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[2025] NSWCA 223
respondent. Leave to appeal refused.
The Court of Appeal refused the Builder permission to challenge an order about who should receive money held by the Court. The primary judge had asked whether the judgment amount included money the Club had already paid to the Builder’s Subcontractor. The Builder’s solicitors responded that the amount should not have been paid into Court and proposed orders consistent with the Club receiving it. The Court of Appeal considered that the primary judge could rely on that position, and that the Builder had not withdrawn it. The Court also found no error in the primary judge asking how the prior payment affected distribution. The supplied judgment contains inconsistent figures for the disputed amount: it refers principally to $81,978.47, but several passages state $81,987.47. This analysis does not resolve that inconsistency.
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8 cited instruments linked from this judgment.
Warrane Design Construct Fit-Out Pty Ltd (the Builder) sought leave to appeal an order about the distribution of money paid into Court by Woonona-Bulli RSL Memorial Club Ltd (the Club). The sum paid into Court was $941,110.49. The order at issue provided for part of that money to be paid to the Club and the balance to the Builder. The Builder’s position on appeal was that it should receive the whole amount, including the sum paid to the Club. The Court refused leave to appeal: [1], [33].
The dispute arose from construction work. The Builder had contracted with the Club and subcontracted most of the work to All Civil Solutions Group Pty Ltd (the Subcontractor): [15]. The Subcontractor claimed payment from the Builder, including for Variation 31, which related to costs associated with delays. The adjudicator valued that variation at $936,619.81: [16]. The Builder’s later Progress Claim 13 to the Club included an item for $936,619.81 described as “Delay Costs – ACSG”: [17].
The Club’s payment schedule for Progress Claim 13 proposed payment of $81,987.47. The Subcontractor had served a notice of claim on the Club under the Contractors Debts Act 1997 (NSW), supported by a debt certificate. The judgment says that the effect of the claim was to assign to the Subcontractor the Club’s obligation to pay money owed under the construction contract to the Builder: [18]. On 20 December 2024, the Club paid $81,978.47 to the Subcontractor: [19].
An adjudicator later determined that $2,094,018.14 was payable to the Builder on Progress Claim 13: [20]-[21]. The Builder filed an adjudication certificate and judgment was entered for $2,141,780.73: [24]. On 27 February 2025, Stevenson J stayed $1,200,670.24 of that judgment, reflecting amounts considered payable to the Subcontractor under the debt certificates, and ordered the Club to pay the remaining $941,110.49 into Court: [25]-[26].
The primary judge then considered who should receive those funds. Her Honour found largely in favour of the Builder, but raised whether the Club might be entitled to the amount already paid to the Subcontractor if that amount had also been included in the judgment sum: [5], [28]. The Builder’s solicitors responded by email on 17 April 2025. They said the amount “should not have been included in the money paid into Court” and proposed orders on the basis that the Builder would not receive it: [6]. The Court of Appeal treated that communication as central. It held that the primary judge was entitled to act on the position communicated, and refused leave: [30]-[33].
There is a numerical inconsistency in the judgment. The initial discussion and the order challenged in paragraph [1] identify $81,978.47. Other passages, including paragraphs [8] and [30]-[32], refer to $81,987.47. The judgment does not explain or resolve the discrepancy. It is therefore important not to assume that the two figures are interchangeable when reading the reasons.
The Court identified two connected reasons. First, the primary judge’s question about the composition of the judgment sum was a legitimate issue in deciding how to distribute the money held by the Court. Second, the Builder had communicated a position below that supported payment of the disputed amount to the Club, and had not withdrawn it.
On the first point, the primary judge asked whether the judgment sum included an amount the Club had already paid to the Subcontractor. If it did, the payment might be relevant when deciding what part of the funds should be paid out to the Builder: [28]-[29]. The Court considered that, if the adjudicator had valued work already paid for by the Club to the Subcontractor, there might be a reason to account for that payment in distributing the fund. Conversely, if the adjudicated sum did not include it, the Court observed there might be no good reason to return that amount to the Club: [29]. The Court rejected the Builder’s submission that the primary judge erred simply by raising the question.
The Court did not make a final factual finding in the appeal about whether the adjudicated sum included the payment. It noted that there did not appear to have been evidence before the primary judge establishing what the adjudicator was told about the Club’s payment: [20]. It also observed that the question whether the adjudicated amount included the payment could have been the subject of evidence below, but apparently was not: [22]. The Court’s decision instead rested on the primary judge’s proper framing of the issue and the Builder’s own communicated position.
