SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Miscellaneous Appeal)

ADELAIDE INTERIOR LININGS PTY LTD v ROMALDI CONSTRUCTIONS PTY LTD

[2013] SASC 110

Judgment of The Honourable Justice Anderson

5 July 2013

CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - ADJUDICATION OF PAYMENT CLAIMS EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - INJUNCTIONS TO PRESERVE STATUS QUO OR PROPERTY PENDING DETERMINATION OF RIGHTS

The appellant in this matter appeals from an interlocutory decision of a judge of the District Court. The respondent was found liable by an adjudicator under the Building and Construction Industry Security of Payment Act 2009 (SA) (`the Act') to pay the appellant money owed for work completed. The respondent sought an injunction from the District Court preventing the appellant from obtaining the adjudication certificate. It is alleged the appellant is impecunious and unable to repay the monies if the respondent is successful in its claim for damages. The judge granted an injunction restraining the appellant from obtaining an adjudication certificate under the Act, finding there was a high level of likelihood the appellant was insolvent.

The issues in the appeal are whether the court had the power to grant an injunction, whether the judge, in granting the injunction, circumvented the process prescribed by the Act for parties to obtain outstanding payments and whether the basis for the injunction being granted was reasonable in the appellant's circumstances.

Held: Appeal allowed - the grant of the injunction circumvents the objects of the Act, and further the appellant is not found to have a high risk of insolvency - the injunction is discharged.

Building and Construction Industry Security of Payment Act 2009 (SA); Corporations Act 2001 (Cth), referred to.

Taylor Projects Group Pty Ltd v Brick Department Pty Ltd & Ors [2005] NSWSC 571; Project Blue Sky Inc & Ors v Australian Broadcasting Authority [1998] HCS 28, applied. Asian Pacific Building Corporation Pty Ltd v Aircon Duct Fabrication Pty Ltd & Ors [2010] VSC 340; Over Fifty Mutual Friendly Society Ltd & Anor v Smithies & Ors [2007] NSWSC 291; Grosvenor Constructions (NSW) Pty Ltd (in administration) v Musico & Ors [2004] NSWSC 344; ABC v O'Neil (2006) 227 CLR 57, considered.

ADELAIDE INTERIOR LININGS PTY LTD v ROMALDI

CONSTRUCTIONS PTY LTD

[2013] SASC 110

Miscellaneous Appeal

ANDERSON J.

Introduction

1 This is an appeal from an interlocutory decision of a judge of the District Court. The judge granted an injunction restraining the appellant from obtaining an adjudication certificate under the Building and Construction Industry Security of Payment Act 2009 (SA) (“the Act”).

2 Various matters raised on appeal focus on the issue of whether the judge, in granting the injunction, effectively circumvented the process prescribed by the Act for subcontractors to obtain payment of outstanding amounts.

3 The judge in weighing up the matters relevant to the exercise of his discretion as to whether to grant an injunction, was swayed by what he regarded as evidence showing that there was a high level of likelihood of insolvency of the appellant. The appellant argued that the judge was wrong in his assessment of the evidence on that topic.

The Act

4 The Act was enacted in South Australia to ensure that persons owed monies under construction contracts are entitled to receive and recover progress payments for the carrying out of work and suppling of construction goods and services.

5 The Act grants a statutory entitlement to such a payment regardless of what is contained in the contract regarding progress payments. The Act aims to empower a person to make a claim to recover a progress payment which, if disputed or not responded to, can then be adjudicated so the payment can be enforced. The Act is not intended to limit any other entitlement a claimant may have under a construction contract or any other remedy a claimant may have for recovering such entitlement.

6 Similar legislation for all relevant purposes has been operating in all Australian states for a number of years. These are the Building and Construction Industry Security of Payment Act 1999 (NSW), the Building and Construction Industry (Security of Payment) Act 2009 (ACT), the Construction Contracts (Security of Payments) Act 2004 (NT), the Building and Construction Industry Payments Act 2004 (Qld), the Building and Construction Industry Security of Payment Act 2002 (Vic), the Construction Contracts Act 2004 (WA) and the Building and Construction Industry Security of Payment Act 2009 (Tas). Whilst there are minor differences between each respective Act, the New South Wales and South Australian legislation is for all intents and purposes identical. Thus the case law arising from the New South Wales Act (which has been in place for over ten years) may be applied in these circumstances.

