DISTRICT COURT OF SOUTH AUSTRALIA

 

Plaintiff: ROMALDI CONSTRUCTIONS PTY LTD

Counsel: MS K CLARK

Solicitor: CRAWFORD LEGAL

Defendant: ADELAIDE INTERIOR LININGS PTY LTD

Counsel: MR P ADAMS

Solicitor: JOHNSTON WITHERS

Hearing Date/s: 07/03/2013

File No/s: DCCIV-13-333

B

 

ROMALDI CONSTRUCTIONS PTY LTD v ADELAIDE

INTERIOR LININGS PTY LTD

[2013] SADC 39

Judgment of His Honour Judge Barrett

3 April 2013

EQUITY - EQUITABLE REMEDIES - INJUNCTIONS – INTERLOCUTORY INJUNCTIONS - INJUNCTIONS TO PRESERVE STATUS QUO AND PROPERTY PENDING DETERMINATION OF RIGHTS

 

The plaintiff builder seeks a stay or an injunction preventing the defendant sub-contractor from recovering payment to it by the plaintiff of monies ordered to be paid by an adjudicator pursuant to determination under the Building and Construction Industry Security of Payment Act 2009 (SA). The plaintiff alleges that the defendant is impecunious and will be unable to repay the monies if the plaintiff is successful in its claim in this court for damages for defective and uncompleted work. The defendant submits the court has no power to grant a stay or injunction and if it does have power, the balance of convenience does not favour the granting of relief.

 

Held: There is power to grant an injunction and in the circumstances of this case an injunction is granted.

 

Building and Construction Industry Security of Payment Act 2009 (SA), referred to.

Jones v Dunkel (1959) 101 CLR 298; Asian Pacific Building Corporation Pty Ltd v Aircon Duct Fabrication Pty Ltd & Ors [2010] VSC 340; The Roosters Club Inc v The Northern Tavern Pty Ltd [No 2] [2003] SASC 143; Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; Musico & Ors v Davenport & Ors [2003] NSWSC 977; Grosvenor Constructions (NSW) Pty Ltd (in administration) v Musico & Ors [2004] NSWSC 344; Kalifair Pty Ltd v Digi-Tech (Aust) Ltd [2002] 55 NSWLR 737; Taylor Projects Group Pty Limited v Brick Dept. Pty Limited and Ors [2005] NSWSC 571; Veolia Water Solutions v Kruger Engineering [No 3] [2007] NSWSC 459; RSA v VDM CCE and VDM CCE v RSA [2012] NSWSC 861; Grindley Constructions Pty Ltd v Painting Masters Pty Ltd [2012] NSWSC 234, considered.

 

ROMALDI CONSTRUCTIONS PTY LTD v ADELAIDE INTERIOR

LININGS PTY LTD

[2013] SADC 39

 

1 This is an interlocutory application by the plaintiff, a builder, seeking a stay or an injunction preventing the defendant, a sub-contractor, from enforcing an adjudication made on an interim basis under the Building and Construction Industry Security of Payment Act 2009 (SA) (“the Act”). The amount of the adjudication is $51,219.83. The adjudication was made on 13 February 2013.

 

2 The defendant says that to allow the application would be to defeat the purpose of the Act. The defendant says it should be permitted to recover from the plaintiff the amount that has been awarded by the adjudicator.

 

Background

 

3 In July 2012 the plaintiff engaged the defendant to install lining at a college it was building. It paid the defendant approximately $10,000 up front. The defendant did work on the site but there is a dispute between the parties about the extent and the quality of the work. The defendant left the site and the plaintiff engaged another sub-contractor to complete the work. There is a dispute about the circumstances in which the defendant left the site.

 

4 In September, October and November 2012 the defendant rendered to the plaintiff interim invoices for the work it said it had done. The plaintiff refused to pay. In December the defendant made an application for an adjudication under the Act. The determination of the adjudicator was issued on 13 February 2013.

 

5 On 20 February 2013, the plaintiff sued the defendant in this court for about $60,000 which it claims is the cost to it of completing the work with other subcontractors. In the alternative, if the plaintiff is required to pay the defendant the adjudication sum of approximately $50,000, the plaintiff claims just over $110,000.

