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Project v TQM

Project v TQM

Case [2009] NSWSC 699 21 September 2009

Jurisdiction

Breach of Contract

Compensatory Damages

Corporate Law & Governance

Commercial Law

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Reported Decision:
[2010] ALMD 1452
234 FLR 391
27 ACLC 1474

New South Wales

Supreme Court

CITATION: Project v TQM [2009] NSWSC 699

HEARING DATE(S): 22/07/09

JUDGMENT DATE :
21 September 2009

JURISDICTION: Equity Division

JUDGMENT OF: Macready AsJ at 1

DECISION: Paragraphs 31 and 32

CATCHWORDS: Corporations Law. Application to set aside statutory demand under s 459G of Corporations Act. Whether a genuine dispute can exist or an off-setting claim can be found notwithstanding a judgment for progress payments under the Building & Construction Industry Security of Payment Act 1999. Held it can.

PARTIES: Project Venture Development No 11 Pty Limited v TQM Design & Construct Pty Limited

FILE NUMBER(S): SC 6027/08

COUNSEL: Mr S Colledge for plaintiff
Miss V Culkoff for defendant

SOLICITORS: Colin Biggers & Paisley for plaintiff
Julie Orsini for defendant

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Associate Justice Macready

Monday 21 September 2009

6027/2008 Project Venture Development No 11 Pty Limited v TQM Design & Construct Pty Limited

JUDGMENT

1 His Honour: This is an application to set aside a statutory demand served on the plaintiff by the defendant. The statutory demand is dated 4 November 2008 and seeks an amount of $43,258.95. In the schedule to the demand the description of the debt showed that it arose from a judgment entered in the Local Court Downing Centre on 18 August 2008.

2 The parties were involved in a construction contract and the defendant was the builder for the plaintiff developer.

3 The judgment to which the demand relates was one which was obtained in the District Court following an adjudication determination under the Building and Construction Industry Security of Payment Act 1999 (the Act). The adjudication was issued on 1 August 2008 for an amount of $43,114.95. The adjudication was in respect of progress claims and not a final payment.

4 The application is made on the basis that the plaintiff has an offsetting claim substantially exceeding the amount of the judgment. The offsetting claim is based upon a claim for liquidated damages as a result of delayed completion and a claim for rectification costs for works on the property.

5 The liquidated damages claim is a substantial claim that was included in the adjudication application by the plaintiff for an amount of $380,279. The amount liquidated damages for $2,333.50 per day for 163 days.

6 The defendant’s answer to the claim was to make an extension of time claim through the superintendent appointed under the construction contract. Extensions of time claims are allowed in the contract for delays resulting from issues such as variations or bad weather. The superintendent’s allowed date for practical completion was 12 December 2007.

7 The defendant relied on a report saying it was entitled to further extensions of time extending the date for practical completion to 10 April 2008. In fact completion was obtained on 23 May 2008 and the adjudicator accepted the defendant’s application and extended the time to…

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 Project v TQM

Details

AGLC: Project v TQM [2009] NSWSC 699
Case: [2009] NSWSC 699
Decision Date: 21 September 2009

CaseChat Overview and Summary

Project Constructions Pty Ltd sought to set aside a statutory demand issued by TQM Electrical & Mechanical Pty Ltd under section 459G of the Corporations Act 2001. The dispute arose from an adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW) where a judgment for progress payments was issued in favour of TQM. Despite this judgment, Project argued that a genuine dispute existed with respect to the amount owed, warranting the setting aside of the statutory demand.

The legal issues before the court were whether a genuine dispute could exist or an off-setting claim could be found despite the judgment for progress payments, and if such a dispute or claim was sufficient to warrant the setting aside of the statutory demand under section 459G. The court considered the definitions of "genuine dispute" and "offsetting claim" under the relevant acts and examined the evidence provided by both parties. The court found that the existence of the judgment did not automatically preclude the possibility of a genuine dispute or an off-setting claim, and that the dispute related to the amount of the debt and not the existence of the debt itself.

The court held that a genuine dispute could indeed exist even after a judgment for progress payments had been issued. The judgment did not preclude Project from asserting a genuine dispute about the amount of the debt. The court found that Project had demonstrated a genuine dispute concerning the amount of the debt owed to TQM. Consequently, the court set aside the statutory demand. The court's decision underscored the importance of examining the specifics of each case to determine the existence of a genuine dispute or an off-setting claim.

Orders