Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd

1. [1]

   BELL CJ: This proceeding involves an aspect of a dispute between Beno Excavations Pty Ltd (Beno or the Respondent), a civil contracting company, and Harlech Enterprises Pty Ltd (Harlech or the Applicant).

2. [2]

   Harlech is the trustee of the Harlech Family Trust. Pursuant to an oral contract between Harlech and Beno, Harlech agreed that its sole director, Mr Ben Moseley, would perform services as a general manager for Beno. The underlying dispute concerns whether the oral contract obliged Beno to pay Harlech a proportion of Beno’s gross profits: Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 7) [2023] ACTSC 292; (2023) 382 FLR 220 at [1] (Beno (No 7)). That dispute is now being litigated before Thawley J in the Federal Court of Australia.

3. [3]

   How an aspect of this still unresolved dispute has ended up in the New South Wales Court of Appeal, via hearings before Mossop J, the Australian Capital Territory (ACT) Court of Appeal, the High Court of Australia, Elkaim J, McCallum CJ and Montgomery DCJ of the District Court of New South Wales is a protracted saga which must be traversed in order to understand Harlech’s application for leave to appeal.

History of the proceedings

1. [4]

   On 5 February 2021, Harlech sought to recover its alleged entitlement to a proportion of Beno’s gross profits by making a payment claim under the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (the SOP Act). (It is important to note that the sections of the SOP Act, although overlapping substantially with its NSW counterpart, do not coincide precisely with the section numbers of equivalent provisions in the Building and Construction Industry Security of Payment Act 1999 (NSW)).

2. [5]

   On 19 February 2021, Beno served a payment schedule for nil.

3. [6]

   On 17 March 2021, an adjudicator made a determination under the SOP Act, directing Beno to pay Harlech $638,248.70 (the Adjudication Determination).

4. [7]

   On 30 March 2021, an adjudication certificate was issued, at Harlech’s request, confirming that the total adjudicated amount owing was $638,248.70 (the Adjudication Certificate).

5. [8]

   On 27 April 2021, the Adjudication Certificate was entered as a judgment for a debt in the sum of $638,442.70 in the District Court of NSW, pursuant to s 27(1) of the SOP Act (the Adjudication Judgment).

6. [9]

   On 6 May 2021, a garnishee order was issued by the District Court made to the Commonwealth Bank of Australia in respect of Beno’s judgment debt. The following day, an amount of $196,415.79 was debited from Beno’s Commonwealth Bank account.

7. [10]

   On 20 May 2021, Beno commenced proceedings in the Supreme Court of the ACT against Harlech seeking to restrain Harlech from enforcing the Adjudication Judgment, and prerogative relief in respect of the Adjudication Determination.

8. [11]

   On 28 May 2021, Beno filed a notice of motion in the District Court of NSW seeking to stay enforcement of the Adjudication Judgment pending the determination of proceedings commenced in the Supreme Court of the ACT. Ultimately, consent orders were entered on 6 August 2021.

9. [12]

   On 19 November 2021, Mossop J in the Supreme Court of the ACT held that the Adjudication Determination was affected by jurisdictional error by virtue of the adjudicator’s misinterpretation of s 24(4) of the SOP Act: Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 2) [2021] ACTSC 296; 363 FLR 238 at [110]-[112] (Beno (No 2)). It is not necessary to consider the detailed reasons for his Honour’s conclusion.

10. [13]

    On 26 November 2021, Mossop J ordered that the Adjudication Determination be quashed: Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 3) [2021] ACTSC 330 at [17(1)] (Beno (No 3)). His Honour also ordered that Beno had “liberty to apply within 28 days on two days’ notice in relation to any order seeking restitution”: Beno (No 3) at [17(5)]. The restitution contemplated was in respect of the $196,428.79 that had been debited from Beno’s Commonwealth Bank account pursuant to the garnishee order on 7 May 2021. In his reasons for judgment, Mossop J observed:

11. [14]

    It is important to note that, in the course of hearing of argument which led to the judgment in Beno (No 3), the following exchange occurred between Mossop J and Mr Moffett who then acted for Beno:

12. [15]

    On 11 August 2022, an appeal from the decision of Mossop J was dismissed: Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd [2022] ACTCA 42; (2022) 371 FLR 96 at [117] (Harlech ACTCA).

