Equa Building Services Pty Ltd v KLG Trading Pty Ltd

[2021] NSWSC 1674

Supreme Court

New South Wales

Medium Neutral Citation:

Equa Building Services Pty Ltd v KLG Trading Pty Ltd [2021] NSWSC 1674

Hearing dates:

13 December 2021; further written submissions 14 and 15 December 2021

Decision date:

17 December 2021

Jurisdiction:

Equity - Technology and Construction List

Before:

Stevenson J

Decision:

Summons dismissed with costs

Catchwords:

BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – service of copy of adjudication application – where adjudication application provided electronically to adjudication authority and adjudicator – where hard copy of adjudication application and USB drive served on plaintiff respondent – where plaintiff respondent initially could not open file on USB drive to view video – where some minor differences between hard copy served on plaintiff respondent and electronic copy provided to adjudication authority and adjudicator – whether what was served was a copy of that provided to adjudication authority and adjudicator – whether substantial compliance with requirements of s 17(5) of the Building and Construction Industry Security of Payment Act sufficient – whether plaintiff respondent denied procedural fairness – whether adjudicator failed to perform his statutory function

STATUTES – proper construction – whether s 17(5) of the Building and Construction Industry Security of Payment Act 1999 requires strict compliance – whether service of copy adjudication application in substantial compliance with s 17(5) effective

Legislation Cited:

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

Corporations Act 2001 (Cth)

Interpretation Act 1987 (NSW)

Cases Cited:

Accident Compensation Commission v Murphy [1988] VR 444

Australian Capital Television Pty Ltd v Minister for Transport & Communications (1989) 86 ALR 119; [1989] FCA 26

Bailey v Hinch [1989] VR 78

Douglas Aerospace v Indistri Engineering Albury [2014] NSWSC 1445

Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd (2018) 98 NSWLR 712; [2018] NSWCA 276

In the matter of Prime City Investments Pty Ltd [2012] NSWSC 1287

Laing O’Rourke Australia Construction Pty Ltd v Monford Group Pty Ltd [2018] NSWSC 491

Pacific General Securities Ltd v Soliman & Sons Pty Ltd (2006) 196 FLR 388; [2006] NSWSC 13

Parkview Constructions Pty Ltd v Total Lifestyle Windows Pty Ltd [2017] NSWSC 194

Petch v Gurney (Inspector of Taxes) [1994] 3 All ER 731

Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd (2017) 95 NSWLR 82; [2017] NSWCA 151

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28

QC Communications NSW Pty Ltd v CivComm Pty Ltd [2016] NSWSC 1095

Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCA 409

Tasker v Fullwood [1978] 1 NSWLR 20

Victoria v The Commonwealth (1975) 134 CLR 81; [1975] HCA 39

Category:

Principal judgment

Parties:

Equa Building Services Pty Ltd (Plaintiff)
KLG Trading Pty Ltd (First Defendant)
Christopher Groves (Second Defendant)
Adjudicate Today Pty Ltd (Third Defendant)

Representation:

Counsel:
D J Byrne (Plaintiff)
D S Weinberger (Defendants)

Solicitors:
HWL Ebsworth (Plaintiff)
Chedid Storey Legal (First Defendant)
King Lawyers Australia (Second and Third Defendants)

File Number(s):

2021/317643

Judgment

1. On 29 October 2021, an adjudicator made an adjudication determination pursuant to s 22 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the “SOPA”) that the plaintiff, Equa Building Services Pty Ltd, pay the defendant, KLG Trading Pty Ltd $394,148.39.

2. Equa had engaged KLG to perform facade works at a development in Miranda known as “Miranda Central”.

3. Equa seeks an order in the nature of certiorari quashing the adjudication determination.

4. Equa contends that:

1. KLG did not, for the purposes of s 17(5) of the SOPA, serve on it a copy of the adjudication application;

2. it has been denied procedural fairness; and

3. the adjudicator did not exercise his statutory function under s 22(2)(d) of the SOPA to consider the payment schedule that Equa served on KLG and any duly made submissions.

Decision

5. Equa has not made out any of these challenges to the adjudication determination.

6. The summons should be dismissed with costs.

The adjudication application served on Equa

7. Section 17(5) of the SOPA provides that:

“A copy of an adjudication application must be served on the respondent concerned.”

