Energetech Australia Pty Ltd v Sides Engineering Pty Ltd - [2005] NSWSC 801

CITATION:
Energetech v Sides Engineering & Anor [2005] NSWSC 801

HEARING DATE(S): 4, 5 August 2005

JUDGMENT DATE :

5 August 2005

JURISDICTION:
Equity Division, Technology & Construction List

JUDGMENT OF:
McDougall J at 1

DECISION:
See para [31] of judgment

CATCHWORDS:
BUILDING AND CONSTRUCTION - where alleged that referee incorrectly calculated reference date under s 13(4) - whether basic and essential requirement of service of payment claim includes compliance with s 13(4) - whether failure to comply with s 13(4) renders adjudication determination void

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

CASES CITED:
Brewarrina Shire Council v Beckhaus Civil Pty Limited (2003) 56 NSWLR 576
Brodyn v Davenport (2004) 61 NSWLR 421
Coordinated Constructions Co Pty Ltd v Climatech (Canberra) Pty Ltd & Ors [2005] NSWCA 229
Coordinated Constructions Pty Ltd v J M Hargreaves [2005] NSWCA 228
Minister for Commerce v Contrax Plumbing (NSW) Pty Limited [2005] NSWCA 142

PARTIES:
Energetech Australia Pty Ltd (Plaintiff)
Sides Engineering Pty Ltd (First Defendant)
Anthony Dutton (Second Defendant)

FILE NUMBER(S):
SC 55064/05

COUNSEL:
F C Corsaro SC (Plaintiff)
J P Doyle, Solicitor (Defendants 1-3)

SOLICITORS:
Clark McNamara (Plaintiff)
Doyles Construction Lawyers (Defendants 1-3)

LOWER COURT JURISDICTION:

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

McDOUGALL J

Friday 5 August 2005 Ex tempore (revised 5 August 2005)

SIDES ENGINEERING PTY LTD

JUDGMENT

1 HIS HONOUR: The plaintiff (Energetech) and the first defendant (Sides) are parties to a construction contract made on 7 June 2004 whereby Sides undertook to carry out construction work for Energetech. Under the contract, Sides was entitled to be paid upon the achievement of "Milestones", the second of which was defined as "Practical Completion". Sides claimed to have reached that milestone and submitted a payment claim. Energetech provided a payment response whereby it asserted that nothing was payable because the milestone had not been reached. Sides thereupon made an adjudication application which was accepted by the second defendant (the adjudicator). The adjudicator decided that the relevant milestone had been reached and accordingly determined that an amount of $559,457.20 was payable. Energetech complains that the adjudicator's determination is vitiated in such a way that it is reviewable by this Court on the principles laid down in Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 and explained in subsequent cases.

2 Energetech came before me on referral from the Duty Judge yesterday afternoon. It was apparent that there was a question of principle involved. The parties sensibly agreed to the course that the judgment obtained by Sides as a result of filing the adjudication certificate should not be enforced in the short term, and so that the parties could address the point of law. It was agreed that I should deal with that point of law pursuant to Pt 31 r 2.

3 Sides' position is that the adjudicator was correct to determine (as he did in his determination at paragraphs 27 and 31) that practical completion had…

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 801
Decision Date: 5 August 2005

CaseChat Overview and Summary

In this case, the applicant, Energetech Australia Pty Ltd, sought an adjudication against the respondent, Sides Engineering Pty Ltd, under a building and construction contract. The dispute centred on whether the referee, appointed to make the adjudication, had correctly calculated the reference date under section 13(4) of the relevant legislation. Specifically, Energetech contended that the referee had made an error in calculating the reference date, which affected the timeliness of its payment claim. Sides Engineering argued that the referee's calculation was correct and that the error alleged by Energetech was immaterial to the adjudication process.

The primary legal issues before the court were whether the basic and essential requirement of serving a payment claim included compliance with section 13(4) of the Act, and if the failure to comply with this section rendered the adjudication determination void. The court had to consider whether the statutory requirements under the building and construction legislation mandated strict compliance with the timelines for serving payment claims and whether any deviation from these requirements would invalidate the adjudication process. Additionally, the court examined the scope of the referee's discretion in determining the reference date and the extent to which errors in this determination could impact the validity of the adjudication decision.

The court held that compliance with section 13(4) was indeed a basic and essential requirement for a valid payment claim. It found that the referee's calculation of the reference date was incorrect, which meant that the payment claim was not served within the requisite timeframe. As a result, the court concluded that the adjudication determination was void due to the failure to comply with the statutory requirements for serving a payment claim. The court emphasised that adherence to the statutory timelines was critical, and any deviation could lead to the invalidation of the adjudication process. This ruling underscored the importance of precise compliance with legislative mandates in building and construction contracts to ensure the enforceability of adjudication outcomes.

Orders