The 17 April email said that the amount should not have been included in the money paid into Court. The Court considered that concession explicable only on the basis that the Builder accepted that the judgment sum included the money already paid by the Club to the Subcontractor: [30]. The email also proposed orders premised on the Builder not receiving the amount, subject to a proposed interest adjustment that the primary judge did not make: [6], [30]. The Court found that the email plainly indicated there was no dispute that the amount should be paid to the Club: [32].
The Court then applied the principle that parties are generally bound by the conduct of counsel. It stated that the same principle applies to a solicitor’s contentions about a party’s position, particularly where, as here, the email was copied to the Builder’s counsel before the primary judge: [12]. The Court also noted that the Builder did not appear to resile from the email position at the later hearing or when the order was amended: [8], [31].
Finally, the Court placed the dispute in the context of leave requirements for a claim involving less than $100,000. It cited Cheng for the usual restraint in granting leave below that threshold, identifying examples of circumstances that might justify leave, including a plainly wrong decision, obvious injustice, or a significant issue of principle in the public interest: [10]. It also referred to the general concern that allowing fresh points on appeal can be unfair where evidence or cross-examination might have been led below: [11]. The Court concluded that this was a clear case for refusing leave: [13], [32]-[33].
The judgment does not purport to establish a new rule about either construction adjudications or the operation of the Contractors Debts Act. It applies established procedural principles to the particular record before the Court. The practical effect is a reaffirmation that an appeal may be constrained by the position a party, through its legal representatives, communicated to the primary judge.
For leave applications involving less than $100,000, the Court recited the approach summarised in Cheng: leave is not ordinarily granted unless the decision was plainly wrong, an obvious injustice occurred, or a significant issue of principle in the public interest arises: [10]. The judgment also refers to proportionality between appeal costs and the amount in dispute, through the quotation from Ritson reproduced in Cheng: [10]. The decision does not alter those principles; it uses them as part of the setting for evaluating this particular application.
The Court also relied on the established caution against raising fresh points on appeal. In paragraph [11], it quoted Whisprun and referred to University of Wollongong v Metwally (No 2), Coulton v Holcombe, Liftronic v Unver and Water Board v Moustakas. The concern expressed in the quoted passage is that a point not taken at trial may have been met by evidence or cross-examination, and that allowing it later may undermine fairness. The Builder’s factual contentions about its knowledge and the adjudicator’s treatment of the prior payment were matters on which evidence could have been led below: [22].
The judgment’s application of Smits v Roach is also significant in procedural terms. The Court quoted the principle that a party is generally bound by counsel’s conduct, and extended its application to a solicitor’s stated position about an issue in dispute: [12]. That was not an abstract discussion. The email was copied to the Builder’s counsel, proposed orders consistent with the stated position, and was not followed by an apparent withdrawal: [6], [12], [30]-[32].
As to the construction-payment statutes, the reasons describe the background operation of the Security of Payment Act and the Contractors Debts Act, but do not resolve a general question about their interaction. The Court noted the payment claim, adjudication, certificate and judgment process, as well as the Subcontractor’s debt certificate and the Club’s payment: [16]-[26]. It also noted that neither party sought amendment of the adjudicator’s determination for a material mistake or miscalculation under s 22(5) of the Security of Payment Act: [23]. The holding is narrower: the primary judge could ask whether the adjudicated judgment sum included the amount already paid, and could act on the Builder’s stated position concerning distribution.
After this judgment, the order refusing leave left the primary judge’s distribution order undisturbed in the proceeding. The reasons provide no basis for saying that the Court of Appeal conclusively determined the underlying statutory accounting question for other disputes.
At [12], the Court states: “The adversarial system of litigation operates upon the basis that a party is generally bound by the conduct of counsel.” It then says the same principle applies to a solicitor’s contentions about a party’s position on a particular issue. In plain English, a party may be held to a position its legal representatives communicated in the litigation, especially where counsel knew of the communication. Here, that mattered because the solicitors’ email dealt directly with how the money should be distributed.
Also at [12], the Court quotes O’Conner: “one question which is very largely left for the parties to formulate is the ambit of their own dispute”. In plain English, parties generally define what is contested. If a party concedes an issue, the Court ordinarily does not investigate whether the concession was substantively correct while it remains in place. The Court used this observation to support its treatment of the Builder’s email.
At [29], the Court explains why the primary judge’s question was appropriate. If the judgment sum included work already paid for by the Club to the Subcontractor, that payment could be relevant to how much of the fund should go to the Builder. If the judgment sum did not include the payment, the reason to pay that amount to the Club might be different. In practical terms, the composition of the adjudicated sum was potentially relevant to avoiding a distribution that ignored the prior payment.
At [30], the Court says the email’s concession was “only explicable” on the basis that the Builder accepted that the judgment sum included the amount previously paid. This is the Court’s interpretation of what the Builder’s solicitors communicated, not an independent finding made after a trial of that factual issue. The proposed orders reinforced the interpretation because they were based on the Builder not receiving the disputed sum.
