Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd - [2018] NSWSC 1229

Supreme Court

New South Wales

Medium Neutral Citation: Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd [2018] NSWSC 1229
Hearing dates: 06/08/2018
Date of orders: 06 August 2018
Decision date: 06 August 2018
Jurisdiction: Equity - Technology and Construction List
Before: McDougall J
Decision:
Summons dismissed with costs. Money in court to be paid out to first defendant.

Catchwords:
BUILDING AND CONSTRUCTION – application to quash adjudicator’s determination under Security of Payment Act – whether payment claim invalid as attachment to supporting statement not included – no requirement for such attachment on the facts of this case.

BUILDING AND CONSTRUCTION – whether adjudicator failed to discharge her statutory functions in good faith – statutory formulation requires certain specified matters be given weight as fundamental elements in the determination – necessary to consider adjudicators’ reasoning in light of the compressed time constraints in which they are created – importance of not overzealously or mechanically applying the description of the adjudicators’ task explained in SSC Plenty Road v Construction Engineering (Aust) [2015] VSC 631 – fair reading of the adjudicator’s reasons in context demonstrates no jurisdictional error.
BUILDING AND CONSTRUCTION – whether builder should be prevented from receiving adjudicated amount – where owner claims to have a substantial offsetting claim – whether owner would be prejudiced if payment out of court is ordered due to insolvency risk of builder – where Security of Payment Act effects a statutory transfer of risk from builder to owner pending final determination – necessary to point to a further risk than that inherent in the statutory allocation to justify the granting of a stay – no such grounds established.
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Building and Construction Industry Security of Payment Regulation 2008 (NSW)
Cases Cited: Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393
John Holland Pty Ltd v Roads and Traffic Authority of New South Wales (2007) 23 BCL 205
Laing O'Rourke Australia Construction Pty Ltd v H&M Engineering and Construction Pty Ltd [2010] NSWSC 818
Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 92 ALJR 248
R J Neller Building Pty Ltd v Ainsworth [2009] 1 Qd R 390
Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd [2018] NSWCA 33
Southern Cross Electrical Engineering v Steve Magill Earthmoving [2018] NSWSC 1027
SSC Plenty Road Pty Ltd v Construction Engineering (Aust) Pty Ltd [2015] VSC 631
Suprima Bakeries Pty Ltd v Australian Weighing Equipment Pty Ltd [2016] NSWSC 998
Zhang v Canterbury City Council (2001) 51 NSWLR 589
Category: Principal judgment
Parties: Goodwin Street Developments Pty Ltd as trustee for Jesmond Unit Trust (Plaintiff)
DSD Builders Pty Ltd (First Defendant)
Australian Building & Construction Dispute Resolution Service Pty Ltd (Second Defendant)
Jennifer Wyatt (Third Defendant)
Representation:
Counsel:
D S Weinberger (Plaintiff)
B A Jacobs (First Defendant)
Solicitors:
Richard Green Construction Lawyers (Plaintiff)
CCS Legal Pty Limited (First Defendant)

File Number(s): 2018/193623

JUDGMENT (EX TEMPORE –…

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 1229
Decision Date: 06 August 2018

CaseChat Overview and Summary

In the matter of Goodwin Street Developments Pty Ltd v DSD Builders Pty Ltd, the Federal Court was tasked with addressing several issues related to the adjudication process under the Security of Payment Act. The developer, Goodwin Street Developments, sought to quash the adjudicator's determination in favour of the builder, DSD Builders. The developer argued that the payment claim was invalid as it lacked an attachment to the supporting statement, and that the adjudicator failed to discharge her statutory functions in good faith. DSD Builders, on the other hand, contended that the developer was not prejudiced by the adjudicator's determination and that the adjudicator had properly exercised her discretion.

The court had to determine whether the absence of an attachment to the payment claim invalidated the adjudicator’s determination and whether the adjudicator discharged her statutory functions in good faith. The court also had to consider whether DSD Builders should be prevented from receiving the adjudicated amount due to the developer’s claims of a substantial offsetting claim and potential insolvency risk. The developer argued that the statutory allocation of risk under the Security of Payment Act should not be the sole consideration in determining whether to grant a stay of payment.

The court found that the absence of an attachment to the payment claim did not invalidate the adjudicator's determination, as there were no statutory or contractual requirements mandating such an attachment in this case. The court also concluded that the adjudicator had properly exercised her discretion and did not commit any jurisdictional errors, despite the compressed timeframes in which adjudicators operate. Regarding the developer’s claims of a substantial offsetting claim and potential insolvency risk, the court held that these factors did not justify a stay of payment. The statutory allocation of risk from the builder to the developer pending final determination was sufficient, and the developer had not demonstrated any further risk beyond what was inherent in the statutory scheme.

The court dismissed the developer's application to quash the adjudicator's determination and ordered the developer to pay the adjudicated amount to the builder.

Orders