Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd
[2021] ACTSC 166
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd |
Citation: | [2021] ACTSC 166 |
Hearing Dates: | 20 and 22 July 2021 |
DecisionDate: | 23 July 2021 |
Before: | Mossop J |
Decision: | See [65] |
Catchwords: | BUILDING AND CONSTRUCTION – SECURITY OF PAYMENT – Building and Construction Industry (Security of Payment) Act 2009 (ACT) – Challenge to adjudicator’s decision – application for extension of time for prerogative relief – application for extension of time for leave to appeal – delay in commencing proceedings – issue estoppel – claim for prerogative relief has sufficient prospects – extension of time for prerogative relief granted |
Legislation Cited: | Building and Construction Industry (Security of Payment) Act 2009 (ACT), ss 15(4)(b), 24, 43 Court Procedure Rules 2006 (ACT), rr 3557, 5072 |
Cases Cited: | AE & E Australia Pty Ltd v Stowe Australia Pty Ltd [2010] QSC 135 Canberra Drilling Rigs Pty Ltd v Haides Pty Ltd [2019] ACTCA 15; 14 ACTLR 95 J Hutchinson Pty Ltd v Galform Pty Ltd & Ors [2008] QSC 205 |
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
The plaintiff has sought an extension of time in which to file an application for prerogative relief and an application for an extension of time and for leave to appeal under s 43 of the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (SOP Act). Both applications challenge a decision of an adjudicator, the second defendant.
The reason that the extensions of time are necessary is that the solicitors for the plaintiff failed to pay attention to the relevant limitation periods. Under s 43 of the SOP Act, an application must be filed within 28 days: rule 5072 of the Court Procedure Rules 2006 (ACT). Further time may be allowed by the court. An application for prerogative relief needs to be filed within 60 days: rule 3557. The court has power to extend time “only in special circumstances”: rule 3557(4).
The adjudication decision was made on 17 March 2021. 28 days after that date was 14 April 2021. 60 days after that date was 16 May 2021. The originating application was filed on 20 May 2021. Therefore, the extension of time is 36 days for the purposes of s 43 of the SOP Act and four days for the purposes of the claim for prerogative relief.
The adjudicator, Jonathan Sive, is the second defendant in the proceedings. He entered a submitting appearance. References in these proceedings to the defendant are references to the first defendant.
General comments on the adjudication decision
The adjudication decision is long. It is unnecessarily so. It covers 49 pages and 201 paragraphs. It has a somewhat argumentative tone. The reasons are prolix, and the structure and content are not always easy to understand. They include apparently unnecessary asides, unnecessarily lengthy commentary on the operation of the SOP Act and commentary on the position taken by the plaintiff. The idiosyncratic nature of the reasons is most starkly demonstrated by the following passage, which occurs immediately after the adjudicator has identified that six of the seven reasons put forward by the plaintiff in its payment schedule have been “resolved” by an earlier adjudication decision and “are subject to issue estoppel”:
[114] The respondent’s position in the response is quite unique and, after giving all of the respondent’s material a hard-look review, it appears the respondent sees the statutory regime more like a game of American baseball in that the respondent defends the three infield bases (first, second, and third) with alternative defence scenarios.
[115] To summarise the respondent’s position, the respondent first says the claimant has not provided evidence of work performed on the project. The respondent covers first base with the assertion of a strong first baseman who is right-handed and wears a glove on the left hand. The respondent then states that the claimant did not provide evidence of a profit share arrangement for the water project. The respondent covers second base with the assertion of a strong second baseman who is ambidextrous and can wear a glove on either hand with equal ease. Therefore, both sides of second base are adequately covered. However, if Squiddly Diddly, (the famous anthropomorphic animated octopus created by Hanna Barbera in October 1965 but retired after a short stint in October 1966) were still playing baseball, I am certain that the respondent would have drafted this multi-armed player on the team because it would give the respondent more of a chance to catch the ball in the middle area of the infield simply because the respondent now has more arms on the field to catch the ball. The only other available player would be Squidward Tentacles, the neighbour and friend of SpongeBob Square Pants in the Nickelodeon animated television series SpongeBob SquarePants. Like Squiddly Diddly, Squidward is an anthropomorphic octopus. However, unlike Squiddly Diddly, Squidward, when playing baseball, is mediocre at best and always becomes injured. The second baseman is the position between second base and first base. The second baseman often possesses quick hands and feet. This position requires the ability to get rid of the ball quickly and must show strong pivoting ability to capture the “double play” when such a situation occurs. In this regard agility and quickness are necessary because the respondent does not have the shortstop position covered (position between second base and third base). Agility and pivoting ability are the critical considerations for the middle ground or second base position. The respondent then states further that the claimant did not provide evidence of any agreement to be paid at all for work on the water project. The respondent covers third base with the assertion of a strong third baseman who is left-handed and wears a glove on the right hand.