 

6 The plaintiff disputes its liability to pay the adjudication sum, but it does not appeal against the determination. It explains that, rather than employ the appeal mechanism provided for in the Act, it has sought to litigate the whole dispute in this court. Rather than challenge what is really an interim order, it has sought to have the whole matter litigated. The plaintiff submits that an appeal against the adjudication would be principally related to errors of law. It would not resolve the factual dispute. The plaintiff argues that by choosing to proceed to litigate in this court, it has chosen the more expeditious way of resolving the disputes between the parties. By that mechanism it avoids the delay of challenging first the adjudication and then proceeding later to litigate the wider dispute.

 

Submissions by the plaintiff

 

7 The plaintiff submits that in order to obtain what is effectively an interlocutory injunction it bears the onus of demonstrating two things:-

 

1 It has a prima facie case against the defendant, or is there a serious question to be determined, and

2 That the balance of convenience as between the parties favours the granting of the order.

 

8 The plaintiff submits that the principal consideration in favour of the application is that the defendant is about to become insolvent. It says that in the absence of an order preventing the defendant from seeking recovery of the adjudication amount, its claim in the principal proceedings will be rendered pointless. The money will not be recoverable from the defendant.

 

9 The plaintiff asserts facts which it says support its contention that the defendant is facing insolvency. These alleged facts are:

 

 

10 The plaintiff asserts that I may draw an inference adverse to the defendant on the topic of its finances because, in the face of the allegations of its facing insolvency, the defendant has produced no evidence of a healthy financial standing. The defendant has done no more than assert it would pay the adjudicated sum if it was ordered to do so.

 

11 By way of contrast, the defendant offers security for the adjudicated amount either by way of paying the sum into the Suitor’s Fund or by delivering to the Registrar an unconditional bank guarantee of an equal sum.

 

12 On behalf of the plaintiff, Ms Clark acknowledged that, were it not for the insolvency question, the plaintiff would not be in a position to make the application it has. Ms Clark acknowledged that a principal purpose of adjudications under the Act is to assist sub-contractors’ cash flows. The mechanism of adjudication says to builders in effect “pay now, argue later”. Ms Clark submits that, on the facts of this case, the “argue later” component would become illusory. There will be no point in arguing later because the defendant will be insolvent. The plaintiff will not be able to recover any monies it now pays pursuant to the adjudication.

 

Submissions by the defendant

 

13 The defendant makes several submissions in opposition to the application under three heads:

 

1 There is no power to grant a stay using the power in Rule 248 of the District Court Rules to preserve property.

2 There is no power to grant an injunction because the plaintiff has no cause of action upon which to found an injunction.

3 If, contrary to its contention, there is power to grant an injunction, the court should not grant the application.

 

Power to protect property

 

14 The defendant submits that the court does not have the power to make the order sought insofar as the application relies on r 248 of the District Court Rules. Rule 248 gives the court power to make orders for the preservation of property. The definition of “property” in 6r4 is “... real or personal property and includes anything of value”. The defendant submits that there is no “property” to be protected.

 

15 The plaintiff asserts that it has a chose in action, having instituted proceedings in this court for a breach of contract. It seeks to protect that property. It says that unless an order is made preventing the defendant from recovering its arbitration sum, the plaintiff will effectively lose its property.

 

16 The plaintiff has been unable to find any South Australian or interstate authority on the operation of the Act in the context of an application for the preservation of property. However it submits that there is interstate authority permitting a stay of execution of judgments obtained by virtue of the registration of Certificates of Adjudication. There is also authority for injunctions being granted to prevent parties from obtaining a judgment in reliance upon an adjudication certificate.

 

17 Unaided by authority I am not persuaded that the power to preserve property contemplated by r 248 is apt to make orders preventing the defendant from proceeding to recover its adjudication sum. I make no order pursuant to r 248.

 

Power to grant an injunction

 

18 The defendant submits that insofar as the plaintiff relies on the court’s power pursuant to r 246 to grant an injunction, the application is flawed.

 

19 An injunction may only be granted where there is a cause of action, and interim relief can only be given in support of final relief. The defendant submits that, while the plaintiff seeks final relief in its claim in this court for breach of contract, it does not seek to challenge the adjudication by way of judicial review.

 

20 In support of that contention the defendant relies on the decision of Vickery J in Asian Pacific Building Corporation Pty Ltd v Aircon Duct Fabrication Pty Ltd and Ors. In that case the defendant had obtained two adjudications under the equivalent Victorian Act. Both adjudications had been challenged in the Supreme Court. One determination (the Olsen determination) had been declared void and set aside. The other (the Blackman determination) had been declared valid in respect of a certain sum and void in respect of another sum. The plaintiff in that case sought a stay of that part of the Blackman determination which had been declared valid.

