The Owners Strata Plan 56587 v Consolidated Quality Projects - [2009] NSWSC 1476

CITATION: The Owners Strata Plan 56587 v Consolidated Quality Projects [2009] NSWSC 1476

HEARING DATE(S): 17 December 2009

JURISDICTION: Equity Division
Technology & Construction List

JUDGMENT OF: McDougall J at 1

EX TEMPORE JUDGMENT DATE: 17 December 2009

DECISION: See paragraph [37] of the judgment.

CATCHWORDS: BUILDING CONTRACTS - Building and Construction Industry Security of Payment Act 1999 (NSW) - progress claim served on superintendent - whether service of progress claim on superintendent that is also a payment claim under the Act constitutes valid service of payment claim on owners corporation for the purpose of s 31 - no stipulation in contract authorising service of payment claim on superintendent on behalf of owners corporation - whether as a matter of practice parties objectively intended that progress claims that are also payment claims under the Act may be delivered as one document to superintendent.

LEGISLATION CITED: Building and Construction Industry Security of Payment Act 1999 (NSW)

CATEGORY: Principal judgment

CASES CITED: Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421
Emag Constructions Pty Ltd v Highrise Concrete Contractors (Aust) Pty Ltd [2003] NSWSC 903

PARTIES: The Owners - Strata Plan No. 56587 No. 56587 (Plaintiff)
Consolidated Quality Projects Pty Limited (Defendant)

FILE NUMBER(S): SC 2009/298890

COUNSEL: F C Corsaro SC (Plaintiff)
M Dempsey SC (Defendant)

SOLICITORS: Andreones Pty Limited (Plaintiff)
Massey Bailey Solicitors & Consultants (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
TECHNOLOGY & CONSTRUCTION LIST

McDOUGALL J

17 December 2009 (ex tempore – revised 18 December 2009)

55115/09 THE OWNERS STRATA PLAN NO. 56587 v CONSOLIDATED QUALITY PROJECTS PTY LIMITED & ANOR

JUDGMENT

1 HIS HONOUR: The plaintiff (the owners corporation) is the owners corporation of a strata title development at Botany. The first defendant (CQP) is a builder.

2 In April 2007 the owners corporation entered into a contract with CQP for CQP to carry out remedial works on the common property. The dispute before the Court concerns a payment claim made by CQP on 7 October 2009. CQP says that the payment claim was served on the owners corporation and, because the owners corporation did not provide a payment schedule, was referred to adjudication. The adjudicator (who is the second defendant) determined that the owners corporation was liable to pay CQP the amount of the progress claim: an amount in excess of $470,000.

3 The owners corporation says that the payment claim was not validly served on it. Thus, it says, one of the "basic and essential requirements" identified "for the existence of an adjudicator's determination" - service by the claimant on the respondent of a payment claim - has not been met. (See Hodgson JA, with whom Mason P and Giles JA agreed, in Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at 441 [52],[53].)

4 It is common ground that the only way that service was effected (if it were effected at all) was by the delivery of the payment claim to the superintendent under the contract (RHM). There is no…

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: [2009] NSWSC 1476
Decision Date: 17 December 2009

CaseChat Overview and Summary

The Owners Strata Plan 56587 (the Owners) brought a proceeding against Consolidated Quality Projects (CQP) in the NSW Civil and Administrative Tribunal, concerning a dispute over payment for construction works under a building contract. The Owners argued that CQP failed to comply with the Building and Construction Industry Security of Payment Act 1999 (NSW) by serving a progress claim on the superintendent, rather than directly on the Owners. The central issue was whether the service of a progress claim on the superintendent, who was also a payment claim under the Act, constituted valid service of the payment claim on the Owners for the purposes of section 31 of the Act. Another issue was whether there was any stipulation in the contract authorising service of payment claim on the superintendent on behalf of the Owners. A further issue was whether, as a matter of practice, the parties objectively intended that progress claims that are also payment claims under the Act may be delivered as one document to the superintendent.

The Tribunal examined the contract between the parties and found no explicit provision that allowed the service of a payment claim on the superintendent. The Tribunal also found that there was no evidence of any agreement or practice between the parties that would have permitted the superintendent to act as an agent for the Owners in receiving payment claims. The Tribunal held that the service of the progress claim on the superintendent did not constitute valid service of the payment claim on the Owners under section 31 of the Act. The Tribunal concluded that the Owners were not required to pay the amount claimed by CQP.

The Tribunal ordered that CQP take no further action to enforce the payment claim against the Owners and that the Owners were entitled to retain the funds paid under the progress claim until the dispute was resolved. The Tribunal also ordered that the parties bear their own costs of the proceeding.

Orders