Samuel Homes Pty Ltd v Derek Raithby

HIS HONOUR: These are proceedings to quash an adjudication determination in favour of the first defendant made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act). All references to sections below are to the Act.

The proceedings are remarkable for a number of reasons. These include that:

When the nature of this matter came to my attention on 3 March 2017, I fixed it for hearing today. Mr R. Killalea, solicitor, appeared for the plaintiff. The first defendant was self-represented.

Given the small amount involved, at the commencement of the hearing, I made an order (to which neither party objected) under Uniform Civil Procedure Rules Pt 42 r 42.5, that the maximum amount recoverable by either party as costs of these proceedings shall be $5,000.

The first defendant is an architect. The plaintiff builds residential homes. The first defendant provided architectural services to the plaintiff in connection with the building of a number of residences. Based on the adjudication determination, on 14 July 2016 the first defendant obtained judgment in the Local Court against the plaintiff for $21,737.41.

He then invoked a number of procedures of that Court in an attempt to obtain payment. These included the issue of a writ for levy of property, and a garnishee order. On 20 July 2016, the Sherriff of New South Wales wrote to the plaintiff informing it of the issue of the writ for levy of property. The plaintiff moved the Local Court for a stay of enforcement which was granted initially to expire on 29 September 2016, but the plaintiff, on legal advice, withdrew the Motion on 13 October 2016. Garnishee orders were issued on 20 December 2016 directed to various banks. There is no suggestion that this endeavour was of any success.

On 14 February 2017, the Local Court made an order for the examination of Steven Samuel Murabito, the director of the plaintiff. As I have earlier mentioned, the plaintiff commenced these proceedings on 17 February 2017. It seeks as interim relief, a stay of the examination and any enforcement proceedings in the Local Court, and as final relief that the adjudication determination be quashed and the judgment in the Local Court be set aside. The substantive grounds upon which the quashing order is sought are that the adjudicator committed jurisdictional error:

It is not necessary to deal with the substantive challenges. In relation to them, relevantly to what is further said below, it suffices to say that:

Two important things are to be observed.

First, the Act provides machinery for the expeditious recovery of progress payments alleged to be due to contractors, and the expeditious resolution (if only on an interim basis) of disputes surrounding such claims. It is only an interim basis because s 32 preserves a respondent’s right to restitution of monies wrongly paid.

Strict time limits for the taking of steps under the Act are imposed.

Second, remedies on judicial review are discretionary, and may be refused depending on the circumstances, including delay: see Timbarra Protection Coalition v Roth Mining NL (1999) 46 NSWLR 55 at 73 [93].

Here, there has been significant and unacceptable delay on the part of the plaintiff in bringing these proceedings. To my mind its explanation exacerbates rather than exonerates its delay. That explanation is that there was another dispute being litigated in this Court between Mr Murabito and his life partner, Lila Stojcevski, on the one hand and the first defendant on the other for review of another adjudication determination in the first defendant’s favour. Instead of bringing the present proceedings expeditiously (as was incumbent on it to do) the plaintiff decided rather to advance the other ones, hoping that both might be settled with the first defendant. Only when that did not happen, did it start these proceedings.

Thus the plaintiff took a deliberate decision, for collateral reasons, not to challenge the adjudication determination until months had elapsed. Given the strict timetables for which the Act provides, the plaintiff’s deliberate delay might be thought even to amount to a waiver of a right to challenge. This delay is enough, in my opinion in the circumstances of this case, to withhold relief as a matter of discretion.

But there is more. It is to be remembered that the plaintiff failed to serve a payment schedule in response to the first defendant’s payment claim, which had the effect, under s 22(a), that the plaintiff was not entitled to serve an adjudication response.

There is also no evidence before the Court that the plaintiff does not owe the first defendant the money, the subject of the judgment. The plaintiff can sue for restitution in the Local Court if the monies are wrongly paid.

The proceedings are dismissed with costs.

I order that the monies currently standing in Court, that is $18,799 be paid to the first defendant.