Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd
[2021] ACTSC 330
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
| Case Title: | Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 3) |
| Citation: | [2021] ACTSC 330 |
| Hearing Date: | 26 November 2021 |
| Decision Date: | 26 November 2021 |
| Before: | Mossop J |
| Decision: | See [17] |
Catchwords: | BUILDING AND CONSTRUCTION – SECURITY OF PAYMENT – Building and Construction Industry (Security of Payment) Act |
| 2009 (ACT) – challenge to adjudicator’s decision – final orders – | |
| where plaintiff sought leave to file amended originating application | |
| seeking restitution – restitution not claimed in present proceedings – inadequate submissions to determine appropriate procedural course regarding restitution – adjudicator’s determination quashed – first defendant to pay plaintiff’s costs on a party and party basis – plaintiff has liberty to apply for compensation – plaintiff has liberty to apply for an order seeking | |
| restitution | |
| Legislation Cited: | Building and Construction Industry (Security of Payment) Act |
| 2009 (ACT), s 27(1) Court Procedures Rules 2006 (ACT), rr 1701(1)(b), 1702, 1751, 3559 | |
| Cases Cited: | Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 2) |
| [2021] ACTSC 296 | |
| Parties: | Beno Excavations Pty Ltd t/as Benex Pipelines (Plaintiff) |
| Harlech Enterprises Pty Ltd atf Harlech Family Trust (First Defendant) Jonathan H Sive (Second Defendant) | |
| Representation: | Counsel |
| J Moffett (Plaintiff) | |
| A Greinke (First Defendant) | |
| Solicitors | |
| BAL Lawyers (Plaintiff) Mills Oakley (First Defendant) | |
| File Number: | SC 206 of 2021 |
| MOSSOP J: | |
| Introduction |
1. Last week I made orders directing that the parties file agreed or competing orders in order to finalise this matter. If there was no agreement on the orders, then the parties were required to file written submissions: see Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 2) [2021] ACTSC 296 at [117]. The parties did not agree on the orders and filed written submissions.
There was general agreement that the adjudicator’s determination should be quashed.
There was some difference in the drafting of the order. The order proposed by the first defendant was more specific and I will make it in those terms. That is order 1 below.
3. The parties agreed that the appropriate order in relation to costs was that the first
defendant pay the plaintiff’s costs of the proceedings on a party and party basis. They
also agreed that any existing orders would remain undisturbed. The drafting of those orders differed slightly. I will adopt the drafting proposed by the first defendant with one
minor variation. In my view, the words “as agreed or assessed” are redundant. If
agreement is reached in relation to the quantum of costs, then r 1702 of the Court Procedures Rules 2006 (ACT) provides that it may be filed and becomes the assessed costs. Therefore, the reference to agreement is redundant. Plainly, if they are not agreed, then they will need to be assessed pursuant to the rules: r 1701(1)(b). Therefore, the reference to assessment is redundant. Having regard to r 1751, the reference to party and party basis is also redundant but puts beyond any doubt the basis of the costs order. The order that I will make is that at order 2 below.
4. The parties also agree that the sum of $450,000 paid into court on 3 September 2021 be
paid out to the trust account of the plaintiff’s solicitors. The drafting of the proposed order
varies as between the parties. I will adopt the more specific language proposed by the
first defendant. However, that refers to the sum of $450,000 “and accretions thereon”.
Similarly, the language proposed by the plaintiff includes reference to interest. Given that
the money has been paid into court there will be no “accretions” or interest and it is not
appropriate to include those words. The order that I will make is that at order 3 below.
5. There are three remaining issues raised by the orders proposed by the parties:
(a) orders for restitution proposed by the plaintiff; (b)
orders relating to compensation pursuant to the undertaking as to damages given by the first defendant on 23 July 2021; and
(c) a stay of the orders proposed by the first defendant.
Restitution
6. The plaintiff seeks a declaration that the first defendant is liable to account to the plaintiff
and the amount of $196,428.79 being the amount garnished from the plaintiff’s bank
account following the filing of the adjudication certificate in the New South Wales (NSW) District Court pursuant to s 27(1) of the Building and Construction Industry (Security of Payment) Act 2009 (ACT) and the issuing of a garnishee order. In the alternative, it seeks leave to file a further amended originating application seeking orders in the nature of restitution.
7. The defendant submitted that the issue of restitution was one entirely for the NSW District Court. That contention is not obviously correct.
8. While the course proposed by the plaintiff has the attraction of efficiency, my tentative view was that the appropriate course was to commence separate proceedings seeking restitution. Restitution was not claimed as relief in the present proceedings. It raises separate issues to those which have been finally determined in these proceedings. Rule 3559 of the Court Procedures Rules is not obviously applicable. It is not appropriate, after having determined the issues in the proceedings, to allow the nature of the proceedings to be amended so as to claim additional final relief.
