Cardiacos v Cooper Consulting & Construction Services

Supreme Court of NSW|2009-08-31|Before: White J

CITATION : Cardiacos v Cooper Consulting & Construction Services (Aust) Pty Ltd [2009] NSWSC 938

CATCHWORDS : CONTRACTS - building, engineering and related contracts - plaintiff contends adjudication determination is void under s 7(2)(b) of Building and Construction Industry Security of Payment Act 1999 because contract was for the carrying out of residential building work - meaning of 'resides in or proposes to reside in' - consideration of plaintiff's intention - plaintiff resided at the premises at all relevant times - purported adjudication determination is void

LEGISLATION CITED : Building and Construction Industry Security of Payment Act 1999 (NSW) Home Building Act 1989 (NSW)

Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 Levene v Inland Revenue Commissioners [1928] AC 217 Clarke v Clarke [1964] VR 773 Inland Revenue Commissioners v Lysaght [1928] AC 234 Re Vassis; ex parte Leung (1986) 9 FCR 518 Re Taylor; ex parte Natwest Australia Bank Ltd (1992) 37 FCR 194 CASES CITED : Corbett v Nguyen [2008] NSWSC 1265 Logue v Hansen Technologies Ltd [2003] FCA 81; (2003) 125 FCR 590 Hafza v D-G of Social Security (1985) 6 FCR 444 Macrae v Macrae [1949] P 397 Appah v Monseu [1967] 1 WLR 893 Acclaim Building Management Pty Ltd v Loewenthal [2006] NSWDC 29 Shorten v David Hurst Constructions Pty Ltd [2008] NSWCA 134; (2008) 72 NSWLR 211 Taylor Projects Group Pty Ltd v Brick Dept. Pty Ltd (2005) NSWSC 571

TEXTS CITED : Macquarie Dictionary, rev 3rd ed (2003) Minister's Second Reading Speech on the Building and Construction Industry Security of Payment Bill (No. 2) (8 September 1999)

Adrian Cardiacos PARTIES : v Cooper Consulting & Construction Services (Aust) Pty Ltd & 1 Or

COUNSEL : Plaintiff: N A Nicholls Defendants: M Christie with L Shipway

SOLICITORS : Plaintiff: Slater & Gordon Defendants: Doyles Construction Lawyers

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY & CONSTRUCTION LIST

55047/09 Adrian Cardiacos v Cooper Consulting & Construction Services (Aust) Pty Ltd & 1 Or JUDGMENT 1 HIS HONOUR: The first defendant is a builder. It carried out residential building work on a house owned by the plaintiff in Cowra Place, Cronulla ("the Cronulla property"). On 25 March 2009 the first defendant made a payment claim on the plaintiff purportedly pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Act"). The plaintiff disputed that the Act applied, but in case that contention was wrong, served a payment schedule pursuant to s 14 of the Act. The plaintiff indicated that the amount of the payment he proposed to make was nil and gave reasons for that position. The first defendant made an adjudication application to which the plaintiff responded. On or about 13 May 2009 the second defendant determined the adjudication application. He determined that the plaintiff pay $226,477.63 to the first defendant and that the plaintiff pay the fees of the adjudication. 2 The plaintiff seeks a declaration that the second defendant's adjudication determination is void. He seeks an injunction to restrain the first defendant from requesting any nominating authority to provide an adjudication certificate in respect of the determination, or from filing such certificate as a judgment in any court, or from otherwise taking any step in relation to the enforcement of the determination. 3 The plaintiff contends that the determination is void because the construction contract between him and the first defendant is one to which the Act does not apply. He relies on s 7(2)(b) which provides: " 7 Application of Act