8. On 1 October 2021, KLG’s solicitors uploaded electronic files containing KLG’s adjudication application to the relevant authorised nominating authority’s online “lockbox” system. The adjudication application was thereafter provided electronically to the adjudicator.

9. On 8 October 2021, KLG caused a hard copy of the adjudication application, in two lever arch binders, together with a USB drive, to be delivered to Equa’s registered office in Queensland by express post. The two folders contained 833 pages of documentation.

10. Equa contends that there were differences between that which was uploaded electronically to the authorised nominating authority and provided to the adjudicator and that which was delivered to its registered office.

11. Equa’s solicitor, Ms Shieana Hamid, affirmed an affidavit to which she annexed a table comparing the contents of the electronic file provided to the adjudication authority and adjudicator and the hard copy documents served on Equa. Mr Weinberger’s instructing solicitor, Mr John Nairn, added his comments in a further column to the table.

12. For the most part, the differences that Ms Hamid identified were that some documents in the electronic file that have colour elements have been reproduced in the hard copy in black and white.

13. Although his written submissions ranged more widely, in oral argument Mr Byrne, who appeared for Equa, made four points about those differences. Mr Byrne did not seek to make anything of the point at [12] above.

The video

14. The first related to the USB drive delivered to Equa on 8 October 2021.

15. That USB drive contained a video which, to adopt the language of the submissions of Mr Weinberger, who appeared for KLG, “shows the movement of objects over 28 seconds”.

16. Ms Leanne Miers, an executive assistant to the director of Equa, Mr Derek Williams, gave this evidence as to what she did in relation to the USB drive on 8 October 2021:

“I put the USB [drive] into my computer to see what it contained. However, I received an error message stating ‘this item was encoded in a format that’s not supported’.

When I clicked ‘close’ on the message, I then got another message stating ‘to play this video, you need a new codec’ …

When I clicked ‘not now’ on this message, a media player popped up where I could hear movement and voices of about 28 seconds in length. However, there was no image and the screen was black.”

17. However, in her table Ms Hamid records, in relation to the “USB data disc”, having been “able to play image on HWLE [1] laptop”.

    1. HWL Ebsworth.

18. Thus, although Ms Miers was not able to access the video content on the USB drive, Ms Hamid was able to do so, presumably because of some software difference in the computers used.

19. The point is that all the information stored electronically on the USB drive was available to be accessed.

The three “missing” documents

20. Mr Byrne then referred to three documents which were uploaded to the authorised nominating authority’s online lockbox system but which were not included in the hard copy documents served on Equa.

21. The first was a part of an “ASIC organisation extract for Miranda Central”. Miranda Central Pty Ltd was the developer of the project in relation to which Equa engaged KLG. This omission was entirely inconsequential. Miranda Central’s organisational structure had no relevance to the adjudication.

22. The other two documents not included in the hard copy documents served on Equa were the second sheets of two Excel spreadsheets.

23. However, the second sheet contained no more than a paragraph “about the company (Vertex 42) who designed the template for KLG’s invoice”, [2] and was thus of no moment.

    2. Mr Nairn’s description in the table to which I have referred. There was no dispute before me as to the accuracy of this description.

Allegedly illegible documents

24. Mr Byrne submitted that 3 of the 833 pages in the 2 lever arch binders served by KLG on Equa on 8 October 2021 were illegible.

25. One of those documents was a photograph of an aspect of the development on which there were superimposed four typed annotations. It is true that annotations on the copy of that page that is included in the court book are a little difficult to read. However, annotations on the copy actually served on Equa are legible.

26. The other two documents are architectural plans prepared on behalf of the developer by Altis Architecture. Some of the writing and detail on those two drawings is difficult to read. That may be because the documents were originally prepared in A3 format and had been included in the folders served on Equa (and in the court book) in A4 format. Nonetheless, it is clear that they are copies of the documents uploaded electronically to the authorised nominating authority’s online lockbox system.

Mislabelling

27. Finally, Mr Byrne pointed to 10 examples of documents where the “tab numbering is mislabelled”. [3] For example, the document in the electronic version of the adjudication application that is described as being at Tab V-16.04 is behind Tab V-16.03 in the hard copy served on Equa.

    3. Again, Mr Nairn’s undisputed description.

28. This “mislabelling” is of no consequence. There is no question that the documents themselves are contained in both the electronic and hard copy versions of the adjudication application.

