Digital City v QX Australia - [2004] NSWSC 933

CITATION: Digital City v QX Australia [2004] NSWSC 933

HEARING DATE(S): 7 October 2004

JUDGMENT DATE:
7 October 2004

JURISDICTION:
Equity
Technology & Construction List

JUDGMENT OF: Campbell J

DECISION: Injunction granted without term for payment in

CATCHWORDS: CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - remuneration - Building and Construction Industry Security of Payment Act 1999 - whether interlocutory injunction against advancing of adjudication process, pending determination of whether adjudicator has jurisdiction, should be on terms of requiring payment into Court of amount claimed

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

CASES CITED: Abacus Funds Management Ltd v Davenport [2003] NSWSC 935
Amflo Constructions Pty Limited v Anthony Jefferies [2003] NSWSC 856

PARTIES :
Digital City Pty Ltd - Plaintiff
QX Australia Pty Limited - First Defendant
Peter Finnane - Second Defendant
LEADR - Third Defendant

FILE NUMBER(S): SC 55071/04

COUNSEL: S Kerr - Plaintiff
G Curtin - First Defendant

SOLICITORS: W G McNally & Co - Plaintiff
No appearance - First Defendant
Submitting appearance - Second Defendant
Submitting appearance - Third Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
DUTY JUDGE LIST

CAMPBELL J

THURSDAY 7 OCTOBER 2004

55071/04 DIGITAL CITY PTY LTD v QX AUSTRALIA PTY LIMITED & ORS

JUDGMENT – Ex Tempore

1 HIS HONOUR: This is an application to extend an ex parte injunction which Palmer J granted yesterday, and which expires later today. The litigation arises under the Building and Construction Industry Security of Payment Act 1999. The plaintiff is the proprietor under a building contract, for whom the first defendant carried out some building work. The first defendant has made an adjudication application, relating to what it says is a payment claim made in accordance with the Act. The third defendant is the nominating authority to whom that application was made. The third defendant has nominated the second defendant as the adjudicator, and the second defendant has accepted that nomination.

2 The basis upon which the plaintiff challenges the jurisdiction of the adjudicator is that it asserts that there never was a payment claim within the meaning of section 13 of the Act served upon it. Palmer J’s orders prevented steps being taken to advance the adjudication process.

3 There is affidavit evidence, which was before Palmer J yesterday, where the solicitor for the plaintiff says, on information and belief, two separate things:

1. “The Plaintiff had never received a payment claim dated 30th June 2004 from the First Defendant”, and

Building and Construction Industry Security of Payment Act 1999

4 Mr Curtin, who appeared today for the first defendant, did not contest that the balance of convenience favoured the continuance of the injunction, or that there was a serious question to be tried. He put his argument to me on the basis that there had been a non-disclosure, yesterday, to Palmer J. The basis for that…

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: [2004] NSWSC 933
Decision Date: 7 October 2004

CaseChat Overview and Summary

The dispute between Digital City and QX Australia was heard in the Supreme Court of New South Wales. Digital City, the plaintiff, is a developer of digital services and infrastructure, and QX Australia, the defendant, is a company engaged in the construction and engineering industry. The primary issue in this case was whether an interlocutory injunction should be granted to prevent QX Australia from advancing the adjudication process under the Building and Construction Industry Security of Payment Act 1999, until the court determined if the adjudicator had jurisdiction. Digital City sought an injunction on the condition that QX Australia would pay the full amount claimed into court.

The court needed to decide whether it was appropriate to grant an interlocutory injunction to halt the adjudication process until the jurisdictional issue was resolved. The court had to weigh the potential harm to QX Australia if the adjudication process was not allowed to proceed against the likelihood of Digital City succeeding on the jurisdictional issue. The court also needed to consider the terms on which any injunction should be granted, specifically whether it should be on the condition that QX Australia paid the full amount claimed into court.

The court determined that it was appropriate to grant an interlocutory injunction, but on terms that QX Australia would pay the full amount claimed into court. The court held that the jurisdictional issue was not frivolous, and therefore, an injunction should be granted to prevent unnecessary costs and delays. However, the court considered it necessary to protect Digital City from any potential harm if the adjudication process was not allowed to proceed, and therefore, required the full amount claimed to be paid into court as a condition of the injunction. The court concluded that this condition balanced the interests of both parties and provided adequate protection for Digital City.

The court ordered that an interlocutory injunction be granted to QX Australia, on the condition that QX Australia would pay the full amount claimed by Digital City into court. The court also ordered that the parties would be required to provide further evidence and arguments on the jurisdictional issue at a later date.

Orders