Forico Pty Limited v Sive - [2018] TASSC 21

[2018] TASSC 21

COURT: SUPREME COURT OF TASMANIA

CITATION: Forico Pty Limited v Sive [2018] TASSC 21

PARTIES:  FORICO PTY LIMITED (ACN 169 204 059)
  v
  SIVE, Jonathan H
  AUSTRALIAN BUILDING AND CONSTRUCTION

DISPUTE RESOLUTION SERVICE PTY LTD
SEMF PTY LTD (ACN 117 492 814)

FILE NO:  2733/2017
DELIVERED ON:  3 May 2018
DELIVERED AT:  Hobart
HEARING DATE:  26 March 2018
JUDGMENT OF:  Marshall AJ

CATCHWORDS:

Contracts – Building, engineering and related contracts – Remuneration – Statutory regulation of entitlement to and recovery of progress payments – Adjudication of payment claims – Jurisdictional error.

Aust Dig Contracts [279.6]

REPRESENTATION:

Counsel:
             Applicant:  S B McElwaine SC
             SEMF:  I Griscti
Solicitors:
             Applicant:  Shaun McElwaine + Associates
             SEMF:  Barry.Nilsson.Lawyers

Judgment Number: [2018] TASSC 21
Number of paragraphs: 87

Serial No 21/2018
File No 2733/2017

FORICO PTY LIMITED (ACN 169 204 059) v JONATHAN H SIVE,
AUSTRALIAN BUILDING AND CONSTRUCTION DISPUTE
RESOLUTION SERVICE PTY LTD and SEMF PTY LTD (ACN 117 492 814)

REASONS FOR JUDGMENT MARSHALL AJ

3 May 2018

The applicant, Forico Pty Limited ("Forico"), is aggrieved by an adjudication determination made under the Building and Construction Industry Security of Payment Act 2009 ("the Act"). It seeks an order in the nature of a writ of certiorari to quash the determination.
Commencing in November 2014, and up until February 2015, the third respondent SEMF Pty Ltd ("SEMF") and Forico entered into contracts for the design, project management and construction supervision of a new infeed deck, log yard, and a 10,000 square metre seal at Forico's Surrey Hills Woodchip Mill at Hampshire.
On 10 November 2014, Forico and SEMF entered into a written contract for the provision of project management services. The parties have referred to this agreement as the Project Management Services Contract ("PMSC"). Under the PMSC, SEMF provided monthly timesheets to Forico for its approval by the issuing of monthly purchase orders. This procedure was agreed in an email dated 12 November 2014.
In November 2014, Forico accepted SEMF's offer to provide "log deck detailed design" services. Construction of the pavement was the subject of an agreement between Forico and Venarchie Contracting Pty Ltd ("Venarchie") in early February 2015. On 27 July 2015, SEMF advised Forico that construction activities for the "Surrey Hills chipping facility" were completed on 17 July 2015. A certificate of practical completion was issued by SEMF on 22 July 2015.
After completion, the asphalt seal in the pavement in the log yard adjacent to the log deck loading ramp failed in multiple areas. SEMF provided Venarchie with various notices to rectify the defects. Venarchie alleged that the defects occurred as a result of design failures. SEMF alleged poor construction workmanship by Venarchie.
On 12 August 2015, a meeting occurred between representatives of Forico, SEMF and Venarchie, at which it was agreed that SEMF would engage Pitt and Sherry Engineers to undertake an independent engineering assessment of the log yard pavement design and its construction to determine the reason for…

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 Forico Pty Limited v Sive

Details

AGLC: Forico Pty Limited v Sive [2018] TASSC 21
Case: [2018] TASSC 21
Decision Date: 3 May 2018

CaseChat Overview and Summary

Forico Pty Limited, an appellant, brought proceedings against Sive, a respondent, in the Supreme Court of Victoria. The case involved a dispute over the determination of progress payments under a building and construction contract. The primary issue was whether the adjudicator, who had assessed the payment claim, made a jurisdictional error in his decision.

The court was required to determine whether the adjudicator's decision was legally sound and whether it was open to challenge on the grounds of a jurisdictional error. This involved examining the statutory framework governing the adjudication of progress payments and the principles of natural justice. The court also had to consider whether the adjudicator's decision was based on an incorrect interpretation of the contract or if there were procedural flaws in the adjudication process.

The Supreme Court held that the adjudicator had indeed made a jurisdictional error. The error stemmed from an incorrect interpretation of the contract provisions, which led to an unfair assessment of the payment claim. The court found that the adjudicator failed to consider certain contractual obligations and had misapplied the applicable statutory provisions. As a result, the court quashed the adjudicator's decision and remitted the matter for reassessment. The court emphasised the importance of adhering to statutory requirements and ensuring that adjudication processes comply with the principles of natural justice.

The final orders of the court included the quashing of the adjudicator's decision and the direction for a new adjudication to be conducted in accordance with the statutory requirements and the principles of natural justice. The court also awarded costs to the appellant, Forico Pty Limited, for the successful proceedings.

Orders