Was that which was served on Equa a “copy” of the adjudication application uploaded to the authorised nominating authority’s online lockbox system?

29. As I have set out, there were some very minor, and entirely inconsequential, differences between what was supplied electronically to the adjudication authority and adjudicator and what was physically served on Equa.

30. The differences are trivial and truly de minimus.

31. The issues are:

1. whether what was served was a “copy” of the adjudication application; and

2. if not, whether the result is that service is taken to have not been effected at all.

Was what was served a “copy” of the adjudication application?

32. In Parkview Constructions Pty Ltd v Total Lifestyle Windows Pty Ltd,[4] Hammerschlag J left open:

“… the question [of] whether an instrument purporting to be a copy of an adjudication application can nevertheless be a copy of it within the meaning of s 17(5) if there are trivial differences.”[5]

4. [2017] NSWSC 194.

5. At [61].

33. I would go further. In my opinion, if what is served has only trivial or inconsequential differences from the original adjudication application, it should been seen as a “copy” of the original. There would of course be questions of degree. But, in this case, the differences are so insignificant that the hard copy adjudication application together with the USB drive delivered to Equa should be seen as a “copy” of the electronic version provided to the adjudicating authority and the adjudicator.

34. Mr Byrne drew my attention to authorities concerning the strictness with which it has been held that the requirement in s 459G(3) of the Corporations Act 2001 (Cth) must be complied with.

35. Section 459G provides:

“Company may apply

(1) A company may apply to the Court for an order setting aside a statutory demand served on the company.

(2) An application may only be made within the statutory period after the demand is so served.

(3) An application is made in accordance with this section only if, within that period:

(a) an affidavit supporting the application is filed with the Court; and

(b) a copy of the application, and a copy of the supporting affidavit, are served on the person who served the demand on the company.”

36. There is authority for the proposition that the “copy” of the application to set aside a statutory demand under s 459G(3) must be “a reproduction” of the original [6] and that “substantial compliance” with the requirement to serve a copy of the supporting affidavit is not sufficient. [7]

    6. For example, Bailey v Hinch [1989] VR 78 (Gobbo J), cited with approval in Robowash Pty Ltd v Robowash Finance Pty Ltd [2000] WASCA 409 at [27] (Kennedy J, with whom Wallwork and Anderson JJ agreed).

    7. Robowash Pty Ltd v Robowash Finance Pty Ltd [at [28]; cited with approval in In the matter of Prime City Investments Pty Ltd [2012] NSWSC 1287 at [5] (Brereton J, as his Honour then was).

37. However, the language in s 459G(3) of the Corporations Act is far stronger than that in s 17(5) of the SOPA. Further, the consequences of failure strictly to comply with the requirements of s 459G(3) of the Corporations Act are such that strict compliance with the section, calling for an exact copy of the application and supporting affidavit to be served on the party that served the statutory demand on the company in question, is understandable.

38. I see no reason to adopt such a strict view in relation to the requirements of s 17(5) of the SOPA.

If what was served was not a “copy” of the adjudication application was service nonetheless effective?

39. Assuming that the hard copy documents and USB drive delivered to Equa were not a “copy” of the adjudication application, the requirements of s 17(5) of the SOPA have not been complied with.

40. The question then arises as to what Parliament intended should be the result of such non-compliance. [8]

    8. Accident Compensation Commission v Murphy [1988] VR 444 at 447 (Crockett, O’Bryan and Vincent JJ); similar language was used in Petch v Gurney (Inspector of Taxes) [1994] 3 All ER 731 (Millett LJ).

41. Is the result that there has been no “service” for the purposes of s 17(5)?

42. The legislature has provided no guidance in the SOPA itself to the answer to this question.

43. In an oft cited passage, it was held in Tasker v Fullwood [9] that:

“The task of construction is to determine whether the legislature intended that a failure to comply with the stipulated requirement would invalidate the act done, or whether the validity of the act would be preserved notwithstanding non-compliance … The only true guide to the statutory intention is to be found in the language of the relevant provision and the scope and object of the whole statute … The intention being sought is the effect upon the validity of the act in question, having regard to the nature of the precondition, its place in the legislative scheme and the extent of the failure to observe its requirement … It can mislead if one substitutes for the question thus posed an investigation as to whether the statute is mandatory or directory in its terms.” (Emphasis added; citations omitted.)

