Citygate Properties Pty Ltd v BGC Construction Pty Ltd
[2016] WASC 101
•1 APRIL 2016
CITYGATE PROPERTIES PTY LTD -v- BGC CONSTRUCTION PTY LTD [2016] WASC 101
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2016] WASC 101 | |
| Case No: | CIV:2654/2015 | 19 FEBRUARY 2016 | |
| Coram: | TOTTLE J | 1/04/16 | |
| 5 | Judgment Part: | 1 of 1 | |
| Result: | Application for leave to enforce determination granted | ||
| B | |||
| PDF Version |
| Parties: | CITYGATE PROPERTIES PTY LTD BGC CONSTRUCTION PTY LTD |
Catchwords: | Construction Contracts Act 2004 (WA) Application to enforce Application granted Where determination made requires money to be paid by a contractor to a principal |
Legislation: | Civil Judgments Enforcement Act 2004 (WA) Construction Contracts Act 2004 (WA), s 39(2), s 43(2) |
Case References: | BGC Construction Pty Ltd v Citygate Properties Pty Ltd [2016] WASC 88 Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
BGC CONSTRUCTION PTY LTD
Defendant
Catchwords:
Construction Contracts Act 2004 (WA) - Application to enforce - Application granted - Where determination made requires money to be paid by a contractor to a principal
Legislation:
Civil Judgments Enforcement Act 2004 (WA)
Construction Contracts Act 2004 (WA), s 39(2), s 43(2)
Result:
Application for leave to enforce determination granted
Category: B
Representation:
Counsel:
Plaintiff : Mr P G Clifford & Mr G J Dunn
Defendant : Mr M Hotchkin
Solicitors:
Plaintiff : Slee Anderson & Pidgeon
Defendant : Hotchkin Hanly Lawyers
Case(s) referred to in judgment(s):
BGC Construction Pty Ltd v Citygate Properties Pty Ltd [2016] WASC 88
Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80
1 TOTTLE J: The plaintiff, Citygate, applies for leave to enter judgment against the defendant, BGC, in the sum of $815,868.94, together with interest, pursuant to s 8(1)(a) of the Civil Judgments Enforcement Act 2004 (WA).
2 On 23 September 2015 Mr Gordon Smith, an adjudicator appointed pursuant to the Construction Contracts Act 2004 (WA) (the Act), determined a payment dispute in Citygate's favour and decided that BGC should pay Citygate the sum of $815,868.94 ($741,699.04 plus GST of $74,169) on or before 30 September 2015.
3 The construction contract which gave rise to the payment dispute determined by the adjudicator is referred to in my reasons in BGC Construction Pty Ltd v Citygate Properties Pty Ltd [2016] WASC 88. Citygate is the owner and BGC is the contractor. Those reasons explain why writs of certiorari should issue to quash determinations made by another adjudicator on 3 March 2015 and 8 May 2015 respectively and why BGC's application for leave to enforce those determinations should be dismissed. Those earlier determinations provided for Citygate to pay BGC a total of $794,418.21.
The relevant legislative provisions
4 Section 43(2) of the Act provides that a determination made by an adjudicator may, with leave of the court, be enforced in the same manner as a judgment or order of the court to the same effect. If leave is given, judgment may be entered in terms of the determination.
5 Section 39(2) of the Act provides that, unless the determination provides otherwise, interest at the rate prescribed under the Civil Judgments Enforcement Act 2004 needs to be paid on such of the amount of the determination as is unpaid after the date specified in the determination. If judgment is entered in the terms of the determination, interest under the Act ceases to accrue.
The discretion conferred by s 43(2) of the Act
6 The court's discretion to grant leave to enforce a determination must be exercised having regard to the objects, purpose and policy of the Act which, expressed compendiously, is 'to keep the money flowing'. Having regard to that object, a party who has the benefit of a determination is entitled to enforce it.
7 What constitutes a sufficient reason for refusing leave to enforce a determination will depend on a consideration of all of the relevant circumstances and must be assessed bearing in mind the scheme and policy of the Act: Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80 [27] - [29] (Corboy J).
The basis of BGC's opposition to the grant of leave
8 BGC argued that the application should be dismissed or deferred pending the outcome of Citygate's applications for judicial review of the March and May 2015 determinations. By force of circumstance, BGC's application has been partially successful in that Citygate's application for leave has been deferred until after the determination of the judicial review applications.
9 In outline, BGC's submissions were as follows:
1. Although it conceded that the Act contemplated a payment up the contracting chain, BGC submitted that the primary purpose of the Act is to keep money flowing down the contractual chain by enforcing timely payment of amounts due by principals to contractors.
2. Progress Payment Certificate 17, which provided for payment to be made by BGC to Citygate and which was the subject of the adjudication determination in respect of which leave to enforce is sought, was not issued until after the works were completed and after the progress payment regime provided for under the contract had ended. Citygate's reliance on the adjudication process to determine the payment dispute that arose in relation to Progress Payment Certificate 17 was described by BGC as a ploy, and 'at best opportunistic and at worst an abuse of the Act's process'.
3. As the adjudication determination would result in money flowing up the chain to the principal Citygate, leave to enforce would be inconsistent with the purpose of the Act and should be refused.
4. It would be manifestly unjust and inconsistent with the purpose of the Act to allow the determination in Citygate's favour to be enforced against BGC pending the determination of BGC's application to enforce the March and May 2015 determinations in its favour.
Disposition
10 BGC has not challenged the adjudicator's determination by bringing an application for judicial review.
11 The quashing of the March and May 2015 determinations made in favour of BGC disposes, for practical purposes, of its argument that it would be contrary to the object of the Act and manifestly unjust to allow Citygate to enforce the September 2015 determination in its favour.
12 The Act clearly contemplates that determinations may be made which call for money to be paid by a contractor to a principal. Thus, granting leave to Citygate to enforce the determination is not inconsistent with the purpose of the Act.
13 In the absence of a challenge to the validity of the September 2015 determination, BGC's submissions that Citygate's reliance on the processes of the Act are opportunistic, a ploy or potentially an abuse of the Act's process do not amount to a sufficient reason not to grant leave to enforce the determination. Accordingly, leave to enforce the determination dated 23 September 2015 will be granted. I will hear the parties in relation to the terms of the order to be made and in relation to costs.
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