Build It Carpentry and Joinery Pty Ltd v John King

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MAGISTRATES COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Build It Carpentry & Joinery Pty Ltd v John King & Anor

Citation:

[2021] ACTMC 1

Hearing Date:

4 September 2020

DecisionDate:

Friday 26 February 2021

Before:

Magistrate Morrison

Decision:

See paragraphs [101] and [102]

Catchwords:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – settlement of contractual disputes – referral of dispute to third party decision-maker – whether dispute notice was valid having regard to matters then in dispute

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – whether court can review third-party determination – whether decision of third party decision-maker was void for legal error – whether a legal error was made – whether determination was made in accordance with the contract

Cases Cited:

Foote & Anor v Barton Property Partnership No 2 [2014] ACTSC 330

Lainson Holdings Pty Ltd v Duffy Kennedy Pty Ltd [2019] NSWSC 576

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; 256 CLR 104

Parties:

Build It Carpentry & Joinery Pty Ltd (Plaintiff)

John King (First Defendant)

Robyn King (Second Defendant)

Representation:

Counsel

B Buckland (Plaintiff)

R Arthur (Defendants)

Solicitors

Mills Oakley (Plaintiff)

Bradley Allen Love (Defendants)

File Number:

CS 264 of 2018

MAGISTRATE MORRISON:

  1. This hearing proceeded on the basis that there is no material dispute between the parties on the facts. A joint tender bundle of some four volumes of documents was received in evidence by consent (Exhibit A).

  1. By way of introductory summary:

(a)     The plaintiff is a building company. The plaintiff and the defendants entered into a Master Builders Association Home Building Contract (‘the Contract’) in March 2014.

(b)     Work was carried out by the plaintiff under the terms of the Contract and on the basis of what the plaintiff says were certain agreed variations to the Contract and additional works.

(c)      A dispute arose between the plaintiff and the defendants about the payments required of the defendants under the Contract.

(d)     The plaintiff purported to make a referral of what it said was the dispute to an independent third party decision-maker (‘the TPDM’) under clause 32 of the Contract.

(e)     The defendants maintained at the time (and continued to maintain at hearing) that the referral to the TPDM was invalid, but nonetheless ‘took part in’ the TPDM referral process by providing evidence and making submissions.

(f)       The TPDM determined that an amount of $76,951.50 was payable by the defendants to the plaintiff, and that the defendants were to pay 100% of the TPDM’s fees.

(g)     The defendants have not paid $76,951.50 (nor costs) to the plaintiff.

  1. Two arguments are raised by the defendants.

  1. The first is that, whilst the defendants accept that a dispute had arisen between the parties about certain variations before the issue of the dispute notice, the defendants say that what was referred to in that notice (and what was subsequently referred to the TPDM for determination) went beyond the matters then in dispute. The defendants say that the referral is invalid as…

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Details
Case
[2021] ACTMC 1
Decision Date

CaseChat Overview and Summary

Build It Carpentry and Joinery Pty Ltd sought judicial review of a decision by a third-party dispute resolution agent, appointed under a contractual agreement, who had ruled in favour of John King in a dispute over the quality of work performed by Build It under a building contract. The primary contention was whether the dispute notice provided by Build It was valid, considering the scope of the issues it covered, and if the decision of the third-party dispute resolution agent was subject to judicial scrutiny. Additionally, it was contested whether the agent had made a legal error and whether the determination complied with the contractual agreement.

The court was tasked with determining the validity of the dispute notice, the extent of judicial review over the third-party decision, and whether the decision was void due to a legal error. The court considered the language of the contractual agreement and the principles governing the role of a third-party dispute resolution agent. It examined whether the dispute notice sufficiently outlined the issues and whether the agent had jurisdiction to address them. Furthermore, the court assessed whether the agent's decision was subject to judicial review and, if so, whether it had erred in law.

The court found that the dispute notice was valid as it covered the scope of the issues raised by Build It. The court concluded that while the third-party decision-maker's role was generally non-reviewable, there were exceptions where legal errors occurred. However, the court held that the decision did not contain any legal errors and was made in accordance with the contract. The court dismissed the application for judicial review, affirming the decision of the third-party dispute resolution agent.

The court ordered that Build It Carpentry and Joinery Pty Ltd pay John King's costs of the proceeding. The court further specified that the costs were to be paid on an indemnity basis, reflecting the unsuccessful nature of the application. This ruling underscored the importance of clear contractual provisions and the limited scope of judicial intervention in third-party dispute resolution processes.

Orders

Orders of the court

See paragraphs [101] and [102]

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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