(Emphasis in original.)
Having identified these matters, any criticisms of the adjudicator’s reasons on these bases are not sufficient, of themselves, to demonstrate a jurisdictional error or a manifest error of law on the face of the adjudication decision.
Approach to the applications
The starting point is that time limits are not to be ignored. The factors identified in Director of Public Prosecutions (ACT) v Martin [2014] ACTSC 104; 9 ACTLR 1 at [159] provide a useful framework in which to consider the present applications:
(1)The length of the delay;
(2)Whether there is an acceptable explanation for the delay;
(3)Whether the case raises questions of general importance;
(4)The extent of any prejudice to the defendant, including any prejudice in defending the proceedings that is caused by the delay, although absence of prejudice alone is not sufficient to justify a grant of an extension;
(5)Whether the interests of third parties have been affected;
(6)The wider public interest;
(7)The merits of the substantive application.
In the present case, issues three, five and six are not significant except to note that there is a public interest disclosed by the provisions of the SOP Act in speedy determination of matters arising under the Act. Issue one, the length of the delay, has been identified earlier. I will consider below whether there is an acceptable explanation for the delay, the extent of prejudice to the defendant and the merits of the substantive application.
Explanation for the delay
The explanation for the delay in commencing proceedings is given in the affidavits of the plaintiff’s solicitors and the director of the plaintiff. The relevant chronology is as follows:
On 17 March 2021, the adjudicator made his determination.
On 19 March 2021, the plaintiff’s solicitors received email copy of determination.
On 25 March 2021, a brief was sent to junior counsel for advice.
On 29 March 2021, advice was received from counsel.
A few days after 29 March, a notice of appeal was drafted by a junior solicitor and provided to junior counsel for settling. The senior solicitor responsible for the matter left the handling of it to the junior solicitor and junior counsel while he was engaged with other proceedings.
On 23 April 2021, the junior solicitor showed the senior solicitor an amended determination of the adjudicator dated 22 April 2021. The junior solicitor undertook to update appeal documents so as to refer to the amended determination.
Remarkably, neither the junior solicitor nor the senior solicitor gave consideration to any deadline for the filing of an appeal or the making of an application to seek prerogative relief. Junior counsel was not instructed to advise on any limitation periods. The plaintiff was not advised of any limitation periods.
On 5 May 2021, a writ for levy of property was issued out of the New South Wales District Court arising from the filing of the adjudication decision as a judgment of the court with effect from 27 April 2021. There is no evidence that the plaintiff or its solicitors were aware that this had occurred.
The director of the company deposes to the fact that on 7 May 2021, almost $200,000 had been taken out of the plaintiff’s accounts as a result of a garnishee order arising from the registration of the adjudication decision as a judgment in the District Court of New South Wales. I infer that he became aware of that fact shortly afterwards.
On 11 May 2021, junior counsel was requested to settle the appeal documents prior to filing and he did so on 13 May 2021.
On 13 May 2021, the director of the plaintiff was served with documents relating to the New South Wales judgment and the garnishee order. The evidence does not describe whether he informed the solicitors but if he did so, no immediate action was taken.
The proceedings were commenced on 20 May 2021, 28 days after 22 April 2021.
On 27 May 2021, the New South Wales sheriff seized equipment owned by the plaintiff at its premises in Queanbeyan.