... (2) This Act does not apply to: ... (b) 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 ... ..." 4 The construction contract between the plaintiff and the first defendant was for the carrying out of residential building work within the meaning of the Home Building Act 1989 (NSW). The plaintiff contends, and the first defendant denies, that the work was to be carried out for the plaintiff on premises in which the plaintiff resided, or in which he proposed to reside. 5 In his adjudication determination the second defendant concluded that the plaintiff did not reside in the property at the time the contract was entered into and did not propose to reside in the property once the construction works were completed. He gave reasons for those conclusions. Nonetheless, it was common ground that it is for the court to determine whether the facts stipulated in s 7(2)(b) are established because, if they are, the first defendant was not entitled to invoke the Act and the second defendant had no jurisdiction to make his determination (Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 at [40]-[43], [64]-[65]; Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 at [28], [33]-[38]). Background 6 The Cronulla property was previously owned by Mr Evangelos Cardiacos ("Mr Evan Cardiacos"). The plaintiff lived with Mr Evan Cardiacos at the Cronulla property from October 1982 when he was 16. The Cronulla property is a large seven-bedroom house. From about October 1983 the plaintiff slept in the property, had his meals there and kept all his personal belongings there. It was his settled place of abode. 7 The plaintiff worked in Mr Evan Cardiacos' business in Trafalgar Street, Enmore. In May 1998 he purchased a terrace house in Trafalgar Street, Enmore to be used as a city residence for them both. From about May 1998 the plaintiff had two residences, namely, the Cronulla property and the Trafalgar Street property. He and Mr Evan Cardiacos lived in the Cronulla property during summer when the business was less busy. In winter they spent the better part of the weekdays in the Trafalgar Street property and returned to the Cronulla property on weekends. In 1999 the plaintiff sold the Trafalgar Street property and purchased a property in Phillip Street, Enmore. The Phillip Street property was used as his and Mr Evan Cardiacos' city residence in the same way as the Trafalgar Street property had previously been used. In November 2000 the plaintiff and Mr Evan Cardiacos rented out the Phillip Street property and moved back to the Cronulla property full-time. However, Mr Evan Cardiacos was hospitalised in November 2002. It was not possible for him to stay at the Cronulla property after he was discharged from hospital because of the size of the house and the large staircase, and because the plaintiff was working during the day in the business in Enmore. The plaintiff and Mr Evan Cardiacos decided to move back to the Phillip Street property. They did not do so on a full-time basis. On weekends and during the summer months they both lived in the Cronulla property. In 2005, the plaintiff again rented out the Phillip Street property and he and Mr Evan Cardiacos moved back to the Cronulla property full-time. 8 Mr Evan Cardiacos died in March 2008 and the plaintiff inherited the Cronulla property. The plaintiff carried out renovations and improvements to the Cronulla property prior to engaging the services of the first defendant. The plaintiff continued to live in the Cronulla property up to 1 October 2008. 9 By mid 2008 the Cronulla property was in need of substantial repairs and renovation. The plaintiff described the house as unliveable. By this he meant that the main timber ceiling was collapsing, or was in danger of collapse. When it rained water came straight through the balconies into the bedrooms or went into the games room. Water also came into the kitchen through the kitchen skylight when it rained. Four glass skylights were also leaking into the sunroom. Plaintiff's Statements of Intention 10 In July 2008 the plaintiff told his plumber, Mr John O'Connor, that he was going to sell the house and would like to renovate it so that he could get a good price. Mr O'Connor put the plaintiff and the first defendant in touch with each other. 11 In August 2008 the plaintiff approached a real estate agent and obtained a rental appraisal of the property. He decided not to rent out the property because the likely rent would be insufficient to cover land tax and other outgoings. At that point the plaintiff decided to take out a loan to repair and renovate the property. 