 

21 Vickery J held that to the extent that the plaintiff sought a stay of a declaratory judgment, the court had no power to grant it. His Honour referred to the case of The Roosters Club Inc v The Northern Tavern Pty Ltd [No 2].

 

22 His Honour held that, on the facts of that case, there was no power to grant a stay of a merely declaratory judgment.

 

23 Vickery J also held at [35] that insofar as the plaintiff’s application is founded on the power to grant an injunction, there was no power to grant it, because it was not based upon a cause of action. His Honour found that no cause of action to found an injunction had been identified.

 

24 In the result Vickery J held that there was no basis for the court to disregard the defendant’s entitlement to that part of the Blackman adjudication which had been declared by the court to be valid.

 

25 In my view, Asian Pacific Building Corporation Pty Ltd v Aircon Duct Fabrication Pty Ltd and Ors is distinguishable from the present case. In this case the adjudication has not been declared valid. The plaintiff has elected not to challenge the determination on the relatively narrow grounds of its legality. The plaintiff has instead chosen what it submits is the more expeditious route of proceeding in this court seeking a final determination of the now crystallised claims and counter-claims between the parties. The disputes giving rise to the adjudication will no doubt be aired in this court, but all disputes between the parties will be aired and determined. The determination by the court will be a final determination of the rights between the parties, unlike the adjudication which is a determination on an interim basis only.

 

26 It is true that the adjudication may be seen as a merely declaratory judgment. Of itself it has no executory effect. The adjudication only becomes a judgment of the court upon the filing in the court of the Certificate of Adjudication. It may be that, insofar as the plaintiff is seeking a stay of the adjudication, the court has no power to grant it. I make no finding on that topic.

 

27 However there is, in my view, undoubtedly a cause of action in respect of which an injunction may be granted. The defendant’s proceedings in this court are that cause of action. In those circumstances I find that there is power to grant an injunction preventing the defendant from taking steps to recover the adjudication sum.

 

Should an injunction be granted?

 

28 There remains the question of whether an injunction should be granted.

 

29 The third and final objection which the defendant makes to the plaintiff’s application is that, even if there is power to grant an injunction, the plaintiff has not demonstrated the criteria necessary for the granting of the discretion in its favour (ABC v O’Neill). There are interstate authorities bearing on the circumstances in which a stay or an injunction may be granted against the recovery of an adjudication sum in legislation comparable to the South Australian Act.

 

30 The defendant submits that the balance of convenience does not favour the granting of the injunction. It submits that it is prima facie entitled to the adjudication amount by virtue of the operation of the Act. It submits that this court should not cut across the purpose of the Act. That purpose is to protect the cash flow of subcontractors.

 

31 The defendant submits that it has good prospects of defeating the plaintiff’s claim and being successful in its cross-action in these proceedings. Further, it is likely to be many months before these proceedings will be finally determined. In that regard I find that it is not possible to predict the outcome of these proceedings on the basis of the material placed before me. On the other hand there is no question that there will be a long delay before these proceedings are finalised. That delay is a relevant consideration tending against the granting of an injunction.

 

32 The defendant submits that the evidence of its impending insolvency is weak. The defendant denies its insolvency, although it does not provide details of its financial position. The defendant says it is able to pay its bills, without giving any details.

 

33 On the other hand the defendant submits that the plaintiff will suffer no prejudice if it is required to pay the adjudication sum.

 

34 I refer to cases which discuss the way in which these competing considerations are to be considered in the context of adjudications being made in favour of subcontractors under comparable legislation interstate.

 

35 In Musico & Ors v Davenport & Ors McDougall J concluded that the New South Wales Act did not have a privative effect. That is, while the Act provides that upon the filing of an Adjudication Certificate the builder should pay the adjudication sum, that legislative provision does not exempt the adjudication from judicial review. However, given the policy of the Act, the courts should not be quick to intervene.

 

36 In Grosvenor Constructions (NSW) Pty Ltd (in administration) v Musico & Ors the defendant subcontractor had filed an Adjudication Certificate. Einstein J noted that the power to grant a stay existed “whenever the requirements of justice so demand” and the power is in addition to the court’s inherent power. In that case his Honour recognised the importance of the policy of the Act. His Honour said at [31]:

 

Whilst payments under the Act are interim, it none the less is the policy of the Act that successful claimants be paid. For that reason, there is a sound reason for making stays less readily available in relation to debts arising under the Act, in contrast to the position in relation to appeals arising from curial proceedings. For example, in case such as the present, the court might require more than a “real risk that [the respondent] will suffer prejudicial damage, if a stay is not granted” (emphasis added)

 

37 On the facts of that case Einstein J found that there was certainty that the defendant’s rights would be rendered nugatory if the stay was not granted. His Honour found that if no stay was granted the interim arrangement would in practice be converted into a final order. There is no such certainty in this case.

