Omega House Pty Ltd v Khouzame

Factual background 4On 11 January 2013, the plaintiff as Owner and the first defendant as Principal Contractor entered into a Principal Contractor Contract ("the Contract") whereby the first defendant agreed to construct a mixed use development at a site in Five Dock for a stated Contract Price of $6,400,000 (excluding GST). The contract was varied by an Amendment Deed entered into on 20 March 2013. 5Payment to the first defendant is primarily dealt with in clause 12 of the Contract, which relevantly provides: "12.1 Subject to clause 12.19 and to any other right to set off which the Owner may have, the Owner must pay the Contractor: (a) the Contract Price; and (b) any other amounts which are payable by the Owner to the Contractor under the Contract. 12.2 For the avoidance of doubt, this clause 12 is subject to the Owner's right to retain retention moneys as described in the Contract Particulars. [...] 12.6 In order for any payment to be valid, the Contractor must: (a) only claim an amount to the value of 80% of works completed to the date of the claim, except for the final claim which will be an amount to the value of 100% of the Contract Price, including approved Variations; and (b) must give the Contract Administrator claims for payment on account of the Contract Price and any other amounts payable by the Owner to the Contractor under the Contract: (i) at the times stated, or upon completion of the milestones described, in the Contract Particulars; (ii) within the times required by clauses 12.13 and 12.15; and (iii) in the format the Contract Administrator reasonably requires, which includes: A. evidence from a quantity surveyor, approved by and paid for by the Contract Administrator, of the value of work completed in accordance with the Contract. The value determined by the quantity surveyor shall be accepted as final; and B. written confirmation that the work has been completed in a proper and workmanlike manner by an architect, approved by and paid for, by the Contract Administrator. The Contractor cannot include in any payment claim under this clause 12.6, a Claim which is barred by clause 16.5. [...] 12.7 The Contract Administrator may, if deemed necessary by the Contract Administrator, within the time period stated in the Contract Particulars of receiving a payment claim under clause 12.6 give the Contractor and the Owner a payment statement which sets out the Contract Administrator's determination as to: (a) the value of work completed in accordance with the Contract; (b) the amount already paid to the Contractor; [...] (d) the amount then payable by the Owner to the Contractor on account of the Contract Price and otherwise under the Contract, together with the reasons for any difference in the amount set out as then payable from the amount in the Contractor's payment claim. [...] 12.8 Subject to clauses 12.12 and 12.19, the Owner must within the time period stated in the Contract Particulars of receiving a payment claim or statement (as applicable), pay the Contractor the amount set out as then payable in the payment statement, less any amounts disclosed as unpaid under clause 12.20. The Owner is not obliged to pay any amounts disclosed as unpaid under clause 12.20 until the Contractor produces evidence to the reasonable satisfaction of the Contract Administrator that the amounts have been paid to the relevant persons. [...] 12.12 The Owner is not obliged to make a payment under clause 12.8 unless the Contractor has: [...] (e) complied with clause 12.20. 12.13 Within 28 days of the issue of a Notice of Completion for the Works or a Stage the Contractor must give the Contract Administrator: (a) a payment claim which must include all amounts which the Contractor claims from the Owner on account of the Contract Price or otherwise under the Contract; and (b) notice of any other amounts which the Contractor claims from the Owner, in respect of any fact, matter or thing arising out of, or in any way in connection with, the Contractor's Activities or the Contract which: (c) in the case of the Works, occurred prior to the Date of Completion of the Works; or (d) in the case of a Stage, occurred prior to the Date of Completion of the Stage, insofar as the fact, matter or thing relates to the Stage. [...] 12.15 Within 28 days after the end of the Defects Liability Period for the Works or a Stage, the Contractor must give the Contract Administrator: (a) a payment claim which must include all amounts which the Contractor claims from the Owner on account of the Contract Price or otherwise under the Contract; and (b) notice of any other amounts which the Contractor claims from the Owner, In respect of any fact, matter or thing arising out of, or in any way in connection with, the Contractor's Activities or the Contract which: (c) in the case of the Works, occurred during the Defects Liability Period for the Works; or (d) in the case of a Stage, occurred during the Defects Liability Period for the Stage, insofar as the fact, matter or thing relates to the Stage. [...] 