Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 3)

[2016] NSWCA 382

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 3) [2016] NSWCA 382

Hearing dates:

23 December 2016

Decision date:

23 December 2016

Before:

Basten JA

Decision:

(1)   Upon the First Respondent undertaking to pay the sum of $314,504.72 into Court by 5pm on 6 January 2017, order that the Appellant is restrained from:

(a) requesting the provision of an adjudication certificate pursuant to s 24(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act);
(b)   filing an adjudication certificate as a judgment for a debt in any court pursuant to s 25 of the Act;
(c)   serving a notice on the Plaintiff pursuant to s 24(1 )(b) of the Act,
in connection with the determination made by the Second Respondent dated 15 February 2016 until after the Relevant Date or until further order of this Court or of the High Court.

 

In this order, "Relevant Date" means:
(a)   5pm on 6 January 2017; or
(b)   if an application for special leave to appeal to the High Court from the orders made by the Court of Appeal on 23 December 2016 is made on or before 6 January 2017:
(i)   the date on which that application is refused; or
(ii)   if that application is granted, the date on which the appeal is determined.

 

(2)   Liberty to apply on two days' notice.

 (3)   Each party is to bear its own costs of the stay application.

Catchwords:

PROCEDURE – civil – stay of appeal judgment – proposed application for special leave to appeal – issue of general importance – protection of subject matter of dispute – balance of convenience – offer to pay sum into court

Cases Cited:

Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1) (1986) 161 CLR 681
Rinehart v Welker (2012) 83 NSWLR 347; [2012] NSWCA 1
Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) [2016] NSWCA 379

Category:

Consequential orders (other than Costs)

Parties:

Shade Systems Pty Ltd (Appellant)
Probuild Constructions (Aust) Pty Ltd (First Respondent)
Doron Rivlin (Second Respondent)

Representation:

Counsel:
Mr D Hume (Appellant)
Mr S Robertson (First Respondent)

  Solicitors:
Moray & Agnew (Appellant)
Maddocks (First Respondent)

File Number(s):

2016/205479

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity Division

Citation:

[2016] NSWSC 770

Date of Decision:

15 June 2016

Before:

Emmett AJA

File Number(s):

2016/64368

Judgment

1. This morning the Court handed down judgment in the matter of Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2). [1] The effect of the judgment was to allow the appeal and set aside the orders made in the Equity Division on 15 June 2016. That meant that the judgment setting aside the determination of the adjudicator was itself set aside and the determination of the adjudicator stands. The issue which was resolved in this Court was whether or not there was a right of review in the supervisory jurisdiction of a determination of an adjudicator for non-jurisdictional error of law on the face of the record; the Court held that there was not.

   1. [2016] NSWCA 379.

2. The issue which is raised by this decision is one of some public importance for the administration of the legislation and for the operation of the building and construction industry. It has been pointed out by counsel for Shade Systems (the respondent on the application, the appellant in this Court), that the Court determined that the correct approach was that which had been taken in the bulk of decisions in this jurisdiction, and indeed elsewhere, up until the decision of the primary judge. That may be so, nevertheless there is obviously an issue which could be agitated before the High Court.

3. I am told that counsel for the unsuccessful respondent has instructions to file an application for special leave to appeal. I do not propose today to consider the prospects of such an application; suffice it to say that an application is foreshadowed.

4. The question then is whether there should be some form of relief granted to avoid the payment being made in terms of the adjudicator’s determination and possibly dissipated before the matter is determined in the High Court. I am prepared to accept on the basis of the evidence of Mr Stulic and the annexed affidavit of the director of the appellant in this Court, Shade Systems, that there is a significant risk that some, if not all of the money, may be dissipated absent an undertaken not to do so, and absent any restraining order on the part of this Court. I accept that some form of relief should be granted if the subject matter of the litigation, which is the debt owing to Shade Systems, is to be preserved.

5. There is common ground between the parties that the principles to be applied in considering an application of this kind are those set out by Brennan J in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (No 1). [2] That was confirmed by the decision of this Court in Rinehart v Welker. [3]

   2. (1986) 161 CLR 681.

   3. (2012) 83 NSWLR 347; [2012] NSWCA 1.

6. The first matter to which Brennan J referred as a relevant consideration was the need to preserve the subject matter of the litigation. He also considered relevant the question whether there was a substantial prospect that special leave would be granted, and whether the applicant had taken, or failed to take, steps necessary to seek a stay from the Court from which the matter is pending. Finally, he said that there was a question of loss to the respondent and to the potential applicant, and the question of where the balance of convenience lay in those circumstances. It is now commonplace for applications for stays to be made to this Court and it is the appropriate course to take.

7. Given that there is a real risk that the subject matter of the litigation will not be preserved, absent an order, and given that there is presently no special leave application on foot (understandably since judgment was delivered this morning), I propose to make orders which will maintain the status quo until such time as it may be reasonable to expect a special leave application to have been prepared, which under the rules requires a summary of argument.

8. The orders sought by Probuild on this application are in the following terms; it requests that the appellant in this Court, Shade Systems, be restrained from pursuing its rights under the Building and Construction Industry Security of Payment Act 1999 (NSW) by way of obtaining an adjudication certificate, filing it so that it becomes a judgment in a court of competent jurisdiction, and then taking steps to enforce the determination. A restraining order could be made only at the last stage, but it probably does not make any difference in this case. It is also possible that there may be some further agreement as to steps which can be taken between the parties in due course.

9. What I propose to do is to place a timetable on the respondent in relation to its application for special leave to appeal, and to restrain the appellant from taking further steps until that time has expired. Accordingly, I propose, in accordance with order 2 in the short minutes sought by the respondent, that the appellant be restrained from taking specified steps in relation to the adjudication. Order 3 identifies the relevant date as 20 January 2017; I propose to vary that to 5pm on Friday 6 January 2017. In the second part of the definition of “relevant date”, if an application for special leave is made to the High Court on or before 6 January 2017 then the relevant date becomes the date on which the application is refused, or, if granted, the appeal is determined.

10. I will also order that the parties have liberty to apply on two days’ notice with the intent that if the matter is to come back before the Court on 6 January that should be before me, and I will deal with any matter that arises.

11. I do not make order 1. I make order 2 subject to the undertaking. Order 3 will be varied in the way we have indicated, and order 4 will be “no order as to costs of the motion.”

12. I direct counsel for the respondent to prepare a document with the amended orders and file it in the registry at an appropriate time.

13. The orders are as follows:

(1)   Upon the First Respondent undertaking to pay the sum of $314,504.72 into Court by 5pm on 6 January 2017, order that the Appellant is restrained from:

(a) requesting the provision of an adjudication certificate pursuant to s 24(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act);

(b)   filing an adjudication certificate as a judgment for a debt in any court pursuant to s 25 of the Act;

(c)   serving a notice on the Plaintiff pursuant to s 24(1 )(b) of the Act,

in connection with the determination made by the Second Respondent dated 15 February 2016 until after the Relevant Date or until further order of this Court or of the High Court.

In this order, "Relevant Date" means:

(a)   5pm on 6 January 2017; or

(b)   if an application for special leave to appeal to the High Court from the orders made by the Court of Appeal on 23 December 2016 is made on or before 6 January 2017:

(i)   the date on which that application is refused; or

(ii)   if that application is granted, the date on which the appeal is determined.

(2)   Liberty to apply on two days' notice.

(3)   Each party is to bear its own costs of the stay application.

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Endnotes

Decision last updated: 27 January 2017