7 The Act establishes a procedure to ensure a person is able to recover a progress payment. Under s 13, a person can make a payment claim against a person that may be liable to make the payment. Under s 14, the person on whom a claim is served may reply to the claim by providing a payment schedule, indicating the amount (if any) of any claim the respondent proposes to make. If a scheduled amount is less than claimed, or a payment schedule is not provided (as under s 15), or the respondent fails to pay the whole or part of the scheduled amount by the due date (under s 16), the claimant can apply for an adjudication decision under s 17. Under s 20 the respondent may lodge a response to the claimant’s adjudication application within a certain time limit. Under s 24, if the respondent fails to pay the whole or part of the adjudicated amount within the time limit set by the adjudicator, the claimant may request an adjudication certificate and serve notice on the respondent of their intention to suspend carrying out further work under the contract. The adjudication certificate may then be filed as a judgment debt in court and is thus enforceable under s 25. If the respondent then commences proceedings to have the judgment set aside, it is not entitled to bring a cross claim against the claimant, to raise a defence in relation to matters arising under the contract or to challenge the adjudicator’s determination.

Background facts

8 The appellant was engaged by the respondent in July 2012 in relation to a construction project at Burc College. The contract involved the supply and installation of internal and external linings. A subcontract agreement was entered into.

9 In September 2012 the appellant rendered to the respondent an invoice for progress payments in the sum of $48,454.97. Under the terms of the subcontract payment of the amount specified in the invoice was required by 22 October 2012.

10 The respondent did not pay the money. Accordingly the appellant on 5 November 2012 served a payment claim on the respondent in respect of that invoice pursuant to s 13 of the Act. The respondent responded on 23 November 2012 by serving a payment schedule on the appellant pursuant to s 14 of the Act.

11 The appellant then made an application for an adjudication on 11 December 2012 pursuant to s 17 of the Act and on 13 February 2013 a determination was issued by the adjudicator pursuant to s 22 of the Act. The adjudication was in favour of the appellant in the sum of $51,219.83 including costs but in addition to interest.

12 Pursuant to the adjudication determination the respondent was required to pay the appellant the adjudicated amount within five business days. If payment did not occur within that time, the appellant was entitled to apply for an adjudication certificate pursuant to s 24 of the Act and then proceed to file that certificate as a judgment debt pursuant to the provisions of s 25 of the Act.

13 It was at that point, before the adjudication certificate was provided, that the respondent sought in the District Court to restrain the appellant by seeking in its application an order pursuant to the Rules of Court, r 248 for preservation of property.

14 The respondent sued in the District Court claiming an amount of $61,840.06 from the appellant, alleging that the appellant abandoned the project site and failed to complete the construction works in keeping with the written subcontract agreement.

15 The respondent elected to prosecute the proceedings in the District Court rather than challenge the adjudication pursuant to s 22(5). It did not seek to argue that the adjudication was void or voidable. It did not seek a judicial review.

16 The respondent produced evidence by way of affidavit in an attempt to show that the appellant was close to insolvency and that there was a serious risk of insolvency on the affidavit evidence. It was for that reason that an order for preservation of property was sought.

The reasons of the judge

17 The judge decided that he had power to grant an injunction in the circumstances outlined above and after weighing up the various discretionary matters granted the injunction. The judge said at [6]:

[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.

18 In this paragraph of the reasons it is argued that the judge has misunderstood the whole basis of the Act and its objects. I will come back to this later in these reasons.

19 The judge summarised the appellant’s submissions before him in paragraph [13] as follows:

[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.

20 The judge said at [25]:

[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 counterclaims 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.

21 His Honour then concluded at [26]-[27]:

[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.

