Watpac Constructions Pty Ltd v Collins & Graham Mechanical Pty Ltd

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL COURT

TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2020 00407

WATPAC CONSTRUCTIONS PTY LTD (ACN 010 462 816)	Plaintiff
v
COLLINS & GRAHAM MECHANICAL PTY LTD AS TRUSTEE FOR THE CGM UNIT TRUST (ABN 59 390 232 267) (ACN 097 469 282)	First Defendant
TIMOTHY SULLIVAN	Second Defendant

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JUDGE:	RIORDAN J
WHERE HELD:	Melbourne
DATES OF HEARING:	26 May, 3 June and 19 June 2020 (Written submissions)
DATE OF JUDGMENT:	10 July 2020
CASE MAY BE CITED AS:	Watpac Constructions Pty Ltd v Collins & Graham Mechanical Pty Ltd
MEDIUM NEUTRAL CITATION:	[2020] VSC 414

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BUILDING CONTRACTS – Building and Construction Industry Security of Payment Act 2002 (Vic) (‘the Act’) – Deemed termination for convenience on a ‘finding’ of repudiation by the principal – Reference date referrable to the payment claim required a ‘finding’ of repudiation – Whether requiring a ‘finding’ of repudiation had the effect of excluding, modifying or restricting the operation of the Act within the meaning of s 48 – Whether s 48 of the Act rendered an offending clause as void in its entirety – Meaning of ‘provision’ in s 48 of the Act considered.

BUILDING CONTRACTS – Whether severance of the contractual provision engaging s 48 of the Act available.

JUDICIAL REVIEW – Finding by adjudicator of repudiation – Principles to be applied in deciding jurisdictional facts on judicial review – Burden of proving jurisdictional error rests with the applicant.

JUDICIAL REVIEW – Whether a court may exercise its residuary discretion not to permit a full trial of a construction dispute in determining a review of an adjudicator under the Act queried.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B Reid	Maddocks
For the Defendant	Mr C P Young SC with Mr W J Stephenson	HFW Australia

HIS HONOUR:

1. By originating motion filed 29 January 2020, the plaintiff (‘Watpac’) seeks an order in the nature of certiorari quashing the adjudication determination purportedly made by the second defendant (‘the Adjudicator’) on 10 January 2020 (‘the Purported Determination’) pursuant to s 23 of the Building and Construction Industry Security of Payment Act 2002 (Vic) (‘the Act’).

Background

1. By Major Works Subcontract Agreement executed by the first defendant (‘CGM’) on 17 August 2018 and by Watpac on 17 September 2018 (‘the Subcontract’), CGM agreed to design and construct the mechanical services package for the Casey Hospital Expansion Project in Berwick, Victoria, for a lump sum price of $10,600,000 (exclusive of GST).

1. The terms of the Subcontract included the following:

37.      SECURITY OF PAYMENT ACT

37.1     Service of notices under the Security of payment act

The Subcontractor must:

(a)ensure that a copy of any written communication it delivers or arranges to deliver to Watpac of whatever nature in relation to the Security of Payment Act (including, without limitation, payment claims under the Security of Payment Act), is provided to Watpac at the same time; and

(b)if the Subcontractor becomes aware that a secondary subcontractor is…