Claire Rewais and Osama Rewais t/as McVitty Grove v BPB Earthmoving Pty Ltd

Solicitors: Agility Legal (Plaintiffs) Stacks Law Firm (First Defendant) No appearance (Second Defendant) File Number(s): 2024/00260669 Publication restriction: Nil

INTRODUCTION

1. This is an application by the plaintiffs, Mrs Claire Rewais and Dr Osama Rewais trading as McVitty Grove (the Rewaises), in relation to an adjudication determination made under the Building and Construction Industry Security of Payment Act 1999 (NSW) on 7 July 2024 (Determination).
2. The Determination made by the second defendant, Mr Christopher Larcos, as adjudicator (Adjudicator) determined that the Rewaises owe the first defendant, BPB Earthmoving Pty Ltd, $277,007.16 in respect of building works and earthworks carried out by BPB at the Rewaises' property in Woodlands, New South Wales (Property).
3. The Rewaises seek a declaration that the Determination is void, an order quashing it and an order permanently restraining BPB from enforcing it. Each of these orders, if granted, would achieve the same practical result.
4. The Rewaises contend that the Determination is invalid because the payment claim of BPB the subject of it and the notice of BPB's intention to seek the adjudication under the Security of Payment Act was not validly served on them and, as a result, the Adjudicator did not have jurisdiction to make the Determination. They also contend that the Determination is unenforceable due to a prohibition against enforcement under ss 10 and 94 of the Home Building Act 1989 (NSW) (HBA) based on BPB's failure to hold a licence to carry on residential building work, to have a contract in writing for the work and to have insurance for the work undertaken by it.
5. For the reasons set out below, I have reached the conclusion that the plaintiffs' application should be dismissed.

Credibility

1. Each of the Rewaises were cross-examined on their evidence at the hearing. I regard them each as having given their evidence honestly and credibly to assist the court. I accept it except in any limited circumstances I have identified below where it can be demonstrated not to be correct based on the contents of contemporaneous documents.

The Rewaises and the Property

1. On 17 December 2020, the Rewaises became the registered proprietors of the Property. The Property includes a residential dwelling, a disused non-grape producing vineyard and olive trees over 22 acres and a separate building which, prior to being acquired by the Rewaises, was used to operate a "cellar-door" and café known as "McVitty Grove Café" (café building).
2. At all relevant times, the Rewaises have used the Property as their family home. The Rewaises have five children, ranging in ages from 20 to 30 years old.
3. The Property had a liquor licence attached to it when the Rewaises acquired it and this liquor licence has been transferred into the name of Mrs Rewais as licensee. The Rewaises have kept the liquor licence because they regard it as a valuable asset attached to the Property and not because they intend to use it in connection with a business to be carried out by them at the Property.
4. On 30 April 2021, the Rewaises registered the business name "McVitty Grove Café" in partnership between them. On 27 November 2021, the business name was changed to "McVitty Grove", and subsequently on 23 September 2023 it was changed again to "Gethsemane" (although this latter name change was after the events relevant to these proceedings). The Rewaises have been considering changing the name of the Property to "Gethsemane".
5. From July 2021 to June 2022, the Rewaises used the Property to generate minor income in the form of $5,785 for the sale of olive oil from olives grown on the Property. Mrs Rewais gave evidence that this was done as a hobby, she sold the olive oil because she was asked to do so as part of a food and wine festival which she regarded as a good community event and the costs of producing the olive oil outweighed any income from it.
6. Dr Rewais is a medical doctor. In February 2023, he obtained development consent for the construction of proposed health consulting rooms at the Property.
7. In April 2024, the Rewaises sold 11 head of cattle which were kept on the Property for about $11,000.

BPB and its business

1. BPB operates as an earthmoving business. It tends to acquire new projects by word of mouth and primarily operates as a sub-contractor on large construction sites. From time-to-time BPB completes smaller-scale general earthmoving work for clients, including in early 2023 as a subcontractor to John Arnot of Oxley Landscapes on a property in Bowral, New South Wales.
2. The sole director of BPB is Beau Braeckmans. Mr Braeckmans' wife, Paula Braeckmans, is an employee of BPB and is responsible for managing its accounts and providing administrative support.
3. In February 2023, while Mr Braeckmans was working as a subcontractor to Oxley Landscapes, Mr Arnot introduced Mr Braeckmans to the Rewaises who needed a builder to carry out certain works on the Property.

Contract for building works

1. On about 6 March 2023, Mr Braeckmans, Mr Arnot and the Rewaises met at the Property and, on or about that date, BPB and the Rewaises entered into an oral agreement pursuant to which BPB would carry out earthworks at the Property as requested by the Rewaises from time-to-time (Contract). As part of the Contract, it was initially agreed that BPB would perform earthworks around the existing café building in which a proposed doctor's surgery was to be constructed on the bottom floor, involving fixing up the carpark and the pathway from the carpark down to the proposed doctor's surgery, the removal of trees and tidying up the batter (the incline). The works to be completed under the Contract expanded throughout 2023 and early 2024 through further oral requests made by the Rewaises to Mr Braeckmans and remain the subject of dispute between the parties.
2. On 14 March 2023, Mr Braeckmans prepared a costs estimate for the initial works agreed to be completed at the Property which was provided by email from Mrs Braeckmans to Mr Arnot. The estimate described the "Scope of Works" as including levelling out the carpark, stripping topsoil and removing trees, sealing sandstone, removing trees near the café building, battering ledges, boxing out for the concrete pathway and building a disabled pathway (initial scope of works). The estimated cost in the initial scope of works was $82,646 exclusive of GST.
3. A few days later, according to Mr Braeckmans' evidence, Mr Arnot told him that the Rewaises "want to go ahead with your estimate for the work around the café and surgery" and asked Mr Braeckmans when he could start.

Commencement of works

1. On 9 May 2023, BPB commenced works at the Property. During the period that BPB was performing works at the Property, there were a total of 14 employees or subcontractors of BPB (including Mr Braeckmans) undertaking that work.
2. On 9 and 10 May 2023, BPB removed trees near the café building, removed an existing asphalt pathway that led from the carpark to the café building and boxed out a new pathway to the café building for concrete formwork.
3. Shortly before 19 June 2023, Mr Braeckmans, Mr Arnot and the Rewaises had another meeting at the Property and discussed further works for BPB to carry out, including mulching embankments and filling in a gully with clay to soften the batter. Dr Rewais agreed to this work being undertaken.
4. On about 19 and 20 June 2023, BPB stripped grass on the ledges around the café building, mulched the grass and loaded the grass and topsoil.
5. Between 21 and 22 June 2023, BPB stripped topsoil off the gully, dug up clay and used the clay to fill in the gully.
6. On 22 June 2023, Mr Arnot advised Mr Braeckmans that the Rewaises no longer wanted to build a doctor's surgery on the Property but wished to renovate it and open it as a function centre and that Mrs Rewais wanted an amphitheatre to be constructed next to the café building using sandstone blocks (amphitheatre works). In cross-examination, Mrs Rewais denied that the purpose of the amphitheatre was for it to be used in conjunction with a business to be run from the café building. In cross-examination, Dr Rewais said that they had no intention of using the café building and the adjoining amphitheatre commercially but the whole idea was to set them up so they could have home weddings for their children. I accept the evidence of the Rewaises on these matters.
7. Mr Braeckmans visited the Property later that day and Mrs Rewais showed him where they wanted the amphitheatre to be located.
8. On 24 June 2023, Mr Arnot requested, on behalf of Dr Rewais, that BPB demolish and reconstruct the retaining wall at the residence on the Property (retaining wall works) and complete roadwork on the road leading to the residence (road works). Later that day, Mr Braeckmans attended the Property to meet with Mr Arnot and the Rewaises to be shown the areas where the retaining wall works and road works were required.
9. On 26 June 2023, BPB began the amphitheatre works and continued filling in the gully.

Communications between BPB and the Rewaises about payment

1. On 26 June 2023 at about 8:30am, Dr Rewais sent a text message to Mr Braeckmans asking whether he had "an indication of costing".
2. In a subsequent message in the same chain at 8:30am, Dr Rewais wrote "srewais@gmail.com", providing Mr Braeckmans with his email address. Dr Rewais said that while he does have that email address, he does not open all emails that come to it and does not regularly check it. As at 5 August 2024, Dr Rewais said that the account had 4,916 unopened emails.
3. At 6:52pm that day, after receiving no response from Mr Braeckmans, Dr Rewais sent a further text message to Mr Braeckmans which asked, "How do you go with the quote ?". Mr Braeckmans replied by text, "Just getting in now will be sent in morning".
4. On 27 June 2023 at 8:38am, Dr Rewais sent Mr Braeckmans a text message which asked, "Have you sent me the estimated quotes?".
5. On 30 June 2023, Mr Braeckmans had a conversation with Mr Arnot in which Mr Arnot advised that Dr Rewais was chasing up the costs estimate for the amphitheatre works, the road works and the retaining wall works.
6. On 1 July 2023 at 8:07am, in response to Dr Rewais' text message of 27 June requesting "estimated quotes", Mr Braeckmans sent a text message to Dr Rewais with a photograph of a handwritten document with costs for each of the amphitheatre works ($97,500), the road works ($180,000) and the retaining wall works ($42,000) (1 July scope of works). Mr Braeckmans sent an accompanying text message to Dr Rewais apologising for the handwriting. Dr Rewais describes the 1 July scope of works as a "quotation" from BPB for the works it sets out but Mr Braeckmans says the 1 July scope of works was merely an "estimate" of the cost of completing those works.
7. The detail of the 1 July scope of works provides: Sams 454 Wombeyan Cave Rd Sandstone blocks and earthwork around café $97,500 Supply sandstone, machines, labour Roads Supply roadbase, labour, machines $180,000 Not allowing asphalt Retaining wall at house Remove old block Supply new retaining wall, labour, machines $42,000

All work are a estimate

1. The amounts contained in the 1 July scope of works total $319,500.

Continuation of works

1. On 10 July 2023, Mr Braeckmans, Mr Arnot and Mrs Rewais met at the Property. The location of the amphitheatre was marked-out in spray paint by Mr Braeckmans in accordance with Mrs Rewais' instructions.
2. On 13 July 2023, BPB then proceeded to cut, shape and level the footings for the amphitheatre based on this marked-out positioning.
3. On 13 July 2023, when the work on the footings was almost complete, Mr Braeckmans was informed that Mrs Rewais wanted to move the location of the amphitheatre. Later that day, Mr Braeckmans met Mrs Rewais at the Property. The new positioning was marked in spray paint by Mr Braeckmans in accordance with Mrs Rewais' instructions. According to Mr Braeckmans, he told Mrs Rewais that because of the new location "[w]e are going to have to redo all the work we've done if you want it here and it [is] going to cost more money" and Mrs Rewais agreed. Mr Braeckmans then gave instructions to BPB personnel who removed the fill for the first marked-out position of the amphitheatre and started digging new footings in the second marked-out position.
4. On about 17 July 2023, during a meeting at the Property also attended by Mr Arnot, Mrs Rewais again told Mr Braeckmans that she wanted to change the position of the amphitheatre. Mr Braeckmans informed her that this would cost more money and take more time. Mrs Rewais instructed him to proceed with the amphitheatre in the new location. Mr Braeckmans and Mr Arnot then marked in spray paint the third marked-out position.
5. Also on 17 July 2023, in the presence of the Rewaises, Mr Arnot informed Mr Braeckmans that the Rewaises wished to make the carpark for the café building larger and lower the ground level near the café building. Mr Braeckmans confirmed that BPB could do those works.
6. Between 18 and 24 July 2023, BPB carried out those further works around the café building.
7. On 24 July 2023, BPB personnel moved all their equipment off the Property as it was needed for another job nearby. This meant that the laying of the sandstone blocks for the amphitheatre and excavation of the retaining wall near the residence could not proceed until the other job was finished.