12 In August 2008 there was a meeting at the property attended by the plaintiff, Mr Dale Poland, (the director of the first defendant), Mr O'Connor, and a Mr Joe Glanville, an estimator. At that meeting, the plaintiff said that he needed to get the ceiling, tiling and glassworks done as soon as possible so that he could put the property on the market for sale. Later, the plaintiff told Mr O'Connor that he did not want to touch the bathrooms or the kitchen because the new owner would like to be able to do whatever was wanted in those areas. 13 Mr Dale Poland deposed that at a site meeting between the plaintiff, himself, Mr Nyle Poland and Mr Glanville, Mr Cardiacos said words to the effect "There's no way that I can sell the property with the ceiling in its current state. I don't intend to live here. I am happy living at Enmore next to my offices." Mr Cardiacos denied saying words "I don't intend to live here". He said that the other statements were statements he made not in one discussion, but from time to time over an extended period. Neither Mr Nyle Poland nor Mr Glanville corroborated Mr Dale Poland's evidence that Mr Cardiacos said "I don't intend to live here". I am not satisfied that those words were said. That was an inference Mr Dale Poland drew from Mr Cardiacos' statement that he intended to sell. 14 The construction contract between the plaintiff and the first defendant was signed on 20 October 2008. It was signed after discussions between Mr Poland for the first defendant and the plaintiff in August and September 2008. On 21 August 2008 Mr Poland provided a forecast and breakdown of costs for several areas of work at the property. He obtained quotes from various sub-contractors. On 26 September 2008 Mr Poland sent the plaintiff a spreadsheet containing estimates for various areas of work. 15 The plaintiff left the property on 1 October 2008 and took all his personal items out of the property at that time. He did so because he could not live in the property whilst the renovations were being carried out. He moved to the Enmore property. He took some of the furniture from the Cronulla property with him and either sold or gave away the rest of the furniture. Building works on the site started on 11 October 2008. 16 The construction contract signed on 20 October 2008 was a costs plus contract. The estimated cost of the work was $370,000. The plaintiff gave the Phillip Street, Enmore property as his address. That is not significant. As at 20 October 2008 the Phillip Street, Enmore property was the address at which the plaintiff was living. A person may have more than one residence. The fact that he specified the Enmore property as his "address" is not inconsistent with the Cronulla property also having been his residence at that time. 17 Mr Dale Poland annexed to his affidavit a printout of a text message he received on or about 5 January 2009 from the plaintiff which stated "[number] Phillip Street, Enmore is home. I am the corner of Enmore Road, London Street having dinner. Cheers A". 18 I do not draw the inference from this text message that the plaintiff no longer regarded the Cronulla property as his "home". The context in which the text message was sent was that Mr Poland telephoned the plaintiff and said that he had something important to discuss but not over the phone. The plaintiff replied "I've got things to do and I am having dinner with someone". The plaintiff said that a number of text messages then ensued, one of which from Mr Poland was in words to the effect "running late. Where is home and where are you now?" It was in response to this text message that the plaintiff responded in the words set out above. The earlier text messages were not produced. It can be inferred from the text message annexed to Mr Poland's affidavit that it was in response to a message of the kind as described by the plaintiff. There was no explanation as to why Mr Poland would have kept the text message which he printed and annexed to his affidavit, but not the preceding messages. Mr Poland denied that he was trying to "set up" the plaintiff so as to extract an admission which would enable the first defendant to have recourse to the Act. I accept that denial. Nonetheless, whilst the text message is evidence, (if evidence were needed), that the Phillip Street, Enmore property was then "home" to the plaintiff, that does not advance the question as to whether the plaintiff, at the relevant time, resided at the Cronulla property, or whether he proposed to reside at the Cronulla property when the work was finished. 