New South Wales Court of Appeal CITATION: Grave v Blazevic Holdings [2010] NSWCA 324 HEARING DATE(S): 16 November 2010 JUDGMENT OF: Allsop P at 1; McDougall J at 2; Macfarlan JA at 40 EX TEMPORE JUDGMENT DATE: 16 November 2010 1. Application for leave to appeal granted. 2. Notice of appeal be filed and served within 7 days. 3. Appeal allowed. 4. Set aside the orders of the District Court (Delaney DCJ) made on 1 December 2009 and in lieu thereof: (a) set aside the default judgment and let in the defendant to defend the proceedings; and DECISION: (b) order that the costs of each of the plaintiff and defendant in the District Court relating to the motion to set aside the default judgment be costs in the proceedings. 5. Respondent pay the appellant's costs of the appeal including the application for leave to appeal. The respondent is to have a certificate under the Suitors' Fund Act 1951 (NSW) if otherwise entitled. Such order for costs be stayed until the resolution of proceedings. 6. The proceedings be removed from the District Court to the Supreme Court and placed in the Technology and Construction List. 7. The matter be listed for directions on Friday 26 November 2010 before the Technology and Construction List Judge with a view to the expeditious resolution of the question as to whether the applicant, Mr Grave, is a relevant party to the "construction contract" for the purpose of the Building and Construction Industry Security of Payment Act 1999 (NSW). 8. Set aside order 3 made by Young JA on 12 July 2010 concerning the provision of a guarantee. Any guarantee provided by or pursuant to order 3 of Young JA made on 12 July 2010 be delivered up to the applicant forthwith. 9. The applicant as defendant serve his defence on the respondent as plaintiff on or before 24 November 2010 and provide a copy to the Technology and Construction List Judge on 26 November 2010. The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16. CATCHWORDS: APPEAL – civil – judgment – whether applicant had shown arguable defence – whether primary judge erred in construction and application of ss 14 and 15 – Building and Construction Industry Security of Payment Act 1999 (NSW) ss 14, 15, 32. - STATUTORY INTERPRETATION – principles – reading provision in context – purpose and object – meaning of "person who, under the construction contract concerned, is or may be liable to make payment" in s 13(1) – Building and Construction Industry Security of Payment Act 1999 (NSW) ss 3, 8, 13, 14, 15. - BUILDING AND ENGINEERING CONTRACTS – remuneration – statutory regulation of entitlement to and recovery of progress payments – payment claims. Civil Procedure Act 2005 (NSW) LEGISLATION CITED: Security of Payment Act 1999 (NSW) Suitors' Fund Act 1951 (NSW) CATEGORY: Principal judgment Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 Chase Oyster Bar v Hamo Industries [2010] NSWCA 190 CASES CITED: Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 Paper Products Pty Ltd v Tomlinsons (Rochdale) Limited (1993) 43 FCR 439 Samick Lines Co Ltd v Antonis P Lemos (Owners) [1985] AC 711 PARTIES: Warwick Sutton Grave (Applicant) Blazevic Holdings Pty Limited ACN 106 372 123 (Respondent) FILE NUMBER(S): CA 2009/324672 COUNSEL: JJJ Garnsey QC / D Hand (Applicant) M Lozina (Respondent) SOLICITORS: Swaab Attorneys (Applicant) Michael Atkinson & Associates (Respondent) LOWER COURT JURISDICTION: District Court LOWER COURT FILE NUMBER(S): 2009/129 LOWER COURT JUDICIAL OFFICER: Delaney DCJ LOWER COURT DATE OF DECISION: 1/12/2009 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL 2009/324672 ALLSOP P MACFARLAN JA McDOUGALL J 16 November 2010 WARWICK GRAVE v BLAZEVIC HOLDINGS PTY LIMITED T/AS KROSS BUILDING SERVICES Judgment 1 ALLSOP P: I will ask Justice McDougall to deliver the first judgment. 2 MCDOUGALL J: The application before the Court is one seeking leave to appeal from a decision of Delaney DCJ refusing to set aside default judgment entered in favour of the respondent against the applicant. The issue, both before the primary judge and before this Court, was whether the applicant had shown an arguable defence. An issue as to proper service that had been raised before the primary judge, and which was flagged in the applicant's written submissions in this Court, was not pressed. The factual background 3 On about 21 January 2009, the respondent quoted to undertake fit-out work at the applicant's dental surgery in Castlereagh Street, Sydney. No formal contract was entered into. However, the respondent undertook work and sent a payment claim on 6 March 2009, seeking payment of an amount in excess of $126,000. That payment claim was said to have been made pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Security of Payment Act). 4 The applicant paid $66,000 on account of that payment claim. The payment was made by cheque drawn on the account of the applicant's service company Gradenco. 