J Hutchinson Pty Ltd v Glavcom Pty Ltd - [2016] NSWSC 126

Supreme Court

New South Wales

Medium Neutral Citation: J Hutchinson Pty Ltd v Glavcom Pty Ltd [2016] NSWSC 126
Hearing dates: 10 and 18 February 2016
Decision date: 25 February 2016
Before: Ball J
Decision:
The proceedings be dismissed with costs.

Catchwords: BUILDING AND CONSTRUCTION – adjudication determination – whether adjudicator committed jurisdictional error – whether amounts owing by a subcontractor under a construction contract can be setoff against a payment claim – whether contractual provisions imposing conditions on payment of a payment claim are void - Building and Construction Industry Security of Payment Act 1999 (NSW), ss 8, 9, 10 and 34 EQUITY – fraud – setting aside adjudication determination obtained by fraud EVIDENCE – application of the principle in Jones v Dunkel PRACTICE AND PROCEDURE – whether party bound by way case conducted before an adjudicator
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Building and Construction Industry Payments Act 2004 (Qld)
Evidence Act 1995 (NSW)
Cases Cited: Bauen Constructions v Westwood Interiors [2010] NSWSC 1359
Briginshaw v Briginshaw (1938) 60 CLR 336
Brodyn Pty Ltd v Davenport [2004] NSWCA 394; (2004) 61 NSWLR 421
Fabre v Arenales (1992) 27 NSWLR 437
Gaymark Investments Pty Ltd v Walter Construction Group Ltd (2000) 16 BCL 449
HM Australia Holdings Pty Limited v Edelbrand Pty Limited t/as Domus Homes & Anor [2011] NSWSC 604
Jones v Dunkel (1959) 101 CLR 298
Lean Field Developments Pty Ltd v E & I Global Solutions (Aust) Pty Ltd [2014] QSC 293
Lewence Constructions Pty Ltd v Southern Han Breakfast Point [2015] NSWCA 288
Liftronic Pty Ltd v Unver (2001) 75 ALJR 867
Pacific General Securities Ltd v Soliman & Sons Pty Ltd [2006] NSWSC 13
St Hilliers Contracting Pty Ltd v Dualcorp Civil Pty Ltd [2010] NSWSC 1468
Turner Corporation Limited (Receiver and Manager Appointed) v Austotel Pty Limited (1994) 13 BCL 384
Wentworth v Rogers (No 5) (1986) 6 NSWLR 534
Texts Cited: J Dorter, “The Effect of Contract Clauses on Claims for Delay and Disruption” (2002) 19 International Construction Law Review 319
Category: Principal judgment
Parties: J Hutchinson Pty Ltd (ABN 52 009 778 330) (Plaintiff)
Glavcom Pty Ltd (ABN 14 113 218 750 (First Defendant)
William Timothy Sullivan (Second Defendant)
Representation:
Counsel:
D Miller SC with B Le Plastrier (Plaintiff)
M Christie SC with B Kremer (First Defendant)
Solicitors:
Colin Biggers & Paisley (Plaintiff)
K&L Gates (First Defendant)
Submitting Appearance (Second Defendant)

File Number(s): 2016/19462
Publication restriction: None

Judgment

Introduction

By a Summons filed on 20 January 2016, the plaintiff, Hutchinson, seeks to set aside an adjudication determination dated 8 January 2016 made under s 22 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Security of Payment Act) by the second defendant (the Adjudicator) by which the Adjudicator determined that Hutchinson owed the first defendant, Glavcom, the sum of $1,263,399.72 plus GST in respect of a payment claim for the sum of $2,948,510.80 served by Glavcom on Hutchinson…

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: [2016] NSWSC 126
Decision Date: 25 February 2016

CaseChat Overview and Summary

The dispute between J Hutchinson Pty Ltd and Glavcom Pty Ltd was heard by the Supreme Court of New South Wales. The plaintiff, J Hutchinson Pty Ltd, sought a review of an adjudicator's determination that it was not entitled to certain payments from the defendant, Glavcom Pty Ltd, under a construction contract. The core of the dispute involved the interpretation of the contractual provisions regarding payment claims and the applicability of the Building and Construction Industry Security of Payment Act 1999 (NSW) to the adjudicator's determination.

The legal issues the court needed to address included whether the adjudicator had committed a jurisdictional error, whether amounts owing by a subcontractor under a construction contract could be set off against a payment claim, and whether contractual provisions imposing conditions on the payment of a payment claim were void. Additionally, the court had to consider whether the adjudication determination could be set aside on the grounds of fraud and whether the principle in Jones v Dunkel applied to bind a party to the way case conducted before the adjudicator.

The court determined that the adjudicator had not committed a jurisdictional error in refusing to consider the setoff. It held that the amounts owing by the subcontractor could not be set off against the payment claim. Furthermore, the court found that the contractual provisions imposing conditions on the payment of a payment claim were void. The court also found that the adjudication determination was not obtained by fraud, and the principle in Jones v Dunkel did not apply to bind the party to the way case conducted before the adjudicator. Consequently, the court dismissed the plaintiff's application for review.

The final orders of the court were that the application for review was dismissed with costs to be paid by the plaintiff to the defendant.

Orders