defendant	No appearance

HIS HONOUR:

Introduction

The three proceedings in this matter are applications for judicial review commenced by originating motion and seeking relief in the nature of certiorari to quash, or declare void three adjudication determinations (‘determinations’) made by William Sullivan, the second defendant (‘the adjudicator’) on 26 November 2023, and to set aside the County Court judgments entered on 13 December 2023 (‘judgments’) following the determinations.

The plaintiffs in the three proceedings are the owners of lots located at 105 Newlands Road, Coburg North. Alois Babicka as trustee of the Alois Babicka First Testamentary Trust is the owner of Lots 3 and 4. Nadia Babicka is the owner of Lot 5. MAZS Investment Group Pty Ltd (ABN 843 476 589 34) (‘MAZS’) as trustee of the M & A Family Trust is the owner of Lots…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] VSC 587
Decision Date: 23 September 2024

CaseChat Overview and Summary

Babicka, the contractor, brought an action against ASD Corporation Aust Pty Ltd, the principal, in the County Court of Victoria to seek a declaration that a payment dispute existed and to seek payment of $1,125,680, plus interest and costs. The dispute arose out of a contract for the construction of a warehouse and related development. The central issue before the court was whether the completion of the structural steel frame of the building was a prerequisite for the completion of the Lock Up stage of the works. This was in turn a question of construction of the contract documents. The Court found that the structural steel frame included the metal steel framing for offices and mezzanines and that the structural steel frame and the concrete panel works had been approved by a building surveyor. The Court found that the Lock Up stage could not be completed until the structural steel frame was completed and that the structural steel frame was not completed until the metal steel framing for the offices and mezzanines was complete. The Court found that the dispute was not within the scope of exceptions to adjudication contained in the Building and Construction Industry Security of Payments Act 2002 (Vic) and remitted the dispute to an adjudicator for determination. The Court exercised its discretion to grant relief from the privative clause in the contract that purported to exclude the Court’s jurisdiction to determine the dispute.

The Court found that the Building and Construction Industry Security of Payments Act 2002 (Vic) was intended to provide a quick and inexpensive means of resolving disputes between contracting parties and that the Act should be interpreted in a way that gave effect to this purpose. The Court found that the privative clause in the contract was not intended to exclude the Court’s jurisdiction to determine whether a dispute existed or whether a dispute was within the scope of the exceptions to adjudication. The Court found that the privative clause was not effective to exclude the Court’s jurisdiction in this case and that it was appropriate to exercise its discretion to grant relief from the privative clause. The Court found that the dispute was not within the scope of the exceptions to adjudication and that the dispute should be remitted to an adjudicator for determination.

Orders