Inten Constructions v Refine Electrical Services - [2006] NSWSC 1282

CITATION: Inten Constructions v Refine Electrical Services & Anor [2006] NSWSC 1282

HEARING DATE(S): 24/11/2006

JUDGMENT DATE :
1 December 2006

JUDGMENT OF: McDougall J at 1

DECISION: See para [83] of judgment

CATCHWORDS: BUILDING AND CONSTRUCTION - where plaintiff's payment schedule and adjudication response asserted that no contract provision supported the first defendant's claim - whether adjudicator was entitled or required to consider the relevant provisions of the contract under s 22(2)(b), (d) of the Building and Construction Industry Security of Payment Act 1999 (NSW) - where adjudicator found claim to be supported by the contract - whether natural justice required adjudicator to provide the plaintiff with an opportunity to respond - where adjudicator considered plaintiff's adjudication response - where adjudicator did not expressly state reasons for rejecting plaintiff's approach - whether adjudicator acted impartially - whether adjudicator lacked good faith - application of Brodyn v Davenport [2004] NSWCA 394 - whether adjudication determination void

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999
Trade Practices Act 1974

CASES CITED: Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421
Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229
Coordinated Construction Co Pty Limited v J M Hargreaves (NSW) Pty Limited (2005) 63 NSWLR 385
John Goss Projects v Leighton Contractors [2006] NSWSC 798
Musico v Davenport [2003] NSWSC 977
Procorp Civil Pty Limited v Napoli Excavations and Contracting Pty Limited [2006] NSWSC 205
Quasar Constructions v Demtech Pty Limited [2004] NSWSC 116

PARTIES: Inten Constructions Pty Ltd (Plaintiff)
Refine Electrical Services Pty Ltd (First Defendant)
Philip Davenport (Second Defendant)

FILE NUMBER(S): SC 55074/06

COUNSEL: G A Sirtes (Plaintiff)
F P Hicks (First Defendant)

SOLICITORS: Jason Li Lawyers (Plaintiff)
Submittiing appearance (Second Defendant)

Inten Constructions v Refine Electrical & Anor [2006] NSWSC 1282

INDEX TO JUDGMENT

The issues: denial of natural justice

6

The issues: lack of Brodyn good faith

8

Notice to the adjudicator

11

The payment claim

14

The payment schedule

21

The adjudication application

27

The adjudication response

31

Relevant provisions of the contract

32

The determination

33

Analysis: denial of natural justice

46

Lack of Brodyn good faith

68

The quantification of prolongation costs

70

Loss of productivity

72

Willingness to accept Refine’s “assertions”

73

The adjudicator’s treatment of the decision in Hargreaves

74

The adjudicator shifted the goalposts

79

The cumulative effect of the propositions

80

Conclusion on want of Brodyn good faith

82

Conclusion and orders

83

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

McDOUGALL J

1 December 2006

ELECTRICAL SERVICES PTY LTD & ANOR

JUDGMENT

1 McDOUGALL J: The plaintiff (Inten) as head contractor and the first defendant (Refine) as subcontractor made a written subcontract on 13 September 2005 (the contract) whereby Refine undertook to perform electrical work at a project at Neutral Bay. There is no doubt that the work to be performed by Refine…

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 Inten Constructions v Refine Electrical Services

Details

AGLC: Inten Constructions v Refine Electrical Services [2006] NSWSC 1282
Case: [2006] NSWSC 1282
Decision Date: 1 December 2006

CaseChat Overview and Summary

In the case of Inten Constructions v Refine Electrical Services, the dispute arose from a claim by the first defendant, Refine Electrical Services, for payment under a sub-contract. Inten Constructions, the plaintiff, disputed the claim and argued that there was no contractual basis for it. The matter was referred to adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW). The adjudicator found in favour of the first defendant, ruling that the claim was supported by the contract. The plaintiff then challenged the validity of the adjudication determination, asserting that the adjudicator failed to adhere to principles of natural justice and lacked impartiality and good faith.

The central legal issues were whether the adjudicator was required or entitled to consider the relevant provisions of the contract, and whether the adjudicator's failure to provide reasons for rejecting the plaintiff's approach rendered the adjudication determination void. The court had to examine if the adjudicator's actions were in line with the principles of natural justice and whether they displayed impartiality and good faith. Furthermore, the court considered if the adjudication determination could be upheld in light of the authority established by Brodyn v Davenport.

The court determined that the adjudicator was indeed required to consider the relevant provisions of the contract under s 22(2)(b)-(d) of the Act. While the adjudicator did consider the plaintiff's adjudication response, the court held that the principles of natural justice were not violated because the adjudicator provided an opportunity for the plaintiff to respond to the claim. Although the adjudicator did not expressly state the reasons for rejecting the plaintiff's approach, this did not render the adjudication determination void. The court found that the adjudicator acted impartially and in good faith, and did not contravene the principles outlined in Brodyn v Davenport. Consequently, the adjudication determination was upheld, and the first defendant's claim for payment was affirmed.

Orders