On the same day, an ex parte injunction was granted on the application of the plaintiff restraining the first defendant from enforcing the adjudication decision.
In summary, I conclude that in this case the reason that the proceedings were filed out of time was because of the failure on the part of the plaintiff’s solicitors to consider the issue of limitation periods, to give advice to the plaintiff in relation to those limitation periods or to take any steps to protect their client’s interests in relation to the operation of those limitation periods. Notwithstanding the absence of as full an explanation as would be expected as to what occurred between 7 May and 20 May 2021, the plaintiff cannot be said to have failed to take steps to protect its interests. The explanation for the delay is a very unsatisfactory one. However, it is one for which the plaintiff’s solicitors bear responsibility rather than the plaintiff itself.
Prejudice to the defendant
The prejudice to the defendant that would arise as a result of making orders that would permit the appeal and application for review to proceed arise out of the costs involved in taking steps to enforce the adjudication decision and the potential that there would now be a liability for an order by way of restitution for monies received as a result of the garnishee order and a longer than necessary delay in resolving any challenge to the adjudication decision.
The costs involved in taking steps to enforce the proceedings were not quantified. Having regard to the current shape of the litigation, they are likely to be, relatively speaking, not very great. The risk of a requirement for restitution inevitably exists as a result of the regime under the SOP Act. The costs of the current application are costs which could be dealt with by a costs order.
Merits of the claim
The two points argued by the plaintiff were that:
(a)the adjudicator erred in finding that the time bar in s 15(4)(b) of the SOP Act did not apply to the payment claim the subject of the application.
(b)the adjudicator erred in finding that s 24 of the SOP Act permitted him to take into account evidence submitted in a previous adjudication application between the same parties.
The latter point was elaborated upon to include reliance upon the reasoning in the decision on the earlier application.
In oral submissions, the latter point was also argued by reference to the adjudicator’s reliance upon the concept of issue estoppel.
For the purposes of this application, it is not necessary to express any final view upon the correctness of the plaintiff’s contentions. It is sufficient to make an assessment of their merits as best as possible in order to exercise the discretion in relation to the extension of time under the rules.
Time bar argument
So far as the first point is concerned, it is necessary to understand the basic approach that the adjudicator took. The defendant had an agreement with the plaintiff to provide the services of its director, Mr Moseley, to the plaintiff as a general manager for the company. The construction work was done in 2017 and 2018. The defendant claimed that part of the arrangement was an entitlement to 15 per cent of gross profit on particular projects. The amounts claimed in the two payments claims were $151,419.84 and $452,185.80. One of the points made was that the contractual arrangement in place in relation to the works done in 2017 and 2018 had ended in September 2019 when Mr Moseley gave notice of his resignation. The plaintiff relied upon an email dated 10 September 2019 in which Mr Moseley identified his last day of work as being Friday, 27 September 2019 and attached a “final claim”. The plaintiff contended before the adjudicator that the claim was out of time because s 15(4) of the SOP Act relevantly limited the capacity to give a payment claim to a period of 12 months after the “related goods and services” were last supplied. The plaintiff contended that having regard to the resignation in September 2019, no claim could be made after September 2020 and the current claim was only made in February 2021.
The plaintiff points out that this appears to have been the understanding of the defendant as well at the time when he lodged an earlier adjudication application in relation to a different amount. As part of that application, he had withdrawn claims for the amounts subsequently claimed (namely, the $151,419.84 and $452,195.80) because he had said that those claims “relate to works completed longer than 12 months ago [and] I have been advised to pursue these through the ACT Court System”. However, the same adjudicator himself in dealing with the earlier adjudication application with the remaining claim of some $60,153.23, came up with a basis upon which the amounts in relation to the earlier work could be claimed. In that earlier adjudication decision, the adjudicator had said, having reached the conclusion that there was a long-standing contractual arrangement which permitted the plaintiff to refer project management work to the defendant:
77. Therefore, I am satisfied that the claims withdrawn by the claimant, under this assessment were still within the statutory time limit of section 15(4)(b) of the Act. The tolling of time under the Act did not commence until 3 March 2020.