BPB invoicing for the works and undertaking further works

1. Prior to August 2023, BPB had not issued any invoices to the Rewaises for works completed. The Contract did not expressly provide for an invoicing or payment process and Dr Rewais said that he and Mr Braeckmans never discussed a specific method of communication to be used between them (including for the issuing of invoices). If not in person, communications between Dr Rewais and Mr and Mrs Braeckmans occurred by a mix of text messages and emails.
2. BPB's usual invoicing practice is to invoice clients on an hourly rate basis and very occasionally by a fixed quote. In effect, that usual practice is as follows: 1. Each work day, a BPB employee completes a docket which records the operators, plant and equipment on site that day, the times each was operational and the task each piece of equipment was being used for. 2. The dockets are given to Mrs Braeckmans weekly on Tuesdays. 3. Mrs Braeckmans reviews the dockets against each employee's weekly timesheets and, when satisfied that they are correct, allocates the dockets to their corresponding client folder. 4. Invoices from suppliers and subcontractors are collated by Mrs Braeckmans, checked by Mr Braeckmans and entered into MYOB (BPB's accounting software) and assigned to the client's job card. 5. At the end of the month or on completion of a set task, Mrs Braeckmans enters the dockets and supplier and subcontractor invoices into an excel spreadsheet which incorporates the agreed hourly hire rate for a job. 6. Mr Braeckmans reviews and approves the spreadsheet and an invoice is completed and sent by email to the client along with supporting documents. 7. MYOB statements are also sent on a monthly basis where a client has an amount outstanding.
3. At around the end of July 2023, Mr and Mrs Braeckmans reviewed the spreadsheet for the work on the Property and Mrs Braeckmans began preparing the first invoice for BPB's work at the Property.
4. On 11 August 2023, BPB sent an email to Dr Rewais at "srewais@gmail.com" (the email he had provided to Mr Braeckmans in his text message of 26 June 2023) attaching an invoice titled Claim 1 for "excavation and landscape works" (Claim 1 invoice) and a docket summary which itemised the works to which that invoice related. The Claim 1 invoice was for $95,524 (inclusive of GST).
5. On 21 August 2023, Mr Arnot informed Mr Braeckmans that Mrs Rewais requested the olive trees near the café building be transplanted to another part of the Property. On 21 and 22 August 2023, BPB completed this work.
6. On 1 September 2023, an MYOB statement of account was emailed to Dr Rewais on behalf of BPB.
7. On 14 September 2023, BPB sent two emails to Dr Rewais. The first email attached an amended version of the Claim 1 invoice (amended Claim 1 invoice) which divided the invoiced amount into "work completed prior to the estimate" and "work completed outside the scope of estimated works". The second email attached an invoice for $38,500 (inclusive of GST) for the supply of 100 sandstone blocks which were used for the amphitheatre works (sandstone invoice).
8. Between 10 and 12 October 2023, BPB undertook the retaining wall works by demolishing and removing the existing retaining wall near the residence.
9. On 16 October 2023, another MYOB statement of account was emailed to Dr Rewais.
10. On each day from 17 to 20 October 2023, the Rewaises paid $20,000 to BPB, totalling $80,000. These payments were made to the bank account listed on the invoices BPB had emailed to Dr Rewais. Mrs Braeckmans could not recall providing these bank account details to Dr Rewais in any other form. Mrs Braeckmans applied these payments to the amended Claim 1 invoice and, on BPB's account, $15,524 remained outstanding on that invoice.
11. Between 17 and 26 October 2023, BPB continued the retaining wall works by erecting a new retaining wall near the residence.
12. In late October 2023, Dr Rewais asked BPB to carry out the road works by undertaking remedial works on the driveway at the front of the residence. Mr Braeckmans agreed to do so. The road works were completed between 30 October and 7 November 2023.
13. On 14 November 2023, Dr Rewais sent Mr Braeckmans a text message which said "[j]ust checking [w]here we are at with quotes, work etc". Mr Braeckmans responded by text message later that day, "[s]till working on it".
14. Between 21 November and 18 December 2023, BPB continued the amphitheatre works, including moving sandstone blocks to the site of the amphitheatre, digging the footings for the blocks, and cutting and laying them. It also carried out road works in connection with the driveway to the residence and the retaining wall works by finishing backfilling the new retaining wall at the residence.
15. On 4 December 2023 and on 7 December 2023, an MYOB statement of account was emailed to Dr Rewais.
16. Also on 7 December 2023, Mrs Braeckmans sent Dr Rewais an email attaching an invoice titled Claim 2 in the sum of $44,000 for the retaining wall (Claim 2 invoice). The Rewaises paid $20,000 towards that invoice later that day and paid the remaining $24,000 the next day.
17. On 8 December 2023 at 10:57am, Dr Rewais sent an email to Mrs Braeckmans from "srewais@gmail.com" to advise that the Claim 2 invoice had been paid in full.
18. At some time on or shortly before 8 December 2023, Dr Rewais told Mr Braeckmans that he planned to build a deck off the café building with disabled ramp access. Dr Rewais requested BPB's assistance in its construction. Mr Braeckmans advised that BPB could assist but requested drawings of the proposed deck.
19. On 8 December 2023 at 5:53pm, Dr Rewais emailed Mrs Braeckmans attaching a hand-drawn plan for the deck and ramp to be constructed at the café building.
20. On 22 December 2023, an MYOB statement of account was sent to Dr Rewais on behalf of BPB. At 3:50pm that day, Dr Rewais emailed Mrs Braeckmans questioning the $38,500 expense which appeared in that statement. At 7:13pm that day, Mrs Braeckmans responded to Dr Rewais' email, advising that the amount related to the sandstone invoice which had been issued on 14 September 2023 and reattaching that invoice.
21. At 8:16pm that day, Dr Rewais sent a photo of the 1 July scope of works by text message to Mrs Braeckmans. According to Mrs Braeckmans, this was the first time she had seen the 1 July scope of works.
22. At 8.23pm that day, Dr Rewais sent an email to Mrs Braeckmans which stated "therapy sandstone was part of the quote. I sent you the text". Dr Rewais was referring to the photo of the 1 July scope of works he had just sent to Mrs Braeckmans.
23. On about 31 December 2023, Mrs Braeckmans prepared two further invoices titled Claim 3 for $26,716.98 for "[e]arthworks completed outside of scope" (Claim 3 invoice) and Claim 4 for $59,312.55 for "[e]arthworks completed for Sandstone wall" (Claim 4 invoice). On Mr Braeckmans' instruction, these were not emailed to Dr Rewais as he wanted to discuss them with the Rewaises in person in the new year.
24. Between 24 January and 12 February 2024, BPB carried out further amphitheatre works at the Property, including moving sandstone blocks to the site, digging footings for them, cutting and laying them, and backfilling the blockwork. During this period, BPB also began work on the disability access ramp to the proposed café building deck.

Outstanding invoices

1. On 2 February 2024, Mr Arnot, Mr Braeckmans and the Rewaises met at the Property to discuss the issue of payment of BPB's invoices. Mr Braeckmans provided the Rewaises with a folder containing hard-copies of all invoices issued by BPB between August and December 2023 (the Claim 1 invoice, the sandstone invoice, and the Claim 2, Claim 3 and Claim 4 invoices) and a spreadsheet prepared by Mrs Braeckmans which indicated the works to which each invoice related, whether they were inside or outside the 1 July scope of works, payments made by the Rewaises, discounts given and the outstanding balance. According to Dr Rewais, this was the first time he had seen the invoices contained in the folder. But that evidence cannot be right in relation to all of the invoices because Dr Rewais conceded in cross-examination that he had obtained the BPB bank account details from the invoices which he had already received by email from Mrs Braeckmans and paid. Those invoices were the Claim 1 invoice, the sandstone invoice and the Claim 2 invoice.
2. On 6 February 2024, Mr Braeckmans sent an email to Dr Rewais attaching an invoice for work completed in January 2024 titled Claim 5 for $33,280.72 for "[e]arthworks completed for Sandstone Wall" (Claim 5 invoice). In the email, Mr Braeckmans also enquired when BPB could expect payment of the outstanding invoices.
3. On 8 February 2024, an MYOB statement of account was emailed to Dr Rewais on behalf of BPB.
4. On 12 February 2024, BPB ceased work at the Property.
5. On 14 February 2024, BPB moved all of its plant and equipment off the Property.
6. On 12 February 2024 at 11:15am, Mrs Braeckmans sent a text message to Dr Rewais which stated, "Can you please advise asap when we can expect any payment on the overdue invoices from Aug - Dec last year ? Thankyou". At 1:38pm that day, Dr Rewais responded by text message, saying, "Just working through all the invoices I was given. I will have this back to you tomorrow".

Payment dispute

1. On 13 February 2024, the following text messages were sent between Mr Braeckmans and Dr Rewais: Mr Braeckmans: Hi Sam we need those invoices sorted out asap please advise when this will be sorted thankyou Hi Beau Dr Rewais: I've finished going through the invoices you gave me. There are quite a few discrepancies between my understanding and your invoices. I'll send you my assessment today and happy to chat with yourself and John. Cheers Sam