12.20 The Contractor must with each payment claim under clause 12.6 provide the Contract Administrator with: (a) a statutory declaration, together with any supporting evidence which may be reasonably required by the Contract Administrator, duly signed by the Contractor or, where the Contractor is a corporation, by a representative of the Contractor who is in a position to know the facts declared, that, except to the extent disclosed in the statutory declaration (such disclosure to specify all relevant amounts, workers and subcontractors): (i) all workers who have at any time been employed by the Contractor on the Contractor's Activities have at the date of the payment claim been paid all moneys due and payable to them in respect of their employment on the Contractor's Activities; and (ii) all subcontractors have been paid all moneys due and payable to them in respect of the Contractor's Activities; (b) a Subcontractor's Statement in the form attached at Schedule 2 (as amended from time to time); and (c) any other documentary evidence required by the Contract Administrator that, except to the extent otherwise disclosed (such disclosure to specify all relevant amounts and workers), as at the date of the payment claim, all workers who have been employed by a subcontractor of the Contractor have been paid all moneys due and payable to them in respect of their employment on the Contractor's Activities." 6The Contract Particulars specify "Monthly on the 15th day of each month" in relation to claims for payment under clause 12.6(b)(i). 7Termination of the Contract is dealt with in clause 14 which relevantly provides: "14.1 Subject to clause 14.7, nothing in this clause 14 or that a party does or fails to do pursuant to this clause 14 will prejudice the right of that party to exercise any right or remedy (including recovering damages) which it may have when the other party breaches (including repudiates) the Contract. 14.2 The Owner may give a written notice under clause 14.4 to the Contractor, if the Contractor: [...] (g) is otherwise in substantial breach of the Contract. [...] 14.4 A notice under this clause 14.4 must state: (a) that it is a notice under clause 14.4; (b) the breach relied upon; and (c) that the party giving the notice requires the other party to remedy the breach within 21 days of receiving the notice. 14.5 If: [...] (b) a party does not remedy a breach of Contract the subject of a notice under clause 14.4 within 21 days of receiving the notice under clause 14.4, then: (c) where that party is the Contractor, the Owner may by written notice to the Contractor terminate the Contract; [...] 14.6 Subject to clause 14.1, if the Owner terminates the contract under clause 14.5 or if the Contractor repudiates the Contract and the Owner otherwise terminates the Contract: (a) the Owner will: [...] (iii) not be obliged to make any further payments to the Contractor, including any money the subject of a payment claim under clause 12.6 or a payment statement under clause 0 [sic]; [...] 14.8 Clauses 14.8 and 14.9 do not apply unless otherwise stated in the Contract Particulars. Without prejudice to any of the Owner's other rights under this Contract, the Owner may: (a) at any time for its sole convenience, and for any reason, by written notice to the Contractor terminate the Contract effective from the time stated in the Owner's notice or if no such time is stated, at the time the notice is given to the Contract; and (b) thereafter, at its absolute discretion, complete the uncompleted part of the Works either itself or by engaging Other Contractors. 14.9 If the Owner terminates the Contract under clause 14.8, the Contractor: (a) will be entitled to payment of the following amounts as determined by the Contract Administrator: (i) for work carried out prior to the date of termination the amount which would have been payable if the Contract had not been terminated and the Contractor submitted a payment claim for work carried out to the date of termination; (ii) the cost of goods or materials reasonably ordered by the Contractor for the Works for which the Contractor is legally bound to pay provided that: A. the value of the goods or materials is not included in the amount payable under sub-paragraph (i) and B. title in the goods and the materials will vest in the Owner upon payment; (iii) the reasonable cost of removing from the Site all labour, Plant, Equipment and Work and other things used in the Contractor's Activities; and (iv) the amount specified in the Contract Particulars; [...] The amount to which the Contractor is entitled under this clause 14.9 will be a limitation upon the Owner's liability to the Contractor arising out of, or in any way in connection with, the termination of the Contract and the Contractor may not make any Claim against the Owner arising out of, or in any way in connection with, the termination of the Contract other than for the amount payable under this clause 14.9. This clause 14.9 will survive the termination of the Contract by the Owner under clause 14.8." 8The Contract Particulars indicate that the clauses relating to termination for the Owner's convenience apply. No amount is specified in the Contract Particulars for the purposes of clause 14.9(a)(iv). 