Tackelly No 8 Pty Ltd as trustee for Tackelly No 8 Trust v Reward Interiors Pty Ltd t/as Reward Group (No 2)

[2025] NSWSC 545

Supreme Court

New South Wales

Medium Neutral Citation:

Tackelly No 8 Pty Ltd as trustee for Tackelly No 8 Trust v Reward Interiors Pty Ltd t/as Reward Group (No 2) [2025] NSWSC 545

Hearing dates:

28 May 2025

Date of orders:

29 May 2025

Decision date:

29 May 2025

Jurisdiction:

Equity - Technology and Construction List

Before:

Peden J

Decision:

At [54]

Catchwords:

BUILDING AND CONSTRUCTION — Adjudication — Judicial review — Building and Construction Industry (Security of Payment) Act 2021 (WA) — Where plaintiff has succeeded in establishing that review adjudicator’s purported determination affected by jurisdictional error — Whether order in the nature of certiorari and/or declaration ought be made

BUILDING AND CONSTRUCTION — Contract — Bank guarantee — Injunction — Whether interim restraint preventing enforcement of original adjudicator’s determination concerning release of the bank guarantees until notice given or further order of Court ought be made

EQUITY — Equitable remedies — Injunctions — Whether interim restraint preventing release of moneys paid into trust under s 40 Building and Construction Industry (Security of Payment) Act 2021 (WA) until notice given or further order of Court ought be made

COSTS — Party/Party — Exceptions to general rule that costs follow the event — Whether judicial review of review adjudicator’s purported determination a dominant or separable issue — Whether costs of late abandonment of positive case advanced in reply ought be awarded

Legislation Cited:

Building and Construction Industry (Security of Payment) Act 2021 (WA) ss 40, 42, 58, 113

Civil Procedure Act 2005 (NSW) s 98

Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Cases Cited:

Access Training Group Ltd v Jane [2024] NSWCA 204

Carrington v Wallace (No 2) [2022] NSWSC 1306

Director of Public Prosecutions (NSW) v Kmetyk [2018] NSWCA 156

Minister for Immigration and Multicultural Affairs v MZAPC [2025] HCA 5

Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2021) 272 CLR 33

Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1

Soyo Investment Holding Pty Ltd v AL Brands Management Group Pty Ltd [2025] NSWSC 246

Tackelly No 8 Pty Ltd v Reward Interiors Pty Ltd [2025] NSWSC 300

Warne v ACN 603 541 411 Pty Ltd [2025] NSWCA 92

Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480

Category:

Consequential orders

Parties:

Tackelly No 8 Pty Ltd as trustee for Tackelly No 8 Trust (Plaintiff)
Reward Interiors Pty Ltd t/as Reward Group (First Defendant)
Max Tonkin (Second Defendant)
Adjudicate Today Pty Ltd (Third Defendant)
Resolution Institute (Fourth Defendant)
Neil Kirkpatrick (Fifth Defendant)

Representation:

Counsel:
M Christie SC and D Hume (Plaintiff)
S Robertson SC and AR Langshaw (First Defendant)

Solicitors:
Vincent Young (Plaintiff)
HWL Ebsworth (First Defendant)

File Number(s):

2025/00019382

Publication restriction:

Nil

JUDGMENT

1. On 11 April 2025, I delivered judgment in this matter: Tackelly No 8 Pty Ltd v Reward Interiors Pty Ltd [2025] NSWSC 300 (Judgment).

2. In the Judgment at [138], I directed the parties to confer and provide various agreed orders to give effect to my reasons or, if they were unable to agree, to provide the plaintiff’s proposed orders and a document setting out the matters on which the parties disagree to my Associate, which they did.

3. After the filing of evidence and submissions, an oral hearing occurred concerning the appropriate final orders.

4. These reasons explain the appropriate form of orders to give effect to the Judgment.

Purported determination of the adjudication review application

5. Tackelly seeks an order, in the nature of certiorari, quashing the purported determination of the review adjudicator.

6. An order in the nature of certiorari has the effect of removing “legal consequences, or purported legal consequences, of an exercise or purported exercise of power which has, at the date of the order, a discernible or apparent legal effect upon rights”: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1 at [28] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

7. Reward submits that no such order should be made. It contends that the review adjudicator merely expressed an “opinion as to his jurisdiction” such that there is no “purported exercise of power”.

