BCFK Holdings Pty Ltd v Rork Projects Pty Ltd - [2022] NSWSC 1706

Supreme Court

New South Wales

Medium Neutral Citation: BCFK Holdings Pty Ltd v Rork Projects Pty Ltd [2022] NSWSC 1706
Hearing dates: 14 and 24 November 2022; further written submissions received 29 and 30 November, 1 December 2022
Date of orders: 14 December 2022
Decision date: 14 December 2022
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision:
Adjudication determination quashed

Catchwords:
BUILDING AND CONSTRUCTION – service of payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) – where payment claim delivered to office of superintendent – where delivery to superintendent not effective service – where payment claim subsequently came to notice of respondent – where respondent served payment schedule asserting service of payment claim not effective – whether the provisions of the Act enlivened – whether respondent should be taken then to have been served – where claimant then served second payment claim – where adjudication proceeded on basis of that second payment claim
BUILDING AND CONSTRUCTION – adjudication – whether adjudicator had jurisdiction – whether s 13(1C) of the Building and Construction Industry Security of Payment Act engaged – proper construction of s 13(1C) of the Act – whether s 13(1C) of the Act permits service of only one payment claim after termination of a construction contract – whether adjudicator failed to exercise jurisdiction – reasons given by adjudicator
MISLEADING OR DECEPTIVE CONDUCT – whether s 18 of the Australian Consumer Law engaged – whether by service of its payment schedule plaintiff represented that payment claim not validly served – whether defendant relied on any such representation to make its decision not to proceed to adjudication based on that payment claim

Legislation Cited:
Building and Construction Industry Security of Payment Act 1999 (NSW)
Building and Construction Industry Security of Payment Amendment Act 2018 (NSW)
Competition and Consumer Act 2010 (Cth) – Schedule 2, Australian Consumer Law
Corporations Act 2001 (Cth)

Cases Cited:
Clyde Bergemann v Varley Power [2011] NSWSC 1039
Cockram Construction Ltd v Fulton Hogan Construction Pty Ltd (2018) 97 NSWLR 773; [2018] NSWCA 107
CPB Contractors Pty Limited v Heyday5 Pty Limited [2020] NSWSC 1625
Falgat Constructions Pty Limited v Equity Australia Corporation Pty Limited [2006] NSWCA 259
Henville v Walker (2001) 206 CLR 459; [2001] HCA 52
Iskra v MMIR Pty Limited [2019] NSWCA 126
Pacific General Securities Ltd & Anor v Soliman & Sons Pty Ltd & Ors (2006) 62 NSWLR 421; (2006) 196 FLR 388; [2006] NSWSC 13
Piety Constructions Pty Ltd v Hville FCP Pty Ltd [2022] NSWSC 1318
QC Communications NSW Pty Ltd v CivComm Pty Ltd [2016] NSWSC 1095
Re Ricochet Pty Ltd; Ian Barron and Morwest Investments Pty Ltd as Trustee of the Morwest Trading Trust v Equity Trustee Executor and Agency Company Limited; Austore Limited and Azelia Pty Ltd (1993) FCR 229; [1993] FCA 99
Southern Han Breakfast Point Pty Ltd (in Liquidation) v Lewence Construction Pty Ltd (2016) 260 CLR 340; [2016] HCA 52

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: [2022] NSWSC 1706
Decision Date: 14 December 2022

CaseChat Overview and Summary

BCFK Holdings Pty Ltd, the claimant, initiated proceedings against Rork Projects Pty Ltd, the defendant, in the Supreme Court of New South Wales. The dispute centred around a payment claim made under the Building and Construction Industry Security of Payment Act 1999 (NSW) and the subsequent adjudication process. BCFK alleged that Rork failed to make the required payments, and Rork contended that the initial payment claim was not validly served, leading to the issuance of a second payment claim. The court was tasked with determining whether the statutory provisions were correctly applied and whether the adjudicator had jurisdiction over the second payment claim. Additionally, the court had to consider if BCFK's conduct in serving a payment schedule asserting the invalidity of the first payment claim constituted misleading or deceptive conduct under the Australian Consumer Law.

The primary legal issues before the court were whether the initial payment claim was effectively served as per the statutory requirements, and if the subsequent service of a second payment claim was permissible under the Act. The court also needed to determine if section 13(1C) of the Act applied, limiting the service of payment claims to one after a contract's termination. Furthermore, the court had to examine whether the adjudicator exercised proper jurisdiction and if BCFK's conduct in asserting the invalidity of the first payment claim amounted to misleading or deceptive conduct.

The Supreme Court of New South Wales held that the initial payment claim was not validly served as it was delivered to the office of the superintendent rather than to Rork directly. However, the court found that once Rork became aware of the payment claim, the provisions of the Act were triggered, effectively deeming Rork to have been served. Consequently, the adjudicator had jurisdiction to proceed with the adjudication based on the second payment claim. The court concluded that section 13(1C) of the Act did not restrict the service of a second payment claim if the initial claim's invalidity was later acknowledged. Additionally, the court ruled that BCFK's conduct did not amount to misleading or deceptive conduct under the Australian Consumer Law, as Rork had not relied on any such representation in deciding not to proceed with the initial payment claim.

The final orders of the court confirmed the adjudicator's jurisdiction over the second payment claim and dismissed Rork's claims regarding misleading or deceptive conduct. The court determined that the adjudication process could proceed on the basis of the second payment claim, and the dispute would be resolved accordingly.

Orders