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Class Electrical Services v Go Electrical

Class Electrical Services v Go Electrical

Case [2013] NSWSC 363 11 April 2013

Contract Formation

Adjudication of Payment Claims

Construction Contract

Construction Law

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Supreme Court

New South Wales

Medium Neutral Citation: Class Electrical Services v Go Electrical [2013] NSWSC 363
Hearing dates: 11/04/2013
Decision date: 11 April 2013
Jurisdiction: Equity Division - Technology and Construction List
Before: McDougall J
Decision:
Declare determination void and order that it be quashed.

Catchwords:
Building and Construction - Building and Construction Security of Payment Act 1999 (NSW)- meaning of "construction contract" for the purposes of the Act - whether undertaking to supply related goods under an arrangement.
Building and Construction - Construction Contracts - Adjudication of payment claims - whether claim in respect of one contract.
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Cases Cited: Chase Oyster Bar Pty Limited v Hamo Industries Pty Limited (2010) 78 NSWLR 393
Machkevitch v Andrew Building Constructions [2012] NSWSC 546
Matrix Projects (Qld) Pty Ltd v Luscombe [2013] QSC 4
Okaroo Pty Ltd v Voss Construction and Joinery Pty Ltd [2005] NSWSC 45
Rail Corporation of NSW v Nebax Constructions [2012] NSWSC 6
Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd and Anor [2012] QCA 276
Texts Cited: Oxford English Dictionary
Category: Principal judgment
Parties: Class Electrical Services Pty Limited (Plaintiff)
Go Electrical Pty Limited (First Defendant)
Philip Davenport (Second Defendant)
Adjudicate Today Pty Limited (Third Defendant)
Representation: Counsel:
BW Rayment QC / B DeBuse (Plaintiff)
DR Pritchard SC / FFF Salama (Defendant)
Solicitors:
HWL Ebsworth Lawyers (Plaintiff)
Marsdens Law Group (Defendant)

File Number(s): 2013/58792

Judgment (ex tempore - revised 11 april 2013)

HIS HONOUR: The first defendant (Go Electrical) claims that the plaintiff (Class Electrical) is indebted to it in an amount exceeding $1.8 million for the supply and delivery of electrical fittings and appliances. Go Electrical sought to utilise the mechanisms of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) to enforce its claim. Ultimately, the claim was referred to an adjudicator (who is the second defendant in these proceedings) for determination. He found in favour of Go Electrical and made a determination accordingly.

Class Electrical says that the adjudicator's determination is affected by a number of errors and that, in consequence, it cannot stand.

There is no doubt that the electrical fittings and appliances in question were utilised by Class Electrical in connection with various contracts or sub-contracts undertaken by it, and that those contracts or sub-contracts themselves were "construction contracts" for the purposes of the Act. Thus, it is common ground that the goods supplied by Go Electrical to Class Electrical were "related goods" for the purposes of the Act.

It would follow from that state of affairs that if there were a construction contract between Go Electrical and Class Electrical for the supply of those related goods (as they may be called), and if the adjudicator's determination related only to one construction contract, then he would have had jurisdiction to undertake the task that he did.

The issues

Class Electrical identified some five grounds of complaint in relation to the determination. The first complaint…

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.

Continue reading Class Electrical Services v Go Electrical

Details

AGLC: Class Electrical Services v Go Electrical [2013] NSWSC 363
Case: [2013] NSWSC 363
Decision Date: 11 April 2013

CaseChat Overview and Summary

The case of Class Electrical Services v Go Electrical was heard in the Supreme Court of New South Wales. The dispute arose between Class Electrical Services, a subcontractor, and Go Electrical, a main contractor, regarding payment under a construction contract. Class Electrical Services submitted a payment claim under the Building and Construction Security of Payment Act 1999 (NSW) seeking payment for work done and materials supplied. Go Electrical disputed the claim, leading to an adjudication process where an adjudicator determined in favour of Class Electrical Services. Go Electrical then sought a review of the adjudicator's decision, arguing the claim was not valid under the Act.

The primary legal issue before the court was whether the agreement between the parties constituted a "construction contract" for the purposes of the Act. Additionally, the court had to determine whether the claim was valid in respect of one contract. Class Electrical Services argued that the agreement was a construction contract and that the claim was valid. Go Electrical contended that the agreement did not qualify as a construction contract and that the claim was invalid because it pertained to an arrangement to supply related goods.

The court found that the agreement between the parties was indeed a construction contract as it involved the supply of related goods and services in the context of a construction project. The court further held that the claim was valid as it pertained to one contract, namely the agreement between the parties. The court emphasised that the Act was designed to ensure timely payment in the construction industry, and the claim was within the scope of the Act. Consequently, the court dismissed Go Electrical's application for a review of the adjudicator's decision.

As a result of the court's decision, Class Electrical Services was entitled to the payment determined by the adjudicator. The court's ruling underscored the importance of clear contractual agreements and the applicability of the Security of Payment Act in ensuring timely payments within the construction industry.

Orders