8. I reject that submission. The review adjudicator provided to the parties a document titled “Review Adjudication Determination” dated 13 January 2025 which contained the following:

REVIEW ADJUDICATOR’S DETERMINATION

I, Neil Kirkpatrick, as the review adjudicator duly appointed pursuant to s.44(1) of the Building and Construction Industry (Security of Payment) Act 2021 (“Act”), having considered all of the submissions properly made, determine that: [citing, in a footnote, s 36(4) of the Act as the purported source of his power, even though that provision is expressed as applying to adjudicators rather than review adjudicators]

(a) the Review Application does not comply with s.42(3), the Review Application was served out of time on the Review Respondent;

(b) I do not have jurisdiction to determine the Review Application; and

(c) the Review Applicant is to bear 100% of the adjudicator’s fees and expenses, which amount to $7,920.00 including GST.

Date: 13 January 2025

9. It is clear that the review adjudicator was purporting to exercise statutory power conferred by the Building and Construction Industry (Security of Payment) Act 2021 (WA) (SOP Act) in determining whether he had jurisdiction or not. That purported determination had an “apparent legal effect”: Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480 at [25] (French CJ, Crennan, Bell, Gageler and Keane JJ).

10. In the Judgment at [112], I found that the review adjudicator’s purported determination was affected by jurisdictional error, as he erroneously concluded that he lacked jurisdiction to determine the adjudication review application. That meant that his purported determination was “lacking in legal force”: Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2021) 272 CLR 33 at [48] (Kiefel CJ, Bell, Gageler and Keane JJ). Nevertheless, I consider it remains appropriate to make an order in the nature of the certiorari to “make the position clearer”, and to also issue a declaration that the review adjudicator’s purported determination was invalid: see eg Director of Public Prosecutions (NSW) v Kmetyk [2018] NSWCA 156 at [62] (Leeming JA, Meagher JA and Sackville AJA agreeing).

Separate question

11. At the oral hearing, a disagreement emerged between the parties as to whether the separate question ordered by Stevenson J on 24 February 2025 remained on foot. The relevant order provided:

Pursuant to UCPR 28.2 and any other enabling power of the Court, the Court orders that all the questions in the proceeding, except for those raised by paragraphs 57(d) and 62 of the Plaintiff’s Technology and Construction List Statement and the First Defendant’s defence to those allegations (if and to the extent those questions ultimately arise) (Separate Questions) are to be determined separately from and prior to all other issues in the proceeding.

12. Paragraph 57(d) of the list statement contended that on the proper construction of the SOP Act, “an adjudicator commits a jurisdictional error if the adjudicator purports to require the release of a bank guarantee, but … the performance security is not due for release in accordance with the relevant construction contract (s 58(4))”.

13. Paragraph 62 of the list statement, referring to the “limitation identified in paragraph 57(d)”, contended that “the Bank Guarantees were not due for release in accordance with the Contract” as “the Contract was not discharged”, or even if it was discharged, “the Bank Guarantees were not per se due for release”.

14. In relation to s 58(4), Tackelly’s claim is that the adjudicator’s determination purporting to release the bank guarantees was affected by jurisdictional error.

15. Reward submitted that the form of the order for a separate question anticipated the possibility that there would be no utility in such a separate question. It further submitted that in fact the separate question no longer needs to be determined in light of the Judgment at [45], where I concluded that “the proper construction of s 58is that, for the adjudicator to have jurisdiction to release performance security, it is the adjudicator who must be subjectively satisfied of the requirements under that section”.

16. Reward consequently sought orders dismissing prayers 13 and 14 of the amended summons. In those orders, Tackelly sought a declaration that the original adjudicator’s determination was invalid to the extent it purported to release the bank guarantees to Reward, and an order restraining Reward from taking steps to enforce the release of those guarantees.

17. Contrary to Reward’s submission, for the following reasons, I consider that the separate question still arises for determination.

18. Paragraph [45] of the Judgment must be read in the context of the reasons as a whole. Paragraphs [46] and [49] indicated that the question of construction before the Court concerned only ss 58(1)-(3) SOP Act. Paragraph [53] then expressly recorded that “[i]t is unnecessary to determine whether, as a matter of fact and the proper construction of the contract, the performance bonds ought to have been released pursuant to s 58(4)” because that issue “has been separated for a future hearing”. The references to s 58 in paragraphs [45] and [50] cannot be read in isolation so as to extend the observations made in those paragraphs to subsection (4), in circumstances where it is clear that the Court was only construing subsections (1)-(3).