1. On 14 February 2024, Dr Rewais sent an email (again from srewais@gmail.com) to Mrs Braeckmans, copied to Mr Arnot, which disputed a number of BPB's invoices. Relevantly, Dr Rewais: 1. stated that he had requested a quote for the scope of works discussed in April 2023 and did not receive that quote until 1 July 2023 (referring to the 1 July scope of works), almost two months after work commenced; 2. stated that the 1 July "quote" divides the scope of works into three sections: works around the café building, the road works and the retaining wall works and noted that much of the work charged falls outside of these; 3. stated that he never agreed to an hourly rate as appears in BPB's invoices and proceeded with the works only on the basis of the costs set out in the 1 July "quote"; and 4. generally complained about the lack of transparency in BPB's invoicing process.
2. Dr Rewais also made specific complaints about individual invoices rendered, including: 1. Claim 1 invoice: most of the work covered by this invoice was considered part of the initial quote (the 1 July scope of works) for work around the café building and should not be invoiced separately. 2. Claim 2 invoice: the quote for the retaining wall works was for $42,000, but this invoice charged $44,000 for that work and appeared to be based on an hourly rate which was not agreed. 3. Sandstone invoice: the invoice for 100 sandstone blocks used in the amphitheatre works was generally challenged. Dr Rewais took "offence" to BPB's assertion that Mrs Rewais changed her mind about the positioning of the amphitheatre and suggested that it was a miscommunication on BPB's part and that "the team was working without direction" in the construction of the amphitheatre meaning the Rewaises were overcharged.
3. In summary, Dr Rewais asserted his position as: I agreed to the cafe work of 97500, I agreed to the retaining wall around the house [for $42,000]. The out of scope work that I agreed to was (a) moving olive trees (b) dropping the land and power by 0.5 m in front of the cafe (c) the work in front of the house . These were out of scope but again no quote for the works? Beau, I will await your assessment of the above and look forward to completion.
4. On 18 February 2024, Mr Braeckmans sent an email to Dr Rewais in response to his email of 14 February 2024. In it, Mr Braeckmans asserted: 1. each of the figures provided to the Rewaises by BPB were costs estimates only, not quotations, and were exclusive of GST; 2. invoicing was conducted by charging for the exact hours worked onsite and materials used for the job; 3. the 1 July scope of works provided an estimated cost for the amphitheatre works, retaining wall works and road works and the work on the powerline, tree removal and driveway were not included in this estimate; 4. many of the invoices BPB rendered were, in any event, significantly discounted (noting certain machinery which was not charged for); and 5. BPB has invoiced on a week-to-week basis since 11 August 2023 and the Rewaises have not complained about this practice prior to 14 February 2024.
5. Mr Braeckmans then addressed each of Dr Rewais' individual invoice complaints. Relevantly, he said: 1. Claim 2 invoice: the $42,000 for the retaining wall in the 1 July scope of works was an estimate only and, in any event, was exclusive of GST. BPB have charged $40,000 for the works on the retaining wall to date (bringing the total, inclusive of GST, to $44,000). 2. Sandstone invoice: as to the amphitheatre works, Mrs Rewais changed her mind about the positioning of sandstone blocks in the presence of Mr Arnot and was aware of the extra costs should she continue to change her mind.
6. Mr Braeckmans concluded: I can see that you have taken our ESTIMATE in July and have interpreted this in your own way as a 'fixed price quote' and are saying you are only paying the amounts in our estimate. I was clear that I cannot supply a fixed quote given the nature of these works. … The extra work out of scope I did not provide quotes for the same reason explained throughout this response. These are additional works and charged for hours, plant and material accordingly. I have not ripped you off or hidden costs as this email has been perceived.
7. On 20 February 2024, Mr Braeckmans sent an email requesting a response to his email dated 18 February 2024.
8. On 21 February 2024, Mr Braeckmans sent a text message to Dr Rewais requesting a response to that email.
9. On 22 February 2024, Dr Rewais sent an email to Mrs Braeckmans (although addressed to Mr Braeckmans) which responded to Mr Braeckmans' email of 18 February 2024. Dr Rewais asserted, among other things, that BPB was aware of the Rewaises' budget of $140,000 and should not have continued to carry out works or render invoices in excess of that amount in those circumstances. Dr Rewais also denied there being any agreement that BPB would charge using hourly hire.
10. On 23 February 2024, Mrs Braeckmans sent an email to Dr Rewais which acknowledged that an expense had been invoiced by both Mr Arnot and BPB. Mrs Braeckmans attached a credit adjustment to indicate that this expense had been removed from the Rewaises' statement of account.
11. On 2 March 2024, Mrs Braeckmans sent an email to Dr Rewais which attached BPB's invoice for $34,352.45 for work completed in February 2024 (Claim 6 invoice). That same day, Mrs Braeckmans sent a further email to Dr Rewais which attached an invoice for $7,315 for the remainder of the sandstone blocks (19 blocks) which had been delivered to the Property.
12. On 4 April 2024, Mrs Braeckmans sent a text message to Dr Rewais which relevantly said: Hi Sam I was speaking with Tim [Mrs Braeckmans' brother] and he mentioned you may be willing to discuss our payment claims with me to come to some sort of resolution out of court? Without prejudice, your emails you sent me suggested you were not willing to pay anything. Tim had suggested there was mention of little work done. I have all the daily work dockets, employee corresponding timesheets and photos of the tasks completed. … If you would like to text me back with any willingness to find a solution to cover our costs please do so. If I do not hear from you I will take it that your position from your last email still stands. I am not in an emotional state to discuss this other than by text but I would be happy to try and come to some sort of mutual agreement if you can tell me where you stand.
13. Subsequent text messages were exchanged in which Mrs Braeckmans and Dr Rewais re-stated their respective positions.

BPB's payment claim

1. On 24 April 2024, Mrs Braeckmans sent four emails to Dr Rewais (24 April emails). The first stated that BPB was withdrawing all previously issued invoices and issued a single combined invoice for "all work and materials completed from 09/05/2023 to 12/02/2024" (invoice 1676). This email also attached a supporting statement and other supporting documentation as required by the Security of Payment Act for the service of a payment claim. The further three emails attached the dockets for all works carried out by BPB at the Property. The documents attached to the 24 April emails together form BPB's payment claim.
2. Invoice 1676 was for $277,007.16 (inclusive of GST) and allowed a discount of $124,000 (inclusive of GST) for the two payments made by the Rewaises. Consistently with all previous invoices issued by BPB, invoice 1676 included a statement that "[t]his claim has been made under the [Security of Payment Act]".
3. On 22 May 2024, Stacks Law Firm, the solicitors for BPB, sent a letter on behalf of BPB addressed to the Rewaises trading as McVitty Grove via email to Dr Rewais and also (according to BPB but disputed by the Rewaises) by express post to the Property (22 May letter).
4. The evidence of Sarah Fletcher, a paralegal of Stacks, is that on 22 May 2024 she handed a letter and an express post envelope to Lucy Condylios (also of Stacks) and instructed her to make a photocopy of the envelope and its contents and to physically mail the envelope at the Bowral Post Office. On 22 May 2024, Ms Condylios then provided Ms Fletcher with a photocopy of the envelope and its contents she had been handed by Ms Fletcher. The photocopy of the envelope proves that it was addressed to the Rewaises at the Property. The photocopy of the contents of the envelope proves that it was the 22 May letter. Also on 22 May 2024, Ms Condylios provided Ms Fletcher with the Australian Post article lodgement receipt she received from the Bowral Post Office when she lodged the express post envelope. I infer from this evidence that the 22 May letter was in the envelope when it was lodged at the Bowral Post Office by Ms Condylios. Australia Post's records indicate that the 22 May letter was delivered on 24 May 2024 at 12:23pm.
5. The 22 May letter relevantly provided (emphasis in original): We refer to [invoice 1676] dated 24 April 2024 in the sum of $277,007.16 issued to you by BPB and served by email dated 24 April 2024 (Payment Claim). In response to the Payment Claim you failed to provide a payment schedule within the time allowed by the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act). As a consequence, you became liable to pay the whole amount of the Payment Claim on the due date for payment. You have failed to pay the whole of the claimed amount by the due date for payment.
6. The 22 May letter then stated that BPB had elected to apply for adjudication of the payment claim and would proceed to adjudication if the Rewaises did not serve a payment schedule or pay the payment claim in full within five business days.
7. The 22 May letter was BPB's attempt to provide notice to the Rewaises under s 17(2) of the Security of Payment Act of its intention to apply for adjudication of the payment claim.
8. On 11 June 2024, Dr Rewais was blind-copied into an email from Stacks to Paul O'Shannassy of Agility Legal (11 June email). Dr Rewais opened that email around the same time he received it, having been notified of it by a telephone call from his solicitor. The 11 June email contained: 1. a link to a OneDrive folder that contained copies of the 24 April emails; and 2. a copy of the 22 May letter.
9. Dr Rewais had not opened, read or seen the 24 April emails or 22 May letter before he received the 11 June email but read them on his receipt of the 11 June email.
10. At some time after he received the 11 June email, Dr Rewais checked his letter box at the Property. The letterbox did not contain the 22 May letter.

Adjudication of BPB's payment claim

1. On 13 June 2024, BPB lodged an adjudication application under s 17(1)(b) of the Security of Payment Act and provided this to the Rewaises by email from Stacks to William Costis of William Costis and Associates (solicitors for the Rewaises at the time). Mr Costis accepted service on behalf of the Rewaises.
2. On 18 June 2024, the Rewaises provided BPB with a payment schedule pursuant to s 14 of the Security of Payment Act. In the payment schedule the Rewaises submitted that they owed nothing to BPB, that the adjudication application was invalid and that the Adjudicator did not have jurisdiction to determine the adjudication application.
3. On 7 July 2024, the Adjudicator published the Determination, determining that the Rewaises were to pay the adjudicated amount of $277,007.16 to BPB.
4. The Determination is separated into five parts headed "Background", "Claims for Payment", "Jurisdiction", "Other Matters" and "Determinations".
5. Under "Background", the Adjudicator set out a brief overview of the relationship between BPB and the Rewaises and the terms of the contract between them, which was "partly oral and partly implied by way of the parties' conduct".
6. Under "Claims for Payment", the Adjudicator stated the respective dates on which BPB's payment claim, the 22 May letter as the s 17(2) notice and adjudication application were filed, and the dates on which payment schedules and payment were due by the Rewaises according to the Security of Payment Act timelines. He said the Rewaises did comply with these timelines.
7. Under "Jurisdiction", the Adjudicator referred to the payment schedule "purported" to be filed by the Rewaises on 18 June 2024 in which they submitted that the adjudication application was invalid and the Adjudicator did not have jurisdiction to determine the claim. The Adjudicator set out in detail the Rewaises' submissions in support of their contention and BPB's submissions in opposition, which are largely similar to the submissions of both parties in this court. The Adjudicator, over five pages of reasons, decided that he did have jurisdiction and concluded that: 1. the payment claim in the 24 April 2024 emails and the 22 May letter as the s 17(2) notice "were served (under the section 31(1)(d) of the [Security of Payment Act] or section 13A(1) of the Electronic Transactions Act 2000 (NSW)) on the [Rewaises] on 24 April 2024 and 22 May 2024 respectively"; and 2. if he was wrong in that conclusion, Dr Rewais became aware of the payment claim and s 17(2) notice on the dates BPB sent them to him by email.
8. Under "Other Matters" the Adjudicator dismissed the Rewaises' challenge to the claimed amount and under "Determinations" the Adjudicator determined that BPB should be paid the whole of the claimed amount.

The Rewaises' summons

1. On 15 July 2024, the Rewaises filed the summons and list statement commencing these proceedings.
2. By the summons, the Rewaises seek the following final relief: 8. The Adjudication Determination of the second defendant dated 7 July 2024 (Determination) be declared void. 9. An order in the nature of certiorari, pursuant to section 69 of the Supreme Court Act 1970 (NSW), quashing the Determination. 10. An order permanently restraining the first defendant from enforcing the Determination.
3. The Rewaises identify in the list statement the following bases in support of their application: 1. the Adjudicator did not have jurisdiction to make the Determination because: 1. the payment claim upon which the Determination was based was not served on the Rewaises until 11 June 2024 (not 24 April 2024 as the Adjudicator found) meaning the adjudication application (filed on 13 June 2024) was filed prematurely; and 2. the s 17(2) notice, a precondition to the filing of an adjudication application, was not validly served on the Rewaises; and 1. irrespective of whether the payment claim and the s 17(2) notice were properly served, BPB is not entitled to enforce the Determination because: 1. the Contract is a contract to which the HBA applies; 2. BPB breached ss 4, 7, 12 and/or 92 of the HBA; and 3. BPB is prohibited from enforcing the Determination by ss 10 and 94 of the HBA.
4. I will deal with each of these issues in turn.

