Illawarra Retirement Trust v Denham Constructions Pty Ltd - [2015] NSWSC 1173

Supreme Court

New South Wales

Medium Neutral Citation: Illawarra Retirement Trust v Denham Constructions Pty Ltd [2015] NSWSC 1173
Hearing dates: 30 July 2015
Decision date: 20 August 2015
Jurisdiction: Equity - Technology and Construction List
Before: McDougall J
Decision:
Summons dismissed with costs.

Catchwords:
BUILDING AND CONSTRUCTION – adjudication determinations – whether adjudicator failed to decide an essential element of contractor’s claim – where principal claimed liquidated damages for delay, and took cash security to set-off those damages – where contractor claimed that extent of delay was reduced by extensions of time that it was or should have been allowed – where an earlier adjudication determination had found that principal’s entitlement to liquidated damages was nil – where that position was re-affirmed in the present adjudication determination – result that it was unnecessary to decide contractor’s submission as to extensions of time – consequence that adjudicator decided all that was necessary for the determination under review – alternative issue estoppel argument does not arise

BUILDING AND CONSTRUCTION – adjudication determinations – error of law on the face of the record – unavailability as a ground of review for determinations of adjudicators
BUILDING AND CONSTRUCTION – adjudication determinations – whether enforcement of statutory right can be restrained by permanent injunction – whether superintendent’s certificate later issued, determined final rights of parties – where that certificate issued under a contractual clause which discharged liability only in relation to termination itself – whether liability in other respects discharged – consequence that both the statutory right to enforce the adjudication determination, and the contractual right to enforce the superintendent’s certificate, remain available to the parties
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Cases Cited: Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421
Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393
Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190
Illawarra Retirement Trust v Denham Constructions Pty Ltd [2015] NSWSC 823
John Holland Pty Ltd v Roads and Traffic Authority of New South Wales (2007) 23 BCL 205
John Holland Pty Ltd v Roads and Traffic Authority of New South Wales (2007) 23 BCL 434
Martinek Holdings Pty Ltd v Reed Construction (Qld) Pty Ltd [2009] QCA 329
Musico v Davenport [2003] NSWSC 977
Watpac Constructions v Austin Group [2010] NSWSC 347
Category: Principal judgment
Parties: Illawarra Retirement Trust (Plaintiff)
Denham Constructions Pty Ltd (First Defendant)
Ted Smithies (Second Defendant)
Australian Solutions Centre Pty Ltd (Third Defendant)
Representation:
Counsel:

M Christie SC / B Michael (Plaintiff)
D M Macfarlane (First Defendant)
Solicitors:
K&L Gates (Plaintiff)
Crisp Lawyers (First Defendant)

File Number(s): 2015/219583

Judgment

HIS HONOUR: The plaintiff (IRT) and the first defendant (Denham) made a written contract on 27 March 2013 (the contract). Under the contract, Denham undertook to construct a residential aged care facility at Tarrawanna. The contract, based on AS4000-1997, was for a lump sum price. The contract price, subject to variation in accordance with the terms…

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: [2015] NSWSC 1173
Decision Date: 20 August 2015

CaseChat Overview and Summary

The dispute in Illawarra Retirement Trust v Denham Constructions Pty Ltd was heard in the Supreme Court of New South Wales. The Illawarra Retirement Trust sought to enforce an adjudication determination against Denham Constructions, a contractor. The Trust claimed liquidated damages for delays in the construction project, while the contractor argued that the delays were mitigated by extensions of time granted under the contract. The Trust had previously taken cash security to offset any potential liquidated damages. The core issue before the court was whether the adjudicator's determination was valid and enforceable. Specifically, the court needed to determine if the adjudicator had failed to decide an essential element of the contractor's claim by not addressing the extensions of time, and if the determination could be reviewed on the basis of an error of law. Another key issue was whether the enforcement of the adjudication determination could be restrained by a permanent injunction in light of a subsequent superintendent's certificate.

The court found that the adjudicator's determination was not flawed because it had decided all that was necessary under the review process. The adjudicator had re-affirmed that the Trust's entitlement to liquidated damages was nil, which rendered the question of extensions of time unnecessary to decide. Consequently, the adjudicator's determination did not fail to address an essential element of the claim. Additionally, the court held that an error of law on the face of the record was not available as a ground for review of an adjudicator's determination. The court further determined that the issuance of the superintendent's certificate did not discharge the parties' liabilities in all respects, meaning both the statutory right to enforce the adjudication determination and the contractual right to enforce the superintendent's certificate remained available.

In conclusion, the court dismissed the contractor's application to set aside the adjudication determination and granted the Trust's application for enforcement of the determination. The court ruled that the adjudicator's determination was valid and enforceable, and the issuance of the superintendent's certificate did not prevent the enforcement of the adjudication determination. The court did not grant the permanent injunction sought by the contractor, allowing the Trust to proceed with enforcing the adjudication determination as per the statutory right.

Orders