 

38 In Taylor Projects Group Pty Ltd v Brick Dept Pty Ltd and Ors, Einstein J again had occasion to discuss the balancing act that is required in applications of this sort.

 

53 As earlier observed, the Court is involved in the exercise of balancing the risk that a respondent’s payment may be irrecoverable because of a claimant’s insolvency, in the event the final rights are determined in the respondent’s favour, against the policy of the Act that successful claimants be paid (Grosvenor at [31]).

 

54 Stays in relation to debts under the Act ought be less readily available than stays in relation to appeals from curial proceedings (Grosvenor at [31]; Herscho v Expile Pty Limited [2004] NSWCA 468 at [3]). In Herscho Hodgson JA suggested the risk of prejudice must be “a very high risk” and certainly more than merely a real risk to justify a stay (at [3] and [9]).

 

55 Since Grosvenor the Court of Appeal has emphasised that the policy of the Act militates against the grant of stays: Brodyn at [85]-[87]. [See also Transgrid v Siemens Ltd [2004] NSWCA 395 at [37] where the Court indicated that the fact that payments are provisional only would not normally be a ground for withholding relief.]

 

39 At [59] Einstein J emphasised the high level of likelihood of insolvency before it would be appropriate to grant a stay. His Honour said:

 

59 The principle in Grosvenor is only applicable where the claimant is either actually, or very close to, insolvent. Were it otherwise then the stay itself may drive the claimant into the very insolvency which the interim payment regime of the Act is designed to prevent. Such a result would be unjust in circumstances where:

 

· prima facie there is a debt due from the respondent to the claimant;

· the final amounts due between the parties may not be ascertained for weeks, months or years;

· the Court is in no position to assess the relative merits of the parties on the final claims;

· the financial situation of the respondent may itself deteriorate so that the claimant loses for all time the benefit of the right which is now prima facie enforceable;

· there is nothing in the Act which suggests a claimant’s entitlement to receive the interim payments depends upon it establishing a capacity to repay those sums if there is a final determination unfavourable to it;

· the claimant is deprived of the very funds the Act contemplated would be made available to it to pay its own employees and suppliers.

 

40 The requirement of that high degree of certainty was however questioned by McDougall J in Veolia Water Solutions v Kruger Engineering [No 3]. His Honour discussed the approach of Einstein J in Grosvener v Musico above. His Honour said:

 

35 Einstein J then referred at paras [18] to [25] to a number of English decisions relating to the Housing Grants, Construction and Regeneration Act 1996 (which Act includes provisions creating a statutory right to progress payments). The effect of the decisions cited by Einstein J was that a successful claimant should not be kept out of its money unless there was real doubt as to the claimant’s ability to repay in the event that a final determination went against it.

36 At paras [29] to [31], Einstein J referred to decisions staying execution on judgments pending an appeal where there was a risk that the appellant might not recover its money if it succeeded on the appeal. In para [31], his Honour noted that “the analogy with appeals is not a perfect one”, because it did not take into account the evident policy of the Act requiring prompt payment of progress claims. Thus, his Honour said, “there is a sound reason for making stays less readily available in relation to debts arising under the [Security of Payment] Act, in contrast to the position in relation to appeals arising from curial proceedings.” His Honour said that one way in which this might be recognised was by requiring “more than a “real risk that [the respondent] will suffer prejudice or damage, if a stay is not granted.”” (The internal quotation comes from the decision of the Court of Appeal in Kalifair Pty Ltd and Another v Digi-Tech (Australia) Ltd and Others (2002) 55 NSWLR 737 at 741-742 [18]; the emphasis comes from Einstein J.)

 

37 Thus, his Honour concluded at para [32], “in a case … where there is a certainty that the defendants’ rights will be otherwise rendered nugatory, and that it will suffer irreparable prejudice, the proper and principled exercise of the Court’s discretion is to grant a stay.” At para [33], his Honour drew comfort from the fact that the plaintiff’s entitlement under the judgment recovered by it was fully secured.