19. Even if objectively understood, the observation in paragraph [45] did extend to subsection (4), it does not follow that the separate question no longer arises. An issue may remain as to whether the adjudicator’s opinion that the performance security was “due for release in accordance with the relevant construction contract” was properly formed.

20. I will consequently not make orders dismissing prayers 13 and 14 of the amended summons at this stage.

Proposed interim restraints

21. Tackelly also seeks what it describes as “interim restraints”.

22. The first proposed restraint prevents Reward from enforcing the original adjudicator’s determination concerning the release of the bank guarantees, until Reward gives three business days’ prior notice to Tackelly or until further order of the Court.

23. The second proposed restraint prevents the Resolution Institute from dealing in or disbursing the moneys held in trust under s 40 SOP Act, until the Resolution Institute gives three business days’ prior notice to Tackelly or until further order of the Court.

24. For the reasons that follow, it is appropriate to grant the first proposed restraint in a modified form, but not the second.

Interlocutory injunctions

25. The principles governing interlocutory injunctions were discussed by Gageler CJ, Gordon, Gleeson and Jagot JJ in Minister for Immigration and Multicultural Affairs v MZAPC [2025] HCA 5 at [23]-[24]. A condition precedent for such relief is that there is “sufficient colour of right to the final relief, in aid of which interlocutory relief is sought”. The “usual description of the sufficiency of that colour of right” is the existence of a serious question to be tried or a prima facie case.

26. The inquiry then turns to “whether the balance of convenience, and questions of hardship and related factors, warrant the grant of an interlocutory injunction”: see Soyo Investment Holding Pty Ltd v AL Brands Management Group Pty Ltd [2025] NSWSC 246 at [24]-[28] (Peden J) and authorities there cited.

27. The first restraint can be characterised as being in aid of the final relief which Tackelly seeks in respect of the original adjudicator’s determination. In particular, Tackelly contends that the adjudicator’s determination was affected by jurisdictional error because the performance securities that he ordered to be released were not “due for release in accordance with the relevant construction contract”: s 58(4) SOP Act. As noted above, this issue was separated on 24 February 2025 by Stevenson J for later hearing and has not yet been dealt with by the Court. That issue constitutes a serious question to be tried.

28. The balance of convenience favours the grant of Tackelly’s first proposed restraint to protect the status quo, ensuring that Tackelly does not lose the benefit of the bank guarantees in the event that it successful in challenging the validity of the adjudicator’s determination.

29. However, the form of order sought by Tackelly, which purports to record a non-voluntary undertaking by Reward, is not appropriate. Instead, the order should be expressed in prohibitory terms.

30. As for the second proposed restraint, the balance of convenience does not favour granting the injunction against the Resolution Institute in circumstances where there is no evidence that it intends or has threatened to dissipate the trust moneys. I refused to grant a final injunction against the Resolution Institute in the Judgment at [134]. I do not consider that the “prior notice” stipulation changes the position.

Relevance of Calderbank offers

31. Reward seeks an order for Tackelly to pay its costs on an ordinary basis up to and including 5 February 2025, and on an indemnity basis from 6 or 7 February 2025. The alleged basis for an indemnity costs order is Tackelly’s unreasonable failure to accept Calderbank offers made by Reward on 6 February 2025.

Reward’s offers

32. On 31 January 2025, Reward’s solicitors sent Tackelly’s solicitors proposed orders for the next steps in these proceedings. On 3 February 2025, in reply, Tackelly’s solicitors sent a Calderbank offer to Reward’s solicitors.