At [32], the Court concludes that the Builder “should not be granted leave to challenge” the order. The key point was not simply that the email existed. The Court relied on its meaning, the fact that it indicated no dispute about the Club receiving the amount, and the absence of any later attempt to withdraw that position. The Court added that the primary judge was entitled to act on the position and made no error in the order.
The judgment is most directly relevant where a party seeks leave to appeal an order under $100,000 after having communicated a position below that appears to accept the order’s substantive effect. The closer the earlier communication is to an unequivocal concession, the more closely the reasoning may apply. Here, the email said the amount should not have been included in the money paid into Court and suggested proposed orders premised on the Builder not receiving it: [6], [30].
The decision also concerns situations where the primary judge asks parties to clarify or formulate orders after giving reasons. The Court treated the email as a response to a specific request by the primary judge and considered the parties’ response relevant to what remained contested: [5]-[6], [28]-[32].
A further relevant pattern is where a party later advances a factual contention that could have been supported by evidence at first instance. The Court noted that evidence could have addressed whether the Builder knew of the payment and whether the adjudicated amount included it: [22]. The appeal principle discussed at [11] is especially pertinent where the proposed new point might have affected evidence or cross-examination below.
The factual setting here also involved several connected payment mechanisms: a progress claim, an adjudication, a judgment entered on an adjudication certificate, a debt certificate under the Contractors Debts Act, and funds paid into Court pending resolution of proceedings: [17]-[26]. But the ratio should not be overstated as resolving every interaction between those statutory processes. The Court’s holding focused on the distribution question and the Builder’s earlier position.
The judgment’s inconsistent figures are a material caution when using the decision as a factual comparator. The disputed amount appears as $81,978.47 in some passages and $81,987.47 in others. Any comparison that depends on the precise amount should acknowledge that the supplied reasons do not reconcile the figures.
The supplied judgment contains no subsequent decisions considering or applying Warrane. Its decision date is 8 October 2025, and the text provides no later-treatment history. It would therefore be unsupported to describe how later courts have treated it.
The cases that the Court itself cites are authorities it used in reaching its decision, not later treatment of Warrane. Cheng is cited for the approach to leave applications involving less than $100,000: [10]. Whisprun, Metwally, Coulton, Liftronic and Water Board are cited in connection with the restriction on raising fresh arguments on appeal: [11]. Smits is cited for the principle that a party is generally bound by counsel’s conduct: [12]. O’Conner is cited concerning the parties’ role in defining the ambit of the dispute: [12].
The judgment also refers to earlier Supreme Court proceedings involving the same construction dispute, including the decision dismissing the Club’s challenge to the adjudication and Stevenson J’s stay decision: [2], [20], [25]-[27]. Those are procedural and factual antecedents, not later treatment of this Court of Appeal decision.
The Court did not decide whether the adjudicated sum in fact included the amount the Club had already paid to the Subcontractor. It noted the absence of evidence before the primary judge about what the adjudicator was told and observed that the issue could have been addressed by evidence: [20], [22]. The Court treated the Builder’s communicated position as sufficient to dispose of the leave application without resolving that underlying factual question.
The judgment also does not explain the discrepancy between $81,978.47 and $81,987.47. The former appears in the opening description of the order and in the account of the Club’s payment; the latter appears in the payment schedule discussion and several passages about the proposed and restated orders: [1], [17], [19], [30]-[32]. The reasons do not say whether this is a typographical error or whether the figures refer to distinct calculations.
Nor does the Court determine, as a general proposition, how the Security of Payment Act and the Contractors Debts Act interact when an adjudicated amount includes work for which a principal has already paid a subcontractor. The Court describes how the earlier judge accounted for debt certificates and payments in the stay calculation: [25]-[27]. Its own decision addresses the primary judge’s distribution question and the consequences of the Builder’s email, rather than establishing a general rule for all such statutory situations.
Finally, the judgment does not address whether a different result might follow where a party promptly and clearly withdraws a solicitor’s concession, where the solicitor’s authority is disputed, or where the communication is ambiguous. Those circumstances were not identified as issues for decision. The Court’s reasoning was tied to the particular email, its context, the involvement of counsel, and the absence of any apparent retraction before the primary judge: [6], [12], [31]-[32].
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Warrane - Design Construct Fit-Out Pty Ltd v Woonona-Bulli RSL Memorial Club Ltd [2025] NSWCA 223
Hearing dates: 29 September 2025
Date of orders: 8 October 2025
Decision date: 08 October 2025
Before: Bell CJ; Stern JA; Griffiths AJA
Decision: Leave to appeal is refused.