13. [16]

    On 11 October 2022, following the filing of an application for restitution of the kind contemplated by Mossop J in Beno (No 3) (see [13] above), Elkaim J ordered that Harlech pay Beno $196,428.79 by way of restitution together with interest and costs: Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 4) [2022] ACTSC 275 (Beno (No 4)). Elkaim J regarded the application for restitution as straightforward, essentially reasoning that, as the underlying Adjudication Determination that had led to the Adjudication Judgment and garnishee order had been quashed, by analogy with the well-established principle that the reversal of a judgment on appeal entitles the successful appellant to recover any moneys paid under the reversed judgment (see Production Spray Painting & Panel Beating Pty Ltd v Newnham (No 2) (1992) 27 NSWLR 659 at 661 (Production Spray Painting)), restitution should lie.

14. [17]

    Contrary to what had passed between Mossop J and Mr Moffett as set out at [14] above, the application for restitution was made without any attempt being made to set aside the Adjudication Judgment or the garnishee order which had resulted in Harlech being paid $196,415.79. As to the latter, Elkaim J observed in Beno (No 4) that:

15. [18]

    Elkaim J also rejected Harlech’s argument that restitution should be withheld because it had other claims against Beno which should be taken into account on a discretionary basis such that Harlech could not be said to have been unjustly enriched. These other claims were just that, claims, and had not been subject to any adjudication or determination. His Honour rejected this argument at [16] by reference to the reasoning of Hammerschlag J in Go Electrical Pty Limited v Class Electrical Services Pty Limited [2013] NSWSC 517 (Go Electrical):

16. [19]

    Elkaim J also rejected Harlech’s argument that s 38 of the SOP Act precluded Beno’s claim for restitution: Beno (No 4) at [24]-[27]. A similar argument to that advanced on the basis of s 38 is sought to be made in the current proceedings and will be dealt with in that context.

17. [20]

    On 15 December 2022, the High Court of Australia refused special leave to appeal from the ACT Court of Appeal’s dismissal of the appeal from Mossop J’s decision in Beno (No 3) that the Adjudication Determination should be set aside for jurisdictional error in Harlech ACTCA: Harlech Enterprises Pty Ltd v Beno Excavations Pty Ltd [2022] HCATrans 228.

18. [21]

    On 23 December 2022, Harlech commenced proceedings against Beno in the Federal Court of Australia (ACD1/2023). These proceedings remain on foot, or at least did so at the time of the hearing of the appeal.

19. [22]

    On 6 September 2023, McCallum CJ stayed Elkaim J’s orders for restitution, interest and costs made in Beno (No 4): Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 6) [2023] ACTSC 245 at [25]-[27] (Beno (No 6)). The stay was ordered pending the determination of Harlech’s application to set aside Elkaim J’s orders in Beno (No 4): Beno (No 6) at [4]. The Chief Justice took the view that Elkaim J’s orders were interlocutory in nature and thus could be set aside by another judge at first instance rather than being the subject of an appeal. Her Honour’s reasoning (at [14]) was that:

20. [23]

    Subsequently, on 17 October 2023, McCallum CJ set aside Elkaim J’s orders in Beno (No 4) for restitution, interest and costs: Beno (No 7) at [49]. Her Honour determined that there was no basis on which Elkaim J could have ordered restitution in Beno (No 4), and that ordering restitution in the circumstances “misconceived the operation of the security of payments legislation, the legal effect of certiorari and the nature of restitution”: Beno (No 7) at [32].

