Cooper v Veghelvi & 2 Ors

Supreme Court of NSW|2005-03-14

The application will therefore be listed before the Tribunal in due course for directions, to proceed the matter to a hearing." 7 By amended summons filed 10 February 2004 the plaintiff seeks a declaration that the adjudication made by the Anthony Veghelyi in favour of Home Productions against the plaintiff pursuant to the BCISP Act is null and void and of no effect. The applicant seeks that default judgment entered in the Local Court set aside [para 3(iii)] appeals the part of this decision of the CTTT where it decided that it lacked jurisdiction to hear the plaintiff's claim for relief and payment. 8 Section 25 of the BCISP Act reads: "25 Filing of adjudication certificate as judgment debt

(1) An adjudication certificate may be filed as a judgment for a debt in any court of competent jurisdiction and is enforceable accordingly.

(3) If the affidavit indicates that part of the adjudicated amount has been paid, the judgment is for the unpaid part of that amount only.

(4) If the respondent commences proceedings to have the judgment set aside, the respondent: (a) is not, in those proceedings, entitled: (i) to bring any cross-claim against the claimant, or (ii) to raise any defence in relation to matters arising under the construction contract, or (iii) to challenge the adjudicator's determination, and

(b) is required to pay into the court as security the unpaid portion of the adjudicated amount pending the final determination of those proceedings." 9 A respondent is defined in s 4 of the BCISP Act to mean a person such as the plaintiff here on whom a payment of claim was served. 10 Home Productions submitted that it cannot be contented that payment into court is not required while an application is pending to have judgment set aside. Cooper submitted that the proceedings are not "proceedings to have the judgment set aside" pursuant to s 25(4) of the BCISP Act but are collateral proceedings seeking to declare as having no legal effect the adjudication. According to Cooper, if the adjudication determination is null and void and of no legal effect, it follows that the adjudication certificate is a nullity. Cooper says that she merely seeks as consequential relief on the appeal from the Local Court, that the judgment dated 17 June 2004 be set aside. Alternatively, Cooper submitted that there are discretionary reasons why security should not be ordered. 11 Both parties referred to Brodyn Pty Ltd t/as Time Cost and Quality v Davenport & Anor [2004] NSWCA 394. The relevant facts in Brodyn are that on 16 October 2003 the adjudicator made his determination. On 17 October 2003 an adjudication certificate was filed in the District Court so as to give it an effect of a judgment as provided by s 25. On 10 May 2004 Dasein undertook not to enforce the District Court judgment on condition that Brodyn lodged a bank guarantee to pay the sum of $265,000.00 with the Registrar. Brodyn applied to this court for an order in the nature of certiorari quashing the adjudicator's decision on the grounds that the payment claim was invalid and that there had been a denial of natural justice. 12 In Brodyn Hodgson JA (with whom Mason P and Giles JA agreed) stated: "41 Further, in my opinion an order of the Supreme Court quashing the determination or declaring it to be void could itself support the setting aside of the judgment. In my opinion, if the determination was quashed or declared void, reliance on there being no determination to support the judgment would not be to challenge the adjudicator's adjudication within s.25(4): this wording assumes that there is a determination which is challenged.

"42 Indeed, even in the absence of such an order quashing the determination or declaring it void, the respondent could in my opinion seek to have the judgment set aside on the ground that there never was a determination. If for example a respondent could show that the document that was filed as being an adjudicator's determination was a forgery, that would not be challenging the adjudicator's determination. Similarly, in my opinion, if the respondent could show that for some other reason recognised in law a purported adjudicator's determination did not amount to an adjudicator's determination within the meaning of the Act, that would not be challenging an adjudicator's determination: this, as indicated above, assumes that there is such a determination to be challenged. Conceivably, the availability of that remedy could itself be a ground for refusing relief in the Supreme Court, on the basis that the same matter could more conveniently be relied on in an application to set aside the judgment; but that was not a matter relied on by the primary judge. … 61 Where the adjudicator's determination is void for one of the reasons discussed above, then until it is filed as a judgment, proceedings can appropriately be brought in a court with jurisdiction to grant declarations and injunctions to establish that it is void and to prevent it being filed. However, once it has been filed, the resulting judgment is not void. An application can be made to set aside the judgment; and as noted above in pars.[41] and [42], it is not contrary to s.25(4)(a)(iii) to do so on the basis that there is in truth no adjudicator's determination." 13 Thus the NSWCA held that a judgment constituted by the filing of the adjudication certificate can be set aside. The issue of whether Dasein was required to pay security into court was not raised in Brodyn. This is because Dasein agreed to lodge security with the court prior to the appeal being heard. 14 Unfortunately, while Cooper was awaiting a decision from the CTTT on whether the CTTT had jurisdiction, Home Productions obtained an adjudication certificate and a judgment in its favour in the Local Court. That means that Cooper has to date not been afforded an opportunity to have a trial on its merits. 15 It is my view that because judgment has already been obtained, that judgment is not void. Therefore the respondent must seek an order in these current proceedings that the Local Court judgment be set aside. It is my view that s 25(4) provides that if the respondent commences proceedings to have the judgment set aside, the respondent is required to pay into the court as security the unpaid portion (that being the whole amount namely $9,834.41) pending the final determination of those proceedings. It is my view that Cooper is obliged to pay the sum of $9,834.41 into court as security in accordance with s 25(4). 16 This interpretation is consistent with the object expressed in s 3 of the BCISP Act which is to ensure that any person who undertakes work regulated by the BCISP Act under a contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work irrespective as to what other remedies may be available to the other party to the contract. 17 Hence, I make an order in accordance with paragraph 2 of the second defendant's notice of motion dated 25 February 2005. The proceedings are referred the Registrar to ascertain whether they should be stayed pending lodgement of the security. 18 The second defendant has sought costs on an indemnity basis. This is not appropriate in the circumstances. Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the second defendant's costs as agreed or assessed on a party/party basis.

(1) I make an order in accordance with paragraph 2 of the second defendant's notice of motion dated 25 February 2005.

(2) The proceedings are referred the Registrar on 13 April 2005 to ascertain whether they should be stayed pending lodgement of the security.

(3) The plaintiff is to pay the second defendant's costs as agreed or assessed. **********

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.

CITATION : Cooper v Veghelvi & 2 Ors [2005] NSWSC 227

CASES CITED : Brodyn Pty Ltd t/as Time Cost and Quality v Davenport & Anor [2004] NSWCA 394

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