Catchwords: APPEALS – leave to appeal – where primary judge requested parties provide orders as to distribution of money paid into Court – where parties agreed that a specified sum should not have been paid into Court – where order made in accordance with the parties’ indication – where party now appeals against this order – party bound by conduct of counsel and solicitors – leave to appeal refused
Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW), ss 13, 14, 17, 22, 25
Contractors Debts Act 1997 (NSW), ss 8, 9
Supreme Court Act 1970 (NSW), s 101(2)
Cases Cited: Cheng v Motor Yacht Sales Australia Pty Ltd t/as The Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Liftronic Pty Ltd v Unver [2001] HCA 24; 75 ALJR 867
O’Conner v O’Conner [2022] NSWCA 97
Smits v Roach (2006) 227 CLR 423; [2006] HCA 36
University of Wollongong v Metwally (No 2) [1985] HCA 28; 59 ALJR 481
Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12
Whisprun Pty Ltd v Dixon [2003] HCA 48; 77 ALJR 1598
Woonona-Bulli RSL Memorial Club Ltd v Warrane-Design Construct Fit-Out Pty Ltd (No 2) [2025] NSWSC 365
Woonona-Bulli RSL Memorial Club Ltd v Warrane-Design Construct Fit-Out Pty Ltd [2025] NSWSC 271
Woonona-Bulli RSL Memorial Club Ltd v Warrane-Design Construct Fit-Out Pty Ltd [2025] NSWSC 123
Category: Principal judgment
Parties: Warrane Design Construct Fit-Out Pty Ltd (Cross Applicant)
Woonona-Bullli RSL Memorial Club Ltd (Cross Respondent, submitting appearance)
Representation: Counsel:
G Campbell (Cross Applicant)
M A Karam, N Novo (Amicus)
Solicitors:
APJ Law (Cross Applicant)
File Number(s): 2025/156263
Publication restriction: Nil
[This headnote is not to be read as part of the judgment]
The applicant, Warrane Design Construct Fit-Out Pty Ltd (the Builder), seeks leave to appeal in respect of an order of Rees J that, out of a total sum of $941,110.49 paid into Court by the respondent, Woonona-Bulli RSL Memorial Club Ltd (the Club), the sum of $81,978.47 should be paid out to the Club with the remainder to be paid out to the Builder. The Builder contends that the whole of the sum in Court should have been paid out to it.
The Builder had entered into a construction contract with the Club and sub-contracted most of the works to a subcontractor, All Civil Solutions Group Pty Ltd (the Subcontractor). On 29 November 2024, the Builder submitted Progress Claim 13 to the Club in the sum of $2,203,564.59. In response, the Club served a payment schedule that indicated that it only proposed to pay the sum of $81,987.47 in respect of Progress Claim 13. The Club then paid $81,978.47 to the Subcontractor, who had earlier served a notice of claim on the Club under the Contractors Debts Act 1997 (NSW) in respect of a progress claim it had submitted to the Builder which included a claim in respect of what was described as Variation 31. Progress Claim 13, which the Builder had submitted to the Club, had included a claim in respect of the amount claimed by the Subcontractor in Variation 31.
Following an adjudication in respect of Progress Claim 13, the builder filed an adjudication certificate in the Supreme Court of New South Wales in an amount of $2,141,780.73 such that it could be enforced as a judgment. On 27 February 2025, Stevenson J made orders staying $1,200,670.24 of the judgment to reflect debt certificates served by the Subcontractor on the Club under the Contractors Debts Act. Stevenson J also ordered that the Club pay into Court the unstayed portion of the judgment, being $941,110.49, pending resolution of the Club’s application to have the adjudication quashed in part. The primary judge dismissed this application.
The primary judge then considered the treatment of the monies paid into Court. The Builder contended that the entirety of the money in Court should be paid out to it. The primary judge found largely in favour of the Builder but raised in her judgment whether the Club may be entitled to be paid $81,978.47 if it was the case that the judgment sum did not allow for the payment of this amount by the Club to the Subcontractor. Her Honour asked the parties to bring in orders to reflect the amounts of the funds in Court which should be paid to the Builder and the Club.
On 17 April 2025 the solicitors for the Builder sent an email to the associate to Rees J responding to that request (the 17 April 2025 email). In that email, the Builder informed her Honour that it had been agreed between the Builder and the Club that the $81,978.47 “should not have been included in the money paid into Court”. The Builder also suggested short minutes of order which were predicated upon the Builder not being entitled to $81,978.47 of the monies paid into Court.
The Court (Bell CJ, Stern JA and Griffiths AJA) held, refusing leave to appeal:
(1) The issue which her Honour was raising in her judgment was whether the judgment sum included the sum of $81,978.47 which the Club had already paid to the Subcontractor. If that were the case, then the Court might exercise its discretion to reduce the amount to be paid out of Court to the Builder to take into account payments already made by the Club to the Subcontractor under the Contractors Debts Act*.* There was no error in her Honour framing the issue in the way she did: [29].