Security of Payment Act

1. The Security of Payment Act sets out a framework for the making of payment claims by parties to construction contracts and the availability of adjudication of disputes under those contracts.
2. Relevantly, s 13 states: (1) A person referred to in section 8 who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment. … (2) A payment claim - (a) must identify the construction work (or related goods and services) to which the progress payment relates, and (b) must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount), and (c) must state that it is made under this Act. … (7) A head contractor must not serve a payment claim on the principal unless the claim is accompanied by a supporting statement that indicates that it relates to that payment claim. … (8) A head contractor must not serve a payment claim on the principal accompanied by a supporting statement knowing that the statement is false or misleading in a material particular in the particular circumstances.
3. Section 14 of the Security of Payment Act states that a person on whom a payment claim is served may reply by providing a payment schedule. If that person does not provide a payment schedule to the complainant within the time required by the relevant construction contract or within 10 business days of the date of service of the payment claim (whichever is earlier), the respondent is liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates: s 14(4) Security of Payment Act.
4. If a respondent becomes liable to pay an amount claimed under a payment claim pursuant to s 14(4) because they failed to provide a payment schedule in time, and fails to pay the claimed amount in whole or part before the due date for the progress payment to which the payment claim relates (ss 15(1)(a) and (b)), the claimant may make an adjudication application under s 17(1)(b) of the Security of Payment Act in relation to the payment claim: s 15(2)(a)(ii) Security of Payment Act.
5. However, s 17(2) states that an adjudication application under s 17(1)(b) cannot be made unless: (a) the claimant has served written notice on the respondent, within the period of 20 business days immediately following the due date for payment, of the claimant's intention to apply for adjudication of the payment claim, and (b) the respondent has been given an opportunity to provide a payment schedule to the claimant within 5 business days after receiving the claimant's notice.
6. Section 22 relevantly provides: 22 Adjudicator's determination (1) An adjudicator is to determine - (a) the amount of the progress payment (if any) to be paid by the respondent to the claimant (the adjudicated amount), and (b) the date on which any such amount became or becomes payable, and (c) the rate of interest payable on any such amount. (2) In determining an adjudication application, the adjudicator is to consider the following matters only - (a) the provisions of this Act, (b) the provisions of the construction contract from which the application arose, (c) the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim, (d) the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule, (e) the results of any inspection carried out by the adjudicator of any matter to which the claim relates. …
7. Section 31 of the Security of Payment Act sets out the requirements for service of documents under that Act as follows: 31 Service of documents (1) Any document that by or under this Act is authorised or required to be served on a person may be served on the person - (a) by delivering it to the person personally, or (b) by lodging it during normal office hours at the person's ordinary place of business, or (c) by sending it by post addressed to the person's ordinary place of business, or (d) by email to an email address specified by the person for the service of documents of that kind, or (d1) by any other method authorised by the regulations for the service of documents of that kind, or (e) in the case of service by a party to a construction contract on another party to the construction contract - in the manner that may be provided under the construction contract. (2) Service of a document that is sent to a person's ordinary place of business, as referred to in subsection (1)(c), is taken to have been effected when the document is received at that place. (3) The provisions of this section are in addition to, and do not limit or exclude, the provisions of any other law with respect to the service of documents. …
8. The application of these service provisions was considered in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2006] NSWCA 259 in which Hodgson JA (Handley JA and Hunt AJA agreeing) set out the following principles: 1. Payment claims and payment schedules are notices within s 31 of the Security of Payment Act and s 31 plainly applies in relation to their service: at [59]. 2. The onus of proof is on a claimant to show it has a cause of action under s 14 of the Security of Payment Act and therefore the onus falls on the claimant to prove service issues: at [51]. 3. If a document has actually been received and come to the attention of a person to be served or provided with it, it does not matter whether or not any "facultative regime" has been complied with and in such a case there has been service, provision and receipt: at [58] citing Howship Holdings Pty Ltd v Leslie (1996) 41 NSWLR 542; Mohamed v Farah [2004] NSWSC 482 at [42]-[44].
9. This position was reiterated by Ball J in QC Communications NSW Pty Ltd v CivComm Pty Ltd [2016] NSWSC 1095, who said at [27] (citing Falgat): A document will be served in accordance with the requirements of the [Security of Payment Act] if it actually comes to the attention of the person to be served. It is not necessary that it be served in accordance with s 31.
10. In BCFK Holdings Pty Ltd v Rork Projects Pty Ltd [2022] NSWSC 1706, Stevenson J at [28]-[31] stated: [28] A party that actually receives a payment claim should not be entitled to assert that service did not ever happen because of a shortcoming, perhaps technical, in the manner in which the claimant purported to effect service. [29] In my opinion, an assertion in a payment schedule that service has not been validly effected should be taken to be an acknowledgment that, notwithstanding the initially ineffective service, the payment claim has, ultimately, come to the attention of the authorised recipient; who would then stand as being validly served. [30] It is true that this may mean that a claimant that has ineffectively purported to serve a payment claim may not know when time starts to run for the respondent to serve a payment schedule and thus may not know at what time they may […] go to adjudication. However, any such circumstance will be a consequence of the claimant's own error so far as concerns service and, if they were to move prematurely to adjudication, it would be of no effect. [31] In any event, the respondent's obligations under the [Security of Payment Act] are engaged once the payment claim has come to the attention of the authorised recipient. Sensible communications between the parties will, and should be encouraged to, resolve any such issues and to ensure that the claimant is made aware of the respondent's contention as to when service was effective.
11. To prove service of a payment claim, the claimant must therefore show that either (see Equa Building Services Pty Ltd v A&H Floors 2 Doors Australia Pty Ltd [2022] NSWSC 152, Hammerschlag J (as the Chief Judge in Equity then was) at [39]-[41]): 1. the payment claim and/or s 17(2) notice were served in accordance with the facultative provisions in s 31 of the Security of Payment Act, in which case the time of service will be the time at which the s 31 requirements were satisfied; or 2. if the payment claim and/or s 17(2) notice were not served in accordance with s 31, that they were in fact brought to the respondent's attention and the time of service will be the time at which the respondent became aware of the payment claim.
12. As to the time of service by email to an email address specified by the person for the service of documents of that kind under s 31(1)(d) of the Security of Payment Act, in Demex Pty Ltd v John Holland Pty Ltd (2022) 12 QR 438; [2022] QSC 259, Crowley J (dealing with the proper construction of the Security of Payment Act) at [70]-[77] concluded that service of a payment claim by email under that provision is effected when it is received at the nominated email address of the recipient party and there is no requirement that the recipient party must be aware of the receipt of the emailed payment claim, let alone that the recipient has accessed, opened or read the email or any attachments. Obviously, this reasoning on s 31(1)(d) only operates where the email address has been specified, not otherwise.

Electronic Transactions Act

1. The Adjudicator also cited compliance with s 13A of the Electronic Transactions Act as a second basis (independently of compliance with s 31 of the Security of Payment Act) on which the payment claim was properly served. Section 13A(1) provides: For the purposes of a law of this jurisdiction, unless otherwise agreed between the originator and the addressee of an electronic communication - (a) the time of receipt of the electronic communication is the time when the electronic communication becomes capable of being retrieved by the addressee at an electronic address designated by the addressee, or (b) the time of receipt of the electronic communication at another electronic address of the addressee is the time when both - (i) the electronic communication has become capable of being retrieved by the addressee at that address, and (ii) the addressee has become aware that the electronic communication has been sent to that address.
2. Section 8 of the Electronic Transactions Act is also raised in BPB's submissions. That section relevantly provides: 8 Writing (1) If, under a law of this jurisdiction, a person is required to give information in writing, that requirement is taken to have been met if the person gives the information by means of an electronic communication, where - (a) at the time the information was given, it was reasonable to expect that the information would be readily accessible so as to be useable for subsequent reference, and (b) the person to whom the information is required to be given consents to the information being given by means of an electronic communication. (2) If, under a law of this jurisdiction, a person is permitted to give information in writing, the person may give the information by means of an electronic communication, where - (a) at the time the information was given, it was reasonable to expect that the information would be readily accessible so as to be useable for subsequent reference, and (b) the person to whom the information is permitted to be given consents to the information being given by means of an electronic communication. … (4) This section applies to a requirement or permission to give information, whether the expression give, send or serve, or any other expression, is used. (5) For the purposes of this section, giving information includes, but is not limited to, the following - (a) making an application, (b) making or lodging a claim, (c) giving, sending or serving a notification, (d) lodging a return, (e) making a request, (f) making a declaration, (g) lodging or issuing a certificate, (h) making, varying or cancelling an election, (i) lodging an objection, (j) giving a statement of reasons.
3. Section 5 of the Electronic Transactions Act defines "consent" for the purposes of that Act in the following way: consent includes consent that can reasonably be inferred from the conduct of the person concerned, but does not include consent given subject to conditions unless the conditions are complied with.

Service of the payment claim

1. The Rewaises submit, first, that the payment claim was not served in accordance with s 31 of the Security of Payment Act because: 1. The payment claim was sent to the Rewaises by the 24 April emails. To be served by email in accordance with the Security of Payment Act, it must comply with s 31(1)(d). 2. Section 31(1)(d) provides for service by email "to an email address specified by the person for the service of documents of that kind". 3. The Contract was oral and the parties did not discuss any specific method or mode of communication to be adopted in relation to it, and no evidence of any discussion of this kind was produced by BPB. 4. Although Dr Rewais sent a text message which contained his email address to Mr Braeckmans on 26 June 2023, this was insufficient to designate that address as an address for service of payment claims, citing Equa Building Services. The message, viewed in context, relates to Dr Rewais' repeated requests for a quotation for the works from BPB. A quotation is not a document which is "authorised or required to be served on a person" by the Security of Payment Act, so the provision of his email address in this context cannot constitute specification of an email address for service of documents of that kind. Further to this, the document Dr Rewais requested by text message on 26 June 2023 be sent to his email address was not actually provided by email by Mr Braeckmans but rather was provided to him by text message on 1 July 2023, being the 1 July scope of works. 5. Although Dr Rewais accepted in cross-examination that he was content for written communications in relation to the works to be sent to his email address, the relevant question is not whether he was content to communicate in this way but whether he specified his email address for the service of documents of a particular kind. The evidence does not establish that he was content for documents under the Security of Payment Act to be transmitted in this way, let alone that he specified his email address for such purpose. 6. Any assertion that it was an implied term of the Contract that service could be effected by email to Dr Rewais is vague and contrary to the intention of BPB at the time and s 31(1)(e) is not engaged.
2. The Rewaises accept that service by email would have been effective (despite not complying with s 31 of the Security of Payment Act) had the 24 April emails been brought to their attention, but submit that the payment claim did not come to the attention of either of them until 11 June 2024 and was therefore not served on them until that date. In support of this contention, they submit: 1. BPB's evidence rises no higher than establishing that email communications were sent by them to the Rewaises and that the Rewaises would sometimes respond in turn via email. This evidence is irrelevant. The test is whether the 24 April 2024 emails specifically came to the Rewaises' attention. 2. The Rewaises' evidence that they were not aware of the payment claim until 11 June 2024 was not contradicted by any positive evidence of BPB, who bears the onus of proof of service. In cross-examination, it was never put to Dr Rewais that he clicked on or opened the 24 April emails or that he viewed them in his inbox and was aware of their content. 3. Dr Rewais does not regularly check his email address and as at 5 August 2024 his account had 4,916 unopened emails. 4. The main method of communication between the parties was text message or in-person conversations and, according to Dr Rewais, the Claim 1 invoice and Claim 2 invoice which he received by email and paid were both notified to him either by text message or in person by Mr Braeckmans or Mr Arnot. 5. Not all invoices rendered by BPB were sent by email. The Claim 3 invoice and Claim 4 invoice were provided in hard copy only at the 2 February 2024 meeting. 6. The fact that Mr and Mrs Braeckmans provided the Rewaises with a hard-copy of their invoices on 2 February 2024 demonstrates that neither of them "had any confidence that Dr Rewais was actively using his email or that their invoices would be paid if they did not take other steps … to ensure the invoices came to his attention." 7. Dr Rewais' understanding was that after BPB ceased work on the Property at the end of February 2024, matters were "at an end" between him and BPB, he was not going to pay any more invoices because of the issues he had raised about invoice 1676 and his understanding that the only amount payable was that set out in the 1 July scope of works, and there was no reason for him to check for or expect further invoices from BPB.
3. Ultimately, the Rewaises submit that because they were not aware of the payment claim prior to 11 June 2024, that is the proper date of service of the payment claim.

Service of the s 17(2) notice

1. The Rewaises submit that even if the court finds the payment claim was served on 24 April 2024, I must also be satisfied that the 22 May letter as the s 17(2) notice was served in time for the adjudication application to have been properly made.
2. They submit, first, that the s 17(2) notice was not served by email on 22 May 2024 because: 1. It was not served in accordance with s 31(1)(d) of the Security of Payment Act because Dr Rewais did not specify his email address for service of these kinds of documents. They repeat their submissions above in relation to the payment claim in support of this point. 2. The email attaching the 22 May letter did not come to their attention until 11 June 2024. They repeat their submissions above in relation to the payment claim in support of this point.
3. Second, they submit that the s 17(2) notice was not served by post on 24 May 2024 (the date on which Australia Post's records mark the envelope said to have contained the 22 May letter as delivered) because: 1. BPB have not proved that the 22 May letter was brought to the Rewaises' attention. Their uncontradicted evidence is that as they live on acreage they rarely check the letter box at the Property and tend to rely on their PO box in Mittagong or at Dr Rewais' business address. Dr Rewais' contention that he did not see an envelope in the mailbox at the Property after 11 June 2024 was not challenged in cross-examination and Mrs Rewais was not questioned about whether she checked the mailbox at the Property. 2. The evidence does not establish with any degree of certainty that the 22 May letter was in fact posted. The employee of Stacks who posted the envelope allegedly containing the letter was not called and BPB provided no explanation for her absence.

