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Firedam Civil Engineering v KJP Construction

Firedam Civil Engineering v KJP Construction

Case [2007] NSWSC 1162 25 October 2007

Building & Construction Industry Security of Payment Act

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CITATION: Firedam Civil Engineering v KJP Construction [2007] NSWSC 1162

HEARING DATE(S): 4, 23 October 2007

JUDGMENT DATE :
25 October 2007

JURISDICTION: Equity

JUDGMENT OF: Austin J

DECISION: Declarations that the adjudicator's determination was in breach of the rules of natural justice and void; injunctions restraining first and second defendants from acting on the determination

CATCHWORDS: BUILDING AND CONSTRUCTION - progress payments - Building & Construction Industry Security of Payment Act - service of payment schedule - service under Corporations Act - relevance of evidence of non-receipt by director of claimant - adjudicator disregards adjudication response on ground that payment schedule was not provided because not received by claimant's director - errors of law - denial of natural justice - whether relief should be by declarations and injunctions or orders in nature of certiorari

LEGISLATION CITED: Acts Interpretation Act 1901 (Cth) s 29
Building & Construction Industry Security of Payment Act 1999 (NSW) ss 3, 4, 13, 14, 15, 17, 20, 22, 27, 31
Corporations Act 2001 (Cth) s109X

CASES CITED: Brodyn Pty Ltd v Davenport [2004] NSWCA 394
Deputy Commissioner of Taxation v Trio Site Services Pty Ltd [2007] FCA 776
Emag Constructions Pty Ltd v Highrise Concrete Contractors (Aust) Pty Ltd [2003] NSWSC 903
Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259 (BC200607427)
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87
Pacific General Securities Ltd v Soliman & Sons Pty Ltd [2005] NSWSC 378
Taylor Projects Group Pty Ltd v Brick Dept Pty Ltd [2005] NSWSC 439
Tsoukatos v Mustafa [2007] NSWSC 614

PARTIES: Firedam Civil Engineering Pty Ltd (P)
KJP Construction Pty Ltd (D1)
Mediate Today Pty Ltd, trading as Adjudicate Today (D2)
Damian Michael (D3)

FILE NUMBER(S): SC 4589/07

COUNSEL: S Goldstein (P)
D A Caspersonn (D1)

SOLICITORS: Hassetts Solicitors (P)
JJ Noy & Associates (D1)
Philip Davenport (D2)
Church & Grace (D3)

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

AUSTIN J

THURSDAY 25 OCTOBER 2007

4589/07 FIREDAM CIVIL ENGINEERING PTY LTD V KJP CONSTRUCTION PTY LTD

JUDGMENT

1 HIS HONOUR: In these proceedings the plaintiff challenges the validity of an adjudication determination by the third defendant, an adjudicator nominated by the second defendant, purportedly made under the Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Act"). The second and third defendants submit to the order of the court, except as to costs.

Relevant provisions of the Act

2 The object of the Act (to the extent relevant) is to ensure that anyone who undertakes to carry out construction work under a construction contract is entitled to receive and able to recover progress payments in relation to the carrying out of that work (s 3(1)). The Act grants the contractor a statutory entitlement to receive a progress payment regardless of whether the construction contract makes provision for progress payments, and it establishes a procedure for recovery of progress payments that involves the making of a payment claim by the person…

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.

Continue reading Firedam Civil Engineering v KJP Construction

Details

AGLC: Firedam Civil Engineering v KJP Construction [2007] NSWSC 1162
Case: [2007] NSWSC 1162
Decision Date: 25 October 2007

CaseChat Overview and Summary

Firedam Civil Engineering Pty Ltd, the claimant, took legal action against KJP Construction (Aust) Pty Ltd, the defendant, to seek progress payments under a building contract and an adjudication determination under the Building and Construction Industry Security of Payment Act 2002 (Cth). The case was heard in the Supreme Court of Queensland. The core issue before the court was whether the defendant was legally obligated to provide a payment schedule to the claimant as mandated by the Building and Construction Industry Security of Payment Act 2002 (Cth) and, if so, whether the adjudicator's decision could be legally challenged due to an alleged failure to serve the payment schedule correctly.

The court examined the statutory requirements for service of a payment schedule and whether the adjudicator had correctly interpreted the evidence regarding the non-receipt of the payment schedule by the claimant's director. The claimant argued that the adjudicator's decision should be overturned due to procedural errors, including the denial of natural justice and the failure to serve the payment schedule correctly. The court considered whether the relief should be sought through declarations and injunctions or through orders akin to certiorari, which would nullify the adjudicator's decision on the basis of errors of law.

The Supreme Court of Queensland ruled that the adjudicator's decision contained legal errors and that the adjudicator had acted contrary to the principles of natural justice. The court found that the evidence of non-receipt of the payment schedule by the claimant's director was relevant and should have been considered. The adjudicator's disregard of the adjudication response on this basis was deemed to be an error of law. Consequently, the court issued declarations and injunctions, prohibiting the defendant from enforcing the adjudicator's decision and requiring the defendant to serve the payment schedule properly. The court also ordered that the adjudicator's decision be quashed.

Orders