Maxstra Constructions Pty Ltd v Joseph Gilbert & Ors

Case [2013] VSC 243


IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST

No. 00884 of 2013

MAXSTRA CONSTRUCTIONS PTY LTD
(ACN 144 590 438)
Plaintiff
v
JOSEPH GILBERT (T/A J GILBERT CONCRETE)
(ABN 62 164 470 431)
First Defendant
AND
JOHN MCMULLAN Second Defendant
AND
THE INSTITUTE OF ARBITRATORS AND MEDIATORS AUSTRALIA
(ACN 008 520 045)
Third Defendant

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JUDGE:

VICKERY J

WHERE HELD:

Melbourne

DATE OF HEARING:

26 April 2013

DATE OF JUDGMENT:

10 May 2013

CASE MAY BE CITED AS:

Maxstra Constructions Pty Ltd v Joseph Gilbert & Ors

MEDIUM NEUTRAL CITATION:

[2013] VSC 243

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BUILDING CONTRACTS - Building and Construction Industry Security of Payment Act 2002 (Vic) – Adjudication conducted under Part 3 Division 2 of the Act – Apparent conflict between s 10B(2)(c) with s 11(1)(b)(iv) of the Act – Conflict resolved by application of statutory construction principles –Adjudicator erred in statutory construction – Jurisdictional error – Certiorari granted – Determination of adjudicator quashed and matter remitted for determination in accordance with the law.

STATUTES INTERPRETATION - Apparent conflict between provisions of an Act – Conflict resolved by application of statutory construction principles – Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28 at [69]-[71] considered and applied.

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APPEARANCES:

Counsel Solicitors
For the Plaintiff Mr J Twigg Moores Legal
For the First Defendant Mr James Shaw Nevett Ford Lawyers
For the Second Defendant No Appearance
For the Third Defendant No Appearance

HIS HONOUR:

Introduction

  1. The Plaintiff was the head contractor for the construction of a new service station on the Northern Highway at Echuca, Victoria, known as the United Service Station (the “Project”).

  1. The First Defendant, Mr Gilbert, is a concreter who trades as a sole trader.  The Plaintiff and Mr Gilbert entered into a sub-contract pursuant to which Mr Gilbert agreed to perform concreting works on the Project.  The sub-contract was in writing and comprised a number of documents.  The terms and conditions of the sub-contract are contained in a document titled “Contract No: S10876, Sub-Contract: Concrete Works, Project: United Service Station Northern Highway Echuca”.  The sub-contract price was $580,000, excluding GST.

  1. Mr Gilbert served a Payment Claim dated 21 December 2012 pursuant to the Building and Construction Industry Security of Payment Act 2002 (the “Act”) on the Plaintiff (the “Payment Claim”).

  1. The amount claimed on the Payment Claim was calculated by reference to the amount of work complete, and made allowances for retention under the contract and also for damage that had occurred to a diesel tank.  The Payment Claim claimed an amount of $259,954.62.

  1. The Plaintiff responded to the Payment Claim with a Payment Schedule dated 28 December 2012 (the “Payment Schedule”).  The Plaintiff disputed the amount claimed by Mr Gilbert and sought to set-off amounts for the cost to complete certain items and the cost of rectification of damage in the amount of $234,729.63.  It also sought to set-off an amount of $217,500 by way of “delay costs”.  After taking these items…

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Maxstra Constructions Pty Ltd v Joseph Gilbert & Ors [2013] VSC 243
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[2013] VSC 243
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CaseChat Overview and Summary

In the case of Maxstra Constructions Pty Ltd v Joseph Gilbert & Ors, the plaintiff, Maxstra Constructions, sought to enforce a payment claim made under a building contract. The defendant, Joseph Gilbert, disputed the claim and raised objections in the adjudication process conducted under the Building and Construction Industry Security of Payment Act 2002 (Vic). The dispute reached the Court of Appeal, which was tasked with determining whether the adjudicator had correctly interpreted and applied the relevant statutory provisions.

The central legal issue before the court was whether there was an apparent conflict between section 10B(2)(c) and section 11(1)(b)(iv) of the Act and, if so, how this conflict should be resolved. The court had to consider whether the adjudicator's interpretation of the statutory provisions was correct and whether there had been a jurisdictional error in the adjudication process. The court needed to determine if the adjudicator had erred in their construction of the Act and whether this error was sufficient to warrant the quashing of the adjudicator's determination and the remitting of the matter for a lawful determination.

The court found that the adjudicator had indeed erred in their statutory construction, leading to a jurisdictional error. The court applied the principles of statutory interpretation as outlined in Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28, finding that the apparent conflict between the statutory provisions could be resolved by applying these principles. The court held that the adjudicator had not correctly interpreted the provisions and thus had made an error in their adjudication. As a result, the court granted certiorari, quashed the adjudicator's determination, and remitted the matter back to the adjudicator for a lawful determination in accordance with the Act.

The final orders of the court were that the determination of the adjudicator be quashed and that the matter be remitted for re-determination in accordance with the law. The court did not impose any further orders or make any further findings beyond those necessary to address the jurisdictional error identified in the adjudication process.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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