Service of the payment claim

1. BPB says the payment claim was served on Dr Rewais on 24 April 2024 by the sending of the 24 April emails in accordance with s 31(1)(d) of the Security of Payment Act. In support of this submission, it says: 1. The Rewaises "specified" and "designated" Dr Rewais' email address as the address to which payment claims could be sent when Dr Rewais sent a text message on 26 June 2023 with his email address to Mr Braeckmans. The text message demonstrates his intention for his email address to be used for communication of "all written documents" between the parties, including for the service of payment claims. 2. Dr Rewais' response to emails sent to him by BPB suggests he was "content" for written communications relating to BPB's invoicing to be conducted over email. Dr Rewais agreed in cross-examination that he was content for written communications relating to the works to be communicated this way. 3. Dr Rewais never told Mr Braeckmans that he did not wish to receive invoices by email despite having the opportunity to do so, having received multiple invoices by email from BPB, having paid the Claim 1 invoice and Claim 2 invoice after receiving them by email, having confirmed payment of the Claim 2 invoice by email on 8 December 2023 and having made payment of those invoices to the BPB bank account, the details of which were listed on the invoices. 4. The court should have regard to the informality of the dealings between the parties throughout the term of the Contract. Because the parties were informal in the way they expanded the scope of works as the Contract progressed, the court ought not require "formality" in the specification or designation of an email address by Dr Rewais. It submits that it is enough that he provided his email for the communication of written documents and it is "artificial" that the parties intended to distinguish between service by email of some documents but not others. It says that by their conduct in corresponding by email, the parties contracted for service of notices by email. 5. Effective service under s 31(1)(d) of the Security of Payment Act does not require proof that the 24 April emails were opened or read by Dr Rewais. The decision in Demex supports the position that service of the payment claim was effected on the Rewaises when it was received at their nominated email address on 24 April 2024 and there is no requirement that the Rewaises needed to be aware of the receipt of the emailed payment claim or that they accessed, opened or read the 24 April emails or the attachments to them.
2. BPB submits that the payment claim should also be deemed to have been served on 24 April 2024 pursuant to the Electronic Transactions Act because: 1. Section 31(3) of the Security of Payment Act does not limit or exclude the operation of provisions of other laws, including the Electronic Transactions Act, with respect to the service of documents. 2. Sections 8(1) and 8(2) of the Electronic Transactions Act, which apply to a requirement or permission to "serve" information, including the making of an application or lodging of a claim, permit that information to be communicated electronically if, among other things, the person to whom the information is given "consents" to the information being given electronically. 3. Section 5 of the Electronic Transactions Act defines "consent" as including consent that can be reasonably inferred from the conduct of a person. 4. It can reasonably be inferred from the Rewaises' conduct (both positive and negative) that they consented to the receiving of payment claims by email. They made payment on the Claim 1 invoice and Claim 2 invoice which were delivered by email, they did not instruct BPB to stop sending their invoices by email and they communicated about invoices by email (on 8 December 2023 and on 14 February 2024, for example). 5. Even if their conduct does not establish consent to the receipt of payment claims by email, given the informality of the dealings between the parties, it is enough that consent to receive any communications by email can be inferred from their conduct. 6. In accordance with s 13A(1)(a) of the Electronic Transactions Act, the time of receipt of the payment claim is the time when the 24 April emails became capable of being retrieved by the Rewaises at their designated email address. The test for "designation" of an email address under the Electronic Transactions Act is broader than the test for "specification" pursuant to the Security of Payment Act. For similar reasons to those in support of their consenting to the use of Dr Rewais' email address for the purposes of s 8, the Rewaises designated Dr Rewais' email address for the purposes of s 13A. Service of the payment claim therefore occurred on 24 April 2024.
3. BPB submits that even if service was not effected in accordance with any of the facultative provisions, the payment claim was brought to the Rewaises' attention by the 24 April emails on 24 April 2024 and was served on that date. BPB says: 1. The Rewaises' evidence as to the date they opened the email attaching the payment claim should be rejected. 2. When works commenced on 9 May 2023, the documentation relating to the works was extremely limited and it was self-evident that at some stage further documentation would likely come into existence and invoices, for instance, would be contemplated. 3. Dr Rewais provided Mr Braeckmans with his email address to which Mrs Braeckmans subsequently sent several progress claims. The Rewaises did not inform BPB that progress claims should not be sent in that way or provide an alternative means for serving progress claims. 4. The Claim 1 invoice and Claim 2 invoice were sent to Dr Rewais' email and were promptly paid. 5. Email chains between Mrs Braeckmans and Dr Rewais on 7, 8 and 22 December 2023 and between 14 and 29 February 2024 are consistent with regular monitoring by Dr Rewais of his email account. 6. The email attaching the payment claim was received by Dr Rewais at his email address and did not "bounce back" to BPB as the sender.

Service of the s 17(2) notice

1. BPB submits that the s 17(2) notice was served by email to Dr Rewais attaching the 22 May letter on 22 May 2024 in accordance with s 31(1)(d) of the Security of Payment Act, or because that email brought the s 17(2) notice to the Rewaises' attention. They repeat their submissions on service of the payment claim on these bases.
2. Alternatively, BPB submits that the s 17(2) notice was served on 24 May 2024 by post in accordance with s 31(1)(c) of the Security of Payment Act because: 1. The 22 May letter was posted to the Property. 2. The Property is the Rewaises' "ordinary place of business" because the relevant business is that of the partnership, the partnership's registered business name has "Woodlands NSW 2575" (the location of the Property) recorded as its principal place of business and the Property is where the partnership conducts its business activities. 3. Australia Post records the envelope which contained the 22 May letter as having been delivered to the Property on 24 May 2024. 4. As the 22 May letter was posted in accordance with s 31(1)(c), it is not necessary that it was brought to the Rewaises' attention. In accordance with s 31(2) of the Security of Payment Act, the time of service of the s 17(2) notice is the time the 22 May letter was received at the Property. 5. Mail delivered to a place of business is "received" there when it is put into the mailbox of that place without the necessity of anyone actually seeing it, citing Falgat, Hodgson JA at [62].

Submissions of the Rewaises in reply

1. The Rewaises reject BPB's reliance on the Electronic Transactions Act and submit that the Electronic Transactions Act is not relevant to the question of service of a payment claim.
2. They submit that s 13A of the Electronic Transactions Act relates to the deemed time of receipt of electronic communications, being when the communication reaches the addressee's electronic address. They say the concept of "receipt" is distinct from service. They say the section does not provide that a recipient is taken to have been made aware of a communication at the time it is received and receipt is not to be equated with effective service.
3. The Rewaises alternatively rely on BCS Infrastructure Support Pty Ltd v Jones Lang Lasalle (NSW) Pty Ltd [2020] VSC 739, where Stynes J at [146] said that s 13A(1)(b) of the Electronic Transactions Act 2000 (Vic) (which is in terms identical to its NSW counterpart) will apply to deem the time of receipt of a payment claim served under the Building and Construction Industry Security of Payment Act 2002 (Vic) (which again is in similar terms to the NSW Security of Payment Act) to be the time when the recipient "became aware" that the payment claim had been sent to the electronic address. Accordingly, they submit that the fact that the 24 April 2024 emails may have been delivered to Dr Rewais' inbox on 24 April 2024 is irrelevant to prove service under the Electronic Transactions Act. The timing of service is when he identified and read those emails.
4. The Rewaises submit that s 8 of the Electronic Transactions Act, similarly, does not deal with service and has no application in this case. Even if it did, the Rewaises say they did not "consent" to payment claims being given to them by means of electronic communications for reasons similar to why they did not "specify" Dr Rewais' email address as the address for service of documents under the Security of Payment Act.

Service of the payment claim

1. In my opinion, BPB has not proved that the payment claim was served in accordance with s 31(1)(d) of the Security of Payment Act or that the payment claim was brought to the Rewaises' attention prior to 11 June 2024.
2. For service in accordance with s 31(1)(d) of the Security of Payment Act, BPB was required to prove Dr Rewais "specified" his email address for the purpose of "service of documents of that kind", being documents required to be served on him under the Security of Payment Act (including payment claims).
3. I accept the Rewaises' submission that, when read in context, Dr Rewais provided his email address to Mr Braeckmans for the purpose of receiving a quote or indication of costing for the works. A quote is not a document required to be served pursuant to the Security of Payment Act, meaning Dr Rewais did not specify an email address for the purpose of service of documents of that kind and s 31(1)(d) is not engaged.
4. I consider that BPB has also failed to prove that the payment claim was brought to the Rewaises' attention prior to 11 June 2024. While the evidence shows that Dr Rewais would, from time-to-time, send emails from and receive emails to his account, there is no evidence of any email communications from Dr Rewais to BPB between 24 April 2024 and 11 June 2024, no evidence that BPB notified the Rewaises over text message or in person of the payment claim that had been emailed, no evidence that he opened the 24 April emails, no evidence that he was aware the 24 April emails were in his inbox and no evidence that Dr Rewais read the 24 April emails prior to 11 June 2024. Moreover, Dr Rewais was not challenged in cross-examination to the contrary. More is required for BPB to meet its onus of proof.
5. In my view, the Adjudicator was incorrect to rely on the Electronic Transactions Act as an independent basis for the proper service of the payment claim on the Rewaises. Section 8 of that Act (relied on by BPB) governs the form of communications by permitting information required or permitted to be given in writing to be sent electronically to a consenting person. Section 13A merely deems the time of receipt of communications sent electronically. Neither of these sections affect the requirements for service of a payment claim under s 31 of the Security of Payment Act and do not bear on the question of whether the Rewaises were made aware of the payment claim. Further, I do not consider that s 8 of the Electronic Transactions Act is engaged in the present case as the Rewaises did not consent to the information in the form of the payment claim being given by means of an electronic communication.
6. The Adjudicator was therefore incorrect to conclude that the payment claim was served on 24 April 2024. My conclusion is that the payment claim was served on 11 June 2024 when the Rewaises were first made aware of it.

Service of the s 17(2) notice

1. Given my finding that the payment claim was served on 11 June 2024, it is not strictly necessary to determine when the s 17(2) notice was served in order to conclude that the adjudication application was filed prematurely on 13 June 2024.
2. However, I consider that, for the same reasons that the payment claim was not properly served by email in accordance with s 31(1)(d) of the Security of Payment Act, neither was the s 17(2) notice served by email to Dr Rewais on 22 May 2024.
3. The s 17(2) notice was also not served in accordance with the requirements of s 31(1)(c) of the Security of Payment Act because it was sent by post addressed to the Rewaises' residence, being the address of the Property. As I have stated above, the postage of the 22 May letter was proven by BPB, but I am not satisfied that the evidence reveals that the Property can be regarded as the Rewaises' ordinary place of business. I accept the evidence of the Rewaises that they do not operate any business at the Property. It is the family home for the Rewaises and their five children. The olive oil production undertaken there is a hobby, the vineyard is disused, the café building and amphitheatre are intended to be used for family weddings, the sale of cattle is at a hobby-farm level and the plans to run health consulting rooms in the café building were abandoned in June 2023.
4. If, contrary to the view I have expressed above that the s 17(2) was not served in accordance with s 31(1)(c), the address of the Property is to be regarded as the Rewaises' ordinary place of business because the business name of McVitty Grove was held by the Rewaises as partners and the address for service of documents was the address of the Property, my findings are as follows. Based on my assessment of the evidence concerning the posting of the 22 May letter set out above, it is my view that the s 17(2) notice would be regarded as addressed to the Rewaises' partnership at the Property and sent by post. As a result of the operation of s 31(2) of the Security of Payment Act, service of a document that is sent to a person's ordinary place of business, as referred to in s 31(1)(c), is taken to have been effected when the document is received at that place. As a result, the evidence of the Australia Post receipt proves that the 22 May letter was received at the Property on 24 May 2024, which would be the date on which it was served.
5. On the view I have formed that the s 17(2) notice was not served by post at the Rewaises' ordinary place of business, it is to be regarded as having been received on 11 June 2024. If, contrary to this view, the s 17(2) notice was served by post at the Rewaises' ordinary place of business and received on 24 May 2024, it was received in advance of the payment claim on 11 June 2024.