19 The plaintiff paid the first defendant $439,834.19 in partial payment of the invoices rendered. The first defendant claimed that it was entitled to a further $326,477.63. The adjudicator upheld that claim. The first defendant says that the reason for the difference between the estimate contained in the contract and the total claim made was that the plaintiff changed the required scope of work. The plaintiff substantially denies this and it is not a question I need consider. Nor are the adjudicator's reasons for allowing the claim material to the present application. 20 In the plaintiff's payment schedule served on 8 April 2009 the plaintiff denied that the Act applied. He said: " It is clear that the contract is for residential building work. It is also clear and you were well aware that I resided at the property prior to the letting of the contract to you. I also confirm my intention to reside at the property once building works are completed. " 21 The plaintiff annexed to his adjudication response of 1 May 2009 a statutory declaration. It relevantly stated as follows: " 1. I am the owner of the property located at [number] Cowra Place, Cronulla, New South Wales ('the Property'). 2. I lived in the Property for approximately 25 years from 1 October 1983 to 1 October 2008. During the latter years of my living at the Property I cared for my sick father at the Property. 3. I inherited the Property upon the death of my father, Evan Cardiacos, in March 2008. 4. At the time of obtaining probate of my father's estate in 2008, the value of the Property for probate purposes was $5,000,000. I have recently obtained a valuation which values the Property at $3,600,000. I do not expect that the property will increase in value in the near future due to the effects of the global financial crisis. 5. At the time of commencement of the works the subject of the adjudication application, I had intended to renovate the Property and then sell it. 6. I now intend to reside in the Property for the following reasons: a. Because of the marked decrease in value of the Property; and b. Because I am in a relationship with someone whom I wish to live with in the Property. " 22 In the adjudication response the plaintiff's solicitors referred to this statutory declaration and said: " 32. In the Payment Schedule, the Respondent additionally relied his [sic] recently formed intention to again reside at the property given the Global Financial Crisis and its adverse effect on high end property prices. The Respondent accepts that at the time of entry into the Contract his intention was to sell. The District Court decision of Acclaim Building Management Pty Ltd v Loewenthal [2006] NSWDC 29 at [48] suggests that that intention must have been formed and communicated at the time of contract formation. The Court of Appeal in Shorten v David Hurst Constructions Pty Ltd [2008] NSWCA 134 at [33] called this conclusion into question. 33. Accordingly, the Respondent is entitled to rely upon his recently formed intention to reside at the Property. 34. However, whatever view is taken in respect of intention to reside, such view does not detract from the fact that the Respondent resided at the Property at the time the contract was formed, hence bringing the exclusion into operation. " 23 In cross-examination the plaintiff agreed that the intention to which he referred in para 6 of his statutory declaration was a recently formed intention as at the date of the statutory declaration. 24 In his affidavit the plaintiff admitted telling Mr Dale Poland, Mr Nyle Poland and Mr O'Connor that he wanted the work finished by Christmas so that the property could be marketed in January, which would be the best time to sell. He did so to motivate the builders to complete the work prior to Christmas. He deposed that at the time it was his intention to renovate the property and complete the renovations as fast as possible and to then return to the property to live there. He had not entered into any agency agreements with a real estate agent for the sale of the property. Nor had he approached any real estate agent to provide him with a proposal for the marketing and sale of the Cronulla property upon completion of the renovation works. 25 In cross-examination the plaintiff denied that it was not his intention to return and live in the premises. He said that throughout the entire period from 1 October 2008 to 1 May 2009 he intended to return to the premises once the renovation was complete. He was then asked about his statutory declaration and the question was again put to him: " Q. For the period between 1 October 2008 and around 1 May 2009 when you swore the statutory declaration, you had not formed the intention of residing in the premises at Cronulla, that's the truth isn't it?