 

38 At para [35], his Honour observed that “if no stay is granted, an interim arrangement would be in practice converted into a final order.” He repeated that the effect of refusing the stay would be to render nugatory Musico’s rights, and thereby cause “irreparable prejudice”.

 

39 I adopt his Honour’s statement of the principles as being those that, in general, should be considered when deciding an application such as that before his Honour, or that before me. However, in any particular case, the application of those principles, and the balancing of the various considerations, will require careful attention. For example, each case will require close analysis of the extent or certainty of the risk of prejudice or damage, if a stay is not granted (I refer to the question posed but not answered by his Honour in para [31]).

 

41 His Honour then analysed the considerations discussed by Einstein J. He referred in particular to the balancing of the relevant factors. I reproduce what his Honour said:

 

72 The exercise of the discretion to grant a stay requires a balancing of the relevant factors. Two factors of particular significance in this case are:

 

(1) On the one hand, the policy of the Security of Payment Act, that successful applicants be paid promptly (recognised by Einstein J in Grosvenor at para [31]);

and

 

(2) On the other, the likelihood of irreparable prejudice, where that prejudice would flow from the refusal of the stay because cross-claims would be rendered worthless (recognised by Einstein J in Grosvenor at para [32]).

 

73 In assessing whether the refusal of a stay will cause irreparable prejudice, it is open to the Court to have regard to the strength of the cross-claim, to ascertain whether there is at least a real risk that prejudice will follow if a stay is not granted (see the analysis of Einstein J in Grosvenor at paras [29] and [30], applying by analogy the principles relevant to stay pending appeal). I say “at least” because of the issue reserved, but not answered, by Einstein J in para [31] of his reasons.

 

74 As a general rule, I think, the balancing of the two significant factors to which I referred in para [72] above requires the Court to look closely at the strength of the crossclaim asserted by the applicant for a stay. There are at least two reasons why this is so. The first is that there has been an examination, admittedly of an abbreviated and sometimes rough and ready way, of the competing claims. I accept that adjudicators are as prone to error as other human beings; and I accept also that the stresses placed upon them by the extremely tight timetable for which ss 19 to 21 of the Security of Payment Act provide may magnify the possibility of error. Nonetheless, the legislature has said that disputes as to progress payments are to be determined in the first instance through the mechanism provided in the Security of Payment Act. That mechanism allows an examination not only of the payment claim but also of the payment schedule, in which (one might expect) the respondent ordinarily would set out all reasons why, it says, the claimant is not entitled to be paid.

 

75 The second reason flows from the plain legislative intention that progress claims should be dealt with, and paid, promptly. In my view, any court faced with, and required to give effect to, that clear legislative policy should be careful before exercising a discretion in a way that would intercept the effectuation of that policy in a particular case. Thus, I agree with Einstein J that the Court would ordinarily do so (in cases such as the present) only where the failure to do so would have the practical effect of making permanent that which, clearly enough, the legislature intended to be only interim.

 

42 In the case of RSA v VDM CCE and VDM CCE v RSA McDougall J again discussed the question of the degree of proof of the risk of non-payment or insolvency by a defendant. His Honour said:

 

8 It has been suggested that there are other cases which suggest that the risk of non-payment must approach virtual certainty before the Court would be justified in granting a stay, in relation to judgments recovered under the Queensland Act or its equivalent in this State, the Building and Construction Industry Security of Payment Act 1999 (NSW). For example, I was taken to the judgment of Hodgson JA in Herscho v Expile Pty Ltd [2004] NSWCA 468. At [3], his Honour referred to what Einstein J had said in Grosvenor Constructions (NSW) Pty Ltd v Musico [2004] NSWSC 344 at [31],[32]. I had referred to those in my judgment in Veolia and the relevant passages are set out in the paragraphs that I have extracted.

 

9 In Herscho at [9], Hodgson JA said that:

 

"...[t]here is evidence that does suggest some risk that if the money is paid it will not be recovered; but it does not go so far as to suggest that it will not be recovered, or that the risk is a very high risk".

 

10 Thus, as his Honour said at [10] "on the whole", and taking into account the policy of the NSW Act, his Honour dismissed the application for a stay.

 

11 In Taylor Projects Group Pty Ltd v Brick Dept Pty Ltd & Ors [2005] NSWSC 571, Einstein J referred at [54] to the decision in Herscho as justifying the proposition that the risk of prejudice must be "a very high risk", and in any event "more than merely a real risk" if a stay were to be granted. With great respect, I think that this is putting too high a burden on the words of Hodgson JA, which clearly were directed not at laying down some general principle but at the facts of the particular case.

