Vcon v Oliver Hume - [2020] VSC 767

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2020 02381

VCON PTY LTD (ACN 054 559 429)	Plaintiff
v
OLIVER HUME PROPERTY FUNDS (ROYAL PARADE) PARKVILLE PTY LTD (ACN 168 808 857)	First Defendant
and
JOHN O’BRIEN (in his capacity as adjudicator appointed under s 20(1) of the Building and Construction Industry Security of Payment Act 2002 (Vic))	Second Defendant

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JUDGE:	Stynes J
WHERE HELD:	Melbourne
DATE OF HEARING:	13 October 2020
DATE OF JUDGMENT:	18 November 2020
CASE MAY BE CITED AS:	VCON v Oliver Hume & Anor
MEDIUM NEUTRAL CITATION:	[2020] VSC 767

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BUILDING CONTRACTS — Trial — Building and Construction Industry Security of Payment Act 2002 (Vic) — Adjudication conducted under Part 3 Division 2 of the Act — Whether properly characterised, the payment claim is for contractual entitlements or is an attempt to recoup liquidated damages — Whether First Adjudication Determination created an issue estoppel that precluded the first defendant from relying on the earlier deductions of liquidated damages — Whether drawing down of two bank guarantees reduced the amount of the progress payment to which the plaintiff was entitled — Whether the first defendant’s contractual entitlement to enforce the bank guarantees operated to exclude, modify or restrict the operation of the Act in a manner prohibited by s 48 of the Act — Whether the claim is for an excluded amount — Building and Construction Industry Security of Payment Act 2002 (Vic) ss 10, 10B, 14(3), 15(2), 21, 23, 47 and 48 — Seabay Properties Pty Ltd v Galvin Constructions Pty Ltd [2011] VSC 183, applied — Shape Australia Pty Ltd v Nuance Group (Aust) Pty Ltd [2018] VSC 808, applied — Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190, applied — Blair & Perpetual Trustee Co Ltd v Curran (1939) 62 CLR 464, applied — Fabtech v Laing O’Rourke Australia Construction Pty Ltd [2015] FCA 1371, applied.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Roberts QC Ms C Symons	Moray & Agnew Lawyers
For the First Defendant	Mr M Robins QC Mr A Morrison	Mills Oakley Lawyers

HER HONOUR:

INTRODUCTION

In August 2017, the plaintiff as contractor and the first defendant as principal, entered into a contract for the construction of four blocks of townhouses located at 535–541 Royal Parade, Parkville (the Contract).[1]
[1]Exhibit (AG-1) to Affidavit of A Georgalis sworn 29 May 2020 at 94–207 (Tab 1) of the Court Book.

On 10 January 2020, the first defendant made a demand on two bank guarantees that had been provided by the plaintiff under the Contract on account of an asserted entitlement to liquidated damages.[2]
[2]Exhibit to Affidavit of A Tuck sworn 27 July 2019 at 804–5 (Tab 8) of the Court Book.

On 6 February 2020, the plaintiff issued Payment Claim 26 under the Contract which included a claim for $889,407, over and above its…

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.

Continue reading Vcon v Oliver Hume

Details

AGLC: Vcon v Oliver Hume [2020] VSC 767
Case: [2020] VSC 767
Decision Date: 18 November 2020

CaseChat Overview and Summary

The case of Vcon v Oliver Hume was heard by the Supreme Court of Victoria. The plaintiff, Vcon, sought to recover progress payments owed under a building contract. The defendant, Oliver Hume, a principal in the contracting company, argued that Vcon's claim was, in fact, an attempt to recoup liquidated damages previously deducted. The court was tasked with determining whether Vcon's claim was properly characterised as a payment claim under the Building and Construction Industry Security of Payment Act 2002 (Vic), and if so, whether it was subject to any defences raised by Oliver Hume.

The primary legal issues included whether the First Adjudication Determination created an issue estoppel that precluded Oliver Hume from arguing that Vcon's claim was for liquidated damages. Another issue was whether the drawing down of two bank guarantees by Vcon reduced the amount of the progress payment to which it was entitled. Additionally, the court had to determine whether Oliver Hume's contractual entitlement to enforce the bank guarantees operated to exclude, modify or restrict the operation of the Act in a manner prohibited by section 48 of the Act. Finally, the court needed to decide if Vcon's claim was for an amount that was excluded under the Act.

The court found that the First Adjudication Determination did not create an issue estoppel that prevented Oliver Hume from arguing that Vcon's claim was for liquidated damages. However, the court ruled that Vcon's drawing down of the bank guarantees did not reduce the amount of the progress payment to which it was entitled. The court further held that Oliver Hume's contractual entitlement to enforce the bank guarantees did not operate to exclude, modify or restrict the operation of the Act in a manner prohibited by section 48. Consequently, Vcon's claim was not for an excluded amount. The court ordered that Vcon was entitled to recover the progress payments as claimed, subject to any offsets for payments already made.

Orders