Black Label Developments Pty Ltd v McMenemy

Case [2025] NSWCA 114

Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Black Label Developments Pty Ltd v McMenemy [2025] NSWCA 114
Hearing dates: 14 April 2025
Date of orders: 27 May 2025
Decision date: 27 May 2025
Before: Bell CJ at [1];
McHugh JA at [2];
Griffiths AJA at [174].
Decision:

(1) Grant leave to appeal with respect to proposed Grounds 2 and 4 in the amended draft notice of appeal.

(2) Direct the appellant to file a notice of appeal pursuant to the leave granted within seven days.

(3) Dismiss the appeal.

(4) Otherwise dismiss the summons for leave to appeal.

(5) The appellant pay the respondent’s costs in this Court.

Catchwords:

BUILDING AND CONSTRUCTION — Building and Construction Industry Security of Payment Act 1999 (NSW) — stay of execution of judgment obtained under s 25 of the Act pending determination of other proceedings — role of statutory policies in discretion to grant a stay of execution — where construction contract for consumer residential building work — where adjudicator did not determine aspects of principal’s response to payment claim — where other proceedings involve issue of whether construction contract void or voidable — where primary judge found principal has strong prima facie case in other proceedings

Legislation Cited:

Building and Construction Industry Security of Payment Act 1999 (NSW), ss 3, 4, 7, 8, 9, 10, 11, 13, 22, 25, 32, 34

Civil Procedure Act 2005 (NSW), ss 67, 56, 58, 59, 60,135

Contracts Review Act 1980 (NSW)

Competition and Consumer Act 2010 (Cth), Sch 2, ss 21, 22

Home Building Act 1989 (NSW), Sch 1, s 2

Building and Construction Industry Security of Payment Regulation 2008 (NSW) (repealed), reg 3A

Building and Construction Industry Security of Payment Regulation 2020 (NSW), reg 4

Cases Cited:

A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2023] NSWCA 144

Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685

Bitannia Pty Ltd v Parkline Constructions Pty Ltd (2006) 67 NSWLR 9; [2006] NSWCA 238

Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394

Greenwood Futures v DSD Builders (No 2) [2018] NSWSC 1471

Hakea Holdings Pty Ltd v Denham Constructions Pty Ltd; BaptistCare NSW & ACT v Denham Constructions Pty Ltd [2016] NSWSC 1120

House v The King [1936] HCA 40; (1936) 55 CLR 499

In the matter of the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318

In the matter of Webuildem Pty Limited [2012] NSWSC 708

Macedonian Orthodox Community Church St Petka Incorporated v His Eminence Petar the Diocesan Bishop of Macedonian Orthodox Diocese of Australia and New Zealand (2008) 237 CLR 66; [2008] HCA 42

Martinus Rail Pty Ltd v Qube RE Services (No. 2) [2025] NSWCA 49

Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24

New South Wales Bar Association v Stevens (2003) 52 ATR 602; [2003] NSWCA 95

PPK Willoughby Pty Ltd v Baird [2019]…

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AGLC
Black Label Developments Pty Ltd v McMenemy [2025] NSWCA 114
Case
[2025] NSWCA 114
Decision Date

CaseChat Overview and Summary

Black Label Developments Pty Ltd (the appellant) sought to appeal a decision of the primary judge concerning the stay of execution of a judgment obtained under the *Building and Construction Industry Security of Payment Act 1999* (NSW). The dispute arose from a payment claim made by McMenemy (the respondent) under a construction contract for residential building work. The adjudicator had determined the payment claim, but certain aspects of the appellant's response were not addressed. The appellant had also commenced separate proceedings seeking to have the construction contract declared void or voidable, and the primary judge had found a strong prima facie case in those proceedings.

The central legal issue before the Court of Appeal was whether the primary judge erred in refusing to grant a stay of execution of the judgment obtained under the Security of Payment Act pending the determination of the separate proceedings concerning the validity of the construction contract. This required the court to consider the interplay between the statutory policies underpinning the Security of Payment Act and the general principles governing the exercise of discretion to grant a stay of execution, particularly where a strong prima facie case exists in related proceedings.

The Court of Appeal, comprising Bell CJ, McHugh JA, and Griffiths AJA, ultimately dismissed the appeal. While granting leave to appeal on specific grounds, the court found that the primary judge had correctly exercised their discretion. The court reasoned that the statutory policies of the Security of Payment Act, which favour prompt payment in the building and construction industry, weighed heavily against granting a stay. Although the appellant had established a strong prima facie case in the separate proceedings, this was not sufficient to override the strong policy considerations favouring the enforcement of an adjudication decision under the Act, especially given the nature of the contract as consumer residential building work. The court concluded that the primary judge’s refusal to grant a stay was not an error of law.

Orders

Orders of the court

(1) Grant leave to appeal with respect to proposed Grounds 2 and 4 in the amended draft notice of appeal.

(2) Direct the appellant to file a notice of appeal pursuant to the leave granted within seven days.

(3) Dismiss the appeal.

(4) Otherwise dismiss the summons for leave to appeal.

(5) The appellant pay the respondent’s costs in this Court.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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