5 On 6 April 2009, the respondent made a further payment claim, for variations. The amount claimed was a little in excess of $57,000. Again, that payment claim was said to have been made pursuant to the Security of Payment Act. 6 The applicant made no further payment. Nor did he provide a payment schedule in accordance with the provisions of the Security of Payment Act. Accordingly, the respondent filed a statement of claim in the District Court, seeking judgment for the unpaid balance, together with interest and costs. 7 The applicant did not file a defence. He did, however, write a letter to the Registrar of the Court referring to the statement of claim and indicating that he opposed the relief sought. 8 On 10 June 2009, the District Court entered judgment in favour of the respondent, in default of appearance by the applicant. The proposed defence 9 The primary judge had the benefit of affidavit evidence from each party. The deponents were cross-examined. The defence which was proposed, and said to be arguable, was that the applicant was not, but his service company Gradenco was, a party to the construction contract under which the respondent had carried out the work to which I have referred. 10 The primary judge did not find, as a matter of fact, that the proposed defence was untenable. Relevant provisions of the Security of Payment Act 11 The object of the Security of Payment Act is set out in s 3(1). It is to ensure that any person who undertakes to carry out construction work (related goods and services may be put to one side) under a construction contract is entitled to receive, and is able to recover, progress payments. By subs (2), it is stated that the Act enforces that object by granting a statutory entitlement to progress payments regardless of the provisions of the construction contract. 12 The right to progress payments is conferred by s 8(1) of the Security of Payment Act. It is a right given to "a person...who has undertaken to carry out construction work under" a construction contract (again, and henceforward, related goods and services may be put to one side). 13 The statutory mechanism for enforcement of a right to a progress payment (whether arising under s 8(1), or under the terms of the construction contract) commences with s 13(1). Since that section and the two following sections are of key importance in the resolution of the question raised by this application, I set them out: 13 Payment claims (1) A person referred to in section 8 (1) who is or who claims to be entitled to a progress payment (the claimant ) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment. (2) A payment claim: (a) must identify the construction work (or related goods and services) to which the progress payment relates, and (b) must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount ), and (c) must state that it is made under this Act. (3) The claimed amount may include any amount: (a) that the respondent is liable to pay the claimant under section 27 (2A), or (b) that is held under the construction contract by the respondent and that the claimant claims is due for release. (4) A payment claim may be served only within: (a) the period determined by or in accordance with the terms of the construction contract, or (b) the period of 12 months after the construction work to which the claim relates was last carried out (or the related goods and services to which the claim relates were last supplied), whichever is the later. (5) A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract. (6) However, subsection (5) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim. 14 Payment schedules (1) A person on whom a payment claim is served (the respondent ) may reply to the claim by providing a payment schedule to the claimant. (2) A payment schedule: (a) must identify the payment claim to which it relates, and (b) must indicate the amount of the payment (if any) that the respondent proposes to make (the scheduled amount ). (3) If the scheduled amount is less than the claimed amount, the schedule must indicate why the scheduled amount is less and (if it is less because the respondent is withholding payment for any reason) the respondent's reasons for withholding payment. (4) If: (a) a claimant serves a payment claim on a respondent, and (b) the respondent does not provide a payment schedule to the claimant: (i) within the time required by the relevant construction contract, or (ii) within 10 business days after the payment claim is served, whichever time expires earlier, the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates. 15 Consequences of not paying claimant where no payment schedule (1) This section applies if the respondent: (a) becomes liable to pay the claimed amount to the claimant under section 