IN THE HIGH COURT OF NEW ZEALAND

HAMILTON REGISTRY

CIV-2010-419-909

BETWEEN CONCRETE STRUCTURES (NZ) LIMITED

Plaintiff

AND INFRAMAX CONSTRUCTION LIMITED

Defendant

Hearing: 5 November 2010

Appearances: Mr K A Badcock for plaintiff

Ms L Farquhar for defendant

Judgment: 9 November 2010 at 4.30 pm

JUDGMENT OF LANG J

[on application for summary judgment]

This judgment was delivered by me on 9 November 2010 at 4.30 pm, pursuant to Rule

11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:

Lance Lawson, Rotorua

McCaw Lewis Chapman, Hamilton

[1] Concrete Structures (NZ) Limited (“Concrete Structures”) and Inframax Construction Limited (“Inframax”) are parties to a sub-contract under which Concrete Structures agreed to carry out work relating to the construction of bridges on a roading project for Transit New Zealand. It is common ground that the subcontract amounted to a construction contract for the purposes of the Construction Contracts Act 2002 (“the Act”).

[2] During the course of the sub-contract, Concrete Structures rendered payment claims on a progressive basis. This proceeding arises out of events that occurred after Concrete Structures rendered its payment claim No 17 (“PC 17”) on or about 2 June 2010. PC 17 sought payment of the sum of $369,489.91 plus GST for work carried out up to 31 May 2010.

[3] The sub-contract required Inframax to serve a payment schedule on Concrete Structures responding to PC 17 within 12 working days if it wished to challenge any of the items or amounts claimed in PC 17. The Act prescribes the information that a payment schedule must contain.

[4] Inframax purported to provide a payment schedule in respect of PC 17 by way of a letter to Concrete Structures dated 17 June 2010. Concrete Structures believed that the letter did not contain sufficient information to amount to a valid payment schedule in terms of the Act. It maintained that Inframax was not entitled to withhold payment of the amount claimed in PC 17.

[5] Concrete Structures has now applied for summary judgment against Inframax. It says that the defective nature of the payment schedule means that Inframax has no defence to its claim. Inframax disagrees. It contends that its payment schedule contained the information required by the Act. On that basis, it says it has a defence to Concrete Structures’ claim.

Relevant principles

[6] There is no dispute regarding the principles that apply when a plaintiff applies for summary judgment against a defendant. These have been well established through cases such as Pemberton v Chappell [1987] 1 NZLR 1 (CA), Westpac Banking Corporation v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) and, more recently, Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307.

[7] In considering an application for summary judgment, the Court is required to apply the following general principles:

a) The plaintiff must establish that the defendant has no defence to the plaintiff’s claim.

b) It is generally not possible to determine disputed issues of fact based on affidavit evidence alone, particularly when issues of credibility arise. Issues of law, even though they may be complex, can, however, be determined in an application for summary judgment.

c) Although the Court should adopt a robust approach, summary judgment may nevertheless be inappropriate where the ultimate determination turns on a judgment that can only properly be reached after a full hearing of all the evidence.

Factual background

[8] PC 17 was preceded (not surprisingly) by payment claim No 16 (“PC 16”). Concrete Structures issued PC 16 on or about 31 December 2009. PC 16 sought payment of the sum of $250,428.53. When GST was added to that sum, the total amount claimed was $281,732.10. PC 17 included the amount claimed under PC 16, because by the time PC 17 was issued Concrete Structures had not been paid the amount that it had claimed in PC 16.

[9] Inframax purported to issue a payment schedule challenging aspects of the sum claimed in PC 16, but Concrete Structures alleged that the payment schedule was issued outside the 12 working day period permitted by the sub-contract. The parties submitted that issue to an adjudicator under Part 3 of the Act. In a determination delivered after Concrete Structures had issued PC 17, the adjudicator upheld Concrete Structures’ argument. As a result, Inframax paid Concrete Structures the full amount claimed in PC 16.