9. [1978] 1 NSWLR 20 at 23 (Hope, Glass and Samuels JJA).

44. In Project Blue Sky Inc v Australian Broadcasting Authority [10] the High Court endorsed the criticism offered in Tasker v Fulwood of what the High Court described as the “elusive distinction between directory and mandatory requirements”[11] and said that the distinctions had “outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid”.

    10. (1998) 194 CLR 355; [1998] HCA 28.

    11. Adopting the language of Gummow J in Australian Capital Television Pty Ltd v Minister for Transport & Communications (1989) 86 ALR 119 at 146; [1989] FCA 26.

45. A better test, the High Court said, was “whether it was a purpose of the legislation that an act done in breach of the provision should be invalid”. [12]

    12. At [93] per McHugh, Gummow, Kirby and Hayne JJ.

46. The Interpretation Act1987 (NSW) provides, relevantly: [13]

“In the interpretation of a provision of an Act …, a construction that would promote the purpose or object underlying the Act … shall be preferred to a construction that would not promote that purpose or object”.

13. Section 33.

47. The object of the SOPA is stated in s 3(1) of the SOPA to be:

“Regard to be had to purposes or objects of Acts …

The object of this Act is to ensure that any person who undertakes to carry out construction work … under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work ....”.

48. Section 3(3) of the SOPA provides that the means by which the Act “ensures that a person is able to recover a progress payment is by establishing a procedure that” includes “the referral of any disputed claim to an adjudicator for determination”.

49. It would not be consistent with that legislative object for s 17(5) of the SOPA to be read as having the effect that the slightest difference between the adjudication application as submitted to the adjudicator and the copy served on the respondent rendered invalid the purported service of the copy adjudication application, let alone an adjudication determination based on it.

50. Where a statutory requirement is capable of “degrees of non-compliance” and if “some degree of non-compliance can be seen as not necessarily prejudicing the substantial carrying into effect of the general object” of the statute, the statute may be construed as not necessarily invalidating the non-compliant action. It will then be a question of degree and “the extent of non-compliance in the particular case must then be examined to determine whether what has in fact occurred nevertheless gives effect to the general object of the statute.”[14]

    14. Adopting the language of Stephen J in Victoria v The Commonwealth (1975) 134 CLR 81 at 179; [1975] HCA 39.

51. The stipulation in s 17(5) of the SOPA that a copy of the adjudication application be served on the respondent is capable of degrees of non-compliance. Some degree of “non-compliance” could occur “without prejudicing the substantial carrying into effect of the objects” of the SOPA. In each case, it would be a matter of degree.

52. In this case, and because of the slight degree to which that which was served by KLG on Equa was less than an exact “reproduction” of that which was provided to the adjudication authority and adjudicator, my conclusion is that, assuming what was served by KLG on Equa was not a “copy” of the adjudication application for the purposes of s 17(5) of the SOPA , it constituted substantial and thus sufficient compliance with the requirements of s 17(5) so as not to render the service ineffective.

Is service of a copy of the adjudication application under s 17(5) of the SOPA a jurisdictional fact?

53. There was debate before me whether service of a copy of the adjudication application on Equa was a jurisdictional fact, in the absence of which the adjudicator had no jurisdiction.

54. In view of the conclusions to which I have come, it is not necessary that I decide this question.

55. However, the weight of authority in this State is that a failure to serve an adjudication application does not go to an adjudicator’s jurisdiction, although, may well bespeak a denial of procedural fairness to the respondent. [15]

    15. See the views expressed in obiter by McDougall J in Douglas Aerospace v Indistri Engineering Albury [2014] NSWSC 1445 at [73]-[74]; and by Ball J in QC Communications NSW Pty Ltd v CivComm Pty Ltd [2016] NSWSC 1095 at [28]-[29].

56. Further, as Mr Weinberger submitted, if s 17(5) should be regarded as jurisdictional, it is difficult to see why s 20(3) (which provides that a copy of the adjudication response must be served on the claimant) should also not be found to be jurisdictional: an unlikely result.

Has Equa been denied procedural fairness?

57. Mr Bryne submitted that even if, as I have found, what was served on Equa was a “copy” of the adjudication application or, alternatively, what was served was sufficient compliance with s 17(5), the manner and form in which the material was served on Equa establishes that it was denied procedural fairness.

