SE Ware Street Dev Pty Ltd v Kwik Flo Pty Ltd

Before: Peden J

Decision: At [48]

Catchwords: BUILDING AND CONSTRUCTION – adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW) – second or subsequent adjudication – where first adjudicator determined no jurisdiction to decide first defendant’s claim – first defendant withdrew application and obtained second adjudication – whether first adjudication decision a determination under s 22(1) – whether withdrawal was valid – whether second determination an abuse of process – whether issue estoppel applies – consideration of appropriate relief

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

Cases Cited: Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 277 CLR 445
Alucity Architectural Produce Supply Pty Ltd v Australian Solutions Centre [2016] NSWSC 608
Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421
Civil & Allied Technical Construction Pty Ltd v Resolution Institute [2019] SASC 193
Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190
Forte Sydney Carlingford Development Pty Ltd v Forte Sydney Carlingford Pty Ltd [2024] FCAFC 9
Forte Sydney Carlingford Pty Ltd v Li [2022] FCA 1499
Goyder Wind Farm 1 Pty Ltd v GE Renewable Energy Australia Pty Ltd [2025] SASCA 39
Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd (2022) 18 ACTLR 245
Ku-Ring-Gai Council v Ichor Constructions Pty Ltd [2014] NSWSC 1534
Olympia Group (NSW) Pty Ltd v Hansen Yuncken Pty Ltd [2011] NSWSC 165 [2011] NSWSC 165
Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1
Tackelly No 8 Pty Ltd as trustee for Tackelly No 8 Trust v Reward Interiors Pty Ltd t/as Reward Group [2025] NSWSC 300
The University of Sydney v Cadence Australia Pty Ltd [2009] NSWSC 635
Urban Traders v Paul Michael [2009] NSWSC 1072

Category: Principal judgment

Parties: SE Ware Street Dev Pty Ltd (Plaintiff)
Kwik Flo Pty Ltd (First Defendant)
Edward Smithies (Second Defendant)

Representation: Counsel:
D Hughes (Plaintiff)
G Sirtes SC with E Ball (First Defendant)
Solicitors:
Mills Oakley Lawyers (Plaintiff)
HWL Ebsworth Lawyers (First Defendant)

File Number(s): 2025/274059

Publication restriction: Nil

JUDGMENT

1. This is a dispute about adjudications under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA).

2. In about March 2022, the directors of SE Ware Street Dev Pty Ltd and Kwik Flo Pty Ltd discussed a joint development of SE Ware’s land in Fairfield, New South Wales. They now differ on what was agreed.

3. Kwik Flo alleged that the agreement was for the construction of a mixed-use development it would finance, including 54 residential lots, ground floor retail lots, first floor offices and associated ground floor parking. Its alleged further terms of the agreement were:

4. Kwik Flo would take all necessary steps to obtain a construction certificate and SE Ware would pay 30% of the costs associated with obtaining the construction certificate;

5. as payment, Kwik Flo would receive proceeds from the sale of all lots except for the ground floor retail lots, a small commercial lot on level 1 and 12 parking spaces;

6. by way of an implied term, if the project did not proceed to completion, then SE Ware would pay Kwik Flo its costs and a reasonable margin.

7. SE Ware contended that it never agreed to pay 30% of the costs associated with obtaining the construction certificate or any other works. It further contended it was entitled to 18 rather than 12 parking spaces. Further, there was no implied term as alleged.

8. Kwik Flo did carry out some work on the land. However, no construction certificate was ever obtained, and the land remains undeveloped.

9. On 15 May 2025, Kwik Flo lodged an adjudication application, having served on SE Ware a payment claim of $3,000,000 plus GST for building works and alleged lost profits.

10. On 11 June 2025, the adjudicator issued a 30-page determination, accepting SE Ware’s version of the agreement (First Determination). The adjudicator addressed the issues raised by both parties, made findings about the terms of the contract and also concluded that the SOPA did not apply, because the parties’ “construction contract” fell within the exception in s 7(2)(c) SOPA. This was said to be because the consideration payable was “to be calculated otherwise than by reference to the value of the work carried out or the value of the goods and services supplied”.

11. Therefore, the adjudicator concluded that he did not have jurisdiction to determine the appropriate amount of Kwik Flo’s payment claim; SE Ware was “not required to pay any amount” to Kwik Flo.

