Equinox Construction Pty Ltd v Henning

Case [2021] QSC 223

SUPREME COURT OF QUEENSLAND

CITATION:

Equinox Construction Pty Ltd v Henning & Anor [2021] QSC 223

PARTIES:

EQUINOX CONSTRUCTION PTY LTD

(applicant)

v
JUSTIN HENNING

(first respondent)

BRUCE CHRISTOPHER CULL

(second respondent)

FILE NO/S:

7369 of 2020

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

31 August 2021

DELIVERED AT:

Brisbane

HEARING DATES:

13 August 2021; 25 August 2021 (further submissions)

JUDGE:

Ryan J

ORDER:

It is declared that the second respondent’s adjudication decision of 25 March 2020 is void.

I make no order as to costs.

CATCHWORDS:

CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS – OTHER MATTERS – where the first respondent received an adjudication decision in his favour against the applicant – where the applicant seeks a declaration that the adjudicator’s decision is void for jurisdictional error – whether the first respondent “gave” the applicant a copy of the adjudication application in accordance with s 79(3) of the Building and Construction Building Industry Fairness (Security of Payment) Act 2017 (Qld)

Building and Construction Building Industry Fairness (Security of Payment) Act 2017 (Qld), ss 79(3), 102

Acts Interpretation Act 1954 (Qld), s 39, 39A

Brown v Bluestone Property Services Pty Ltd [2010] NSWSC 869, considered
Capper v Thorpe (1998) 194 CLR 342, considered
CMF Projects Pty Ltd v Masic Pty Ltd & Ors [2014] QSC 209, cited
Conyeyor & General Engineering Pty Ltd v Basetec Services Pty Ltd and Anor [2014] QSC 30, considered
Deputy Commission of Taxation, in the matter of ABW Design and Construction Pty Ltd v ABW Design and Construction Pty Ltd [2012] FCA 346, considered
Dwyer v Canon Australia Pty Ltd [2007] SASC 100, cited
Emag Constructions Pty Limited v Highrise Concrete Contractors (Aust) Pty Limited [2003] NSWSC 903, considered
Grant Thornton (Qld) Pty Ltd v Green Global Technologies Ltd [2009] QSC 262, considered
Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542, cited
McCarthy v TKM Builders Pty Ltd & Anor [2020] QSC 301, considered
Morel v Bank of Queensland Limited [2013] QCA 207, considered
National Management Group Pty Ltd v Biriel Industries Pty Ltd trading as Master Steel & Ors [2019] QSC 219, cited
Niclin Constructions Pty Ltd v SHA Premier Constructions Pty Ltd & Anor [2019] QSC 91, considered
Northumbrian Ice Cream Co Ltd v Breakaway Vending Pty Ltd [2006] NSWSC 1216, considered

Pearlburst Pty Ltd v Summers Resort Group Pty Ltd [2007] NSWSC 1126, cited

COUNSEL:

S Hogg for the Applicant
G Robson (solicitor) for the First Respondent
No appearance for the Second Respondent

SOLICITORS:

Fenson Lawyers for the Applicant
North Law for the First Respondent
No appearance for the Second Respondent

  1. Where a party to a construction contract applies for adjudication of a payment claim, that party must “give” a copy of their application for adjudication to the respondent to it under section 79(3) Building Industry…

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AGLC
Equinox Construction Pty Ltd v Henning [2021] QSC 223
Case
[2021] QSC 223
Decision Date

CaseChat Overview and Summary

The matter of Equinox Construction Pty Ltd v Henning involved a dispute between the applicant, Equinox, and the respondents, Henning and the Queensland Building and Construction Commission (QBCC). Equinox sought a declaration that an adjudication decision made in favour of Henning was void due to a jurisdictional error. Specifically, Equinox contested whether Henning had properly served a copy of the adjudication application to Equinox in accordance with section 79(3) of the Building and Construction Industry Fairness (Security of Payment) Act 2017 (Qld).

The central legal issue was whether Henning's actions complied with the statutory requirements for serving the adjudication application, as stipulated in section 79(3) of the Act. Equinox argued that Henning failed to strictly prove that he had given a copy of the adjudication application to Equinox. The court had to determine whether Henning's evidence sufficiently demonstrated that he had complied with the statutory obligations regarding service. This included considering whether the address to which Henning posted the application was correct and whether all necessary steps to ensure service, such as pre-paying postage, were completed.

The court found that Henning did not strictly prove that he had served the adjudication application to Equinox. While Henning provided evidence that he posted the application to an address he believed to be correct, he did not explicitly demonstrate that he had pre-paid the postage. Additionally, there was a discrepancy between the addresses stated in the evidence. The court held that strict compliance with the statutory requirements was necessary to ensure the quick and efficient resolution of disputes as intended by the Act. As a result, the court declared the adjudication decision void due to the jurisdictional error stemming from inadequate proof of service.

No order was made regarding costs.

Orders

Orders of the court

It is declared that the second respondent’s adjudication decision of 25 March 2020 is void.

