Northcliffe Constructions Pty Ltd v Rothrewel James Stein - [2000] NSWSC 1216

CITATION: NORTHCLIFFE CONSTRUCTIONS PTY LTD v ROTHREWEL JAMES STEIN & ORS [2000] NSWSC 1216

FILE NUMBER(S): SC 55041/00

HEARING DATE(S): 1/12/00, 8/12/00

JUDGMENT DATE: 8 December 2000

PARTIES :

Northcliffe Constructions Pty Ltd (Plaintiff)
Rothrewel James Stein (Defendant)

JUDGMENT OF: Einstein J

COUNSEL : I H Bailey (Plaintiff)
J Doyle (Solicitor) (Defendant)

SOLICITORS: Brophy Bridge & Mirow (Plaintiff)
Doyles Construction Lawyers (Defendant)

CATCHWORDS: Practice and Procedure - costs - building contracts - arbitration - giving of notice of dispute or difference - condition precedent to commencement of proceedings - whether dispute or difference has arisen is a question of fact - requirement that bona fide dispute or difference be shown to have arisen as opposed to a sham or a specious pretext - defendant pays whole of claim within days of summons being issued but claims costs alleging that a dispute/difference had arisen and that plaintiff failed to give notice - defendant ordered to pay costs of the proceedings.

LEGISLATION CITED: Commercial Arbitration Act, 1984

CASES CITED: Attorney General v Barker Bros Ltd [1976] 2 NZLR 495
Ellerine Brothers (Pty Ltd) v Klinger [1992] 1 WLR 1375
J and H Mantkelow Pty Ltd v Alloway Grazing Pty Ltd (1975) 1 NSWLR 385
Reservoir Hotel Pty Ltd v ES Clementson (Victoria) Pty Ltd [1961] VR 721
Sandhurst Engineering Ltd v Citra Constructions (1987) 3 BCL 198
Tradax Internacional SA v Cerrahogullari TAS (The M Eregli) [1981] 3 All ER 344

DECISION: Defendant ordered to pay costs of the proceedings.

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION - CONSTRUCTION LIST

EINSTEIN J

Friday 8 December 2000 ex tempore
Revised 18 December

55041/00 NORTHCLIFFE CONSTRUCTIONS v ROTHREWEL JAMES STEIN

JUDGMENT 1 These proceedings commenced on 13 November 2000 by the filing of a summons by the plaintiff against the defendants who jointly carried on business as a property developer under a joint venture. 2 By Agreement entered into on 23 July 1999 ("the building contract") the plaintiff agreed to construct an industrial development on land at Castle Hill and the defendants agreed to pay the plaintiff in accordance with the terms of the building contract. 3 The plaintiff claimed in the summons:

(a) that in accordance with the terms of the building contract and during the course of its performance, deductions were made from progress payments to the plaintiff of amounts which were held by the defendants as a retention fund.

(b) that it was a term of the building contract that the plaintiff may at any time provide in lieu of, or in substitution for, the whole of the retention fund, security in the form of a bank guarantee or bank guarantees and that once they were provided, the defendants would promptly release or pay the retention fund to the plaintiff. [See clause 10.12 of the building contract]

(c) that in or about August or September 2000 the plaintiff advised the defendants that it wished to substitute bank guarantees for the retention held as security under the building contract.

(d)…

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: [2000] NSWSC 1216
Decision Date: 8 December 2000

CaseChat Overview and Summary

Northcliffe Constructions Pty Ltd brought an action against Rothrewel James Stein in relation to a building contract. The dispute centred on the defendant's failure to give notice of a dispute or difference as a condition precedent to the commencement of proceedings. The defendant argued that he had paid the whole of the plaintiff's claim within days of the summons being issued, and sought costs on the basis that a dispute or difference had arisen and that the plaintiff failed to give notice. The court was required to determine whether the dispute or difference had indeed arisen and if the requirement for a bona fide dispute was met.

The court considered the legal issues of whether a dispute or difference had arisen and if it was bona fide. It found that the determination of whether a dispute or difference had arisen was a question of fact, and that the requirement was to show a bona fide dispute rather than a sham or specious pretext. The court held that the defendant's payment of the whole claim within days of the summons being issued did not negate the fact that a dispute or difference had arisen, and that the defendant's argument was specious. The court found that the defendant had failed to establish a bona fide dispute or difference, and that the plaintiff's failure to give notice was not a bar to the proceedings.

The court ordered the defendant to pay the costs of the proceedings. The reasoning was that the defendant's conduct in paying the claim shortly before the proceedings were commenced did not negate the fact that a dispute or difference had arisen. The court found that the defendant's argument was a sham, and that the plaintiff was not required to give notice of a dispute or difference. The court held that the defendant's failure to establish a bona fide dispute or difference warranted the award of costs against him.

Orders