12. On 20 June 2025, Kwik Flo purported to “withdraw” its adjudication application and made a new application to a different adjudication body. Its explanation for taking this course was that the first adjudicator had not made a “determination” for the purposes of s 22 SOPA, and thus no determination had been made within the time frame allowed under s 26(1)(b), such that Kwik Flo claimed it was entitled to bring another application under s 26(2).

13. SE Ware engaged in the second adjudication process, both in terms of substance concerning the contract and the payment claim, but also asserting that it was an abuse of process, because there had already been an adjudication determination.

14. On 14 July 2025, the second adjudicator made a determination in Kwik Flo’s favour of $1,200,000 (Second Determination), including making different findings about the terms of the agreement. He did not consider this second adjudication was an abuse of process.

15. SE Ware now seeks an order in the nature of certiorari quashing the Second Determination, and an order permanently restraining Kwik Flo from taking any steps to register the Second Determination as a judgment and enforce it.

16. SE Ware submitted that the Second Determination was void, or liable to be set aside, because:

17. it was an abuse of process or Kwik Flo was estopped from relying on the Second Determination, because it was seeking to reagitate an issue (including the terms of the contract) that had already been decided; and

18. the First Determination was a “determination” for the purposes of the SOPA, such that the extension provisions for a second application in s 26 SOPA did not apply and the second application was out of time.

19. In submissions provided after the oral hearing, SE Ware sought leave to advance a further reason why the Second Determination was without jurisdiction. It submitted that even if the first adjudication application had been validly withdrawn, the second application was still out of time. That submission was predicated on the assumption that Kwik Flo made the second application on 23 June 2025, the date stated in the parties’ joint chronology. However, based on email correspondence, the second application was in fact made on 20 June 2025. Therefore, there is no need to consider this point.

20. In my opinion for the reasons that follow, the First Determination was a “determination” for the purposes of the SOPA. It has not been found to be invalid. In those circumstances, the second application was an abuse of process and SE Ware is entitled to injunctive relief preventing Kwik Flo from taking steps to register and enforce any judgment based upon the Second Determination.

21. I note that the second adjudicator who was named as the second defendant filed a submitting appearance.

First Determination was a “determination” under SOPA

17. The primary issue for these proceedings is whether the First Determination was a determination for the purposes of ss 22(1) and 26(b) SOPA. Resolution of that question is assisted by various authorities. However, the parties disagreed about the applicability of those cited.

18. The first is Alucity Architectural Produce Supply Pty Ltd v Australian Solutions Centre [2016] NSWSC 608 (Alucity). The adjudicator had issued a “determination”, in which he concluded that he did not have jurisdiction to determine Alucity’s application because the relevant payment claim was invalid under s 13(5) SOPA; Alucity had previously served payment claims in respect of the same reference date.

19. Rather than seeking to challenge that determination through judicial review, including, for example, as to jurisdictional error, Alucity sued the adjudicator and the authorised nominating authority for damages and restitution of the adjudication fees paid to them. Alucity’s claim was brought on the basis that the adjudicator had not made a “determination” under s 22 SOPA and thus was not entitled to payment. Hammerschlag J (as the Chief Judge in Equity then was) considered the adjudicator’s determination of the validity of the payment claim was a “determination” and stated at [58]:

Section 22(1)(a) requires the adjudicator to determine the amount of the progress payment (if any) to be paid by the respondent to the claimant. A determination that no amount is to be paid because the claim is invalid is no less a determination than one which determines that no money is payable for some other reason.

20. Therefore, Alucity failed.

21. The Full Court of the Federal Court referenced Alucity in Forte Sydney Carlingford Development Pty Ltd v Forte Sydney Carlingford Pty Ltd [2024] FCAFC 9 (Forte Appeal). The adjudicator had held that the relevant agreement was not a “construction contract” as required by ss 5 or 6 of the SOPA, and, in the alternative, the contract was excluded from the operation of the SOPA under s 7(3)(c)(iii): see [11]. The claimant then notified the relevant adjudication body that it was withdrawing its application and then resubmitted the application, requesting that the first adjudicator not be appointed to determine the second application. Stewart J granted an injunction to prevent the consideration and determination of the second application (and a third application later made to a different adjudication body): Forte Sydney Carlingford Pty Ltd v Li [2022] FCA 1499 (Forte First Instance). His Honour considered that the initial determination was valid, which had the effect that the claimant was not entitled to withdraw its adjudication application and re-submit it to either the same or a different adjudication body; to do so would be an abuse of process: at [38]-[39].

