In this case the Chief Justice considered an application to strike out paragraphs of an amended statement of claim concerning a claim by the plaintiff for restitution of amounts allegedly paid in excess of the defendant’s contractual entitlement. Her Honour ultimately struck out the paragraphs but granted leave to re-plead. In doing so, the Chief Justice observed that it was doubtful that s 100 of the Building and Construction Industry Payments Act 2004, which permits a court to make orders for restitution of amounts paid as a result of an adjudication, gives rise to an independent right to restitution.
29 June 2018
This matter concerned an application brought by the defendant to strike out certain paragraphs of an amended statement of claim. . The paragraphs concerned a claim by the plaintiff for restitution of amounts paid in excess of what the plaintiff alleged was the defendant’s contractual entitlement. .
The action concerned a standard form building contract between the plaintiff hotelier and the defendant construction company. . The plaintiff alleged that it had terminated the contract after the defendant had failed to rectify defects. . The defendant claimed that the termination was wrongful, and it elected to affirm the contract. .
The plaintiff argued that on account of (i) progress payments, (ii) an amount paid to the defendant in respect of a Building and Construction Industry Payments Act 2004 (“BCIPA”) claim, and (iii) a further amount determined by an adjudicator on the defendant’s BCIPA claim, it had paid more than the defendant’s entitlement under the contract. . Specifically, cl 2.1 provided that the plaintiff was not liable to pay the defendant more than the “adjusted guaranteed maximum price”. . The plaintiff sought the excess payment back by way of restitution, in an action for money had and received by the defendant to the use of the plaintiff, or alternatively, pursuant to s 100 of BCIPA,which permits the court to make orders it considers appropriate for restitution of any amount paid as a result of an adjudication. .
Chief Justice Holmes considered whether cl 2.1 had survived the termination of the contract. . Ultimately, her Honour found that the plaintiff had no real prospect of demonstrating that cl 2.1 survived termination, so that the costs of the works or the adjusted guaranteed maximum price could provide the basis for the determination of its claim in restitution. . However, her Honour did consider that the plaintiff was entitled to make its claim for restitution on the alternative basis that the contract had not been terminated. .
As for the basis of the plaintiff’s restitutionary claim, her Honour noted that it was “doubtful that it [could] rely on s 100 of BCIPA as giving it some independent restitutionary right”. . It was thus necessary for her Honour to consider whether the plaintiff had an arguable action for money had and received. . Her Honour ultimately concluded that the plaintiff did have an arguable action for money had and received, on the grounds that it had made a payment on a basis, namely the state of affairs pursuant to which the plaintiff had a statutory obligation to make payment, which had failed. .
Her Honour ordered that the relevant paragraphs be struck out but gave leave to re-plead them. .