ISSUE 2: WHETHER THE ADJUDICATOR HAD JURISDICTION TO MAKE THE DETERMINATION

1. Given that the date of service of the payment claim is 11 June 2024 and the date of the service of the s 17(2) notice was also 11 June 2024, the next issue is whether BPB was entitled to file its adjudication application on 13 June 2024 (before the receipt of the payment schedule on 18 June 2024) and, accordingly, whether the Adjudicator's jurisdiction to make the Determination was properly invoked.

Legal principles

1. This court has power to grant relief in the nature of certiorari where jurisdictional error is found: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1; [2018] HCA 4, Kiefel CJ, Bell, Keane, Nettle and Gordon JJ at [29]. However, the operation of the Security of Payment Act excludes the jurisdiction of this court to review and quash an adjudicator's determination for non-jurisdictional error of law on the face of the record: Probuild at [45], [53].
2. For an adjudicator's determination to have legal effect, it must satisfy the conditions set out in the Security of Payment Act as essential for the making of a determination: Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394, Hodgson JA (Mason P and Giles JA agreeing) at [52]. Hodgson JA set out in Brodyn the "basic and essential requirements" for the existence of an adjudicator's determination at [53] as follows: 1. The existence of a construction contract between the claimant and the respondent, to which the Act applies (s 7 and s 8). 2. The service by the claimant on the respondent of a payment claim (s 13). 3. The making of an adjudication application by the claimant to an authorised nominating authority (s 17). 4. The reference of the application to an eligible adjudicator, who accepts the application (s 18 and s 19). 5. The determination by the adjudicator of this application (s 19(2) and s 21(5)), by determining the amount of the progress payment, the date on which it becomes or became due and the rate of interest payable (s 22(1)) and the issue of a determination in writing (s 22(3)(a)).
3. If any of these five conditions are not satisfied, the purported determination will not be an adjudicator's determination in accordance with the Security of Payment Act and will be void because of jurisdictional error, not merely voidable: Brodyn at [52].
4. However, as Hodgson JA proceeded to note in Brodyn at [54], where the issue is not whether the complainant complied with one of the five requirements set out above, but with the more detailed requirements set out in the Security of Payment Act (including in s 17 as to the time when an adjudication application can be made), the court must "ask whether a requirement being considered was intended by the legislature to be an essential pre-condition for the existence of an adjudicator's determination". Only if the requirement is "an essential pre-condition" will non-compliance with it by a claimant void a determination.
5. In Brodyn, Hodgson JA concluded at [55] (emphasis added): In my opinion, the reasons given above for excluding judicial review on the basis of non-jurisdictional error of law justify the conclusion that the legislature did not intend that exact compliance with all the more detailed requirements was essential to the existence of a determination: cf. Project Blue Sky Inc. v. Australian Broadcasting Authority (1998) 194 CLR 355 at 390-91. What was intended to be essential was compliance with the basic requirements (and those set out above may not be exhaustive), a bona fide attempt by the adjudicator to exercise the relevant power relating to the subject matter of the legislation and reasonably capable of reference to this power (cf. R v. Hickman; Ex Parte Fox and Clinton (1945) 70 CLR 598), and no substantial denial of the measure of natural justice that the Act requires to be given. If the basic requirements are not complied with, or if a purported determination is not such a bona fide attempt, or if there is a substantial denial of this measure of natural justice, then in my opinion a purported determination will be void and not merely voidable, because there will then not, in my opinion, be satisfaction of requirements that the legislature has indicated as essential to the existence of a determination. If a question is raised before an adjudicator as to whether more detailed requirements have been exactly complied with, a failure to address that question could indicate that there was not a bona fide attempt to exercise the power; but if the question is addressed, then the determination will not be made void simply because of an erroneous decision that they were complied with or as to the consequences of non-compliance.
6. The High Court noted in Probuild at [52] that although the Security of Payment Act has been substantially amended since Brodyn was decided, "[n]o amendment was made to alter the effect of the decision in Brodyn."
7. In Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; [2016] HCA 52, Kiefel, Bell, Gageler, Keane and Gordon JJ at [44] stated that it was undoubtedly correct that service of a payment claim under s 13(1) of the Security of Payment Act is an essential precondition to taking subsequent steps in the procedure set out in Pt 3 of the Act and that unless a payment claim answering that description is served, there can be no adjudication application and hence no adjudication within the jurisdiction conferred by s 22 of the Act.
8. Although this statement of principle was not the subject of argument in Southern Han because the parties agreed, in All Seasons Air Pty Ltd v Regal Consulting Services Pty Ltd [2017] NSWCA 289, Leeming and Payne JJA (White JA agreeing) at [35] said that it was plainly correct.

Submissions of the Rewaises

1. The Rewaises submit that service of a payment claim under s 13(1) of the Security of Payment Act is an "essential precondition" to the taking of subsequent steps under that Act (including the lodging of an adjudication application).
2. They submit that the adjudication application was filed prematurely and as a result, the Adjudicator did not have jurisdiction under s 22 of the Security of Payment Act to make the Determination and accordingly, the Determination is void and invalid.
3. The Rewaises further submit that because their payment schedule, served on BPB on 18 June 2024 and although provided within time (s 14(4)(b)(iii) of the Security of Payment Act), was provided after the adjudication application was made on 13 June 2024, the adjudication application was invalidly made under s 17(2), the Adjudicator did not have jurisdiction to be appointed and the Determination is void and invalid.

Submissions of BPB

1. BPB did not make any written or oral submissions on the consequences of it being found (as I have) that the payment claim and the s 17(2) notice were both served on 11 June 2024.

Consideration

1. In a general sense, it appears that all the "essential requirements" for an adjudicator's determination under the Security of Payment Act have been complied with. The payment claim was served on the Rewaises on 11 June 2024, satisfying condition two of Hodgson JA's list in Brodyn. Its s 17(2) notice was served on this date too. BPB's adjudication application was filed on 13 June 2024. The Rewaises' payment schedule was provided on 18 June 2024.
2. In my view this case falls into the separate category identified by Hodgson JA in Brodyn of compliance with the more detailed requirements of the Security of Payment Act. BPB filed its adjudication application only two days after its payment claim was served on the Rewaises, failing to comply with the timeline for the filing of such documents stipulated by the Security of Payment Act. Pursuant to s 17(2)(a), an adjudication application cannot be made unless the claimant has served written notice on the respondent within 20 business days of the due date for payment.
3. The claimed amount becomes due for payment 10 business days after the service of the payment claim on the respondent if the respondent does not file a payment schedule within that time: s 14(4) Security of Payment Act. As only two days passed between service of the payment claim and the s 17(2) notice, and filing of the adjudication application, BPB's claimed amount was not due for payment and, in my view, BPB filed the adjudication application prematurely.
4. This question of the timing of the filing of BPB's adjudication application was squarely raised before the Adjudicator. Both parties made submissions to the Adjudicator about his jurisdiction, the timing of service of the payment claim and the s 17(2) notice. The Rewaises' position was: Because, on [their] analysis, the [payment claim] was served on 11 June 2024, both the 17(2) Notice and the [adjudication application] are premature. Accordingly, both are invalid.
5. The Adjudicator produced five pages of reasons dealing with the parties' submissions on his jurisdiction to make the Determination. He considered the application of s 31 of the Security of Payment Act and the Electronic Transactions Act and the time at which the Rewaises became aware of the payment claim and s 17(2) notice. The Adjudicator concluded that the payment claim and s 17(2) notice were served on the Rewaises on 24 April 2024 and 22 May 2024 respectively, that the adjudication application was not filed prematurely and that he had jurisdiction.
6. Although I have come to a different conclusion about the timing of service, it was open to the Adjudicator to find as he did. He dealt with the parties' submissions comprehensively, demonstrating a bona fide attempt to exercise his power to make a determination. The question of jurisdiction was addressed directly. The Determination is not void simply because his decision as to the timing of service and whether the adjudication application was made in time was erroneous: Brodyn at [55].
7. Accordingly, although I find that BPB's adjudication application was filed prematurely, the Determination is not void and will not be quashed on this basis.
8. As a result of this finding, it is not necessary for me to deal with the additional argument made by BPB that s 32A of the Security of Payment Act operates such that any jurisdictional error only affects part of the Determination.

