Van Ek Contracting Pty Ltd v Roads Corporation - [2007] VSC 336

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
BUILDING CASES LIST

No. 5792 of 2007

VAN EK CONTRACTING PTY LTD	Plaintiff
v
ROADS CORPORATION	Defendant

---

JUDGE:	HABERSBERGER J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	7 JUNE 2007
DATE OF JUDGMENT:	12 SEPTEMBER 2007
CASE MAY BE CITED AS:	VAN EK CONTRACTING PTY LTD v ROADS CORPORATION
MEDIUM NEUTRAL CITATION:	[2007] VSC 336

---

Contract – Non-payment of adjudicated amount determined under Building and Construction Industry Security of Payment Act 2002 – Security given by defendant in accordance with s.25(4) of the Act - Whether contractual provision concerning mediation and arbitration meant that defendant had commenced a proceeding within the meaning of s.25(2) of the Act – Summary judgment application unsuccessful.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C Scerri QC, with Mr N Hopkins	Clayton Utz
For the Defendant	Mr J Digby QC, with Mr R Andrew	Phillips Fox

HIS HONOUR:

By a summons filed on 3 May 2007, the plaintiff, Van Ek Contracting Pty Ltd (“VEC”), applied for summary judgment against the defendant, Roads Corporation (trading as VicRoads) (“VicRoads”), in the sum of $1,149,506.65 together with interest and costs. VEC’s claim was made pursuant to the provisions of the Building and Construction Industry Security of Payment Act 2002 (“the Act”). The application was supported by two affidavits sworn on 2 and 28 May 2007 respectively by Cornelis Van Ek, the managing director of VEC. In opposition to the application, VicRoads relied on two affidavits sworn on 21 and 29 May 2007 respectively by Rex Atkins, the manager of the Contract Services Department of VicRoads.

At the end of the hearing, in order that the parties knew where they stood, I informed them that I had concluded that the summary judgment application should fail and that I would give written reasons at a later date. I now publish my reasons for reaching that conclusion.

Whilst a large number of issues were raised by VicRoads’ defence and Mr Atkins’ affidavits, in the end there were only two issues argued by VicRoads in opposition to the summary judgment application. They were:

(a)whether VicRoads had, within the meaning of s.25(2) of the Act, “commenced proceedings” against VEC; and
(b)whether the outcome of the adjudication determination on which the application was based was so flawed that it should be regarded as invalid or not bona fide.

The parties agreed that should I find in favour of VicRoads on the first issue, which I have, it was not necessary to consider the second issue. I therefore propose to say nothing more about the second issue.

In the circumstances, the relevant facts can be simply stated. On or about 15 September 2004, VEC entered into a contract with VicRoads (“the Contract”) under which VEC agreed to carry out certain rehabilitation work to the Bethanga Bridge over Lake Hume on the border between Victoria and New South Wales. Part of that work was to remove the existing paint from…

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.

Keep reading for free

Create a free CaseChat account to read Van Ek Contracting Pty Ltd v Roads Corporation and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2007] VSC 336
Decision Date: 12 September 2007

CaseChat Overview and Summary

Van Ek Contracting Pty Ltd brought proceedings against the Roads Corporation in the Supreme Court of Victoria, seeking payment of an amount determined by an adjudicator under the Building and Construction Industry Security of Payment Act 2002. The dispute arose from a contract for the construction of a bridge, where Van Ek Contracting claimed that the Roads Corporation had failed to pay the adjudicated amount. The Roads Corporation defended the claim on the basis that it had given security in accordance with section 25(4) of the Act, and that the contractual provisions concerning mediation and arbitration meant it had commenced a proceeding within the meaning of section 25(2) of the Act.

The central legal issue before the court was whether the contractual provisions concerning mediation and arbitration constituted a proceeding within the meaning of section 25(2) of the Act. The court had to determine if the Roads Corporation's decision to engage in mediation and arbitration under the contract amounted to the commencement of a proceeding that would entitle it to give security under section 25(4) of the Act. Additionally, the court needed to consider whether the Roads Corporation was entitled to summary judgment on the basis that it had given security as required by the Act.

The court held that the contractual provisions concerning mediation and arbitration did not constitute a proceeding within the meaning of section 25(2) of the Act. The court found that the provision for mediation was not a proceeding as it did not involve the determination of a dispute, and the provision for arbitration was not a proceeding until an arbitrator had been appointed. Consequently, the Roads Corporation had not commenced a proceeding under the Act and was not entitled to give security. The court dismissed the Roads Corporation's application for summary judgment, finding that there were genuine issues for trial concerning the merits of Van Ek Contracting's claim.

The court's decision means that the Roads Corporation is liable to pay the adjudicated amount to Van Ek Contracting. The court did not make any specific orders in the judgment, but it is likely that Van Ek Contracting will seek an order for payment of the adjudicated amount, plus interest and costs. The case highlights the importance of ensuring that security is given in accordance with the provisions of the Act and that any contractual provisions concerning dispute resolution are carefully considered in light of the statutory scheme.

Orders