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Ian Street Developer Pty Ltd v Arrow International Pty Ltd

Ian Street Developer Pty Ltd v Arrow International Pty Ltd

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Case Copied 13 November 2018 37 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2018 0026

IAN STREET DEVELOPER PTY LTD	Applicant
v
ARROW INTERNATIONAL PTY LTD	First Respondent
and
JONATHAN SMITH	Second Respondent

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JUDGES:	MAXWELL P, McLEISH and NIALL JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	16 October 2018
DATE OF JUDGMENT:	13 November 2018
MEDIUM NEUTRAL CITATION:	[2018] VSCA 294
JUDGMENT APPEALED FROM:	[2018] VSC 14 (Riordan J)

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STATUTORY INTERPRETATION – Legislative intention – Non-compliance with statutory requirement – Whether legislature intended non-compliance to invalidate act purportedly done – Construction industry progress payments scheme – Provision for adjudication of amount claimed – Time limit within which adjudication determination must be made – Time limit breached – Whether determination invalid – Express provisions inconsistent with invalidity – Adjudicator’s non-compliance beyond claimant’s control – Invalidity would create inconvenience – Invalidity not intended – Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 applied – Building and Construction Industry Security of Payment Act 2002 ss 22, 23, 28.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr R Andrew with Mr N J Phillpott	Noble Lawyers
For the First Respondent	Mr C M Caleo QC with Mr B Reid	Thomson Geer
For the Second Respondent	No appearance

MAXWELL P:

Summary

In October 2016, the applicant (‘proprietor’) entered into a construction contract with the first respondent (‘builder’) for the construction of apartments on a site in Noble Park. The dispute between them concerns a progress claim issued by the builder under s 14 of the Building and Construction Industry Security of Payment Act2002 (the ‘Act’).

The object of the Act is

to ensure that any person who undertakes to carry out construction work … under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work.[1]

To secure that object, the Act confers on the claimant a statutory entitlement to the progress payment, provided that it is claimed in accordance with the procedure laid down in the Act.

[1]The Act s 3(1).

One of the steps in the statutory procedure is the referral of a disputed claim to an adjudicator for a determination.[2] In the present case, the builder’s payment claim was referred to an adjudicator, who determined that the proprietor was liable to pay the builder $381,446.78, together with interest and 50 per cent of the adjudicator’s fee.[3]
[2]Ibid s 18.
[3]Ian Street Developer Pty Ltd v Arrow International Pty Ltd [2018] VSC 14 [32] (‘Reasons’).

As will appear, the Act specifies a time limit within which an adjudication must be completed. In this case, the adjudication was completed outside that time limit. The question for resolution is whether the adjudicator’s non-compliance with the time limit has the effect that the adjudication decision is void.

The Act is silent on that question. That being so, the interpreting court must seek to discern the legislature’s intention with respect to the consequences of non-compliance by examining the statutory scheme in…

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] VSCA 294
Decision Date: 13 November 2018

CaseChat Overview and Summary

The case of Ian Street Developer Pty Ltd v Arrow International Pty Ltd concerned a dispute over the validity of an adjudication determination under the Building and Construction Industry Security of Payment Act 2002. The plaintiff, Ian Street Developer Pty Ltd, sought to recover an amount claimed for progress payments, while the defendant, Arrow International Pty Ltd, challenged the validity of the adjudication determination on the basis that it was made beyond the statutory time limit. The dispute was heard in the Supreme Court of New South Wales. The primary legal issue before the court was whether the non-compliance with the statutory time limit for making an adjudication determination rendered the determination invalid. The court was required to consider whether the legislature intended such non-compliance to invalidate the act purportedly done, and whether the invalidity would create an unreasonable inconvenience.

The court examined the statutory provisions and the case law, particularly the decision of the High Court in Project Blue Sky Inc v Australian Broadcasting Authority, which established a test for determining whether a statutory provision should be construed as rendering an act invalid when a statutory requirement is not complied with. The court found that the express provisions of the Act were inconsistent with the invalidity of the adjudication determination. The court also considered that the adjudicator's non-compliance with the time limit was beyond the control of the claimant, and that rendering the determination invalid would create an unreasonable inconvenience. The court concluded that the legislature did not intend the invalidity of the adjudication determination, and that the determination was therefore valid.

In light of the above, the court dismissed the defendant's challenge to the validity of the adjudication determination and ordered the defendant to pay the amount determined by the adjudicator, plus interest and costs. The court held that the statutory time limit for making an adjudication determination was not a jurisdictional requirement, and that non-compliance with the time limit did not render the determination invalid. The court also held that the invalidity of the adjudication determination would create an unreasonable inconvenience, and that the legislature did not intend such invalidity. The court's decision provides guidance on the interpretation of statutory provisions that are inconsistent with the invalidity of an act purportedly done, and the circumstances in which such invalidity may be implied.

Orders