22. The applicant sought leave to appeal, arguing that Stewart J erred in finding that the first adjudication was a “determination” within s 22 SOPA. The Full Court refused the application for leave to appeal: see [79]-[81]; [91]. In doing so, the Full Court considered the facts involved were similar to those in Alucity and distinguished the decision of Ball J (as his Honour then was) in Olympia Group (NSW) Pty Ltd v Hansen Yuncken Pty Ltd [2011] NSWSC 165 (Olympia Group).

23. In Olympia Group, the claimant made an adjudication application under s 17 SOPA and shortly after, the respondent sent a letter to the adjudication body, putting jurisdiction under the SOPA in issue because the construction work had been completed in the ACT, not NSW.

24. An adjudicator was appointed and almost immediately caused the adjudication body to write to the parties advising, inter alia:

… I am satisfied the contract and therefore the payment claim made under the contract is not under the jurisdiction of the [SOPA]. As such I have formed the view the Payment Claim the subject of this adjudication application is invalid.

25. Ball J held at [19] that the decision of the adjudicator was not a “determination” contemplated by s 22 SOPA based on certain facts, namely, that the adjudicator:

26. was asked to decide the question of jurisdiction before he accepted his nomination;

27. did not wait to receive an adjudication response as required by s 22 of the Act, before deciding he did not have jurisdiction;

28. did not examine the payment claim or payment schedule in arriving at his decision;

29. simply relied on the fact that the construction site was outside of NSW to determine he did not have jurisdiction.

30. From these facts, Ball J held that the adjudicator was not purporting to make a determination under s 22 SOPA.

31. In dismissing the application for leave to appeal in Forte Appeal, the Full Court emphasised the difference between the facts before them and those in Olympia Group at [90]:

In Olympia Group … the adjudicator … considered the question of jurisdiction as a preliminary matter, as he was asked to do, forming a view about the issue on the same day as he accepted his nomination. That is not what happened here. Rather, in contrast, the question of existence of a construction contract and therefore jurisdiction was not raised as a preliminary or threshold issue but in detailed submissions. [The adjudicator] accepted his nomination, he then considered the payment claim, payment schedule and the adjudication response and wrote a lengthy and considered determination having regard to that material.

28. Those observations are apposite here. Paragraph 35 of the First Determination states “…once [SE Ware] had in its [adjudication response] contended that the Act did not apply to the present construction contact, it was necessary for me to be satisfied as to this threshold jurisdictional issue” (emphasis added). Kwik Flo highlighted the word “threshold” to submit that the current facts required the same result as in Olympia Group. I do not accept that submission.

29. Here, the adjudicator reached his conclusion about his want of jurisdiction only after considering Kwik Flo’s adjudication application, SE Ware’s adjudication response, and further submissions from Kwik Flo, which the adjudicator had invited. The conclusion was reached in the context of the adjudicator following the process of making a “determination” about the payment claim. The adjudicator did not treat jurisdiction as merely a preliminary or threshold issue, but instead considered the issue towards the end of the substantive reasons about the payment claim. Olympia Group is therefore distinguishable.

30. I consider that the First Determination was a determination for the purposes of the SOPA.

Could Kwik Flo withdraw its first application and lodge a second application?

31. During the oral hearing, SE Ware submitted that, because the First Determination was a determination made within the time allowed within the meaning of s 26(1)(b) SOPA, Kwik Flo had no entitlement to withdraw its first application under s 17A. Although this was not raised in SE Ware’s written submissions, I allowed the parties to provide further submissions on the point and consider it appropriate to allow the argument. I do not consider that Kwik Flo was relevantly prejudiced by the argument being raised late, particularly where SE Ware had in fact raised the argument in its second adjudication response, and Kwik Flo took up the opportunity to respond in further written submissions here.