Legal principles

1. The HBA generally applies to contracts for "residential building work". "Residential building work" is defined in cl 2(1) of Schedule 1 to the HBA as: [A]ny work involved in, or involved in co-ordinating or supervising any work involved in - (a) the construction of a dwelling, or (b) the making of alterations or additions to a dwelling, or (c) the repairing, renovation, decoration or protective treatment of a dwelling.
2. "Dwelling" means "a building or portion of a building that is designed, constructed or adapted for use as a residence": cl 3(1) of Schedule 1 to the HBA. This definition relevantly includes the following structures or improvements if "constructed for use in conjunction with a dwelling" (cl 3(2) of Schedule 1 to the HBA): … (f) detached garages and carports, (g) detached decks, porches, verandahs, pergolas and the like, … (i) detached workshops, sheds and other outbuildings (but not jetties, slipways, pontoons or boat ramps and any structures ancillary to these exceptions), … (k) driveways, paths and other paving, (l) retaining walls, …
3. Amongst the exclusions from the definition of "residential building work" are (cl 2(3) of Schedule 1 to the HBA): (a) any work (other than specialist work) the reasonable market cost of the labour and materials involved in which does not exceed the amount prescribed by the regulations, … (j) demolition work, …
4. The amount prescribed in r 12 of the Home Building Regulation 2014 (NSW) for the purposes of cl 2(3)(a) of Schedule 1 to the HBA is $5,000.
5. If it applies, the HBA imposes obligations on people who contract to do residential building work. Relevantly, s 4(1) imposes a licensing requirement as follows: A person must not contract to do - (a) any residential building work, or (b) any specialist work, except as or on behalf of an individual, partnership or corporation that is the holder of a contractor licence authorising its holder to contract to do that work. Maximum penalty - 1,000 penalty units in the case of a corporation and 200 penalty units in any other case.
6. Sections 7 and 7AAA provide for the form of residential building contracts. Section 6(1) states that these sections apply to a contract under which the holder of a contractor licence undertakes to do any residential building work or to vary any such undertaking. A contract for residential building work must be in writing and dated and signed by or on behalf of each of the parties to it: s 7(1) in the case of contracts for greater than $20,000 (r 5(1)(b) of the Home Building Regulation), s 7AAA(2) in the case of contracts for greater than $5,000 but less than $20,000 (r 5(2)(b) of the Home Building Regulation).
7. The consequences of being an unlicensed contractor in contravention of s 4 or being licensed but failing to meet the requirements of a contract in s 7 are dealt with in s 10 of the HBA, which relevantly states: 10 Enforceability of contracts and other rights (1) A person who contracts to do any residential building work, or any specialist work, and who so contracts - (a) in contravention of section 4 (Unlicensed contracting), or (b) under a contract to which the requirements of section 7 apply that is not in writing or that does not have sufficient description of the work to which it relates (not being a contract entered into in the circumstances described in section 6(2)), or (c) in contravention of any other provision of this Act or the regulations that is prescribed for the purposes of this paragraph, is not entitled to damages or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, and the contract is unenforceable by the person who contracted to do the work. However, the person is liable for damages and subject to any other remedy in respect of a breach of the contract committed by the person. …
8. In Brodyn, the builder (Dasein Constructions Pty Ltd) did not have a licence to do residential building work in contravention of s 4 of the HBA and it was submitted that this led to the work being illegal under s 4 with the consequence under s 10 of the HBA that the unlicensed builder was not entitled to progress payments claimed under the Security of Payment Act and the adjudicator's determination of them was void. Hodgson JA (Mason P and Giles JA agreeing) rejected this argument, saying at [82]-[83]: [82] In my opinion, the civil consequences for an unlicensed contractor for its breach of s 4 are those set out in s 10, and not any wider deprivation of remedies. In my opinion this is confirmed by the different provisions of s 94, which explicitly precludes, in the event of breach of the insurance provisions, the obtaining of a quantum meruit unless a court considers it just and equitable. In my opinion, the remedy given by the Act is not of the nature of damages or any other remedy in respect of breach of contract nor is it enforcement of the contract: it is a statutory remedy, albeit one that in part makes reference to the terms of a contract, and thus it is not affected by s 10 of the [HBA]. [83] Accordingly, in my opinion Dasein's failure to have a licence could not be a ground on which the adjudicator's determination could be considered void, or for otherwise giving relief in respect of the determination.
9. Section 12 also restricts the kind of work which can be completed by an unlicensed builder. That section provides: 12 Unlicensed work An individual must not do any residential building work, or specialist work, except - (a) as, or as a member of a partnership or an officer of a corporation that is, the holder of a contractor licence authorising its holder to contract to do that work, or (b) as the holder of an owner-builder permit authorising its holder to do that work, or (c) as an employee of the holder of such a contractor licence or permit. Maximum penalty - 1,000 penalty units in the case of a corporation and 200 penalty units in any other case.
10. Section 92 of the HBA imposes an insurance requirement as follows: 92 Contract work must be insured (1) A person must not do residential building work under a contract unless - (a) a contract of insurance that complies with this Act is in force in relation to that work in the name under which the person contracted to do the work, and (b) a certificate of insurance evidencing the contract of insurance, in a form approved by the Authority, has been provided to the other party (or one of the other parties) to the contract. Maximum penalty - 1,000 penalty units in the case of a corporation and 200 penalty units in any other case. … (2) A person must not demand or receive payment under a contract for residential building work (whether as a deposit or other payment and whether or not work under the contract has commenced) from any other party to the contract unless - (a) a contract a contract of insurance that complies with this Act is in force in relation to that work in the name under which the person contracted to do the work, and (b) a certificate of insurance evidencing the contract of insurance, in a form approved by the Authority, has been provided to the other party (or one of the other parties) to the contract. …
11. Section 99(1) of the HBA states that the contract of insurance required by s 92 must insure, relevantly, against the risk of loss resulting from non-completion of the work because of the insolvency, death or disappearance of the contractor.
12. The consequences of a failure to comply with the insurance requirements of s 92 are dealt with in s 94 of the HBA, which relevantly states: (1) If a contract of insurance required by section 92 is not in force, in the name of the person who contracted to do the work, in relation to any residential building work done under a contract (the uninsured work), the contractor who did the work - (a) is not entitled to damages, or to enforce any other remedy in respect of a breach of the contract committed by any other party to the contract, in relation to that work, and (b) is not entitled to recover money in respect of that work under any other right of action (including a quantum meruit). (1A) Despite section 92(2) and subsection (1), if a court or tribunal considers it just and equitable, the contractor, despite the absence of the required contract of insurance, is entitled to recover money in respect of that work on a quantum meruit basis. …
13. The question of what is meant by "any other right of action" in s 94(1)(b) of the HBA has not been the subject of judicial consideration. In my view, those words would be construed to have a generic legal meaning which is derived from the word "action" in other contexts.
14. In Malek Fahd Islamic School Ltd v Minister for Education and Early Learning (2023) 111 NSWLR 585; [2023] NSWCA 143, the Court of Appeal of this court (Basten AJA, with Ward P and Meagher JA agreeing) considered the meaning of the term "action" in the context of s 14 of the Limitation Act 1969 (NSW). Basten AJA said at [31] (footnotes omitted): The term "action" as used in the context provided by a Limitation Act does not bear the ordinary and natural meaning of any form of conduct. It has a legal meaning derived from its context, which is to identify the temporal limit of enforceable rights. For example, in Vezitis v McGeechan Taylor J held that proceedings for a declaration as to a prisoner's rights were not precluded by a section in the Prisons Act 1952 (NSW) which protected the Commissioner from any "action or claim for damages". Clearly the proceedings did not involve a claim for damages, but did they involve an "action"? Taylor J, holding that they did not, stated: "The word 'action' in its proper legal sense is a generic term and includes every sort of legal proceeding; see Re Carter Smith; Ex parte Commissioner of Taxation per Street J where the learned judge cited a passage from the decision from the House of Lords in Clarke v Bradlaugh the passage being approved of by the House of Lords on appeal. Street J went on to say that when used by the legislature it - that is the word 'action' - must be construed according to its true legal meaning, unless it is apparent upon the face of the act in which it is used that it is intended to bear a more restricted meaning."
15. To similar effect, in Malek Basten AJA concluded at [59]: … Like the term "action", the phrase "cause of action" is a legal term which connotes the availability of proceedings in a court of law.
16. In Ketchell v Wynch [2002] 2 Qd R 560; [2001] QCA 391 the Queensland Court of Appeal considered the meaning of the word "action" in the context of s 45 of the Magistrates Court Act 1921 (Qld). Thomas JA (with whom Davies and Williams JJA agreed) at [26], [27] and [31] recited a number of authorities on that expression, saying: [26] On the natural meaning of the term "action" prima face these proceedings may be so regarded. Whatever the popular signification of the word 'action' may be, it is clear, as was pointed out by Bramwell and Lush, LJJ., in Clarke v Bradlaugh [(1881), 7 QBD 38, AT PP 50, 57] and by the Earl of Selborne, LC and Lord Blackburn in the same case on appeal to the House of Lords [8 App.Cas. 354 at pp. 361 and 374] that in its proper legal sense it is a generic term or nomen generale, and includes every sort of legal proceeding. When used by the legislature it must … be construed according to its true legal meaning unless it is apparent upon the face of the Act in which it is used that it is intended to bear a more restricted meaning. Re Carter Smith, ex parte Taxation Comrs (1908) 8 SR(NSW) 246, per Street J at p 248. [27] It is true that the term "action" has been given a range of meanings in a variety of contexts. Before the Judicature Acts the term was generally used to refer to a proceeding in a common law court, in contradistinction to a suit in equity. In more recent times, it became recognised that the term was not appropriate to describe criminal proceedings. Counsel for the respondent referred to Martin v Commissioner for Employees' Compensation [1953] St R Qd 85 as supporting a narrow construction of the appellate jurisdiction conferred by s 45. In that case, Mack J held that an appeal heard by a magistrate under s 20 of the Commonwealth Employees' Compensation Act was not an "action" and accordingly, that s 11 (the forerunner of the present s 45) of the Magistrates Courts Act conferred no appeal from such a decision. That, with respect, was plainly a correct decision (cf Goward v The Commonwealth (1957) 97 CLR 355, 359), but it hardly bears upon the question whether the proceeding in which original jurisdiction of the kind exercised in the present matter should be regarded as an "action" in the Magistrates Court. … [31] In Johnson v Refuge Assurance Company Limited Kennedy LJ considered that the natural meaning of "action" is "any proceeding in the nature of a litigation between a plaintiff and a defendant". This statement was made in the context of a proceeding in the County Court where proceedings were not commenced by writ. Kennedy LJ described the matter thus: In this case there was a civil proceeding in the county court which was, according to the ordinary understanding of language, not merely a matter, but a litigation between a plaintiff and defendants in the nature of an action. This approach is consistent with the wide meaning of "action" recognised by Street J in Re W. Carter Smith, Ex parte The Commissioners of Taxation.
17. In my consideration, the expression "any other right of action" in s 94 of the HBA would be construed as meaning any other right to bring proceedings in a court of law.
18. As BPB relied on an argument which depends on s 32A of the Security of Payment Act (which relates to findings of jurisdictional error in an adjudicator's determination), I have turned my mind to that provision, which is in the following terms: (1) If, in any proceedings before the Supreme Court relating to any matter arising under a construction contract, the Court makes a finding that a jurisdictional error has occurred in relation to an adjudicator's determination under this Part, the Court may make an order setting aside the whole or any part of the determination. (2) Without limiting subsection (1), the Supreme Court may identify the part of the adjudicator's determination affected by jurisdictional error and set aside that part only, while confirming the part of the determination that is not affected by jurisdictional error.

Submissions of the Rewaises

1. The Rewaises submit that the Property in its entirety constitutes a "dwelling" under the HBA because: 1. The Property is their family home and no part of it is used for or intended to be used for a commercial purpose, citing cl 3(1) of Schedule 1 to the HBA. 2. It has never been suggested that any particular business has in fact operated at the Property since the Rewaises became its owners (whether using the amphitheatre, the olive grove, a café or reception hall). 3. Although they had transferred the liquor licence for the Property into the partnership's name, they never intended to use the licence in connection with a business operated at the Property. 4. The Rewaises never intended to operate an olive oil business from the Property and the fact that they had sold approximately $5,785 worth of olive oil does not preclude the characterisation of the Property as a dwelling. Mrs Rewais described the production of olive oil as her "hobby". 5. The amphitheatre constructed next to the café building was not to be used in conjunction with a business to be run from that building and, in cross-examination, Dr Rewais stated that the amphitheatre was constructed in contemplation of hosting home weddings for his children at the Property. 6. The café building could not properly be described as a "café"; rather, it was a building for family use. Dr Rewais denied that the café building was to be used as commercial premises and that the Property would be used as a function centre.
2. The Rewaises submit that works completed under the Contract are works involved in the construction of a dwelling or the making of alterations or additions to a dwelling such that the Contract is a contract for residential building works because: 1. The Property is a dwelling and the works involve additions to it. 2. The construction of the retaining wall falls expressly within the definition of "dwelling", citing cl 3(2)(l) of Schedule 1 to the HBA.
3. Even if not all of the work under the Contract is residential building work, the Rewaises submit that the Contract cannot be severed into parts which relate to residential building work and parts which did not. The Contract in its entirety is a contract for residential building work. They point to the fact that BPB has not presented a case where a contract providing for the completion of some residential and some non-residential building work has been divided as such. They submit that the Contract is either caught by the HBA as a whole or it is not.
4. The Rewaises submit that as the Contract was for residential building work, ss 4, 7, 12 and 92 of the HBA apply and BPB has breached each of these provisions as follows: 1. At the time of entering into the Contract, BPB did not hold the requisite licence in accordance with s 4(1). 2. Even if BPB was licensed, s 7 applies because BPB undertook to do residential building work and the Contract price exceeded $20,000. The Contract was not in writing as required by s 7(1) so BPB has contravened this section. 3. BPB did not hold the requisite contract of insurance pursuant to s 92(1). Mrs Braeckmans annexed to her affidavit copies of the certificates of currency for the insurance policies held by BPB between March 2023 and March 2024 which were limited to: 1. employer's liability insurance under the Workers Compensation Act 1987 (NSW); 2. public liability and product liability insurance; 3. commercial motor insurance for vehicles and equipment used by BPB; and 4. road risk insurance. 1. None of the certificates of currency produced by BPB are for insurance policies which comply with s 99 of the HBA. Accordingly, BPB has breached s 92 of the HBA.
5. The Rewaises submit that the effect of breaching s 4 and/or s 7 of the HBA is as follows: 1. Pursuant to s 10(1) of the HBA, BPB is not entitled to an award of damages or to enforce any other remedy in respect of a breach of the Contract and the Contract is unenforceable by BPB. 2. The effect of this bar on enforcement is that BPB was not entitled to pursue adjudication pursuant to the Security of Payment Act. This is because the Security of Payment Act adjudication provisions are a means by which a residential building contract may be enforced. 3. The court ought to construe the Security of Payment Act adjudication provisions as operating "harmoniously" with the HBA as, if this were not the case, the protections provided for by the HBA would be rendered meaningless.
6. They submit that the effect of BPB's breach of s 92 of the HBA is that s 94 is engaged. They say the different wording in s 94 compared to s 10 produces a different consequence and submit: 1. Section 10 contains a restriction on entitlement to damages and enforcement of "any other remedy in respect of a breach of the contract". Section 94 contains the same restriction plus an additional restriction on recovering money "in respect of that work under any other right of action (including a quantum meruit)". 2. In Brodyn, Hodgson JA at [82] distinguished s 94 from his observations about s 10 and his Honour's reasons have no wider application than s 10, citing Tagara Builders Pty Ltd v AP & L Services Pty Ltd (2015) SASR 29; [2015] SASC 30, Blue J at [38]. Brodyn states that because an adjudicator's determination is a "statutory remedy" it is not "damages or any other remedy in respect of breach of contract" but does not state that an adjudicator's determination is not a "right of action" as captured by s 94. Section 94 should therefore be read as having broader application than s 10 in terms of its effect in precluding the enforcement of building contracts. 3. Although they note that s 94 preserves the court's ability to grant quantum meruit if it considers it just and equitable to do so, it submits that such an order is not sought and is not an issue in these proceedings.
7. For these reasons, the Rewaises submit that BPB should be permanently restrained from enforcing the Determination.

