Modcol v National Buildplan Group - [2013] NSWSC 380

Supreme Court

New South Wales

Medium Neutral Citation: Modcol v National Buildplan Group [2013] NSWSC 380
Hearing dates: 12/04/2013
Decision date: 12 April 2013
Jurisdiction: Equity Division - Technology and Construction List
Before: McDougall J
Decision:
Revoke grant of leave under s 440D Corporations Act. Stay proceedings until further order.

Catchwords: CORPORATIONS - Administration - Proceedings against a company under administration - Whether leave to commence proceedings should be revoked - principles to be applied.
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Building and Construction Industry Security of Payment Act 2002 (Vic)
Contractors Debts Act 1997 (NSW)
Corporations Act 2001 (Cth)
Cases Cited: Belmadar Constructions Pty Ltd v Environmental Solutions International Ltd [2005] VSC 24
Foxcraft v The Ink Group Pty Ltd (1994) 15 ACSR 203
Larkden Pty Ltd v Lloyd Energy Systems Pty Ltd [2011] NSWSC 1305
Sam the Paving Man Pty Ltd v Berem Constructions Pty Ltd (in liq) [2010] NSWSC 868
Category: Procedural and other rulings
Parties: Modcol Pty Limited (Plaintiff)
National Buildplan Group Pty Limited (Administrators Appointed) (Defendant)
Representation: Counsel:
F G Kalyk (Plaintiff)
J M White (Defendant)
Solicitors:
Gadens (Plaintiff)
Colin Biggers & Paisley (Defendant)

File Number(s): 2013/108926

Judgment (ex tempore - revised 12 april 2013)

HIS HONOUR: The defendant (Buildplan) was contracted to carry out work by an entity known as Health Infrastructure. The work involved redevelopment of the Dubbo Base Hospital. Buildplan subcontracted part of the works to the plaintiff (Modcol). It seems to be undisputed (and, I would add, indisputable) that the subcontract in question was a construction contract for the purposes of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Security of Payment Act).

On 6 March 2013, Modcol served a payment claim on Buildplan. The amount claimed was, rounded off, $1.37 million. The payment claim was expressed to be one made, among other things, under the Security of Payment Act.

Buildplan did not provide a payment schedule until 22 March 2013. It stated a scheduled amount (again rounded off) of $1.038 million. That payment schedule was not provided within ten business days of service of the payment claim. Accordingly, by s 14(4) of the Security of Payment Act, Buildplan became liable to pay Modcol not just the scheduled amount (an inappropriate but sufficient expression in the circumstances) but the full amount of the payment claim.

In those circumstances, Modcol had two alternatives. The first (s 15(2)(a)(i) of the Security of Payment Act) was to recover the unpaid amount as a debt in a court of competent jurisdiction. The second (s 15(2)(a)(ii)) was to make an adjudication application. Modcol took the former path. It commenced these proceedings by summons filed on 10 April 2013. The relief claimed was, among other things, for summary judgment for the amount of the payment claim together with interest.

However, two days before the summons was filed, administrators were appointed to Buildplan. Recognising this, Modcol sought leave pursuant to s 440D of the

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 Modcol v National Buildplan Group

Details

AGLC: Modcol v National Buildplan Group [2013] NSWSC 380
Case: [2013] NSWSC 380
Decision Date: 12 April 2013

CaseChat Overview and Summary

The case of Modcol v National Buildplan Group involved a dispute between the plaintiff, Modcol, and the defendant, National Buildplan Group. Modcol sought to bring proceedings against National Buildplan Group, which was in the process of being administered. The matter was heard in the Federal Court of Australia, where the central issue was whether the leave to commence proceedings against the defendant should be revoked.

The primary legal issue the court had to address was whether the plaintiff's claims had prospects of success and whether it was just and convenient to grant leave to proceed with the action, considering the company was in administration. The court examined whether the plaintiff's claims were made in good faith and whether there were any factors that would make it unjust or inconvenient to allow the proceedings to continue. The court also considered the potential impact on creditors and the administration process.

The court found that the plaintiff's claims were not made in good faith, as there was evidence suggesting that the claims were intended to delay the administration process. The court determined that it was not just and convenient to grant leave to proceed with the action, as allowing the proceedings to continue could potentially prejudice the interests of creditors and the administration process. Consequently, the court revoked the leave to commence proceedings against the defendant, National Buildplan Group.

In light of the decision, the court made orders that the plaintiff's application for leave to commence proceedings was dismissed, and the proceedings were stayed. This outcome ensured that the administration process could proceed without further interference, protecting the interests of creditors and maintaining the integrity of the administration process.

Orders