32. The status of the First Determination as a “determination” for the purposes of the SOPA necessarily means that Kwik Flo had no entitlement to withdraw the first application under s 17A (which must relevantly occur before the application is determined: s17A(1)(b)). Kwik Flo was therefore not entitled to make a new application under s 26, as the first adjudicator did not fail to determine the application within the time allowed by s 21(3): s 26(1)(b).

33. SE Ware did not object at the time Kwik Flo purported to withdraw the first adjudication application. Had it done so, the adjudicator could have decided whether “it is in the interests of justice to uphold the objection” to the withdrawal: s 17A(2). However, I do not consider SE Ware’s failure to raise the objection prevents it from now asserting that the withdrawal was invalid. Kwik Flo did not suggest SE Ware was so prevented.

Appropriate relief

34. As noted, SE Ware seeks relief in the nature of certiorari in relation to the Second Determination and injunctive relief restraining Kwik Flo from taking any steps to register or enforce the Second Determination as a judgment on the basis of abuse of process and issue estoppel.

35. An abuse of process in the security of payment context can manifest itself in two ways. A party can abuse:

36. the legislative processes by purporting to re-agitate a claim which had already been decided; or

37. the processes of the Court by attempting to enter judgment with respect to a second or subsequent application.

Certiorari?

36. As to the first class of case, the Court’s power to prevent an abuse of process relating to the re-agitation of a claim, which has already been decided, is context specific. As McDougall J explained in Urban Traders v Paul Michael [2009] NSWSC 1072 (Urban Traders) at [41], the “relevant concept is not abuse of process at large” but is “abuse of the processes of the [SOPA]”. His Honour continued at [32]-[43]:

…whether or not the repetition of a claim amounts to an abuse of process requires consideration of all relevant contextual facts. In addition it requires consideration of the reasons why the courts intervene to prevent abuse of process. Those reasons include intervention to prevent a person from being vexed by having to reargue an issue already authoritatively decided. Thus, in deciding whether a repetition of a claim amounts to an abuse of process, it may be relevant to take into consideration whether, because of fresh claims that are advanced, the respondent will be required to defend itself in any event.

I do not think that it is possible to state in some exhaustive fashion what combination of factors, including repetition, will lead to the conclusion that there is an abuse of process. … in my opinion, it would be inconsistent with the provisions of the [SOPA] … to hold that repetition, by itself and without more, always amounts to an abuse or process.

37. Although “conceptions of abuse of process of [the security of payment legislation] have tended to coalesce around repetition”, the “outer limits of what is capable of constituting an abuse of process in this regard” have not been established: Goyder Wind Farm 1 Pty Ltd v GE Renewable Energy Australia Pty Ltd [2025] SASCA 39 (Goyder Wind Farm) at [127] (Livesey P, S Doyle and Bleby JJA).

38. As noted, SE Ware did not seek a stay of the second adjudication process to avoid engaging with the second process, and instead sought certiorari after the determination was made.

39. Relief in the nature of certiorari will be granted where the determination of an adjudicator is void: Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421 at 443 [59] (Hodgson JA, Mason P and Giles JA agreeing). The principal basis for the making of such an order is jurisdictional error: Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1 at [29] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

40. However, rather than contending for any specific jurisdictional error, SE Ware submitted that the Second Determination was subject to global “jurisdictional [in]validity” because it was an abuse of process and was commenced when an issue estoppel applied. No submission was made that the second adjudicator’s conclusion that the first adjudication application was properly withdrawn amounted to jurisdictional error, such as, for example, an erroneous conclusion as to a jurisdictional fact: see eg Tackelly No 8 Pty Ltd as trustee for Tackelly No 8 Trust v Reward Interiors Pty Ltd t/as Reward Group [2025] NSWSC 300 at [43] and the authorities there cited.