9The provisions of the Contract Particulars concerning clause 12.2 and retention monies were varied by the Amendment Deed so that it was henceforth provided: "5% of Contract Price (plus GST) is retained as follows: 10% of the value of each payment claim is retained by the Contract Administrator until an accumulative value of 5% of the Contract Price (plus GST) has been retained. Retention money is released as follows: 5% retention of Contract Price (plus GST) to be released upon: 1.Completion of the Works, free from any Defects; 2.the Owner receiving a final occupation certificate from City of Canada Bay Council for the Works; and 3.the Guaranteed Sum [sic - is delivered?] in accordance with clause 19; and The Guaranteed Sum to be released 12 months after the date of the final occupation certificate, subject to all defects being completely rectified." 10Clause 19.1 of the Contract provides for the Contractor, on or by the date of Completion, to obtain and deliver to the Owner a bank guarantee for the sum of $176,000 (being 2.5% of the Contract Price). 11During the course of the performance of the Contract, the first defendant submitted a number of payment claims expressed to be made under the Act. As required by clause 12.20 of the Contract, each of those claims was accompanied by a statutory declaration made by the first defendant concerning the payment of sub-contractors. 12The first seven payment claims, which were dated the 15th day of each month from February 2013 to August 2013, were paid in full by the plaintiff. Difficulties emerged in late August 2013 when it became apparent to the plaintiff that the first defendant was having difficulty making payments that were due to the various contractors and suppliers providing goods and services for the development. 13On about 29 August 2013 the first defendant told Mr Brian Metledge (a director of the plaintiff who was, along with Mr Albert Metledge, the Contract Administrator) that he had a cashflow problem and needed help. The first defendant requested the plaintiff to pay some of the contractors and suppliers directly, as he was unable to do so. On 30 August 2013 the first defendant sent an email to Brian Metledge which included the following: "As per our discussions yesterday afternoon. I will need you to take over payments to subcontractors and suppliers for money currently owing and for future payments for all existing subcontractors as well as new ones. This decision has been made in the best interest of the project and its progress. Please access funds for Monday next week so we can get the subcontractors and suppliers paid on Monday and Tuesday next week so that the job will continue without any delays. I have requested all subcontractors and suppliers to forward a stat dec with payments received. I will follow them up and pass these onto you once received." 14From early September 2013 the first defendant commenced providing information to the plaintiff about what had been paid to, and what remained outstanding, in relation to various contractors and suppliers, and made many requests that the plaintiff pay the outstanding amounts. From about 6 September 2013, the plaintiff made payments directly to a number of those entities. 15Discussions followed between the parties about what to do about the Contract. By 28 October 2013, the plaintiff was indicating that unless a mutual agreement was reached to end the relationship amicably, the plaintiff would need to exercise rights under the Contract, including the right to terminate. 16On 11 November 2013, the first defendant submitted payment claims 8 and 9 dated 15 September 2013 and 15 October 2013 respectively. On 14 November 2013, solicitors then acting for the first defendant wrote to the plaintiff. The letter contained allegations that the plaintiff was in breach of the Contract by failing to cooperate, including by interfering with subcontractors and suppliers. It was also alleged that the plaintiff was in breach by failing to pay payment claim 8. The letter disclosed that the first defendant had only one subcontractor, namely, Saferway Constructions Pty Ltd, and that the first defendant did not owe it any money in relation to the project. The letter further disclosed that Saferway Constructions Pty Ltd had debts totalling more than $907,000 to its subcontractors on the project. 17Saferway Constructions Pty Ltd is a company of which the first defendant is the sole director and shareholder. It was incorporated in December 2012. 18At 3:32pm on 15 November 2013, the plaintiff sent an email to the first defendant attaching a Notice of Termination of the Contract. The notice recited numerous alleged breaches by the first defendant, said to amount to a repudiation of the Contract such as to entitle the plaintiff to terminate the Contract. 19At 3:36pm on 15 November 2013, the plaintiff sent a further email to the first defendant attaching a Notice of Termination of the Contract. This notice was expressed to be given pursuant to the termination for convenience provisions of clause 14.8 of the Contract. 20About half an hour later, the first defendant submitted payment claim 10 dated 15 November 2013. The total amount claimed was $1,995,658.19. That amount did not include the retention moneys which were stated to be $233,773.47. 21On 22 November 2013, solicitors then acting for the first defendant wrote to the solicitors then acting for the plaintiff. The letter included a statement that the first defendant relied on clause 14.9 of the Contract and claimed: "1 In accordance with clause 14.9(a)(i) our client seeks payment of claim 10 for work complete prior to termination on 15 November 2013; 2 In accordance with clause 14.9(a)(ii), the costs of the materials left on site, which have not formed part of payment claim 10, this amount is calculated in the total sum of $130,000 [...]