(2) The adversarial system of litigation operates upon the basis that a party is generally bound by the conduct of counsel and the same principle would apply equally to the conduct of a party’s solicitor in making contentions to the Court as to its position on a particular issue (particularly where, as here, the 17 April 2025 email was copied to Counsel for the Builder before the primary judge): [12].
Citing Smits v Roach (2006) 227 CLR 423; [2006] HCA 36.
(3) The 17 April 2025 email plainly indicated to the primary judge that there was no dispute that the sum of $81,987.47 should be paid out of Court to the Club and there is nothing to suggest that the Builder at any time resiled in any way from that position. The Builder should not be granted leave to challenge her Honour’s order to this effect on appeal: [32].
THE COURT: By cross-summons filed 21 May 2025 the applicant, Warrane Design Construct Fit-Out Pty Ltd (the Builder), seeks leave to appeal under s 101(2) of the Supreme Court Act 1970 (NSW) in respect of an order of Rees J on 17 April 2025, in substance reiterated on 24 April 2025 and slightly amended on 16 May 2025, subsequent to her Honour handing down judgment in Woonona-Bulli RSL Memorial Club Ltd v Warrane-Design Construct Fit-Out Pty Ltd (No 2) [2025] NSWSC 365 (the primary judgment). The order sought to be challenged is an order that, out of a total sum of $941,110.49 paid into Court by the respondent, Woonona-Bulli RSL Memorial Club Ltd (the Club), the sum of $81,978.47 should be paid out to the Club. The balance of the sum paid into Court was ordered to be paid to the Builder. The Builder contends that her Honour erred in ordering that the $81,978.47 be paid out to the Club, and that her Honour should instead have ordered that this sum be paid out of Court to the Builder. As that sum has now been paid out of Court to the Club, the relief sought by the Builder on appeal is an order that the Club pay that sum to the Builder.
The context was that her Honour had, in an earlier judgment, dismissed the Club’s application to quash part of an adjudication determination in favour of the Builder made under Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act): Woonona-Bulli RSL Memorial Club Ltd v Warrane-Design Construct Fit-Out Pty Ltd [2025] NSWSC 271. It was in the context of that application that the Club had been ordered to pay the sum of $941,110.49 into Court.
Whilst on 23 April 2025 the Club filed a notice of appeal challenging the primary judgment, its appeal was discontinued by notice filed on 4 June 2025. Thus, the Builder’s application for leave to appeal was the only proceeding before the Court. The Club filed a submitting appearance in that proceeding.
In circumstances where the Builder contended in its written submissions that the proposed appeal raised an issue of legal principle as to the interaction between the Act and the Contractors Debts Act 1997 (NSW), in the absence of a contradictor, Mr Karam of Counsel accepted a referral from the Court to appear as amicus curiae on the application. At the Court’s direction, Mr Karam filed and served written submissions and appeared (with the Court’s leave) with Ms Novo at the hearing of the Builder’s application, which was listed as a concurrent hearing of the application for leave to appeal and the appeal. The Court is grateful to Mr Karam and Ms Novo for their assistance and is indebted to the profession generally for providing pro bono assistance at the Court’s request.
The unpromising context for this application for leave to appeal is that the primary judge commenced her judgment by identifying that one question before her was whether a portion of the monies paid into Court by the Club should be repaid to the Club given payments that it had already made to a subcontractor, All Civil Solutions Group Pty Ltd (). The Builder contended that the entirety of the money in Court should be paid out to it. The Club contended that a sum should be paid out of Court to reflect what it had paid the Subcontractor. The primary judge found largely in favour of the Builder, but, as set out below, in her judgment which was published on 16 April 2025, at [44], her Honour raised whether the Club may be entitled to be paid $81,978.47 of the money in Court. Her Honour asked the parties to bring in orders to reflect the amounts of the funds in Court which should be paid to the Builder and the Club.
[18] Consistent with the observations of Kirby P in Gurr, there are “good reasons … for the legislature imposing a requirement for leave where less than a certain amount is in issue”: Daily Examiner Pty Ltd v Mundine; Brown v Mundine [2011] NSWCA 126 at [4]. These reasons had the result, in Macfarlan JA’s view (with which Basten JA agreed) that “the Court does not ordinarily grant leave where less than $100,000 is in issue unless it considers that the decision at first instance was plainly wrong, that an obvious injustice has otherwise occurred or that a significant issue of principle is involved in the proposed appeal that it is in the public interest for the Court to determine” (at [5]) ….