33. On 6 February 2025 at 2:41pm, Reward’s solicitors responded to the 3 February offer with a counter-offer to settle the proceedings (Initial Offer):

3. … in order to avoid time and cost to all parties, and to the Court, of having this issue determined in the Supreme Court, we are instructed to offer to consent to the following orders on the basis of the mutual undertakings set out below:

(a) a declaration that Tackelly complied with section 42(3) of the Building and Construction Industry (Security of Payment) Act 2021 (WA);

(b) an order that the Review Determination of the Fifth Defendant dated 2 December 2024 be quashed;

(c) an order that:

(i) the Review Application, comprising the documents provided to the Resolution Institute by Tackelly on 2 December 2024; and

(ii) the Review Response, comprising the documents issued by Reward on 16 December 2024,

be remitted to the Review Adjudicator for review in accordance with the relevant provisions of the Building and Construction Industry (Security of Payment) Act 2021 (WA) (the Remitted Review);

(d) an order that the period within which the Remitted Review is to be determined be taken to commence on the day the Review Adjudicator is notified of these orders;

(e) note the undertaking of the Plaintiff and the First Defendant, within no more than 2 business days of receiving notification that the Remitted Review has been completed, to pay the costs of the Review Adjudicator in such proportions as determined by the Review Adjudicator.

(f) on the Plaintiff giving the usual undertaking as to damages and undertaking to the Court that it will not have recourse to Bank Guarantee No. 922434817 or Bank Guarantee No. 922381671 (the Bank Guarantees), the First Defendant undertakes to take no steps to enforce the determination, or purported determination, of the Second Defendant that the Bank Guarantees be released to the Plaintiff, until the Review Application is determined in accordance with order (c) above;

(g) on the Plaintiff giving the usual undertaking as to damages, an order restraining the Fourth Defendant from dealing in or otherwise disbursing the amount it holds in trust under section 40 of the Building and Construction Industry (Security of Payment) Act 2021 (WA) in connection with the Review Application, until the Review Application is determined in accordance with order (c) above; and

(h) order that each party is to pay its own costs of the proceedings to date. [emphasis omitted]

34. The offer was expressed as being open for acceptance until 5pm that afternoon.

35. At 4:46pm on 6 February, Tackelly’s solicitors sent a counter-proposal to Reward’s solicitors for acceptance by 7pm that day. Tackelly agreed to Reward’s proposed orders (a), (b), (d), (e), (g) and (h), but proposed:

1. The deletion of proposed order (c)(ii);

2. The addition of the words, “until further order of the Court”, at the end of proposed order (f); and

3. The addition of a further order providing that “upon release of the determination of the Remitted Review (as defined in … [(c)]), the matter be relisted for further directions”.

36. At 6:40pm on 6 February, Reward’s solicitors sent a further counter-offer to Tackelly for acceptance by 9pm that day (Revised Offer). Reward agreed to the first of Tackelly’s proposed changes (concerning order (c)(ii)) but rejected the second and third changes (concerning order (f) and the new proposed order). Tackelly also proposed “the addition of an order that the balance of the proceeding be dismissed”.

37. At 8:45pm on 6 February, Tackelly’s solicitors replied stating that they were “unable to take instructions and revert in the extremely short timeframe stated” in the 6:40pm Calderbank offer. They stated that they would reply to the proposal “in due course”.

38. The following day, on 7 February 2025, Reward’s solicitors extended the time for acceptance of its Revised Offer until 5pm that day.

39. On 10 February 2025 at 12:47pm, Reward’s solicitors asked for a response to the Revised Offer or confirmation as to when Tackelly intended to provide a reply. At 4:04pm, Tackelly’s solicitors stated that they were taking instructions and would provide a reply but could not “confirm the exact time for our reply”.

40. On 11 February 2025 at 10:16am, Reward’s solicitors extended the time for acceptance of the Revised Offer until midnight that day. The offer was ultimately not accepted by Tackelly.

Consideration

41. The Revised Offer made on 6 February 2025 was intended to settle the whole of these proceedings. It included a proposed order that “the balance of the proceeding be dismissed”. That would include dismissal of the issue separated on 24 February 2025 by Stevenson J for later hearing concerning whether the performance bonds ought to have been released by the adjudicator pursuant to s 58(4) SOP Act. As already noted, that issue has not yet been determined and remains on foot.

42. Consequently, it cannot presently be said that the Revised Offer is “more favourable than the ultimate judgment’: Warne v ACN 603 541 411 Pty Ltd [2025] NSWCA 92 at [29] (Ward ACJ, Mitchelmore and Kirk JJA). If the separate question had already been resolved in favour of Reward, then there might be an argument that Tackelly did not obtain a more favourable outcome compared to the Revised Offer. However, at present, the Revised Offer is not capable of justifying an indemnity costs order against Tackelly.