57. Mr Byrne submitted that the denial of procedural fairness concerning the file on the USB drive was “obvious” as Equa was not able to review that file and was not in a position to make any comments on it.

58. However, it appears that the only reason Equa was not able to review that file was that Ms Miers’ computer did not have software, or other functionality, sufficient to enable her to view the video. It is clear that the USB drive in fact contained, in electronic form, both the video and audio file as Ms Hamid was, later, able to view both.

59. In any event, any such denial of procedural fairness arising from Ms Miers inability to view the video appears to have been of no moment as the adjudicator recorded:

“I should also observe that a video file included in the adjudication application, which the respondent contended could not be played from the file contained in the copy adjudication application served on it, was of no assistance to me in making this determination, and its content has not been relied upon in any of the findings which follow.”

61. Mr Byrne also relied upon the fact that KLG “chose to deliver” the adjudication application to Equa’s registered office in Queensland, being the office of its accountants, rather than to Equa’s ordinary place of business in New South Wales and also “chose to wait a week” before serving the adjudication application on 8 October 2021.

62. In those circumstances, Mr Byrne submitted:

“Such conduct was obviously intended to maximise delays in [Equa] preparing its response. While [Equa] does not contend that such conduct is contrary to what the authorities have found to be permissible, it is nevertheless relevant to assessing the impact of a failure to provide [Equa] with exactly the same documents that the adjudicator was provided with. The differences in form are not trivial; rather they are differences that delayed [Equa] in preparing its adjudication response.

63. I see no basis upon which I could conclude that KLG engaged in conduct “obviously intended to maximise delays” in Equa preparing its adjudication response.

64. Nor did Mr Byrne point to any evidence to support the submission that the “differences” between the adjudication application provided to the adjudication authority and adjudicator and that served on Equa had delayed Equa in preparing its adjudication response. Equa’s adjudication response was served within the time specified in the SOPA and appears to be a comprehensive document. It comprises a 33 page, 184 paragraph document together with over 1400 pages of annexures.

65. Mr Byrne also pointed to evidence that Equa had requested KLG to provide an electronic copy of the adjudication application and that this was not provided. But there is no evidence that this caused Equa any problem.

66. Ultimately, Mr Byrne submitted that procedural fairness dictated that:

“… a respondent to an adjudication must be served with an adjudication application in the same medium as that which has been provided to the adjudicator. That is, if an electronic version has been lodged with the adjudicator; then an electronic version must be served on the respondent.”

67. In my opinion, this position overstates matters.

68. It has been held that:

“The content of the requirement of procedural fairness (or natural justice) turns on the scheme of the SOP Act. The statutory power must be exercised in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations. What must always be borne in mind is that ‘[w]hether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice’.”[16] (Emphasis added; citations omitted.)

16. Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd (2017) 95 NSWLR 82; [2017] NSWCA 151 at [100] (McColl JA, with whom Beazley ACJ and Macfarlan JA agreed).

69. I see no “practical injustice” here. Mr Byrne did not point to any particular difficulties that Equa had preparing its adjudication response by reason of the very slight differences between the copy served on it and the copy made available to the adjudication authority and adjudicator.

70. That is not surprising as the insignificant nature of those differences points strongly to the conclusion that they made no difference to Equa’s ability to respond to the adjudication application.

71. I am not satisfied that Equa has been denied procedural fairness.

Did the Adjudicator fail to exercise his statutory function?

72. Section 22(2)(d) of the SOPA required the adjudicator to consider Equa’s payment schedule and any “duly made” submissions.

73. Section 14(3) of the SOPA required Equa to indicate in its payment schedule “why” the scheduled amount was less than the claimed amount and the “reasons” for withholding payment.

74. Section 20(2A) of the SOPA prevented Equa from including in its adjudication response any “reasons” for withholding payment unless those “reasons” had already been included in its payment schedule.

75. In its payment schedule, Equa alleged that KLG had not rectified unspecified defects.

76. In a schedule to the payment schedule Equa listed, amongst other matters, four items in respect of which it alleged:

“There are defects in the works, which [KLG] was notified of, and required to rectify but [KLG] has not rectified as at the date of the Payment Claim, or at all”.

77. Equa then “assessed” the four claims and stated, in relation to each of them, that:

“[Equa] considers a reasonable amount to be as the percentage reflected”.

