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Shell Refining (Australia) Pty Ltd v AJ Mayr Engineering Pty Ltd

Shell Refining (Australia) Pty Ltd v AJ Mayr Engineering Pty Ltd

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Case Copied 6 March 2006 56 min read

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CITATION: Shell Refining (Australia) Pty Limited v A J Mayr Engineering Pty Limited [2006] NSWSC 94

HEARING DATE(S): 15 February 2006

JUDGMENT DATE :
6 March 2006

JUDGMENT OF: Bergin J

DECISION: The Summons is dismissed. The plaintiff is to pay the defendant's costs of proceedings.

CATCHWORDS: [ADMINISTRATIVE LAW] - Whether a determination should be declared void because the adjudicator failed to comply with basic and essential requirements of the Building and Construction Industry Security of Payment Act 1999 (NSW) in determining that the plaintiff pay $11,137,998.30 to the defendant. - [ADJUDICATOR PRACTICE] - Whether, as a matter of practice, adjudicators should include statements in determinations to the effect that it is not to be assumed that matters not mentioned in the determination have not been taken into account. - [STATUTORY CONSTRUCTION] - Whether progress claims for the provision of related goods and services in Victoria in respect of construction work in New South Wales are able to be made under the Building and Construction Industry Security of Payment Act 1999 (NSW).

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999 (NSW)
Building and Construction Industry Security of Payment Act 2002 (Vic)
Interpretation Act 1987 (NSW)

CASES CITED: Brodyn Pty Ltd t/as Time Cost and Quality v Davenport & Anor (2004) 61 NSWLR 421
Coordinated Constructions Co Pty Limited v J M Hargreaves (NSW) Pty Limited (2005) 21 BCL 390
Goliath Portland Cement Co Limited v Bengtell and Anor (1994) 33 NSWLR 414
Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404
Multiplex Constructions Pty Limited v Luikens & Anor [2003] NSWSC 1140
Pacific General Securities v Soliman & Sons Pty Ltd [2006] NSWSC 13
R v PLV (2001) 51 NSWLR 736
R v Young (1999) 46 NSWLR 681
Wentworth Securities Ltd v Jones [1980] AC 74

PARTIES: Shell Refining (Australia) Pty Limited ACN 004 303 842 (Plaintiff)
A J Mayr Engineering Pty Limited ABN 86 095 864 985 (Defendant)

FILE NUMBER(S): SC 55005/2006

COUNSEL: M Christie (Plaintiff)
MG Rudge SC, F Hicks (Defendant)

SOLICITORS: Freehills (Plaintiff)
Mallesons Stephen Jaques (Defendant)

- 39 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

BERGIN J

6 MARCH 2006

55005/06 SHELL REFINING (AUSTRALIA) PTY LIMITED V A J MAYR ENGINEERING PTY LIMITED

JUDGMENT

1 These are proceedings to have declared null and void an adjudicator’s determination made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act). The plaintiff, Shell Refining (Australia) Pty Limited, and the defendant, A J Mayr Engineering Pty Limited, are parties to a construction contract (the Contract) pursuant to which the defendant agreed to fabricate and pre-assemble modules for use in the plaintiff’s refineries in Clyde, New South Wales and Geelong, Victoria. The plaintiff appointed Aker Kvaerner Australia (AKA) to administer the Contract.

2 The defendant served on the plaintiff a payment claim, dated 30 November 2005, under the Act in the amount of $11,137,998.30 which included items E5.1 to E5.7, identified as claims for “Reimbursement…

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: [2006] NSWSC 94
Decision Date: 6 March 2006

CaseChat Overview and Summary

Shell Refining (Australia) Pty Ltd sought to have a determination by an adjudicator voided, which required it to pay AJ Mayr Engineering Pty Ltd $11,137,998.30. The dispute arose under the Building and Construction Industry Security of Payment Act 1999 (NSW). The Federal Court of Australia was tasked with determining whether the adjudicator's failure to comply with certain statutory requirements rendered the determination void, whether adjudicators should include specific statements in their determinations, and whether the progress claims for goods and services provided in Victoria for construction work in New South Wales could be made under the Act.

The central legal issues included whether the adjudicator's failure to comply with the essential requirements of the Act invalidated the determination, whether adjudicators should include disclaimers in their determinations regarding the consideration of matters not mentioned, and whether progress claims for work done in Victoria but related to construction work in New South Wales were permissible under the Act. The court had to consider the statutory language, the role of adjudicators, and the nature of the work in question to address these issues.

The court found that the adjudicator's determination should be declared void due to the failure to comply with the Act's basic and essential requirements. It was determined that while the adjudicator's failure did not necessarily render the entire determination void, the lack of compliance was significant enough to invalidate the determination. The court also held that adjudicators should include statements in their determinations to clarify that the omission of certain matters does not imply they were not considered. Lastly, the court ruled that progress claims for work done in Victoria, which related to construction work in New South Wales, could be made under the Act, provided they met the statutory criteria.

The court ordered that the determination be declared void and remitted the matter back to the adjudicator for reconsideration in light of the court's findings. The court's decision highlighted the importance of strict adherence to statutory requirements and the need for clear communication in adjudicators' determinations.

Orders