Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd

Coordinated Construction Co Pty Ltd (the respondent) sought to enforce an adjudicator's determination made under the *Building and Construction Industry Security of Payment Act 1999* (NSW) (the Act) against JM Hargreaves (NSW) Pty Ltd (the appellant). The dispute concerned whether certain amounts claimed by the respondent, described as "delay damages" under the construction contract, were recoverable as progress payments under the Act. The appellant sought to set aside the adjudicator's determination on the basis that these delay damages were not for construction work or related goods and services as defined by the Act.

The central legal issue before the Court of Appeal was whether "delay damages" payable under a construction contract could be considered a claim for payment for "construction work" or "related goods and services" within the meaning of the Act, thereby falling within the scope of a payment claim and the adjudicator's jurisdiction. The appellant argued that such damages were compensatory in nature, arising from a breach of contract, and not payments for work performed or goods supplied.

The Court of Appeal, comprising Hodgson, Ipp and Basten JJA, dismissed the appeal. Their Honours reasoned that the Act is intended to provide a statutory regime for the recovery of progress payments for construction work and related goods and services. While delay damages might arise from a breach of contract, they were found to be payments "for" construction work in the broader sense, as they compensated the respondent for the consequences of delays in the carrying out of that work. The Court affirmed that the Act should be interpreted broadly to achieve its remedial purpose, and that payments arising from the contract, even if labelled as damages for delay, could fall within its ambit if they related to the performance or non-performance of construction obligations.

The appeal was dismissed with costs.