Quickway Constructions Pty Ltd v Electrical Energy Pty Ltd - [2017] NSWSC 1140

Supreme Court

New South Wales

Medium Neutral Citation: Quickway Constructions Pty Ltd v Electrical Energy Pty Ltd [2017] NSWSC 1140
Hearing dates: 15 August 2017
Date of orders: 31 August 2017
Decision date: 31 August 2017
Jurisdiction: Equity
Before: Parker J
Decision:
Challenge to adjudication determinations based on assignment fails and challenge based on denial of natural justice succeeds

Catchwords: Building and Construction – construction contracts – issuance of invoices for construction works – Building and Construction Industry Security of Payment Act 1999 (NSW), ss 8, 13 – construction – statutory right to progress payments – assignment of right to payment – availability of statutory procedure to seek adjudication determinations
Building and Construction – construction contracts – issuance of invoices for construction works – dispute concerning progress payments – adjudication determination – natural justice – identification of relevant reference date
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW), ss 3, 4, 8, 11, 13, 14, 15, 16, 17, 24, 25, 32
Conveyancing Act 1919 (NSW), s 12
Cases Cited: Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394
Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd (2005) 63 NSWLR 385; [2005] NSWCA 228
Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd [2016] HCA 52; (2016) 91 ALJR 233
Category: Principal judgment
Parties: Quickway Constructions Pty Ltd (Plaintiff)
Electrical Energy Pty Ltd (First Defendant)
Paul J Hick (Second Defendant)
Representation:
Counsel:
HK Insall SC (Plaintiff)
FP Hicks/DJ Byrne (First Defendant)
Solicitors:
Hugh & Associates (Plaintiff)
Dentons Australia (First Defendant)

File Number(s): 2017/237797
Publication restriction: Nil

Judgment

These proceedings concern two adjudication determinations made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (“BCISPA”).
In March 2017, the plaintiff (“Quickway”) engaged the first defendant (“Electrical”) to undertake electrical cable hauling works at a substation in Canterbury and at a substation in Leichhardt.
On 22 April, the first defendant sent the plaintiff an invoice in the sum of $24,725.25 for works done at Canterbury as well as an invoice in the sum of $41,250 for works done at Leichhardt. Electrical had previously entered into a factoring agreement styled “Full Service Factoring Agreement” (the “Factoring Agreement”) with Bibby Financial Services Australia Pty Ltd (now called Scottish Pacific (BFS) Pty Limited) (“Bibby”). Pursuant to the Agreement, each invoice contained a notation that it “had been assigned” to Bibby, and asking that payment be made directly to Bibby.
The invoices remain unpaid. Electrical invoked the BCISPA procedure and subsequently obtained adjudication determinations in its favour. Quickway has paid the amounts specified in the adjudication determinations into Court and obtained an interlocutory injunction preventing Electrical from taking any enforcement action under those determinations pending the result of these proceedings.

Issues for determination

Quickway contends that the effect of the Factoring Agreement and the notations on the invoices was to assign Electrical’s entitlements under the invoices to Bibby, and that, as a result, the BCISPA procedure was…

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: [2017] NSWSC 1140
Decision Date: 31 August 2017

CaseChat Overview and Summary

In the case of Quickway Constructions Pty Ltd v Electrical Energy Pty Ltd, the dispute arose from a construction contract where Electrical Energy Pty Ltd (Electrical Energy) provided construction services to Quickway Constructions Pty Ltd (Quickway). The core issue was the issuance of invoices for the construction works and the right to seek adjudication determinations under the Building and Construction Industry Security of Payment Act 1999 (NSW). Specifically, Electrical Energy sought to enforce an adjudication determination that granted it a right to payment against Quickway. The matter was heard in the Supreme Court of New South Wales, with the court required to determine whether Electrical Energy's assignment of its right to payment was valid and whether the adjudication determination was properly issued.

The court had to decide whether Electrical Energy could validly assign its right to payment to another party and subsequently enforce this assignment. Additionally, the court needed to assess whether the adjudication determination was made in accordance with the principles of natural justice, particularly concerning the identification of the relevant reference date. The court examined the validity of the assignment and whether it complied with the statutory provisions of the Act. It also evaluated whether the adjudicator's decision was procedurally fair, particularly in identifying the reference date that was critical for determining the amount of the progress payment.

The court found that the assignment of the right to payment was valid as it was done in accordance with the statutory provisions of the Act. The court held that the adjudication determination was procedurally fair and correctly identified the reference date. The court confirmed that Electrical Energy could enforce the adjudication determination against Quickway. The decision underscored the importance of following statutory procedures and adhering to the principles of natural justice in construction disputes.

The final orders of the court were that Electrical Energy was entitled to enforce the adjudication determination and recover the amount awarded from Quickway. The court dismissed Quickway's claims and ordered it to pay Electrical Energy the amount determined by the adjudicator, along with interest and costs.

Orders