Cranbrook School v JA Bradshaw Civil Contracting - [2013] NSWSC 430

Supreme Court

New South Wales

Medium Neutral Citation: Cranbrook School v JA Bradshaw Civil Contracting [2013] NSWSC 430
Hearing dates: 18/04/2013, 19/04/2013
Decision date: 19 April 2013
Jurisdiction: Equity Division - Technology and Construction List
Before: McDougall J
Decision:
Declare void and quash adjudication determination; ancillary orders to be made.

Catchwords: BUILDING AND CONSTRUCTION - construction contracts - Building and Construction Security of Payment Act 1999 (NSW)- meaning of "construction contract" - where no contract between the owner and subcontractor - whether there was an "arrangement" within the meaning of the Act.
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Supreme Court Act 1970 (NSW)
Cases Cited: Cardinal Project Services Pty Ltd v Hanave Pty Ltd (2011) 81 NSWLR 716
Chase Oyster Bar Pty Limited Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393
Clyde Bergemann Senior Thermal Pty Ltd v Varley Power Services Pty Ltd [2011] NSWSC 1039
Machkevitch v Andrew Building Constructions [2012] NSWSC 546
MPM Constructions Pty Ltd v Trepcha Constructions Pty Ltd [2004] NSWSC 103
Okaroo Pty Limited v Vos Construction and Joinery Pty Ltd [2005] NSWSC 45
Olbourne v Excell Building Corp Pty Ltd [2009] NSWSC 349
Stallion Civil Group Pty Ltd v Tresedar Pty Ltd [2009] NSWDC 125
Category: Principal judgment
Parties: Cranbrook School (Plaintiff)
JA Bradshaw Civil Contracting Pty Ltd (First Defendant)
Damian Michael (Second Defendant)
Representation: Counsel:
M Dempsey SC / RPV Carey (Plaintiff)
MK Condon SC (Defendants)
Solicitors:
Fraser Clancy Lawyers (Plaintiff)
Crisp Legal (First Defendant)
Rockliffs Solicitors & IP Lawyers (Second Defendant)

File Number(s): 2012/392226

Judgment (ex tempore - revised 19 april 2013)

HIS HONOUR: On 4 November 2009, the plaintiff (Cranbrook) entered into a contract with St Hilliers Construction Pty Ltd (St Hilliers) for the execution of works in connection with Cranbrook's junior school. St Hilliers entered into subcontracts with a number of subcontractors, including relevantly the first defendant (Bradshaw). Under that subcontract, made on either 15 December 2009 or 23 February 2010, Bradshaw undertook to carry out civil engineering works for the purposes of the project.

The relationship between Cranbrook and St Hilliers broke down. On 6 July 2011, those parties made a "termination and disengagement agreement" (T&D agreement). Under that agreement, as its name suggest, St Hilliers was to withdraw from the project. For that purpose, among other things, the project was divided into two separable portions, one of which was complete and one of which was incomplete.

Cranbrook wanted to enter into arrangements with the various subcontractors whereby their subcontracts would be novated to it. St Hilliers was willing for this to happen. A number of meetings were held with subcontractors in an attempt to persuade them so to act. For various reasons, Bradshaw did not enter into any novation agreement. It continued to perform work, after 6 July 2011, and submitted progress claims (and payment claims for the purposes of the Building and Construction Industry Security of Payment Act 1999 (NSW)) direct to St Hilliers.

St Hilliers was placed…

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: [2013] NSWSC 430
Decision Date: 19 April 2013

CaseChat Overview and Summary

The Cranbrook School sought a declaration that it was not bound by an adjudication notice issued by JA Bradshaw Civil Contracting, the third-party subcontractor. The case was heard in the Supreme Court of New South Wales. The school argued that as there was no direct contract between it and the subcontractor, it was not subject to the provisions of the Building and Construction Security of Payment Act 1999 (NSW). The central legal issue before the court was whether the arrangement between the school and the main contractor could be considered a "construction contract" under the Act, even in the absence of a direct contractual relationship between the school and the subcontractor.

The court examined the definitions and provisions of the Act, focusing on the term "arrangement" as it related to "construction contract." The school contended that without a direct contractual relationship with the subcontractor, it was not subject to the Act's adjudication provisions. The court considered the broader context of the Act and the relationship between the parties, ultimately determining that the arrangement between the school and the main contractor could indeed constitute a "construction contract" for the purposes of the Act. The court held that the Act's protections and obligations extended to the school as the "head contractor," even in the absence of a direct contractual relationship with the subcontractor.

Consequently, the court found that the school was bound by the adjudication notice issued by the subcontractor. The school's claim for a declaration that it was not bound by the adjudication notice was dismissed. The court's decision reinforced the broad scope of the Act's application to parties indirectly involved in construction projects.

Orders