Miller v LMG Building Pty Ltd - [2023] NSWSC 995

Supreme Court

New South Wales

Medium Neutral Citation: Miller v LMG Building Pty Ltd [2023] NSWSC 995
Hearing dates: 7 August 2023
Decision date: 23 August 2023
Jurisdiction: Equity - Technology and Construction List
Before: Ball J
Decision:
See [31] to [33]

Catchwords:
BUILDING AND CONSTRUCTION — Adjudication — Judicial review — Security of Payment Act (SOPA) — Whether Adjudicator considered relevant material — Where Adjudicator does not consider material filed after payment schedule — Adjudicator committed a jurisdictional error
BUILDING AND CONSTRUCTION — Adjudication — Judicial review — Security of Payment Act (SOPA) — Whether Adjudicator considered merits of the claim at all — Where Adjudicator accepts one party’s expert findings based on credibility without reference to inconsistent evidence — Adjudicator committed a jurisdictional error

Legislation Cited:
Building and Construction Industry Security of Payment Act 1999 (NSW)

Cases Cited:
Laing O’Rourke Australia Construction Pty Ltd v Monford Group Pty Ltd [2018] NSWSC 491
Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140

Category: Principal judgment
Parties: Suzanne Miller (Plaintiff)
LMG Building Pty Ltd (First Defendant)
Christopher Harris (Second Defendant)
Adjudicate Today Pty Ltd (Third Defendant)
Representation:
Counsel:
D Hume (Plaintiff)
P Folino-Gallo (First Defendant)
Submitting Appearances (Second and Third Defendants)
Solicitors:
Hones Lawyers (Plaintiff)
Bradbury Legal (First Defendant)

File Number(s): 2023/235082
Publication restriction: None

JUDGMENT

Introduction

By a summons filed on 24 July 2023, the plaintiff, Ms Suzanne Miller, seeks to set aside an adjudication determination made on 10 July 2023 by the second defendant (the Adjudicator) under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act), in respect of a payment claim dated 18 May 2023 made by the first defendant, LMG Building Pty Ltd (LMG), by which the Adjudicator determined that Ms Miller was liable to pay the sum of $249,516.92 (plus the adjudicator’s fees of $16,650) in respect of the claim. Ms Miller also seeks to be repaid the amount of $269,739,38 (which comprises the adjudication determination plus fees) which was garnished from her bank accounts following registration of the adjudication determination as a judgment of the District Court.

Background

The payment claim was made under a building contract entered into on 30 July 2021 by which LMG agreed to undertake alterations and additions to the plaintiff’s home in Mosman for a fixed price of $2,750,000 (including GST). Under the terms of the contract, LMG was entitled to make progress claims calculated by reference to the percentage of the work completed under the contract.
On 18 May 2023, following termination of the contract by Ms Miller on 4 April 2023, LMG made progress claim No 10. Included in that claim was an amount of $96,250 (including GST) representing 3.5 percent of the total contracted‑for sum together with $261,250 (including GST) for contract and provisional sum adjustments to date. Under the contract, the amount of $96,250 was payable on completion of 90.5 percent of the contracted‑for work.
The payment claim was supported by a report from Canning…

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: [2023] NSWSC 995
Decision Date: 23 August 2023

CaseChat Overview and Summary

The matter of Miller v LMG Building Pty Ltd involved a dispute between a contractor and a subcontractor over payment for construction work. The case was heard in the Supreme Court of New South Wales. Miller, the subcontractor, claimed that LMG, the principal contractor, had failed to make full payment for work completed, and sought adjudication under the Security of Payment Act (SOPA). The adjudicator ruled in favour of LMG, and Miller sought judicial review of that decision.

The primary legal issues were whether the adjudicator had considered all relevant material when making the decision, and whether the adjudicator had considered the merits of the claim at all. Miller argued that the adjudicator had failed to consider material filed after the payment schedule, and had accepted one party’s expert findings based on credibility without reference to inconsistent evidence. LMG, on the other hand, argued that the adjudicator had properly exercised their discretion in considering the evidence before them.

The court found that the adjudicator had indeed failed to consider all relevant material and had committed a jurisdictional error in accepting one party’s expert findings without reference to inconsistent evidence. The court held that the adjudicator must consider all material that has been filed before the payment schedule, and that they must consider the merits of the claim based on the evidence before them. The court found that the adjudicator had not properly exercised their discretion in this case, and that the decision was therefore invalid.

The court set aside the adjudicator’s decision and remitted the matter back to the adjudicator for reconsideration. The court emphasised that the adjudicator must properly consider all material before them, and must consider the merits of the claim based on the evidence presented. The court did not make any orders as to costs.

Orders