Coordinated Construction Co v J M Hargreaves - [2005] NSWSC 77

CITATION:
Coordinated Construction Co v J M Hargreaves & Ors [2005] NSWSC 77

HEARING DATE(S): 3 February 2005, 9 February 2005

JUDGMENT DATE :

22 February 2005

JUDGMENT OF:
McDougall J at 1

DECISION:
See para [63] of judgment

CATCHWORDS:
BUILDING AND CONSTRUCTION - progress payment - adjudicator's determination - basic and essential requirements of a valid determination - whether determination void because adjudicated amount included amounts assumed (but not decided) not to be "for" construction work - whether determination in breach of the Building and Construction Industry Security of Payment Act 1999 is unlawful - whether payment claim served on or from reference date

LEGISLATION CITED:
Building and Construction Industry Security of Payment Act 1999

CASES CITED:
Brodyn Pty Ltd v Davenport [2004] NSWCA 394
De Martin & Gasparini v Energy Australia [2002] NSWCA 330
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Kembla Coal & Coke v Select Civil [2004] NSWSC 628
Quasar Constructions v Demtech Pty Ltd [2004] NSWSC 116
Rothnere v Quasar [2004] NSWSC 1151
TransGrid v Siemens Ltd [2004] NSWCA 395

PARTIES:
Coordinated Construction Co Pty Limited (Plaintiff)
J M Hargreaves (NSW) Pty Limited (First Defendant)
John Parnell (Second Defendant)
Peter Sarlos (Third Defendant)
LEADR (Fourth Defendant)

FILE NUMBER(S):
SC 55086/04

COUNSEL:
M G Rudge SC/M Christie (Plaintiff)
D D Feller SC/D Loewenstein (First Defendant)

SOLICITORS:
Colin Biggers & Paisley (Plaintiff)
James R Knowles Lawyers Pty Limited (First Defendant)

LOWER COURT JURISDICTION:

COORDINATED CONSTRUCTION CO PTY LIMITED

J M HARGREAVES (NSW) PTY LIMITED & ORS

55086/04

Index to Judgment

Para

The issues 2

The subcontract 6

Hargreaves’ claims 12

EOT 1 (V 36) 13

EOT 2 (V 37) 14

EOTs 3 to 6 (V 64, V 80, V 97 and V 105) 15

The interest claims 17

V 65 and V 94 19

The extension of time granted 21

Mr Makin’s determination 24

Mr Parnell’s determination 25

Mr Sarlos’ determination 33

First and second issues: “delay damages”, interest 36

The second question: the Brodyn argument 41

Alternative argument based on Project Blue Sky 54

Third and fourth issues: interest - point not taken or “de minimis” 56

Fifth and sixth issues: EOTs 3 to 6 57

Seventh and eighth issues: escalation costs claims 1 and 2 – s 22(4) 59

Ninth issue – reference date 61

Conclusion and order 63

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

McDOUGALL J

22 February 2005

55086/04 COORDINATED CONSTRUCTION CO PTY LIMITED v
J M HARGREAVES (NSW) PTY LIMITED & ORS

JUDGMENT

1 HIS HONOUR: The plaintiff (Coordinated) and the first defendant (Hargreaves) are parties to a subcontract under which Hargreaves agreed to carry out certain work in connection with the redevelopment of the former Gazebo Hotel at Elizabeth Bay. Hargreaves made a number of what it said were payment claims under the Building and Construction Industry Security of Payment Act 1999 (the Act). In at least three cases, those claims were disputed. They proceeded to…

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.

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Details

Case: [2005] NSWSC 77
Decision Date: 22 February 2005

CaseChat Overview and Summary

Coordinated Construction Co, as the principal contractor, brought an action against J M Hargreaves, the principal, seeking a declaration that a determination made by an adjudicator was invalid and an order for payment of the adjudicated amount. The dispute arose from a construction project where the principal contractor claimed that the principal had failed to make an interim payment. The matter was heard in the Supreme Court of New South Wales. The primary issue before the court was whether the adjudicator's determination was valid and enforceable. Specifically, the court needed to determine if the determination was void because it included amounts that the adjudicator assumed, but did not decide, were not for construction work. Another issue was whether the determination was unlawful because it breached the Building and Construction Industry Security of Payment Act 1999.

The court examined the requirements of a valid determination under the Act and found that the adjudicator had not fulfilled the basic and essential requirements. The adjudicator had not decided the disputed amount; instead, the adjudicator assumed that certain amounts were not for construction work and included them in the determination. The court held that this assumption was not a decision and therefore, the determination was void. Additionally, the court found that the determination was in breach of the Act because it was not made in accordance with the basic and essential requirements. The court also considered whether the payment claim was served on or from the reference date and concluded that it was. Consequently, the determination was not unlawful because it did not breach the Act. The court found that the determination was invalid and unenforceable.

In conclusion, the Supreme Court of New South Wales held that the adjudicator's determination was invalid and unenforceable. The court found that the determination was void because the adjudicator had not decided the disputed amount and had instead assumed that certain amounts were not for construction work. The court also found that the determination was not in breach of the Act because the payment claim was served on or from the reference date. The court did not make any orders for payment of the adjudicated amount.

Orders