14 (4) as a consequence of having failed to provide a payment schedule to the claimant within the time allowed by that section, 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) In those circumstances, the claimant: (a) may: (i) recover the unpaid portion of the claimed amount from the respondent, as a debt due to the claimant, in any court of competent jurisdiction, or (ii) make an adjudication application under section 17 (1) (b) in relation to the payment claim, and (b) may serve notice on the respondent of the claimant's intention to suspend carrying out construction work (or to suspend supplying related goods and services) under the construction contract. (3) A notice referred to in subsection (2) (b) must state that it is made under this Act. (4) If the claimant commences proceedings under subsection (2)(a)(i) to recover the unpaid portion of the claimed amount from the respondent as a debt: (a) judgment in favour of the claimant is not to be given unless the court is satisfied of the existence of the circumstances referred to in subsection (1), and (b) the respondent is not, in those proceedings, entitled: (i) to bring any cross-claim against the claimant, or (ii) to raise any defence in relation to matters arising under the construction contract. 14 Passing over the provision for adjudication of disputes contained in Div 2 of Pt 3, and the consequential provisions for enforcement of adjudication determinations, it is necessary to refer to s 32. That section deals with the effect which Pt 3 of the Security of Payment Act has on civil proceedings. I set it out: 32 Effect of Part on civil proceedings (1) Subject to section 34, nothing in this Part affects any right that a party to a construction contract: (a) may have under the contract, or (b) may have under Part 2 in respect of the contract, or (c) may have apart from this Act in respect of anything done or omitted to be done under the contract. (2) Nothing done under or for the purposes of this Part affects any civil proceedings arising under a construction contract, whether under this Part or otherwise, except as provided by subsection (3). (3) In any proceedings before a court or tribunal in relation to any matter arising under a construction contract, the court or tribunal: (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 it makes in those proceedings, and (b) may make such orders as it considers appropriate for the restitution of any amount so paid, and such other orders as it considers appropriate, having regard to its decision in those proceedings. The primary judge's reasons 15 The primary judge directed himself, correctly, that it was for the applicant to explain the delay in filing his defence, and that he had an arguable defence on the merits. His Honour proceeded to examine that latter question (there being no contest that such delay as there was had been adequately explained) by reference to relevant provisions of the Security of Payment Act. He concluded that there was a "construction contract" within the meaning of the Security of Payment Act because, even though there was no formal signed contract, there was nonetheless an arrangement under which the respondent had undertaken to carry out construction work. It is implicit in his Honour's conclusion that, as the definition of "construction contract" indicates, the arrangement was made by the respondent with the applicant. But whether or not there was such an arrangement is the very question that the applicant sought to argue before his Honour, and again before us. 16 His Honour referred to ss 8 and 13 of the Security of Payment Act and concluded, on the basis of the evidence given by Mr Josip Blazevic, the principal of the respondent, both in his affidavit and in cross-examination, that the applicant was a person who is or may be liable to pay the amount of the respondent's quotation. It does not appear that his Honour directed himself expressly to the words of s 13(1), which refers to "the person who, under the construction contract concerned, is or may be liable to make the payment". 17 The primary judge referred to ss 14 and 15 of the Security of Payment Act and concluded that, by reason of s 32, the applicant continued to have rights at law. That was so, his Honour thought, because it would have been open to the applicant to commence proceedings at law to recover the amount of any overpayment made to the respondent pursuant to the provisions of the Security of Payment Act. 18 His Honour concluded that "in light of the provisions of sections 14 and 15 of the Act, I am of the view that the judgment which has been entered in favour of the respondent cannot be set aside". His Honour appears to have drawn support for that conclusion by considering what he saw as an analogy between the limited finality of adjudication determinations and the effect