I make no order as to costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

On 17 August 2020, Equinox obtained an order for substituted service of its application for a declaration upon Mr Henning. However, its next step in pursuit of the declaration was not taken until July of 2021 – triggered, it seems, by Mr Henning’s service upon it, on 11 June 2021, of a statutory demand for the adjudication amount. Evidence There was no objection to any of the evidence produced by either side to this application – all of which consisted of affidavits and a variety of documents exhibited thereto; and much of which involved hearsay. Mr Henning’s evidence of his posting a copy of the adjudication application is critical evidence in this case. He deposed to the following preliminary matters:·On 14 February 2020, he emailed a payment claim (invoice #401) to the applicant at accounts@equinoxconstructions.com.au. This was the claim the subject of the adjudication.·He was able to “see” that his payment claim had been viewed and downloaded on multiple occasions (he annexed to his affidavit copies of screen shots of his digital book-keeping program to support his evidence).·He received no payment schedule in response to his payment claim.·He filed an adjudication application on 5 March 2020 with the QBCC. As to what he did to “give” a copy of the adjudication application to the applicant, he said (my emphasis): “[21]On 9 March 2020 I did attend the Kallangur Australia Post Office in order to send the Adjudication Application to the Applicant’s address as per the QBCC’s Licence Search at the time.[22]The address for the Applicant at that time was Unit 22, 56 Sanders Street Upper Mt Gravatt Queensland 4122.[23]I documented the posting by taking a photo of the envelope containing the Adjudication Application inside the Kallangur Post Office with the date and time in the background on 9 March 2020 at 2.29 pm.[24]Exhibited hereto and marked “JH-7” is a true copy of a photo taken in the Kallangur Post Office as referred to in paragraph 23 above.[25]I recorded my return postal address on the back of the envelope of [address] and, as at the date of swearing this my affidavit, it has never been returned to me, as sender.[26]The purchase order of the Applicant relevant to this matter also notes its address as Unit 22, 50 – 56 Sanders Street, Upper Mt Gravatt Q 4122.” It may be noted that, although Mr Henning said in his affidavit that he attended the post office “in order to post” the adjudication application to the applicant, he did not say that he paid the postage; nor did he say that he actually posted the envelope. Further, there is a difference between the addresses stated in [22] and [26]. This difference was missed by both parties. At the hearing, the first respondent relied upon an affidavit of his solicitor, Gregory Robson, which exhibited “a true copy of an ASIC search extracted on 8 June 2021”. That search relevantly revealed that there had been a change in Equinox’s registered address and principal place of business address in March 2020. Neither Mr Henning nor Mr Robson exhibited to their affidavits an “ASIC search” revealing Equinox’s registered office address or principal place of business address at the relevant time (that is, on 9 March 2020). Nor did they exhibit evidence of the QBCC search which Mr Henning said he undertook.

Decision

Reasons for decision

The first respondent submitted, in his supplementary submissions, that section 39 of the Acts Interpretation Act permitted the first respondent to post the application for adjudication to Equinox’s “principal office”, as revealed by the QBCC search. He also submitted that, for the purposes of the BIF Act, it was “preferred” that the first respondent send the adjudication application to Equinox’s “principal office” as per the QBCC records, rather than its registered office, because this was not a proceeding under the Corporations Act 2001.Discussion and conclusion Although Equinox received Mr Henning’s February 2020 payment claim, it did not give him a payment schedule in response to his payment claim. Section 77 of the BIF Act therefore applied and Equinox was liable to pay the amount claimed under the payment claim on the due date for the progress payment to which the payment claim related. Equinox not having paid that amount, Mr Henning was entitled to apply for adjudication of the payment claim under section 78(2)(b) of the BIF Act. An application for adjudication is dealt with in section 79 of the BIF Act. As I have already noted, under section 79(3), a copy of the adjudication application must be given to the respondent or the adjudicator has no jurisdiction to adjudicate the payment claim. The adjudication decision (exhibit JH1 to Mr Henning’s affidavit) records that no payment schedule was issued by Equinox. It also records that, accordingly, under section 82(2), Equinox was not permitted to provide an adjudication response. I note that the adjudicator stated that he was advised by Mr Henning (in response to a request for further information) that the adjudication application had been served upon the respondent on 9 March 2020. It seems that the adjudicator did not require any further proof of service. I note thought the adjudicator’s observation at paragraph 18 of his decision that the respondent (Equinox) had not “acknowledged requests for further submissions”, one of which concerned service (see paragraph 67 of the adjudicator’s decision). The consequences of not complying with time limitations under the BIF Act may be significant (as explained in Emag; cf Morel). Service of the adjudication application is critical to the jurisdiction of the adjudicator (Niclin). In my view, it is incumbent upon a claimant in an adjudication application to strictly prove that a copy of the application has been given to the respondent to it – first to the adjudicator, and later, if necessary, to the court (cf Emag, Chase Oyster Bar). In my view, it is necessary for a claimant to be in a position to strictly prove service so that there can be, consistently with the aims of the BIF Act, quick and efficient recovery of progress payments and the resolution of disputes by way of adjudication. Mr Henning was not in a position to prove that he had “given”, or brought his adjudication application to the notice of Equinox, other than by relying upon sections 39 and 39A of the Acts Interpretation Act. It is not difficult to prove compliance with those provisions. All Mr Henning had to do was swear that he (i) put the adjudication application inside an envelope; (ii) properly addressed the envelope to either the head office, registered office or principal office of Equinox; (iii) pre-paid the postage of it; and (iv) posted it. But he did not expressly produce evidence covering those four matters.

Ratio Decidendi

Legal Principle Established

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