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SSC Plenty Road Pty Ltd v Construction Engineering (Aust) Pty Ltd

SSC Plenty Road Pty Ltd v Construction Engineering (Aust) Pty Ltd

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Case Copied 26 May 2016 59 min read

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

S APCI 2016 0011

SSC PLENTY ROAD PTY LTD (ACN 124 197 128)

Applicant

CONSTRUCTION ENGINEERING (AUST) PTY LTD (ACN 392 781 199)

and

JOHN McMULLAN (in his capacity as adjudicator appointed under s 20(1) of the Building and Construction Industry Security of Payment Act 2002 (Vic))

First Respondent

Second Respondent

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JUDGES:	SANTAMARIA, BEACH and McLEISH JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	21 April 2016
DATE OF JUDGMENT:	26 May 2016
MEDIUM NEUTRAL CITATION:	[2016] VSCA 119
JUDGMENT APPEALED FROM:	SSC Plenty Road v Construction Engineering (Aust) Pty Ltd [2015] VSC 631 (Vickery J)

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BUILDING CONTRACTS – Building and Construction Industry Security of Payment Act 2002 (‘the Act’) – Whether a contractual provision in the relevant construction contract that mandates attendance of the parties at mediation is a ‘method of resolving disputes’ for the purposes of s 10A(3)(d)(ii) of the Act – Purpose of the Act considered – Whether adjudicator valued work in accordance with the Act – Valuation task of adjudicator under the Act considered – Whether terms of construction contract void under s 48 of the Act for inconsistency with the Act.

ADMINISTRATIVE LAW – Judicial review – Determination of an adjudicator appointed under the Building and Construction Industry Security of Payment Act 2002 – Whether error of law amounting to jurisdictional error – Whether adjudicator is bound to adopt pricing by the superintendent.

STATUTORY INTERPRETATION – Construction of legislation to be borne out by its context – CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384.

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APPEARANCES:	Counsel	Solicitors
For the applicant	Mr P Solomon QC with Mr N Wood	Baker & McKenzie
For the first respondent	Mr T Margetts QC with Mr L Connolly	Piper Alderman
For the second respondent	No appearance

SANTAMARIA JA
BEACH JA
MCLEISH JA:

Introduction

In the proceeding below, SSC Plenty Road Pty Ltd (‘SSC’) applied for judicial review of an adjudication determination made by the second respondent (‘the adjudicator’) on 21 August 2015 (‘the adjudication determination’) under the Building and Construction Industry Security of Payment Act 2002 (‘the Act’).[1]
[1]The second respondent filed a submitting appearance.

The adjudication determination arose out of a construction contract entered into on or about 20 December 2013 under which SSC, as the principal, engaged Construction Engineering (Aust) Pty Ltd (‘Construction Engineering’) as the designer and builder, to design and construct a shopping centre at 850 Plenty Road, Reservoir in Victoria (‘the Project’), for the sum of $35,554,985 (plus GST) (‘the contract’).

On 1 July 2015, Construction Engineering served a payment claim on SSC under s 14 of the Act for a ‘progress payment’ in the amount of $4,460,815.06. On 14 July 2015, SSC responded by providing a payment schedule under s 15 which indicated that it proposed to pay $967,865.02. Construction Engineering applied under s 18 of the Act for adjudication of its claim.

On 29 July 2015, Construction Engineering served on SSC an adjudication application under s 18…

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: [2016] VSCA 119
Decision Date: 26 May 2016

CaseChat Overview and Summary

SSC Plenty Road Pty Ltd brought proceedings against Construction Engineering (Aust) Pty Ltd in the Supreme Court of Victoria, seeking a declaration that an adjudication determination made by an adjudicator was void. The dispute arose from an adjudication under the Building and Construction Industry Security of Payment Act 2002, where the adjudicator determined that SSC was entitled to payment of an amount claimed in a payment claim. The primary issues for the court were whether the adjudicator's decision was made in error of law, and if a contractual requirement for mediation prior to adjudication was inconsistent with the statutory scheme of the Act.

The court considered whether the adjudicator was bound to adopt the pricing by the superintendent as the court found that the adjudicator did not consider the pricing provided by the superintendent. The court found that the adjudicator was not bound to adopt the superintendent’s pricing, and the adjudicator was entitled to make an independent assessment of the evidence and determine the amount to be paid. The court also considered the purpose of the Act, which is to ensure that a claimant receives a prompt and fair determination of the disputed amount. The court found that the adjudicator had valued the work in accordance with the Act, and the adjudicator’s determination was not an error of law.

The court further considered whether the contractual requirement for mediation was inconsistent with the Act. The court found that the Act does not preclude the parties from agreeing to a method of resolving disputes, and the requirement for mediation did not amount to an inconsistency with the Act. The court also found that the terms of the construction contract were not void under section 48 of the Act for inconsistency with the Act.

The court held that the adjudicator's determination was not an error of law and was not void. The court dismissed the proceedings brought by SSC Plenty Road Pty Ltd.

Orders