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Holdmark v Melhemcorp

Holdmark v Melhemcorp

Case [2009] NSWSC 305 23 April 2009

Contract Formation

Injunction

Admissibility of Evidence

Building Engineering & Construction Law

Civil Litigation & Procedure

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CITATION: Holdmark v Melhemcorp [2009] NSWSC 305

HEARING DATE(S): 08/04/09

JUDGMENT DATE :
23 April 2009

JURISDICTION: 55025/09

JUDGMENT OF: Macready AsJ at 1

DECISION: Paragraph 55

CATCHWORDS: Contracts. - Building Engineering & Construction contracts. Application to an Adjudicator under the Building and Construction Industry Security of Payment Act 1988 for correction of an adjudication under s 22(5) of the Act. Held that is one of the fundamental requirements of the Act. Injunction granted to restrain enforcement of part of award.

PARTIES: Holdmark (Aust) Pty Ltd v Melhemcorp Pty Ltd and Mr Max Tonkin

FILE NUMBER(S): SC 55025/2009

COUNSEL: Mr NA Nicholls for plaintiff
Mr IG Roberts for 1st defendant

SOLICITORS: Colin Biggers and Paisley for plaintiff
Maddocks for 1st defendant
Mr Philip Davenport for 2nd defendant

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

Associate Justice Macready

Thursday 23 April 2009

55025/09 Holdmark (Aust) Pty Ltd v Melhemcorp Pty Ltd and anor

JUDGMENT

1 His Honour: This is the hearing of an application for an injunction to restrain the enforcement of part of an adjudication decision which was made by the second defendant under the Building and Construction Industry Security of Payment Act 1999. The actual dispute concerns an application under section 22 (5) of the Act for the correction of an error in the adjudication. The Adjudicator is the second defendant who has filed a submitting appearance. The hearing of the proceedings has been referred to me by a Judge of the Court.

Background to the dispute

2 The submissions of the parties helpfully set out these matters and I will incorporate them with some modifications.

3 In about January 2007, the Plaintiff (Holdmark) engaged the Defendant (Melhemcorp) to undertake site remediation and landscaping works to a reserve in Shepherd Bay Park, Meadowbank. It is common ground between the parties that during the course of performing the works and pursuant to arrangements made between them, Holdmark made certain payments directly to sub-contractors engaged by Melhemcorp with its knowledge and authorisation.

4 On 25 January 2009, Melhemcorp made a Payment Claim in the amount of $644,886.64. The amount claimed was later reduced by Melhemcorp in its Adjudication Application to $503,149.58. The Payment Claim acknowledged that Melhemcorp had been paid a total of $914,221 by Holdmark and stated in paragraph 7:

“To date, Holdmark has paid Melhemcorp $914,221….”

5 In its Payment Schedule dated 10 February 2009, Holdmark indicated as a reason for withholding payment that it had paid directly to certain sub-contractors of Melhemcorp the sum of $213,940.65. In particular, Holdmark stated in paragraph 14(c):

“The Respondent has, at the request of the Claimant, paid directly to the Claimant’s sub-contractors, including Ezy-Pave, Bellingham Marine and Sydney Marina Contracting, a total of $213,940.65 in respect of works to be carried out by the Claimant under the contract.”

6 In its Adjudication Application dated 24 February 2009, Melhemcorp responded to what is described as “specific matters” in Holdmark’s Payment Schedule, including…

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 Holdmark v Melhemcorp

Details

AGLC: Holdmark v Melhemcorp [2009] NSWSC 305
Case: [2009] NSWSC 305
Decision Date: 23 April 2009

CaseChat Overview and Summary

In the case of Holdmark v Melhemcorp, the dispute arose from a construction contract where Holdmark sought to enforce a payment claim against Melhemcorp under the Building and Construction Industry Security of Payment Act 1988. Holdmark made an application to the court for a correction of an adjudicator's decision, arguing that the adjudicator had failed to consider certain aspects of the contract. The primary issue before the court was whether the statutory scheme of the Act required the adjudicator to correct the adjudication, and if so, what relief the court could grant.

The court examined the legislative intent behind the Act and its provisions for correcting an adjudication. It determined that the statutory scheme did indeed require the adjudicator to correct the adjudication if there were errors of law or material omissions. The court held that it had the authority to grant an injunction to restrain enforcement of the part of the award that was in error. This decision was based on the principle that the Act was designed to provide a quick and fair process for resolving payment disputes in the construction industry.

Following its analysis, the court found in favour of Holdmark and granted an injunction to restrain enforcement of the erroneous part of the adjudication. The court concluded that the relief was necessary to ensure that the statutory scheme was properly adhered to and to uphold the integrity of the adjudication process. This decision underscores the importance of compliance with the legislative requirements under the Act and the court's willingness to intervene when necessary to correct errors in adjudications.

Orders