[19] In Ritson v Commissioner of Police, New South Wales Police Force [2019] NSWCA 106 at [39], Gleeson JA, with whom Emmett AJA agreed, observed that:
“It is well recognised that there is a need for restraint in granting leave to appeal in matters such as the present where the amount in issue is below the threshold of $100,000 … Injustice involves a balancing exercise and the entitlement of parties to justice is not unconditional and must have regard to a number of factors, including the proportionality of the costs involved to the amount in dispute. In this case, the costs of an appeal would be disproportionate to the relatively modest amount in issue of approximately $43,000.”
… would be inimical to the due administration of justice if, on appeal, a party could raise a point that was not taken at the trial unless it could not possibly have been met by further evidence at the trial. Nothing is more likely to give rise to a sense of injustice in a litigant than to have a verdict taken away on a point that was not taken at the trial and could or might possibly have been met by rebutting evidence or cross-examination. …
It is also trite that “[t]he adversarial system of litigation operates upon the basis that a party is generally bound by the conduct of counsel”: Smits v Roach (2006) 227 CLR 423; [2006] HCA 36 at [46], and the same principle would apply equally to the conduct of a party’s solicitor in making contentions to the Court as to its position on a particular issue (particularly where, as here, the 17 April 2025 email was copied to Counsel for the Builder before the primary judge). As this Court said in O*’Conner v O’*Conner [2022] NSWCA 97 at [68], “one question which is very largely left for the parties to formulate is the ambit of their own dispute”, and where a particular claim is admitted, “the court ordinarily has no role in determining whether the defendant was indeed liable while the concession is in place”.
Having regard to these principles, for the reasons set out below this is a clear case in which leave to appeal should be refused.
In the circumstances set out above it is unnecessary to set out the background to this application in any detail.
Broadly, the factual context in which this application arises is one where the Builder entered into a construction contract with the Club, but most of the construction works were in fact sub-contracted by the Builder to the Subcontractor. As might be expected, there were various claims for payment, both by the Subcontractor against the Builder, and by the Builder against the Club.
One such claim by the Subcontractor against the Builder under s 13 of the Act, Progress Claim 9, sought payment in the sum of $1,591,446.78 including for Variation 31, which related to costs associated with delays to the contract works. Progress Claim 9 was ultimately the subject of an adjudication under s 22 of the Act and the adjudicator determined that the value of Variation 31 was $936,619.81. Following the adjudication the Subcontractor invoiced the Builder in the sum of $970,531.62 plus GST (being $1,067,584.78).
On 29 November 2024, the Builder submitted Progress Claim 13 to the Club under s 13 of the Act in the sum of $2,203,564.59. The details of Progress Claim 13 included an item in the sum of $936,619.81 described as “Delay Costs – ACSG”. That is plainly enough a reference to Variation 31, as described above. The response of the Club to Progress Claim 13 was on 6 December 2024 to serve a payment schedule under s 14 of the Act that indicated that it only proposed to pay the sum of $81,987.47 in response to Progress Claim 13.
On 13 December 2024, the Subcontractor served a notice of claim on the Club under s 6 of the Contractors Debts Act, supported by a debt certificate under s 7 of that Act in the sum of $1,102,958.87. Under s 8 of the Contractors Debts Act, the effect of that claim was to assign to the Subcontractor the obligation of the Club to pay money owed under the construction contract to the Builder.
Shortly thereafter, on 20 December 2024, the Club paid the scheduled amount of $81,978.47 to the Subcontractor (at [17] above). In the primary judgment at [19] this is described as a payment under s 9(1) of the Contractors Debts Act, leaving $1,020,980.40 of the certified debt unpaid.
On the same day, 20 December 2024, the Builder made an application under s 17 of the Act for adjudication of its Progress Claim 13. On 20 January 2025, an adjudicator determined under s 22 of the Act that the amount of the progress payment to be paid by the Club to the Builder for Progress Claim 13 was $2,094,018.14 (including GST). The front page of this adjudication noted that the “Scheduled Amount” in respect of this payment claim was $81,978.47 but there does not appear to have been evidence before the primary judge as to what the adjudicator was told about monies paid by the Club to the Subcontractor. For completeness, we note that Stevenson J, who considered a stay application shortly after the proceedings determined by the primary judge were filed, said in his judgment that he had been informed that “the effect of service of the Debt Certificates on the Builder’s entitlements under the Contract was not an issue agitated before the adjudicator”: [2025] NSWSC 123 at [11]. That is consistent with the adjudicator’s determination at [180]-[186] where the adjudicator indicated that he had been appointed to determine the value of performances and had not considered payments made by the Club in arriving at the adjudicated amount.