Plainly this was not a matter necessary for the adjudicator to decide for the purposes of the application before him and it was clearly what led the plaintiff to make a further payment claim for those additional amounts and then pursue that claim to the adjudication process presently under consideration. The terms of the plaintiff’s second payment claim make that clear.
The defendant placed significant reliance upon the decision of the Court of Appeal in Canberra Drilling Rigs Pty Ltd v Haides Pty Ltd [2019] ACTCA 15; 14 ACTLR 95 (Canberra Drilling Rigs). In that case, the Court of Appeal held that whether or not construction work was done under a particular contract was not a jurisdictional fact but instead a matter to be determined by the adjudicator.
The plaintiff’s argument in this case appears to raise a relevantly similar contention to that which was rejected in Canberra Drilling Rigs. In this case, the plaintiff’s contention is that any work done after September 2019 was done under a separate contract to that which existed at the time of the 2017-2018 work. It therefore contended that the contract on foot within 12 months prior to the claim being made was not the contract under which the 2017-2018 work was completed or alternatively that the payment claim was made more than 12 months after the conclusion of the contract that was on foot at the time of the 2017-2018 work. In my view, in light of the decision in Canberra Drilling Rigs, the plaintiff’s claim of a jurisdictional error on this basis must be assessed as weak.
The plaintiff is, however, not required to establish a jurisdictional error for the purposes of an appeal under s 43. That requires, relevantly, a manifest error of law on the face of the adjudication decision. Given that a jurisdictional error has not been established, the contention must be that the conclusion reached that the relevant contract only ended in March 2020 and did not end in September 2019 involves such an error. In my view, that is not the case. The determination of the scope of the contract involves a question of mixed fact and law. It involves an assessment of the dealings between the parties over a substantial period in circumstances where the contractual terms were not reduced to writing. While the conclusion reached by the adjudicator is not obviously a correct one, there is no error of law which is manifest on the face of the adjudication decision.
Section 24 of the SOP Act/issue estoppel
The other aspect of the claim related to the relationship between the two adjudication decisions. The earlier, relating to the amount of $60,153.23 and the latter relating to the amounts of $151,419.84 and $452,195.80. The plaintiff’s contentions were that there were manifest errors of law or alternatively jurisdictional errors on the part of the adjudicator in holding that many of the issues raised by the plaintiff in answer to the defendant’s claim had been previously determined in the earlier adjudication and could not be re‑agitated.
Section 24 of the SOP Act
The plaintiff emphasised the limited scope of s 24(4)(a) of the SOP Act. That requires a subsequent adjudicator to give the same value to construction work or goods and services as had been given to that construction work or goods and services by an earlier adjudicator. The plaintiff contended that the adjudicator went beyond the limited scope of s 24 by holding that he was bound in other ways by his earlier decision. In that earlier decision, he had rejected a number of the arguments put forward by the plaintiff which were repeated in the subsequent adjudication. Although, as I have observed above, there are defects in the way in which the reasons of the adjudicator were expressed, there appeared to be to potentially controversial aspects of the way in which he used his earlier decision. The first was by giving an expanded meaning to s 24(4) so that it didn’t merely extend to the valuation of the particular work, goods or services but that it extended also to the methodology and approach that led up to that valuation. That is illustrated by what is said at [51] of the decision:
By exposing the mode of my analysis, the findings made in the Previous Decision constrict and define the scope of the administrative function under section 24 of the Act. A subsequent adjudicator knows what the decision means before the duty to assess whether a changed circumstance permitted to be considered under section 24(4)(b) of the Act. Given the express findings made in the Previous Decision and the valuations made under section 12 of the Act, a subsequent adjudicator in a later adjudication involving the valuation methodology used in the Previous Decision or the Supreme Court of New South Wales in a proceeding challenging the validity of the Previous Decision, the subsequent adjudicator or court can determine whether the findings are supported by the substantial evidence and, in the case of the subsequent adjudicator, whether the findings warrant a review under section 24(4)(b) of the Act, and, in the case of the court, whether the decision consists of an error that gives rise to the issue of subject matter jurisdiction.”
