Procorp Civil Pty Limited v Napoli Excavations and Contracting Pty Limited & Ors

Procorp Civil Pty Limited v Napoli Excavations and Contracting Pty Limited & Ors - [2006] NSWSC 205 - NSWSC 2006 case summary — Zoe

[19]

(b) Claimant's Invoice No 1042 for $742.50 is not referred to in the payment Schedule at all. As the respondent has raised no objection to the amount claimed I find the claimant is entitled to this amount as claimed." [emphasis added] 23 Nothing in this approach is exceptional. Nothing in this approach suggests a failure to bona fide address the factual issues. The adjudicator's task 24 Returning to the authorities, [conveniently summarised by McDougall J in Energetech Australia Pty Ltd v Sides Engineering Pty Ltd [2005] NSWSC 801]: · In Minister for Commerce v Contrax Plumbing (NSW) Pty Ltd [2005] NSWCA 142, Hodgson JA dealt with the consequences of errors of law (and fact) at para [49]. He said that an error of law in the interpretation of the Act or the contract, or as to the validity and operative terms of the contract, would not prevent a determination from being valid for the purposes of the Act: "49 In my opinion, an error of fact or law, including an error in interpretation of the Act or of the contract, or as to what are the valid and operative terms of the contract, does not prevent a determination from being an adjudicator's determination within the meaning of the Act. Section 22(2) does require the adjudicator to consider the provisions of the Act and the provisions of the contract; but so long as the adjudicator does this, or at least bona fide addresses the requirements of s 22(2) as to what is to be considered, an error on these matters does not render the determination invalid." [Similar views were expressed by his Honour in Coordinated Constructions Pty Ltd v J M Hargreaves (NSW) Pty Ltd [2005] NSWCA 228 at paras [45] and [46].] · In Coordinated Constructions Co Pty Ltd v Climatech (Canberra) Pty Ltd & Ors [2005] NSWCA 229, Hodgson JA said at para [24] that the task of the adjudicator was in substance to determine the claimant's entitlement within the framework of the dispute that was propounded by the parties. He said: "24 However, I accept that what is referred to an adjudicator for determination is a claimant's payment claim, and what an adjudicator is to determine is the amount of the progress payment to be paid on the basis of that claim and on the basis of other considerations in s 22(2) of the Act. Accordingly, the task of the adjudicator is to make a determination within the parameters of the payment claim, although that is not to say that, if an adjudicator were to make an error which can later be seen as taking the determination outside those parameters, it necessarily invalidates the determination." · In Energetech Australia Pty Ltd v Sides Engineering Pty Ltd [2005] NSWSC 1143, Campbell J observed as follows:

[27]

ii. a breach of the fundamental requirements of natural justice required by the Act, namely a failure by the adjudicator to receive or consider submissions which is due to a breach of the provisions in sections 17(1), (2), 20, 21(1) or 22(2)(d) of the Act. Evidence taken on the voire dire 27 During the hearing both parties sought to place the extensive affidavit evidence of a variety of matters before the Court. Ultimately only extremely limited affidavit evidence was permitted and on a particular basis. The evidence [both in affidavit form as well as came forward in the limited cross-examination] was admitted on the voire dire upon the basis that a decision as to whether or not the evidence would be admitted on the hearing would be given in the judgment. This course permitted very limited evidence on only one area, namely what precisely had occurred on 14 December 2005. Portions only of the affidavit of Ms Bechini of Procorp of 22 March 2006 and of the affidavit of Mr Guerrera of Napoli of 24 March 2006 were permitted. 28 The decision is that none of this evidence is allowed. To my mind the evidence is simply irrelevant in terms of the task of the Court at hand. Alternatively and if the evidence be relevant, the probative value of the evidence is outweighed by the danger that the evidence would cause or result in a waste of time within the meaning of s 135 of the Evidence Act 1995. 29 I reject the proposition that the adjudicator, following receipt of the adjudication response of Procorp, was obliged to invite further submissions first from Napoli and then further responsive submissions from Procorp. The adjudicator was entitled to proceed upon the basis that s20 (2B) was operative. That he did so is clear from his use of the words "fatally for the respondent". Indeed nothing in the adjudication response submissions of Procorp threw up the vital questions put to the Court, concerning precisely what had occurred on 14 December 2005. The incorrect computation of the total amount 30 The adjudicator included in the determination the following paragraph:

[28]

"…[T]he claimant at par.26 of their submissions accepts that since making the payment claim they have received payment of $122,139.35 for the works the subject of the invoices comprising the payment claim, I note the payment claim invoices are for $378,887.92, and the claimant "claims the outstanding amount of $256,748.57." 31 The position which obtains may clearly be characterised in terms of the adjudicator failing [as is apparent on the face of the determination] to have had regard to the matter which was indeed common ground, in terms of the net amount claimed by the claimant following receipt by Napoli of $122,139.35. One presumes that this was simply an oversight. 32 The adjudicator's determination clearly containing what must be characterised for the purposes of s 22 (5) as a clerical mistake and/or an error arising from an accidental slip or omission and/or a material miscalculation of figures, the adjudicator had power on his own initiative or on the application of either party, to correct the determination. 33 At the commencement of the hearing, the Court raised with the parties the question of whether the adjudicator still has the power on his own initiative or on the application of either party, to correct the determination. Indeed at one stage the parties were asked to address on whether a preliminary point should be ordered on the questions concerning whether a slip or mistake was able to be remedied even at this late point in time. It was made clear by both parties that they did not discern this issue as a matter of substance. [transcript 6, 7, 9, 10, 38, 39]. 34 Mr Corsaro SC, counsel for Procorp, did contend that as the adjudicator had been joined as a party to these proceedings, it was open to him, even after these proceedings had commenced, to have sought leave to correct the determination on the computation issue. 35 In my view the position which obtains is that the adjudicator is still possessed of the above-described power. Procedures/the way forward 36 It is important to follow with precision the precise events which occurred. They are as follows:

