On Forbes Developments Pty Ltd v Chase Building Group (Canberra) Pty Ltd - [2020] ACTSC 163

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

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.

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…

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: [2020] ACTSC 163
Decision Date: 23 June 2020

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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