Kumar v Frankies Cranes Pty Ltd

Cases Cited: BCFK Holdings Pty Ltd v Rork Projects Pty Ltd [2022] NSWSC 1706
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421
Chase Oyster Bar v Hamo Industries (2010) 78 NSWLR 393
Cubillo v Commonwealth (No 2) (2000) 103 FCR 1
Falgat Constructions Pty Ltd v Equity Australia Corporation Ltd [2006] NSWCA 259
Fifty Property Investments Pty Ltd v Barry O’Mara [2006] NSWSC 428
Jones v Dunkel (1959) 101 CLR 298
Long Spring Pty Ltd v RD Beechworth Pty Ltd [2025] NSWSC 437
Nefiko Pty Ltd v Statewide Form Pty Ltd (No 2) [2014] NSWSC 840
QC Communications NSW Pty Ltd v CivComm Pty Ltd [2016] NSWSC 1095
Ratcliffe v Horizon Glass & Aluminium Pty Ltd [2023] NSWSC 196
Rewais v BPB Earthmoving Pty Ltd [2025] NSWCA 103
Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340

Category: Principal judgment

Parties: Rakesh Kumar (Plaintiff)
Frankies Cranes Pty Ltd (First Defendant)
Lou Stojanovski (Second Defendant)

Representation: Counsel:
D Weinberger SC (Plaintiff)
M Sahade (First Defendant)
Solicitors:
Madison Marcus (Plaintiff)
Olivieri Lawyers (First Defendant)
Lauderdale Law (Second Defendant, submitting appearance)

File Number(s): 2025/00332339

Publication restriction: Nil

JUDGMENT

1. Rakesh Kumar seeks to set aside an adjudication determination made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) in favour of Frankies Cranes Pty Limited for $142,120, on the basis it is void for jurisdictional error. The adjudicator’s certificate was registered as a judgment in the NSW District Court.

2. I accept Mr Kumar’s submissions that the determination is void because the adjudicator did not have jurisdiction: Mr Kumar did not agree to a s 7 SOPA construction contract with Frankies Cranes, and the payment claim and s 17(2) SOPA notice were not served on Mr Kumar before the adjudication application was lodged.

Was there a construction contract?

Can the Court review the adjudicator’s decision there was a construction contract?

3. An essential prerequisite to the adjudicator’s jurisdiction is the existence of a construction contract in accordance with s 7 SOPA (and as defined in s 4 SOPA): Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at 441 [53] (Hodgson JA) (Brodyn). Whether such a contract exists is a jurisdictional fact which may be the subject of review in this Court: Ratcliffe v Horizon Glass & Aluminium Pty Ltd [2023] NSWSC 196 at [7] (Rees J), citing Fifty Property Investments Pty Ltd v Barry O’Mara [2006] NSWSC 428 at [18]-[23] (Brereton J); Nefiko Pty Ltd v Statewide Form Pty Ltd (No 2) [2014] NSWSC 840 at [30]-[49] (Ball J, as his Honour then was).

4. Frankies Cranes’ counsel, Mr Sahade, did not engage with this line of authority. Rather, he submitted that this Court could not review an adjudicator’s finding as to the existence of a construction contract “unless … the adjudicator was capricious, unreasonable, [or] took into account irrelevant matters”. He submitted that this followed from the Court of Appeal’s decision in Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393, which he submitted overruled that aspect of Brodyn. I reject that submission.

5. Therefore, I must determine whether there was a construction contract that enlivened the SOPA and gave the adjudicator jurisdiction to determine the adjudication application.

Was there a construction contract?

6. The principles relevant to whether the parties entered into an oral contract are well known: see eg the summary in Long Spring Pty Ltd v RD Beechworth Pty Ltd [2025] NSWSC 437 at [33]-[36].

7. Mr Frank Azzopardi, director of Frankies Cranes, alleged that he had a conversation with Mr Kumar in about May 2023 at a property in Toongabbie, NSW, which concluded a construction contract, the terms of which were that Mr Kumar agreed to pay $1700 per week from May 2023 for the hire of Frankies Cranes’ crane on the property.

