Supreme Court

_{New South Wales}

Case Title: Nigro v EVS Group Pty Limited

Medium Neutral Citation: [2012] NSWSC 1545

Hearing Date(s): 2 April 2012

Decision Date: 14 December 2012

_{Before: Hislop J}

Decision: 1. Leave to appeal granted.

2. Appeal dismissed.

_{3. Plaintiff to pay the defendant's costs of the appeal.}

Catchwords: Contract - Building and Construction Industry (Security of Payment) Act 1999 - entitlement of non- contractual party to recover moneys paid pursuant to a judgment filed under s 25 of the Act.

Legislation Cited: Local Court Act 2007

Building and Construction Industry (Security of Payments) Act 1999

Cases Cited: Chase Oyster Bar Pty Limited v Hamo Industries Pty Limited (2010) 78 NSWLR 393

Dualcorp Pty Limited v Remo Constructions Pty Limited [2009] NSWCA 69, (2009) 74 NSWLR 190

Laws Holdings Pty Limited v Short (1972) 46 ALJR 563

Grave v Blazevic Holdings Pty Limited [2010] NSWCA 324, 79 NSWLR 132

Brodyn Pty Limited v Davenport [2004] NSWCA 394, (2004) 61 NSWLR 421

Texts Cited: Precedents of Pleadings, Bullen, Leake and Jacobs

Category: Principal judgment

Parties: Remolo Niko Nigro (Plaintiff)

EVS Group Australia Pty Limited (Defendant)

Representation

- Counsel: B Bradley (Plaintiff) J Hyde (Defendant)

- Solicitors: CCS Legal (Plaintiff)

Wilkinson Building and Construction Lawyers (Defendant)

_{File Number(s): 2011/324420}

JUDGMENT

Introduction

1 This is an application for leave to appeal from a decision of the Local Court pursuant to s 40(2) of the Local Court Act 2007. It concerns the application of the Building and Construction Industry (Security of Payments) Act 1999 ("the Act").

2 In Chase Oyster Bar Pty Limited v Hamo Industries Pty Limited (2010) 78 NSWLR 393 Spigelman CJ said at [4]:

"The Act creates a statutory right to progress payments (s 8 and s 9) which cannot be modified by a contract (s 34). Part 3 of the Act sets out a procedure for recovering such payments that, save for the necessity that a builder initiate the procedure by making a claim (s 13), makes express statutory provision for each step in the dispute resolution process. This extends to provision for an 'adjudicator's determination' (s 22), which is required to be paid (s 23), and the issuance of an adjudication certificate by an authorised nominating authority (s 24), which certificate may be filed in court as a judgment for a debt (s 25)."

Section 3 identifies the objects of the Act whilst s 32 provides for the effect of Pt 3 of the Act on civil proceedings.

3 The procedure is plainly one designed to facilitate the speedy making and payment of progress claims and, where necessary, the speedy resolution of any disputes - Dualcorp Pty Limited v Remo Constructions Pty Limited [2009] NSWCA 69, (2009) 74 NSWLR 190 at [29].

Background

4 Remax Developments Pty Limited purchased a site for development at Parramatta Road Homebush. It engaged Remax Group Pty Limited to construct residential units on the site. The plaintiff was a director of each company.

5 The defendant contracted to provide security personnel services on the site. There was a question as to whether the contract by the defendant was with Remax Developments Pty Limited, Remax Group Pty Limited or the plaintiff.

6 There was a failure to pay the defendant for services rendered by it pursuant to the contract. The defendant issued adjudication applications in respect of that failure pursuant to s 17 of the Act against the plaintiff and Remax Group Pty Limited. The adjudicator determined that the plaintiff should pay the defendant the sum of $44,139.56.

7 An adjudication certificate was obtained (s 24) and was filed as a judgment for a debt in a court of competent jurisdiction pursuant to s 25(1). Pursuant to that judgment a garnishee order issued as a result of which the defendant obtained $27,202.03 from the plaintiff's bank account.

8 The plaintiff issued a statement of claim against the defendant in the Local Court seeking restitution of the $27,202.03 together with interest and costs. The proceedings were defended.