of s 15 where a judgment was obtained. The parties' submissions 19 Mr Garnsey of Queen's Counsel, who appeared with Mr Hand of counsel for the applicant, submitted that the primary judge had misdirected himself in relying on the analogy to which I have just referred, and accordingly, as to the effect of ss 14 and 15. Mr Garnsey submitted further that, just as an adjudication determination must be founded on an existing construction contract to be valid (see Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at [52], [53]), so, too, must any judgment that could be obtained pursuant to s 15(2)(a)(i) of the Security of Payment Act. 20 Mr Lozina of counsel, for the respondent, submitted that his Honour had not misdirected himself. He submitted that the applicant was a person who could be brought within the regime initiated by s 13 of the Security of Payment Act because, as the primary judge had said, the respondent claimed to be entitled to a progress payment from the applicant as a person who was or might be liable to make that payment. Decision 21 I start by repeating that the primary judge did not conclude, as a matter of fact, that the proposed defence had no prospect of success. This Court has not had the opportunity of hearing the witnesses and is in no position to make such a finding. Mr Lozina did not submit otherwise. 22 As I have said, the primary judge found that the applicant was a person who fell within s 13(1) of the Security of Payment Act because, in his Honour's view, the applicant was a person is was or might be liable to pay the amount claimed. In my opinion, that finding is wrong, because (as I have indicated already) it did not pay attention to the words "under the construction contract concerned". That follows, in my opinion, from the proper construction of the relevant provisions of the Security of Payment Act. 23 I have referred to the object of the Act as set out in s 3. It is no part of that object to give a party to a construction contract a right to receive progress payments from someone who is not a party. The object is limited to operating between those who are parties to a construction contract. 24 Section 8 is the source of the statutory right to receive progress payments. It says who is entitled to be paid. That is a party to the construction contract - the person who undertakes to carry out construction work. It does not say in terms who is liable to make the payment, but I think it is implicit at least that the liability is one that is created against the other party to the construction contract. 25 Section 13 is, as I have said, the starting point of the statutory mechanism for enforcement. The mechanism is one of which a person referred to in s 8(1) who is or who claims to be entitled to a progress payment may avail himself or herself. The words "who claims to be entitled" do not detract from the qualification introduced by the words "a person referred to in section 8(1)". They do not qualify the requirement that the person claiming the progress payment must be a person who has undertaken to carry out construction work under the contract. 26 The person on whom the progress claim may be served is someone who, under the construction contract concerned, is or may be liable to make the payment. The words "is or may be liable" may be capable of referring, for example, to primary or secondary liability (the latter, for example, as guarantor). They may be capable of encompassing disputes as to quantification; and indeed, disputes as to whether, on the proper construction of the contract and the Security of Payment Act, any payment is due at all. However, whatever is the nature and amount of the liability sought to be enforced, it must be a liability "under the construction contract concerned". If the proposed recipient of the payment claim is not a party to or liable under the construction contract, then it falls outside that statutory description. 27 Section 14 deals with the way in which the recipient of a payment claim may dispute, in whole or in part, its liability. The consequences of failure to take advantage of the dispute process are spelled out in s 14(4). The respondent to the payment claim "becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates". 28 The person referred to in s 14(4) as "the respondent" is, by reference to subs (1), the person on whom the payment claim is served. That in turn directs attention back to s 13(1). The person must be someone who under the construction contract is or may be liable to make the payment. I do not think that it is the correct construction of the statutory liability that may come into existence pursuant to s 14(4) that it extends beyond those who, by s 13(1), are denoted as being susceptible to that liability. 