Nefiko Pty Ltd v Statewide Form Pty Ltd (No 2) - [2014] NSWSC 840

Supreme Court

New South Wales

Case Title: Nefiko Pty Ltd v Statewide Form Pty Ltd (No 2)

Medium Neutral Citation: [2014] NSWSC 840

Hearing Date(s): 12 June 2014

Decision Date: 27 June 2014

Jurisdiction: Equity Division

Before: Ball J

Decision:
Proceedings dismissed with costs.

Catchwords: ADMINISTRATIVE LAW - judicial review - grounds of review - Building and Construction Industry Security of Payment Act 1999 (NSW) - adjudication determination - whether identity of parties to construction contract a jurisdictional fact - whether decision by adjudicator as to identity of contracting parties reviewable for jurisdictional error - distinction between determination of a jurisdictional fact with binding legal effect and the formation of an opinion by an administrative body in relation to a jurisdictional fact - whether denial of natural justice - whether adjudicator took into account all relevant factual matters

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

Cases Cited: B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147
Barrier Wharfs Ltd v W Scott Fell & Co Ltd [1908] HCA 88; (1908) 5 CLR 647
Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153
Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393
Fifty Property Investments Pty Ltd v O'Mara [2006] NSWSC 428
Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251
Howard Smith & Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68
IWD No 2 Pty Ltd v Level Orange Pty Ltd [2012] NSWSC 1439
Lederberger v Mediterranean Olives Financial Pty Ltd [2012] VSCA 262
Nefiko Pty Ltd v Statewide Form Pty Ltd [2014] NSWSC 442
R v Hickman; Ex parte Fox and Clinton [1945] HCA 53; (1945) 70 CLR 598
Re Adams and Tax Agents' Board (1976) 12 ALR 239
Tomko v Palasty [2007] NSWCA 258
Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422; (2004) 61 NSWLR 707

Category: Principal judgment

Parties: Nefiko Pty Ltd (ABN 69 002 401 676) (Plaintiff)
Statewide Form Pty Ltd (ABN 34 159 561 403) (First Defendant)
Robert Sundercombe (Second Defendant)

Representation

- Counsel: Counsel:
J Glissan ESM QC with Ms L Walsh (Plaintiff)
AJ Macauley (First Defendant)

- Solicitors: Solicitors:
Pryor Tzannes & Wallis (Plaintiff)
Avondale Lawyers (Defendant)

File Number(s): 2014/94834

Publication Restriction: None

JUDGMENT

Introduction

In these proceedings, the plaintiff, Nefiko Pty Ltd, challenges the validity of an adjudication determination of the second defendant, Mr Robert Sundercombe (the Adjudicator), made on 17 March 2014 in relation to a payment claim made by the first defendant, Statewide Form Pty Ltd, against Nefiko. The Adjudicator has filed a submitting appearance.

Background facts

Nefiko carries on the business of producing and selling finished marble and other fancy stone, mostly for bench tops and similar applications. The directors of Nefiko are Suk Chun Janette Cheong (Ms Cheong) and her sister, Suk Fan Angela Wong (

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: [2014] NSWSC 840
Decision Date: 27 June 2014

CaseChat Overview and Summary

The dispute between Nefiko Pty Ltd and Statewide Form Pty Ltd arose from a construction project governed by the Building and Construction Industry Security of Payment Act 1999 (NSW). Nefiko, the principal contractor, sought to enforce an adjudicator's determination against Statewide, a subcontractor, for an outstanding payment. The central issue was whether the adjudicator had jurisdiction to determine the identity of the parties to the construction contract, and if the decision was subject to review for jurisdictional error. Additionally, Nefiko argued that the adjudicator had breached the rules of natural justice by not considering all relevant facts.

The court was required to examine whether the identity of the parties to the construction contract was a jurisdictional fact that needed to be determined by the adjudicator. It also needed to assess whether the adjudicator's decision on this matter could be reviewed for jurisdictional error, and whether the adjudicator's failure to consider all relevant facts amounted to a denial of natural justice. The distinction between the determination of a jurisdictional fact with binding legal effect and the formation of an opinion by an administrative body in relation to a jurisdictional fact was also central to the decision.

The court held that the identity of the parties to the construction contract was a jurisdictional fact. However, it found that the adjudicator's determination of this fact was not subject to review for jurisdictional error because it did not result in a binding legal effect. The court distinguished between the determination of a jurisdictional fact with binding legal effect and the formation of an opinion by an administrative body in relation to a jurisdictional fact, concluding that the latter did not give rise to a jurisdictional error. Furthermore, the court found that the adjudicator had not breached the rules of natural justice by failing to consider all relevant facts, as the omission did not affect the outcome of the adjudication.

The court dismissed Nefiko's application for judicial review, holding that the adjudicator's decision was not subject to review for jurisdictional error or breach of natural justice. The adjudicator's determination of the identity of the parties to the construction contract was affirmed, and the court did not interfere with the outcome of the adjudication.

Orders