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Golets v Southbourne Homes & Anor

Golets v Southbourne Homes & Anor

Case [2017] VSC 705 23 November 2017

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2017 0178

MARKIAN GOLETS	Plaintiff
v
SOUTHBOURNE HOMES PTY LTD (ACN 160 896 971)	First Defendant
and
JOHN MCMULLAN	Second Defendant

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	16 NOVEMBER 2017
DATE OF JUDGMENT	23 NOVEMBER 2017
CASE MAY BE CITED AS:	GOLETS v SOUTHBOURNE HOMES & ANOR
MEDIUM NEUTRAL CITATION:	[2017] VSC 705

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BUILDING CONTRACTS — Building and Construction Industry Security of Payment Act 2002 (Vic) — Section 7(2)(b) meaning of ‘in the business of building residences’ — Whether the Act applies — Applicant not ‘in the business of building residences’ — No jurisdiction in adjudicator to determine adjudication application — Adjudication determination quashed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R Andrew	Moray & Agnew
For the First Defendant	Mr N J Phillpott	Ward & Co Legal Consultants

HIS HONOUR:

Introduction

This proceeding arises under the Building and Construction Industry Security of Payment Act 2002 (Vic) (the ‘Act’).

The construction contract in issue provides for the construction of two residential dwellings by the First Defendant, Southbourne Homes Pty Ltd (‘Southbourne Homes’ or the ‘Builder’) on land owned by the Plaintiff, Dr Markian Golets (‘Dr Golets’).

Dr Golets seeks judicial review of an adjudication determination purportedly made pursuant to s 23 of the Act by the Second Defendant (the ‘Adjudicator’) dated 16 July 2017 (the ‘Adjudication Determination’) which was in large part favourable to Southbourne Homes.

By originating motion dated 1 August 2017, Dr Golets seeks orders quashing the adjudication determination on the following grounds advanced to support the contention that the adjudicator fell into jurisdictional error, or alternatively made error on the face of the record:

(1) the Adjudicator committed jurisdictional error, alternatively erred in law, in determining that the Plaintiff is in the business of building residences (‘Ground 1’).

(2) the Adjudicator committed jurisdictional error, alternatively erred in law, in finding that the Act permits a claimant to deliver a payment claim under the Act following termination of the relevant construction contract (‘Ground 2’).

(3) further, or in in the alternative to Ground 2 above, the Adjudicator committed jurisdictional error, alternatively erred in law, in finding that there was a relevant reference date supporting the payment claim, when no such reference was provided for in the construction contract (‘Ground 3’).

(4) the Adjudicator committed jurisdictional error, alternatively erred in law, in finding that each of the stages prior to the Final Stage was complete in accordance with the construction contract and that therefore a relevant reference date under the contract arose (‘Ground 4’).

(5) the Adjudicator committed jurisdictional error, alternatively erred in law, in finding that the payment claim contained sufficient information to satisfy the requirements of s 14(2)(c) of the Act (‘Ground 5’).

(6) the Adjudicator committed jurisdictional error, alternatively erred in law, in failing to value the payment claim (‘Ground 6’).

Further or in the alternative, Dr Golets seeks declarations that:

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 Golets v Southbourne Homes & Anor

Details

AGLC: Golets v Southbourne Homes & Anor [2017] VSC 705
Case: [2017] VSC 705
Decision Date: 23 NOVEMBER 2017

CaseChat Overview and Summary

The case of Golets v Southbourne Homes & Anor involved the applicant, Mr. Golets, who was engaged in a dispute over payments under a building contract with the respondents, Southbourne Homes and another party. The matter was heard in the Supreme Court of Victoria, where Mr. Golets sought to enforce an adjudication decision. The core of the dispute was whether the Building and Construction Industry Security of Payment Act 2002 (Vic) applied to the contract and if the adjudicator had the jurisdiction to determine the adjudication application. The key issue was whether the respondent, Southbourne Homes, was "in the business of building residences" as required by section 7(2)(b) of the Act.

The court was required to determine the scope of "in the business of building residences" and whether Southbourne Homes fell within this category. It also had to consider whether the adjudicator had jurisdiction to determine the adjudication application, given the respondent's status. The court examined the legislative intent behind the Security of Payment Act, which aimed to ensure timely payment to those in the building and construction industry. The court needed to balance the protection provided by the Act with the need to ensure it applied only to those truly within the industry it intended to cover.

The court found that Southbourne Homes was not "in the business of building residences" as it did not engage in the primary activity of constructing residential buildings but rather acted as an intermediary or developer. This interpretation aligned with the legislative intent to provide protection to those directly involved in the construction process. Consequently, the court held that the Act did not apply to the contract in question, and the adjudicator lacked jurisdiction to determine the adjudication application. As a result, the adjudication determination was quashed.

The Supreme Court ordered that the adjudication determination made by the adjudicator be set aside and that no costs be awarded. This decision underscored the importance of correctly identifying the scope of the Security of Payment Act and the necessity for those involved in the building and construction industry to clearly fall within its provisions to benefit from its protections.

Orders