 

12 Of more moment is what Einstein J said in Taylor Projects at [59]:

 

59 The principle in Grosvenor is only applicable where the claimant is either actually, or very close to, insolvent. Were it otherwise then the stay itself may drive the claimant into the very insolvency which the interim payment regime of the Act is designed to prevent. Such a result would be unjust in circumstances where:

 

· prima facie there is a debt due from the respondent to the claimant;

 

· the final amounts due between the parties may not be ascertained for weeks, months or years;

 

· the Court is in no position to assess the relative merits of the parties on the final claims;

 

· the financial situation of the respondent may itself deteriorate so that the claimant loses for all time the benefit of the right which is now prima facie enforceable;

 

· there is nothing in the Act which suggests a claimant's entitlement to receive the interim payments depends upon it establishing a capacity to repay those sums if there is a final determination unfavourable to it;

 

· the claimant is deprived of the very funds the Act contemplated would be made available to it to pay its own employees and suppliers.

 

43 His Honour then formulated his own view at [17]:

17 I remain of the view that in considering whether or not to grant a stay, it is necessary to see what risk there is to the applicant for a stay, other than the simple and unquantified risk that the respondent to the application for a stay will become insolvent, if a stay is granted; to take into account the prejudice to the respondent to the application for a stay if the stay is granted; and to take into account the policy of the Act.

 

44 In the particular circumstances of that case his Honour granted the stay.

 

45 Finally in Grindley Constructions Pty Ltd v Painting Masters Pty Ltd Ball J granted an injunction preventing a sub-contractor from filing an Adjudication Certificate where there was both a risk to the reputation of the plaintiff if the judgment was entered and also what his Honour described as “a real risk” that the plaintiff would not be able to recover the sum if it were required to pay it.

 

46 I conclude from the above authorities that despite an interpretation that might be placed on the words of Einstein J in Grosvenor and Taylor above there would have to be demonstrated a near certainty of a defendant’s insolvency before an injunction would be granted, that test might more accurately be described as there being a real risk of a defendant’s inability to repay. I reach that conclusion having considered the detailed analysis by McDougall J in Veolia and RSA and also the remarks of Ball J in Grindley.

 

47 I turn to the facts of this case and the balancing exercise that is required. In favour of granting the injunction sought is the evidence of the impecuniosity of the defendant. I have to determine whether the plaintiff has demonstrated that there is a real risk that the defendant will be unable to pay the adjudication sum if the plaintiff has to pay it. I consider that the evidence of the defendant’s approaching insolvency is high. The plaintiff has really carried out all the investigations it reasonably can to demonstrate that the defendant is in an extremely difficult financial situation. The plaintiff has disclosed the results of those investigations. The plaintiff has sought the disclosure of financial records by the defendant. Those requests have been ignored. In these proceedings, the defendant has produced nothing in rebuttal of the plaintiff’s evidence beyond the denial of imminent insolvency and an assertion that it can pay its bills. I am willing to infer that, in the absence of rebutting evidence from the defendant, it is unable to produce evidence of a healthy financial situation. It is unable to deny the specific allegations of impecuniosity that have been made. In those circumstances there would appear to be a high likelihood of the defendant becoming insolvent. If the defendant became insolvent then I think there is a real risk that the defendant would be unable to repay the adjudication sum. If the adjudication sum were paid to the defendant that sum would appear not to be sufficient to pay the defendant’s other (alleged) outstanding liabilities.

 

48 On the other hand, there are considerable factors militating against the granting of an injunction. The policy of the Act is that subcontractors who have adjudications issued in their favour ordinarily have a right to the payment of those adjudications. The policy of the Act is to assist subcontractors’ cashflows. The court should be slow to intervene so as to defeat the policy of the Act. It is also relevant to note that if an injunction is granted there will be a delay of many months before the present proceedings are concluded. That delay will disadvantage the defendant. It is precisely that sort of delay that the Act attempts to minimise.

 

Conclusion

 

49 Balancing the above considerations I conclude that I should grant the injunction sought. I find that there is a real risk of the defendant’s inability to repay the adjudication sum if the injunction is not granted. I find that the balance of convenience favours the granting of the injunction. In so finding, I bear in mind that the plaintiff has offered to pay a sum equivalent to the adjudicated sum into the Suitor’s Fund. I grant the injunction only on condition that the plaintiff pay the sum of $51,219.83 into the Suitor’s Fund.

 

50 I will hear the parties as to consequential orders.