8. The crane was on the property because the former builder, SK Homes Pty Ltd, had hired it from Frankies Cranes.

9. I do not accept that the conversation occurred in May 2023, because Mr Azzopardi and Mr Kumar considered the conversation occurred after Mr Kumar told him he was the new owner of the property; exchange occurred in June 2023, and in October 2023, Mr Kumar’s special purpose corporate vehicle, Elante Investments 9 Pty Ltd, became the registered owner of the land.

10. Mr Azzopardi claimed that during the conversation, Mr Kumar agreed to pay the weekly hire rate of $1700 going forward. Mr Azzopardi claimed he responded to Mr Kumar: “Ok, the rate will start today. I need some details off you including your email address and full name”. Mr Kumar handed Mr Azzopardi his business card for his business, “Elante Homes”. At the time, Frankies Cranes was owed about $100,000 by SK Homes.

11. Mr Kumar’s version of the conversation was that at a meeting with some of SK Homes’ subcontractors, including Mr Azzopardi, he said he would consider engaging them in the future, should he continue the development. He claimed that Mr Azzopardi asked, and he agreed, that the crane could remain on the property until it was needed elsewhere, because of the high cost of removing it. He provided Mr Azzopardi his business card when requested. I accept his evidence and prefer it to that of Mr Azzopardi, for the reasons below.

12. I am not persuaded there was an oral contract as alleged by Frankies Cranes for the following reasons.

13. First, as I have explained, Mr Azzopardi’s contended commencement date cannot be correct, which raises concerns about the other elements of the alleged conversation. It is unlikely that Mr Kumar would have agreed to be liable for the crane hire from May 2023 as alleged, when he did not own the property on which the crane was located, and there is no evidence he had any right to house a crane there.

14. Secondly, commercial realities tell against Mr Azzopardi’s version of the agreement. It is unlikely that business parties would not have documented their agreement in some way, for example, an email affirming the payment terms. Had there been an agreement, it would have been likely that Frankies Cranes would have sent an invoice before Elante sold the property in October 2024, particularly where Mr Azzopardi’s usual practice was to invoice monthly. Frankies Cranes sent the first and only invoice in May 2025, for the period from May 2023 to October 2024. The delay in sending the invoice is unexplained. Further, Frankies Cranes had no internal business records concerning the terms on which the crane was left at the property.

15. Thirdly, Mr Kumar had no need for the crane, because he carried out no work on the property. He wanted to consider his position about the development of the property, and did not engage any other contractors. This makes it unlikely that he agreed to pay for a crane he did not use, particularly where he was not given the keys to the crane.

16. Fourthly, it is highly unlikely Mr Kumar would have agreed to be personally liable for the hire of a crane, when he operated his business through corporate entities. If a contract was to be found, it would more likely have been with Elante or a similar entity, given that Mr Kumar provided his Elante Homes business card.

17. Finally, Frankies Cranes does not bring forward any other witness to the alleged conversation that gave rise to the agreement, even though Mr Azzopardi claimed that the former foreman, Mr Harry Costa, and other workers were present at the time. In circumstances where Mr Kumar denied the conversation, I consider that there is an unexplained failure of Frankies Cranes to call the other alleged witnesses to give evidence, and I infer that the uncalled evidence would not have assisted it: Jones v Dunkel (1959) 101 CLR 298 at 308 (Kitto J), 312 (Menzies J), 320-321 (Windeyer J); Cubillo v Commonwealth (No 2) (2000) 103 FCR 1 at 118 [353] (O’Loughlin J).

18. Without there being a construction contract, to which the SOPA applies, the adjudicator lacked jurisdiction and the determination is void.

Was there ‘service’ in accordance with the SOPA?

19. In any event, I do not accept Mr Kumar was served with Frankies Cranes’ payment claim by email on or about 14 April 2025, or its notice under s 17(2) on or about 15 May 2025.

20. Service of a payment claim under s 13(1) SOPA and compliance with s 17(2) are preconditions to an adjudicator’s jurisdiction: see Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340 at [44] (Kiefel, Bell, Gageler, Keane and Gordon JJ); see also Rewais v BPB Earthmoving Pty Ltd [2025] NSWCA 103 at [8]-[9] (Leeming JA) (Rewais).