9 Counsel for the plaintiff described the proceedings in the Local Court as:

"a common money count for restitution for monies had and received by the defendant under compulsion of law. All that this Court needs to determine, we say, is who were the parties to the contract and if the plaintiff was not a party to the contract with EVS then some other entity was, it is entitled to receive back the monies that the defendant now holds and that the defendant now bears the onus of establishing that they are entitled to keep those funds."

10 Counsel for the defendant said:

"...the dispute between us is over the effect of the determination, judgment being entered and a garnishee order being executed against the plaintiff's bank account. We say that because of the structure of the Act it is incumbent on the plaintiff if it disputes the determination made under the Act for it to seek declaratory orders and relief in the Supreme Court Equity Division and they have, in the statement of claim prepared by them, in effect complained about the adjudicator's determination.

They effectively say that it's miscarried, he's failed to accept their submission that their client was not a party to any construction contract."

11 The parties agreed that the substantive issues for determination by her Honour the presiding Magistrate in the Local Court proceedings were:

"(i) Who were the contracting parties to the contract for the provision of services from EVS on the site?;

(ii) Whether the plaintiff is entitled to recover the sum of $27,202.03 together with interest on that sum from 9 November 2010."

12 It was common ground that on the evening before the hearing the defendant informed the plaintiff that it proposed to raise two preliminary issues namely -

"1 Whether the Local Court had jurisdiction to hear and determine the matter.

Whether the plaintiff is estopped from bringing the current proceedings in circumstances where:

(a) there has been no application made to the Supreme Court, Equity Division, to set aside the Adjudication Certificate made under s 24 of the [Act]...;

(b) the Plaintiff has not sought a declaration that the Plaintiff is not indebted to the Defendant in the sum of $44,139.56."

13 Her Honour proceeded to hear and determine the preliminary issues. She held, inter alia:

1. the defendant could raise an estoppel defence even though it had not been specifically pleaded;

2. the estoppel defence was available to the defendant in respect of the adjudicator's determination that the plaintiff was a party to the construction contract and liable to pay the defendant the determined amount;

3. s 32 of the Act did not allow the plaintiff to bring these proceedings;

4. the plaintiff was not entitled to bring these proceedings unless and until the adjudicator's determination and judgment which had been entered were set aside by the Supreme Court in its Equity Division.

14 Her Honour, when publishing her judgment, said of her decision:

"In essence it is that the plaintiff cannot bring his case with the adjudicator's determination and the judgment which has been entered [unless and] until that is set aside by the Supreme Court..."

15 On 10 October 2011 her Honour made the following orders:

"1. These proceedings be stayed pending the determination of any application made by the plaintiff to the Supreme Court.

2. In the event that the plaintiff does not make any application to the Supreme Court of New South Wales by 31 October 2010, the stay be listed on that date.

3. Costs otherwise be reserved.

4. The parties have liberty to restore this matter on 7 days notice."

16 The plaintiff disputed her Honour's decision and, by amended summons filed in this Court on 13 March 2012, sought the following orders:

"1. Leave to appeal from the whole of the decision below.

2. Appeal allowed.

3. Orders 1 and 2 made 10 October 2011 of the court below be set aside.

4. A declaration that the court below has jurisdiction to hear the plaintiff's claim.

5. The proceedings be remitted back to the court below for hearing.

6. Costs."

17 The defendant opposed the orders sought.

Leave

18 The application for leave to appeal was made pursuant to s 40(2) of the Local Court Act 2007. The plaintiff submitted that leave should be granted for the following reasons:

"(a) The costs and time associated with an appeal are modest and limited as opposed to the substantial costs and time associated with an application to this Court for judicial review of the Adjudicator's decision foreshadowed by the magistrate.

(b) If the Appeal is successful, the proceedings can continue in the court below without the need to conduct expensive and lengthy proceedings in this Court that necessitate the involvement of a non- party to the present proceedings, namely, the Adjudicator.

(c) The administration of justice requires leave to be granted to determine whether it was just in circumstances to allow the defendant to raise an estoppel argument not foreshadowed in any pleading or motion by way of oral address in opening and subsequently determine those issues against the plaintiff.

(d) A proper construction of the Act and the jurisdiction of the court below are matters of significance and relevant to the administration of justice in building and construction disputes in this State."

