Isis Projects v Clarence Street Limited - [2004] NSWSC 222

CITATION: Isis Projects Pty Limited v Clarence Street Limited [2004] NSWSC 222

HEARING DATE(S): 23/03/04, 24/03/04

JUDGMENT DATE:
29 March 2004

JURISDICTION:
Equity Division
Technology and Construction List

JUDGMENT OF: Einstein J

DECISION: Appeal to be dismissed on the bringing in of short minutes of order

CATCHWORDS: Contract - Building and Construction - Building and Construction Industry Security of Payment Act 1999 (NSW) - Amendments effected by the Building and Construction Industry Security of Payment Amendment Act 2002 - Whether following amending legislation the Act requires the respondent upon receiving a payment claim to set out any objection it may have to the claim (whether it be an objection arising out of the contract or otherwise) in a payment schedule, failing which the respondent is liable to pay the claim whether or not the claimant be in fact entitled to the progress payment - Application for summary judgment - Whether General Steel principles apply upon an application for summary judgment pursued by reference to the Building and Construction Industry Security of Payment Act 1999 where the parties final rights are reserved

LEGISLATION CITED: Building and Construction Industry Security of Payment Amendment Act 2002.
Building and Construction Industry Security of Payments Act 1999 (NSW)

CASES CITED: Brewarrina Shire Council v Beckhaus Civil Pty Ltd (2003) 56 NSWLR 576
Brimson v Rocla Concrete Pipes Limited [1982] 2 NSWLR 937
Dey v Victorian Railways Commissioners (1949) 78 CLR 62
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125
Hession v Century 21 South Pacific Limited (In Liquidation) (1992) 28 NSWLR 120
House v R (1936) 55 CLR 499
Pannizutti v Trask (1987) 10 NSWLR 531
Rajski v Powell (1987) 11 NSWLR 522

PARTIES :
Isis Projects Pty Limited (Plaintiff)
Clarence Street Limited (Defendant)

FILE NUMBER(S): SC 55032/03

COUNSEL: Mr R J Powell SC, Mr Elliott (Plaintiff)
Mr RJH Darke SC, Mr M Southwick (Defendant)

SOLICITORS: Turtons Lawyers (Plaintiff)
Watson Mangioni (Defendant)

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

Einstein J

Monday 29 March 2004

55032/03 Isis Projects Pty Limited v Clarence Street Pty Limited

JUDGMENT

The Appeal

1 There is before the court an appeal from the judgment of Master Macready delivered on 23 February 2004 dismissing a notice of motion by which the appellant, the plaintiff below, Isis Projects Pty Ltd ["Isis"] had sought summary judgment pursuant to Part 15 rule 2 of the Supreme Court Rules in the sum of $770, 347.11. The respondent, the defendant below, Clarence Street Pty Limited [“Clarence Street”] has filed a notice of contention.

2 The issues, which are raised, concern the proper construction and application of particular sections of the Building and Construction Industry Security of Payment Act 1999 ["the Act"]. The Act has been the subject of much attention over the past few years there now being a reasonably considerable body of first instance decisions covering a variety of disparate issues.

3 The significance of the central issue here raised for decision concerns…

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: [2004] NSWSC 222
Decision Date: 29 March 2004

CaseChat Overview and Summary

The parties in this case are Isis Projects and Clarence Street Limited, who are embroiled in a dispute concerning an alleged payment for work done under a building contract. The matter was heard in the Supreme Court of New South Wales. The primary issue before the court was whether the amendments introduced by the Building and Construction Industry Security of Payment Amendment Act 2002 required the respondent to specify any objections to a payment claim in a payment schedule. If the respondent failed to do so, it would be liable to pay the claim irrespective of whether the claimant was entitled to the progress payment. The court was also required to determine whether the principles set out in the case of General Steel Industries applied to applications for summary judgment pursued under the Building and Construction Industry Security of Payment Act 1999 when the parties' final rights were reserved.

The court examined the language of the amending legislation and concluded that the respondent was required to specify any objections in a payment schedule. The court found that the obligation to specify objections in a payment schedule was mandatory and that failure to do so resulted in the respondent being liable to pay the claim. The court also found that the General Steel principles did not apply to applications for summary judgment pursued under the Building and Construction Industry Security of Payment Act 1999 where the parties' final rights were reserved. The court held that the respondent's failure to specify its objections in a payment schedule resulted in a judgment in favour of the applicant, Isis Projects.

The court made orders for summary judgment in favour of Isis Projects, for payment of the sum claimed, interest, and costs. The court found that the respondent's failure to specify its objections in a payment schedule resulted in it being liable to pay the claim. The court also found that the General Steel principles did not apply to the application for summary judgment in this case, as the parties' final rights were reserved. The court's decision highlights the importance of complying with the requirements of the Building and Construction Industry Security of Payment Act 1999 and its amendments.

Orders