." 22The letter from the first defendant's solicitors further stated that it was the first defendant's position that the Contract had either been terminated pursuant to clause 14.8 for convenience, or else remained on foot. 23Payment claim 10 was not paid, and the first defendant made an application for adjudication under the Act. In its Adjudication Application, the first defendant contended that the plaintiff was in breach of clause 14.9, including by failing to meet payment claim 10. Ultimately, an adjudication determination under the Act was given by Mr Damian Michael on 31 January 2014. He determined that the amount to be paid by the plaintiff to the first defendant was $842,915.72. 24In the course of his lengthy determination, Mr Michael found that the Contract had been terminated by the plaintiff for convenience under clause 14.8. He further found that 15 November 2013 was the relevant reference date for the progress payment as that date had already accrued by the time the Notice of Termination under clause 14.8 had been served. 25The plaintiff paid the adjudicated amount to the first defendant on 14 February 2014. There is no evidence that the first defendant paid any of the money to Saferway Constructions Pty Ltd, or directly to any contractor or supplier in relation to the Five Dock project. 26On 4 March 2014, a special resolution of Saferway Pty Ltd was passed pursuant to s 491 of the Corporations Act 2001 (Cth) for the voluntary winding up of the Company. The liquidator's initial report to creditors noted a deficiency of assets to liabilities in the sum of $1,673,052. A number of the named creditors appear to be contractors or suppliers in relation to the project. 27On 23 July 2014, the first defendant submitted payment claim 11. The claim was stated to be made under the Act "for a progress payment on account of the amount to which our company is entitled under clause 14.9 of the Contract". The claimed amount was $960,037.67 (including GST), consisting of four components. 28The first component, of $326,037.66, was calculated on the basis of the total valuation of the work (including variations) as determined by Mr Michael, less defects and other deductions found by Mr Michael, and less the amount already received (again as determined by Mr Michael) and Mr Michael's adjudicated amount. 29The second component was a claimed credit of $180,200 in respect of a Schindler lift together with $27,033, being a 15% margin for that item. 30The third component was $158,508.31 for materials left on site, and the fourth component was $180,982.54 for variations not previously claimed. 31On 6 August 2014, the plaintiff served a payment schedule in response to claim 11. The plaintiff stated that it did not propose to make any payment. Numerous arguments were raised by the plaintiff, including that the claim was not a payment claim under the Act because there was no reference date in relation to which the claim could be made. The plaintiff also contended that no claim could be made under clause 14.9 of the Contract in circumstances where the first defendant had already made a payment claim for work carried out up to 15 November 2013, the date of termination of the Contract. 32On about 19 August 2014, the first defendant made an application for adjudication under the Act. In this application, the first defendant described the claim for the first component (now adjusted down to $320,000) as a claim for the retention moneys. The first defendant had not previously described the claim in that fashion. The third and fourth components were reduced to $96,246 and $155,402 respectively, bringing the total amount claimed down to $856,769. The plaintiff provided its Adjudication Response on 26 August 2014. 33As noted earlier, the second defendant gave her adjudication determination on 16 September 2014. She determined that the amount that the plaintiff should pay to the first defendant was $179,221.74 (including GST). 34The second defendant accepted that the Contract had been terminated for convenience under clause 14.8, and went on to state that she was not satisfied that the first defendant had repudiated the Contract so as to entitle the plaintiff to terminate on that basis. The second defendant also accepted that for payment claim 11 to be valid, there had to be a reference date other than the reference date of 15 November 2013 which applied in relation to payment claim 10. On that issue, the second defendant concluded that there was nothing in the Contract which provided for reference dates to cease upon termination, so (in accordance with s 8(2)(b) of the Act) further reference dates arose on 30 November 2013 and on the last day of each month thereafter. The second defendant did not expressly deal with the argument that no claim could be made under clause 14.9 because the first defendant had already made a claim for work carried out up to the date of termination. 35In summary, the second defendant determined that, after allowing for some further defects and omissions, the first defendant should be paid the full value of the work performed, together with $30,000 for materials left on site, $1,200 for removal of plant and equipment, and $3,359.09 for variations not previously claimed.