22 His Honour then directed himself as to whether an injunction should be granted. This involved an assessment of the evidence put on by the respondent as to the financial position of the appellant. His Honour summarised the leading cases on the corresponding provisions of the New South Wales Act.

23 Having analysed the cases His Honour concluded at [46]:

[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.

24 His Honour concluded at [49]:

[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.

Grounds of appeal

25 The grounds of appeal are:

1. That the learned Judge erred in granting an injunction, as the plaintiff’s application was for an order for the preservation of property pursuant to Rule 248 and did not seek an injunction (pursuant to Rule 246 of the District Court Rules or at all).

2. That the learned Judge erred in law in determining that there was a cause of action upon which to grant an injunction, in circumstances where the adjudication determination (the subject of the injunction) had not been challenged by the plaintiff (by way of proceedings for judicial review).

3. That the learned Judge erred in determining that the District Court action brought by the plaintiff did or could constitute a cause of action for which an injunction to restrain the issuing of an adjudication certificate or the registration of an adjudication certificate as a judgment debt could be granted.

4. That the learned Judge erred in failing to apply the operative mechanism of the Building and Construction Industry Security of Payment Act 2009 and in construing the commencement of District Court proceedings as a basis for circumventing the enforcement of an adjudication determination.

5. The learned Judge erred in holding that the balance of convenience favoured the plaintiff, as there was no or insufficient evidence for him to find that the defendant’s alleged approaching insolvency was high and that there was a real risk of the defendant’s inability to repay the adjudication sum of an injunction were not granted.

Appellant’s arguments

26 Mr Adams submitted that the basis of the respondent’s application in the District Court was pursuant to 6R248 for an order for preservation of property, and that no remedy in the form of an injunction was pleaded. Mr Adams submitted it followed there was no cause of action in the proceedings that could be the subject of an injunction. He further submitted on this point that the respondent did not challenge the validity of the adjudication determination on the two challenges available, that is, that the decision was void or voidable.

27 Mr Adams further submitted that the injunction could only be granted in the form of a stay following the adjudication certificate being registered as a judgment debt (thus allowing the Court to stay enforcement of the judgment, based on grounds such as insolvency).

28 Mr Adams submitted the judge erred in finding the adjudication was a declaratory judgment rather than executory. He submitted that under s 25 of the Act, the adjudication determination is valid and enforceable, as the adjudication gives rights to the claimant to enforce the debt as a judgment.

29 Mr Adams further submitted that there was no cause of action to support an injunction. Mr Adams submitted the right of the appellant to enforce the adjudication determination as a judgment debt is a statutory entitlement standing independently of the respondent’s right to pursue court proceedings.

30 Mr Adams submitted the proceedings begun by the respondent in the District Court (that of the alleged breach of contract) were a completely separate cause action, and were not a valid cause of action that would enable an injunction in regard to the adjudication certificate to be ordered.

31 Mr Adams noted that if the adjudication had not been halted due to the application for the injunction, and had reached the stage where an adjudication certificate was registered and judgment enforced under s 25(4) of the Act, the party bringing this challenge could not bring a cross-claim, raise a defence on matters arising under the contract or challenge the determination itself. He submitted that the legislation clearly did not contemplate an action such as this to abort the progress of the claimant in obtaining the adjudication certificate.

32 In regard to the operation of the Act, Mr Adams submitted in his fourth ground of appeal that the injunction had the effect of negating the purpose and intent of the legislation. Mr Adams emphasised the purpose of the Act as ensuring cash flow for subcontractors is recognised as being of paramount importance, recognising the principal “pay now and argue later”. Mr Adams further submitted the legislation cannot be circumvented by the courts unless a debt has become enforceable, and the court finds the debt void or voidable, which has not occurred in this case.

