Biseja Pty Ltd v NSI Group Pty Ltd - [2007] NSWSC 294

CITATION: Biseja Pty Ltd v NSI Group Pty Ltd [2007] NSWSC 294

HEARING DATE(S): 28 March 2007

JUDGMENT DATE :
2 April 2007

JURISDICTION: Equity Division

JUDGMENT OF: Brereton J

DECISION: Application to discharge stay dismissed upon undertaking to bring into court an additional security.

CATCHWORDS: BUILDING AND CONSTRUCTION – Dispute Resolution – Adjudications – Enforcement – stay of execution – where judgment creditor moves to discharge stay granted by consent – where proceedings in which issues will be finally determined are part-heard – where those proceedings have been adjourned because of default by judgment creditor – where judgment debtor has bona fide arguable case that no amount properly due – where judgment debt can be fully secured by deposit of title deeds in court

LEGISLATION CITED: (NSW) Building & Construction Industry Security of Payment Act 1999

CASES CITED: Biseja Pty Limited v NSI Group Pty Limited [2006] NSWSC 835
Harrison Partners Construction Pty Ltd v Jevena Pty Ltd (2005) 225 ALR 369, [2005] NSWSC 1225

PARTIES: Biseja Pty Ltd (plaintiff)
NSI Group Pty Ltd (defendant)

FILE NUMBER(S): SC 2969/06

COUNSEL: Mr M W Sneddon (plaintiff)
Mr N A Cotman SC w Mr F P Hicks (defendant)

SOLICITORS: L Capolupo & Co (plaintiff)
William Cotsis & Associates (defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Monday, 2 April 2007

2969/06 Biseja Pty Limited v NSI Group Pty Limited

JUDGMENT

1 HIS HONOUR: The substantive proceedings were instituted by the plaintiff Biseja by summons filed on 29 May 2006, claiming the removal of several caveats that the defendant NSI had lodged in respect of lots in a strata development of which Biseja was the proprietor and NSI the builder. Although that aspect of the proceedings has been resolved, by its amended summons Biseja claims damages from NSI for defective or incomplete building work for which NSI was responsible on Biseja’s projects at Swansea and North Entrance. By a cross-claim filed on 24 July 2006, NSI claims declarations that it is entitled to three lots in the strata development, and orders for their transfer to NSI. This entitlement is said to arise from a project management agreement in respect of the North Entrance Stage Two project, NSI contending that it is entitled to a lump sum fee (which is uncontroversial) for the building works, plus an additional 10% for profit and project management, with the option of acquitting that 10% project management fee by a transfer of three lots, for which purpose it has selected Lots 79, 80 and 81.

2 On 8 September 2006, on Biseja’s application, I ordered that the proceedings on NSI’s cross-claim be determined separately and before the proceedings on Biseja’s claim (which is now a technical building case). The hearing of the cross-claim was expedited, and fixed for four days commencing on 4 December 2006. However, at the end of the second day of that hearing, Biseja called for the production of certain documents on a Notice to Produce, and on…

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: [2007] NSWSC 294
Decision Date: 2 April 2007

CaseChat Overview and Summary

In the Federal Circuit Court of Australia, Biseja Pty Ltd, the applicant, sought to discharge a stay of execution on a judgment debt owed by NSI Group Pty Ltd, the respondent. The underlying dispute originated from a building and construction contract. The applicant, a subcontractor, claimed for progress payments and liquidated damages, which were referred to adjudication. The adjudicator ruled in favour of the applicant, and judgment was entered in their favour. However, the respondent sought to stay the enforcement of the judgment pending the outcome of proceedings for final determination of the dispute.

The central legal issue before the court was whether the stay of execution should be discharged, given that the proceedings for final determination were part-heard and had been adjourned due to the applicant's default. Additionally, the court had to consider whether the respondent had a bona fide arguable case that no amount was properly due, and whether the judgment debt could be fully secured by the deposit of title deeds in court. The applicant argued that the stay should be discharged as the respondent had not demonstrated a reasonable prospect of success in the proceedings for final determination.

The court considered the principles of dispute resolution and the role of adjudication in building and construction contracts. It noted that the stay of execution was granted by consent and could only be discharged if there were exceptional circumstances. The court found that the respondent had a bona fide arguable case that no amount was properly due, as the proceedings for final determination were part-heard and had been adjourned due to the applicant's default. Furthermore, the court held that the judgment debt could be fully secured by the deposit of title deeds in court. Consequently, the court declined to discharge the stay of execution.

The court ordered that the stay of execution on the judgment debt remained in place. The applicant was directed to deposit the relevant title deeds in court to secure the judgment debt. The proceedings for final determination were to proceed as scheduled, with the respondent's default being addressed in accordance with the court's directions.

Orders