Supreme Court New South Wales

• Medium Neutral Citation: PPK Willoughby v Eighty Eight Construction (No.2) [2014] NSWSC 839
• Hearing dates: 25/06/2014
• Decision date: 25 June 2014
• Jurisdiction: Equity Division - Technology and Construction List
• Before: McDougall J

Decision

Summons and second cross-claim dismissed with costs. First cross-claim stood over to final hearing in proceedings 2014/78684 with costs reserved.

• Catchwords: BUILDING AND CONSTRUCTION - Practice and procedure - application for stay of order that money paid into court for interlocutory relief be paid to defendant - whether to grant application for stay where risk that defendant may become insolvent before final relief granted - whether to grant application for stay where plaintiff considering whether to challenge earlier decision on appeal.; PROCEDURE - costs - whether to make an order as to costs in respect of cross-claim where cross-claim essentially defensive - whether to make an order as to costs where issues raised by cross-claim not yet decided
• Cases Cited: Grosvenor Constructions (NSW) Pty Ltd (in Administration) v Musico & Ors [2004] NSWSC 344; PPK Willoughby v Eighty Eight Construction [2014] NSWSC 760; Veolia Water Solutions v Kruger Engineering [No 3] [2007] NSWSC 49
• Category: Procedural and other rulings
• Parties: PPK Willoughby Pty Ltd (Plaintiff); Eighty Eight Construction Pty Ltd (First Defendant); Scott Petersen (Second Defendant); Adjudicate Today Pty Limited (Third Defendant)
• Representation: Counsel: FP Hicks / M Kloucek (Plaintiff); L Shipway (Defendants); Solicitors: Madison Marcus (Plaintiff); Beazley Singleton (First Defendant); Moray & Agnew (Second and Third Defendants)
• File Number(s): 2014/68292

Judgment (ex tempore - revised 25 june 2014)

1 HIS HONOUR: I heard this matter on 28 and 29 May 2014 and gave judgment on 11 June 2014 ([2014] NSWSC 760). In that judgment I came to the conclusion that the plaintiff's challenge to the adjudicator's determination failed. I stood the matter over for the parties to bring in draft orders.

2 It is clear (following from my earlier judgment) that the plaintiff's claim should be dismissed with costs, as should the plaintiff's so-called second cross-claim.

3 The first defendant had brought a cross-claim in which it sought to enforce what it said was a contractual right to payment. That contractual claim, in respect of the very same payment claim (progress claim), no 13, as was the subject of the adjudicator's determination, sought payment of the amount certified by the superintendent. It was common ground, on the conclusion to which I came, that it was not necessary to deal with that cross-claim.

4 In any event, I had directed that the issues raised by that cross-claim be dealt with separately from and after the determination of all other issues in the proceedings. I did that because, amongst other things, the plaintiff relied on a defence to the cross-claim which asserted that there were numerous defects in the works, the cost of rectification of which would exceed the amount certified (in favour of the first defendant) by the superintendent.

5 The question of defects is still alive. It is being litigated in other proceedings between the same parties. A referee has been appointed. She has undertaken an inspection. I understand that the parties' experts are conferring. No doubt, in due course, there will be a hearing before the referee, she will report and the Court will be asked to deal with her report.

6 In my earlier reasons, I expressed the provisional view that the first cross claim should be dismissed but, that, since it was essentially defensive, its costs should be regarded as costs in the proceedings.

7 On further consideration and after hearing counsel, I have decided that the provisional view should not become final. The issues raised by the first cross claim have not been decided. In particular, it may very well be (depending upon what the referee reports, and what happens to her report) that the plaintiff's alternative defence, based on defects, will be found to have substance.

8 In those circumstances, it seems to me the appropriate order in respect of the first cross-claim is it be stood over to the final hearing of the proceedings, once the referee has reported, and that its costs should be reserved accordingly.

9 That leaves the plaintiff's application for a stay of some of the orders in favour of the first defendant: namely, the order for payment out to the first defendant of the amount brought to Court by the plaintiff as the price of interlocutory relief; and the order discharging the injunction preventing the first defendant from enforcing, at least until the resolution of the issues, the determination in its favour.

10 The basis upon which that order is sought is that there are fears the first defendant would not be able to repay the amount in question if, ultimately, it turns out that the plaintiff's position is vindicated and in fact the first defendant owes the plaintiff money.

11 The ground of insolvency could have been raised as an alternative ground for seeking to restrain enforcement of the rights under the adjudicator's determination. That is established by first instance decisions in this Court, including the decision of Einstein J in Grosvenor Constructions (NSW) Pty Ltd (in Administration) v Musico & Ors [2004] NSWSC 344 and my own decision in Veolia Water Solutions v Kruger Engineering [No 3] [2007] NSWSC 49.

12 It was not so raised. There may be discretionary issues as to whether the plaintiff should now be able to rely upon it, but I will not go into that possibly fascinating argument at this point.

13 The plaintiff submitted, further, that it was considering whether to challenge my decision on appeal. If the only basis for a stay were the latter, I would grant a stay for 14 days, to enable the plaintiff to make an application to the Court of Appeal.

14 However, since there is more than one basis, it seems to me the appropriate course is to stay the matter until Friday 27 June 2014, so that the parties can work out what their position is and what their evidence will be. It is likely that on 27 June 2014, the Court will be able to allocate a relatively prompt hearing date for the application, if it is to be pressed. If that were to happen I have no doubt the parties would be able to agree upon a regime to hold the position until the application for a stay is dealt with.

15 The result of all that is that I make orders in accordance with paras 1 to 5, as amended, of the short minutes of order, initialled by me and dated today's date.

16 I order that orders 3 and 4 be stayed up until 5pm on 27 June 2014.

17 I stand the proceedings over to the motion list on that date.

18 ADJOURNED TO FRIDAY 27 JUNE 2014

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Decision last updated: 26 June 2014