Supreme Court
New South Wales
Medium Neutral Citation: IWD No 2 Pty Ltd v Level Orange Pty Ltd [2012] NSWSC 1439 Hearing dates: 6 & 15 November 2012 Decision date: 27 November 2012 Jurisdiction: Equity Division - Commercial List Before: Stevenson J Decision: Determination affirmed
Catchwords: BUILDING AND CONSTRUCTION - adjudication - jurisdictional error - construction contract - guarantee - indemnity Legislation Cited: Building and Construction Industry Security of Payment Act 1999
Uniform Civil Procedure RulesCases Cited: Brodyn Pty Ltd v Davenport [2004] NSWCA 394; (2004) 61 NSWLR 421
Fifty Property Investments Pty Ltd v O'Mara [2006] NSWSC 428
IWD No 2 Pty Ltd v Level Orange Pty Ltd [2012] NSWSC 1394
Machkevitch v Andrew Building Constructions [2012] NSWSC 546
Okaroo Pty Ltd v Vos Construction and Joinery Pty Ltd [2005] NSWSC 45
Olbourne v Excell Building Corp Pty Ltd [2009] NSWSC 349
Sunbird Plaza Pty Ltd v Maloney [1988] HCA 11; (1988) 166 CLR 245
Walton Construction (Qld) Pty Ltd v Salce [2008] QSC 235
Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422; (2004) 61 NSWLR 707Texts Cited: O'Donovan, Modern Contract of Guarantee Category: Principal judgment Parties: IWD No 2 Pty Limited (ACN 109 910 358) (plaintiff)
Level Orange Pty Limited (ACN 133 786 437) (first defendant)
Philip Martin (second defendant)
Adjudicate Today Pty Limited (ACN 109 605 021) (third defendant)
Registrar General of New South Wales (fourth defendant)Representation: Counsel:
I G B Roberts SC (plaintiff)
M Christie SC with A R R Vincent (first defendant)
Solicitors:
Sparke Helmore (plaintiff)
Salim Rutherford Lawyers (first defendant)
File Number(s): SC 2012/313669 Publication restriction: Nil
Judgment
Introduction
These proceedings relate to a dispute under the Building and Construction Industry Security of Payment Act 1999 ("the Act").
The plaintiff, IWD No 2 Pty Limited ("IWD") seeks a declaration that a determination ("the Determination") made on 27 September 2012 by Mr Philip Martin, an adjudicator appointed under Division 2 of the Act ("the Adjudicator"), was:-
(a) made without jurisdiction;
(b) contains jurisdictional errors; and
(c) is void and of no effect.
The Adjudicator determined that there existed between IWD and the first defendant, Level Orange Pty Limited ("Level Orange") a "construction contract" within the meaning of s 4 of the Act, and that IWD was liable to pay Level Orange a "progress payment" for the purpose of s 8 of the Act of $142,449.00.
On 9 October 2012 the relevant authorised nominating authority issued an adjudication certificate pursuant to s 24 of the Act. On the same date, the adjudication certificate was filed as a judgment in the District Court of New South Wales pursuant to s 25 of the Act.
On 10 October 2012 IWD commenced these proceedings. On the same day, McDougall J made various interlocutory orders, including an order that IWD pay into court $153,317 on account of the Determination and interest.
IWD contends that there was no "construction contract" between IWD and Level Orange of the kind found by the Adjudicator; and…
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- Case
- [2012] NSWSC 1439
- Decision Date
CaseChat Overview and Summary
The court was required to determine whether it had jurisdiction to hear the claim, considering the legal validity of the adjudication process, and whether there was a jurisdictional error in the adjudicator's determination. The court also had to decide if the guarantee and indemnity agreement could be enforced against Level Orange's parent company, and whether the parent company was liable for the subsidiary's debts.
The court found that the adjudicator had not made a jurisdictional error, and therefore the court had jurisdiction to hear the claim. The court upheld the adjudicator's decision that IWD No 2 was entitled to the payment claimed. However, the court determined that the guarantee and indemnity agreement did not extend to cover debts of Level Orange, and thus the parent company was not liable for Level Orange's debts. Consequently, IWD No 2 was not entitled to enforce the guarantee and indemnity against the parent company.
The court ordered Level Orange to pay IWD No 2 the sum determined by the adjudicator, but did not grant any relief in respect of the guarantee and indemnity agreement.
Orders
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
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Ratio Decidendi
Legal Principle Established
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