Maxcon Constructions Pty Ltd v Vadasz (No 2)

This case concerned an appeal and a notice of contention arising from a building contract dispute between Maxcon Constructions Pty Ltd, the builder, and Mr Vadasz, a piling subcontractor trading as Australasian Piling Contractors (APC). Mr Vadasz was an undischarged bankrupt at the time the contract was entered into. The dispute centred on an adjudication determination made under the Building and Construction Industry Security of Payment Act 2009 (SA) (the Act), which Maxcon sought to have judicially reviewed. The Supreme Court of South Australia, comprising Blue, Lovell and Hinton JJ, considered multiple issues including the effect of a bankrupt entering into a contract without disclosing their status, and alleged errors by the adjudicator.

The court was required to determine several key legal issues. Firstly, whether a contract entered into by a bankrupt in the course of carrying on business under a firm name without disclosing their bankruptcy, in breach of subsection 269(2) of the Bankruptcy Act 1966 (Cth), was rendered void or unenforceable by that Act or at common law. Secondly, whether the primary judge erred in finding that Mr Vadasz had failed to disclose his bankruptcy, by not adequately considering the principles in *Briginshaw v Briginshaw* and whether the evidence lacked sufficient clarity. Thirdly, whether an error by the adjudicator in deeming contractual retention sum provisions void as "pay when paid" provisions constituted a jurisdictional error or an error of law on the face of the record, thereby vitiating the adjudication determination. Finally, the court considered whether certiorari for error of law on the face of the record was implicitly excluded by the Act, and if the adjudication determination was affected by error, whether it vitiated the entire determination or only the specific component relating to the retention sum.

The court found that a failure by a bankrupt to disclose their status when entering into a contract in the course of business under a firm name, in contravention of section 269(1)(b) of the Bankruptcy Act, did not render the contract void. The primary judge had found that Mr Vadasz had not disclosed his bankruptcy, a finding the court did not disturb. The court also held that the adjudicator had erred in law by concluding that the contractual retention provisions were "pay when paid" provisions rendered void by section 12 of the Act, as this conclusion was made without sufficient evidence. However, the court determined that this error did not constitute a jurisdictional error. Furthermore, the court found that the adjudicator's reasons, which disclosed the error, did not form part of the adjudication determination itself, meaning it was not an error of law on the face of the record. Consequently, the court concluded that the adjudication determination was not vitiated by the adjudicator's error.

The appeal was dismissed, and the notice of contention was also dismissed. The court upheld the primary judge's decision that the adjudication determination was not invalidated by the alleged errors.