78. Equa then “assessed” the four claims as being, variously, 90%, 95% or 99% of the amount claimed.

79. Later in the payment schedule, Equa stated that:

“Lists of outstanding works & defects have been provided to [KLG], refer extensive correspondence, including [Equa’s] notices of 14 May 2021.”

80. Equa did not include in its payment schedule a statement of what “defects” were notified to KLG in its “notices of 14 May 2021”. Nor did Equa explain by what process of reasoning it had “assessed” the amounts claimed for the four items to which I have referred at 90%, 95% or 99% of the amounts claimed.

81. The adjudicator dealt with this matter by referring to Equa’s 14 May 2021 notices and continuing:

“I agree with [KLG] that the identification of that notification, and accordingly the indication of the defect allegation, is insufficient. [KLG] (and, I would add, a reasonable informed observer) cannot reasonably discern from the payment schedule what each of these defect allegations is. While I accept [Equa] has notified [KLG] of each of them, that identification is not sufficiently telegraphed in the payment schedule so as to be understood and therefore to constitute an identified reason for withholding payment.

It follows that by operation of s. 20(2B) of the Act, I am not satisfied any submissions made in the adjudication response in support of these defect items may be considered by me. If a reason for withholding payment is not identified in the payment schedule, then the respondent may not legitimately press submissions seeking a deduction upon that reason, in its adjudication response.

Accordingly, I am not satisfied that any deduction is merited for these alleged defect items.”

82. It is clear from the adjudicator’s reference to s 20(2B) of the SOPA that his conclusion that no deduction was “merited” for the alleged defect was based on his conclusion that Equa had not indicated in its payment schedule “why” it had made the deductions on account of alleged defects and had failed to give “reasons” for those deductions.

83. In so far as Equa had referred, generally, to the allegedly defective items, and to its 14 May 2021 notification, and had made the 90%, 95% or 99% “assessments”, Equa had given some explanation as to “why” it had made the deductions and what its “reasons” were.

84. However, as I have said, Equa did not explain by what process of reasoning it made its calculations, nor did it specify what the defective items were.

85. Minds might differ as to whether this was a sufficient indication as to “why” the deductions were made or to the “reasons” for them. But I am unable to conclude that the adjudicator’s conclusion was unreasonable, let alone wrong. If the adjudicator did make an error in this regard, it was within jurisdiction.

86. Further, I do not see this as a case where an adjudicator has simply awarded an amount of a claim, without addressing its merits, merely because Equa did not adduce relevant material. [17]

    17. Cf: Pacific General Securities Ltd v Soliman & Sons Pty Ltd (2006) 196 FLR 388; [2006] NSWSC 13 at [82] (Brereton J) and my decision in Laing O’Rourke Australia Construction Pty Ltd v Monford Group Pty Ltd [2018] NSWSC 491 at [1]-[5].

87. Equa did not in its payment schedule contest that the contract works were complete. Rather, as I have set out, it made “assessments” as to the “reasonable amount” payable to KLG on account of the allegedly defective work and reduced the amounts claimed by the percentages to which I have referred. The percentage deductions proposed by Equa were not on account of any suggestion that the works were not complete. Indeed, they assumed the works were complete.

88. Consistently with that position, the adjudicator found that the works were practically complete and that, on the face of it, and but for Equa’s contentions about defects, KLG was “entitled to be paid the full contract sum”.

89. The adjudicator then dealt with Equa’s contentions about defects.

90. In those circumstances, there was no call for the adjudicator separately to considered whether the work had been done or its value. I think Mr Weinberger was correct to submit that, in this respect, the circumstances are similar to those considered by the Court of Appeal in Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd [18] where Basten JA said, in similar circumstances:

“[T]he fact is [the adjudicator] did not value the defective work. However, as already noted, [the adjudicator] had first to find that there was defective work which entitled the owner to a deduction under the contract. That condition not being satisfied, there was no requirement to value the work or to make the deduction”. [19]

18. (2018) 98 NSWLR 712; [2018] NSWCA 276.

19. At [48].

91. I see no basis upon which I could conclude that the adjudicator failed to exercise his statutory function.

Conclusion

92. Equa’s challenge to the adjudication determination fails.

93. The summons should be dismissed with costs.

94. Orders should now be made for the payment out to KLG of the monies paid into Court.

95. The parties should bring in short minutes to give effect to these reasons.

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Endnotes

Decision last updated: 17 December 2021