Building and construction - Determination made under Construction Contract Act 2004 (WA) - Application for leave to enforce as a judgment of District Court - Turns on own facts

1 FENBURY DCJ: This is an application for leave to enforce a determination made under the Construction Contracts Act 2004 (WA) in the same manner as a judgment of the District Court. The application is brought pursuant to s 43.

2 The case relevantly has many similarities to O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [ 2008] WASC 58, being a decision of single Judge in Chambers in the Supreme Court.

3 If I had been familiar with the legislation and had had more opportunity to "get across" the papers and the relevant authorities before the hearing then I would have been able to give an extempore decision.

4 There is no reason not to follow the persuasive reasoning of his Honour in that matter and, further more, to a similar outcome.

5 Each of the counsel filed helpful and well presented submissions in respect of this matter. The hearing required consideration of three separate issues. The first was whether the order sought should be made, the second was whether, if made, a sum should be set off against it and the third was whether the effect of the order should be suspended.

6 Filed on behalf of the applicant relevantly were submissions as follows:

"3. On a proper construction of the Act leave will be granted under s 43(2) of the Act unless the defendant to an application establishes a ground upon which leave should be refused. The Act gives rise to a predisposition in favour of a grant of leave.

1. The Act does not expressly identify the matters relevant to whether the leave should be granted under s 43(2). Consequently, in exercising the power to grant leave, regard must be had to the context, objects, purpose and policy of the purpose and policy of the legislation.
2. The context, objects, purpose and policy of the Act are set out in the explanatory memorandum of the bill and extracts from the second reading speech as outline at pars 37 and 38 of O'Donnell and include the following:

'Its primary aim is to keep the money flowing in the contracting chain by enforcing timely payment and sidelining protracted or complex disputes. The process is kept simple, and therefore cheap and accessible - even for small claims.

If a party is not satisfied, it retains its full rights to go to Court or use any other dispute resolution mechanism available under the contracts. In the meantime, the determination stands, and any payments ordered must be made on account pending an award under the more formal and precise process.'

1. A determination is binding on the parties even though other proceedings relating to the substantive dispute between the parties are on foot.
2. A party liable to pay under a determination must do so.
3. ... in this case there is no pending review or appeal of the adjudication determination and thus there are no circumstances or grounds upon which leave should be refused."

7 In submissions filed on behalf of the respondent it is asserted that the parties reached an agreement to the effect that they would finalise outstanding issues under the contract privately and that the applicant breached the agreement by seeking the adjudication the subject of this application. An argument is put that in fact the applicant owes the defendant $55,000 which should be set off against the amount of the adjudication in any event.

8 It is also put that there was a compromise reached between the parties in February 2008 part of the results of which were that the respondent did not pay the amount of the adjudication determination.

10 The applicant submits that there is nothing raised on behalf of the defendant which would prevent the granting of the leave sought, relying on the reasoning in O'Donnell's case.

11 Having regard to that case, in my view, the application for leave sought to enforce the determination of the adjudicator should be granted.

12 The respondent argues that leave should be denied, in any event, in relation to an alleged debt of $55,000 owed by the applicant to the respondent. This amount allegedly represents liquidated damages for failure to complete on time, about which some negotiations had apparently taken place. Given the objects of the Act, and the inevitability of further determinations, then in my view, the adjudicator's determination should stand.

13 The more vigorously pressed argument on behalf of the respondent related to the making of a suspension order.

14 As to the making of such an order the ordinary rule is that the successful party should be entitled to enforce the judgment pending any appeal. In order to persuade the Court to exercise its discretion and suspend the effect of the granting of the leave obtained, the respondent carries the onus of showing the circumstances are special such as to justify suspension (s 15(3) Civil Judgment Enforcement Act 2004).

15 I do not think the circumstances articulated on behalf of the respondent are special in the sense or to the degree envisaged by the section, especially having regard to the object of the legislation.

16 Consequently in my view the application is allowed with costs to the applicant to be taxed if not agreed.