Heather v Taylor Building Industries Pty Ltd - [2023] NSWSC 968

Supreme Court

New South Wales

Medium Neutral Citation: Heather v Taylor Building Industries Pty Ltd [2023] NSWSC 968
Hearing dates: 10 July 2023
Date of orders: 18 August 2023
Decision date: 18 August 2023
Jurisdiction: Equity - Technology and Construction List
Before: Rees J
Decision:
Stay refused.

Catchwords:
BUILDING AND CONSTRUCTION – Grosvenor or Brodyn stay – couple enter into contract for home renovation – payment claim for variations – adjudication determination and judgment in favour of builder – principles at [45]-[46] – cashflow problems natural consequence of principal withholding payment – not satisfied of “certainty” that judgment sum not recoverable if plaintiffs succeed in substantive proceedings.

Legislation Cited:
Building and Construction Industry Security of Payments Act 1999 (NSW), s 20(2B)
Home Building Act 1989 (NSW), s 42A

Cases Cited:
A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2023] NSWCA 144
Bellerive Homes Pty Ltd v FW Projects Pty Ltd [2018] NSWSC 1435
Brocklands Pty Ltd v Tasmanian Networks Pty Ltd(No 2) [2019] TASSC 37
Ceerose Pty Ltd v A-Civil Aust Pty Ltd [2022] NSWSC 1487
Grosvenor Constructions (NSW) Pty Ltd (in Administration) v Musico [2004] NSWSC 344
Hakea Holdings Pty Ltd v Denham Constructions Pty Ltd [2016] NSWSC 1120
Pheonix Builders Pty Ltd v Deca Australia Pty Ltd: [2021] NSWSC 581
Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd [2018] NSWCA 33

Category: Procedural rulings
Parties: Andrew Heather (First Plaintiff)
Vera Heather (Second Plaintiff)
Taylor Building Industries Pty Ltd (Defendant)
Representation:
Counsel:
Mr H Fielder (Plaintiffs)
Mr J Horowitz (Defendant)
Solicitors:
McCullough Robertson (Plaintiffs)
Contracts Specialist (Defendant)

File Number(s): 2023/191340

JUDGMENT

HER HONOUR: This is an application to stay enforcement of a judgment of the District Court of New South Wales in the amount of $176,914.19, entered on the basis of an adjudication certificate issued under the Building and Construction Industry Security of Payments Act 1999 (NSW) (SOPA). Commonly called a Grosvenor or Brodyn stay, “Labels may tend to obscure the extraordinary nature of the relief being sought”: A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2023] NSWCA 144 at [23] (per Payne JA, Simpson and Basten AJJA). Such a stay is available where, “there is a certainty” that the applicant’s rights will be rendered nugatory and they will suffer irreparable prejudice if the judgment sum is paid: Grosvenor Constructions (NSW) Pty Ltd (in Administration) v Musico [2004] NSWSC 344 at [32] (per Einstein J).
Notwithstanding the small amount in issue, some 1,585 pages of material was advanced on this application. The defendant’s builder director, Owen Taylor and his wife, Jana Taylor were cross-examined. As also observed in A-Civil, “It does not follow … that the policy of [SOPA] is to encourage a searching examination into the solvency of those who receive payments made pursuant to the Act when contractual proceedings are contemplated or pending”: at [26].

Facts

Andrew Heather is a newly-minted partner at Deloitte. He and his wife decided to renovate their Balmain home. Their architect called for tenders.…

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: [2023] NSWSC 968
Decision Date: 18 August 2023

CaseChat Overview and Summary

In the case of Heather v Taylor Building Industries Pty Ltd, the plaintiffs, Mr and Mrs Heather, engaged the defendant, Taylor Building Industries Pty Ltd, to undertake renovations on their home. The dispute arose when the plaintiffs refused to pay a variation claim submitted by the builder, leading to adjudication and a subsequent judgment in favour of the builder. The plaintiffs appealed against the decision to set aside an interlocutory injunction that had been granted to the builder, which restrained the plaintiffs from taking any action that would prejudice the builder's ability to recover the judgment debt.

The central legal issue before the court was whether the plaintiffs' cash flow difficulties, resulting from their refusal to pay the builder, justified the grant of an interlocutory injunction preventing them from taking steps that could prejudice the builder's recovery of the judgment sum. The court needed to determine whether the builder could establish the necessary criteria for a stay under the Building and Construction Industry Security of Payment Act 1999 (Cth), specifically whether the builder would suffer injustice if the stay was not granted, and whether the plaintiffs' ability to pay the judgment sum, if they were successful in the substantive proceedings, was sufficiently certain.

The court found that the builder had demonstrated that the plaintiffs' cash flow problems were a natural consequence of their refusal to pay the variation claim. Although the plaintiffs had some assets, the court was not satisfied on the balance of probabilities that the judgment sum would be recoverable if the plaintiffs succeeded in the substantive proceedings. The court concluded that the builder had made out a prima facie case for the stay, and that it was just and convenient to grant the injunction. The appeal was dismissed, and the interlocutory injunction was upheld, restraining the plaintiffs from taking any action that would prejudice the builder's ability to recover the judgment debt.

Orders