Determination 36Mr Macfarlane of Counsel, who appeared for the plaintiff, described the main issue as whether there was a reference date pursuant to which payment claim 11 could be made. This was Ground 3 in the List Statement. Mr Macfarlane submitted that in the absence of an available reference date, there was no entitlement to make a progress payment under the Act. It was then submitted that because s 13(5) of the Act precludes a claimant from serving more than one payment claim in respect of each reference date, a reference date other than 15 November 2013 (which was the reference date for payment claim 10) was required to support payment claim 11. Mr Macfarlane further submitted that there was no reference date after 15 November 2013, and payment claim 11 was therefore not a valid payment claim under the Act capable of being the subject of an adjudication under the Act. 37Reliance was placed upon the recent decision of Ball J in Patrick Stevedores Operations No. 2 Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2014] NSWSC 1413. In that case, his Honour dealt with the same issue in the context of contractual provisions similar to those found here, including a clause very similar to clause 14.9. Mr Macfarlane submitted that the decision is directly on point and ought be followed. 38Mr Moujalli of Counsel, who appeared for the first defendant, submitted that the contract did not preclude reference dates arising after termination of the contract or the cessation of work by the first defendant. Reference was made to the statement of Hodgson JA (with whom Mason P and Giles JA agreed) in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport and Anor [2004] NSWCA 394; (2004) 61 NSWLR 421 at [63]: "However, s 8(2) of the Act does not provide that reference dates cease on termination of a contract or cessation of work. This may be the case under s 8(2)(a) if the contract so provides but not otherwise; while s 8(2)(b) provides a starting reference date but not a concluding one. In my opinion, the only non-contractual limit to the occurrence of reference dates is that which in effect flows from the limits in s 13(4): reference dates cannot support the serving of any payment claims outside these limits." 39Mr Moujalli submitted that clause 14.9 did not specify the reference date in relation to the payments under the clause, and the second defendant was thus correct to conclude that s 8(2)(b) of the Act provided the reference date. 40Mr Moujalli further submitted that Patrick Stevedores (supra) could be distinguished because of critical differences between the respective contracts under consideration. In particular, he pointed to clause 37 and item 28 of the contract in Patrick Stevedores (supra) and submitted that, unlike the contract here, payment claims had to be made in respect of work carried out in the month in which the claim is made. He did not, however, suggest that the approach taken by Ball J in that case was in any respect erroneous. 41In Patrick Stevedores (supra) the relevant contract provided for progress payments in clause 37.1 and item 28, which stipulated the time for progress payments as the last day of each month for work under contract done to the second last day of that month. Clause 39A.1 gave the Principal a right to terminate for convenience, and clause 39A.2 provided (in terms similar to clause 14.9 of the Contract) that in that event the Contractor would be entitled to the payment of certain amounts. Clause 39A.2, like clause 14.9 here, was stated to survive termination of the contract. 42The contract in Patrick Stevedores (supra) was terminated under clause 39A.1 on 24 April 2014, and the Contractor served a payment claim on 30 June 2014 in respect of the amount payable under clause 39A.2. 43Ball J stated (at [23]) that the answer to the question whether the contractor was entitled to serve a payment claim under the Act for the amount payable under clause 39A.2 depended on the construction of s 8 of the Act. After making a number of observations concerning s 8 (at [26]-[30]), including referring to the statement made by Hodgson JA in Brodyn (supra) which I have quoted above, his Honour continued (at [32]-[33]): "It is not altogether easy to fit a claim under cl 39A.2 of the contract into the structure of the Security of Payment Act. Clause 39A.2 contemplates a one-off payment calculated in accordance with that clause. The starting point for the claim is the calculation of the amount due under that clause. However, the starting point of a claim under the Act is s 8. That section requires the identification of construction work carried out under the contract and the supply of related goods and services. The question is whether the contract makes provision for progress payments in respect of that work and the supply of those goods and services. The first question, then, is whether the items that are the subject of a claim under cl 39A.2 can be described as construction work under the contract or the supply of related goods or services. The second is, if they can, whether the contract makes provision for progress payments in respect of them and, if so, the precise terms on which it does so. If the contract does not, then provision is made by s 8(2)(b) for the fixing of reference dates and by s 9 for the amount payable." 44Ball J noted (at [36]) that much of the Contractor's claim concerned work done prior to the last reference date provided for under the contract before termination, and that the contract "clearly provided for progress payments in respect of that work". His Honour continued: "In those circumstances, it is clear that s 8(2)(b) of the Security of Payment Act does not apply since the contract provides reference dates in respect of that work. Two questions, however, remain. The first is whether the contract continued to provide reference dates following termination. The second is the position in relation to work done during the period between the last reference date before termination and termination." 