On Forbes Developments Pty Ltd v Chase Building Group (Canberra) Pty Ltd

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SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

On Forbes Developments Pty Ltd v Chase Building Group (Canberra) Pty Ltd

Citation:

[2020] ACTSC 163

Hearing Date:

12 May 2020

DecisionDate:

23 June 2020

Before:

Crowe AJ

Decision:

See [88]

Catchwords:

CIVIL LAW – Failure by the Principal to pay adjudication amount under the Building and Construction Industry (Security of Payment) Act 2009 (ACT) – suspension of work by the Builder under the Act – subsequent determination by expert under the contract resulting in the Builder owing the Principal more than the adjudication amount – date at which the Builder’s right to suspend work comes to an end – it comes to an end at the time of the unqualified acknowledgement by the Principal of the set off of the adjudication amount against the debt owed to the Principal

Legislation Cited:

Building and Construction Industry (Security of Payment) Act 2009 (ACT) ss 17, 18, 19, 21, 22, 24, 25, 26, 27, 29, 38, 42, div 4.2
Building and Construction Industry Security of Payment Act 1999 (NSW) ss 25, 27, 34
Building and Construction Industry Security of Payment Amendment Act 2002 (NSW)
Corporations Act 2001 (Cth) ss 553C, 1321

Cases Cited:

Beckhaus Civil Pty Ltd v Brewarrina Shire Council (No 2) [2004] NSWSC 1160
Brewarrina Shire Council v Beckhaus Civil Pty Ltd
[2005] NSWCA 248
Brodyn Pty Ltd v Dasein Constructions Pty Ltd [2004] NSWSC 1230
Canberra Drilling Rigs Pty Ltd v Haides Pty Ltd
[2018] ACTSC 282

Falgat Constructions Pty Limited v Equity Australia Corporation Pty Ltd [2006] NSWCA 259
Firedam Civil Engineering v KJP Construction
[2007] NSWSC 1162
Haides Pty Ltd v Canberra Drilling Rigs Pty Ltd
[2018] ACTCA 68
Pacific General Securities Ltd v Soliman & Sons Pty Ltd [2005] NSWSC 378
Pines Living Pty Ltd v John O’Brien & Walton Construction Pty Ltd
[2013] ACTSC 15
Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151; 95 NSWLR 82
Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; 264 CLR 1
R v Lee
[2016] ACTCA 69

Shellbridge Pty Ltd v Rider Hunt Sydney Pty Ltd [2005] NSWSC 1152

Parties:

On Forbes Developments Pty Ltd (Plaintiff)

Chase Building Group (Canberra) Pty Ltd (First Defendant)

Representation:

Counsel

B Buckland (Plaintiff)

J Moffett (First Defendant)

Solicitors

HFW Australia (Plaintiff)

Bradley Allen Love Lawyers (First Defendant)

File Number:

SC 658 of 2019

Crowe AJ:

Background

  1. The plaintiff is a developer. On 22 August 2017, the plaintiff entered into a contract with the first defendant for the latter to design and build an apartment building between Forbes Street and Northbourne Avenue, Turner in the Australian Capital Territory (ACT). Work proceeded pursuant to the contract between the parties and on 28 August 2019 the Superintendent under the contract determined that Practical Completion had been reached.

  1. In that context, several disputes arose between the parties as to delay (involving liquidated damages) and variations (involving increases in the contract price). On 12…

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Details
Case
[2020] ACTSC 163
Decision Date

CaseChat Overview and Summary

The case of Forbes Developments Pty Ltd v Chase Building Group (Canberra) Pty Ltd was heard in the Civil and Administrative Tribunal of the ACT. The primary dispute involved the failure of Forbes Developments, the principal, to pay an adjudication amount as determined under the Building and Construction Industry (Security of Payment) Act 2009 (ACT). Chase Building Group, the builder, had suspended work in accordance with the provisions of the Act due to the principal's non-payment. An expert subsequently determined that the builder owed the principal a sum greater than the adjudicated amount, leading to a complex issue regarding the timeline of the builder's right to suspend work.

The court was tasked with resolving several legal issues, including the precise moment at which the builder's right to suspend work under the Act concluded. The central issue revolved around the interpretation of the Act and the contract's terms concerning the set-off of the adjudication amount against the principal's debt. The court needed to determine if the builder's right to suspend work ended at the time of the unqualified acknowledgement by the principal of the set-off or at some other point.

In its decision, the tribunal found that the builder's right to suspend work terminated at the moment the principal unequivocally acknowledged the set-off of the adjudication amount against the debt owed to the principal. The tribunal reasoned that this acknowledgment by the principal constituted an unqualified acceptance of the set-off, which in turn extinguished the builder's right to suspend work. This conclusion was based on the language of the Act and the contractual terms, as well as established legal principles concerning the resolution of disputes in the building and construction industry.

The tribunal ordered that the builder's right to suspend work ceased upon the principal's unqualified acknowledgement of the set-off, and further outlined the implications of this decision for the parties involved. The tribunal emphasized the importance of clear communication and timely resolution of payment disputes under the Act to prevent unwarranted suspensions of work and to uphold the integrity of the construction process.

Orders

Orders of the court

See [88]

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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