Civil Mining & Construction Pty Ltd v Isaac Regional Council

McMurdo J

17 September 2014

This recent decision of the Supreme Court considers the interaction between contractual and statutory dispute resolution mechanisms. The parties had entered a contract whereby the applicant, CMC, agreed to undertake road works for the respondent, the Issac Regional Council (the “Council”) – a contract in part governed by the provisions of the Building and Construction Industry Payments Act 2004 (“BCIPA”). Following disputes regarding payment for work completed, CMC initiated a number of claims under the BCIPA to recover amounts it alleged were owed to it by the Council. The first two of these claims were the subject of adjudications favourable to CMC, which were challenged by the Council and later declared void by the Court. Subsequently CMC initiated proceedings under the dispute resolution provisions of its contract with the Council, and also made and then referred a new claim for adjudication. See [4]–[11]. The Council challenged this claim alleging that, in the circumstances, it was an abuse of the statutory scheme as: (1) the present claim is almost entirely incorporated in previous claims which have been adjudicated, and these decisions have subsequently been set aside; (2) that the claim is substantially disputed by the Council and CMC is aware of this; and (3) that CMC has already invoked the dispute resolution provisions of the parties’ contract with regards to this same issue. [3]. CMC then applied to this Court for a declaration that its conduct – in referring an additional claim for adjudication despite being engaged in concurrent contractual enforcement proceedings – was not an abuse of process. [1]

In addressing the Council’s contentions, the Court firstly considered the significance of the previously voided adjudications. Central to its reasoning was the fact that though previously set aside by this Court, this action was a consequence of procedural, rather than substantive defects in the previous adjudications and, thus the decision to set aside the adjudications simply put the parties in the same position as if there had been no adjudication. [13]. Given this, and the fact that s 17(6) of the BCIPA permits subsequent claims which include amounts the subject of a previous claim, it was held that the previous adjudications did not make the claim-in-issue an abuse of process. Id. Briefly turning to the question of the effect of CMC’s knowledge that the Council “substantially disputed” the claim, the Court considered that this “could never be a bar to the pursuit of a claim under the [BCIPA], which provides claimants with the remedy of an adjudication in the very circumstance where their claims are disputed.” [14]. Finally, the Court considered whether CMC’s conduct in commencing and continuing effectively parallel proceedings under the parties’ contract, meant that its statutory claim was an abuse of process. In addressing this question, the Court initially looked to the decision of the NSW Court of Appeal in Falgat Constructions v Equity Australia Corporation Pty Ltd, where Handley JA held, in similar circumstances, that there was no impediment to the concurrent pursuit of statutory and contractual proceedings so long as this “did not interfere with the fair trial of the court proceedings.” [15]-[16]. In light of this decision, and the absence of conduct by CMC, such as a breach of an undertaking to a court, see J Hutchinson Pty Ltd v Galform Pty Ltd; see also [18]-[21], which would operate to negate the well-established principle that the pursuit of concurrent remedies is not an abuse of process, [22], the Court denied the Council’s application.