45The second of those questions does not arise in the present case. On the first question, Ball J concluded (at [37]) that the contract, on its true construction, did not continue to provide reference dates following termination. He found that aside from clause 37.6, clause 37 did not continue to operate following termination, and indeed the parties made specific provision in clause 39A for what should happen following a termination for convenience. 46In my opinion, despite the differences between the relevant contracts, similar reasoning can and should be applied in the present case to conclude: (1)that the Contract provided reference dates in respect of the construction work carried out under the Contract prior to its termination; and (2)that the Contract does not, after termination, continue to provide reference dates in respect of construction work carried out under the Contract prior to its termination. 47Payment claim 11, at least insofar as it claimed the retention moneys, concerned construction work carried out under the Contract during the period the Contract was on foot. It seems to me that clause 12.6(b)(i) made express provision for reference dates in relation to the construction work carried out under the Contract until termination occurred on 15 November 2013. Moreover, the provisions of clause 12 (including clause 12.6), do not in my view survive termination. Accordingly, the Contract provides that reference dates in relation to such construction work cease on termination (or at least cease to arise following termination), and there is no room for s 8(2)(b) to supply reference dates after termination. Section 8(2)(b) does not operate merely because clause 14.9 does not itself provide any reference dates. 48It follows that no reference date arose after 15 November 2013 which could support payment claim 11. That payment claim was thus not a valid payment claim under the Act, and the second defendant had no jurisdiction to conduct an adjudication in respect of it. The Court will therefore declare that the adjudication determination made by the second defendant on 16 September 2014 is void. 49It should be added that a claim (such as payment claim 11) for payment of all amounts specified under clause 14.9 of the Contract includes claims for amounts which are not for the value of construction work carried out under the Contract or the supply of related goods and services (cf Patrick Stevedores (supra) at [35]). As payment claims under the Act are concerned with such construction work or related goods and services (see s 13(2) of the Act), the inclusion of such claims may provide a further reason to regard payment claim 11 (either as a whole, or to the extent it includes such claims) as not a valid payment claim under the Act. However, as this point was not specifically raised as a ground of complaint, it is not necessary to express a concluded view on it. 50It is also not necessary, given my conclusion concerning Ground 3, to proceed to determine the various other grounds of complaint advanced by the plaintiff. Nevertheless, in case my conclusion concerning Ground 3 is incorrect, I should briefly say something about those other grounds.

Other grounds 51Ground 1, like Ground 3, involved a contention that the second defendant committed a jurisdictional error. Ground 1 concerns the contention that was advanced by the plaintiff that its first Notice of Termination, which was based on an alleged repudiation of the Contract, was effective to bring the Contract to an end. The plaintiff submitted that the second defendant fell into jurisdictional error by failing to deal with the plaintiff's arguments to that effect (and by expressly declining to consider certain material in the plaintiff's Adjudication Response), or failing to provide reasons as to why the first notice was not valid. 52The first defendant submitted that the first adjudicator, Mr Michael, had earlier determined that the first notice was not valid, and that such determination was binding on the parties. Reference was made to the judgment of Macfarlan JA (with whom Handley AJA agreed) in Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69; (2009) 74 NSWLR 190 at [60] where his Honour stated: "These various provisions in my view indicate a legislative intent to render adjudication determinations relevantly conclusive. Such determinations do not conclude contractual rights. Section 32 expressly so provides. The Act however creates special statutory rights to progress payments. When a claim is made, a dispute arises and an adjudication determination resolves that dispute. I consider that determination to be final and binding between the parties as to the issues determined, except to the extent that the Act allows the determination to be revisited. It would in my view be quite contrary to the scheme of the Act to permit claimants simply to resubmit the already adjudicated claims if they were dissatisfied with the adjudication." (see also at [70]). 53Mr Michael does not seem to have expressly determined that the first notice was invalid. However, he was not satisfied that the first defendant was in breach of an essential term or had repudiated, as stated in the first notice (see paragraphs 5.367 to 5.368). Mr Michael further concluded that the plaintiff had not validly terminated the Contract pursuant to clause 14.5, but had terminated for convenience pursuant to clause 14.8 (see paragraph 5.74). 54The second defendant, in paragraph 23 of the adjudication, referred to Mr Michael's finding about the Contract being terminated for convenience, and accepted that position for the purpose of her own determination. She noted that Mr Michael did not "definitively determine" the validity of the first notice, and then went on to state that in her view the notice was invalid as there was no notice of default provided in accordance with clauses 14.2 and 14.4 of the Contract. She further stated that she was not satisfied that the first defendant had repudiated the Contract such that the plaintiff could accept such repudiation and terminate the Contract. 