Cornonero v Bright Moon Buddhist Society - [2018] VSC 737

IN THE SUPREME COURT OF VICTORIA AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST

Not Restricted

S ECI 2018 0950

CORNONERO PTY LTD	Plaintiff
v
BRIGHT MOON BUDDHIST SOCIETY & ANOR	Defendants

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JUDGE:	DIGBY J
WHERE HELD:	Melbourne
DATE OF HEARING:	21 November 2018
DATE OF JUDGMENT:	29 November 2018
CASE MAY BE CITED AS:	Cornonero v Bright Moon Buddhist Society
MEDIUM NEUTRAL CITATION:	[2018] VSC 737

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ADMINISTRATIVE LAW – Judicial review – Relief in the nature of certiorari – Whether adjudication determination is vitiated by jurisdictional error – Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 56.

BUILDING CONTRACTS – Review adjudications – Application for review by respondent – Requirement for respondent to pay adjudicated amount other than alleged excluded amounts to claimant – Where respondent transfers funds before making review application – Where funds clear after making review application – Requirement for respondent to pay alleged excluded amounts into designated trust account – Where respondent pays undisputed amounts to claimant instead of into trust – Building and Construction Industry Security of Payment Act 2002 (Vic) s 28B(5), s 28B(6).

STATUTORY INTERPRETATION – Legislative intention – Statutory precondition to review application – Where respondent took partial steps of compliance – Need for strict compliance – Meaning of ‘paid’ – Electronic funds transfer – Whether ‘paid’ requires clearance of funds in recipient’s bank account.

WORDS AND PHRASES – ‘Clearance’ – ‘Paid’ – ‘Pay’ – ‘Security’ – ‘Trust’ – ‘Undisputed’.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Andrew	Ward & Co. Legal Consultants
For the First Defendant	Mr A Laird	Gadens
For the Second Defendant	No appearance

HIS HONOUR:

Application for judicial review

In this proceeding, Cornonero Pty Ltd (the plaintiff) applies for judicial review of a review adjudication determination made by the second defendant in favour of the Bright Moon Buddhist Society (the first defendant) under the Building and Construction Industry Security of Payment Act 2002 (the SOP Act).

The plaintiff claim the following:

(a) relief in the nature of certiorari quashing a review determination made 21 June 2018;

(b) an injunction (both interlocutory and final) restraining the first defendant from taking steps to enforce the review determination;

(c) an injunction (both interlocutory and final) restraining the second defendant from providing an adjudication certificate in respect of the review determination; and

(d) a declaration that the review determination is unlawful and void.[1]

[1]Originating Motion for Judicial Review dated 21 August 2018 (Originating Motion).

Background facts
The Contract

On 18 January 2017, the plaintiff and the first defendant contracted for the first defendant to carry out construction work on the plaintiff’s land at 540 Springvale Road, Springvale South (the Contract).[2] The total Contract price was around $2,088,800 (including GST).[3]
[2]Affidavit of Rachel Brady, 21 August 2018 (Brady Affidavit), Exhibit ‘RB–1’.
[3]Plaintiff’s Submissions, 15 October 2018 (Plaintiff’s Submissions), [4].

The Payment Claim

On 27 April 2018, the plaintiff served a payment claim on the first defendant seeking payment…

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: [2018] VSC 737
Decision Date: 29 November 2018

CaseChat Overview and Summary

The case of Cornonero v Bright Moon Buddhist Society involved a dispute between a construction contractor and a Buddhist society regarding a building contract. The dispute was brought before the Victorian Court of Appeal, which was tasked with determining whether the adjudication determination was vitiated by jurisdictional error, and whether the respondent had complied with statutory requirements under the Building and Construction Industry Security of Payment Act 2002 (Vic). The legal issues before the court included the interpretation of statutory preconditions to a review application, the requirement for strict compliance with these preconditions, and the meaning of terms such as ‘paid’, ‘clearance’, and ‘trust’ in the context of electronic funds transfer.

The court considered whether the respondent had strictly complied with the statutory preconditions for making a review application, specifically the requirement to pay the adjudicated amount into a designated trust account and to pay the undisputed amounts to the claimant. The court examined the actions of the respondent, who had transferred funds before making the review application, and had made payments into the claimant's account instead of a designated trust account. The court also considered whether the term ‘paid’ required the clearance of funds in the recipient’s bank account, and whether the respondent's actions constituted a payment within the meaning of the Act.

In its decision, the court found that the respondent had not strictly complied with the statutory preconditions for making a review application. The court held that the term ‘paid’ required the clearance of funds in the recipient's bank account, and that the respondent's actions did not constitute a payment within the meaning of the Act. The court also found that the respondent had not paid the undisputed amounts to the claimant, but rather had made payments into the claimant's account instead of a designated trust account. As a result, the court allowed the appeal and quashed the decision of the trial judge.

The court made orders setting aside the decision of the trial judge and substituting its own decision in lieu. The court also ordered that the respondent pay the undisputed amounts into a designated trust account within 14 days of the date of the judgment, and that the respondent pay interest on the undisputed amounts from the date of the adjudication determination until the date of payment. The court further ordered that the respondent bear the costs of the appeal.

Orders