Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd - [2022] NSWSC 234

Supreme Court

New South Wales

Medium Neutral Citation: Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd [2022] NSWSC 234
Hearing dates: 4 March 2022
Decision date: 09 March 2022
Jurisdiction: Equity - Commercial List
Before: Rees J
Decision:
Second defendant removed from the proceedings pursuant to rule 6.29 of the Uniform Procedure Rules 2005 (NSW).

Catchwords:
CIVIL PROCEDURE — removal of party —
principles at [41]-[49] — bank has charge over company’s assets – company enters into building contract with plaintiff – company obtains judgment against plaintiff for progress payment under s16(2)(a), Building and Construction Industry Security of Payment Act 1999 (NSW) – bank’s charge attaches to judgment debt – company goes into liquidation – bank assigns rights – plaintiff commences proceedings against company and bank, claiming neither entitled to judgment debt by reason of s34, Building and Construction Industry Security of Payment Act – assignee joined – whether bank a proper or necessary party following assignment — bank does not “have or claim an interest in the subject matter” — bank removed.

Legislation Cited:
Uniform Civil Procedure Rules 2005 (NSW) rr 6.29, 13.4
Personal Property Securities Act 2009 (Cth)
Building and Construction Industry Security of Payment Act 1999 (NSW) ss 16(2)(a), 32, 34
Corporations Act 2001 (Cth) ss 513B(b), 513C(b), 553C

Cases Cited:
Carpenter’s Investment Trading Co Ltd v Commonwealth (1952) 69 WN (NSW) 175
Hamersley Iron Pty Ltd v Forge Group Power Pty Ltd (in liq) (mgrs and recs apptd) [2017] WASC 152; (2017) 52 WAR 90
Hamersley Iron Pty Ltd v Forge Power Group Pty Ltd (in liq) (mgrs and recs apptd) [2018] WASCA 163; (2017) 53 WAR 325
Hayes v Lend Lease Darling Park One Pty Limited [2017] NSWSC 1376
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1; [2010] HCA 19
K v St Vincent's Hospital Sydney Limited [2020] NSWSC 742
News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410
Pegang Mining Co Ltd v Choong Sam [1969] 2 MLJ 52
Re Spectrum Plus Ltd (in liq) [2005] 2 AC 680
Ross v Lane Cove Council (2014) 86 NSWLR 34; [2014] NSWCA 50
Seller v Jones [2014] NSWCA 19
Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2018] NSWSC 412
Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (No 2) (Supreme Court (NSW), Stevenson J, 20 April 2018, unrep)
Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2019] NSWCA 11
Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (No 2) [2019] NSWCA 64
Sproule v John Fairfax & Sons Ltd [1968] 3 NSWR 655
Uniting Church in Australia Property Trust (NSW) v Monsen [1978] 1 NSWLR 575

Texts Cited:
Ritchie’s Uniform Civil Procedure NSW

Category: Procedural rulings
Parties: Australia and New Zealand Banking Group Ltd (Second Defendant/Applicant)
Seymour Whyte Constructions Pty Ltd (Plaintiff/Respondent)
Representation:
Counsel:
Mr D Krochmalik (Second Defendant/Applicant)
Mr M Christie SC…

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: [2022] NSWSC 234
Decision Date: 09 March 2022

CaseChat Overview and Summary

Seymour Whyte Constructions Pty Ltd brought an action against Ostwald Bros Pty Ltd and the National Australia Bank, following a dispute over a building contract. The matter was heard in the Supreme Court of New South Wales. Ostwald Bros Pty Ltd had entered into a building contract with Seymour Whyte Constructions Pty Ltd. The National Australia Bank held a charge over Ostwald Bros Pty Ltd’s assets. Ostwald Bros Pty Ltd obtained a judgment against Seymour Whyte Constructions Pty Ltd for progress payments under the Building and Construction Industry Security of Payment Act 1999 (NSW). The bank's charge attached to the judgment debt. Subsequently, Ostwald Bros Pty Ltd went into liquidation, and the bank assigned its rights to the judgment debt. Seymour Whyte Constructions Pty Ltd commenced proceedings against Ostwald Bros Pty Ltd and the National Australia Bank, claiming neither was entitled to the judgment debt by reason of section 34 of the Building and Construction Industry Security of Payment Act. The bank was joined as a party to the proceedings. The court was required to determine whether the bank was a proper or necessary party following the assignment. The court found that the bank did not "have or claim an interest in the subject matter" and therefore removed the bank from the proceedings.

The Supreme Court of New South Wales held that the National Australia Bank was not a proper or necessary party to the proceedings. The bank did not have or claim an interest in the subject matter of the dispute between the plaintiff and the defendant. The bank's role was limited to the assignment of rights to the judgment debt. The court referred to the principles outlined in paragraphs 41 to 49 of the judgment, which emphasise that a party must have a direct interest in the subject matter to be considered a proper or necessary party. Since the bank did not meet this criterion, it was removed from the proceedings. The court's decision was based on the statutory interpretation of section 34 of the Building and Construction Industry Security of Payment Act 1999 (NSW), which governs the rights and obligations of parties in relation to adjudication and enforcement of payments. The court concluded that the bank's involvement in the proceedings was unnecessary, as its interest was purely incidental and did not pertain to the substantive issues between the original parties.

Orders