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Category: Procedural rulings

Parties: Warrane - Design Construct Fit-Out Pty Ltd (Plaintiff/ Respondent)
Woonona-Bulli R S L Memorial Club Ltd (Defendant/ Applicant)

Representation: Counsel:
G Campbell (Plaintiff/Respondent)
F Corsaro SC with A Girgis (Defendant/Applicant)
Solicitors:
APJ Law (Plaintiff/Respondent)
Pigott Stinson (Defendant/Applicant)

File Number(s): 2025/00423599

Publication restriction: Nil

JUDGMENT

1. On 21 December 2021, Woonona Bulli RSL Memorial Club Limited (Club) engaged Warrane Design Construct Fit Out Pty Ltd (Warrane) under a written contract to design a masterplan for the refurbishment of the Woonona Bulli RSL Memorial Club in Woonona NSW (Site), including a carpark (Design Contract). On 7 December 2023, the Club engaged Warrane to construct the carpark at the Site under a costs plus contract (Construction Contract). Warrane provided an “estimate” of a little over $4,000,000.

2. On 17 October 2025, Warrane obtained an adjudication determination under s 22 Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) in its favour in the amount of $2,912,491.25 including GST, plus costs, against the Club in respect of works performed under the Construction Contract. The Club did not challenge the determination. On 4 November 2025, on the basis of that determination, Warrane obtained judgment in these proceedings in the amount of $3,026,967.85 (Judgment).

3. The Club now seeks a stay of the Judgment, pending determination of the Club’s substantive claims (including a s 32 SOPA claim) in proceedings filed on 26 May 2025.

4. Often a stay would be conditional upon payment into Court of a judgment sum. The Club instead submitted that if the Judgment sum was required to be paid, it would be “catastrophic” for its continued existence.

5. For the reasons below, I will not order a stay.

Legal Principles

6. There is no dispute as to the principles concerning stays in the context of SOPA, which were recently explained by the unanimous NSW Court of Appeal decision, Black Label Developments Pty Ltd v McMenemy [2025] NSWCA 114 (Black Label). Without seeking to depart from what was outlined there, it is sufficient to note:

7. The objectives of the SOPA, while important, are not statutory commands and do not limit the Court’s discretion to order a stay: see eg s 67 Civil Procedure Act 2005 (NSW) (CPA); see also Black Label at [60] [74].

8. The two “policies” of the SOPA are:

(a) To maintain the flow of money to the contractor; and (b) To place the risk of insolvency on the principal: see A-Civil Aust Pty Ltd v Ceerose Pty Ltd [2023] NSWCA 144 at [21] (Payne JA, Simpson and Basten AJJA) (A-Civil); Black Label at [68]-[74] (McHugh JA, Bell CJ and Griffiths AJA agreeing); see also Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd (2018) 264 CLR 1 at [40] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).

3. The “overriding principle” from the CPA applies when determining an application for a stay and requires consideration of the interests of justice.
4. The consequences of granting or refusing a stay are relevant considerations.
5. Each case is fact specific, including the context of the entering of the particular judgment.
6. The onus is on the applicant to convince the Court that the interests of justice require a stay: see eg Black Label at [50] citing In the matter of Webuildem Pty Limited [2012] NSWSC 708 at [13] (Black J). The onus has been described as a “heavy” one: see A-Civil at [31].
7. A conventional approach to the exercise of discretion is to determine whether a party has established a prima facie case concerning the substantive proceeding, and then to address other factors relevant to the balance of convenience (or risk) in granting or refusing a stay: Black Label at [54].
8. The size of the judgment is not a relevant consideration in determining whether to order a stay: see Martinus Rail Pty Ltd v Qube RE Services (No 2) Pty Ltd [2025] NSWCA 49 at [302] (Payne JA, Gleeson JA and Griffiths AJA agreeing) (Martinus).

Determination

7. I reject the Club’s submissions in support of a stay for the following reasons.

Type of judgment and context of its entry

8. First, I accept that the context surrounding the entry of the Judgment is relevant.

9. The adjudication determination was given on 17 October 2025. The Club did not challenge its validity, and it was then entered as the Judgment. Nevertheless, the Club submitted that the adjudicator did not consider its response to the adjudication application “on the merits”, but rather concluded that the Club’s 146 challenges to the payment schedule and adjudication application were not “tethered” to the payment claim and therefore were not “duly made”.