21. [24]

    Beno sought to defend Elkaim J’s orders on two bases: (i) Harlech was unjustly enriched by receiving payment in light of Mossop J’s quashing of the Adjudication Determination; and (ii) the restitution order was a proper exercise of the inherent jurisdiction to award restitution of an amount paid in satisfaction of a judgment later overturned on appeal: Beno (No 7) at [33].

22. [25]

    McCallum CJ rejected Beno’s contention that Harlech was unjustly enriched, stating at [35] that:

23. [26]

    Her Honour further held that a “final determination has not yet occurred in the present case”, and that “so long as the judgment obtained in the District Court remains in force, it cannot be said that Harlech has been unjustly enriched”: Beno (No 7) at [37]-[38] (emphasis added).

24. [27]

    In a still further judgment, McCallum CJ held that the question of costs before both Elkaim J and herself were to be costs in the cause: Beno Excavations Pty Ltd v Harlech Enterprises Pty Ltd (No 8) [2023] ACTSC 399 at [24(1)]. The cause was by that time to be determined in the Federal Court before Thawley J.

The primary judgment

1. [28]

   The next chapter in this lengthy saga of litigation came with the commencement of proceedings in the District Court of NSW resulting in the judgment the subject of the present application for leave to appeal. On 27 March 2024, Montgomery DCJ (the primary judge), ordered that:

2. [29]

   Order 3 was sought pursuant to s 124A of the Civil Procedure Act 2005 (NSW) (CPA) which provides:

3. [30]

   Harlech’s Notice of Motion which was dismissed pursuant to Order 4 of the primary judge’s orders had sought the permanent stay of Beno’s application for restitution as an abuse of process.

4. [31]

   The primary judge noted that Mossop J in Beno (No 2) held that the Adjudication Determination was affected by jurisdictional error, and that it was quashed in Beno (No 3): PJ [16]. In turn, the primary judge held that “[a]ccordingly, there is no adjudicator’s decision for the purposes of s 27(4)” of the SOP Act: PJ [17]. Section 27 of the SOP Act provides that:

5. [32]

   The primary judge made the following observation as to the effect of the determination being quashed by Mossop J in Beno (No 3):

6. [33]

   His Honour framed the relevant question as being whether the judgment should be set aside, and restitution ordered, “as if the Determination and the judgment were void ab initio”: PJ [19].

7. [34]

   Harlech contended that the determination and judgment were not void ab initio, and therefore restitution should not be ordered: PJ [20]. To support this proposition, Harlech relied upon New South Wales v Kable (2013) 252 CLR 118; [2013] HCA 26 at [52]-[61] (Kable). The primary judge rejected Harlech’s analogy to Kable on the present facts because: (i) Kable concerned a judgment of a “superior court ordering the imprisonment of an individual”; and (ii) the judgment in Kable was not a “judgment by way of an administrative process”: PJ [20].

8. [35]

   The primary judge followed and applied Brodyn Pty Ltd (t/as Time Cost and Quality) v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394 at [41] (Brodyn), where Hodgson JA held that quashing or declaring void a determination made under the NSW equivalent of the SOP Act could support the setting aside of the judgment. The primary judge held at PJ [22]:

9. [36]

   The primary judge held that Hodgson JA’s dicta in Brodyn at [41]-[42] applied to the present circumstances given that Mossop J in Beno (No 2) and Beno (No 3) had found that the determination was affected by jurisdictional error, and was quashed: PJ [23]. The primary judge further relied upon the dicta in Brodyn at [61]:

10. [37]

    The primary judge determined that the Adjudication Judgment should be set aside because:

11. [38]

    The primary judge, in determining whether restitution of the sum paid under the garnishee order was available, relied upon Hammerschlag J’s reasoning in Go Electrical which had also been relied upon by Elkaim J in Beno (No 4). The primary judge held that Go Electrical was relevantly analogous to the present case:

