Samuel Homes Pty Ltd v Derek Raithby

[2017] NSWSC 205

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Samuel Homes Pty Ltd v Derek Raithby [2017] NSWSC 205
Hearing dates:	6 March 2017
Decision date:	06 March 2017
Jurisdiction:	Equity - Technology and Construction List
Before:	Hammerschlag J
Decision:	Proceedings dismissed with costs. The monies currently standing in Court, that is $18,799, be paid to the first defendant.
Catchwords:	BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) – Claim for relief in the nature of certiorari quashing an adjudication determination – necessity to bring proceedings expeditiously - delay in bringing proceedings – deliberate decision to delay – discretion to deny relief for delay – HELD relief to be withheld because of unacceptable delay
Legislation Cited:	Building and Construction Industry Security of Payment Act 1999 (NSW)
Cases Cited:	Timbarra Protection Coalition v Roth Mining NL (1999) 46 NSWLR 55
Category:	Principal judgment
Parties:	Samuel Homes Pty Ltd - Plaintiff Derek Raithby - Defendant
Representation:	Counsel: R. Killalea – Solicitor - Plaintiff D. Raithby – Self-Represented - Defendant N. King – Submitting Appearance   Solicitors: Kazi and Associates - Defendant
File Number(s):	2017/51597

EX TEMPORE Judgment

1. HIS HONOUR:   These are proceedings to quash an adjudication determination in favour of the first defendant made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act). All references to sections below are to the Act.

2. The proceedings are remarkable for a number of reasons. These include that:

1. the adjudication determination is for the amount of $18,799 including GST;

2. they relate to a payment claim dated 30 March 2016 (that is, almost a year ago);

3. the plaintiff did not serve a payment schedule in response to the first defendant’s payment claim (and therefore at that time did not dispute the debt); 

4. the adjudication determination was made by the second defendant (who has filed a submitting appearance, as is usual) on 20 June 2016; and

5. the plaintiff only commenced these proceedings, by suing out a Summons, on 17 February 2017, that is, 8 months after the determination.

3. When the nature of this matter came to my attention on 3 March 2017, I fixed it for hearing today. Mr R. Killalea, solicitor, appeared for the plaintiff. The first defendant was self-represented.

4. Given the small amount involved, at the commencement of the hearing, I made an order (to which neither party objected) under Uniform Civil Procedure Rules Pt 42 r 42.5, that the maximum amount recoverable by either party as costs of these proceedings shall be $5,000.

5. The first defendant is an architect. The plaintiff builds residential homes. The first defendant provided architectural services to the plaintiff in connection with the building of a number of residences. Based on the adjudication determination, on 14 July 2016 the first defendant obtained judgment in the Local Court against the plaintiff for $21,737.41.

6. He then invoked a number of procedures of that Court in an attempt to obtain payment. These included the issue of a writ for levy of property, and a garnishee order. On 20 July 2016, the Sherriff of New South Wales wrote to the plaintiff informing it of the issue of the writ for levy of property. The plaintiff moved the Local Court for a stay of enforcement which was granted initially to expire on 29 September 2016, but the plaintiff, on legal advice, withdrew the Motion on 13 October 2016. Garnishee orders were issued on 20 December 2016 directed to various banks. There is no suggestion that this endeavour was of any success.

7. On 14 February 2017, the Local Court made an order for the examination of Steven Samuel Murabito, the director of the plaintiff. As I have earlier mentioned, the plaintiff commenced these proceedings on 17 February 2017. It seeks as interim relief, a stay of the examination and any enforcement proceedings in the Local Court, and as final relief that the adjudication determination be quashed and the judgment in the Local Court be set aside. The substantive grounds upon which the quashing order is sought are that the adjudicator committed jurisdictional error:

1. in finding that s 17(5) (which requires copy of an adjudication application to be served on a respondent to a payment claim) had been complied with, when there was no evidence that the adjudication application had been served (the plaintiff asserting that there was no such evidence);

2. in wrongly finding that the contract between the plaintiff and the first defendant was an exempt residential construction contract, when the plaintiff, a company, could not reside in or propose to reside in the residences (see the definition of “exempt residential construction contract” in s 4(1) and see s 7(2)(c) – these sections operate to exclude from the operation of the Act a construction contract for the carrying out of residential work under the Home Building Act 1989 on such part of any premises as the party for whom the work is carried out resides in or proposes to reside in);

3. notice under s 17(2)(a) was served prior to the period allowed (this section provides that an adjudication application cannot be made where the respondent fails to provide a payment schedule and fails to pay the whole or any part of the claimed amount by the due date unless the claimant has notified the respondent within 20 business days immediately following the due date for payment of the claimant’s intention to apply for adjudication of the payment claim).

8. It is not necessary to deal with the substantive challenges. In relation to them, relevantly to what is further said below, it suffices to say that:

1. there is evidence before the Court, from which an inference can be drawn, that the plaintiff had the adjudication application as early as 7 June 2016, and there is an admission that it had it at least by 13 September 2016, but that its officers did not read it;

2. the challenge to the adjudication determination on the grounds that the contract was, contrary to the adjudicator’s finding, not an exempt residential construction contract is a nonsense. It is an assertion that his finding meant that he had no jurisdiction, but his finding was wrong, so he actually had jurisdiction. In other words, the adjudicator had jurisdiction but wrongly found that he had jurisdiction;

3. notice under s 17(2)(a) was sent by express post to the plaintiff on 18 April 2016, and the plaintiff does not suggest that it did not get it.

9. Two important things are to be observed.

10. First, the Act provides machinery for the expeditious recovery of progress payments alleged to be due to contractors, and the expeditious resolution (if only on an interim basis) of disputes surrounding such claims. It is only an interim basis because s 32 preserves a respondent’s right to restitution of monies wrongly paid.

11. Strict time limits for the taking of steps under the Act are imposed.

12. Second, remedies on judicial review are discretionary, and may be refused depending on the circumstances, including delay: see Timbarra Protection Coalition v Roth Mining NL (1999) 46 NSWLR 55 at 73 [93].

13. Here, there has been significant and unacceptable delay on the part of the plaintiff in bringing these proceedings. To my mind its explanation exacerbates rather than exonerates its delay. That explanation is that there was another dispute being litigated in this Court between Mr Murabito and his life partner, Lila Stojcevski, on the one hand and the first defendant on the other for review of another adjudication determination in the first defendant’s favour. Instead of bringing the present proceedings expeditiously (as was incumbent on it to do) the plaintiff decided rather to advance the other ones, hoping that both might be settled with the first defendant. Only when that did not happen, did it start these proceedings.

14. Thus the plaintiff took a deliberate decision, for collateral reasons, not to challenge the adjudication determination until months had elapsed. Given the strict timetables for which the Act provides, the plaintiff’s deliberate delay might be thought even to amount to a waiver of a right to challenge. This delay is enough, in my opinion in the circumstances of this case, to withhold relief as a matter of discretion.

15. But there is more. It is to be remembered that the plaintiff failed to serve a payment schedule in response to the first defendant’s payment claim, which had the effect, under s 22(a), that the plaintiff was not entitled to serve an adjudication response.

16. There is also no evidence before the Court that the plaintiff does not owe the first defendant the money, the subject of the judgment. The plaintiff can sue for restitution in the Local Court if the monies are wrongly paid.

17. The proceedings are dismissed with costs.

18. I order that the monies currently standing in Court, that is $18,799 be paid to the first defendant.

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Amendments

08 March 2017 - corrected grammatical error

Decision last updated: 16 March 2017