Southern Cross Electrical Engineering v Steve Magill Earthmoving - [2018] NSWSC 1027

Supreme Court

New South Wales

Medium Neutral Citation: Southern Cross Electrical Engineering v Steve Magill Earthmoving [2018] NSWSC 1027
Hearing dates: 05/06/2018; further written submissions 21/06/2018
Date of orders: 05 July 2018
Decision date: 05 July 2018
Jurisdiction: Equity - Technology and Construction List
Before: McDougall J
Decision:
Summons dismissed with costs.

Catchwords: BUILDING AND CONSTRUCTION – Building and Construction Industry Security of Payment Act 1999 (NSW) – application to quash adjudicator’s determination – whether adjudicator imposed an onus of proof on plaintiff inconsistent with his statutory obligation to come to his own view on the material – whether adjudicator’s determination regarding lineal metreage unreasonable – necessary to consider adjudicator’s reasoning in light of statutory requirement to determine often difficult questions within tight timeframe – necessary to have regard to the statutory scheme which renders determination final as to payment claims but otherwise preserves all rights – impermissible to conduct merits inquiry under guise of jurisdictional reasonableness – fair reading of the adjudicator’s reasons in context demonstrates no error with regards to onus – not shown that determination was unreasonable to the extent of invalidation – summons dismissed.
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
Cases Cited: Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570
Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Avopiling (NSW) Pty Ltd v Menard Bachy Pty Ltd [2012] NSWSC 1466
Bauen Constructions v Westwood Interiors [2010] NSWSC 1359
Cockram Construction Ltd v Fulton Hogan Construction Pty Ltd [2018] NSWCA 107
Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190
Fulton Hogan Construction Pty Ltd v Cockram Construction Ltd [2018] NSWSC 264
Minister for Immigration and Citizenship v Li (2013) 249 CLR 332
Pinnacle Construction Group Pty Ltd v Dimension Joinery & Interiors Pty Ltd [2018] NSWSC 894
Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 92 ALJR 248
Richard Crookes Construction Pty Ltd v CES Projects (Aust) Pty Ltd (No 2) [2016] NSWSC 1229
SSC Plenty Road Pty Ltd v Construction Engineering (Aust) Pty Ltd [2015] VSC 631
SSC Plenty Road Pty Ltd v Construction Engineering (Aust) Pty Ltd [2016] VSCA 119
Suprima Bakeries Pty Ltd v Australian Weighing Equipment Pty Ltd [2016] NSWSC 998
Category: Principal judgment
Parties: Southern Cross Electrical Engineering Limited (Plaintiff)
Steve Magill Earthmoving Pty Limited (First Defendant)
Adrian Ashman (Second Defendant)
Adjudicate Today Pty Limited (Third Defendant)
Representation:
Counsel:
S Robertson / M Keene (Plaintiff)
D Hume (First Defendant)
Solicitors:
HWL Ebsworth Lawyers (Plaintiff)
Moray & Agnew (First Defendant)
King Lawyers (Second and Third Defendants, submitting save as to costs)

File Number(s): 2018/38597

Judgment

HIS HONOUR: This is yet another dispute over a determination of an adjudicator made pursuant to s 22(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Security of Payment Act).

Background

On about 23 May 2017, the plaintiff (Southern Cross) as contractor and the first defendant (Earthmoving) as subcontractor entered into…

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: [2018] NSWSC 1027
Decision Date: 05 July 2018

CaseChat Overview and Summary

The dispute between Southern Cross Electrical Engineering and Steve Magill Earthmoving was brought before the court under the Building and Construction Industry Security of Payment Act 1999 (NSW). Southern Cross Electrical Engineering sought to have an adjudicator’s determination quashed, arguing that the adjudicator had imposed an onus of proof on them inconsistent with his statutory obligations and that the determination regarding lineal metreage was unreasonable. The adjudicator had been appointed to resolve payment disputes under the Act, which provides a streamlined process for resolving such disputes.

The central legal issues were whether the adjudicator had correctly interpreted his statutory role and whether his determination was unreasonable. Specifically, the court had to determine whether the adjudicator’s approach to the onus of proof and the calculation of lineal metreage complied with the statutory requirements. The court had to consider the adjudicator’s reasoning within the context of the statutory scheme, which mandates that adjudicators come to their own view on the material and decide often difficult questions within tight timeframes.

The court found that a fair reading of the adjudicator’s reasons, considering the statutory context, demonstrated no error with regards to the onus of proof. The court held that it was necessary to have regard to the statutory scheme, which renders the adjudicator’s determination final as to payment claims but preserves all other rights. It was impermissible to conduct a merits inquiry under the guise of jurisdictional reasonableness. The court concluded that the determination was not shown to be unreasonable to the extent of invalidation, and the summons to quash the determination was dismissed.

The final orders of the court dismissed the summons brought by Southern Cross Electrical Engineering to quash the adjudicator’s determination. The court affirmed the adjudicator’s decision, upholding the statutory process designed to ensure timely resolution of payment disputes in the building and construction industry.

Orders