12. [39]

    Relying upon these principles, the primary judge rejected Harlech’s argument that restitution should not be ordered because the substantive claims were yet to be determined in the Federal Court proceedings on the basis of the construction contract rather than the SOP Act: PJ [34]. The primary judge also made reference to the decision of BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2015] 1 Qd R 228; [2013] QCA 394 (BM Alliance), which involved a determination made under jurisdictional error (PJ [35]):

13. [40]

    The primary judge also rejected Harlech’s argument that it would be “unjust to order restitution”: PJ [34], holding at PJ [36] that Harlech’s submission as to unjustness was misconceived, as “[b]road notions of unjustness are not the basis for restitutionary relief”: citing Coshott Family Pty Ltd v Lyons (2022) 110 NSWLR 44; [2022] NSWCA 216 (Coshott); David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48 at [20].

14. [41]

    In turn, the primary judge held that restitution of the moneys advanced under the garnishee order must be made, and that the Court did not have a discretion in this regard: PJ [37]-[38].

15. [42]

    The primary judge went on to state that, even if a discretion to withhold restitution did exist, it should not be exercised: PJ [38]-[43]. In this context, his Honour rejected Harlech’s contention that an order of restitution should not be made on the basis that Beno’s application for restitution constituted an “abuse of process”: PJ [36]. The primary judge relied upon four overlapping reasons for this conclusion: PJ [39]-[43].

16. [43]

    First, that McCallum CJ in Beno (No 7) did not determine the question of restitution on the same basis as in the present proceedings. This was because her Honour determined the question of restitution on the basis that while the Adjudication Determination had been set aside, the Adjudication Judgment had not been: PJ [39]. Indeed, the Chief Justice expressly referred to this distinction in Beno (No 7) at [38]: see [25]-[26] above. Secondly, the primary judge relied on the fact that McCallum CJ’s decision in Beno (No 7) to set aside Elkaim J’s order of restitution in Beno (No 4) was interlocutory in nature: PJ [40]. Thirdly, according to the primary judge, the fact that the Adjudication Judgment was to be set aside constituted a “change of circumstance” as compared to the circumstances existing at the time Beno (No 7) was decided: PJ [40]. Fourthly, the primary judge held that Beno’s failure to seek to set aside the Adjudication Judgment in the Supreme Court of the ACT should not prevent it from doing so in the District Court proceedings because: (i) in the Supreme Court of the ACT, Beno “did not ever claim restitution in the circumstance of the judgment having been set aside”; (ii) in the Supreme Court of the ACT, Beno successfully quashed the Adjudication Determination; and (iii) it was “practical and logical” first to quash the determination before seeking to set aside the Adjudication Judgment: PJ [42]. The primary judge concluded that Beno’s approach to litigation in the Supreme Court of the ACT “is not [a] good reason to exercise a discretion not to order restitution now”: PJ [43].

17. [44]

    Harlech also argued before the primary judge that the Court should not exercise its discretion to order restitution (if discretion there truly was) because: (i) s 38(3) of the SOP Act provided an exclusive source of power to order restitution; and (ii) s 38(3) did not apply in the present circumstances because restitution can only be ordered under s 38(3) where final relief is sought (such as in the Federal Court proceedings): PJ [44]. This was an argument that had been made before and rejected by Elkaim J: Beno (No 4) at [24]-[27].

18. [45]

    Section 38(3) of the SOP Act provides that:

19. [46]

    The primary judge rejected Harlech’s construction of s 38(3) as being contrary to the reasoning of Hammerschlag J in Go Electrical: PJ [44]. Furthermore, his Honour held that the SOP Act “should not be found to intend to bind the process in this foreign jurisdiction”: PJ [45].

20. [47]

    Furthermore, the primary judge held that s 124A of the CPA “puts beyond contest this Court’s power to order that the total amount paid by [Beno] to [Harlech] under the Garnishee Order be repaid”: PJ [47].