33 Finally Mr Adams submitted that while the judge erred in deciding the Court had the power to grant an injunction in the circumstances, in any event the reasons for the injunction itself were not valid. Mr Adams submitted that when considering the question of solvency, the judge placed the burden on the appellant to establish it was solvent. He submitted that the burden should be placed on the party seeking to avoid payment on the basis of alleged impecuniosities to prove the insolvency, as per Over Fifty Mutual Friendly Society Ltd & Anor v Smithies & Ors [2001] NSWSC 291. Mr Adams submitted that the respondent did not provide sufficient information regarding insolvency so as to satisfy the test in Grosvenor Constructions (NSW) Pty Ltd (in administration) v Musico & Ors [2004] NSWSC 344 that insolvency was one of “more than a real risk”, and further the appellant had provided evidence in reply to the respondent’s claims they were insolvent demonstrating its solvency.

Respondent’s arguments

34 In response to the appellant’s argument, Ms Clark for the respondent submitted in her written outline of argument that while an injunction was not specifically referred to, the appellant was on notice it was being sought. The test for the grant of an injunction was mentioned in the respondent’s outline of argument filed in the District Court. The respondent further submitted it was sought in oral submissions at the hearing, and acknowledged by the appellant in its written outline filed in the District Court by the heading “Interlocutory Injunction”.

35 In relation to the appellant’s submission, that there was no challenge to the adjudication itself and thus no cause of action to found the injunction given, Ms Clark submitted the respondent did not concede the adjudication was correct. Rather, she submitted it was factually wrong because the adjudicator was in error as to how much work the appellant had in fact completed on site, and also because they did not take into account the rectification costs incurred allegedly as a result of the appellant’s error, as the respondent had not yet invoiced for those costs. Ms Clark submitted the District Court action is challenging the adjudication determination. In regard to the appellant’s argument that there is a distinction between a challenge to the District Court action and the judicial review proceedings, she submitted this distinction is not relevant to the power to grant an interlocutory injunction as long as the test in ABC v O’Neill (2006) 227 CLR 57 is satisfied. That is, that there is a sufficient likelihood of success of the applicant to relief at trial.

36 Ms Clark submitted that the cause of action in contract enables relief to be given in the form of an interlocutory injunction, and that denying such relief would be unjust by treating matters under the Act as different from all other types of matters dealt with by the court.

37 In regard to the fourth ground of appeal, namely, that the effect of the injunction would negate the purpose and intention of the Act, Ms Clark submitted that while timely cash flow is a goal of the legislation, it is not to be achieved at all costs. She submitted that the legislation allows for an opportunity for the parties to have their dispute determined by a Court, but this opportunity would be lost in the respondent’s circumstances due to the appellant’s alleged imminent insolvency.

38 Ms Clark submitted adjudications under the Act are interim determinations, and enforcing the adjudication would render it final. She submitted the case before the court involves exceptional circumstances due to the demonstrated risk of the appellants insolvency which allowed the Court’s interference the matter. She noted a Court will act with caution when depriving a party of a statutory right; however it still has the power to do so if needed. This includes the power to intervene in the process created by the Act, and these circumstances warrant the use of such power.

39 Finally, Ms Clark submitted that there was ample evidence before the District Court as to the high risk of insolvency of the appellant. She submitted there were a number of submissions the appellant could have made about its financial position to demonstrate it is not close to insolvency, and she submits in any event the balancing exercise carried out by the District Court was approached correctly. She submitted this discretionary decision should not be interfered with by appeal.

Consideration

40 In my view the arguments by the appellant can be confined to two main points, even though the appellant argues other matters. Because this is an appeal from an interlocutory decision of a judge in the District Court I intend to deal in some detail with the main points because I have formed the view that they dispose of the appeal in favour of the appellant in any event.

41 The first main point is simply that the judge has circumvented the operation of the Act by his order granting an injunction. The objects of the Act make it clear that the legislation was intended to create a regime for the payments of amounts owing to subcontractors.

42 The Act sets out very precise steps as to the pathway by which an adjudication certificate can be obtained. In this matter the appellant’s attempts in following the natural progress contemplated by the Act have been thwarted by the order made by the judge. At the point when the appellant was about to register the adjudication certificate, thus making it a judgment debt, the respondent chose to issue proceedings in the District Court.