9. The submissions of the parties were inadequate to permit the determination of the appropriate procedural course. Notwithstanding that the issue of restitution must be an issue which commonly arises in proceedings of this nature, the parties directed me to no authority illustrating the appropriate procedural course. The submissions of the first defendant were not sufficient to convince me that, having regard to the fact that the garnishee order was issued by the NSW District Court, that court was the only jurisdiction in which the issue of restitution could be raised. In order to permit the making of final orders and not preclude an argument that an order for restitution may be sought as relief
ancillary upon the setting aside of the adjudicator’s decision, I will expressly grant liberty
to apply for an order relating to restitution within a limited period. This, I must emphasise, is not to encourage the making of such an application. It is simply to permit one if, properly advised in the light of relevant authority in relation to the circumstances in which this issue has arisen, it is open to make that order in these proceedings. That is order 5 which I will make.
Undertaking as to damages
10. The plaintiff seeks directions relating to the enforcement of the undertaking as to damages. While it is clear that the undertaking may be enforced in these proceedings, I accept the submission made by the first defendant that the process is a staged one and that the application should be made following the making of final orders in the matter. In order to ensure that there can be no argument that the proceedings have been determined in a way that precludes the claiming of compensation pursuant to the undertaking as to damages, I will make an order granting liberty to apply by application in proceeding supported by affidavit for the enforcement of the undertaking. That is order 4 below.
11. In adopting this approach, I reject the submission that any such application is premature
because of the first defendant’s intention to appeal. That might be the case if all orders
| made were stayed. However, for reasons which I give in relation to the application for a stay that will not be the case. |
| Stay |
12. The first defendant has asked for a stay of the orders until 17 December 2021 and if a Notice of Appeal is filed by that date, a stay of the orders until 21 days following the determination of the appeal or earlier order. In the alternative, it seeks a stay of all of the orders until 17 December 2021 in order to give it the opportunity to appeal and apply for an ongoing stay.
13. In my view, an ongoing stay should not be made. Even in cases involving questions of law of some novelty, the decision of a trial judge is not simply a step along the way to the parties having their rights finally determined by the Court of Appeal. The starting point is that the decision of a trial judge finally determines those rights. In my view, in this case, if there is to be any stay of the proceedings pending the determination of the appeal, then that is a matter of which the Court of Appeal needs to be persuaded.
14. Further, given that there is the likelihood of further proceedings for the enforcement of the undertaking as to damages and for restitution, those should not be impeded because of the prospect of an appeal from the underlying decision. That is because the continuation of those proceedings would not render the appeal nugatory. It would be a matter for the plaintiff to consider whether it was appropriate to bring those proceedings if there is an appeal on foot, taking into account its assessment of the risk that the foundational decision for the purposes of those proceedings may be overturned.
15. It is only in relation to the payment out of the $450,000 that there is the real potential for the appeal proceedings to be rendered nugatory. That might occur if the money was paid out pending the appeal, the appeal was ultimately successful and the plaintiff unable to meet the outstanding balance of the judgment arising from the filing of the adjudication certificate. Without embarking upon any enquiry about capacity to pay or the merits of any appeal other than to note the novelty of the issues considered, it is appropriate that there be some stay in relation to this aspect of the judgment.
16. It is appropriate that the order relating to payment out be stayed in a way that preserves the capacity of the first defendant to file any appeal and make an application to the Court of Appeal for a continuation of the stay, but not otherwise. Having regard to the proximity of the end of the law term, I will stay the order relating to payment out of the $450,000 until 17 December 2021 in order to ensure that the issue of payment out or stay is resolved prior to the lengthy term break.
Orders
17. The orders of the Court are:
1. The determination of the second defendant made on 17 March 2021 as amended on 22 April 2021 in respect of the adjudication application number ABCDRS ACT 28 be quashed.
2. Without affecting any orders for costs previously made in the proceedings, the
first defendant pay the plaintiff’s costs of the proceedings on a party and party
basis.
3. The sum of $450,000 paid into court by the plaintiff on or about 3 September 2021 be paid out of court to the plaintiff by payment to BAL Lawyers Trust Account.
4. The plaintiff has liberty to apply by application in proceeding supported by affidavit for compensation pursuant to the undertaking as to damages given by the first defendant on 23 July 2021.
5. The plaintiff has liberty to apply within 28 days on two days’ notice in relation to
any order seeking restitution.
6. Order 3 is stayed until 17 December 2021.
I certify that the preceding seventeen [17] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.
Associate:
Date: 1 March 2022
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