19 The defendant opposed the grant of leave but made no specific submissions in relation thereto.

20 In my opinion it is an appropriate case for the grant of leave to appeal generally for the reasons advanced by the plaintiff.

The appeal

21 There are four appeal grounds. They are set out in the amended summons. They are discussed below.

Ground 1

"The Magistrate below was mistaken at law to allow the defendant to agitate an issue estoppel on the day of the hearing in circumstances where:

(a) The defendant had not pleaded the alleged estoppel; and

(b) The plaintiff objected to the defendant raising estoppel in the absence of it being pleaded or the subject of a formal motion to amend the defence."

22 When the matter came on for hearing in the Local Court counsel for the plaintiff informed her Honour:

"...there are two extra issues that my friend contends for...Issue 2 seeks to raise an estoppel that has not been pled for which we have received no notice of and on its face is contrary to the admission made in para 24 of the defence."

23 Counsel for the plaintiff expanded on this in his final submissions as follows:

"We weren't expecting this issue of course until last night. I should note in final submission that in relation to estoppel, that is a matter that ought have been pleaded on the defence, so my friend is now seeking to raise an argument that has not been pleaded and a matter which ought ordinarily be pleaded on the defence. So whilst he may try and argue a jurisdiction issue, what he is actually seeking to do is run an estoppel argument that hasn't been pleaded. ... He has not pleaded the estoppels on which he now seeks to rely and if he was seeking to rely on those estoppels, he ought file a motion seeking leave and deal with the AON and ANU ramifications that will no doubt follow.

Now I understand he is trying to run a jurisdictional argument. I actually understand his argument to be an estoppel argument in its central and clear focus and I don't think he is in fact running a jurisdictional argument, but your Honour my friend contends differently. But if he wants to run the estoppels being the second issue identified in his statement of issues, it's not pleaded. That's the reason why we've had to spend so long today dealing with it, because we were not on notice of it until last night..."

24 It was common ground the estoppel alleged (see para [12] hereof) was not expressly pleaded in the statement of claim.

25 The statement of claim alleged, inter alia:

"20. On 23 August 2010, the Adjudicator determined the Adjudication Application (the Determination). The Adjudicator determined that the plaintiff was liable to pay the entire amount claimed by the defendant in the Payment Claim.

_Particulars

Adjudication Determination, dated 23 August 2010.

...

Grounds for relief sought

24. The Determination does not finally determine or affect the rights of the parties, or prevent the plaintiff from pursuing legal action to

recover any overpayment.

_Particulars

Section 32 of the Act.

25. The plaintiff says that no contract exists, or ever existed, between the plaintiff and the defendant. If any contractual arrangement existed with the defendant for the performance of services, it was between Remax Group and the defendant.

26. The plaintiff denies any personal liability to pay the defendant.

27. The plaintiff is entitled to restitution of the amount determined by the Adjudicator and paid to the defendant.

_Particulars

Section 32(3)(b) of the Act.

28. The plaintiff claims restitution for $27,202.03 for the wrongful redirection of funds to the defendant, pursuant to the Garnishee Orders for Debts.

29. Alternatively, there has been a total failure of consideration on the part of the defendant and the plaintiff claims restitution of the money paid."

26 In its defence the defendant admitted paras 20 and 24 and denied paras 25-29 inclusive of the statement of claim. In paras 27, 28 and 29 the defendant expressly pleaded that the adjudicator had determined that the plaintiff was liable to pay the defendant for the services rendered.

27 Her Honour held:

"16. The plaintiff contends that the defendant cannot raise estoppel because it has not been specifically pleaded, contrary to the requirements of Part 14 r 14.14 of the Uniform Civil Procedure Rules 2005. That rule requires the specific pleading of allegations of fact relied on to establish estoppel. In both the statement of claim and the defence, the parties plead the fact of the adjudication and the determination reached. I am not satisfied that the defence is precluded from raising estoppel based on those facts.

...

19. I am not convinced that the defendant's admission to paragraph 24 precludes his present challenge. Paragraph 24, standing alone, is a vague and inadequate generalisation of the effect of s 32 but it is not clearly wrong. When read in the context of the pleadings in which it appears, it could be asserting that s32 allows the plaintiff to bring this legal action, in which case the defendant's contention would contradict its pleading.

