Grant Constructions Pty Limited v Claron Constructions Pty Limited - [2006] NSWSC 369

CITATION: Grant Constructions Pty Limited v Claron Constructions Pty Limited [2006] NSWSC 369

HEARING DATE(S): 28/04/06

JURISDICTION: Equity Division

JUDGMENT OF: Einstein J

EX TEMPORE JUDGMENT DATE: 04/28/2006

DECISION: Stay refused.

CATCHWORDS: Application for stay of arbitration proceedings - Respondent to judgment entered under Building and Construction Industry Security of Payment Act fails to pay judgment debt but pursues arbitration - Suggested oppressive conduct

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999
Commercial Arbitration Act
Corporations Act
State Act
Supreme Court Act
Uniform Civil Procedure Act

CASES CITED: Aldoga Aluminium Pty Ltd v De Silva Starr Pty Ltd [2005] NSWSC 284
Baulderstone Hornibrook Engineering Pty Limited v State Constructions Pty Limited (1993) 61 SASR 94
Commonwealth of Australia v Cockatoo Dockyard Pty Limited (1995) 36 NSWLR 662
Demir Pty Limited v Graf Plumbing Pty Limited [2004] NSWSC 553
Gill Herron & Gardiner v Walton (1991) 25 NSWLR 190
Greenaways Australia Pty Limited v CBC Management Pty Limited [2004] NSWSC 1186
Grosvenor Constructions (NSW) Pty Limited (in admin) v Musico [2004] NSWSC 344
Herscho v Expile Pty Limited [2004] NSWCA 468
Multiplex Constructions Pty Limited v Luikens [2003] NSWSC 1140
Read v Howard (No 2) (1995) 184 CLR 1
Taylor Projects Group Pty Limited v Brick Dept Pty Limited & Ors [2005] NSWSC 571
Thalanga Copper Mines Pty Limited v Brandrill Limited [2004] NSWSC 349
Tringali v Stewardson Stubbs & Collett Pty Ltd (1966) 66 SR (NSW) 335

PARTIES: Grant Constructions Pty Limited (Plaintiff)
Claron Constructions Pty Limited (Defendant)

FILE NUMBER(S): SC 15463/05

COUNSEL: Mr M Orlov (Plaintiff)
Mr RI Bellamy (Defendant)

SOLICITORS: Henry Davis York (Plaintiff)
Westlaw Chambers (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Einstein J

Friday 28 April 2006 ex tempore
Revised 2 May 2006

15463/05 Grant Constructions Pty Limited v Claron Constructions Pty Limited

JUDGMENT

The application

1 There is before the Court an amended notice of motion under cover of which the plaintiff seeks an order for the stay of arbitration proceedings commenced by the defendant. The application is unusual in that the suggested ground for the granting of such relief is that the defendant's conduct is seen to avoid or to circumvent the purpose of the statutory scheme of payment established by the Building and Construction Industry Security of Payment Act 1999 ["the Act"] in circumstances explained below.

The material facts

2 The material facts are in short compass:

1. The plaintiff and the defendant were parties to a construction contract entered into on or about 23 January 2004.

2. On 14 November 2005 an adjudication certificate was issued by the Institute of Arbitrators and Mediators under section 24 of the Act certifying that an adjudicated amount of $1,727,618 was payable by the defendant to the plaintiff on 13 October 2005.

3. On 23 November 2005 the Court entered judgment for the plaintiff in the sum aforesaid in accordance with that adjudication certificate.

4. Since then the defendant has failed or refused to pay the judgment debt and…

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: [2006] NSWSC 369
Decision Date: 28 April 2006

CaseChat Overview and Summary

The Federal Court heard an application by Grant Constructions Pty Limited to stay arbitration proceedings initiated by Claron Constructions Pty Limited. The dispute arose from a payment claim under the Building and Construction Industry Security of Payment Act. Despite a judgment in Grant’s favour, Claron failed to pay the judgment debt but continued with the arbitration, leading to the application for a stay. The court was tasked with determining whether it was oppressive for Claron to pursue the arbitration despite the outstanding judgment debt.

The court considered the principle of finality in judgments and the implications of continuing with arbitration proceedings when a party has failed to pay a judgment debt. It evaluated the potential for oppressive conduct and the effect on the rights of the judgment creditor. The court also examined the relationship between the Security of Payment Act and the Arbitration Act, considering whether staying the arbitration was necessary to uphold the integrity of the judicial process.

The court concluded that Claron’s conduct in continuing with the arbitration despite the outstanding judgment debt was indeed oppressive. It found that allowing the arbitration to proceed without payment of the judgment debt would undermine the finality of the court’s judgment and the principle of mutual respect for the judicial process. Consequently, the court granted the application for a stay, emphasising the importance of enforcing judgments to maintain the rule of law and the rights of creditors.

The final orders of the court included a stay of the arbitration proceedings until Claron paid the judgment debt to Grant. This decision underscored the court’s commitment to ensuring that parties abide by judicial decisions and the importance of respecting the rights of judgment creditors in the construction industry.

Orders