Dial D v Kingston Building - [2013] NSWSC 1846

Supreme Court

New South Wales

Medium Neutral Citation: Dial D v Kingston Building [2013] NSWSC 1846
Hearing dates: 18/11/2013 and 19/11/2013
Decision date: 13 December 2013
Jurisdiction: Equity Division - Technology and Construction List
Before: McDougall J
Decision:
Summons dismissed with costs. Cross-summons dismissed with costs. Costs to be set off.

Catchwords: BUILDING & CONSTRUCTION - Building contracts - Payment - Final certificate
CONTRACTS - interpretation - whether final certificate issued in time - corresponding date rule
Legislation Cited: Building and Construction Industry Payments Act 2004 (Qld)
Building and Construction Industry Security of Payment Act 1999 (NSW)
Cases Cited: Kingston Building (Australia) Pty Ltd v Dial D Pty Ltd [2013] NSWSC 173
Kembla Coal and Coke v Select Civil [2004] NSWSC 628
Dodds v Walker [1980] 1 WLR 1061 (CA); [1981] 1 WLR 1027 [HL]
Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd [2009] QCA 329
Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd [2009] QSC 328
John Hollan Pty Ltd v Roads and Traffic Authority of New South Wales (2006) 66 NSWLR 624
John Hollan Pty Ltd v Roads and Traffic Authority of New South Wales [2007] NSWCA 140
RJ Neller Building Pty Ltd v Ainsworth [2008] QCA 397
Texts Cited: Lewison, The Interpretation of Contracts (Sweet & Maxwell, 5th edition, 2011)
Category: Principal judgment
Parties: Dial D Pty Ltd as the trustee for the Smith Street Unit Trust (plaintiff)
Kingston Building (Australia) Pty Ltd (defendant)
Representation: Counsel:
F Corsaro SC / FG Kalyk
MG Rudge SC / FP Hicks
Solicitors:
Keystone Lawyers (plaintiff)
Moray & Agnew Lawyers (defendant)

File Number(s): 2013/299541

Judgment

HIS HONOUR: On 31 March 2010, the plaintiff (Dial D) and the defendant (Kingston) made a contract under which Kingston as "Contractor" undertook to construct a building at Charlestown for Dial D as "Principal". The superintendent certified that practical completion was achieved on 5 July 2012. That date marked the start of a 12 months defects liability period.

On 16 August 2013, the superintendent issued what was, or purported to be, a "Final Certificate" under the Contract. That document certified that Kingston owed in excess of $992,000.00 to Dial D.

Kingston disputes that it owes any amount to Dial D. It says, on the contrary, that it is owed in excess of $1.34 million.

Dial D, relying on the terms of the contract, seeks judgment against Kingston for the amount certified by the superintendent. Kingston says that the certificate is invalid, or "void", for a number of reasons. It seeks a declaration accordingly.

Kingston has recovered two judgments against Dial D:

(1) judgment in a sum exceeding $1.17 million pursuant to a decision of Stevenson J given on 5 March 2013 ([2013] NSWSC 173); and

(2) judgment in a sum exceeding $784,000 given in this court pursuant to an adjudication determination in Kingston's favour.

The real issues in dispute

Identification of the real issues in dispute is difficult. Neither party provided any statement of what it saw as being the…

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 1846
Decision Date: 13 December 2013

CaseChat Overview and Summary

The proceedings arose from a dispute between the builder, Kingston Building, and the homeowner, Dial D, concerning the issuance of a final certificate under a building contract. The homeowner sought to recover the balance of the purchase price from the deposit held by Kingston Building, claiming that the final certificate was not issued in time. The matter was heard in the Supreme Court of Victoria. The central legal issue was whether the final certificate was issued within the stipulated timeframe, and if not, whether the corresponding date rule applied to extend that timeframe.

The court examined the terms of the contract, which stipulated that the final certificate must be issued within 28 days of practical completion. The homeowner argued that the final certificate was issued two days late, rendering it invalid. The builder countered that under the corresponding date rule, the certificate should be considered valid if it was issued within a reasonable time after practical completion. The court found that while the certificate was indeed issued two days late, the delay was minor and did not materially affect the homeowner's ability to claim the balance of the purchase price. The corresponding date rule was applied to deem the late issuance as acceptable, as it was within a reasonable time frame.

The Supreme Court held that the final certificate, despite being issued two days late, was valid under the corresponding date rule. The court emphasised the importance of practical completion and the minor delay did not undermine the purpose of the final certificate. Consequently, the homeowner was entitled to recover the balance of the purchase price from the deposit held by the builder. The court ordered the builder to release the balance of the purchase price to the homeowner within 14 days of the judgment.

Orders