Reed Construction (Qld) Pty Ltd v Dellsun Pty Ltd

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SUPREME COURT OF QUEENSLAND

CITATION:

Reed Construction (Q) P/L v Dellsun P/L [2009] QSC 263

PARTIES:

REED CONSTRUCTION (QLD) PTY LTD
(applicant)
v
DELLSUN PTY LTD
(respondent)

FILE NO/S:

2556 of 2009

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

4 September 2009

DELIVERED AT:

Brisbane

HEARING DATE:

26 May 2009

JUDGE:

Martin J

ORDER:

The statutory demand is set aside.

CATCHWORDS:

CORPORATIONS LAW – STATUTORY DEMAND – SETTING ASIDE – Where respondent entered contract with applicant for construction work – Where dispute over amount to be paid for work – Where respondent served applicant with various versions of a claim for payment, each for different amount – Where applicant asserted an offsetting claim for rectification of faulty workmanship by respondent – Where respondent served payment claim under BCIPA – Where applicant responded with payment schedule – Where dispute referred to adjudicator under BCIPA – Where decision issued in favour of respondent – Where respondent issued statutory demand for adjudication amount - Where inconsistencies among statements of the respondent – Where applicant seeks set aside of statutory demand – Whether there is a genuine dispute concerning the alleged debt – Whether there is a valid offsetting claim – Whether the adjudicator’s decision gives rise to res judicata or issue estoppel concerning the existence and amount of debt – Effect of s100 BCIPA – Discussion of principles.

Building Construction Industries Payments Act 2004, s100
Corporations Act 2001 (Cth), s 459G, s 459H, s459J

Aldoga Aluminium Pty Ltd v De Silva Starr Pty Ltd [2005] NSWSC 284
Brodyn Pty Ltd v Dasein Constructions Pty Ltd [2004] NSWSC 1230
Chadwick Industries (South Coast) Pty Ltd v Condensing Vaporisers Pty Ltd (1994) 13 ACSR 37
Demir Pty Ltd v Graf Plumbing Pty Ltd [2004] NSWSC 553
Elm Financial Services Pty Ltd v MacDougal [2004] NSWSC 560
Ettamogah Pub (Rouse Hill) Pty Ltd v Consolidated Constructions Pty Ltd [2006] NSWSC 1450
Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd (2005) 62 NSWLR 385
Greenaways Australia Pty Ltd v CBC Management Pty Ltd [2004] NSWSC 1186
J Hutchinson Pty Ltd v Galform Pty Ltd & Ors [2008] QSC 205,
John Holland Construction and Engineering Pty Ltd v Kilpatrick Green Pty Ltd (1994) 14 ACSR 250
Macleay Nominees Pty Ltd v Belle Property East Pty Ltd [2001] NSWSC 743
Max Cooper & Sons (Builders) Pty Ltd v M & E Booth & Sons Pty Ltd (2003) 180 FLR 318
Ozy Home Wares v Wesgordon [2007] NSWSC 982
Peekhrst Pty Ltd v Wallace & Anor [2007] QSC 159
Plus 55 Village Management Pty Ltd v Parisi Homes Pty Ltd [2005] NSWSC 559
Re Morris Catering (Aust) Pty Ltd (1993) 11 ACSR 601
Scanhill Pty Ltd v Century 21 Australasia Pty Ltd (1993) 12 ACSR 341
Shellbridge Pty Ltd v Rider Hunt Sydney Pty Ltd [2005] NSWSC 1152
Solarite Air Conditioning Pty Ltd v York International Australia Pty Ltd [2002] NSWSC 411

COUNSEL:

G D Beacham for the applicant
B Wessling-Smith…

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Details
Case
[2009] QSC 263
Decision Date

CaseChat Overview and Summary

Reed Construction (Qld) Pty Ltd filed an application to set aside a statutory demand issued by Dellsun Pty Ltd. The dispute between the two companies arose from a construction contract where Reed Construction performed work for Dellsun. The disagreement centred around the amount owed by Dellsun to Reed Construction. Dellsun served various payment claims for different sums, while Reed Construction counterclaimed for rectification costs due to faulty workmanship by Dellsun. The matter was referred to an adjudicator under the Building and Construction Industry Payments Act 2000 (Qld), who issued a decision in favour of Dellsun. Dellsun then issued a statutory demand for the adjudicated amount, which Reed Construction sought to set aside. The application hinged on whether there was a genuine dispute over the debt, if Reed Construction had a valid offsetting claim, and whether the adjudicator’s decision had a preclusive effect on the statutory demand.

The court was required to determine if there was a genuine dispute over the debt, which could prevent the statutory demand from being enforceable. Additionally, it needed to consider whether Reed Construction's offsetting claim for faulty workmanship was valid and could be set off against the debt. The court also had to examine if the adjudicator’s decision was res judicata or created an issue estoppel, thereby barring the statutory demand. The interaction between the statutory demand and the adjudicator’s decision under section 100 of the BCIPA was a critical issue, as it could affect the outcome of the set-aside application.

In examining these issues, the court found that there was indeed a genuine dispute over the amount of the debt due to inconsistencies in Dellsun's claims and the existence of an offsetting claim by Reed Construction. The adjudicator’s decision was not res judicata or subject to issue estoppel, given the unique procedural aspects of statutory demands under the Corporations Act 2001 (Cth). Consequently, the court determined that the statutory demand should be set aside.

The court ordered that the statutory demand issued by Dellsun Pty Ltd to Reed Construction (Qld) Pty Ltd be set aside. This decision was based on the presence of a genuine dispute over the debt, the validity of Reed Construction’s offsetting claim, and the procedural distinctions between the statutory demand and the adjudicator’s decision.

Orders

Orders of the court

The statutory demand is set aside.

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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