Legal Research
Cases
Seabay Properties Pty Ltd v Galvin Construction Pty Ltd

Seabay Properties Pty Ltd v Galvin Construction Pty Ltd

Link copied

Case Copied 6 May 2011 73 min read

Contents

On this page

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

No. SCI 2010 7001

SEABAY PROPERTIES PTY LTD (ABN 43 105 314 074)	Plaintiff
v
GALVIN CONSTRUCTION PTY LTD (ABN 82 054 156 339)	First Defendant
And
JOHN McMULLAN	Second Defendant

---

JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	4-5 APRIL 2011
DATE OF JUDGMENT:	6 MAY 2011
SEABAY PROPERTIES PTY LTD v GALVIN CONSTRUCTION PTY LTD & ANOR
MEDIUM NEUTRAL CITATION:	[2011] VSC 183

---

Building Contracts - Building and Construction Industry Security of Payment Act 2002 (Vic) – Adjudications conducted under Part 3 Division 2 of the Act – Whether non-claimable variations included in payment claim and adjudication determination – Whether severance of invalid part open - Whether inclusion of liquidated damages claimed by respondent in payment schedule and adjudication determination permitted - Whether inclusion of liquidated damages claimed by respondent within s. 10B(2) of the Act - Whether prematurely served payment claim and adjudication thereon valid – Whether Payment claim sufficiently identified the work done.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J.A.H. Foxcroft SC Mr J.A.F. Twigg	Giannakopoulos Solicitors
For the First Defendant	Mr B.A. Shnookal	Logie-Smith Lanyon
For the Second Defendant	No Appearance

TABLE OF CONTENTS

Background......................................................................................................................................... 1

Ground 1. Incorrect Inclusion of Non-claimable Variations............................................... 9
Ground 2. Incorrect Exclusion of Liquidated Damages as an Excluded Amount........ 22

The Issue – Whether Liquidated Damages Claimed by a Respondent are an “Excluded Amount” 22
Subsidiary Question as to Jurisdiction of an Adjudicator to Proceed on an Agreed Basis....... 23
Seabay’s Claim for Liquidated Damages................................................................................... 25
Key Statutory Provisions......................................................................................................... 27
Galvin’s Submissions............................................................................................................... 32
Seabay’s Submissions............................................................................................................... 33
Whether Seabay’s Deduction Fell Within s.10B(2)(b).............................................................. 37
Whether Seabay’s Deduction Fell Within s.10B(2)(c).............................................................. 38
Whether Seabay’s Liquidated Damages Properly Deducted..................................................... 39

Ground 3. Premature Submission of Payment Claim........................................................ 45
Ground 4. Failure of the Payment Claim to Identify the Work Performed in the Claim Period. 48

Conclusion......................................................................................................................................... 53

HIS HONOUR:

Background

This proceeding arises under the Building and Construction Industry Security of Payment Act 2002 (Vic) (the “Act”). It raises questions at to whether there was a valid payment claim and whether there was a valid adjudication determination under the Act.

The First Defendant, Galvin Construction Pty Ltd, (“Galvin”) was a claimant pursuant to the provisions of the Act. The Second Defendant, Mr John McMullan, (the “Adjudicator”) purportedly made a determination under s.23 of the Act, dated 14 December 2010, which was amended on 20 December 2010 (the “Adjudication Determination”). The Adjudicator is a lawyer with extensive experience in the building and construction industry and the security of payment regime. The Adjudicator took no part in the present proceeding.

A construction contract within the meaning of s.7 of the Act (the “Contract”) was entered into between the Plaintiff, Seabay Properties Pty Ltd (“Seabay”) as Principal and Galvin as the Contractor on 24 July 2008. The Act therefore applies in its amended form.[1] The Contract 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.

Keep reading for free

Create a free CaseChat account to read Seabay Properties Pty Ltd v Galvin Construction Pty Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2011] VSC 183
Decision Date: 6 MAY 2011

CaseChat Overview and Summary

In the matter of Seabay Properties Pty Ltd v Galvin Construction Pty Ltd, the Supreme Court of Victoria was tasked with resolving disputes arising under a construction contract, specifically addressing issues concerning variations, payment claims, and adjudications under the Building and Construction Industry Security of Payment Act 2002 (Vic). The primary dispute centred on whether certain non-claimable variations were included in the payment claim and the subsequent adjudication determination, whether the invalid part of the claim could be severed, and if the inclusion of liquidated damages was permissible under the Act. Additionally, the court examined whether the payment claim and adjudication were prematurely served and whether the claim sufficiently identified the work done.

The legal issues before the court involved the interpretation of the Security of Payment Act and the validity of the adjudication process. Specifically, the court needed to determine if the inclusion of non-claimable variations and liquidated damages in the payment claim and adjudication determination rendered them invalid. Furthermore, the court assessed whether the premature service of the payment claim and the adequacy of the work identification in the claim were compliant with the statutory requirements.

In reaching its decision, the court held that the adjudication determination was invalid due to the inclusion of non-claimable variations. However, the court allowed for the severance of the invalid part of the adjudication, permitting the remaining valid part to stand. The court also ruled that the claim for liquidated damages was not within the scope of section 10B(2) of the Act, thereby upholding its inclusion. Regarding the premature service of the payment claim, the court found it to be valid as the statutory requirements were substantially complied with. Lastly, the court determined that the payment claim sufficiently identified the work done, despite minor deficiencies.

The final orders of the court mandated that the adjudication determination be severed to exclude the non-claimable variations, while the claim for liquidated damages was permitted to remain. The prematurely served payment claim was deemed valid, and the adjudication process, to the extent it was severable, was upheld. The court's decision provided clarity on the application of the Security of Payment Act in the context of construction disputes, particularly concerning the handling of non-compliant elements within payment claims and adjudications.

Orders