headnote
[This headnote is not to be read as part of the judgment]
In December 2010 the applicant, Fitz Jersey Pty Ltd ("the developer"), engaged the respondent, Atlas Construction Group Pty Ltd ("the builder"), to design and construct a major development project at Mascot in Sydney. On 15 November 2016, the builder served a final payment claim on the developer pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) ("Security of Payment Act") for an amount in excess of $10.5 million plus interest. On 29 November 2016, the developer served a payment schedule asserting that no money was owing to the builder.
An adjudicator determined that the payment claim was payable in full. As the developer did not make payment within the five business days specified under the Act, the builder obtained an adjudication certificate, which it filed in the Supreme Court. The result was a judgment debt, on the basis of which the builder then obtained a garnishee order. On 27 January 2017, the garnishee order was served on the developer's bank, which duly paid the amount owing from the developer's account.
Prior to the adjudication certificate being filed, the developer had commenced proceedings under s 69 of the Supreme Court Act 1970 (NSW) challenging the validity of the adjudication determination. The developer did not, however, seek interlocutory relief, or an undertaking from the builder not to take steps to enforce the determination. On learning of the payment from its bank account, it sought orders that the garnishee order be set aside and the money repaid. That application was dismissed by McDougall J in the Equity Division.
The questions before this Court were whether:
(1) the builder was required to notify the developer that an order for judgment debt had been obtained before taking steps to enforce it;
(2) in applying ex parte for a garnishee order with respect to the judgment debt, the builder was required to notify the court that the developer had commenced proceedings to review the underlying adjudication determination; and
(3) the primary judge erred in refusing to set aside the garnishee order and order repayment of the amount paid by the garnishee.
The Court (Beazley ACJ, Basten JA and Leeming JA), granting leave to appeal but dismissing the appeal, held:
In relation to question (1):
- A judgment can be enforced without serving it on the party affected: [38]. The Security of Payment Act s 25(4) provides an entitlement to seek relief which, if made good on appropriate grounds, might result in a judgment being set aside. However, s 25(4) does not put a respondent in a better position than any other unsuccessful respondent against whom a judgment debt has been obtained in civil proceedings: [40].
Garrard (T/as Arthur Andersen & Co) v Email Furniture Pty Ltd (1993) 32 NSWLR 662 discussed.
In relation to question (2):
- An applicant for ex parte relief must inform the judicial officer of circumstances which would disentitle it from the relief sought: [55]. Even if some interlocutory relief in the nature of a stay is not in place, the fact that it has been sought and the motion not determined should be disclosed: [56]. Further, it is generally necessary to disclose circumstances where there have been discussions between the parties; at least where an undertaking not to enforce has been sought and, though not given, an application for a stay has been foreshadowed: [57]. This case involved no such circumstances.
Aristocrat Technologies Australia Pty Ltd v Allam [2016] HCA 3; 90 ALJR 370; Brink's Mat Ltd v Elcombe [1988] 1 WLR 350; Garrard (T/as Arthur Andersen & Co) v Email Furniture Pty Ltd (1993) 32 NSWLR 662; International Finance Trust Co Ltd v New South Wales Crime Commission (2009) 240 CLR 319; [2009] HCA 49; Thomas A Edison Ltd v Bullock (1913) 15 CLR 679; Town & Country Sport Resorts (Holdings) Pty Ltd v Partnership Pacific Ltd (1988) 20 FCR 540 discussed.
- There are circumstances in which a garnishee order should not issue for reasons which are not expressly identified in the rules: [70]. Although there is a discretion to issue a garnishee order, this discretion is not equitable [112]-[114]. Further, the statutory evolution of garnishee orders may not engage a duty of candour: [116]-[126].
ML Ubase Holdings Co Ltd v Trigem Computer Inc (2007) 69 NSWLR 577; [2007] NSWSC 859 discussed.
In relation to question (3):
- No error of principle was identified warranting interference with the judge's refusal to exercise a discretionary power sought on equitable grounds: [3], [86], [106].