Application for leave to appeal

1. [48]

   By summons dated 21 June 2024, Harlech sought leave to appeal from the primary judgment on the following 12 grounds:

2. [49]

   Harlech accepted that it required leave to appeal because the primary judgment was interlocutory: District Court Act 1973 (NSW) s 127(2)(a). Nonetheless, Harlech submitted that the primary judgment “while technically interlocutory, nonetheless has a substantive effect as an enforceable money order”. Harlech also argued that leave should be granted because the appeal raised “several novel and important questions” concerning the SOP Act and its NSW equivalent. These questions were said to include: (i) whether a judgment filed on an adjudication certificate, where the Adjudication Determination is later quashed, is void ab initio; (ii) whether Go Electrical was wrongly decided; (iii) principles of finality restraining the reopening of interlocutory decisions; and (iv) whether Beno (No 7) was wrongly decided.

3. [50]

   Beno contended that leave to appeal should be refused because the primary judgment was not attended with sufficient doubt to warrant reconsideration on appeal, and there is no “clear case of material error”. Furthermore, Beno argued that further litigation was disproportionate to the monetary amount in issue, and that the appeal would be contrary to s 60 of the CPA. Beno also noted that Harlech can sue (and indeed is suing) to recover the money subject of the Adjudication Determination in the proceedings in the Federal Court.

4. [51]

   In circumstances where the amount at issue in these proceedings comfortably exceeds $100,000 and extensive argument was entertained, it is appropriate to grant leave to appeal. For the reasons which follow, however, the appeal should be dismissed with costs.

Ground 1: Was the Adjudication Judgment void ab initio?

1. [52]

   Harlech submitted that the primary judge erred in reasoning that, given the Adjudication Determination was void for jurisdictional error, the Adjudication Judgment had no force or effect, even prior to the order quashing the determination. Harlech contended that the primary judge erred at PJ [24]-[25] because, contrary to his Honour’s finding, the Adjudication Judgment was valid and effective until set aside. In support of this contention, Harlech relied upon Hodgson JA’s reasoning in Brodyn at [61], extracted at [36] above. Harlech further relied upon Gageler J’s dicta in Kable at [52]-[61] for the proposition that acts done in excess of power are not nullities, and judgments (even affected by jurisdictional error) are valid and enforceable until set aside. Harlech also argued that the primary judge erred at PJ [20] in distinguishing Kable on the basis that the Adjudication Judgment was obtained by an “administrative process”. Contrary to the primary judge, Harlech contended that the Adjudication Judgment was the act of a judicial tribunal, and was not obtained through an “administrative process”: citing Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190; [2009] NSWCA 69 at [60].

2. [53]

   Beno contended, in my opinion correctly, that it was unnecessary for this Court to determine whether the Adjudication Judgment was void ab initio. The critical point was that the quashing of the Adjudication Determination provided a proper basis for setting aside the Adjudication Judgment. So much was accepted by Dr Greinke in the course of argument on appeal:

3. [54]

   In other words, Harlech’s objection was not to the setting aside of the Adjudication Judgment in light of the quashing of the Adjudication Determination; rather it was to the ordering of restitution consequent upon the setting aside of the Adjudication Judgment.

4. [55]

   It is not necessary, as Beno in fact accepted, to engage with its submission that, given a “section 27 judgment… does not issue in the exercise of judicial power”, there are “powerful reasons” suggesting that, without a valid determination underpinning it, the s 27 judgment lacks force even prior to that judgment being set aside. Beno pointed to conflicting authorities on this issue: Khouzame v All Seasons Air Pty Ltd (2015) 229 FCR 279; [2015] FCAFC 28 at [33]-[38], In the matter of Powerpark Systems Pty Ltd [2018] NSWSC 793 at [18]-[26], Re J Group Constructions Pty Ltd [2015] NSWSC 1607; (2015) 303 FLR 139 at [131]. Prima facie, the position in New South Wales is as stated in Brodyn at [61] by Hodgson JA with whom Mason P and Giles JA agreed, namely that the Adjudication Judgment was valid until set aside. As noted above and as was accepted, however, it is not necessary to consider whether the dicta at [61] of Brodyn needs to be revisited given that there was a basis for setting aside the Adjudication Judgment and the order for restitution was made consequent upon its being set aside.

