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Pacific General Securities Ltd v Soliman & Sons Pty Ltd

Pacific General Securities Ltd v Soliman & Sons Pty Ltd

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Case Copied 31 January 2006 59 min read

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Reported Decision:
196 FLR 388

New South Wales

Supreme Court

CITATION: Pacific General Securities Ltd & Anor v Soliman & Sons Pty Ltd & Ors [2006] NSWSC 13

HEARING DATE(S): 12/12/05

JUDGMENT DATE :
31 January 2006

JUDGMENT OF: Brereton J

DECISION: Declare determination void, order that defendant builder be restrained from requesting, and nominating authority from issuing, adjudication certificate.

CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – Resolution of disputes – Adjudication – Determinations – Judicial review – minimum requirements for validity – whether 12-month limit for serving a claim is a basic and essential requirement non-compliance with which results in invalidity – held it is not – whether payment claim made within 12 months of performance of the latest of the construction work to which it related – whether specificity in payment claim is basic and essential requirement non-compliance with which results in invalidity – held it is not – whether payment claim sufficiently specified the construction work in respect of which it was made - whether service on receiver of respondent required – held it is not – whether adjudicator failed to have regard to relevant submissions – where submissions were outside ambit of payment schedule - held adjudicator rightly did not have regard to submissions – whether adjudicator entitled to determine progress payment at amount claimed upon rejection of respondent’s material – held such approach is jurisdictional error or failure of basic and essential requirement of validity as to minimum content of adjudication – whether further prosecution of adjudication application should be restrained as abuse of process – where proceedings at law on foot but not advanced – held no basis for stay. CORPORATIONS – Proceedings – Service – whether service on receiver of corporation required – effect of appointment of receiver on means of service – service on sole director sufficient service on company.

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999 (NSW), ss 4, 8, 9, 10, 13, 14, 15, 16, 17, 20, 22, 24, 31
Corporations Act 2001 (Cth), s 109X

CASES CITED: Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421
Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229
Coordinated Construction Co Pty Ltd v J M Hargreaves (NSW) Pty Ltd [2005] NSWCA 228
Craig v South Australia (1995) 184 CLR 163
Emhill Pty Ltd v Bonsoc Pty Ltd (2004) 50 ACSR 305; [2004] VSC 322
Energetech Australia Pty Ltd v Sides Engineering Pty Ltd [2005] NSWSC 801
Estate Property Holdings Pty Ltd v Barclay Mowlem Construction Ltd (2004) 61 NSWLR 515
Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2005] NSWCA 49
Gomba Holdings UK Ltd v Homan [1986] 1 WLR 1301
Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] 2 NSWR 782, 790; (1969) 92 WN(NSW) 199
Holmwood Holdings Pty Ltd v Halkat Electrical Contractors Pty Ltd [2005] NSWSC 1129
Howship Holdings Pty Ltd…

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: [2006] NSWSC 13
Decision Date: 31 January 2006

CaseChat Overview and Summary

The case of Pacific General Securities Ltd v Soliman & Sons Pty Ltd involved a dispute concerning the validity of an adjudication determination in a construction contract context. The primary issue before the court was whether the adjudication determination was valid and binding on the parties. The respondents, Soliman & Sons Pty Ltd, challenged the enforceability of the adjudication determination on several grounds, including the timing and specificity of the payment claim, the service of the claim, the adjudicator's consideration of submissions, and the adjudicator's approach in determining the progress payment.

The court considered whether the 12-month limit for serving a payment claim was a fundamental requirement, concluding that non-compliance with this limit did not render the claim invalid. Additionally, the court held that the requirement for a payment claim to specify the construction work to which it relates was not a basic and essential requirement for its validity. Regarding service of the claim, the court ruled that service on the receiver of the respondent was not necessary, as service on the sole director of the company was sufficient. The court also determined that the adjudicator did not err in failing to consider submissions outside the ambit of the payment schedule. However, the court found that the adjudicator's approach in determining the progress payment without considering the respondent's material constituted a jurisdictional error or a failure to meet the basic and essential requirements of the adjudication process. Finally, the court dismissed the respondents' application to restrain the further prosecution of the adjudication application, finding no basis for a stay due to the proceedings at law being underway but not yet advanced.

The court's decision underscored the importance of adhering to the basic and essential requirements of the adjudication process, particularly in the context of determining progress payments. The ruling clarified the circumstances under which an adjudication determination may be challenged and provided guidance on the procedural aspects of serving claims and the scope of the adjudicator's consideration of submissions.

Orders