Supreme Court New South Wales

• Medium Neutral Citation: Nefiko Pty Ltd v Statewide Form Pty Ltd [2014] NSWSC 442
• Hearing dates: 11 April 2014
• Decision date: 11 April 2014
• Jurisdiction: Equity Division
• Before: Ball J

Decision

1. Application for interlocutory relief dismissed.

2. The Plaintiff pay the defendant's costs of the interlocutory application.

• Catchwords: BUILDING AND CONSTRUCTION - Building and Construction Industry Security of Payment Act 1999 (NSW) - adjudication determination - whether denial of natural justice - jurisdiction of adjudicator - whether adjudicator took into account all relevant factual matters
• Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW)
• Cases Cited: John Holland Pty Ltd v TAC Pacific Pty Ltd [2009] QSC 205; [2010] 1 QdR 302; Trysams Pty Ltd v Club Constructions (NSW) Pty Ltd [2008] NSWSC 399
• Category: Interlocutory applications
• Parties: Nefiko Pty Ltd (ABN 69 002 401 676) (Plaintiff); Statewide Form Pty Ltd (ABN 34 159 561 403) (Defendant)
• Representation: Counsel: Robert Macaulay (Pryor Tzannes & Wallis); AJ Macauley; Solicitors: Pryor Tzannes & Wallis (Plaintiff); Avondale Lawyers (Defendant)
• File Number(s): 2014/94834
• Publication restriction: None

EX TEMPORE Judgment

1 By a summons filed on 28 March 2014, the plaintiff, Nefiko Pty Ltd, seeks an interlocutory injunction restraining the defendant from acting or seeking to enforce an adjudication determination of Mr Robert Sundercombe (the Adjudicator) dated 17 March 2014 under the provisions of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act). The injunction is sought on the basis that the Adjudicator, in making his determination, failed to comply with the rules of natural justice.

2 On 31 December 2013, the defendant, who had been engaged to perform construction work on a house owned by Ms Janette Cheong in which Ms Cheong resides, served a payment claim under the Act and subsequently served a notice of intention to lodge an adjudication application under the Act.

3 The plaintiff did not serve a payment schedule in response to either the payment claim or the notice served by the defendant.

4 On 19 February 2014, the defendant made an adjudication application in respect of the payment claim. That application was heard by the Adjudicator.

5 By letter dated 13 March 2014, the solicitors for the plaintiff sought to make submissions to the Adjudicator concerning the Adjudicator's jurisdiction. In effect, the submissions asserted that the Adjudicator did not have jurisdiction because the contract to perform the relevant works was not between the defendant and the plaintiff but rather was a contract between the defendant and Ms Cheong and that, consequently, the operation of the Act was excluded by s 7(2)(b). Relevantly, that section provides that the Act does not apply to:

A construction contract for the carrying out of residential building work (within the meaning of the Home Building Act 1989) on such part of any premises as the party for whom the work is carried out resides in or proposes to reside in.

6 In short, it was submitted that Ms Cheong was a party to the construction contract and that contract was for the carrying out of residential building work at premises in which she resides.

7 In support of that submission, the plaintiff's solicitor's letter asserted that the plaintiff denied being a party to the construction contract and that Ms Cheong admitted to being the principal to the relevant construction contract. The letter also asserted that Ms Cheong had made a cash payment of $9,000 in respect of part of the work carried out by the defendant.

8 Apart from those assertions, the submission did not place any other material before the Adjudicator which shed light on the question of who the parties to the construction contract were.

9 In his reasons for determination, the Adjudicator concluded that he had jurisdiction to determine the application. In reaching that conclusion, the Adjudicator pointed out that the plaintiff had not provided a payment schedule pursuant to s 20(2A) of the Act and, therefore, was not entitled to provide an adjudication response. The Adjudicator went on to consider the question whether he had jurisdiction under the Act, which involved considering the question whether the plaintiff or Ms Cheong was the true party to the construction contract.

10 After examining various matters, the Adjudicator concluded that he was satisfied that the contract was an agreement between the defendant and the plaintiff.

11 The plaintiff claims in these proceedings that in failing to refer to the plaintiff's submissions the Adjudicator denied the plaintiff natural justice.

12 In my opinion, there are two insuperable difficulties with the plaintiff's claim.

13 First, under s 22(2) of the Act, the Adjudicator was required in determining an adjudication application to consider only the matters set out in that section. Those matters do not include the submissions that the plaintiff's solicitors sought to make to the Adjudicator. Mr Macaulay, who appeared for the plaintiff, submitted that s 22 could not be read as excluding the right of a party to make submissions to the Adjudicator concerning the Adjudicator's jurisdiction. In his submission, that was something prior to the adjudication process and was a matter on which submissions could be made in effect at any time by a person affected by the adjudication process.

14 I do not accept that submission.

15 In this case, the submission of the plaintiff in effect is that it was not a party to the construction contract, but someone else was. I can see no reason why that is a matter that should not have been raised as part of the normal process contemplated by the Act - that is, in a payment schedule.

16 In any event, for the plaintiff to succeed, it must establish that there is a serious question to be tried that any failure no the part of the Adjudicator to comply with the rules of natural justice was material: see Trysams Pty Ltd v Club Constructions (NSW) Pty Ltd [2008] NSWSC 399 at [52] and John Holland Pty Ltd v TAC Pacific Pty Ltd [2009] QSC 205; [2010] 1 QdR 302 at [40].

17 I am not satisfied that any failure on the part of the Adjudicator to follow the requirements of natural justice was material. It is true that the Adjudicator did not refer specifically to the submissions made on the plaintiff's behalf. However, the Adjudicator did take into account all the relevant factual matters referred to in the submissions made on behalf of the plaintiff. In particular, the Adjudicator observed that Ms Cheong was the owner of the land and he also recorded the payment of $9,000 in cash by Ms Cheong. The Adjudicator also referred to a number of other matters from which he concluded that the contract was an agreement between the plaintiff and the defendant. In doing so, in my opinion, the Adjudicator took into account the relevant factual matters that the plaintiff sought to place before him. It is true that the Adjudicator did not refer to the assertion in the plaintiff's solicitor's letter that Ms Cheong acknowledged that she, rather than the plaintiff, was the party to the building contact. However, in my opinion, the Adjudicator was entitled to take the view that that bare assertion, in the circumstances, was of little weight.

18 I dismiss the plaintiff's application for interlocutory relief. I order that the plaintiff pay the defendant's costs of the interlocutory application.

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Decision last updated: 15 April 2014