Siemens v TolcoTolco v Siemens - [2007] NSWSC 257

CITATION: Siemens v Tolco;Tolco v Siemens [2007] NSWSC 257

HEARING DATE(S): 15 February 2007

JUDGMENT DATE :
4 April 2007

JURISDICTION: Equity Division

JUDGMENT OF: Associate Justice Macready at 1

CATCHWORDS: Administrative Law. Judicial review. Building & Construction Industry Security of Payment Act 1999 (NSW). Whether determination by an adjudicator was a bona fide exercise of power or a denial of natural justice. Held no consideration of submission and determination set aside.

PARTIES: Siemens Limited v Tolco Pty Limited & Anor
Tolco Pty Limited & Anor v Siemens Limited

FILE NUMBER(S): SC 55082/06; 55001/07

COUNSEL: Mr M Christie & Mr MS White for Siemens
Mr WG Muddle for Tolco

SOLICITORS: Baker & McKenzie for Siemens
Church & Grace for Tolco

- 1 -

SUPREME COURT
NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY AND CONSTRUCTION LIST

ASSOCIATE JUSTICE MACREADY

Wednesday 4 April 2007

55082/06 - SIEMENS LIMITED v TOLCO PTY LIMITED & ANOR
55001/07 - TOLCO PTY LIMITED & ANOR v SIEMENS LIMITED

JUDGMENT

1 His Honour: The proceedings 55082/06 concern an adjudication determination by the second defendant (“the adjudicator”) pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (“the Act”) arising out of a contract between the plaintiff (“Siemens”) and the first defendant (“Tolco”). The contract was for Tolco to carry out construction work at the Westvamp power generation plant located at the West Cliff Colliery, in Appin, New South Wales (“the contract”).

2 On 21 September 2006 Tolco served a payment claim upon Siemens pursuant to s13 the Act in the sum of $842,054.77. On 5 October 2006 Siemens served a payment schedule pursuant to s14 of the Act in which Siemens stated that the amount of the payment, which it proposed to make, was nil.

3 On 19 October 2006, Tolco served its adjudication application (pursuant to section 17 of the Act) upon the authorised nominating authority. On 27 October 2006 Siemens served its adjudication response on the adjudicator.

4 The adjudicator forwarded his adjudication determination by facsimile on 8 November 2006. The adjudicated amount was $306,851.76. Thereafter the adjudication was registered as a judgment in the District Court.

5 There are two proceedings before me which I have heard together. In proceedings 55082 of 2006 in its amended summons, Siemens seek a declaration that the adjudication determination is void.

6 Siemens also seeks an order in the nature of certiorari pursuant to s 69 of the Supreme Court Act 1970 (NSW) quashing the determination. Siemens acknowledged that on the basis of the Court of Appeal’s decision in Brodyn Pty Ltd (t/as Time Cost & Quality) v Davenport (2004) 61 NSWLR 421, such relief is unavailable. Accordingly I was not requested to deal with this claim.

7 Proceedings 55001 of 2007 concern the judgment obtained in the District Court following the adjudication. In orders made by Bergin J on 11 December 2006 those proceedings were transferred to the Supreme Court and are now proceedings 55001 of 2007. Under her orders the adjudicated amount…

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: [2007] NSWSC 257
Decision Date: 4 April 2007

CaseChat Overview and Summary

The case of Siemens v TolcoTolco v Siemens was heard in the Supreme Court of New South Wales. Siemens sought to set aside an adjudicator's determination under the Building and Construction Industry Security of Payment Act 1999 (NSW) on the grounds that it was a denial of natural justice and not a bona fide exercise of power. Tolco, in turn, argued that the adjudicator's determination should be upheld as it was a fair and proper exercise of the adjudicator's power.

The central legal issue in this case was whether the adjudicator's determination was a legitimate exercise of their power under the Security of Payment Act, or if it constituted a denial of natural justice due to the failure to consider one of the submissions made by Siemens. The court had to examine the process followed by the adjudicator and determine if there was a fundamental procedural error that invalidated the determination.

The Supreme Court held that the adjudicator's determination was not a bona fide exercise of power because it failed to consider one of Siemens' submissions. The court found that this omission constituted a denial of natural justice, as it deprived Siemens of the opportunity to properly respond to that submission. Consequently, the determination was set aside. The court emphasized the importance of following proper procedures and considering all submissions when making determinations under the Security of Payment Act.

As a result of the court's decision, the adjudicator's determination was set aside, and the matter was remitted to a new adjudicator for reconsideration in accordance with the principles of natural justice.

Orders