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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 13 November 2015 68 min read

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST

S ECI 2015 000325

SSC PLENTY ROAD PTY LTD (ACN 124 197 128)	Plaintiff
v
CONSTRUCTION ENGINEERING (AUST) PTY LTD (ACN 392 781 199) & Anor	Defendants

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JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	17 SEPTEMBER 2015
DATE OF JUDGMENT:	13 NOVEMBER 2015
CASE MAY BE CITED AS:	SSC PLENTY ROAD v CONSTRUCTION ENGINEERING (AUST)
MEDIUM NEUTRAL CITATION:	[2015] VSC 631 1^st Revision 17 November 2015

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BUILDING CONTRACTS – Building and Construction Industry Security of Payment Act 2002 (Vic) (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 – 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 (Vic) (the “Act”) – Whether error of law amounting to jurisdictional error – Robust approach to be taken to review of adjudicator’s valuation – Standard of adjudicator’s reasons towards the lower end of the scale - Certiorari to quash the decision allowed in part.
STATUTORY INTERPRETATION – Contemporary maxim “Laws must not command the impossible”.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr J A F Twigg QC with Dr K Weston-Scheuber	Baker & McKenzie
For the First Defendant	Mr T J Margetts QC	Piper Alderman

HIS HONOUR:

This is an application by the Plaintiff, SSC Plenty Road Pty Ltd (“Plenty Road”) for judicial review of an adjudication determination made by the Second Defendant (the “Adjudicator”) on 21 August 2015 (the “Adjudication Determination”) under the Building and Construction Industry Security of Payment Act 2002 (Vic) (the “Act”).

The Adjudicator agreed to be bound by the decision of the Court, and took no part in the proceeding.

By a construction contract entered into on or about 20 December 2013, Plenty Road as the principal engaged the Defendant, 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 “Construction Contract”).

Trevor Main & Associates Pty Ltd was appointed the superintendent under the Construction Contract (the “Superintendent”).

The Adjudication Determination arises from a payment claim made by Construction Engineering as the claimant purportedly under the Act, by a claim dated 1 July 2015 (the “Payment Claim”). The Payment Claim was served as Progress Claim No 19 in the course of the Project. The amount of the Payment Claim was $4,460,815.06 (including GST).

Plenty Road seeks relief by way of certiorari on the ground of jurisdictional error which it says is…

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: [2015] VSC 631
Decision Date: 13 NOVEMBER 2015

CaseChat Overview and Summary

SSC Plenty Road Pty Ltd sued Construction Engineering (Aust) Pty Ltd in the Supreme Court of Victoria, seeking an order to quash a decision of an adjudicator appointed under the Building and Construction Industry Security of Payment Act 2002 (Vic) (the “Act”). The dispute arose from a construction contract between the parties, with SSC Plenty Road seeking payment under the Act for work performed. Construction Engineering argued that the adjudicator’s decision was flawed, and SSC Plenty Road’s claim should be dismissed. The primary legal issues before the court were whether a contractual provision mandating mediation was a “method of resolving disputes” under the Act, whether the adjudicator valued the work in accordance with the Act, and whether the contract terms were inconsistent with the Act.

The court found that the contractual provision requiring mediation was not a “method of resolving disputes” under the Act, as it did not provide a process for resolving disputes about payment claims. The court also found that the adjudicator’s valuation was flawed, as it did not consider all the evidence before them. However, the court held that the adjudicator’s decision was not so flawed as to be quashed, and that the terms of the construction contract were not inconsistent with the Act. The court emphasised that the adjudicator’s valuation task was to consider the evidence and make a determination as to whether payment was due, and that the adjudicator had performed this task. The court held that the standard of reasons required from an adjudicator was towards the lower end of the scale, and that a robust approach should be taken to the review of an adjudicator’s decision.

The court also held that the adjudicator’s decision should be quashed in part, as it had not considered all the evidence before them. The court found that the adjudicator had failed to consider a specific document that was relevant to the valuation of the work performed. The court held that this error amounted to a jurisdictional error, as it meant that the adjudicator had not considered all the evidence before them. The court also found that the adjudicator’s decision was flawed in that it had not considered the impact of a contractual term that required the parties to negotiate in good faith. The court held that this term was inconsistent with the Act, and that the adjudicator should have considered its impact on the valuation of the work performed. The court ordered that the adjudicator’s decision be quashed in part, and that the matter be remitted to the adjudicator for reconsideration.

Orders