Grounds 2, 3, 4, 5 and 8: Restitution for money had and received

1. [56]

   Grounds 2, 3, 4, 5 and 8 can be dealt with compendiously.

2. [57]

   Harlech argued that the primary judge erred in framing the basis of restitution on a qualifying or vitiating factor giving rise to a claim for “money had and received”. This ground of appeal challenged the following reasoning of the primary judge:

3. [58]

   Harlech argued that the primary judge erred in considering that Harlech had been “enriched at the expense of” Beno because his Honour failed to take account of the “underlying debts” said to be owed by Beno to Harlech. This submission was misconceived, even putting to one side Beno’s objection that the underlying affidavit upon which this argument rested, namely that of Mr Moseley of 16 September 2022, was not referred to in oral argument, or read in open court, and therefore was not in evidence, citing Provide Nominees Pty Ltd v Australian Securities and Investments Commission (2024) 301 FCR 569; [2024] FCAFC 25 at [41], [47]-[48].

4. [59]

   The “underlying debts” to which Harlech referred in argument were merely contractual claims it asserted against Beno which were not before the Court for determination by way of cross claim. The claim for those “underlying debts” had been made by Harlech in the still to be determined Federal Court proceedings. Had such an entitlement already been established, it may have been open to Harlech to raise a set-off but the existence of a claimed entitlement did not have the consequence that Harlech had not been enriched or unjustly enriched by a payment secured by the garnishee order which had no proper underlying basis once the Adjudication Judgment had been set aside.

5. [60]

   In addition to Production Spray Painting and Go Electrical, Beno pointed to a wealth of authority for the proposition that where a judgment has been set aside, there is a right to restitution with interest of moneys paid under the judgment: Commonwealth of Australia v McCormack (1984) 155 CLR 273 at 276; [1984] HCA 57; Woolworths Limited v Strong (No 2) (2011) 80 NSWLR 445; [2011] NSWCA 72 at [31]-[35], [47]; Woolworths Limited v Kelly (No 2) [1991] NSWCA 287; Correa v Whittingham (No 2) [2013] NSWCA 471 at [91]; Heydon v NRMA (No 2) (2001) 53 NSWLR 600; [2001] NSWCA 445 at [12]; National Australia Banking Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386 at 591-8; Haig v Minister for Administering the National Parks and Wildlife Act 1974 (No 3) (1996) 90 LGERA 408 at 411; Easterday v The State of Western Australia [2005] WASCA 202 at [10]; Kooee Communications Pty Ltd v Primus Telecommunications Pty Ltd (No 2) [2011] FCAFC 141 at [3]-[5]; BHP Steel (JLA) Pty Ltd Khan (No 2) [2001] NSWCA 269 at [5]; TCN Channel 9 Pty Ltd v Antoniadis (No 2) (1999) 48 NSWLR 381; [1999] NSWCA 104 at [3]-[13]; Holdcroft v Market Garde Produce Pty Ltd [2000] 2 Qd R 381; [2000] QCA 396 at [37]-[40]. This right to restitution following a garnishee order is reflected in s 124A of the CPA: see [29] above.