21. Section 31 provides mechanisms of service under the SOPA. Relevantly, it provides at s 31(1)(d) that a document required to be served may be served “by email to an email address specified by the person for the service of documents of that kind”.

22. However, if a document actually comes to the attention of the person to be served, it is effective service, even if it was not served in accordance with s 31: QC Communications NSW Pty Ltd v CivComm Pty Ltd [2016] NSWSC 1095 at [27] (Ball J, as his Honour then was), citing Falgat Constructions Pty Ltd v Equity Australia Corporation Ltd [2006] NSWCA 259 at [58] (Hodgson JA); see also BCFK Holdings Pty Ltd v Rork Projects Pty Ltd [2022] NSWSC 1706 at [20]-[24] (Stevenson J) (BCFK Holdings).

Did Mr Kumar “specify” his email for service?

23. I do not accept that Mr Kumar specified the email on his business card for the purpose of service of documents under SOPA as contemplated by s 31(1)(d).

24. In Rewais, the NSW Court of Appeal recognised that “specification” for s 31(1)(d) may be express or inferred from conduct, such as a course of conduct of using a particular email for documentation required for SOPA.

25. McHugh JA also stated at [173]:

Given the jurisdictional significance of service, contractors wishing to use a particular email address to serve documents engaging the Act’s operation, and particularly its adjudication procedures, would be well advised first to obtain express confirmation from the principal that the email address may be used for service of the documents authorised or required to be served by or under the Act.

26. Here, there was no evidence that Mr Kumar expressly specified his email address could be used for SOPA communications.

27. Mr Sahade submitted that Mr Kumar handing a business card to Mr Azzopardi, in response to a request for details including email address and full name, amounted to “specification”, because of the oral agreement that had just been formed. However, I do not accept that the conversation took place as alleged by Mr Azzopardi, or that a construction contract was formed as he alleged.

28. Also, I do not accept that I ought to infer that Mr Kumar’s conduct of handing over a business card, without more, amounted to a specification of an email for the service of SOPA documents.

29. Therefore, Frankies Cranes would have to prove service by Mr Kumar having actually received the emails.

Did Mr Kumar receive the documents?

30. I accept that Mr Azzopardi’s friend, Mr George Khouri, emailed to Mr Kumar:

31. on 14 April 2025, Frankies Cranes’ payment claim; and

32. on 15 May 2025, Frankies Cranes’ s 17(2) notice.

33. In the body of the 14 April 2025 email was a document entitled “Tax Invoice”, also stating it was a payment claim under SOPA for the sum of $142,120 for “Crane Hire at Toongabbie Project” from 15 May 2023 to 28 October 2024 at a weekly rate of $1,700 including insurance. The 15 May 2025 email amounted to a s 17(2) notice.

34. Mr Kumar’s unchallenged evidence was that he:

35. never received the payment claim; he searched his emails and has not found it.

36. first found the s 17(2) notice in August 2025.

37. No submission was made that I ought not accept Mr Kumar’s evidence, and I do. That means that I accept that Mr Kumar did not receive either document before Frankies Cranes made its adjudication application.

Conclusion on service

34. The consequence of the non-service of the payment claim meant that Frankies Cranes did not, and could not, comply with the strict timing regime under ss 14, 15 and 17 of the SOPA. Its application was premature, and therefore of no effect: see BCFK Holdings at [30].

35. I reject Mr Sahade’s submission that there is some residual discretion that would apply here, and I would not declare the determination void. This is not a situation where there is no utility in the declaration.

Conclusion

36. For the reasons above, the appropriate orders are:

37. The adjudication determination made in favour of the defendant against the plaintiff under the Building and Construction Industry (Security for Payments) Act 1999 (NSW) on 18 June 2025 by Lou Stojanovski of Adjudicate Today be set aside and declared void.

38. The first defendant is to pay the plaintiff’s costs as agreed or assessed.

39. Grant liberty to the parties to apply for an alternative costs order within seven days of today's date, setting out the application and any evidence and submissions of no more than 3 pages upon which they rely.

40. Should such an application be made for an alternative costs order, the responding party is to provide evidence and submissions of no more than 3 pages opposing any alternative costs order within 7 days of receiving the first application.

41. The Court will determine any such alternative costs application on the papers, if appropriate.

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