20. In the face of this ambiguity, and where both parties have made submissions on their opposing interpretations of the effect of s32, I do not consider that I am precluded by the defendant's pleading from considering the defendant's contention that s32 does not apply and that the plaintiff is estopped from bringing this action."

28 UCPR 14.14 provides:

"(1) ...

(2) In a defence or subsequent pleading, a party must plead specifically any matter:

(a) that, if not pleaded specifically, may take the opposite party by surprise, or

(b) that the party alleges makes any claim, defence or other case of the opposite party not maintainable, or

(3) Matters which must be pleaded pursuant to subrule (2) include (but are not limited to) fraud, performance, release, statute of limitation, extinction of right or title, voluntary assumption of risk, causation of accident by unknown and undiscoverable mechanical defect and facts showing illegality."

29 In Laws Holdings Pty Ltd v Short (1972) 46 ALJR 563 at 571 it was held:

"...in general matters of fact grounding an estoppel ought to be pleaded under this rule [the Queensland equivalent of UCPR 14.14]...The rule is not one that excludes from the consideration of the court the relevant subject matter for decision simply on the ground that it is not pleaded. It leaves the party in mercy and the court will deal with him as is just."

30 In my opinion, there was reliance in the defence on the adjudicator's determination in support of the defendant's denial of liability. There is ambiguity in the pleading relating to para 24. Plaintiff's counsel was informed on the previous evening that the preliminary issues were to be argued; it was not asserted to her Honour that plaintiff's counsel needed to obtain evidence to meet the preliminary issues or required further time to consider the relevant law; plaintiff's counsel did not seek an adjournment. The matter was fully argued on both sides. The suggested prejudice in not having adequate time to consider the desirability of seeking judicial review was raised only on the issue of costs on a subsequent occasion. The only prejudice which appears to have been alleged at the hearing was as follows: "That's the reason why we've had to spend so long today dealing with it because we were not on notice of it until last night." It would seem that if the estoppel had been specifically pleaded, the issue would have been fought in the same way as it was in fact fought though, perhaps, more concisely. Any prejudice could be dealt with by appropriate cost orders.

31 The question whether the defendant should be permitted to pursue the estoppel issue at the hearing was a matter in her Honour's discretion. It was open to her Honour to permit the issue to be argued at that time notwithstanding the deficiency in the pleadings. In my opinion, the plaintiff has not established her Honour erred in permitting the estoppel issue to be agitated by the defendant.

Ground 2

"The Magistrate below was mistaken at law to find that the adjudicator's decision made 23 August 2010 gave rise to an estoppel in circumstances where:

(a) on the proper construction of section 22 of the Building and Construction Industry Security of Payments Act 1999, the question before the Magistrate and the Adjudicator were not the same; and

(b) on its proper construction, the Act does not manifest an intention to confer a sufficient degree of finality on the Adjudicator's decision so as to create the estoppel found in the proceedings below."

32 In Dualcorp at [48] the court said:

"It is well accepted that domestic tribunals are within the ambit of the res judicata principles. As Spencer Bower, Turner and Handley say (at 25 [25]):

'Every domestic tribunal, including any arbitrator, or other person or body of persons invested with authority to hear and determine a dispute by consent of the parties, court order, or statute, is a "judicial tribunal" for present purposes and its awards and decisions [are] conclusive, unless set aside. The position is no different with issue estoppel...'"

33 Her Honour stated that the requirements for an issue estoppel were:

"that the same question has been decided, that the judicial decision said to create the estoppel was final and that the parties to that decision were the same as the parties to the proceedings in which the estoppel is raised."

34 Her Honour held:

"...The question of who was party to the construction contract was raised and argued at the adjudication. The determination was on the merits. That determination is judicial and final. It was filed in court as a judgment debt. The parties to the determination are estopped from seeking a redetermination of the same issue."

35 The plaintiff challenged her Honour's conclusion on the two bases expressly stated. He also asserted the adjudicator had not determined the issue of whether the plaintiff was a party to the construction contract.

36 The plaintiff contended no evidence was before her Honour as to what took place before the adjudicator. In the absence of any such evidence, it was difficult to see how the magistrate could have reached the conclusion that the issue of who were parties to the contract was determined on the merits and such determination was "judicial and final".