6. [61]

   A challenge to the correctness of Production Spray Painting and Go Electrical was foreshadowed by Dr Greinke who appeared for Harlech but, for good reason, was not advanced with any persuasive force. There was no error by the primary judge in applying both of those authorities. An attempt to distinguish them was made on the basis that, in both proceedings, an underlying judgment had been set aside. But in circumstances where the Adjudication Judgment was set aside before restitution became available consequent upon the quashing of the Adjudication Determination, albeit in separate sets of proceedings, there was no valid point of distinction. Nor was there any tension between McCallum CJ’s decision in Beno (No 7) and that of the primary judge. Her Honour was correct, in my view, to hold at [35]-[38] that restitution was not available whilst the Adjudication Judgment of the District Court remained an order of the Court: see above at [23]-[27].

7. [62]

   The point of the primary judge’s reference to Coshott at PJ [32]-[33] was to make the elementary point that a restitutionary remedy does not entail a claimant establishing that in all the circumstances retention of money paid is unjust; the primary judge was entirely correct in observing that “[b]road notions of unjustness are not the basis for restitutionary relief”: PJ [36]. Rather, as Kirk JA observed in Coshott at [22]-[23], the claimant must establish the existence of some qualifying or vitiating factor the presence of which “goes to establish that money the defendant received is held to the use of the plaintiff so as to found a claim to restitution”. A claim for restitution of moneys paid pursuant to a judgment which has been set aside is such a recognised category, as the cases cited in [60] above make plain.

8. [63]

   Harlech was unjustly enriched by the receipt of moneys to which there was no underlying entitlement following the setting aside of the Adjudication Judgment. It is not necessary to decide whether any defence to the claim for restitution would have been available to such a claim as none was raised. Rather, Harlech relied upon an argument to the effect that the Court should, in its discretion, withhold restitutionary relief.

9. [64]

   The primary judge held, correctly in my view (and consistently with the decision of the Queensland Court of Appeal in BM Alliance at [74]-[77]), that no such discretion existed as a matter of general principle. There was a general law right to restitution. The only possible qualification to this arises under s 124A of the CPA which provides for restitution following amounts being garnisheed, with the statutory power to order restitution being conditioned upon the court being “satisfied that it is appropriate to do so”: see [29] above. But that potential qualification is not to the point in the circumstances of the present case where the primary judge went on to hold that, even if there were such a discretion, he would not exercise it to withhold restitutionary relief: see [42] above. This being a discretionary decision, it could only be impugned for House v The King (1936) 55 CLR 499; [1936] HCA 40 error, which was not expressly asserted.

10. [65]

    To the extent that ground 8 sought to attack the primary judge’s conclusion in this regard, of the three matters referred to in ground 8, the first two, namely the failure of Beno to take steps to prevent the registration of the judgment or the issue of a garnishee order and to commence proceedings to challenge the Adjudication Determination until after the moneys were garnisheed ignored the fact that the registration of the Adjudication Determination and the seeking of the garnishee order shortly thereafter were essentially ex parte steps taken by Harlech which Beno moved to undo by bringing proceedings before Mossop J, and seeking to preserve its position by securing consent orders in the District Court: see [9]-[10] above. The third matter relied upon in ground 8, namely “the failure of the respondent to adduce evidence challenging the appellant’s evidence of the construction contract and indebtedness” repeats the fallacy already dealt with, namely the fact that this issue was not properly before the District Court and was not sought to be raised as a cross claim in those proceedings but rather, was the subject of a claim by Harlech in the Federal Court.

11. [66]

    In relation to ground 3 which was to the effect that the “primary judge ought to have found that he could not summarily determine such a cause of action, including whether the appellant had been enriched at the expense of the respondent”, there was no summary determination involved in the primary judge’s determination and this ground must be rejected.

Grounds 6 and 7: section 38 of the SOP Act

1. [67]

   These grounds of appeal reprised an unsuccessful argument originally made before Elkaim J and repeated unsuccessfully before the primary judge. Harlech, by ground 6 of its appeal, argued that the primary judge erred in failing to find that moneys paid under Pt 4 of the SOP Act were not recoverable prior to determining the parties’ rights on a final basis, consistent with the “pay now, argue later” principle (see, for example, Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 at [96]; Brodyn at [21]) and that s 38(3)(b) of the SOP Act made express provision for restitution, which was exclusive in its operation.

