12 Bridge Street Epping Pty Ltd atf 12 Bridge Street Epping Unit Trust v D.R. Design (NSW) Pty Ltd [2022] NSWSC 866

Catchwords: BUILDING AND CONSTRUCTION – adjudication determination under Building and Construction Industry Security of Payment Act 1999 (NSW) – adjudication application by architect against developer - where developer informed adjudicator that it had not been served with adjudication application – where adjudicator invited submissions as to date and manner of service of adjudication application – whether adjudicator had power to do so – consideration of s 21 of the Act – whether developer’s response to adjudicator’s invitation constituted an adjudication response Supreme Court New South Wales Medium Neutral Citation: 12 Bridge Street Epping Pty Ltd atf 12 Bridge Street Epping Unit Trust v D.R. Design (NSW) Pty Ltd [2022] NSWSC 866 Hearing dates: 28 June 2022 Decision date: 28 June 2022 Jurisdiction: Equity - Technology and Construction List Before: Stevenson J Decision: Summons dismissed with costs Catchwords: BUILDING AND CONSTRUCTION – adjudication determination under Building and Construction Industry Security of Payment Act 1999 (NSW) – adjudication application by architect against developer - where developer informed adjudicator that it had not been served with adjudication application – where adjudicator invited submissions as to date and manner of service of adjudication application – whether adjudicator had power to do so – consideration of s 21 of the Act – whether developer’s response to adjudicator’s invitation constituted an adjudication response Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW) Category: Principal judgment Parties: 12 Bridge Street Epping Pty Ltd atf 12 Bridge Street Epping Unit Trust (Plaintiff) D.R. Design (NSW) Pty Ltd (First Defendant) Richard Green (Second Defendant) Representation: Counsel: D S Weinberger (Plaintiff) F Corsaro SC (First Defendant) Solicitors: Dentons Australia Ltd (Plaintiff) C J Boyd Solicitors (First Defendant) File Number(s): 2022/160243 EX TEMPORE Judgment (REVISED) By a contract dated 21 February 2020 made between the plaintiff ( the “ Developer") and the first defendant ( the “ Architect") , the Architect agreed to provide "Architectural and Planning Professional Services" to the D eveloper in relation to a development in Bridge Street, Epping. By a Summons filed on 2 June 2022 the D eveloper seeks to challenge an adjudication determination made by the second defendant (the “ A djudicator") under s 22 of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the “ Act") on 26 May 2022 that the D eveloper pay the A rchitect $105,847.50. The A rchitect served on the Developer a payment claim pursuant to s 13 of the Act on 30 March 2022 claiming $123,428.25 . O n 13 April 2022 the D eveloper served on the Architect a payment schedule pursuant to s 14 of the Act, in effect, nominating an amount of $ n il. On 22 April 2022 the A rchitect made an adjudication application pursuant to s 17 of the Act claiming $123,428.25 and, in the usual way forwarded the adjudication application to Adjudicate Today, together with a 14 page document headed "Submissions". The A rchitect alleges that it served the a djudication application on the Developer on 22 April 2022 at two email addresses, being those to which it directed its payment claim. There is a dispute as to whether that service was effective. It is not necessary for me to resolve that dispute . On 28 April 2022 the A djudicator communicated to the parties his acceptance of his appointment. At 3.07pm on 5 May 2022, the D eveloper sent the A djudicator, with a copy to the solicitors for the A rchitect, an email as follows: “Just confirming our conversation that we have not received a copy of the adjudication application. Can you please request the claimant to send through a copy of the application and advise the adjudicator that we have not been served with the documents.” That prompted the A djudicator, a short time later on 5 May 2022, to send to the parties an email as follows: “The parties are invited to make submissions as to the date and method of service of the Adjudication Application and the date of service of the Notification of my Acceptance of this matter. Submissions Due by Friday 6 May The parties are invited to provide the above submissions (together with any relevant judgment references) and any contemporaneous supporting documents in support of their respect above outlined positions (copied to the other side) by 1:30pm, Friday 6 May 2022 . Should either party wish to comment on the submissions of the other, it must do so by 4:30pm, Friday 6 May 2022 (also copied to the other side). The parties are expressly requested to limit any submissions to answering the above request.” (Emphasis in original.) Mr Weinberger, who appears for the D eveloper, submitted that the A djudicator had no power to take that step. I do not agree. Section 21 of the Act provides , relevantly : “ 21 Adjudication procedures (1) An adjudicator is not to determine an adjudication application until after the end of the period within which the respondent may lodge an adjudication response … (4) For the purposes of any proceedings conducted to determine an adjudication application, an adjudicator— (a) may request further written submissions from either party and must give the other party an opportunity to comment on those submissions, and (b) may set deadlines for further submissions and comments by the parties …” . By the time the Adjudicator sent out his request , he had already received "submissions" from both parties. In my opinion the Developer's email of 5 May 2022 should be characterised as a submission by the D eveloper that it had not been served with an adjudication application. And the A rchitect had provided the A djudicator a document which was, in terms, a submission, albeit not in respect of the time of service of the adjudication application. Mr Weinberger submitted : “The adjudicator did not have the statutory power to issue the 5 May direction. The power contained in s 21(4)(a) to request ‘further’ written submissions only arises once an adjudication response has been served.” I see nothing in s 21, or elsewhere in the Act, to compel acceptance of that submission. Mr Weinberger also submitted that the A djudicator had no power to truncate the time by which parties could make submissions on any topic . The difficulty I see with that submission lies the provisions in s 21(4)(a) and (b) which provide, in terms, it seems to me, that the A djudicator can request "further written submissions" and can set "deadlines" for those "further submissions". It appears to me that is exactly what the A djudicator did. Mr Weinberger also submitted that the A djudicator had no power to truncate the time by which the D eveloper could provide an adjudication response. That may be so, but I do not see that the A djudicator sought to do that. At 6.12pm on 5 May 2022, the A rchitect replied to the A djudicator's request by asserting, that is to say "submitting", that the adjudication application had been served on 26 April 2022 [1] at the two email addresses to which I have referred. The following day, 6 May 2022, and evidently within the time specified by the A djudicator, the D eveloper provided the A djudicator with a document that was headed "Submissions" and which included : “The respondent received the Application on 5 May 2022, being the day that it opened the Application and received notice of the Adjudicator’s acceptance on 5 May 2022. The adjudicator should determine that 5 May 2022 is the date of service and the date on when the Claimant was notified of his acceptance.” In relation to that document, Mr Weinberger submitted : “The 6 May submission necessarily served as the plaintiff’s adjudication response pursuant to s 20 of the Act and shut the plaintiff out from serving a valid adjudication response on any topic or at all, thereby denying the plaintiff natural justice.” Again, I do not agree. The D eveloper was responding to the A djudicator's s 21(4)(a) request for further written submissions. On the De veloper's case, it had been served with the adjudication application on 5 May 2022 and had until 12 May 2022 to serve that adjudication response. The De veloper did not serve an adjudication response within that time or at all. There is no explanation in the evidence for this. In those circumstances, I agree with the submission made by Mr Corsaro SC, who appeared for the A rchitect : “Having submitted that it had only received a copy of the adjudication application on 5 May 2022, the plaintiff did not provide any adjudication response by 12 May 2022. This was the product of the plaintiff’s own failure [to] adhere to its own stated position and to apply the requirements of section 20 of the Act accordingly. Having assumed the position that it was only served with the adjudication application on 5 May 2022, it should have acted accordingly and lodged its adjudication response on the basis of the position it has assumed. Its failure to do so should not be visited on either the defendant nor on the Adjudicator.” The A djudicator proceeded to make his determination and, as it happens, accepted the D eveloper's submission that it had not been served with the adjudication application until 5 May 2022. I see no lack of procedural fairness here. The A djudicator responded, sensibly and timeously, to the D eveloper's submission that it had not been served with an adjudication application, gave the D eveloper a chance to make submissions about that matter and then determine d the matter on the basis that those submissions were correct. Nor do I see the A djudicator as having acted beyond power. As I have said, on 26 May 2022 the A djudicator published his adjudication. I see no basis to impugn that adjudication determination. I make the following orders: O rder that the S ummons be dismissed with costs. O rder that the funds paid into C ourt by the plaintiff be paid out to the defendant forthwith . O rder that these orders be taken out forthwith. Costs Following delivery of judgment, Mr Vishney , the solicitor for the Architect , tendered a letter he sent to the solicitors for the Developer last Friday in which the Architect asserted the weakness of the D eveloper's position, and offered to, in effect, walk away with no order as to costs. W hether, as Mr Vishney submits, on the basis of that letter, the Architect should have its costs on an indemnity basis following service of that letter depends on whether the offer was reasonable and whether it was unreasonable of the offeree not to accept it. Assuming that the offer was reasonable, I cannot conclude that it was unreasonable of the Developer not to accept the offer. I have not accepted Mr Weinberger's submissions in relation to the various matters he put, but I cannot say they were not arguable. I cannot conclude that it was unreasonable of the Developer not to accept that offer. I decline to order indemnity costs. ********** Endnote 1. Rather than 22 April 2022: cf [6] above. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 June 2022