Supreme Court

_{New South Wales}

Case Title: DJ's Home and Property Maintenance v Dujkovic

Medium Neutral Citation: [2012] NSWSC 870

Hearing Date(s): 30/07/2012

Decision Date: 30 July 2012

Jurisdiction: Equity Division - Technology and Construction List

_{Before: McDougall J}

Decision: _{Interlocutory injunction discharged.}

Catchwords: [PROCEDURE] - civil - Building and Construction Industry Security of Payment Act 1999 (NSW) - whether service of payment claim was regularly effected - whether injunctive relief should be discharged or continued.

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

Cases Cited: Texts Cited:

Category: Procedural and other rulings

Parties: DJ's Home and Property Maintenance Pty Limited (Plaintiff)

Zed Dujkovic (First Defendant) Damian Michael (Second Defendant)

Representation

- Counsel: Counsel:

F A Sinclair / D J Mihalic (Plaintiff)

R P Freeman (Defendants)

- Solicitors: Solicitors:

Longman Hill Solicitors (Plaintiff)

Phontos Legal (First Defendant)

File number(s): 2012/233132

_{Publication Restriction:}

JUDGMENT

1 HIS HONOUR: On 26 July 2012 I granted, on the ex parte application of the plaintiff, an interlocutory injunction restraining the first defendant (the claimant) from prosecuting and the second defendant (the adjudicator) from deciding an adjudication application purportedly made by the claimant pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act).

2 I granted that relief for two reasons. First, I thought, on the basis of the plaintiff's evidence, there was at least a serious question to be tried as to whether the adjudication application or the preceding documents under the Act - the payment claim and the notice pursuant to s17(2) - had been served. The second reason was that, again on the evidence of the plaintiff, there was a serious question to be tried as to whether the claimant carried out work for the plaintiff as an employee, so that, by reason of s7(3)(a) of the Act, the Act did not apply to any contract between the plaintiff and the claimant in the latter's capacity as an employee of the former.

3 I brought the matter back today. The claimant filed in court a lengthy affidavit which proved a number of documents. Of present relevance, the documents proved included a search of the plaintiff, in the records held by the Australian Securities and Investments Commission (ASIC) which showed that from 7 October 2009, the principal place of business of the plaintiff was an address in Orange which is identical to the address at which service of the adjudication application, the payment claim and the s17(2) notice had been effected, on the evidence for the plaintiff. ASIC searches showed further that the principal place of business of the plaintiff remained at that address until it was changed by notification dated 20 July 2012. That change occurred well after the last in time of the relevant documents - the adjudication application - had been served.

4 The significance of service is of course that if the documents in question had not been served in a manner authorised by the Act, then there was no basis on which there could be a dispute arising out of the payment claim that could be submitted to adjudication. One of the functions of service of documents such as payment claims and adjudication applications is to afford a measure of natural justice to a person in the position of the plaintiff who is said to be liable to make a payment claim pursuant to a construction contract to which the Act applies.

5 Service of notices under the Act is dealt with, in a non-exclusive way, by s31. By s31(1)(b), service of a document may be effected by "lodging it" during normal office hours at the ordinary place of business of the person to be served. By sub-s(2), service is taken to have been effected when the notice is received in accordance with sub-s(1)(b).

6 Thus, when the documents in question were delivered to the address in Orange which was shown on the ASIC searches as the plaintiff's principal place of business, service was taken to have been effected when they were there received. In this context, I take the expression "lodging it" to the equivalent to "serving it" or "delivering it". I do this because subs(2) refers to the consequence of "lodging" as being that the notice "is received". Receipt is - at least usually - the counterpart of delivery.

7 On that basis, the payment claim was apparently regularly served, as were the s17(2) notice and the adjudication application. The plaintiff had not responded to the payment claim, nor to the s17(2) notice. Ms Sinclair of counsel, who appeared for the plaintiff today with Mr Mihalic of counsel, sought to explain this by saying that the director of the plaintiff, Mr Dodd, had been unaware at all relevant times that the principal place of business of the plaintiff was the address in Orange to which I have referred several times. Even accepting that for the sake of argument - so that I could not infer, for example, that the plaintiff's affidavit had been constructed to leave a deliberately misleading impression with the court (and I do not draw any such inference) - the fact remains that, on what appears to be the agreed state of affairs as to the records of ASIC, service had been regularly effected.

8 That means that there is a dispute as to a progress claim that has properly been referred to adjudication and that the adjudicator is required by law to consider. The obligations of adjudicators, in relation to matters of procedure, include a specific obligation to determine an application as expeditiously as possible and in any event within ten business days after notification of acceptance unless the parties agree to extend that time (see s 21(3) of the Act).

9 Even where there has been no payment schedule and no adjudication response, adjudicators are required to consider for themselves whether the claim to be entitled to a progress payment has been substantiated. Thus, among other things, adjudicators are required to satisfy themselves that there subsists, between the claimant and the respondent to the payment claim, a construction contract to which the Act applies.

10 Further, an adjudicator's decision on that matter cannot be determinative of jurisdiction. If the adjudicator considers that there was a construction contract to which the Act applies, and the respondent is aggrieved by that decision, the respondent may ask this court to grant relief in the nature of certiorari, on the basis of jurisdictional error on the part of the adjudicator. Whether the court would grant certiorari (assuming that a ground for the grant had been made out) involves perhaps some element of discretion. It is unnecessary to consider, in the present case, how that discretion might be exercised if application were made. That is because the circumstances that might be relevant to the exercise of any discretion to grant or withhold relief once a basis for that relief has been made out are not before me at present, and there is no point in speculating.

11 The result of all this is that, in my view, the interlocutory injunction should be discharged and the second defendant, the adjudicator, should be left free to perform his statutory function.

12 In the ordinary way, I would be inclined to dismiss the summons with costs. However, against the prospect that the adjudicator may decide in favour of the claimant and the plaintiff may wish to challenge that determination on the basis of jurisdictional error, I think the better course is to stand the summons over to a date sufficient to allow the adjudicator to make a determination, so that the plaintiff can consider the matter and (if so advised) seek leave to amend the summons so as to challenge the determination.

13 In those circumstances and for those reasons I make the following orders:

1. Order the injunction granted on 26 July 2012 be discharged forthwith.

2. Direct the first defendant forthwith to inform the second defendant that the injunction has been discharged.

3. Stand the proceedings over for directions until 17 August 2012.

4. Reserve liberty to apply on 24 hours notice.

5. Order the plaintiff to pay the first defendant's costs to date.

6. Direct that the exhibits to the affidavit of the first defendant be handed out.

7. I direct that these orders be entered forthwith.

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