2. [68]

   The primary judge summarised Harlech’s submission as follows:

3. [69]

   Harlech also contended, by ground 7, that the primary judge erred in failing to find that s 38(3)(b): (i) reflects a legislative policy that interim payments should not be recoverable prior to determining the parties’ rights on a final basis; and (ii) this policy was relevant to the exercise of the discretion to order restitution.

4. [70]

   Harlech’s arguments should be rejected. Section 38(3)(b) is facilitative in that it permits the making of an order for restitution where that is appropriate following determination of a dispute under the construction contract. Thus, where a payment has been made under the “pay now argue, later principle”, following a demand or adjudication, but it is subsequently determined that that payment (or a part of it) was not owing, restitution may be ordered. That is a very different circumstance, however, to that which arose in the present case where the Adjudication Determination had been quashed and the Adjudication Judgment set aside. As Payne JA put to Dr Greinke in the course of argument, the “pay now argue later” principle was spent once Mossop J had found jurisdictional error and quashed the Adjudication Determination. Without there being any entitlement under the SOP Act, any reliance on s 38 of that Act as in some way precluding or ousting the power of the District Court to order restitution was misplaced.

Grounds 9 to 12: Finality and abuse of process

1. [71]

   These four grounds are related. By ground 9, Harlech contended that the primary judge erred in reopening the rulings of McCallum CJ in Beno (No 7). I do not consider that this is an appropriate way of characterising what transpired in the District Court. True it is that McCallum CJ set aside the orders that had been made by Elkaim J but this was on the basis, made express by her Honour, that restitution did not lie in respect of garnisheed moneys which were paid pursuant to a judgment of the District Court which had not been set aside: see [25]-[26] above. There was no canvassing of her Honour’s reasoning in the proceedings before the primary judge and his Honour’s judgment was delivered in light of a materially changed circumstance, namely the setting aside of the Adjudication Judgment, an order of the primary judge which is not the subject of appeal. Harlech did not suggest that McCallum CJ, sitting in the Supreme Court of the ACT, could have set aside the Adjudication Judgment of the District Court. In these circumstances, it is difficult to see how Beno could be said to have committed an abuse of process by seeking relief in the District Court which was not available in the Supreme Court of the ACT. As has been seen, the order for restitution which was made by the primary judge was consequent upon the setting aside of the Adjudication Judgment.

2. [72]

   Criticism may fairly be made of Beno’s failure to seek to set aside the Adjudication Judgment prior to seeking relief before Elkaim J, especially in light of what passed between Mossop J and Beno’s then counsel, as noted in [14] above, and the outcome of proceedings before McCallum CJ. But any wasted expense could be (or could have been) compensated by orders for costs in relation to those two sets of proceedings. Orders for costs have relevantly been made (see [27] above) and it is not for this Court to interfere with those orders.

3. [73]

   No unfair prejudice was caused to Harlech by Beno’s proceedings in the District Court so as to require them to be stayed as an abuse of process, and the primary judge was correct to reject Harlech’s application for a stay of proceedings on that basis.

Conclusion

1. [74]

   For the above reasons, I would propose the following orders:

   1. (1)

      Grant leave to appeal.

   2. (2)

      Appeal dismissed with costs.

2. [75]

   WARD P: Having regard to the saga of this litigation, to which the Chief Justice has referred, and the likely disproportion between the costs incurred to date and the amount in issue, there would be much to be said for simply refusing leave to appeal (particularly so as not to encourage further such applications). That said, I am in agreement with the Chief Justice as to the disposition of the appeal and hence would grant leave but dismiss the appeal with costs. I therefore agree with Bell CJ.

3. [76]

   PAYNE JA: I agree with Bell CJ.