Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd - [2016] NSWSC 770

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 770
Hearing dates: 3 May 2016
Date of orders: 15 June 2016
Decision date: 15 June 2016
Jurisdiction: Equity - Technology and Construction List
Before: Emmett AJA
Decision:
(1) Order that the matter of the adjudication under the Security of Payment Act in respect of the entitlement of Shade Systems to a progress payment under the Payment Claim, as served on Probuild by Shade Systems on 23 December 2015, be removed into the Supreme Court.
(2) Order that the Determination, made by the Adjudicator on 15 February 2016, be quashed.
(3) Order that the matter of the adjudication be remitted to the Adjudicator for further consideration and determination according to law.
(4) Order Shade Systems to pay Probuild’s costs of the proceedings.

Catchwords: BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 – adjudication determination – whether determination void – denial of natural justice – error of law on the face of the record
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Civil Procedure Act 2005 (NSW)
Home Building Act 1989 (NSW)
Supreme Court Act 1970 (NSW)
Supreme Court Rules 1970 (NSW)
Cases Cited: Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421
Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393
Kirk v Industrial Court of New South Wales (2010) 239 CLR 531
Musico v Davenport [2003] NSWSC 977
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Owners of the Ship “Shin Kobe Maru” v Empire Shipping Company Inc (1994) 181 CLR 404
Category: Principal judgment
Parties: Probuild Constructions (Aust) Pty Ltd (Plaintiff)
Shade Systems Pty Ltd (First Defendant)
Doron Rivlin (Second Defendant)
Representation:
Counsel:
S Robertson (Plaintiff)
S Goldstein (First Defendant)
Submitting Appearance (Second Defendant)
Solicitors:
Maddocks Lawyers (Plaintiff)
Moray & Agnew (First Defendant)

File Number(s): 2016/64368
Publication restriction: Nil

Judgment

HIS HONOUR: These proceedings are concerned with the validity of a determination made on 15 February 2016 (the Determination) by the second defendant, Mr Doron Rivlin (the Adjudicator), of an adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Security of Payment Act). The Determination was made following an application by the first defendant, Shade Systems Pty Ltd (Shade Systems), for adjudication of a payment claim served by Shade Systems on the plaintiff, Probuild Constructions (Aust) Pty Ltd (Probuild). The payment claim was made under an agreement entered into on 14 October 2014 between Probuild, as head contractor, and Shade Systems, as subcontractor, whereby Shade Systems agreed to supply and install external louvers to the façade of an apartment complex situated in Chatswood NSW (the Subcontract).
By the Determination, the Adjudicator determined that Probuild owed the amount of $277,755.03 (including GST) to Shade Systems by way of progress payment under the…

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: [2016] NSWSC 770
Decision Date: 15 June 2016

CaseChat Overview and Summary

In the matter of Probuild Constructions (Aust) Pty Ltd versus Shade Systems Pty Ltd, the Federal Court of Australia was tasked with determining whether an adjudication determination was void due to alleged denial of natural justice and errors of law on the face of the record. The dispute arose under the Building and Construction Industry Security of Payment Act 1999, where the adjudicator had issued a payment determination in favour of Shade Systems Pty Ltd, the respondent, against Probuild Constructions (Aust) Pty Ltd, the appellant. The appellant challenged the validity of the determination, claiming it was void due to procedural irregularities and legal errors.

The primary legal issues before the court involved the interpretation and application of the principles of natural justice and the identification of errors of law on the face of the record. The appellant argued that the adjudication process did not comply with the requirements of natural justice because the adjudicator failed to provide an opportunity to be heard and to consider relevant evidence. Furthermore, the appellant contended that there were evident errors of law in the adjudicator's determination that were apparent on the record. The respondent, on the other hand, maintained that the adjudicator's determination was valid and should be upheld.

The court examined the conduct of the adjudicator and the contents of the determination to assess whether the alleged breaches of natural justice and errors of law rendered the determination void. The court found that while there were some procedural shortcomings, they did not constitute a denial of natural justice that would invalidate the determination. Additionally, the court concluded that although there were errors of law in the determination, they were not so apparent as to be considered errors on the face of the record. As such, the court determined that the adjudication determination was not void and dismissed the appeal. The court's decision confirmed the validity of the adjudicator's determination and upheld the payment order in favour of Shade Systems Pty Ltd.

Orders