Submissions of BPB

1. BPB concedes that it did not have a licence for the purposes of s 4 of the HBA to do residential building work. BPB also concedes that it had no insurance in place complying with the requirements of s 92 of the HBA.
2. BPB denies that the Contract is a contract for residential building work within the meaning of the HBA. It submits that: 1. The Property in its entirety cannot be characterised as a "dwelling" pursuant to the HBA because there are multiple buildings on it, only one of which is a "dwelling" (the residence). The separate café building is not a dwelling, nor is the 22-acre vineyard or olive grove. 2. At the time the Contract was entered into in March 2023, the works agreed to be carried out were those described in the initial scope of works which related only to earthworks around the café building and the construction of a doctor's surgery, and these were not "residential building works" within the meaning of the HBA. The plans to build a doctor's surgery were not abandoned until June 2023, over a month after works had commenced. 3. The Rewaises had the liquor licence referable to the Property transferred to their name when they acquired the Property, suggesting that they intended to use part of the Property for a commercial purpose.
3. BPB accepts that from time to time after the Contract was entered into, BPB carried out additional works at the Rewaises' request that did constitute "residential building works" within the meaning of the HBA. BPB submits that these residential works are limited to: 1. the retaining wall works near the residence (but only insofar as they involved the construction of a new retaining wall; the demolition of the old retaining wall is not "residential building works"); and 2. remedial work on a pier connected to the residence.
4. BPB submits that the court should not find that the entire Contract is subject to the HBA and that only the residential works conceded by them above are subject to the HBA.
5. BPB submits that even if it has breached the HBA and ss 10 or 94 is engaged, on the proper construction of the HBA and the Security of Payment Act, it is not precluded from taking steps (including filing an adjudication application) under the Security of Payment Act because: 1. On a proper construction of the HBA and the Security of Payment Act, the HBA does not limit entitlements under the Security of Payment Act. 2. The wording of ss 8 and 13 of the Security of Payment Act create a right to progress payments for construction work carried out under a construction contract, notwithstanding the provisions of any other Act. 3. The remedy provided by the Security of Payment Act is not "damages" or any other remedy in respect of breach of contract, nor does it amount to enforcement of the Contract so it does not fall within the scope of ss 10 or 94. 4. Brodyn at [82] is dispositive, at least, of the s 10 issue. Section 10 of the HBA is not a bar to its enforcement of the Determination. 5. Section 22(2) of the Security of Payment Act (set out above), in any event, precludes the Adjudicator from considering the operation or terms of the HBA in making the Determination. 6. There is no contrariety between ss 10 and 94 of the HBA and the Security of Payment Act and, even if there is, the Security of Payment Act, coming later in time, impliedly repeals ss 10 and 94. 7. The object of the Security of Payment Act set out in s 3(1) is to ensure "that any person who undertakes to carry out construction work … under a construction contract is entitled to receive, and is able to recover, progress payments" and s 3(2) describes the entitlement to receive progress payments as a "statutory entitlement".
6. In relation to the operation of s 94 specifically, which includes the additional bar to recovering money in respect of work done under a contract for residential building work "under any other right of action", BPB submits that the enforcement of an adjudication application is not recovery of money "under a right of action". It submits that the adjudication process under the Security of Payment Act is not a judicial process, does not finally decide any rights and points to the fact that money paid pursuant to an adjudication determination can be required to be repaid by s 32(3)(b) of the Security of Payment Act.
7. BPB submits, alternatively, that if I find that there is contrariety between ss 10 and 94 and the Security of Payment Act, the contrariety exists only insofar as residential building work is performed and does not bar BPB from enforcing the Determination. They rely on s 32A of the Security of Payment Act in connection with this submission and say only the value of the Determination relating to residential building work is affected by error such that I should, under s 32A, sever out those parts.
8. In such a case, BPB submits that the Claim 2 invoice for the retaining wall works (being residential building work) was paid in full prior to the adjudication application and this amount did not form part of the Determination. The only part of the residential works that are included in the Determination have a value of no greater than $10,917.83.

Consideration

1. I accept the Rewaises' submission that the entire Property is a dwelling because it is used as a residence. No business was demonstrated to have been conducted at the Property by the Rewaises. A dwelling is defined in the HBA as a "building or portion of a building that is designed, constructed or adapted for use as a residence" (cl 3(1) of Schedule 1 to the HBA) or a structure or improvement if it is constructed for use in conjunction with a dwelling (cl 3(2) of Schedule 1 to the HBA). The Property as defined includes the residence (which is clearly a dwelling), but also includes a vineyard, olive grove and the separate café building (which would be regarded as an "outbuilding" that is used in conjunction with a dwelling within cl 3(2)(i) of Schedule 1 to the HBA).
2. I consider that the uses to which the rest of the Property are put are consistent with them being part of or used in conjunction with a residence for the Rewais family. The vineyard is disused, the olive grove is used as part of a hobby, the cattle that were sold are part of a hobby and the café building and amphitheatre are intended to be used to host weddings for the five children in the Rewais family. The intention to use the café building as a doctor's surgery has been abandoned.
3. The next question is whether the Contract is a contract for residential building work.
4. The scope of work to be completed under the Contract changed over time following relatively informal conversations between Mr Braeckmans, Mr Arnot, Dr Rewais and Mrs Rewais at different times. Initially, the parties agreed that BPB would do works relating to the construction of a proposed doctor's surgery in the existing café building, but that plan ceased.
5. The initial scope of works (which was in fact completed) was the work levelling out the carpark, stripping topsoil and removing trees and building a pathway near the café building. As the café building is used in conjunction with a dwelling, I consider the work around it to be residential building work. Therefore, the Contract was a contract for residential building work.
6. By conversations on 22 and 24 July 2023, the Rewaises expanded the work to be completed pursuant to the Contract to include the amphitheatre works, the retaining wall works and the road works. By 1 July 2024, when Mr Braeckmans sent a text message of a photograph of the 1 July scope of works, the works to be done within the Contract had changed.
7. The amphitheatre works relate to the construction of an amphitheatre immediately adjacent to the café building. These are designed for use in conjunction with a dwelling or involved in the construction of a dwelling and on that basis I find that the amphitheatre works are residential building works.
8. BPB conceded that the retaining wall works are residential building works. Retaining walls are expressly included in the HBA definition of a "dwelling", if constructed for use in conjunction with a dwelling. The retaining wall to be constructed is at the residential building on the Property and satisfies this definition.
9. The road works were for the construction of a road leading to the residential building. A "driveway" constructed for use in conjunction with a dwelling is included in the definition of a dwelling (cl 3(2)(k) of Schedule 1 to the HBA). I consider that the road works fall within this definition.
10. Subsequently, BPB expanded the carpark next to the café building pursuant to Mr Arnot's oral instruction on behalf of the Rewaises on 17 July 2023. This specific task is also residential building work for the reasons set out above in relation to the initial carpark works around the café building. BPB transplanted the olive trees from the olive grove pursuant to Mrs Rewais' oral instructions on 21 August 2023. This work is related to the dwelling on the Property and is also residential building work. Finally, on 8 December 2023, Dr Rewais requested that BPB construct a deck around the café building. Decks are included in the definition of a dwelling if constructed for use in conjunction with a dwelling. As reasoned above, the café building is used in conjunction with a dwelling and this work is residential building work.
11. As BPB contracted to do residential building work for the Rewaises, they are bound by the obligations in the HBA, including licensing and insurance requirements. Given BPB's concession that it did not have the required licence or insurance policy, it has breached ss 4 and 92 of the HBA. The effect of this breach, including whether it infects the Contract in its entirety and its impact on the enforceability of the Determination, is considered below.
12. BPB is not barred by s 10 of the HBA from enforcing the Determination. Hodgson JA's reasoning at [82] in Brodyn is sufficient to dispose of this issue.
13. What remains to be determined is whether BPB is barred by s 94 of the HBA from enforcing the Determination. This depends on whether an adjudication application made under the Security of Payment Act can properly be characterised as a "right of action" such that it comes within the s 94 prohibition on a contractor, in relation to "any residential building work done under a contract", from recovering money in respect of that work "under any other right of action (including a quantum meruit)".
14. In Brodyn, Hodgson JA described the Security of Payment Act remedy as a "statutory remedy". This accords with the description in s 3(2) of the Security of Payment Act of the right to progress payments as a "statutory entitlement". In my opinion, the statutory remedy provided by the Security of Payment Act does not come within any part of s 94 of the HBA because it is not equivalent to seeking damages or any other remedy in respect of a breach of the contract committed by any other party to the contract in respect of any residential building work (s 94(1)(a)) and nor is it equivalent to seeking to recover money in respect of that work under any other right of action (including a quantum meruit) (s 94(1)(b)). I consider that such a statutory entitlement as provided by the Security of Payment Act is not a "right of action" within the meaning of s 94 of the HBA. As I have stated above, I consider that a "right of action" is a right to bring proceedings in a court of law. The statutory remedy to receive progress payments under the Security of Payment Act is not a right to bring proceedings in a court of law.
15. I therefore accept BPB's submission that the adjudication process under the Security of Payment Act is not judicial, does not finally decide any rights and is liable to be reversed by order of the court.
16. I have also had regard to s 22 of the Security of Payment Act which sets out the matters an adjudicator is allowed to consider when making a determination. Those matters include the provisions of the Security of Payment Act, but do not include the provisions of any other legislation. This means, in making a determination, an adjudicator is not allowed to have regard to the effect of s 94 of the HBA. This reinforces my view that the Security of Payment Act is intended to operate independently of and unaffected by provisions such as ss 10 and 94 of the HBA.
17. In light of my conclusions, it is unnecessary for me to consider the operation of s 32A of the Security of Payment Act in respect of setting aside the whole or part of the Determination as contended by BPB.
18. Ultimately, my conclusion is that BPB is not barred by either s 10 or s 94 of the HBA from enforcing the Determination.

ORDERS

1. For the reasons set out above, I propose to make the following orders: 1. The summons filed 15 July 2024 by the plaintiffs is dismissed. 2. The plaintiffs are to pay the defendant's costs of the proceedings.

Amendments 03 December 2024 - [145] - Date amended - "24 June 2024" corrected to "24 April 2024". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 December 2024