A. I had never decided either way. " 26 The Cronulla property remains the plaintiff's electoral address and is the address given to the Australian Taxation Office. Residence 27 It is clear that up to 1 October 2008 the plaintiff resided at the Cronulla property. The question is whether he ceased to reside there when he moved out on 1 October 2008. Residence does not require continued physical presence. The dictionary meaning of "reside" is "to dwell permanently or for a considerable time; have one's abode for a time" (Macquarie Dictionary, rev 3rd ed (2003)), and "to dwell permanently or for a considerable time, to have one's settled or usual abode, to live, in or at a particular place" (Oxford English Dictionary; Levene v Inland Revenue Commissioners [1928] AC 217 at 222). There are many examples of a person having been found to be resident at a particular place although he or she spent the majority of his or her time away from that place. Thus a mariner might ordinarily reside at his family home, although he or she spends the majority of time at sea. A school child was "ordinarily residing with the insured" so as to be excluded from the benefits of an insurance policy, although for the majority of the time she lived away from home as a boarder at school (Clarke v Clarke [1964] VR 773). Numerous taxpayers have found themselves to be resident, or ordinarily resident, in one country where they have a home, although they spend the majority of their time in another at which they also have a home (e.g. Levene v Inland Revenue Commissioners; and Inland Revenue Commissioners v Lysaght [1928] AC 234 and cases there cited). It is well settled that a person can be both resident and ordinarily resident in more than one place (Re Vassis; ex parte Leung (1986) 9 FCR 518 at 524-525; Re Taylor; ex parte Natwest Australia Bank Ltd (1992) 37 FCR 194 at 198; Corbett v Nguyen [2008] NSWSC 1265 at [21]-[22]). 28 Therefore, it does not follow that because from 1 October 2008 the plaintiff resided in the Phillip Street, Enmore property and was not physically present in the Cronulla property that he ceased to reside at the Cronulla property. As Weinberg J said in Logue v Hansen Technologies Ltd [2003] FCA 81; (2003) 125 FCR 590 at 599 [26], after reviewing a number of authorities: " What these cases, and others like them seem to establish is that the test for ordinary residence depends to a significant degree upon the state of mind of the person whose residence is in question. The language used in a number of the cases focuses upon whether the person habitually and normally resides in the jurisdiction, and does so for a settled purpose. " 29 The first defendant submits that the plaintiff ceased to reside at the Cronulla property because he intended not to return. In Hafza v D-G of Social Security (1985) 6 FCR 444, Wilcox J said at 449-450: " As a general concept residence includes two elements: physical presence in a particular place and the intention to treat that place as home; at least for the time being, not necessarily forever. ...