37 It was an agreed fact that the adjudicator determined that the plaintiff should pay a sum of $44,139.56 to the defendant. In Grave v Blazevic Holdings Pty Limited [2010] NSWCA 324, 79 NSWLR 132 at [24] it was held:

"Section 8 is the source of the statutory right to receive progress payments. It says who is entitled to be paid. That is a party to the construction contract - the person who undertakes to carry out construction work. It does not say in terms who is liable to make the payment, but I think it is implicit at least that the liability is one that is created against the other party to the construction contract."

38 Counsel for the defendant informed her Honour, without contradiction from plaintiff's counsel, that:

(a) "...an adjudicator looked at the materials having had submissions from both [parties] and decided that the defendant was entitled to a certain sum of money and a determination was made."

(b) "...Your Honour doesn't need to be troubled about the mechanics of how it came to pass that the adjudication determination was made, other than to appreciate that the adjudicator was presented with submissions and evidence from both the plaintiff and defendant in these proceedings. He, having considered that material, reached a determination which resulted in a monetary sum according to his determination being due and owing by the plaintiff to the defendant."

(c) "...this issue was squarely raised by learned friend's client during the adjudication process. He said that there was no contract between the plaintiff and the defendant and that was rejected by the adjudicator, so it was something that was considered, and considered in some detail."

39 In these circumstances, it was, in my opinion, open to her Honour to conclude, as she did, that the adjudicator had determined the issue that the plaintiff was a party to the construction contract and liable as such.

(a) The question before the magistrate and the adjudication was not the same

40 In Dualcorp Macfarlan JA (at [69]) said:

"As pointed out in Kuligowski (at 379 [40]) for the principle of issue estoppel to apply, the same issue must have been earlier determined as is later sought to be reagitated..."

41 The plaintiff submitted the issue before the magistrate and the issue before the adjudicator were not the same; the issue before the adjudicator was whether or not someone owed an obligation to make interim statutory payments.

42 A basic and essential requirement for the existence of an adjudicated determination appears to be the existence of a construction contract between the claimant and the respondent to which the Act applies - Brodyn Pty Limited v Davenport [2004] NSWCA 394, (2004) 61 NSWLR 421 at [53]-[55].

43 Her Honour held the adjudicator had determined that the plaintiff was a party to the construction contract. A substantive question which it was agreed her Honour was to determine was who were the contracting parties to the construction contract. The issue relevantly before her Honour was the same as that determined by the adjudicator.

(b ) The determination was not final

44 The plaintiff contended there was an insufficient degree of finality to give rise to an issue estoppel for all purposes.

45 In Dualcorp Macfarlan JA held:

"[60] These various provisions in my view indicate a legislative intent to render adjudication determinations relevantly conclusive. Such determinations do not conclude contractual rights. Section 32 expressly so provides. The Act however creates special statutory rights to progress payments. When a claim is made, a dispute arises and an adjudication determination resolves that dispute. I consider that determination to be final and binding between the parties as to the issues determined, except to the extent that the Act allows the determination to be revisited. It would in my view be quite contrary to the scheme of the Act to permit claimants simply to resubmit the already adjudicated claims if they were dissatisfied with the adjudication.

...

[67] ...I consider that the Act when read as a whole manifests an intention to preclude reagitation of the same issues. Thus, if questions of entitlement have been resolved by an adjudication determination, those findings may not in my view be reopened upon a subsequent adjudication...

[68] ... It is best that the applicable principles be recognised to be those of issue estoppel...

...

[70] ...The view that the claimant once disappointed by an adjudicator can seek a different determination from another, or indeed from a succession of others, until a favourable decision is reached would in my view conflict with the policy of the Act to render adjudicators' determinations final on issues which they resolved, subject only to provisions of the Act conferring limited rights of correction of determinations.

...

[72] ...This is in fact the usual situation and is consistent with what the High Court in D'Orta-Ekenaike (at 17 [34]) referred to as the 'central and pervading tenet of the judicial system ... that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances'."

46 Handley AJA agreed in the judgment of Macfarlan JA. Allsop P, who was the other member of the court, did not finally decide the estoppel issue.

