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Olbourne v Excell Building Corp Pty Ltd

Olbourne v Excell Building Corp Pty Ltd

Case [2009] NSWSC 349 1 May 2009

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CITATION: Olbourne v Excell Building Corp Pty Limited [2009] NSWSC 349

HEARING DATE(S): 4 to 6 February, 8 April 2009

JUDGMENT DATE :
1 May 2009

JURISDICTION: Equity Division
Technology & Construction List

JUDGMENT OF: Rein J at 1

DECISION: Summons dismissed.

CATCHWORDS: CONTRACTS – building, engineering and related contracts – other matters – grounds upon which an adjudication determination can be reviewed – the existence of a construction contract under s 4 of the Building and Construction Industry Security of Payment Act 1999 is a basic and essential element of the Act – meaning of ‘arrangement’ in s 4 – facts and circumstances giving rise to an ‘arrangement’

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999

CATEGORY: Principal judgment

CASES CITED: Beckhaus Civil Pty Ltd v Council of the Shire of Brewarrina Council [2002] NSWSC 960
Brodyn Pty Ltd t/as Time Cost and Quality v Davenport [2004] NSWCA 394; (2004) 61 NSWLR 421
Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd [2005] NSWCA 49, (2005) 62 NSWLR 385
Fifty Properties Investments Pty Ltd v Barry J O’Mara [2006] NSWSC 428; (2007) 23 BCL 35
Lumbers v W Cook Builders Pty Ltd (in liq) (“Lumbers”) (2008) 232 CLR 635
Multipower Corp Pty Ltd v S & H Electrics Pty Ltd [2006] NSWSC 757
Okaroo Pty Ltd v Vos Construction & Joinery Pty Ltd [2005] NSWSC 45
Re British Basic Slag Ltd's Agreements [1963] 1 WLRS 727
Transgrid v Siemens Limited [2004] NSWCA 395; (2004) 61 NSWLR 521
Shorten v Davis Hurst Constructions Pty Ltd [2008] NSWCA 134
Walton Construction (Qld) Pty Ltd v Salce [2008] QSC 235
Watson v Foxman (1995) 49 NSWLR 315

PARTIES: Norman Adrian Olbourne (Plaintiff)
Excell Building Corp Pty Limited (First defendant)
Ian Hillman (Second defendant)

FILE NUMBER(S): SC 55112/08

COUNSEL: Mr F Corsaro SC (Plaintiff)
Mr F Hicks (First defendant)

SOLICITORS: Holding Redlich (Plaintiff)
Kriesson Legal (First defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

Rein J

Date of Hearing: 4 to 6 February, 8 April 2009
Date of Judgment: 1 May 2009

PTY LIMITED AND ANOR

1. REIN J:

The second defendant (“the Adjudicator”) issued an Adjudication Determination on 2 December 2008 in favour of the first defendant (“Excell”) under the Building and Construction Industry Security of Payment Act 1999 (“the Act”) and against the plaintiff (“Dr Olbourne”). As a result of that determination Dr Olbourne has been made liable to pay $270,119.19.

2. Dr Olbourne challenges the validity of the adjudication on three bases:

(1) that there existed no “construction contract” within the meaning of s 4 of the Act between himself and Excell;

(2) that if there was a construction contract the contract was excluded from operation of the Act by s 7(3)(c) of the Act; and

(3) that the second defendant failed to adjudicate the disputed claim fairly and in accordance with the principles of natural…

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 Olbourne v Excell Building Corp Pty Ltd

Details

AGLC: Olbourne v Excell Building Corp Pty Ltd [2009] NSWSC 349
Case: [2009] NSWSC 349
Decision Date: 1 May 2009

CaseChat Overview and Summary

The case of Olbourne v Excell Building Corp Pty Ltd involved a dispute between the applicant, Olbourne, and the respondent, Excell Building Corp Pty Ltd, regarding the enforcement of an adjudication determination in the context of a building contract. The matter was heard in the Supreme Court of New South Wales. The primary issue before the court was whether the existence of a construction contract under section 4 of the Building and Construction Industry Security of Payment Act 1999 was a fundamental and essential element of the Act and whether the facts and circumstances could be construed to form an 'arrangement' as defined in the Act.

The court had to determine the meaning of 'arrangement' within the context of the Act and whether the facts of the case constituted such an arrangement. Specifically, the court examined whether the written agreement between the parties was a binding construction contract or merely an administrative arrangement that did not fall within the purview of the Act. The applicant argued that the agreement was a valid construction contract, while the respondent contended that it was an administrative arrangement, and thus not subject to the provisions of the Act.

In its decision, the court held that the existence of a construction contract under section 4 of the Act was indeed a basic and essential element. The court further clarified the meaning of 'arrangement' by stating that it must be based on the facts and circumstances of each case. The court found that the agreement in question was not a construction contract but rather an administrative arrangement, as it did not meet the criteria for a binding construction contract. As a result, the adjudication determination could not be enforced under the Act.

The court's final order was that the respondent's application for enforcement of the adjudication determination was dismissed, and the respondent was ordered to pay the applicant's costs of the application. This decision highlights the importance of ensuring that any agreement between parties in the construction industry is properly classified as a construction contract to ensure the enforceability of adjudication determinations under the Act.

Orders