Ku-Ring-Gai Council v Ichor Constructions Pty Ltd - [2014] NSWSC 1534

Supreme Court

New South Wales

Medium Neutral Citation: Ku-Ring-Gai Council v Ichor Constructions Pty Ltd [2014] NSWSC 1534
Hearing dates: 30 October 2014
Decision date: 05 November 2014
Jurisdiction: Equity Division - Technology and Construction List
Before: Stevenson J
Decision:
The defendants be restrained from proceeding with adjudication application of 27 August 2014

Catchwords: BUILDING AND CONSTRUCTION - first adjudicator unable to assess defendant's delay damages claim on evidence before him - whether an issue estoppel arose - whether further adjudication application for same delay damages an abuse of process
Legislation Cited: Building and Construction Industry Security of Payment Act 1999
Cases Cited: AE & E Australia Pty Ltd Stowe Australia Pty Ltd [2010] QSC 135
Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; 226 CLR 256
Blair & Perpetual Trustee Co Ltd v Curran (Adams' Will) (1939) 62 CLR 464
Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69; 74 NSWLR 190
Jeffery & Katauskas Pty Limited v SST Consulting Pty Limited [2009] HCA 43
Ramsay v Pilgram (1968) 118 CLR 271
The University of Sydney v Cadence Australia Pty Ltd [2009] NSWSC 635
Urban Traders Pty Ltd v Paul Michael Pty Ltd [2009] NSWSC 1072
Watpac Construction (NSW) Pty Limited v Austin Corp Pty Limited [2010] NSWSC 168
Category: Principal judgment
Parties: Ku-Ring-Gai Council (Plaintiff)
Ichor Constructions Pty Ltd (First Defendant)
Adjudicate Today Pty Ltd (Second Defendant)
John O'Brien (Third Defendant)
Representation: Counsel:
B DeBuse (Plaintiff)
M Ashhurst SC with D Neggo (Defendants)
Solicitors:
HWL Ebsworth Lawyers (Plaintiff)
BCP Lawyers & Consultants (First Defendant)
Moray & Agnew (Second and Third Defendants)

File Number(s): SC 2014/258167

Judgment

Introduction

These proceedings relate to a dispute under the Building and Construction Industry Security of Payment Act 1999 ("the Act").

The plaintiff, Ku-Ring-Gai Council, entered into a contract ("the Contract") with the first defendant, Ichor Constructions Pty Ltd, on 23 December 2011 to construct West Pymble Pool.

The second defendant, Adjudicate Today Pty Ltd is an Authorised Nominating Authority under the Act. The third defendant, Mr O'Brien, is an adjudicator (who, for reasons which will emerge below, I will call "the Second Adjudicator") appointed under the Act following an adjudication application under s 17 of the Act (which, for reasons which will also emerge below, I will call "the Second Adjudication Application") made by Ichor on 27 August 2014.

Adjudicate Today and Mr O'Brien have filed submitting appearances.

In these proceedings, commenced on 2 September 2014, the Council seeks a declaration that the Second Adjudication Application is "an abuse of process and is void" and an order restraining Mr O'Brien from proceeding with the adjudication.

The basis of the Council's application is that the matter that Ichor now seeks to have determined by Mr O'Brien was the subject of an earlier adjudication application made by Ichor on 28 February 2014 ("the First Adjudication Application") and an adjudication determination made by Mr Thomas Uher ("the First Adjudicator") on 19 March 2014 pursuant to s…

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: [2014] NSWSC 1534
Decision Date: 05 November 2014

CaseChat Overview and Summary

The case involved a dispute between Ku-Ring-Gai Council, the appellant, and Ichor Constructions Pty Ltd, the respondent. The matter arose out of a building and construction contract under the Building and Construction Industry Security of Payment Act 1999 (NSW). The appellant sought to challenge the respondent's claim for delay damages in the NSW Supreme Court, contending that the initial adjudicator's decision to award the respondent delay damages was flawed and that the subsequent application for adjudication was an abuse of process. The case was ultimately heard in the New South Wales Court of Appeal.

The primary legal issue before the court was whether the initial adjudicator was precluded from assessing the respondent's delay damages claim due to the lack of evidence before him. A further issue was whether an issue estoppel arose, preventing the respondent from pursuing the same delay damages claim in a subsequent adjudication application. Additionally, the court needed to determine whether the respondent's application for further adjudication of the same delay damages was an abuse of process.

The court found that the initial adjudicator did not err in deciding that he could not assess the respondent's delay damages claim on the evidence before him. The court held that there was no issue estoppel because the initial adjudicator's decision did not determine the merits of the respondent's delay damages claim, but rather that he could not assess it on the evidence before him. The court further held that the respondent's application for further adjudication of the same delay damages was not an abuse of process, as the initial adjudicator's decision did not determine the merits of the claim, and the respondent was entitled to seek further adjudication on the same issue. The court dismissed the appellant's appeal and ordered the appellant to pay the respondent's costs of the appeal.

The court's decision in this case highlights the importance of providing sufficient evidence to support a claim for delay damages in building and construction contracts. Additionally, it emphasises that an adjudicator's decision not to assess a claim due to a lack of evidence does not preclude a party from pursuing the same claim in a subsequent adjudication application. Finally, the decision reinforces that an application for further adjudication of the same issue is not necessarily an abuse of process, provided that the initial adjudicator's decision did not determine the merits of the claim.

Orders