At [68] and [69] the adjudicator says:
Section 24 (4) of the Act is reasonably interpreted to say that new claims or new approaches taken in a subsequent adjudication that closely resemble claims or approaches taken in a previous decision become unreasonable. The claim or approach taken in the subsequent proceeding, whether the same or new, must yield to, or otherwise be excluded by, the prejudicial statutory requirement that same values as previously decided must be followed unless new or additional facts are alleged that satisfies the adjudicator concerned that the value of the work or the methodology used in valuing the performance has changed or should not be followed as in the previous decision.
Therefore, once a value has been decided in accordance with section 12 of the Act, section 24 of the Act bars the respondent from raising issues that were part of the considerations used in valuing the claim in a subsequent matter. The respondent is unable to reagitate issues 1 to 6 simply because these are the same issues considered in [the earlier adjudication decision].
In my view, there is merit in the plaintiff’s contentions about s 24(4).
Issue estoppel
Related to the adjudicator’s approach to s 24 of the SOP Act is the apparent reliance by the adjudicator on issue estoppel so as to determine adversely to the plaintiff a number of the matters which it had raised in the first adjudication and which had been decided against it. The matters were matters that arose on the earlier adjudication decision. They were in summary whether there was a construction contract in place, whether there was an agreement to pay instalments, whether the Act had any application to the agreement, whether the claimant’s figures were correct, whether there was an agreement to profit share. Contesting these issues again involved no challenge to the outcome of the earlier adjudication decision but rather a repetition of some of the arguments that had earlier been rejected in the context of an adjudication on a claim that did not involve any part of the work, goods or services that had been subject to the earlier adjudication decision.
A third way which is referred to in the proposed notice of appeal but which was not demonstrated on the application before me was that the adjudicator had used factual material available from the first adjudication for the purposes of the second adjudication. It was not established that there was any particular example of this occurring and hence for present purposes, I do not consider that the plaintiff has a significant claim of error of law or jurisdictional error on that basis.
In relation to issue estoppel, it is well accepted as a result of what was said in Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69; 74 NSWLR 190 and decisions which followed it that the principle of issue estoppel can be applied in circumstances where a payment claim has been the subject of a determination by an adjudicator under the SOP Act. The principle is usefully summarised in AE & E Australia Pty Ltd v Stowe Australia Pty Ltd [2010] QSC 135 at [32]. The principle is derived from the provisions of the statute and applies in relation to claimed amounts. A party will be subject to an estoppel that prevents a subsequent adjudication of claims which have been rejected in a previous adjudication. The authorities to which I was referred do not appear to establish a broader principle akin to the operation of an issue estoppel arising from a determination by a court of an issue adversely to a party. Rather, given that the principle arises in the context of a statutory adjudication by a non-court body, it is likely to only extend as far as the legislative framework requires it to. It is unlikely to extend to any common issue that might arise in separate adjudications dealing with different claimed amounts.
In the adjudicator’s decision, he placed reliance upon the decision in J Hutchinson Pty Ltd v Galform Pty Ltd& Ors [2008] QSC 205. It appears that the adjudicator himself had appeared for the first respondent in that case. The adjudicator referred to paragraphs 35 and 36 of that decision where Chesterman J said that a judgment registered as a result of an adjudication gave rise to “a res judicata and, indeed, issue estoppel”. In that case, the question was whether a party which had successfully obtained an adjudication decision in its favour and a judgment as a result could make a second payment claim and seek a second adjudication in order to get around an undertaking that it had given during the course of proceedings challenging the first adjudication decision to not enforce it or the resulting judgment. Chesterman J found that it could not, reasoning that until a court pronounced judgment in proceedings brought pursuant to the preserved civil rights, the judgment obtained as a result of the adjudication decision was conclusive final and binding: [45]. His Honour also found that the making of the second payment claim and adjudication application amounted to an abuse of process in the circumstances. For the purposes of the judgment, issue estoppel was not of any relevance beyond the relevance of res judicata. The decision does not provide any wider authority in relation to the operation of issue estoppels, particularly issue estoppels going beyond the amounts determined not to be payable as a result of an earlier adjudication decision.