47 The plaintiff submitted Dualcorp was concerned with the question of issue estoppel in respect of subsequent adjudications. The plaintiff sought to limit the principle in Dualcorp to the issue before the court at that time and referred to the use of expressions such as "relevantly conclusive", "may not be reopened upon a subsequent adjudication" as indicative of the limited estoppel intended by the court.

48 The plaintiff also claimed support for its argument by reference to the operation of the Act which had been said to operate

"in a way that has been described as 'rough and ready' or, less kindly, as 'Draconian'. It imposes a statutory regime regardless of the parties' contract: s 34. It provides extremely abbreviated time frames for the exchange of payment claims, payment schedules, adjudication applications and adjudication responses. It provides a very limited time for adjudicators to make their decisions on what, experience shows, are often extremely complex claims involving very substantial volumes of documents" - Chase at [208].

49 However, the statement of principle in Dualcorp

"...the policy of the Act [is] to render adjudicators' determinations final on issues which they resolved, subject only to provisions of the Act conferring limited rights of correction of determinations"

is not, in its terms, so limited. The reference to D'orta in Dualcorp at [72] also suggests a wider principle was intended.

50 Her Honour held that the principles of issue estoppel applied to any determinations made by an adjudicator under the Act except to the extent that the Act allowed the determination to be revisited. This is consistent with the wider interpretation of Dualcorp.

51 Her Honour concluded that on its proper construction, the Act manifested an intention to confer a sufficient degree of finality on the adjudicated determination such as to found the estoppel contended for subject to any rights of correction conferred by the Act.

52 There is a tension between the general principles of issue estoppel and the operation of the Act. However, it is unnecessary to determine the extent of the relevant estoppel as counsel for the defendant, in his written submissions, stated:

"The defendant does not suggest that there has been a final determination of the plaintiff's rights by reason of an adjudication determination but rather that s 32 of the Act does not give rise to an appropriate remedy in the circumstances peculiar to this matter. The defendant contends that if it is correct that there is no construction contract for the purposes of an application of the Act, then it is incumbent on the plaintiff to challenge the validity of the determination in a different forum to that of the Local Court."

He affirmed this in his oral submissions, observing:

"Now we don't say, and I think I expressly disavowed the proposition in my outline of submissions, that the plaintiff is estopped from bringing any recovery proceedings. We simply say that they are estopped from relying on s 32. So, whilst my learned friend went to some lengths to take your Honour through the estoppel issues that were raised in Dualcorp and elsewhere. We don't cavil with that."

_{Ground 3}

"The Magistrate below was mistaken at law to find section 32 of the Act did not allow the plaintiff to bring his claim below in circumstances where on its proper construction, section 32(2) operates so as to permit the plaintiff to bring a claim for restitution of a liability incurred by way of a statutory progress payment made on account of a construction contract to which he was not a party."

53 Section 32 of the Act is in the following terms:

"(1) Subject to section 34, nothing in this Part affects any right that a party to a construction contract:

(a) may have under the contract, or

(b) may have under Part 2 in respect of the contract, or

(2) Nothing done under or for the purposes of this Part affects any civil proceedings arising under a construction contract, whether under this Part or otherwise, except as provided by subsection (3).

(3) In any proceedings before a court or tribunal in relation to any matter arising under a construction contract, the court or tribunal:

(a) must allow for any amount paid to a party to the contract under or for the purposes of this Part in any order or award it makes in those proceedings, and

(b) may make such orders as it considers appropriate for the restitution of any amount so paid, and such other orders as it considers appropriate, having regard to its decision in those proceedings."

54 "Construction contract" is defined in the Act as:

"means a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party".

55 Section 3 provides:

"(1) The object of this Act is to ensure that any person who undertakes to carry out construction work (or who undertakes to supply related goods and services) under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services.

...

(4) It is intended that this Act does not limit:

(a) any other entitlement that a claimant may have under a construction contract, or

(b) any other remedy that a claimant may have for recovering any such other entitlement."

56 Section 8(1) provides:

"On and from each reference date under a construction contract, a person:

(a) who has undertaken to carry out construction work under the contract, or

(b) who has undertaken to supply related goods and services under the contract,

is entitled to a progress payment."