10. I reject that is the appropriate analysis. The adjudication determination contained 128 pages of reasons and engaged with the Club’s response in detail. Non-exhaustive examples of the adjudicator engaging in the merits of the Club’s response include:

11. The adjudicator referenced “extensive procedural hostilities that exist between the parties … [being] the product of the [Club’s] persistent and unreasonable conduct, which has crossed the line into judicially admonished conduct … intended to obstruct [Warrane’s] entitlements under both the contract and the Act”. He referenced the decisions of Stevenson J in Warrane Design Construct Fit-Out Pty Ltd v Woonona Bulli RSL Memorial Club Ltd [2025] NSWSC 123 and Rees J in Woonona-Bulli RSL Memorial Club Ltd v Warrane-Design Construct Fit-Out Pty Ltd (No 2) [2025] NSWSC 365, which upheld an earlier adjudication determination in full (and leave to appeal was refused: see Warrane Design Construct Fit-Out Pty Ltd v Woonona-Bulli RSL Memorial Club Ltd [2025] NSWCA 223).

12. The adjudicator listed all the components of the Club’s response and “carefully reviewed” about 6,000 pages of material which were “predominantly pre-contractual or contemporaneous with contract formation”, and included exhibits, the majority of which “are irrelevant or tangential to the payment claim”.

13. The adjudicator indicated: “I am satisfied that the [Club] has not provided any substantive argument – whether in the payment schedule, adjudication response, or supporting material – that challenges the existence of subject matter jurisdiction under the Act”.

14. The adjudicator included in his reasons various tables outlining the Club’s dispute about various items in the payment claim and his assessment.

Consequences of granting or refusing a stay

11. Secondly, I do not accept that the Club has demonstrated that the consequences of not ordering a stay would be “catastrophic” for the Club.

12. The Club appears to have a healthy overall financial position. Its audited accounts to December 2025 (being shortly after the Judgment was entered), show net assets of over $14,000,000 (taking into account liabilities).

13. The Club’s asset position is valued “at cost”, rather than market value. It is unnecessary to decide whether market value would be more than “at cost” value. However, I note an unchallenged expert report of certified valuer Chris Shepherd AAPI, relied upon by Warrane. He gave the opinion that the value of the Club’s real property (on which the Club and carpark stand) is approximately $19,200,000.

14. In addition, the Club’s December 2025 financial accounts show it has “plant and equipment” valued “at cost” of $5,568,342. There is evidence that the Club owns various gaming machines and licences.

15. Mr Shepherd also gave the opinion, without concluding that a subdivision would be approved, that part of the Club’s carpark could be sold for about $2,900,000 (if subdivided).

16. In late 2022, the Club had sold some of its subdivided land for $7,600,000 (after tax), to raise money for the Construction Contract.

17. However, the Club submitted that to sell off Club “core property” would require compliance with s 41E Registered Clubs Act 1976 (NSW), including a resolution of members, but also a subdivision. While that may be accepted, in the context of Mr Shepherd’s report, it is surprising that there is no evidence that the Club has made any inquiries in relation to possibly selling more land. Instead, the only evidence is a trite observation from the Club’s CEO and secretary, Mr Michael Brennan, that if part of the carpark was sold, available carparking would be reduced, and a bald assertion that this would “disadvantage the club relative to other clubs in its locality”. That is not compelling. The Club has not demonstrated a sale of land or assets is not possible to fund the Judgment sum.

18. In January 2025, the Club appears to have taken out a $6,000,000 loan with the Commonwealth Bank of Australia. A bank statement showed that, as at 29 April 2025, the amount owing on the loan was $4,400,000. As at 29 January 2026, there was $4,015,000 owing. There was no evidence as to the current state of the loan, nor whether the Club is entitled to draw down on the amount that has been repaid so far, nor whether the bank would be prepared to provide a further loan. While Mr Brennan gave evidence that at the time of entry into the Construction Contract the Club did not want to “go to the bank for funding”, that appeared to be a preference at that time. There is no evidence that it is currently not possible for the Club to borrow money to pay the Judgment sum.

19. I am not satisfied that the Club has demonstrated that not ordering a stay would cause catastrophic circumstances, nor that it is in the same position as a homeowner, as in Black Label.