[10] The letter that Inframax sent to Concrete Structures on 17 June 2010 in response to PC 17 was worded as follows:

Rugby Road Payment Schedule

This is a payment schedule in terms of s21 of the Construction Contracts Act 2002. This payment schedule is in respect of your payment claim dated 02 June 2010 for work carried out as a subcontractor on the project known as TRT-1214 Rugby Road.

Your claim was stated to be for work carried out to 31 May 2010. You have already submitted a payment claim no 16 transmitted 18 December 2009 and purporting to cover all work carried out to 31 December 20109 (sic). That claim is the subject of an adjudication that is currently on foot.

Claim 16 shows a gross total to date of $3,818,220.84 . The current claim to 31 May 2010 shows a gross total to date of $3,785,583.32 . No work has been done since December 2009, there are no new items and there is nothing new in the current claim. In fact, the current claim shows a lesser amount than previously claimed.

All of your “issues” will be dealt with in the adjudication over payment claim 16 so that the 31 May 2010 payment claim is an irrelevancy.

For all of the above reasons, the scheduled amount related to the 31 May 2010 payment claim is zero.

[11] At the time that Inframax sent this letter to Concrete Structures, the parties were about to be involved in another adjudication. This related to an assertion by Inframax that Concrete Structures had claimed too much in relation to certain items contained in earlier payment claims. Once the dispute arose about the validity of Inframax’s letter, Inframax agreed to a suggestion by Concrete Structures that that issue could also be determined in the same adjudication. The parties then filed submissions with the adjudicator in relation to both issues.

[12] In a determination issued on 15 October 2010, the adjudicator upheld Inframax’s claim that it had overpaid Concrete Structures the sum of $108,957.07. he adjudicator determined that Inframax was entitled to be reimbursed that sum, and Concrete Structures has now paid it. The adjudicator also upheld Inframax’s argument that the letter dated 17 June 2010 constituted a valid payment schedule. As a result, Inframax is not presently required to pay the amount claimed in PC 17.

The relationship between the adjudication process and civil proceedings arising out of a construction contract

[13] Rather than proceed to another adjudication dealing with the substance of PC 17, Concrete Structures asks the Court to determine its claim that the letter dated 17 June 2010 did not constitute a valid payment schedule in terms of the Act. Inframax contends that this is an abuse of process, because the parties have already sought and obtained an adjudicator’s determination in relation to this very issue.

[14] The relationship between the adjudication process and other dispute resolution procedures, including court proceedings, is dealt with in ss 26 and 27 of the Act. Both sections are located in Part 3 of the Act, which deals with the determination of disputes using the adjudication process. Sections 26 and 27 provide:

26 Relationship between Part and other dispute resolution procedures

(1) To avoid doubt, nothing in this Part prevents the parties to a construction contract from submitting a dispute to another dispute resolution procedure (for example, to a court or tribunal, or to mediation), whether or not the proceedings for the other dispute resolution procedure take place concurrently with an adjudication.

(2) If a party to a construction contract submits a dispute to another dispute resolution procedure while the dispute is the subject of an adjudication, the submission to that other dispute resolution procedure does not—

(a) bring to an end the adjudication proceedings; or

(b) otherwise affect the adjudication.

(3) However, an adjudicator must terminate the adjudication proceedings on a dispute if, before the adjudicator determines the dispute, that dispute is determined under another dispute resolution procedure.

...

27 Effect of Part on civil proceedings

(1) Except as provided in this section and section 61(2), nothing done under, or for the purposes of, this Part affects any civil proceedings arising under a construction contract.

(2) In any proceedings before a court or tribunal, or before [ a member ] under the Weathertight Homes Resolution Services Act [2006], in relation to any matter arising under a construction contract, the court or tribunal [ or member ] —

(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 the court, tribunal, [ or member ] makes in those proceedings; and

(b) may make any orders that the court, tribunal, [ or member ] considers appropriate, having regard to any steps taken by a party to the contract in good faith and in reliance on an adjudicator’s determination under this Part (including an order requiring a party to the contract to pay for goods and services supplied by another party to that contract in good faith and in reliance on an adjudicator's determination).

[15] The combined effect of ss 26 and s 27(1) is that an adjudication may proceed in tandem with court proceedings, whether or not the adjudication process commences before the court proceedings are issued. The adjudication process will only terminate if the court proceeding (or some other form of dispute resolution procedure) determines or resolves the disputed issue before the adjudicator has determined it. If the adjudicator issues a determination before the court has determined the issue, the determination will be binding on the parties and continue to have full effect even where one party has issued judicial review or other court proceedings in relation to the dispute: s 60.

[16] The legislation does not, however, provide for a court proceeding to terminate once an adjudicator has issued a determination. Court proceedings remain unaffected by the outcome of an adjudication, subject only to the requirement under s 27(2)(a) that the Court must allow for any payments made as a result of an adjudicator’s determination.

[17] It is now well established that a determination by an adjudicator does not create an issue estoppel or bring into play the doctrine of res judicata: Marsden Villas Ltd v Wooding Construction Ltd [2007] 1 NZLR 807 (HC) at [67]; Donovan Drainage and Earthmoving Ltd v Halls Earthworks Ltd [2008] NZCA 135 at [4]. The unsuccessful party in an adjudication determined under the Act is quite entitled to ask the Court to consider its argument afresh in the context of civil proceedings addressing the same issue that the adjudication has already determined. It follows that I do not accept Inframax’s argument based on abuse of process.

[18] I also reject the argument for Inframax that the summary judgment procedure is inappropriate in the present context, and that it should only be used to enforce the payment of undisputed debts. The fact that a dispute exists does not render the summary judgment procedure inappropriate. Every defended application for summary judgment involves the determination of a dispute of one sort or another. The important feature about an application for summary judgment is that the plaintiff must demonstrate that the defendant has no arguable defence to the plaintiff’s claim. That can involve determination of disputed issues of both fact and law, although the former may be difficult to resolve where questions of credibility arise.

[19] This discussion leads to another issue that arose as a preliminary question in this case. It relates to whether or not an adjudicator’s determination may be adduced in evidence in court proceedings dealing with the same issue as the adjudicator’s determination.

Can an adjudicator’s determination be adduced in evidence in a court proceeding dealing with the same issue as the adjudicator’s determination?

[20] Inframax sought to place before the Court a copy of the adjudicator’s determination relating to the validity of the letter dated 17 June 2010 as a payment schedule in terms of the Act. Concrete Structures argued that the determination was inadmissible in this proceeding because of the confidentiality provisions contained in s 68 of the Act. Ultimately I was not required to rule on the issue, because I elected to determine the application for summary judgment afresh and without reference to the adjudicator’s determination. For that reason the comments that I make in relation to this issue are obviously obiter.

[21] Section 68 provides:

68 Confidentiality of adjudication proceedings

(1) This section applies to the following information:

(a) any statement, admission, or document created or made for the purposes of an adjudication; and

(b) any information (whether written or oral) that, for the purposes of the adjudication, is disclosed in the course of the adjudication.

(2) The adjudicator and any party to a dispute must not disclose to another person any of the information to which this section applies except –

(a) with the consent of the relevant party; or

(b) to the extent that the information is already in the public domain; or

(c) to the extent that disclosure is necessary for the purposes of, or in connection with, the adjudication or the enforcement of the adjudicator’s determination; or

(d) in statistical or summary form arranged in a manner that prevents any information disclosed from being identified by any person as relating to any particular person; or

(e) if the information is to be used for statistical or research purposes and will not be published in a form that could reasonably be expected to identify any particular person.

[22] The wording used in s 68 suggests that it is designed to apply primarily to the material that the parties place before an adjudicator and not to the adjudicator’s determination. The words “any document created or made for the purposes of an adjudication” are, however, sufficiently wide to capture within their scope the determination itself. For that reason I accept that an issue may arise as to whether a determination is caught by the section.

[23] The Act contains several provisions, however, that clearly require the courts to have access to the adjudicator’s determination. The most obvious of these is s 52, which permits the District Court to review an adjudicator’s decision in certain circumstances. It is also now accepted that an adjudicator’s decision is amenable to judicial review by this Court, although the permissible ambit of such proceedings may still be a matter of debate: see Willis Trust Company Ltd v Green HC Auckland CIV-2006-404-809, 25 May 2006 at [20]-[23] and Spark it Up Ltd v Dimac Contractors Ltd (2009) 19 PRNZ 631 (HC) at [19]-[29]. Under s 73 a party may also apply to the District Court to enforce an adjudicator’s determination by entry as a judgment of that court. The courts could not properly exercise any of these functions without access to the adjudicator’s determination.

[24] The Act also contains at least one specific provision requiring the courts to have regard to an adjudicator’s determination. Section 61 permits a party to bring proceedings in the District Court to enforce its rights under the contract where the other party fails to comply with the adjudicator’s determination under s 48(1)(b) or (2) as to the rights and obligations of the parties to the contract. Section 61(2) provides that, in any such case, the court must have regard to, but is not bound by, the adjudicator’s determination.

[25] All of these factors confirm that the confidentiality provisions in s 68 cannot be viewed as absolutely prohibiting any party from placing an adjudicator’s determination before the court.

[26] It needs to be remembered, however, that in most cases the courts will not be reviewing the manner in which an adjudicator has determined a particular issue. Rather, they will be considering the same issue afresh. For that reason many Judges may prefer to approach their task uninfluenced by the reasoning process that the adjudicator adopted. That is particularly likely to occur where, as in the present case, the matter for determination is predominantly a legal issue. In other cases, however, the Judge might consider that he or she would be assisted by understanding the manner in which an adjudicator has previously decided a particular issue. For that reason, in cases where the court does not require access to the determination in order to carry out its function, it will be a matter for the presiding Judge to determine whether he or she wishes to have access to the adjudicator’s determination.

[27] In cases where the Court cannot properly carry out its function without access to the adjudicator’s determination, the determination should obviously be included within the evidence adduced as part of the case for the plaintiff or applicant. In other cases, however, the best practice may be to initially exclude any previous determination from the evidence. The presiding Judge can then determine whether he or she would be assisted by having access to that document.

The purpose of the Act

[28] In virtually every case concerning the manner in which the Act is to be applied, it is necessary to bear in mind the purpose of the Act. The present case is no exception.

[29] The purpose of the Act is succinctly described in s 3, which provides:

3 Purpose

The purpose of this Act is to reform the law relating to construction contracts and, in particular,—

(a) to facilitate regular and timely payments between the parties to a construction contract; and

(b) to provide for the speedy resolution of disputes arising under a construction contract; and

[30] In Marsden Villas (see above) Asher J explained that the payments regime promulgated by ss 22 and 23 is designed to ensure that cash flow is maintained for those involved in the construction industry. He said:

[10] The 1999 Law Commission Paper SP3, “Protecting Construction Contractors”, which led to the legislation, stated at para [32] that the Act was to “have as its purpose the ensuring of prompt cash flow to contractors …”

[11] A little earlier in the report at para [31] it was put more graphically:

“The basic intention is that instead of the cash flow being held up for weeks, months and years, pending a final solution, a decision, described as being ‘quick and dirty’ will be given to resolve the cash flow situation, leaving a final determination of financial rights and obligations to be arrived at later.”

[12] In Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) Ltd [1974] AC 689 at p 716 the House of Lords quoted Lord Denning in the Court below:

“There must be a ‘cash flow’ in the building trade. It is the very lifeblood of the enterprise.”

This was quoted with approval by the New Zealand Court of Appeal in George Developments Ltd v Canam Construction Ltd [2006] 1 NZLR 177 at para [41].

[13] In Gilbert-Ash , the House of Lords allowed the appeal against Lord Denning’s decision. Lord Reid commented at p 699 that, in a range of judgments, the English Court of Appeal had come near to laying down a general rule that, not only in cases between an employer and contractor, but also in cases between contractor and sub-contractor, sums due under an architect’s certificate must be paid at once without waiting for determination of claims for set-off. This line of authority was disapproved by the House of Lords, at least as it related to contractor and subcontractor.

[14] The effect of the Act was to strongly confirm that such a regime, which protected and encouraged cash flows, was right for cases between the principal and contractor. The intention was to improve the head contractor’s ability to obtain payment, by setting up a quick and mandatory payment process. In enacting such legislation, the legislature set aside the longestablished conservative contractual approach to construction contracts which emphasised freedom of contract. The history of these cases is described in Hon R Smellie CNZM QC, Progress Payments and Adjudication (2003), paras 1 – 15. The Act has “emphatically vindicat[ed] Lord Denning’s approach” (Smellie, para 31).

[31] The courts have consistently strived to ensure that they interpret the Act in a manner that promotes this concept. In George Developments the Court of Appeal said at [41]:

We are satisfied that the necessary analysis must be undertaken with the purpose of the Act in mind. The purpose provision of the Act includes the fact that the Act was “to facilitate regular and timely payments between the parties to a construction contract”.

[32] I propose to bear these comments in mind when considering the manner in which the Act is to be interpreted in relation to the issues that arise in the present case.

Does the letter dated 17 June 2010 amount to a valid payment schedule in terms of the Act?

[33] The requirements that the Act imposes in relation to payment schedules, and the consequences of failing to meet those requirements, are found in ss 21, 22 and 23 of the Act. They provide:

21 Payment schedules

(1) A payer may respond to a payment claim by providing a payment schedule to the payee.

(2) A payment schedule must—

(a) be in writing; and

(b) identify the payment claim to which it relates; and

(3) If the scheduled amount is less than the claimed amount, the payment schedule must indicate—

(a) the manner in which the payer calculated the scheduled amount;

and

(b) the payer's reason or reasons for the difference between the scheduled amount and the claimed amount; and

(c) in a case where the difference is because the payer is withholding payment on any basis, the payers’ reason or reasons for withholding payment.

22 Liability for paying claimed amount

A payer becomes liable to pay the claimed amount on the due date for the progress payment to which the payment claim relates if—

(a) a payee serves a payment claim on a payer; and

(b) the payer does not provide a payment schedule to the payee within—

(i) the time required by the relevant construction contract; or

(ii) if the contract does not provide for the matter, 20 working days after the payment claim is served.

23 Consequences of not paying claimed amount where no payment schedule provided

(1) The consequences specified in subsection (2) apply if the payer—

(a) becomes liable to pay the claimed amount to the payee under section 22 as a consequence of failing to provide a payment schedule to the payee within the time allowed by section 22(b);

and

(b) fails to pay the whole, or any part, of the claimed amount on or before the due date for the progress payment to which the payment claim relates.

(2) The consequences are that the payee—

(a) may recover from the payer, as a debt due to the payee, in any court,—

(i) the unpaid portion of the claimed amount; and

(ii) the actual and reasonable costs of recovery awarded against the payer by that court; and

(b) may serve notice on the payer of the payees’ intention to suspend the carrying out of construction work under the construction contract.

...

[34] In Marsden Villas, Asher J summarised the statutory scheme in the following terms at [16]:

The Act sets up a procedure whereby requests for payment are to be provided by contractors in a certain form. They must be responded to by the principal within a certain timeframe and in a certain form, failing which the amount claimed by the contractor will become due for payment and can be enforced in the Courts as a debt. At that point, if the principal has failed to provide the response within the necessary time frame, the payment claimed must be made. The substantive issues relating to the payment can still be argued at a later point and adjustments made later if it is shown that there was a set-off or other basis for reducing the contractor’s claim…

[35] As I have already indicated, the purposes of the Act need to be kept firmly in mind. In particular, it needs to be remembered that the Act is designed to provide for the speedy resolution of disputes that arise under construction contracts. The purpose of a payment schedule is to advise the payee (in this case Concrete Structures) promptly of the extent to which the payer (in this case Inframax) disputes the amount sought by the payee in a payment claim. It also serves to advise the payee of the reasons for that difference.

[36] Once the payee receives a valid payment schedule, it can make its own assessment as to the merits of the position that the payer has adopted. It then has three choices. First, it can accept the reasons that the payer has given for disputing the payment claim. In that event it will receive the scheduled amount specified in the payment schedule. Secondly, the payee can elect to invoke the adjudication process under Part 3 of the Act. Thirdly, the payee can elect to pursue its claim for payment in another forum. It cannot properly assess any of these options, however, unless it has a basic understanding of the extent to which the payer does not accept its claim, and the essential reasons why that is the case.

[37] The payment schedule does not need to be in any particular form, and does not need to be framed with the precision that would be required in a court pleading. As in the case of a payment claim, technical quibbles will not be sufficient to affect the validity of a payment schedule. A payment schedule must, however, provide the payee with sufficient information to enable it to make an informed decision as to how it should respond: West City Construction Ltd v Edney (2005) 17 PRNZ 947 (HC) at [44].

[38] There is no dispute in the present case that the letter was delivered within the required 12 working-day period, that it was in writing and that it identified the payment claim to which it related. Counsel for Concrete Structures also accepted that the letter indicated a scheduled amount of zero. He contended, however, that the letter fell short of the requirements of s 21 because it failed to indicate the manner in which Inframax calculated the scheduled amount, and the reasons for the difference between the scheduled amount of zero and the amount that Concrete Structures had claimed in PC 17.

[39] Counsel for Inframax submitted that the letter was perfectly adequate to enable Concrete Structures to understand why Inframax was challenging PC 17. The letter pointed out that PC 16 had covered work that had been carried out prior to 31 December 2009, and that no work had been carried out on site since that time. It also told Concrete Structures that PC 16 was subject an adjudication process that was “on foot”, and that all of the “issues” raised in PC 17 would be dealt with in that adjudication. Finally, it stated that PC 17 did not contain any new items and that there was “nothing new in the current claim”.

[40] Reading the letter as a whole, it is reasonably clear that Inframax may not have appreciated that PC 17 went beyond what Concrete Structures had claimed in PC 16. That is the only realistic explanation for the statement in the letter that PC 17 contained “nothing new”. That statement is not, however, correct. That can easily be demonstrated by even a cursory comparison between PC 16 and PC 17. Copies of both are annexed as Appendices 1 and 2 respectively for ease of reference.

[41] By way of example, item 5.1.1 (Waitepuke Stream Bridge) contained new claims totalling $8,349.81. Similarly, item 5.1.3 (Waipuku-iti Stream Bridge) contained new claims totalling $59,940. PC 17 also contained three significant concessions by Concrete Structures in relation to item 6.0 (Variations). It accepted that Inframax should be given credits totalling $100,947 in relation to this item.

[42] I accept that the letter would have provided an adequate response if PC 17 had been in exactly the same terms as PC 16. That was not, however, the case, because PC 17 contains new claims and credits that did not form part of PC 16. In order to properly respond to these, it was necessary for Inframax to advise Concrete Structures of the extent to which it accepted and rejected the sums that formed the basis of these new items. It was not, in my view, sufficient for Inframax to respond by saying that there was nothing new in PC 17, or by saying that the extant adjudication process would resolve all outstanding issues.

[43] I do not consider, either, that it was sufficient for Inframax to rely upon the fact that Concrete Structures had not carried out further work on site since it had issued PC 16. Contracts of this type give rise to an ongoing process in which both parties regularly re-assess their respective positions in light of information that comes to light as matters progress. That process no doubt resulted in Inframax lodging its claim based on the overpayments that it had made to Concrete Structure. The fact that Concrete Structures was prepared to reduce its claim for variations by more than $100,000 should also have alerted Inframax to the fact that the new claims and credits were a result of Concrete Structures re-assessing its position and not from any new work that it had carried out since the date of its previous payment claim.

[44] I have therefore concluded that the payment schedule was not sufficient to comply with the requirements of the Act. As a result, Inframax is liable under s 22 of the Act to pay the amount claimed in PC 17.

[45] The only way in which Inframax can escape liability is by establishing that it has taken steps in good faith and in reliance on the adjudicator’s determination. Had it been able to do that, the Court would have the power under s 27(2)(b) to make such orders as it thought appropriate. The adjudicator’s determination regarding the validity of the payment schedule did not, however, result in Inframax taking any steps at all. It was not required to make any payment based on PC 17 because the payment schedule was determined to be valid. That being the case, Inframax cannot rely upon s 27(2)(b), and judgment as to liability must be entered against it.

Quantum

[46] In any order or award that the court makes in civil proceedings arising out of a construction contract, it is required by s 27(2)(a) to allow for any payments that a party has made as a result of an adjudication under Part 3 of the Act. As a result, counsel agreed that any judgment in favour of Concrete Structures in this proceeding would need to allow for the payment that Inframax was required to make when the adjudicator determined that it had issued its payment schedule in respect of PC 16 outside the 12 working-day period allowed by the sub-contract.

[47] Concrete Structures was similarly required to make a payment to Inframax when the adjudicator found that Inframax had overpaid Concrete Structures in relation to some earlier items. It therefore argues that the Court is also required to take that payment into account when fixing the amount payable to Concrete Structures in this proceeding.

[48] I have some difficulty following this argument. The payment that Inframax made in relation to PC 16 should logically be taken into account when fixing the amount payable under PC 17, because PC 17 included within its ambit the unpaid amounts that Concrete Structures had claimed in PC 16. If allowance was not made for that payment, Concrete Structures would receive a windfall because it would be paid twice in respect of the same payment claim.

[49] That argument does not hold true in relation to the claim for the overpayment by Inframax. That claim formed no part of either PC 16 or PC 17. As I understand the situation, the claim for the overpayment related to earlier payment claims that were entirely unrelated to PC 16 and PC 17. For that reason the adjudicator’s decision merely restored the parties to the position that they ought to have been in prior to the point at which Concrete Structures issued PC 16 and PC 17. I therefore fail to see how it can properly be taken into account in fixing the amount to be paid in the present proceeding.

[50] This is an issue that arose late in the hearing before me, and I am not sure that counsel for Inframax had turned his mind to it before the hearing. It was not referred to in the written submissions of either counsel.

[51] I therefore propose to refrain from finally determining quantum at this stage. Counsel are to endeavour to reach agreement regarding that issue over the next seven days. If they cannot do so, counsel for Concrete Structures is to file and serve concise submissions (that is, no more than five pages in length) by 5 pm on Friday 12 November 2010. Submissions in response and in reply (if any) are to be filed and served at intervals of three working days each. I will then determine the issue of quantum on the papers.

Costs

[52] Concrete Structures has succeeded and is entitled to its actual and reasonable costs by virtue of s 23(2)(a)(ii) of the Act. If counsel cannot reach agreement regarding that issue, they should file short memoranda as to costs at seven day intervals following resolution or determination of the issue of quantum.

Lang J