Physical presence and intention will coincide for most of the time. But few people are always at home. Once a person has established a home in a particular place, even involuntarily ... a person does not necessarily cease to be resident there because he or she is physically absent. The test is whether the person has retained a continuity of association with the place ( Levene v Inland Revenue Commissioners [1928] AC 217 at 225 and Judd v Judd (1957) 75 WN (NSW) 147 at 149) together with an intention to return to that place and an attitude that that place remains 'home' (see Norman v Norman (1969) 16 FLR 231 at 236). It is important to observe, firstly, that a person may simultaneously be a resident in more than one place ... and, secondly, that the application of the general concept of residence to any particular case must depend upon the wording, and underlying purposes, of the particular statute in relation to which the question arises. But where the general concept is applicable, it is obvious that, as residence of a place in which a person is not physically present depends upon an intention to return and to continue to treat that place as 'home', a change of intention may be decisive of the question whether residence in a particular place has been maintained. " 30 Counsel for the plaintiff submitted that because the plaintiff owned the Cronulla property and had resided there for 25 or 26 years, for the purposes of s 7(2)(b) he should be taken to reside in the premises, whatever was his intention at the time he left the premises about returning. Counsel submitted that a purposive construction should be given to s 7(2)(b), and that the Minister's Second Reading Speech on the Building and Construction Industry Security of Payment Bill (No. 2) (8 September 1999) showed that the purpose of the Act was to reform payment behaviour in the construction industry to ensure timely cashflow. Counsel submitted that the Second Reading Speech showed that the "construction industry" to which the Act is directed did not include home buyers and home owners who retained a builder. In his Second Reading Speech, the Minister for Public Works and Services said: " Since its initial introduction, a minor anomaly has been drawn to my attention regarding the effect of the original bill on home buyers and home owners. The Government deliberately decided to exempt these people from the effects of the proposed legislation as they were not seen as being part of the construction industry. Also, contractors working for home owners and home buyers have access to other security of payment mechanisms established under the Home Building Act. " 31 The plaintiff is a home owner who contracted for the carrying out of building work on his home. Hence, counsel submitted, s 7(2)(b) should not be construed so as to subject him to the requirements of the Act as he was not part of the construction industry. 32 The difficulty with this submission is that whilst the Second Reading Speech spoke of an exemption for home owners and home buyers, the exemption in s 7(2)(b) is not given to construction contracts for the carrying out of residential building work to which the owner or buyer of the premises on which the work is to be carried out is a party. Nor is there a security of payment mechanism in the Home Building Act which could be relevant to the construction of s 7(2)(b) of the Act. The exemption in s 7(2)(b) applies if the party to the contract resides in or proposes to reside in the premises, irrespective of whether he or she is the owner of the premises or has contracted to buy them. A construction contract for the carrying out of residential building work entered into with a lessee who resided in the premises would be outside the scope of the Act. On the other hand, a construction contract entered into with an owner of residential premises for the carrying out of residential building work is not outside the Act if the owner does not reside or propose to reside in the premises. The scope of s 7(2)(b), in this case depends on the meaning of the expressions "resides in or proposes to reside in [the premises]", not on a construction of the Minister's Second Reading Speech. Whether the plaintiff resided or proposed to reside in the premises at the relevant time depends on his intention as to his future use of the property. Time for Determining the Plaintiff's Intention 33 The first defendant submitted that the time at which the plaintiff was required to show he resided in the property or proposed to reside in the property was when the construction contract was entered into, or alternatively, the time when the work the subject of the claim was performed. The plaintiff made no contrary submission. I incline to the view that the relevant time is the time at which the "construction contract" (as defined) is entered into. That is not necessarily the same time as the time at which a written contract is signed because "construction contract" is defined to mean "a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods or services, for another party" (my emphasis). The plaintiff did not seek to demonstrate that an arrangement had been made under which the first defendant undertook to carry out the construction work on or prior to the date on which he left the property. Although it might be inferred that such an arrangement was made by the time the first defendant started work on the project, the plaintiff had ceased living in the property prior to the entry into the "construction contract" (as defined) and prior to the commencement of work. Plaintiff's Intention 34 At the time he moved out of the property and at the time the "construction contract" was entered into, the plaintiff did not have a fixed and definite intention as to the use he would make of the property. He intended that renovations would be carried out to make the property liveable and to maximise the price to be received on sale. He intended to sell the property, but not for any price. He had not engaged a real estate agent to sell the property. The market for properties of the kind in question had suffered a sharp decline. I accept his evidence given in cross-examination and re-examination that he had not decided on a course of action. He said he had not decided "either way" whether he would reside in the Cronulla property, and had not decided whether to sell. I do not accept that he had an unqualified intention to return to the Cronulla property to live there. His intention was qualified by the fact that he intended to put the property up for sale. But I conclude that if the property were not sold, his intention was to have two residences; one near the city and one at Cronulla, as he had had in the past. 35 In Macrae v Macrae [1949] P 397, Somervell LJ said (at 403): " The fact that the desertion took place in England and that he was ordinarily resident in England up to a short time before, does not seem to me to affect the matter. Ordinary residence can be changed in a day. A man is ordinarily resident in one place up till a particular day: he then cuts the connexion he has with that place - in this case he left his wife; in another case he might have disposed of his house or anyhow left it and made arrangements to have his home somewhere else. Where there are indications that the place to which he moves is the place which he intends to make his home for at any rate an indefinite period, then as from that day in my opinion he is ordinarily resident at the place to which he has gone. "