[45]

iv. That matter can also be remedied by the District Court within the slip rule applying in that jurisdiction. 38 The appropriate course is to simply adjourn the proceedings for a short period and to then relist the proceedings following the parties having had an opportunity to review these reasons. 39 A real degree of assistance may be found in the recent decision of the Court of Appeal: Khoury v Hiar [2006] NSWCA 47 dealing with disconformity between the order of court and the relevant statutory regime. The Legal Profession Act 1987 enabled a party to obtain a judgment through an assessment of costs and the filing of an assessor's certificate. That Act relevantly provided that a legally assisted person should not be liable for the payment of the whole or any part of particular costs. The judgment taken to have been entered on the filing of the certificate was subject to the statutory prescript that the claimant [a legally assisted person] was not liable for the costs. 40 The holding was that the judgment and the non-liability stood together. The effect of the section was superimposed on the judgment which had no greater force then the order for costs which enabled the assessment of costs. Disconformity between a Court's order and liability to pay was accepted in the Act's approach, by which the liability of a legally assisted person to pay costs was not worked out when the court made its costs order, but was left for the superimposition of the section. [cf at 37-41; 45]. 41 There is particular relevance in the reference (at [50]) to the ability of the Court to turn to its armoury of relief and to control by injunction enforcement of the judgment so as to permit enforcement only to the extent of the entitlement. An injunction was ordered restraining the First Opponent from enforcing the judgment entered in the District Court save to the extent of his entitlement. 42 The purpose of these observations is to make clear that this Court, depending upon what occurs after the parties have had a proper opportunity to consider these reasons, has the jurisdiction to restrain Napoli from enforcing the judgment entered in the District Court save to the extent of the unpaid part of the adjudicated amount. 43 Submissions will be taken as to whether there is any need for a further interim interlocutory regime pending the next occasion when the matter is before the Court.

Parties

Applicant/Plaintiff:

Procorp Civil Pty Limited

Respondent/Defendant:

Napoli Excavations and Contracting Pty Limited & Ors

Legislation Cited (2)

Building and Construction Industry Security of Payment Act 1999(NSW)

Evidence Act 1995(NSW)

Cases Cited (21)

CITATION : Procorp Civil Pty Limited v Napoli Excavations and Contracting Pty Limited & Ors [2006] NSWSC 205

Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394 Brookhollow Pty Ltd v R & R Consultants Pty Ltd [2006] NSWSC 1 Coordinated Constructions Co Pty Ltd v Climatech (Canberra) Pty Ltd & Ors [2005] NSWCA 229 Coordinated Constructions Pty Ltd v J M Hargreaves (NSW) Pty Ltd [2005] NSWCA 228 Emergency Services Superannuation Board v Davenport [2004] NSWSC 697 Energetech Australia Pty Ltd v Sides Engineering Pty Ltd [2005] NSWSC 801 Energetech Australia Pty Ltd v Sides Engineering Pty Ltd [2005] NSWSC 1143 Estate Property Holdings Pty Ltd v Barclay Mowlem Construction Ltd [2004] NSWCA 393 Khoury v Hiar [2006] NSWCA 47 CASES CITED : Kioa v West (1985) 159 CLR 550 Lifestyle Retirement Projects No 2 Pty Ltd v Parisi Homes Pty Ltd [2005] NSWSC 705 Minister for Commerce v Contrax Plumbing (NSW) Pty Ltd [2005] NSWCA 142 Minister for Immigration and Multicultural affairs, Re; Ex parte Lam (2003) 214 CLR 1 Multiplex Constructions Pty Limited v Luikens [2003] NSWSC 1140 Musico v Davenport [2003] NSWSC 977 O'Reilly v Mackman [1983] 2 AC 237 Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 194 CLR 355 R v Hickman; Ex parte Fox and Clinton (1945) 70 CLR 598 Transgrid v Siemens [2004] NSWCA 394 Twist v Randwick Municipal Council (1976) 136 CLR 106

ii. As payments made under the Act are only on account of a liability to be finally determined, there is only limited opportunity for the Court's involvement in the process. Musico v Davenport [2003] NSWSC 977 had determined the touchstone for the Court intervention's in the adjudication process to be "jurisdictional error of law."

viii. The decision in Emergency Services Superannuation Board v Davenport [2004] NSWSC 697 is to the same effect.

(2004) 61 NSWLR 421

(1985) 159 CLR 550

(2003) 214 CLR 1

(1998) 194 CLR 355

(1945) 70 CLR 598

(1976) 136 CLR 106