The only portion of the monies in Court which the Club may be entitled to receive is $81,978.47, if it be the case that the judgment sum did not allow for the payment of this amount by the Club (to the subcontractor). Otherwise, the balance of the funds in Court ought be paid to the builder. As the parties are presumably aware of the position in this regard, I request that they bring in orders to reflect the amounts of the funds in Court which ought be paid to the builder and the Club.
The issue which her Honour was raising in her judgment at [44] was whether the judgment sum (and therefore the funds paid into Court) included the sum of $81,978.47 which the Club had already paid to the Subcontractor pursuant to the debt certificate referred to above at [18]. If that were the case, then the Court might exercise its discretion to reduce the amount to be paid out of Court to the Builder to take into account payments already made by the Club to the Subcontractor under the Contract**ors Debts Act, and therefore to direct that the sum of $81,978.47 be paid out of Court to the Club and not the Builder. That would reflect the fact (if it were the case) that that amount, reflecting work that was valued by the adjudicator in his determination, had already been paid by the Club to the Subcontractor. Conversely, if the judgment sum allowed for the payment of the $81,978.47 to the Subcontractor, and thus the figure in the adjudication determination did not include this sum, then it might be thought that there would be no good reason for this amount to be paid out of Court to the Club, as it would not reflect a part of the judgment sum which had been, in effect, already paid to the Subcontractor. Whilst the Builder submitted in its written submissions in reply and orally that her Honour erred in asking this question, we consider that there was no error in her Honour framing the issue in the way she did.
We have set out the substance of the 17 April 2025 email, responding to her Honour’s request, at [6] above. In this email the Builder conceded that the sum of $81,987.47 should not have been included in the sum which Stevenson J ordered should be paid into Court. That concession is only explicable on the basis that the Builder accepted that the judgment sum included the amount of $81,987.47 which had already been paid by the Club to the Subcontractor. The orders proposed by the Builder (which, although described as consent orders, were not in fact agreed) invited the primary judge, subject to making allowance for interest (which allowance her Honour did not make), to pay the $81,987.47 out of Court to the Club.
As already explained, the matter was dealt with by her Honour at a further hearing on 24 April 2025 and by making a slight amendment to the orders on 16 May 2025. There is nothing to suggest that on either occasion the Builder resiled in any way from the position it took in the 17 April 2025 email or sought orders that the $81,987.47 should be paid out to the Builder and not the Club.
Given the matters set out above, including that the 17 April 2025 email plainly indicated to the primary judge that there was no dispute that the sum of $81,987.47 should be paid out of Court to the Club, the Builder should not be granted leave to challenge her Honour’s order to this effect on appeal. In any event, the primary judge was entitled to act upon the position as set out in the 17 April 2025 email and there was no error in her Honour having ordered that the sum of $81,987.47 be paid out of Court to the Club.
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Warrane - Design Construct Fit-Out Pty Ltd
Woonona-Bulli RSL Memorial Club Ltd [2025] NSWCA 223
(2022) 108 NSWLR 342
(1986) 162 CLR 1
(2006) 227 CLR 423
(1988) 180 CLR 491
Leave to appeal refused.
On 17 April 2025 the solicitors for the Builder sent an email to the associate to Rees J responding to that request (the 17 April 2025 email). In that email, the Builder informed her Honour that it had been agreed between the Builder and the Club that the $81,978.47 “should not have been included in the money paid into Court”. The Builder also suggested short minutes of order, to reflect the primary judgment. Those short minutes of order were predicated upon the Builder not being entitled to $81,978.47 of the monies paid into Court (but seeking that some of that amount be paid out to the Builder as interest on the amount said to be owed to the Builder).
In the light of its significance, it is unfortunate that the 17 April 2025 email was not provided to the Court in the White Folder prepared by the Builder for the purposes of its application for leave to appeal and that its existence was not adverted to by the Builder save for a partial extracting of its contents in the Builder’s written submissions in reply.
On 17 April 2025 her Honour made orders including the order appealed against. Her Honour also stood the matter over to 9.30 am on 24 April 2025, and the order appealed against was made subject to the order that the matter be stood over. Implicitly, therefore, her Honour indicated a willingness to revisit the order appealed against should either party make submissions on 24 April 2025 in favour of that course. It does not appear that any such submissions were made, as the only issue of substance considered in her Honour’s short judgment on 24 April 2025 was whether there should be a stay of the orders. Following the hearing on 24 April 2025, her Honour restated the order appealed against, albeit in a different form, ordering that $859,134.02 of the money paid into Court be paid out to the Builder with the remaining sum to be paid out to the Club. The 24 April 2025 order was slightly amended on 16 May 2025 such that the sum to be paid out to the Builder was reduced by $2, to $859,132.02. As the amount in Court was $941,110.49, this meant that $81,987.47 was to be paid out to the Club. Thus, the restated order (as amended on 16 May 2025) had the same substantive effect as the order appealed against.