41. I do not accept SE Ware’s submission. Ordinarily, the relief for an abuse of process or issue estoppel is a stay or dismissal of the process in question. SE Ware did not refer to any decision where a court has found that an adjudication ought to be quashed because it was an abuse of process or because an issue estoppel applied. Rather, there are authorities where an attempted second adjudication has been stayed before it was completed because it would be an abuse of process: see eg Urban Traders; The University of Sydney v Cadence Australia Pty Ltd [2009] NSWSC 635 (Hammerschlag J, as the Chief Judge in Equity then was); Ku-Ring-Gai Council v Ichor Constructions Pty Ltd [2014] NSWSC 1534 (Stevenson J). SE Ware did not seek a stay, but instead engaged with the second adjudication. I do not accept that the Second Determination can now be set aside by reason of abuse of process. Further, the application of the common law doctrine of issue estoppel (or a modification of that doctrine) in the security of payment context is a matter of some controversy: see Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd (2022) 18 ACTLR 245 (Harlech) at [85]-[88] (Lee J, Elkaim J agreeing).

Injunction?

42. In circumstances where the First Determination was a valid determination for the purposes of the SOPA and it has not been found to be invalid, I consider it would be an abuse of process for Kwik Flo to attempt to enforce the Second Determination as a judgment pursuant to s 25 SOPA because of the commonality of issues, including findings as to the terms of the contract: see eg Civil & Allied Technical Construction Pty Ltd v Resolution Institute [2019] SASC 193 at [65] (Kourakis CJ); Harlech at [91] (Lee J, Elkaim J agreeing); Goyder Wind Farm at [122] (Livesey P, S Doyle and Bleby JJA).

43. That is so even if the First Determination was vitiated by jurisdictional error and is no determination at all (a point which the parties did not raise before me). As Stewart J explained in Forte First Instance at [39]-[40]:

There is a further consideration, which is that it is in my view an abuse of the procedures of the Act for the Developer to seek to re-agitate a claim which has already been decided. Indeed, two adjudicators … have each decided that the Developer is not party to a “construction contract” with the Owner and that the contended-for contract or arrangement is in any event relevantly exempted from the application of the Act. It may be … that a determination vitiated by jurisdictional error is no determination at all and can be ignored. However, that does not mean that the repetitious use of the Act by resubmitting the same payment claim to successive adjudicators in the hope of a favourable outcome is not an abuse of the processes of the Act. …

As observed by Kennett J in Harlech (at [16]), the doctrine of abuse of process has been invoked by single judges in the Supreme Court of NSW in granting injunctive relief to restrain the pursuit of repetitious claims under the Act … It is well-established that the Act as a whole generally manifests an intention to prevent repetitious re-agitation of the same issues …

44. For completeness, I note that I do not accept Kwik Flo’s submission that SE Ware waived its right to seek an injunction in relation to the Second Determination because its enforcement would be an abuse of process in circumstances where it failed to seek injunctive relief to prevent the Second Determination from occurring.

45. The High Court has observed that while the term waiver “is a term that is used in many different senses”, perhaps the most common is “to describe an unequivocal decision by a party, communicated to the other party, not to insist upon a right”: Allianz Australia Insurance Ltd v Delor Vue Apartments CTS 39788 (2022) 277 CLR 445 at [28] (Kiefel CJ, Edelman, Steward and Gleeson JJ). Waiver may be described as a “doctrine by operation of which assertion of a right is precluded”: at [137] (Gageler J, as the Chief Justice then was).

46. SE Ware did not act inconsistently with its right to raise an abuse of process argument. While it participated in the second adjudication process, it maintained that it was an abuse of process. Further, SE Ware did not waive its rights in relation to any attempt by Kwik Flo to enforce the Second Determination.

47. It follows from the above that the appropriate relief is an injunction restraining Kwik Flo from taking steps to register or enforce the Second Determination.

Orders

48. For these reasons, I make the following orders:

49. On or before 4pm on 26 September 2025, the plaintiff serve on the first defendant short minutes of order intended to give effect to these reasons for judgment together with the orders it proposes in relation to costs and any necessary explanation;

50. On or before 4pm on 3 October 2025, the first defendant:

(a) if it agrees with the plaintiff’s short minutes of order, notify the plaintiff and my Associate of their agreement, in which case the orders will be considered in chambers if appropriate; (b) if it does not agree with the plaintiff’s short minutes of order, serve on the plaintiff a document (which may include alternative short minutes of order) setting out the matters on which it disagrees and provide copies of the plaintiff’s short minutes of order and its document to my Associate, in which case the matter will be listed, initially for directions, at 9:30 am on 8 October 2025, or such other date as is agreed with my Associate, to deal with all outstanding issues.

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