His Lordship was not speaking of a man who had, or intended to have, two residences. 36 In Appah v Monseu [1967] 1 WLR 893, the question was whether a plaintiff against whom security for costs was sought was ordinarily resident out of the jurisdiction. The plaintiff was a foreigner who had resided in England for some years but who had expressed her intention to leave at the conclusion of the litigation. It was submitted for the defendant that the plaintiff was only temporarily resident in England because she intended to leave. The plaintiff's intention to leave was provisional, dependent upon whether she could obtain suitable employment in her native country and make arrangements to go back there. Given the provisional nature of her intention, the judge was not satisfied that the plaintiff was ordinarily resident out of the jurisdiction. 37 In the present case, the plaintiff had the provisional intention not to return to the Cronulla property as his home for an indefinite period in that he intended to sell if a sufficient price could be obtained. But such a provisional intention does not displace the fact that until the property were sold, he treated the property as one of two settled places of abode. I conclude that at all relevant times the plaintiff resided in the premises although he was not present whilst the construction work was being carried out.

Proposed Residence 38 If that conclusion be wrong, the next question is whether the plaintiff proposed to reside in the premises. The assumption on which this question arises is that the plaintiff had ceased to reside in the premises at the time he physically vacated them. Was his provisional intention to return to the premises to live there indefinitely as one of his homes sufficient for him to "propose to reside" in the premises? 39 The Macquarie Dictionary gives the following meanings of the verb "propose": "1. to put forward (a matter, subject, case, etc.) for consideration, acceptance, or action: to propose a new method; to propose a toast. 2. to put forward or suggest as something to be done: he proposed that a messenger be sent. 3. to present (a person) for some position, office, membership, etc. 4. to put before oneself as something to be done; to design; to intend. 5. to present to the mind or attention; state. 6. to propound (a question, riddle, etc.). --verb (i) 7. to make a proposal, especially of marriage. 8. to form or entertain a purpose or design. " 40 In s 7(2)(b) the verb "proposes" is used in the fourth sense of "to put before oneself as something to be done; to design; to intend". The fact that the plaintiff's design or intention to live in the Cronulla property as one of his settled places of abode was conditional upon his not selling the property does not mean that he did not propose to reside there. A conditional proposal is nonetheless a proposal. In my view, the second limb of s 7(2)(b) would be satisfied if the first were not. Communication of Intention Unnecessary 41 In Acclaim Building Management Pty Ltd v Loewenthal [2006] NSWDC 29, Johnstone DCJ said, obiter (at [48], [56]), that s 7(2)(b) excludes from the Act construction contracts for the carrying out of residential building work entered into between parties between whom there is a mutual understanding that the party for whom the work is to be carried out currently resides or proposes at some future time to reside in the premises. It appears that the significance in that case of the defendant's intention to reside in the premises having been communicated to the builder, and the contract having been entered into on that mutual understanding, was that it showed there was no genuine dispute about the defendant's intention so that the matter was appropriate for summary judgment (at [56]-[57]). In Shorten v David Hurst Constructions Pty Ltd [2008] NSWCA 134; (2008) 72 NSWLR 211, the Court of Appeal did not decide the point, but certainly did not endorse the proposition that the intention of the party for whom the building work was done to reside in the premises needed to be communicated to the builder (at [33], [56]). In my view, there is no such requirement in s 7(2)(b) in order to establish residence or proposed residence. Conclusion 42 For these reasons I conclude that the Act did not apply to the construction contract and the plaintiff is entitled to the declaration and injunction sought. As I differ from the adjudicator, I should add that there was a lot more evidence before me going to the plaintiff's connection with the Cronulla property, and his intentions, than was before him. It also appears that the adjudicator reasoned that because the plaintiff was not living in the Cronulla property when the construction contract was entered into, he had ceased to reside there. That is too narrow a conception of residence. 43 It is unnecessary to deal with the plaintiff's alternative claim for an injunction to restrain enforcement of the adjudication determination on the alleged ground that there was a real and significant risk that the first defendant would not be able to repay the adjudicated amount to the plaintiff if it were ordered to do so in proceedings commenced under s 32 of the Act. Had I concluded that the Act applied, the evidence fell far short of establishing actual or imminent insolvency of the first defendant which might warrant an injunction which would stay the statutory regime (Taylor Projects Group Pty Ltd v Brick Dept. Pty Ltd (2005) NSWSC 571 at [52]-[60] and cases there cited). Orders 44 For these reasons I make the following declaration and orders:

Declare that the purported adjudication determination of the second defendant dated 13 May 2009 in adjudication application 2009ADJT197 ("the Determination") is void.

Order that the first defendant by itself, its servants and agents be restrained from requesting any nominating authority to provide an adjudication certificate in respect of the Determination, or from filing such certificate as a judgment in any court, or from otherwise taking any step in relation to the enforcement of the Determination.

The exhibits may be returned after 28 days. 45 I will hear the parties on costs.

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