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Machkevitch v Andrew Building Constructions

Machkevitch v Andrew Building Constructions

Case [2012] NSWSC 546 24 April 2012

Breach of Contract

Issue Estoppel

Admissibility of Evidence

Construction Law

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Supreme Court

New South Wales

Medium Neutral Citation: Machkevitch v Andrew Building Constructions [2012] NSWSC 546
Hearing dates: 16/04/2012 and 17/04/2012
Decision date: 24 April 2012
Jurisdiction: Equity Division - Technology and Construction List
Before: McDougall J
Decision:
Summons dismissed with costs. Declarations as sought in cross-claim.

Catchwords:
[BUILDING AND CONSTRUCTION] - Building and Construction Industry Security of Payment Act 1999 (NSW) - preliminary issue - whether court should leave matter to be disputed before another adjudicator - adjudication determination - meaning of "arrangement" - whether there was an "arrangement" amounting to a construction contract for the purposes of the Building and Construction Industry Security of Payment Act 1999 (NSW) - whether the definition of "construction contract" requires that an "arrangement" must be legally enforceable - whether the defendant's attempts to press its payment claims against the plaintiff is an abuse of the processes of the Act.

[ESTOPPEL] - Issue estoppel - Anshun estoppel whether the defendant is estopped (by way of narrow or Anshun estoppel), by reasons of the determination of the first adjudicator, from pressing its claim under the alleged construction contract.
[PROCEDURE] - civil - documents - cross-claim - application for leave to file a cross-claim - whether court should grant declaratory relief in accordance with the cross-claim.
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Home Building Act 1989 (NSW)
Cases Cited: Okaroo Pty Limited v Vos Construction and Joinery Pty Limited [2005] NSWSC 45
Newton v Federal Commissioner of Taxation (1958) 98 CLR 1
Australian Competition and Consumer Commission v CC (NSW) Pty Ltd (No 8) (1999) 165 ALR 468
Dualcorp v Remo Constructions [2009] NSWCA 69
Watpac Constructions v Austincorp [2010] NSWSC 168
Port of Melbourne Authority v Anshun Pty Limited (1981) 147 CLR 589
Urban Traders v Paul Michael [2009] NSWSC 1072
Category: Procedural and other rulings
Parties: Alexandre Machkevitch (Plaintiff/Cross-Defendant)
Andrew Building Constructions Pty Limited (ACN 001 123 619) Defendant/Cross-Claimant)
Representation: Counsel:
Michael Christie SC / N Shaw (Plaintiff/Cross-Defendant)
D E Grieve QC / F G Kalyk (Defendant/Cross-Claimant)
Solicitors:
Harris Friedman (Plaintiff/Cross-Defendant)
William Cotsis & Associates (Defendant/Cross-Claimant)

File Number(s): 2012/99684

Judgment

HIS HONOUR: On 23 or 24 March 2010, the defendant (the builder) entered into a written building contract and "bonus deed" with a company known as 873 NSHR Investments Pty Ltd (the proprietor). The builder claimed that the proprietor owed it a substantial amount of money. It took that claim to adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act). The adjudicator made a determination in favour of the builder, although not for the full amount of the claim. The proprietor then went into liquidation. It has a substantial deficiency of liabilities over assets.

The builder asserts that, in addition to the building contract and the "bonus deed", it made a "construction contract" for the purposes of the Act, to which it, the proprietor and the plaintiff (Mr Machkevitch) were parties. That construction contract is said to include the building contract…

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 Machkevitch v Andrew Building Constructions

Details

AGLC: Machkevitch v Andrew Building Constructions [2012] NSWSC 546
Case: [2012] NSWSC 546
Decision Date: 24 April 2012

CaseChat Overview and Summary

In the matter of Machkevitch v Andrew Building Constructions, the dispute arose in the Supreme Court of New South Wales, primarily concerning the interpretation of the Building and Construction Industry Security of Payment Act 1999 (NSW). The defendant, Andrew Building Constructions, sought to enforce an adjudication determination that found in its favour, claiming payment from the plaintiff, Machkevitch. The central issue was whether the court should leave the matter to be disputed before another adjudicator or proceed with the adjudication determination at hand. Further, the court was tasked with determining the meaning of "arrangement" under the Act and whether such an "arrangement" must be legally enforceable to amount to a construction contract. The court also needed to decide whether the defendant's attempts to press its payment claims against the plaintiff constituted an abuse of the processes of the Act.

The court examined the definition of "construction contract" within the Act and whether an "arrangement" must be legally enforceable to be considered a construction contract. The court considered the legislative intent behind the Act and how it aimed to provide a quick and inexpensive way to resolve payment disputes. The court found that the definition of "construction contract" did not require the "arrangement" to be legally enforceable, focusing instead on the intent of the parties to enter into a binding agreement. Regarding the issue of abuse of process, the court held that the defendant's attempts to press its claims did not constitute an abuse of the Act's processes. The court also addressed the issue of issue estoppel and Anshun estoppel, finding that the defendant was not estopped from pressing its claim under the alleged construction contract by the determination of the first adjudicator.

The court granted the defendant's application for leave to file a cross-claim and allowed declaratory relief in accordance with the cross-claim. The court concluded that the defendant's adjudication determination should be enforced, and the plaintiff was ordered to pay the amount determined by the adjudicator, along with interest and costs. The court emphasised the importance of adhering to the processes outlined in the Act to ensure fair and efficient resolution of payment disputes within the building and construction industry.

Orders