55I do not think that the second defendant committed any jurisdictional error as alleged. It appears that she considered the question whether the first notice was valid, and whilst her reasons were but briefly expressed, it is clear that she concluded that the first defendant had not been shown to have repudiated the Contract. That conclusion is consistent with the conclusion reached earlier by Mr Michael. Moreover, I do not think that the second defendant's refusal to consider the "Background section" of the plaintiff's Adjudication Response constitutes either a substantial denial of natural justice or a failure to consider material she was bound to take into account. That part of the Adjudication Response (paragraphs 12 to 24) was stated to be by way of response to certain allegations made by the first defendant in his Adjudication Application, and was not specifically directed to whether the first notice was valid, or effective to terminate the Contract. The question of termination pursuant to the first notice was expressly dealt with elsewhere in the Adjudication Response (see paragraphs 105 to 108). 56Ground 2 is another allegation of jurisdictional error. It concerns the contention advanced by the plaintiff that because the first defendant had already made a claim for work carried out up to the date of termination, clause 14.9(a)(i) had no further operation. The argument is to the effect that a Contractor seeking payment under clause 14.9(a)(i) must not have already submitted a payment claim for work carried out to the date of termination. It is said that the payment under the clause is predicated on the assumption that such a payment claim had not already been made. 57The plaintiff submitted that the second defendant failed to deal with this argument and that this amounted to a substantial denial of natural justice. 58The argument (which was clearly raised in the plaintiff's payment schedule and Adjudication Response) was not expressly dealt with by the second defendant in the adjudication. It should be noted, however, that in paragraph 107 of the adjudication, the second defendant noted, and rejected, a submission made by the plaintiff that the first defendant had "claimed all of its entitlements in respect of the work performed up until the reference date for (payment claim 10)" and therefore the first defendant "is not entitled to payment for work in excess of the amounts already claimed after the work had been performed". The second defendant concluded that the first defendant was entitled to make its claim under clause 14.9. She regarded the claim as one for the retention monies (see paragraph 50), and she noted that the claim was not the same as the claim made under payment claim 10 (see paragraph 42). 59The second defendant states in the adjudication that she considered the payment schedule and the Adjudication Response. I accept that she did. It is possible that she overlooked the plaintiff's argument concerning the construction of clause 14.9 in coming to her conclusion that clause 14.9 permitted the first defendant to make its claim for the retention moneys. However, even if such an omission is assumed, I would not regard it as a substantial denial of the measure of natural justice that the Act requires such as would render the determination void (see Brodyn (supra) at [55]; John Holland Pty. Limited v. Roads & Traffic Authority of New South Wales & Ors [2007] NSWCA 19 at [55]). It is not necessary to say anything about the merits of the plaintiff's construction argument, and it is not desirable to do so given the prospect that the argument may need to be considered in future litigation between the plaintiff and the first defendant. 60Ground 4 is that the first defendant, in pursuing payment claim 11, engaged in an abuse of process because pursuit of the claim involved making claims that had already been the subject of adjudication under the Act. It was further contended that pursuit of the claim in reliance upon clause 14.9 of the Contract was contrary to either an issue estoppel or an Anshun-type estoppel. By Anshun-type estoppel, I mean the "extended principle" expressed in Henderson v Henderson, as discussed in Port of Melbourne Authority v Anshun Proprietary Limited [1981] HCA 45; (1981) 147 CLR 589 at 598-603. The plaintiff further submitted that, in substance, the first defendant made the same claim (for work undertaken up to the termination of the Contract) in payment claim 11 as had earlier been made in payment claim 10. 61I do not think that such submission should be accepted. Insofar as payment claim 11 concerned work done up to the date of termination, it was a claim for the retention moneys. Those moneys were not in my view the subject of payment claim 10. 62In final submissions, Mr Macfarlane seemed to accept that Mr Michael did not determine the amount the first defendant was entitled to under clause 14.9. However, he submitted that as payment claim 10 concerned all work done up to 15 November 2013, the claim for payment under clause 14.9 made by payment claim 11, which itself concerned work done up to 15 November 2013, could have been brought, and ought reasonably have been brought, as part of the earlier payment claim. 63Nevertheless, assuming that an Anshun-type estoppel may arise in the context of payment claims under the Act (as to which see Watpac Constructions v Austin Corp [2010] NSWSC 168 at [94]-[104] per McDougall J), I would not conclude that an estoppel of that type operated in this case such that the later pursuit by the first defendant of payment claim 11 should be taken to be an abuse of process. 