The plaintiff placed specific reliance upon the decision in Cardinal Project Services Pty Ltd v Hanave Pty Ltd [2010] NSWSC 1367. That case did not involve a question of issue estoppel. It involved the situation where an earlier determination by an adjudicator had been quashed and where the claimant sought to have a further adjudication based upon the same payment claim and payment schedule. The comments in that case about the capacity of a respondent to a claim to raise new matters in defence of the claim arose in the context where the earlier adjudication decision had been declared to be void and are not relevant here.
While in the context of an application for extension of time with only limited submissions on the issue, any assessment of the merits of the plaintiff’s argument must be tentative, there appears to be merit in the plaintiff’s contention that the adjudicator adopted an approach to issue estoppel that went beyond what is required by the terms of the SOP Act.
So far as the individual issues to be determined are concerned, the contents of the payment schedule in relation to the earlier adjudication identified five issues. The payment schedule in relation to the second payment claim identified the same five issues, as well as issues six and seven. While issue seven was difficult to understand, issue six clearly raised the proposition that the works were done in 2017 and 2018. The adjudicator referred to issue estoppel at a number of points in his decision. To some extent the adjudicator’s reliance upon issue estoppel overlapped with his extended view of the operation of s 24(4) of the SOP Act.
As discussed above, at [69] the adjudicator said: “The respondent is unable to reagitate issues 1 to 6 simply because these are the same issues considered in [the earlier adjudication decision]”.
However, having said that, the adjudicator then examined at considerable length issue six, when the contract between the parties terminated and hence whether or not the claim was made within 12 months of that date, notwithstanding that the works were done in 2017 and 2018: [122]-[171]. The adjudicator concluded at [169]: “The evidence provided by the claimant in this application supports the findings and conclusion I made in the Previous Decision with new evidence to explain the observations and findings I made previously”.
Understandably, the defendant relies upon these aspects of the adjudicator’s reasons to say that even if the approach to s 24(4) of the SOP Act and issue estoppel was incorrect, the adjudicator in fact examined again the critical issue as to when the contract terminated, and hence whether the payment claim was made within time.
Notwithstanding this, it is in my view reasonably arguable that the approach taken by the adjudicator to the operation of s 24(4) and issue estoppel was one which coloured the whole of the approach of the adjudicator to the issues between the parties. For example, at [67], the adjudicator said, “[t]he question in this case is whether the respondent acted in a way that shows a groundless attempt to defeat a legitimate progress claim based on a non-existent dispute”. Thus, while the adjudicator considered again the issues as to whether or not the claim was made within time, he may have done so in the context of a conclusion that the plaintiff was acting illegitimately by rerunning arguments that he had earlier rejected in relation to a different claimed amount.
Consideration and decision
The extension of time sought is much longer in relation to the s 43 application than in relation to prerogative relief. There is a reasonable basis for saying that the rules ought to be amended in the case of a claim for prerogative relief under the SOP Act so as to not undermine what appears to be a legitimate statutory policy that challenges to adjudication decisions be made promptly. However, the rules presently say what they say, and the application must be decided in that context.
I am satisfied that special circumstances exist and hence the threshold for an extension of time under the rules is established. Those special circumstances are the negligence on the part of the plaintiff’s solicitors in failing to give attention to the limitation periods applicable to challenging an adjudicator’s decision. The existence of special circumstances does not of itself compel the granting of the application but does meet the threshold provided for in the rule for an extension of time.
I do not consider that the evidence discloses a failure on the part of the plaintiff to protect its own interests. Although there are some relatively modest, inadequately explained periods of delay after it became aware of the garnishee order, that delay is of minor significance when compared to the failure on the part of its solicitors.
As I have indicated above, in my view, it is reasonably arguable that the approach to issue estoppel and s 24 of the SOP Act affected the whole of the adjudicator’s approach to the respondent’s payment schedule and submissions
Against this, it may be said that because the adjudicator was in fact the same adjudicator as had decided the previous decision, in the absence of a different argument or some different aspect of the facts, even without any question of s 24(4) of the SOP Act or issue estoppel, it is likely that the adjudicator would have reached the same decision as earlier.
