Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd - [2018] NSWSC 1791

Supreme Court

New South Wales

Medium Neutral Citation: Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd [2018] NSWSC 1791
Hearing dates: 20 November 2018
Decision date: 21 November 2018
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision:
Plaintiff’s Notice of Motion of 20 November 2018 be dismissed with costs

Catchwords: BUILDING AND CONSTRUCTION – application by owner to quash adjudicator’s determination in favour of builder dismissed by judge of the division and confirmed by Court of Appeal – whether funds paid into court by owner pending challenge to the determination should be retained in court pending determination of underlying building dispute – where judge hearing application to quash determination had rejected such an application – where Court of Appeal refused to entertain application – whether factors of inability of builder to repay established – whether any factors beyond those available to owner when making original application established
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Cases Cited: Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393; [2010] NSWCA 190
Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd [2018] NSWSC 1229
Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd [2018] NSWCA 276
Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4
RJ Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390; [2008] QCA 397
Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd [2018] NSWCA 33
Category: Procedural and other rulings
Parties: Goodwin Street Developments Pty Ltd as trustee for Jesmond Unit Trust (Plaintiff/Applicant)
DSD Builders Pty Ltd (Defendant/Respondent)
Representation:
Counsel:
F P Hicks SC (Plaintiff/Applicant)
D Hume (Defendant/Respondent)
Solicitors:
Richard Green Construction Lawyers (Plaintiff/Applicant)
CCS Legal Pty Ltd (Defendant/Respondent)

File Number(s): SC 2018/260981

Judgment

Goodwin Street Developments Pty Ltd and DSD Builders Pty Ltd were parties to a construction contract. DSD agreed to construct a number of boarding houses on property owned by Goodwin in Jesmond, a suburb of Newcastle.
Goodwin purported to terminate the contract on 19 March 2018. The work was not complete.
On 14 May 2018 the contract administrator under the contract issued a certificate that the cost of completion of the work was $976,497.91.
On 24 August 2018 Goodwin commenced these proceedings seeking judgment for that sum.
The proceedings have progressed in a dilatory fashion. Pleadings are not yet closed. Goodwin filed an Amended Summons and Amended Technology & Construction List Statement on 2 November 2018. On 2 November 2018 Ball J directed that DSD serve its List Response and any Cross-Claim by 30 November 2018.
On 30 April 2013 DSD served on Goodwin a payment claim pursuant to s 13 of the Building and Construction Industry Security of Payment Act 1999 (NSW) claiming $727,256.
On 15 June 2018 an adjudicator determined that claim pursuant to s 22 of the Act and awarded DSD $265,510.
On 6 August 2018 McDougall J dismissed a challenge to that determination: Goodwin Street Developments…

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.

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Details

Case: [2018] NSWSC 1791
Decision Date: 21 November 2018

CaseChat Overview and Summary

In the case of Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd, the dispute arose from an adjudication process in which the adjudicator determined in favour of the builder, DSD Builders Pty Ltd. The owner, Goodwin Street Developments Pty Ltd, sought to challenge the adjudicator's determination, but the judge of the division dismissed the application to quash the determination. The owner subsequently appealed to the Court of Appeal, which confirmed the dismissal. The central issue in this case was whether the funds paid into court by the owner, pending the challenge to the adjudicator's determination, should be retained in court pending the resolution of the underlying building dispute. This issue arose because the judge hearing the application to quash the determination had rejected the owner's application to retain the funds in court. The Court of Appeal had also refused to entertain the application. The question for the court was whether the factors that the builder was unable to repay the funds had been established, and whether any factors beyond those available to the owner when making the original application had come to light.

The court held that the decision to retain the funds in court pending the resolution of the underlying dispute was within the court's discretion. The court considered the factors relevant to the decision, including the risk of the builder being unable to repay the funds if they were returned, and the potential impact on the owner if the funds were not retained. The court found that the builder had not established that it would be unable to repay the funds if they were returned, and that no new factors had come to light that were not available to the owner when making the original application. The court concluded that the judge's decision to reject the owner's application to retain the funds in court was not an error of law, and that the Court of Appeal was correct to refuse to entertain the application. The court dismissed the owner's appeal and confirmed the decision of the Court of Appeal.

The court did not make any orders regarding the retention of the funds in court, as the decision on that matter had already been made by the Court of Appeal. The court's decision confirmed the position that the Court of Appeal had jurisdiction to review the decision of the judge of the division, and that the Court of Appeal had exercised its discretion in refusing to entertain the application to retain the funds in court. The court's decision also highlighted the importance of considering the relevant factors when making a decision about the retention of funds in court, and the need for parties to be aware of the potential consequences of their actions in the adjudication process.

Orders