64Payment claim 10 was submitted on 15 November 2013 about half an hour after the notices of termination had been given. I would infer that it had been in the course of preparation well before the notices were served, and hence before any entitlement under clause 14.9 could arise. The intervention of the termination notices (which were sent to the email address of the first defendant which he used to submit payment claim 10) clearly provided an occasion for the first defendant to reconsider the proposed payment claim which was ready, or at least nearly ready, to be submitted. Nevertheless, the payment claim was submitted without including the claim for retention moneys that was later the subject of payment claim 11. 65Viewed in the context of the Act, and the nature of the relatively informal process it envisages for the making of payment claims and the adjudication of them, I do not think that the failure of the first defendant to seek payment of the retention moneys in payment claim 10 should be seen as deliberate or careless or otherwise of such a nature that the later seeking of the retention moneys should be precluded as an abuse of process. It is also relevant to note that a claim under clause 14.9, which includes the costs of removal of equipment from the site, might not be able to be formulated until well after the termination of the Contract. 66Grounds 6 and 7 also allege an abuse of process. In essence, the plaintiff submitted that it was an abuse of the Act for the first defendant to pursue payment claim 11, having regard to his conduct concerning Saferway Constructions Pty Ltd and payment of the contractors and suppliers for the project who dealt with that company. It was put, broadly, that the first defendant should not be permitted to pursue payment claim 11 because he: (1)arranged his affairs so that he was not personally liable to the contractors and suppliers; (2)pursued his rights as a Contractor to obtain progress payments; (3)failed to take steps to cause the money that he received to go to Saferway Constructions Pty Ltd, or directly to the contractors and suppliers; and (4)caused Saferway Constructions Pty Ltd to go into liquidation owing large debts to the contractors and suppliers. 67In addition, it is alleged that the first defendant, in submitting the statutory declarations in support of payment claims 1 to 7, engaged in misleading or deceptive conduct in that a misleading impression was given as to whether the contractors and suppliers had been or were being paid. The plaintiff submitted that it relied upon the statutory declarations in making payments under the Contract, and that had it known the true position it would have terminated the Contract earlier than it in fact did. The plaintiff contended that it suffered loss as a result of the misleading or deceptive conduct at least in an amount greater than the second defendant's adjudicated amount, and that the first defendant should therefore be restrained from taking steps in reliance upon the second defendant's determination. 68I do not propose to deal with the various issues raised by Grounds 6 and 7. Again, it is not desirable to do so given the prospect that many of the issues may be raised in future litigation between the plaintiff and the first defendant. 69The remaining grounds (5 and 8 to 12), each of which concerns a particular aspect of the adjudication, may be dealt with shortly. 70Ground 5 alleges a denial of natural justice in relation to the determination that the first defendant should be paid $33,000 for materials (plasterboard and framing) left on site. The plaintiff alleges that certain submissions and evidentiary material provided in support were not taken into account by the second defendant, and that inadequate reasons were given for her conclusion. 71I do not think this ground is made out. It is apparent from paragraph 99 of the adjudication that she considered the central submission made by the plaintiff, and did so in the light of the evidence placed before her. I do not discern any denial of natural justice, and her brief reasons seem to be adequate in the circumstances. 72Ground 8 alleges that no claim for retention moneys was made in payment claim 11, and thus such a claim should not have been adjudicated upon. This ground is also not made out. Whilst payment claim 10 did not describe the claim as one for the retention moneys, in substance it was such a claim, as found by the second defendant (see paragraph 50 of the adjudication). 73Ground 9 was a complaint that the amount determined for variation 13 was overstated by $6,037.50 due to an oversight on the part of the second defendant. This error was conceded by Mr Moujalli in final submissions. 74Grounds 10 and 11 (which concern $1,000 and $2,000 respectively) were not developed in submissions and I do not propose to deal with them. 75Ground 12 (which concerns $3,359.09) is an allegation that the second defendant allowed variations that were time barred by clause 16.5 of the Contract. The plaintiff submitted that the second defendant failed to apply the time bar and thus failed to take into account the terms of the relevant contract as required by s 22(2)(b) of the Act. This ground is also not made out. 76It is clear that the second defendant took the relevant contractual provisions into account. The matter was dealt with in paragraphs 109 and 110 of the adjudication. In those paragraphs, the second defendant sets out clause 16.5 and discusses its effect. She concludes that if a claim is not barred at the time of termination of the Contract, the Contractor is entitled to payment. The second defendant then proceeds to deal with the claimed variations. It is implicit, in her allowance of the variations, that, rightly or wrongly, she regarded them as not barred at the time of termination.

Conclusion 77The Court will declare that the adjudication determination made by the second defendant on 16 September 2014 is void. 78Costs should follow the event. The first defendant should pay the plaintiff's costs of the proceedings.

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: 19 December 2014