Strength of the Club’s substantive claim?

20. Thirdly, the Club made a vague submission that its substantive case was “strong”, but did not develop it. In oral submissions, the Club appeared to accept that it would be difficult for me to make a determination of the strength of its case on an interlocutory basis, where it is highly factual and contested by Warrane. The Club alleges misleading or deceptive conduct in relation to the estimates given before entering into the “cost plus” contract and misperformance of the contract. It further relies on alleged defective works, impugns delay claims, impugns a variation claim, and in particular impugns claims for delay due to the discovery of asbestos. They are all complex factual matters. Warrane took me to various documents in the evidence of it warning the Club about risks that could lead to delays and extra costs, which it says will ultimately defeat the Club’s claim.

21. Therefore, I do not consider it appropriate to make a determination of the strength of the Club’s claim, nor did the Court of Appeal in Black Label suggest it was necessary to make such a determination in this context (even though it may be a relevant factor): see Black Label at [115]-[118] (and citations there).

22. However, I note that there is nothing in the Club’s pleading that challenges the validity of the Construction Contract, which formed the basis of the adjudication determination and is the foundation for Warrane claiming on a costs plus basis. This is a critical distinction between the facts in Black Label and the present.

23. In Black Label, a homeowner’s home was threatened if the judgment arising from an adjudication was not stayed. The homeowner’s substantive claim was that the underlying contract that formed the basis of the adjudication determination ought to be set aside, and there was documentary evidence that provided a strong basis for that claim.

24. In contrast here, the Club’s claim is in restitution for delay and damages for misleading or deceptive conduct claims under the ACL.

25. Further, I do not consider the Club is in the same position as a homeowner about to lose a home. The Club is a corporation limited by guarantee. It operates a commercial operation, and is licenced for gaming machines and to sell liquor.

Factors relevant to the balance of convenience

26. Unlike the broader policy of SOPA, the balance of convenience is concerned with the circumstances of the particular case: Black Label at [70]. I consider below matters relevant.

27. Consideration of insolvency risks*:* As noted above, the Club has not demonstrated it will suffer “irreparable prejudice” if a stay is not granted, or as the Club put it, would expose the Club to “immediate risk of insolvency and liquidation”: see eg A-Civil at [26]. In any event, the mere risk of insolvency is ordinarily insufficient to justify a stay: see eg Martinus at [300].

28. I also note that there is no evidence that Warrane is insolvent; no submission was made that it would not be able to repay money at the conclusion of the Club’s substantive proceedings, should the Club be successful and have practically “overpaid” the Judgment sum now: see eg Martinus at [302].

29. Delay in bringing stay application*:* Despite the determination being handed down in October 2025 and the Judgment being entered on 4 November 2025, the Club waited until 26 February 2026 to file its stay application. I consider this delay is relevant to the exercise of the discretion and may cause prejudice to Warrane, in circumstances where:

30. After Judgment was obtained, Warrane garnished the Club’s bank account and obtained a Writ of Levy of Property; in that time, the Club did not raise the possibility nor put on their application for a stay;

31. Warrane’s uncontested evidence is that the Club’s failure to pay the Judgment sum is “significantly” impacting on its cashflow and ability to settle amounts payable: see eg Black Label at [149] (and citation there); and

32. The Club did not explain the delay in bringing the stay application, which tells against the Club fearing “catastrophic” consequences without a stay.

33. The Club submitted the Court could impose conditions on a stay to ameliorate the negative impact on Warrane, such as case managing the proceedings towards an expedited hearing. However, it is not possible to have confidence in the Club complying with Court orders or moving expeditiously, in circumstances where the stay application was brought months after the Judgment, and where the hearing of this stay application was beset with significant delays in complying with Court timetabling orders.

34. However, and in any event, the Technology and Construction List can accommodate an early final hearing, should the parties wish it.

35. I therefore consider that the balance of convenience does not favour the granting of a stay.

Appropriate orders

33. For the reasons above, I consider it appropriate to make the following orders:

34. The Club’s notice of motion filed on 26 February 2026 is dismissed with costs.

35. The matter be listed for directions, together with proceeding 2025/00201408, on 21 August 2026.

**********

Amendments

13 August 2026

Corrected matter number in paragraph 33(2).