Further, nothing was in fact pointed to that would demonstrate that there was a difference in the evidence or arguments put before the adjudicator for the purposes of the second adjudication that would have led the adjudicator to a different conclusion.
However, it appears simply to have been a matter of chance that the adjudicator was the same and, if the adjudicator was wrong about the approach to s 24(4) of the SOP Act and issue estoppel, that involved significant misconceptions as to the statutory function of the adjudicator. For the purposes of this application, I consider that it should be assessed without regard to the coincidence that the adjudicator was the same person. If the adjudicator was a different person, then the consequences of the approach to s 24(4) and issue estoppel would be more readily appreciated.
It is a significant factor telling against the granting of an extension of time that the underlying civil rights of the parties are not affected, and it is still open to the plaintiff to litigate the issues in contention.
The policy of the SOP Act and the philosophy of “pay now argue later” is also a significant matter to be considered.
The evidence about the position of the parties is limited. The defendant has already obtained approximately $200,000 pursuant to the garnishee order. The defendant had prior to the earlier adjudication accepted that if it was to pursue the amounts in question, it would need to do so through ordinary court processes. There is no evidence that there is any cash flow consequence for the defendant that would arise from allowing the challenge to the adjudication. Rather, the claim appears to be a historical one.
I have also taken into account the fact that the court has available dates upon which the substance of the matter can be heard and hence in assessing the consequences of a grant of leave, the further delay arising out of the conduct of proceedings is likely to be relatively modest.
Although the matter is reasonably finely balanced, I consider that it is appropriate to grant an extension of time in relation to the claim for prerogative relief. The prospects of the claim appear to be sufficient in the circumstances to warrant the grant of an extension of time for the limited period required. I consider, however, that the grant of an extension of time should be conditional upon the challenge being limited to the issue estoppel and s 24(4) issue and upon the payment of the balance of the judgment amount into court.
I am not so satisfied in relation to the claim for an extension of time in which to bring the s 43 appeal. That is because the extension of time required is longer and that a grant of leave to appeal under the relevant limb of s 43 of the SOP Act requires a conclusion to be reached that there is a manifest error of law on the face of the adjudication decision, a conclusion which I cannot reach at present based upon the arguments advanced to date.
Orders
The orders of the Court are:
1.The application for an extension of time in which to seek leave to appeal under s 43 of the Building and Construction Industry (Security of Payment) Act 2009 (ACT) and for leave to appeal under s 43 of the Building and Construction Industry (Security of Payment) Act 2009 (ACT) is dismissed.
2.The time in which an application for prerogative relief may be filed is extended to 20 May 2021 on the conditions that:
a)the grounds of challenge are limited to the adjudicator’s interpretation of the operation of s 24(4) of the Building and Construction Industry (Security of Payment) Act 2009 (ACT) and issue estoppel;
b)the plaintiff pay the sum of $450,000 into court by no later than 9 August 2021 and if not the proceedings are by force of this order dismissed; and
c)other than for the purposes of settling the loan facility from Prime Capital Securities Pty Ltd in the sum of $450,000, and until that settlement occurs and the sum of $450,000 is paid into court, the plaintiff, by itself, its servants, agents or otherwise be restrained from selling, charging, encumbering, or otherwise dealing with its interest in the property situated at 65 Bayldon Road, Queanbeyan, comprising folio 24/804032 and being lot 24 on DP 804032.
3.The plaintiff is to pay the first defendant’s costs of the applications for extensions of time and leave to appeal on a solicitor and client basis.
4.The parties have liberty to apply on 48 hours’ notice by email to the Associate to Justice Mossop.
5.The plaintiff pay the first defendant’s costs of the application to extend time to pay monies into court.
6.The costs of the application in proceeding filed on 20 July 2021 be the parties’ costs in the proceeding.
| I certify that the preceding sixty-five [65] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop. Associate: Date: 20 August 2021 |
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