43 I have set out earlier the judge’s reasons at [6] of his judgment. His Honour refers to an appeal both in the first and second sentence. If His Honour is regarding the process set out under the Act as an appeal then in my view that is an error. Under s 22(5) there is provision for either the adjudicator himself or either of the parties to correct the determination in the event that there is a clerical mistake, error from an accidental slip or omission, a material miscalculation of figures or a defect of form.

44 Outside of those matters there is no mechanism providing an appeal. The judge may be referring to an application for judicial review. Many of the cases he cites relate to judicial reviews. However, the respondent in this matter has elected not to proceed by way of judicial review but instead has instituted proceedings seeking an order for preservation of property and an injunction to prevent the issue of an adjudication certificate. The respondent, having elected not to challenge the validity of the adjudication, cannot be permitted to circumvent the objects of the Act by taking its own action to prevent the adjudication certificate from being issued.

45 It appears that the judge’s reasoning is that the respondent, in instituting the action in the District Court, is being efficient in bringing all issues between the parties before the court.

46 The Act has clearly stated objectives as to its intended operation. The duty of a court is to give the words of a statutory provision the meaning that the legislation is taken to have intended as per Project Blue Sky Inc & Ors v Australian Broadcasting Authority (1998) 194 CLR 355 at [78]. Counsel for the respondent acknowledged before the judge that the only basis for the application for an injunction was because of the perceived insolvency of the appellant. His Honour deals with this in his reasons at [12]:

[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.

47 It was on the basis of this argument, namely, that the “pay now, argue later” concept would become illusory if the appellant became insolvent, that His Honour proceeded to grant the injunction.

48 In my view the judge has misdirected himself in relation to the procedure under the Act. The Act is designed to prevent the party which owes the money from delaying payment. The object of the Act in s 3(2) makes it clear that the Act is “granting a statutory entitlement to such a payment regardless of whether the relevant construction contract makes provision for progress payments”. The Act is not concerned with legal defences and makes that clear in s 25(4).

49 As I have said, the only basis under the Act for any challenge to the adjudication is by virtue of s 22(5). This procedure was not availed of by the respondent. The respondent did not seek to argue that the adjudication was either void or voidable. It did not seek a judicial review.

50 In my view the judge, by allowing the respondent the luxury of delaying payment by instituting an action in court under the guise of bringing all matters between the parties into a dispute in court, has permitted the respondent to circumvent the Act.

51 The respondent made a pre-emptive strike before the appellant obtained its adjudication certificate. Had it not proceeded in that way the appellant would have proceeded to enter the amount owing as a judgment debt which is the natural conclusion contemplated in the Act where an adjudication is conducted.

52 The Act in s 25(4) specifically prevents a respondent from taking proceedings to set a judgment aside. The respondent has attempted to prevent the appellant from enforcing the judgment debt in the natural progression which the Act allows for.

Insolvency or not

53 His Honour was motivated to indulge the respondent’s application for an injunction because of his assessment of the appellant’s insolvency. He then proceeded to analyse a series of cases in New South Wales dealing with the power of a court to grant a stay according to the requirements of justice.

54 Those cases make it clear that in the balancing act involved, where a payment made to a subcontractor may become irrecoverable because of a later insolvency, there has to be a “high level of likelihood of insolvency” as per Einstein J in Taylor Projects Group Pty Ltd v Brick Department Pty Ltd & Ors [2005] NSWSC 571 at [59].

55 Applying the test of Einstein J it is my view that the evidence in this case does not go far enough to satisfy that test. I have read the affidavits exchanged between the parties as to the financial position of the appellant. The respondent makes certain allegations in its affidavit, many of them based on hearsay information. That is not to say that hearsay information cannot be used in such an application but its weight becomes relevant. Against the clear statements made by Mr Struck the sole director of the respondent in his affidavit, it is my view that the information does not approach a high level of likelihood of insolvency using that as the test.

56 The evidence relating to the alleged insolvency comes from Mr Romaldi, the chief executive officer of the respondent, and from a solicitor representing the respondent.

