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Kitchen Xchange v Formacon Building Services

Kitchen Xchange v Formacon Building Services

Case [2014] NSWSC 1602 5 November 2014

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Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Kitchen Xchange v Formacon Building Services [2014] NSWSC 1602
Hearing dates: 05/11/2014
Decision date: 05 November 2014
Jurisdiction: Equity Division
Before: McDougall J
Decision:
Adjudication determination quashed. Ancillary orders made.

Catchwords:
BUILDING AND CONSTRUCTION – whether payment claim is valid – where claimant served two payment claims in relation to the same reference date – whether payment claim served in breach of s 13(5) is valid – whether there was a unilateral withdrawal of a payment claim – where withdrawal not consensual – where nothing said or done to indicate claimant no longer relied on payment claim – application of s 13(5) of the Building and Construction Industry Security of Payment Act 1999 (NSW)

BUILDING AND CONSTRUCTION – whether service of payment claim valid – where payment claim not accompanied by supporting statement in the form prescribed by regulations – meaning of “must not” – whether requirement to include supporting statement is jurisdictional – whether s 13(7) intended to invalidate service of the payment claim – application of s 13(7) of the Building and Construction Industry Security of Payment Act 1999 (NSW)
BUILDING AND CONSTRUCTION – adjudication determinations – whether as a matter of discretion to nonetheless withhold relief – whether first defendant led into its actions by conduct of the plaintiff – whether to withhold relief as amount of claim relatively small and within jurisdiction of Local Court
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Building and Construction Industry Security of Payment Amendment Act 2013
Cases Cited: Birch v Wesco Electrics (1966) Pty Ltd (2012) 257 FLR 237
Brodyn Pty Limited v Davenport (2004) 61 NSWLR 421
Brygel v Stewart-Thornton [1992] 2 VR 387
Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd (2005) 63 NSWLR 385
Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190
Halwood Corporation Ltd v Roads Corporation [1998] 2 VR 439
NC Refractories Pty Limited v Consultant Bricklaying Pty Limited [2013] NSWSC 842
Posner v Collector for Interstate Destitute Persons (Vic) (1946) 74 CLR 461
Trustees of Roman Catholic Church for Diocese of Lismore v TF Woollam& Son [2012] NSWSC 1559
Texts Cited: New South Wales, Parliamentary Debates, Legislative Council, 12 November 2013 (Matthew Mason-Cox)
Category: Principal judgment
Parties: Kitchen Xchange Pty Limited (Plaintiff)
Formacon Building Services Pty Limited (First Defendant)
Peter James Halon (Second Defendant)
Representation:
Counsel:
P M Barham (Plaintiff)
B DeBuse (Defendant)
Solicitors:
Simone Legal (Plaintiff)
Marsdens Law Group (Defendant)

File Number(s): 2014/273848

Judgment(ex tempore – revised 5 november 2014)

HIS HONOUR: On 2 May 2014, the plaintiff contracted with the first defendant for the latter to fit out the former's shop at Rouse Hill. There is no doubt that the contract was a construction contract for the purposes of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act). There is a dispute as to the validity of a payment claim and as to an adjudicator’s determination…

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 Kitchen Xchange v Formacon Building Services

Details

AGLC: Kitchen Xchange v Formacon Building Services [2014] NSWSC 1602
Case: [2014] NSWSC 1602
Decision Date: 05 November 2014

CaseChat Overview and Summary

In the matter of Kitchen Xchange Pty Ltd v Formacon Building Services Pty Ltd, the dispute centred around the validity of payment claims made under the Building and Construction Industry Security of Payment Act 1999 (NSW). Kitchen Xchange, the claimant, had served two payment claims for the same reference date to Formacon Building Services, the defendant. The validity of these claims was challenged by Formacon, leading to the court's examination of the statutory provisions governing the submission of payment claims.

The court was required to determine whether the service of the payment claims was valid despite being served in breach of section 13(5) of the Act, which prohibits the claimant from serving more than one payment claim in relation to a particular reference date. Additionally, the court needed to consider whether the claimant's unilateral withdrawal of one of the claims was effective, and whether the absence of a supporting statement in the form prescribed by regulations rendered the service of the payment claims invalid. The court had to decide if the requirement to include a supporting statement was jurisdictional, and if section 13(7) of the Act was intended to invalidate the service of the payment claim.

The court found that the claimant's withdrawal of one of the payment claims was not effective as it was not consensual, and there was nothing to indicate that the claimant no longer relied on the withdrawn claim. The court held that section 13(5) was not jurisdictional and therefore did not invalidate the payment claims. Furthermore, the court determined that the requirement to include a supporting statement in the prescribed form was not jurisdictional, and the absence of such a statement did not render the service of the payment claims invalid. The court also held that the requirement to include a supporting statement was not intended to invalidate the service of the payment claim. The court exercised its discretion to withhold relief, considering the conduct of the parties, the relatively small amount of the claim, and the jurisdiction of the Local Court.

Orders