57 The plaintiff contended that the issues determined by the adjudicator were apt to be revisited pursuant to s 32 of the Act.

58 Her Honour held:

"...the plaintiff's claim is not a claim under or in respect of the construction contract. It is a claim that the adjudicator was wrong in his determination that the plaintiff was a party to the contract. Section 32 does not, in my view, allow the plaintiff to bring these proceedings."

59 The defendant submitted the language of s 32(1) of the Act was clear and referred to the rights of a party "to a construction contract". Section 32(2) requires civil proceedings arising under a construction contract whilst s 32(3) requires proceedings in relation to any matter arising under a construction contract. Each has as an essential prerequisite the existence of a construction contract to which the plaintiff and defendant were parties. This is consistent with the scheme of the Act - see, for example, ss 3 and 8 above.

60 The foundation of the plaintiff's case is that he was not a party to a construction contract and has no liability thereunder. He was a stranger to the construction contract.

61 The purpose of the Act does not extend to making strangers to construction contracts liable for progress payments - Grave at [44]; see also [23] and [33].

62 A defence that "I am not a party to, and thus not liable under, the construction contract" is not a defence arising under the contract sued upon. It is a denial of the existence, as between the applicant and the respondent, of any such contract - Grave at [36].

63 Counsel for the defendant contended:

"...s 32 of the Act has no application on the plaintiff's pleaded case. We say that because, even on the plaintiff's case, there was no relevant construction contract. In those circumstances s 32 simply does not have an application."

64 In my opinion the defendant's contention that s 32 has no application is correct. The purpose of the Act is to enable progress payments under the Act to be promptly paid. A construction contract is a necessary prerequisite to such a payment. Section 32 provides for revisiting of the initial decision in some circumstances. It has no application in the circumstances of this case.

Ground 4

"The magistrate ought to have found that (a) the court below had jurisdiction pursuant to s 30 of the Local Court Act 2007 to determine the plaintiff's claim, and (b) the plaintiff was otherwise entitled to bring his claim for restitution in para 28 of the statement of claim or the alternative claim advanced in para 29 of the statement of claim independently of any claim contemplated by s 32 of the Act."

65 The plaintiff contended that even if s 32 did not permit revisiting of the adjudicator's determination in the circumstances of this case, the plaintiff was nevertheless entitled to recover the funds from the defendant in these proceedings on a claim for moneys had and received by the defendant under compulsion of law. I do not agree.

66 In my opinion:

(a) such a claim is not made pursuant to the Act or other statute. It would be contrary to the estoppel created by the judgment entered pursuant to s 25 of the Act;

(b) such a claim would be tantamount to an appeal from the adjudicator's determination in circumstances where there is no entitlement to appeal;

(d) money paid under compulsion of law cannot, in general, be recovered - Bullen, Leake and Jacobs Precedents of Pleadings, p 660.

67 Reliance is placed by the plaintiff on the judgment of McDougall J in Grave at [35] as authority that such an action may be brought. This involves a misconception of para [35] which, read in context, is to the contrary.

68 The basic and essential requirements laid down for the existence of an adjudicator's determination appear to include the existence of a construction contract between the claimant and the respondent to which the Act applies (s 7 and s 8) - Brodyn. Its absence will render the determination void: Brodyn at [53]-[55].

69 Where the adjudicator's determination is void [for the reason referred to in the previous paragraph], then until it is filed as a judgment, proceedings can appropriately be brought in a court with jurisdiction to grant declarations and injunctions to establish that it is void and to prevent it being filed. However once it has been filed, the resulting judgment is not void. An application can be made to set aside the judgment; and ... it is not contrary to s 25(4)(a)(iii) to do so on the basis that there is in truth no adjudicator's determination - Brodyn at [61].

70 The plaintiff has made no application to set aside the judgment.

Conclusion

71 I agree with her Honour's conclusion that the plaintiff cannot bring his case unless and until the adjudicator's determination and the judgment which has been entered are set aside by the Supreme Court. In my opinion, the appeal should be dismissed.

Orders

72 The Court makes the following orders:

1. Leave to appeal granted.

2. Appeal dismissed.

3. Plaintiff to pay the defendant's costs of the appeal.

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