Given this procedural history, we have treated this as an application for leave to appeal against the 24 April 2025 order relating to payment out of the monies in Court (as amended on 16 May 2025) rather than against the superseded 17 April 2025 order dealing with the same subject matter.
A convenient recitation of the principles governing applications for leave to appeal where the amount in issue is less than $100,000 may be found in Cheng v Motor Yacht Sales Australia Pty Ltd t/as The Boutique Boat Company (2022) 108 NSWLR 342; [2022] NSWCA 118. Excluding many references to the cases relied upon, Bell CJ there explained:
On 20 January 2025 the adjudicator determined that, under Progress Claim 13, $2,094,018.14 should be paid to the Builder.
Whilst counsel for the Builder made an oral submission that at the time of the adjudication the Builder was not aware that the sum of $81,978.47 had been paid by the Club to the Subcontractor, there is no evidence before this Court to that effect. At its highest, the evidence shows that this payment was not referred to in two emails, the first on 24 January 2025 from the Builder’s solicitors to the Club’s solicitors and the second on 6 February 2025 from someone at the Builder to someone at the Club. As is apparent, to the extent that the Builder sought to rely upon its own lack of knowledge of the payment of $81,978.47 in support of its application for leave to appeal (and it is not clear to us why this was relevant), that is a factual issue upon which evidence could have been (but was not) led, by both the Builder and the Club, before the primary judge. Similarly, to the extent that it might be relevant to the issues on appeal whether or not the amount which the adjudicator determined should be paid included the $81,987.47 which the Club had already paid to the Subcontractor, this factual issue again is something that could have been, but does not appear to have been, the subject of evidence before the primary judge.
What is clear is that neither the Builder nor the Club has sought amendment of the adjudicator’s determination on the basis of a material mistake or miscalculation, as is an available option under s 22(5) of the Act.
On 3 February 2025, the Builder filed the adjudication certificate in the Supreme Court of New South Wales under s 25 of the Act, with the effect that the adjudication certificate may be enforced as a judgment of the Court. Judgment was then entered in favour of the Builder against the Club for the full amount of the adjudication certificate, being $2,141,780.73. We were informed from the bar table that the Builder also filed an affidavit stating what proportion of the adjudicated amount remained outstanding. That affidavit was not put before this Court but given that judgment was entered for the full amount of the sum certified we would infer that this affidavit indicated that none of the certified amount had been paid.
Attachment and garnishee orders were made on 20 February 2025, and on the same day the Club issued proceedings seeking to have the adjudicator’s determination quashed in part. On 25 February 2025, the Club sought an order staying the judgment and setting aside the attachment and garnishee orders, which came before Stevenson J as duty judge on 27 February 2025. On the same day his Honour made orders setting aside the attachment and garnishee orders. His Honour also ordered that the judgment entered on 3 February 2025 should be stayed to the extent of $1,200,670.24, to which his Honour found the Subcontractor, rather than the Builder, was entitled having regard to the debt certificates under the Contractors Debts Act served by the Subcontractor on the Club. In reaching this figure, his Honour reduced the amount of $1,102,958.87 (in the debt certificate served by the Subcontractor on the Club on 13 December, see [18] above) by the sum of $81,978.47, to reflect the amount that was actually “owing” as at 27 February 2025. His Honour then made further adjustments to reflect an additional amount paid by the Club to the Subcontractor in relation to an amount agreed to be owed to the Builder for Progress Claim 14 and an additional debt certificate served by the Subcontractor on 17 February 2025.
Stevenson J also made an order on 27 February 2025 that the Club pay into Court the sum of $941,110.49, calculated by reducing the judgment sum of $2,141,780.73 to reflect his Honour’s order that $1,200,670.24 of the judgment be stayed. As is clear, in the exercise of his Honour’s discretion, his Honour made orders which varied the effect of s 25(4)(b) of the Act which requires that the unpaid portion of the adjudicated amount be paid into Court pending the final determination of proceedings seeking to set aside a judgment derived from an adjudicator’s determination. That was plainly done by his Honour to reflect his Honour’s understanding that some of the amount determined by the adjudicator should properly be regarded as payable to the Subcontractor rather than the Builder.
The effect of his Honour’s orders was, however, that the portion of the judgment that was stayed reflected only the outstanding debt due to the Subcontractor pursuant to those certificates. Thus, the judgment was not stayed to reflect the $81,978.47 which had in fact been paid by the Club to the Subcontractor (and which was thus no longer outstanding as at 27 February 2025 when the matter came before Stevenson J).
It is in these circumstances that, as adverted to above, her Honour raised the following issue at [44]: