Isaac Regional Council v Civil Mining and Construction Pty Ltd
[2014] QSC 105
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- Unreported Judgment
- Isaac Regional Council v Civil Mining and Construction Pty Ltd[2014] QSC 105
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Isaac Regional Council v Civil Mining and Construction Pty Ltd[2014] QSC 105
Isaac Regional Council v Civil Mining and Construction Pty Ltd[2014] QSC 105
SUPREME COURT OF QUEENSLAND
PARTIES: | (applicant) |
FILE NO/S: | |
Trial | |
PROCEEDING: | Application |
ORIGINATING COURT: | |
DELIVERED ON: | 21 February 2014 ex tempore |
DELIVERED AT: | Cairns |
HEARING DATE: | 20 February 2014 |
JUDGE: | Henry J |
ORDERS: | 1. First respondent restrained from enforcing the adjudication decision. 2. First respondent restrained from seeking adjudication certificate. 3. Second respondent restrained from issuing adjudication certificate until further order. 4. Costs reserved. |
CATCHWORDS: | CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – ILLEGAL AND VOID CONTRACTS – EFFECT OF ILLEGALITY OR INVALIDITY – IN GENERAL – where the applicant and first respondent are parties to a contract for restoration roadworks – where the first respondent failed to serve the payment claim in accordance with the contract – where the applicant failed to make the payment – where the first respondent obtained an adjudication decision enforcing payment – where the applicant claims the adjudicator’s decision is void for want of jurisdiction – where the applicant seeks an order restraining the first respondent from enforcing the adjudication decision – whether failed service renders the adjudication decision void for want of jurisdiction EQUITY – EQUITABLE REMEDIES – INJUNCTIONS – INTERLOCUTORY INJUNCTIONS – RELEVANT CONSIDERATIONS – BALANCE OF CONVENIENCE GENERALLY – where the applicant claims the first respondent engaged in misleading or deceptive conduct in contravention of s 18 of the Competition and Consumer Act 2010 (Cth) in relation to making of the payment claim and pursuing the application – whether sufficient evidence of misleading and deceptive conduct exists to warrant interlocutory relief Building and Construction Industry Payment Act 2004 (Qld) s 18, s 21, s 24, s 103 Competition and Consumer Act 2010 (Cth) s 18 ABC v O'Neill (2006) 227 CLR 57, applied Neumann Contractors Proprietary Limited v Traspunt No 5 Pty Ltd [2010] QSA 119, applied |
COUNSEL: | DP Morzone QC and C Taylor for the plaintiff PL O'Shea QC and MH Hindman for the first defendant |
SOLICITORS: | Wilson Ryan Grose Lawyers for the plaintiff Clayton Utz for the first defendant |
HENRY J: The plaintiff, a local government, has been engaged in major flood restoration roadworks, funded by the Queensland Reconstruction Authority (QRA) as part of the so-called Natural Disaster Relief and Recovery Arrangements (NDRRA). Some of those works have been performed by the first defendant for the plaintiff, pursuant to a contract between it and the plaintiff of 22 March 2013. Various payments have already been made pursuant to that contract.
The dispute before the Court arises from a payment claim by the first defendant to the plaintiff, dated 6 December 2012, made under the Building and Construction Industry Payment Act 2004 (Queensland) (BCIP), which will occasionally be referred to as BCIPA. That claim, which was for $20,063,483.17, was not paid and the first defendant has obtained a decision by an adjudicator, pursuant to BCIPA, which, if enforced, will require the payment under that claim, of an amount of $9,923,090.87.
In the present application the plaintiff seeks an order restraining the first respondents from enforcing the adjudication decision. The first respondent (“CMC”), who I will generally be referring to as the first defendant, is the only active litigant. The second and third defendants, or respondents, will, as per convention, abide the order of the Court.
The Issues
The plaintiff’s claim for ultimate relief as against the defendants seeks declarations:
(1) that the first defendant engaged in misleading or deceptive conduct in contravention of section 18 of the Australian Consumer Law in relation to the making of the payment claim of the 6th of December 2013; and
(2) that the adjudication decision is void for want of jurisdiction.
The relevant principles applicable in determining whether an interlocutory injunction ought be granted were confirmed by Gummow and Hayne JJ, with whom Gleeson CJ and Crennan J relevantly agreed, in ABC v O'Neill (2006) 227 CLR 57, at paragraph 65, where their Honours observed:
“The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This Court … said that on such applications the court addresses itself to two main inquiries, and continued: ‘The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.’ By using the phrase ‘prima facie case’, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.”
Their Honours went on to emphasise at paragraph 71 the governing consideration, namely:
“…that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought.”
The Applicant asserts it has a sufficient likelihood of success at trial to warrant the interlocutory relief presently sought, pending determination of its claim at trial. In summary, it alleges two bases by which it will at trial avoid the adjudicator’s decision. Firstly, the relevant provisions of BCIPA granting the adjudicator’s jurisdiction, particularly those relating to service, were allegedly not complied with, and the adjudication decision is void for want of jurisdiction. Secondly, the first defendant ought be permanently restrained from enforcing the adjudicator’s decision, because the first defendant allegedly engaged in misleading or deceptive conduct in making the payment claim and pursuing the application.
The likelihood of success of those arguments must necessarily be considered by reference to the facts before me, although in undertaking that exercise I do not purport to reach or now express any final view of the facts, that being a matter for trial.
Background
The contract provided for a superintendent empowered to give the first defendant directions and act as the plaintiff’s agent for the purpose of receiving and delivering claims, including payment claims made under BCIPA (see clause 23, pages 43, 44, exhibit 2, General Conditions of Contract). The inclusion of a superintendent through the contract is unremarkable, particularly given the plaintiff is a local government, that is to say, a bureaucracy. As the plaintiff’s executive director of engineering and infrastructure, Mr De Pereira, explained in his affidavit:
“… the contract was drafted in that way because the plaintiff does not have appropriately qualified staff to assess a construction claim. This is a reason the plaintiff retained the services of the superintendent.”
The superintendent was a company know as AECOM. The general process followed under the contract for the making of plans, as explained in the affidavit of Mr Gray of AECOM, at paragraph 5, was that CMC would serve a claim for payment on AECOM, which would assess the claim before issuing a progress certificate, which was not necessarily for as much as the amount claimed. The first defendant would issue a tax invoice for the certified amount to AECOM, which then forwarded the invoice to the plaintiff for payment. For the first five such claims the first defendant and the superintendent would meet to discuss items to be paid before the claim was issued. But that practice then ceased. The first defendant’s claims for payment were, in the first four instances, progress claims under the contract. Thereafter, while its claims for payment could still be characterised as progress claims under the contract, they were expressed to be payment claims under BCIPA.
It is noteworthy that the first four claims were directed only to the superintendent. However, when the first respondent started styling its claims from its fifth claim as payment claims under BCIPA, it directed its claims to two addressees namely the respective addresses of the superintendent and the plaintiff’s Chief Executive Officer. This simultaneous issue appears to have been done to comply with the contract’s requirement that:
“Service of payment claims under the Building and Construction Industry Payment Act 2004 by the contractor on the principal shall be made by forwarding or serving such claims simultaneously to both the superintendent and the principal.”
This simultaneous process was adopted for the fifth claim of 22 August 2013 for $9,252,150.20; the sixth claim of 23 September 2013 for $10,243,186.92; and the seventh claim of 22 October 2013 for $17,221,026.88.
Then the eighth claim of 22 November 2013 seemingly reverted, apparently without explanation, to the former pattern of directing a progress claim, as distinct from a payment claim under BCIPA, to the superintendent only, as distinct from the superintendent and the plaintiff simultaneously. That claim, the eighth claim, was for $8,583,684,87. The superintendent certified for payment in respect of that claim of $3,063,586.27, and under cover of correspondence dated 5 December 2013, the first defendant forwarded the superintendent an invoice to the plaintiff for that amount.
That same day the defendant was the loser in an application by the plaintiff against it, before North J in the Townsville Supreme Court. That application sought to avoid an adjudicator’s decision under BCIPA in respect of what appears to have been the fifth claim, that is, the first of the claims styled as a payment claim under BCIPA and issued simultaneously to the superintendant and the plaintiff CEO. The issue there was whether the adjudication application was correctly served upon Council. Service was purportedly effected by leaving the adjudication application at a council office at Clermont. His Honour observed the council, Isaac Regional Council, has multiple offices in various regional towns, although, the plaintiff has its chambers at Moranbah. In any event, his Honour found service had not been properly effected. His Honour considered service should have been effected by service upon the CEO or his delegate, or in the manner stipulated under the contract.
The contract relevantly provided in the general conditions at clause 7:
“A notice shall be deemed to have been given when it is received by the person to whom it is addressed or is delivered to the address of that person stated in the contract or last communicated in writing by that person to the person giving the notice, whichever is the earlier.”
The address of the principal, as stated at clause 3(b) of the contract, was:
“Chief Executive Officer
Isaac Regional Council
PO Box 97
Moranbah, Queensland 4744” .
On 6 December 2013, the day immediately following its loss before North J, the first defendant purported to deliver a payment claim, dated 6 December, for $20,063,483.17 to the address of the principal, as stipulated in clause 3(b) of the contract. It did so by purporting to deliver 45 volumes held in archive boxes to PO Box 97 at the Moranbah post office. It obviously intended to effect service in that way, because, it may be reasonably be inferred from the materials, one of its representatives attended the post office to hand over the documents, armed with a document styled as a “confirmation of postal service”, which allowed for the relevant Australia Post officer to solemnly declare under the Act:
“...that on Friday, the 6th December 2013, I delivered into PO Box 97 at the Moranbah post office 45 volumes, 9 boxes marked ‘Chief Executive Officer, Isaac Regional Council, PO Box 97, Moranbah, Queensland, 4744’.”
Despite the employee who apparently received the boxes completing that declaration, it is obviously incorrect. Council probably has a corporate sized PO Box at the post office at Moranbah, but it is inconceivable that such a large delivery could be placed into any PO Box at the Moranbah post office. Moreover, an Australia Post employee
deposes to seeing the boxes sitting in the post office’s mailing sorting room on the evening of 8 December, when she then shifted them to the local delivery contractor’s shed at the rear of the post office. She does not know what happened to them then, nor does the plaintiff. Its CEO, Mr Dodds, deposes, at paragraphs 3 and 4:
“I have directed the relevant plaintiff’s staff members to carry out an exhaustive search of the plaintiff’s Moranbah offices for the nine archives and/or the 45 folders, including a search of the plaintiff’s records maintained of all incoming mail and other deliveries. I am informed by those staff members, and I believe it to be true, that the plaintiff’s staff have been unable to locate any of the nine archive boxes and/or the 45 folders or any record of such being received at the plaintiff’s Moranbah offices at any time.”
It is possible this topic, particularly the fate of these boxes, may attract more evidentiary exposition at trial. We might, for example, hear from the local postal contractor. However, it is likely, on the existing materials, that the payment claim of the 6th of December 2013 was not physically delivered into the PO Box which was the address for service of the principal under the contract.
Misleading and Deceptive Conduct
The plaintiff’s apparent non-receipt of the payment claim might not, in the normal course, have been problematic, in that the first defendant had a clear contractual obligation to deliver the payment claim not only to the plaintiff but to the plaintiff’s superintendent. Notwithstanding the clarity of the evidence of the parties’ past dealings in respect of the directing of claims by the first defendant, much time was consumed in the application with oral submissions about the existence or otherwise of a pattern in those previous dealings. My above summary of those dealings exposes some changes in the course of conduct over time. However, the most material feature of the conduct in the present context had in all of the previous eight claims remained constant, that is, the or a claim was always provided to the superintendent.
That well established course of dealing reflected the pivotal role the first defendant well knew the superintendent had under the contract in relation to its making of claims on the plaintiff. However, on 6 December 2013 it was cast aside without warning, notice or explanation and in clear breach of clause 7 of the general conditions of the contract.
The plaintiff alleges this involved misleading and deceptive conduct. It acknowledges that the making of a payment claim under BCIPA must comply with the requirements of BCIPA, as distinct from the contract. But it says, correctly, that is not determinative in the context of assessing the alleged misleading or deceptive conduct case. If there is substance to that case it would justify this Court’s interference under the common law or the consumer law, notwithstanding that there has been compliance with BCIPA, to prevent enforcement of the adjudication decision.
There is clearly substance in the plaintiff’s argument that the events of 6 December involved a clear and very significant departure from the past pattern of commercial dealing between the parties. The first defendant is likely to have appreciated the past pattern and its consistency with the contract reasonably entitled the plaintiff to conduct and arrange its commercial relationship with the first defendant on the understanding that it would be continued. The force of that entirely reasonable expectation, founded inter alia upon the first defendant’s own past course of conduct, may have diminished had the first defendant given some notice of this fundamental change. However, no notice was given, let alone an explanation given to the plaintiff for the fundamental departure.
The first defendant submitted, in effect, that the dispute before North J and its outcome must have meant the plaintiff realised it could no longer rely on past expectations. But there is nothing in that case that could herald a likely departure from the past pattern of service on the superintendent. That case went to the proper method of serving the plaintiff; it did not suggest the superintendent ought be served no longer. For completeness, I record no notice or explanation was given to the superintendent either. Indeed, none of the ensuing BCIPA notices relating to the payment of the claim was served on the superintendent.
An additional relevant factual consideration is the period to which the payment claim purported to relate. It was said to be for “work completed on the above project to 22 November 2013”. However, the eighth claim of 22 November was also for work up to that date. Comparison of both claims make it clear the claim of 22 November was a progress claim only for work completed since the previous period, whereas the payment claim of 6 December was for outstanding payment for the entirety of work performed on the project up to 22 November. However, there had to have been overlap, indeed, at least about $8.5 million worth of overlap, between these two claims.
The risk of confusion in submitting different claims relating to the same end period and to different entities is self-evident. That confusion manifested itself in subsequent events.
Having purported to serve its payment claim under section 17 of the Act, the first defendant then, in compliance with section 21 of the Act, gave notice by facsimile letter to the plaintiff of its intention to apply for adjudication of the payment claim. This was important in that it provided the mechanism under the Act whereunder the plaintiff would only have five business days to have its last chance to respond with its payment schedule – a document allowing a respondent to a claim to identify a lesser amount and explain why only that amount ought be paid (see section 18).
When did the first defendant give its section 21 notice? It gave it on Christmas Eve and then, again, in identical terms by facsimile on the 7th of January.
It must be accepted that even local government bureaucracies ought to arrange their affairs to ensure timely operations during the Christmas/New Year holiday season. However, in respect of its dealing with the first defendant, the plaintiff had so arranged its affairs. It had an agent, the superintendent. The plaintiff did not know in embarking upon the Christmas/New Year period and making any arrangements for it, so far as its dealing with the first defendant were concerned, that the first defendant had unilaterally cut the superintendent out of the entire process. What then followed is therefore unsurprising.
The section 21 notice of 24 December seems to have gone unnoticed, perhaps unremarkably given it was Christmas Eve. As for the notice of 7 January, it was eventually seen by Mr Woodley, the plaintiff’s manager of infrastructure, as he worked through a backlog of mail and faxes during the week following his return from leave on the 6th of January. That was when the obvious potential for confusion, to which I have referred, then manifested itself. He deposes:
“Although I do not remember when, I do recall seeing the notice of 7 January 2014 and its reference to the first defendant’s payment claim dated 6 December 2013. I was aware that the first defendant had issued a tax invoice in early December 2013 with respect to its progress claim dated 22 November 2013. I understood that the notice of 7 January 2014 was referring to that progress claim and that tax invoice. Prior to seeing to that document, it was my understanding that the first defendant had been paid all that was owing to it. On 6 January 2014 I received an email from Sonja Swanton, whom I know to be the executive assistant to Mr De Pereira, asking me about payment to the first defendant, to which I replied that day that everything due had been paid to them… However, when I later became aware that the tax invoice had not been paid, I made arrangements for payment of that invoice in the amount of $2,785,078.43 plus GST on or about 15 January 2014. I understood that as payment of that claim had been made that no further action was required with respect to the letter of 7 January 2014. In particular, I was unaware of any requirement to serve a payment schedule in response.”
The practical consequence of this chain of events is that the plaintiff was deprived by the strict legislative machinery of BCIPA of the chances which the purported service of the payment claim, and then the section 21 notice gave it, namely, to respond with a payment schedule. In consequence, it was in turn deprived by section 24 of BCIPA of the opportunity to submit to the adjudicator a response, in a substantive sense, to the first defendant’s application. The adjudication was therefore made without the benefit of arguments from the plaintiff as to why various components of the multimillion dollar claim were not payable.
The first defendant emphasises the fact the adjudicator only awarded about half the claimed amount. But that hardly means the same result would have followed if the plaintiff had the opportunity to be heard. It is a nonsense to contemplate the plaintiff chose not to be heard in respect of this multimillion dollar claim. Indeed, the evidence shows that when it was belatedly aware of what had occurred it made unsuccessful representations to the adjudicator to prevent him proceeding.
The first defendant observes, in effect, that really this is all the problem of the plaintiff for conducting its affairs ineptly. That line of argument obviously has some force to it, but so too does the plaintiff’s argument that its problem was caused by the misleading and deceptive nature of the first defendant’s conduct in unilaterally abandoning the contractual safety net of the superintendent’s involvement, on which the first defendant likely knew the plaintiff relied, and in directing different claims for the same end period.
The first defendant contends there is no adequate causal link between that conduct and what ensued, effectively because there was the second chance for the plaintiff to take remedial action when it received the section 21 notices. However, I have explained how those notices were unseen and misunderstood in a context directly linked with the first defendant’s directing of different claims for the same end period and with the selective abandonment of the supervisor’s safety net involvement.
The case has some features in common with Bitannia Pty Ltd and Parkline Constructions Pty Ltd [2006] NSWCA 238; compare Lucas Stuart Pty Ltd v Council of the City of Sydney (2005) NSWSC 840. In Bitannia, Hodgson JA observed at paragraph 8:
“The basic complaint of the appellants is that one element of the cause of action brought against them, namely the non-service of a payment schedule, came about as a result of Parkline’s breach of section 52; and that if a remedy is not provided by the Trade Practices Act, they suffer the substantial damage of having a judgment against them which is obtained by Parkline in reliance on its own misleading conduct. The Trade Practices Act discloses a legislative intention that persons should have a remedy to protect them from damage from the misleading conduct of a corporation, or to recover from the corporation compensation for such damage; and it would not be in accordance with that intention that a corporation should be permitted to obtain a judgment against a defendant on a cause of action one essential element of which has been created by that corporation’s misleading conduct against that defendant. Subject to discretionary questions, it would in my opinion be appropriate for a court to give effect to that legislative intention by granting an injunction under section 80, or by making an order pursuant to section 87 dismissing proceedings (noting that the orders made available by section 87 include orders mentioned in section 87(2), but are not restricted to those orders).”
In Queensland, Austruct Pty Ltd v Independent Pub Group Pty Ltd (2009) QSC 1, and Neumann Contractors Propriety Limited v Traspunt No 5 Pty Ltd [2010] QCA 119 also provide support for the plaintiff’s position to be advocated at trial. In Neumann, commenting on circumstances with some factual similarity to the present, Muir JA observed at paragraphs 57 and 59:
“In my view, the circumstances identified by counsel for Traspunt give rise to an arguable case that the conduct of Neumann in changing the basis of its claims without first alerting Traspunt to the change was in breach of section 52… If officers of Traspunt had been alert or wary, or both alert and wary, it is likely that they would have understood from the Payment Claim and the covering letter, at least after ascertaining that the Payment Claim had not been submitted to the Superintendent, that Neumann was intending to rely on the provisions of the Act. The evidence, however, does not suggest that anything has occurred to put Traspunt on notice that Neumann was contemplating changing existing claim procedures and that, in consequence, claims had to be scrutinised with particular care. There was thus no compelling reason why Traspunt should have appreciated that the Payment Claim and the accompanying letter signalled a very substantial change to the basis on which claims for payment of moneys due under the contract were to be made and dealt with.”
The legal context of those comments was a successful appeal against a summary judgment, but the logic of his Honour’s observations demonstrates the force of the plaintiff’s misleading and or deceptive conduct case. That case has sufficient likelihood of success at trial as to warrant interlocutory relief in the event I conclude that the balance of convenience also favours intervention.
The same considerations may also give rise to an estoppel – and the plaintiff submitted as much – but the above conclusion makes it unnecessary to articulate a view on that issue.
Lack of jurisdiction because of ineffective service
My conclusion as to the misleading or deceptive conduct case also allows me to deal more briefly with the plaintiff’s jurisdictional argument arising from the failed service of 6 December. I have already detailed those circumstances.
Section 103 of BCIPA provides:
“103 service of notices.
(1)A notice or other document that under this Act is authorised or required to be served on a person may be served on the person in the way, if any, provided under the construction contract concerned.
(2)Subsection (1) is in addition to, and does not limit or exclude, the Acts Interpretation Act 1954, section 39 or the provisions of any other law about the service of notices.”
There exists a reasonable argument that that section applies to the service of section 17 payment claims. As already explained, there exists evidence giving rise to the inference the claim was not, as the contract required, “delivered” to the principal’s address which was, as I have mentioned under the contract, a PO Box. On a view of the facts reasonably open, it was delivered to the post office where that PO Box was located, but it was not delivered to the PO Box.
The first defendant says, in effect, that means of service was an impossibility, so I ought interpret the contract differently to give it commercial efficacy. Whether such a response is appropriate in the circumstances of this particular case is to be doubted, particularly at this stage of proceedings. However, it is not inevitable that service was actually impossible under the contract. Plainly, it would have been possible to deliver at least something to the PO Box, even if it was a document referring to the balance of the delivery being elsewhere for collection or delivery.
But events did not unfold in that way. It may very well be they did not occur that way because there was an arrangement between the post office and the plaintiff about which the first defendant knew nothing, that items directed to the plaintiff’s PO Box would not, in fact, be put into its PO Box and would, instead, be held for delivery to council. However, the evidence on that aspect and whether it was an arrangement applying to all council mail is presently unclear.
I well appreciate the plaintiff’s argument that it was not served, has a highly technical nature to it. It relies, to a large extent, on a strict, indeed, literal interpretation of the contractual and legislative provisions.
However, the process implemented by BCIPA has potentially very serious consequences, and applicants enjoy advantages and protections under that process beyond that which they might secure by contract only. For that reason, it is plainly incumbent on applicants in the position of the first defendant to ensure they strictly comply with the Act. There was, of course, nothing to prevent the first defendant outsmarting itself by, instead of simply effecting service without heralding the change of process to which I have referred, instead communicating more effectively with the plaintiff, or more particularly, its representatives and, for that matter, with the superintendent, about what it was it was planning to do and had done.
The argument that the claim was not properly served and that accordingly the adjudicator had no jurisdiction to act is arguably weaker than the potential case so far as misleading or deceptive conduct is concerned. But in the circumstances, particularly bearing in mind the strictness of the regime under BCIPA to which I have referred, it appears to have sufficient likelihood of success to also warrant interlocutory intervention, subject to the issue of balance of convenience.
I note for completeness, before turning to balance of convenience, that there was also some argument on the jurisdictional issue relating to the time frames that were operable as to when notices ought to have been given. It is unnecessary to reach any concluded view about that subject, although it appeared in the course of argument at least highly likely that there was unlikely to be a problem from the first defendant’s point of view with that feature of the case at trial.
Balance of Convenience
Turning to balance of convenience, if interlocutory intervention does not occur, it is inevitable enforcement action will ensue and the payment of over $9,000,000 will have to be made. I do not accept the plaintiff would be unable to raise and pay that amount pending trial, notwithstanding the suggestion in the materials of potential difficulty in that regard.
That is not to suggest that it would not be a logistically difficult process. It is apparent from the materials that under the convention that had historically applied, whereunder the superintendent would scrutinise submitted claims, culminating in a process of an invoice being issued that as part of that process, the plaintiff would secure funding for each of the payments it was going to make as inferentially sanctioned by the superintendent from the QRA. There is no material before me as to what the QRA would likely do if presented with the set of facts that I have discussed here in determining whether it would provide the funding of the over $9,000,000 adjudication amount. On the materials as they stand, the best information, in effect, is that it would be a logistically difficult, but not an impossible process for council to raise the necessary funds. The prospect that that might well impair council’s discharge of its other obligations remains live, although, again, there was really no specific evidence touching upon that topic either.
The counterpoint, of course, is that the first defendant will not be paid the adjudicator’s ordered amount if I intervene. However, there is nothing to stop the first defendant being paid for its work by proceeding with further progress claims – indeed, the evidence shows it issued one in December – or further payment claims under BCIPA, see in particular, section 17(6). It might yet be that such processes supersede the need for the first defendant to press for enforcement.
In any event, the first defendant plainly has open to it a mechanism readily available by which it can secure payments of substantial further funds for the works it has to date performed. Even if through that process it does not recoup all of the monies which the adjudicator awarded, it is inevitable that it would bridge a very significant economic gap.
In the circumstances, the balance of convenience favours maintenance of the status quo by my intervention.
...
The first defendant emphasises section 31(4), which provides:
“If the respondent commences proceedings to have the judgment set aside, the respondent ...
(b)is required to pay into the court as security the unpaid portion of the adjudicated amount pending the final decision in those proceedings.”
Counsel for the first defendant referred me to Australian Remediation Services Proprietary Limited v Earth Tech Engineering Proprietary Limited and Others, [2005] NSWSC 715 wherein Campbell J said:
“The price of commencing proceedings of that kind as to set aside a judgment, as set out in section 25(4)(b), is payment into court of the unpaid portion of the adjudicated amount, as security. Mr Forster SC submits that if my granting the injunction which the plaintiff seeks prevents there being a judgment, the price of that injunction should be no less than the price that the legislature has decided should be paid for a stay of judgment which has been obtained, namely, an actual payment into court. I accept that the policy which is implicit in section 25(4)(b) is one that I should take into account in deciding what counts as a preponderance of the balance of convenience. That policy is that the person who has obtained an adjudication determination should be in a position actually to receive the amount payable under it virtually as soon as a court has held that the adjudication determination is not void.”
Those observations are, of course, of some assistance but are not binding. It is relevant in considering this issue that the legislature in Queensland in electing to impose the mandatory requirement which appears in section 33 of the Act abstained from identifying such a requirement as mandatory at some earlier stage in the sequence of events through which parties such as those before me must proceed before getting to the stage foreshadowed in section 31. It also is relevant in the particular circumstances of this case to bear in mind the benefit, as his Honour explained, of the so called policy, was that virtually as soon as a court has held an adjudication determination is not void, the fact that the money has been paid into court will ensure that it is immediately available for payment out. That is a weighty consideration in some cases, no doubt, particularly where there is cause for concern as to potential impecuniosity otherwise. This is not such a case. The plaintiff is a local government. In all of the circumstances, I do not accept it is likely that there would be a significant delay in it providing payment in the event that it ultimately fails in avoiding the adjudication determination.
Orders
The result, then, is that I propose to order the first respondent is restrained from enforcing the adjudication decision, including seeking an adjudication certificate, and ordering that the second respondent is restrained from so issuing such a certificate until further order. Those orders in more complete form appear in a draft order before me which I propose to shortly make. However, it remains to consider the question of costs. I embark upon hearing the parties on this, with the intimation that my present view is that costs ought be reserved. But we will hear argument.
...
Returning then to my decision, the parties do not submit that other than the normal course ought be followed so far as costs are concerned in a matter like this, that is, that they should be reserved.
...
I order as per the amended draft order, signed by me and placed with the papers.