57 First, the chief executive officer deposes in his affidavit of 20 February 2013 that he has performed an ASIC search which shows a paid-up capital for the appellant company of $10 and that it has no assets by way of real property within South Australia. Second, he refers to a financial risk report from Dunn & Bradstreet which shows the appellant company as a “severe” credit risk and that it has recommended that business should be conducted with the appellant on a cash-ondelivery basis. Finally he deposes to the fact that requests have been made for the appellant to prove by some documentation that they were not insolvent. In my view none of this comes close to satisfying the test of a high level of likelihood of insolvency.

58 Ms Visintin deposes in her affidavit of 21 February 2013 that there is a judgment debt in the Elizabeth Magistrates Court whereby the appellant owes the sum of $2,479 to another company. That amount apparently remained unpaid at the date of the affidavit.

59 Next she deposes to a conversation with the credit department of Boral Industries where she was advised that Boral had taken steps to recover amounts from the appellant. She also deposes to the fact that the appellant’s credit account with Boral has been suspended.

60 She next deposes to contact she made with the credit department of another company ABX Industries to the effect that that company will now only deal with the appellant on a cash-only basis.

61 Finally she deposes to conversations with the general manager of One Stop Building Hardware to the effect that no credit has been offered by that company to the appellant, that they have recently been involved in court proceedings with the appellant and that they will not conduct business with the appellant again.

62 Again in my view none of this information of itself comes sufficiently close to pass the test previously set out.

63 In addition, Mr Struck responds to these matters in his affidavit of 1 March 2013. He firstly denies the allegation that his company is trading insolvent. He deposes to the fact that the appellant has not had any statutory demands served upon it and is not subject to any winding up proceedings under the Corporations Act 2001 (Cth).

64 He further deposes to the fact that the appellant has no intention of appointing an external administrator and has every intention of continuing to trade. He says he does not understand the basis of the Dunn & Bradstreet report, and without more, I agree that it is hard to draw any conclusions from it. Mr Struck deposes to the fact that since Boral refused to supply, other suppliers have continued to provide credit terms to the appellant. As he points out in relation to the allegation regarding ABX, there is no suggestion that the appellant is a debtor but simply that it has always traded on a cash business with ABX and had never sought credit terms.

65 In relation to One Stop Building Hardware Mr Struck deposes to the fact that the dispute relates to an allegation of breach of contract in which the appellant has claimed the One Stop company had breached its contract. The proceedings were resolved at a conciliation conference.

66 Mr Struck deposes to the fact that the appellant has steadily built up its business reaching a turnover of approximately $300,000 in the last calendar year. He deposes to the fact that the appellant continues to trade solvently.

67 The affidavit from Mr Struck is unchallenged by any answering affidavit and in my view the judge was wrong in concluding that there was a sufficiently high likelihood of insolvency so that he should grant the injunction. In my view the facts deposed to do not support this. Moreover, no fresh facts are alleged since late February or early March 2013 and the appellant continues to trade.

Conclusion

68 The appellant succeeds both on its arguments as to the circumvention of the policy of the legislation and also as to the conclusion of the judge that it was approaching insolvency.

69 In relation to the other grounds it is my view that although the application was made under the rule relating to preservation of property and no remedy regarding an injunction was pleaded, the parties knew in the argument before the judge that an injunction was sought, and moreover the court possesses an inherent power to grant an injunction in any event. In my view nothing turns on this.

70 Although the decision by the adjudicator appears to be declaratory because it, of itself, is not enforceable in the court, the process prescribed by the Act envisages that there will be an adjudication certificate. This makes the adjudication executory in the sense that it later becomes enforceable.

71 In relation to the propriety of a stay of proceedings, in a matter under this Act, it is my view that in an appropriate case when a stay is sought where there are proceedings on foot for a judicial review, a stay may be the appropriate way in which to achieve justice between the parties. This is not such a case for the reasons I have stated.

72 I would therefore allow the appeal and discharge the injunction. I will hear the parties as to any other orders sought.