Costs determination

43. It is consequently appropriate to determine the costs following the Judgment in accordance with the usual principles.

44. The principles governing the exercise of the Court’s discretion as to costs under s 98 Civil Procedure Act 2005 (NSW) and r 42.1 Uniform Civil Procedure Rules 2005 (NSW) where a party is only partly successful are well known. They were recently summarised in Access Training Group Ltd v Jane [2024] NSWCA 204 (Access) at [182]-[192] (Ward P, Payne JA agreeing) and [217]-[220] (Basten AJA).

45. Tackelly submits that “Reward won on the bank guarantees issue” whilst “Tackelly won on the Review Determination issue” and therefore, each party should bear its own costs. Tackelly also suggested that there was a “reasonable argument” that it had “in fact won the dominant issue in the proceedings”, but submitted an order that each party bear their own costs was appropriate.

43. Tackelly has been unsuccessful so far in establishing that the original adjudication determination, which ordered the release of various bank guarantees, was affected by jurisdictional error: Judgment at [52]. Nor was Tackelly successful in obtaining an injunction against the Resolution Institute, preventing it from releasing moneys paid into trust under s 40 SOP Act: Judgment at [134].

44. However, Tackelly was successful in establishing that the review adjudicator fell into jurisdictional error by determining that he did not have jurisdiction to determine the adjudication review application: Judgment at [112].

45. I consider that this issue was “clearly dominant or separable”. It involved judicial review of the review adjudicator’s purported determination, as distinct from the original adjudicator’s determination. And its determination took up the bulk of the hearing time, requiring the Court to:

1. Construe ss 42 and 113 SOP Act, where there was no existing authority concerning the interpretation of these provisions: see Judgment at [54]-[73];

2. Make a finding as to whether Reward was in fact served with the adjudication review application: see Judgment at [74]-[96];

3. Determine whether compliance with s 42(3) SOP Act was a precondition for the review adjudicator’s jurisdiction to be enlivened (see Judgment at [97]-[113]), in circumstances where “[d]ifferent approaches … have been taken in different jurisdictions concerning similar provisions about the time for service of an adjudication application”: Judgment at [98]; and

4. Consider what relief ought be granted: Judgment at [114]-[124].

49. The judicial review of the review adjudicator’s purported determination should consequently be treated as a separate “event” for the purposes of costs.

50. Reward principally relied on its Calderbank offer in respect of costs. However, Reward also contended that if the Court did not accept that an indemnity costs order ought be made in its favour, Tackelly should pay Reward’s costs of Tackelly’s late abandonment of the positive case advanced in its reply, namely that Tackelly had abused the processes of the SOP Act and had engaged in unconscionable conduct.

51. In Carrington v Wallace (No 2) [2022] NSWSC 1306 at [91], Ward P considered that a claim for costs incurred in defending claims that were brought but subsequently abandoned “calls to mind (although … is not on all fours with) the issue of whether there should be an apportionment of costs across particular issues where there have been multiple issues in a proceeding”.

52. “[W]here there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory”: Access at [179]. Here, I consider that Tackelly’s success entitles it to approximately 50% of the costs incurred in respect of the questions determined in the Judgment. That leaves Reward with an entitlement to the remaining 50%, including by reason of the abandoned claims.

53. As a consequence, the appropriate order is for Tackelly and Reward to each bear its own costs.

Orders

54. The Court makes the following orders:

1. An order, in the nature of certiorari, quashing the Review Determination of the fifth defendant dated 13 January 2025.

2. A declaration that the Review Determination is invalid.

3. On the conditions that:

1. the plaintiff gives the usual undertaking as to damages; and

2. the plaintiff undertakes to the Court that it will not until further order of the Court have recourse to Bank Guarantee No.922434817 or Bank Guarantee No. 922381671,

the first defendant must not take any steps to enforce the purported determination of the second defendant that Bank Guarantee No. 922434817 or Bank Guarantee No. 922381671 be released to the first defendant until the earlier of:

3. the first defendant giving three business days’ prior notice to the plaintiff; or

4. further order of the Court.

4. Each party is to bear its own costs in respect of the questions determined by the Court in Tackelly No 8 Pty Ltd v Reward Interiors Pty Ltd [2025] NSWSC 300.

5. Lists the matter for directions on 20 June 2025.

Decision last updated: 29 May 2025