29 Section 15 provides for alternative ways of enforcing a statutory liability which may arise under s 14(4). If the alternative of litigation is chosen, the rights of the respondent are limited by s 15(4)(b). It is to be noted that again, in subpara (ii), the words "under the construction contract" are used. It follows from s 15(4)(b)(ii) that the statutory liability created by s 14(4) may be defeated by a defence that does not arise under the construction contract. 30 It is accordingly necessary to consider the extent of the words "arising under the construction contract". In some contexts, those words have been considered to be equivalent to the words "arising out of". See, for example, the authorities reviewed by Allsop J in Comandate Marine Corp v Pan Australia Shipping Pty Ltd (2006) 157 FCR 45 at [169] and following. However, as Lord Brandon of Oakbrook pointed out in Samick Lines Co Ltd v Antonis P Lemos (Owners) [1985] AC 711 at 727 (one of the decisions reviewed by Allsop J), the width to be given to prepositional phrases such as "arising out of" and "arising under" must depend on their context. 31 In some cases, as French J observed in Paper Products Pty Ltd v Tomlinsons (Rochdale) Limited (1993) 43 FCR 439 at 448, reference to a dispute "arising under" an agreement may be of more limited application than reference to a dispute "arising out of" an agreement. 32 Again in some cases, prepositional phrases should be construed widely. Thus, an arbitration clause that sends to arbitration disputes arising out of or under a contract would generally be given a wide construction, consistent with the presumed intention of the parties that arbitration is their preferred method of dispute resolution. 33 In this case, however, the words "arising under the construction contract" must be construed having regard to their statutory context and the object of the legislation in which they appear. That statutory object does not extend to imposing obligations on those who are not parties to construction contracts. The context of s 13 makes it clear that the liability that is enforced through the mechanism of judgment, is one of which the starting point is, again, "arising under a construction contract". 34 The alternative construction - that it is sufficient that the person be named as a respondent and not supply a payment schedule, so as to be susceptible to judgment - has consequences which render it unlikely. First, it creates disconformity with the alternative enforcement path of adjudication. It is clearly established, by the decision in Brodyn, that an adjudication determination is void if there is no underlying construction contract. The authority of Brodyn in this respect was not disturbed by the decision of this Court in Chase Oyster Bar v Hamo Industries [2010] NSWCA 190. It would be quite extraordinary if a claimant who chose to go down the path of adjudication could be disappointed because the adjudicator lacked jurisdiction (for want of a construction contract between the claimant and the respondent), but a claimant who went down the path of litigation could enforce the claimed right even in the absence of such a construction contract. 35 A second inconvenience is that there would be an immediate multiplicity of proceedings. On the construction which appears to underlie the reasoning of the primary judge, a party in the position of the applicant in this case would have no defence to the action brought to enforce the statutory liability created, or said to have been created, by s 14(4). But there would be no true foundation for that liability, if there were no construction contract between that person and the claimant. In those circumstances, once judgment had been entered and enforced, the judgment debtor would be in a position to bring an action of a restitutionary nature, seeking to recover the amount paid. Such an action is quite distinct from an action of the kind contemplated by s 32 of the Security of Payment Act, to enforce claims under or in respect of the contract. It is difficult to conceive of a reason why the legislature would wish to encourage multiplicity of actions. 36 For those reasons, I conclude that the primary judge erred in his construction and application of ss 14 and 15 of the Security of Payment Act. He erred because the defence proposed by the applicant was not one foreclosed by s 15(4)(b)(ii). A defence that "I am not a party to, and thus not liable under, the construction contract" is not a defence arising under the contract sued upon. It is a denial of the existence, as between applicant and respondent, of any such contract. Conclusion and orders 37 In my view, the applicant succeeds on the substantive point - that there is an arguable defence. As I have noted, it was not suggested that there was any relevant delay in making the application to set aside the default judgment. It follows, in my view, that the applicant was entitled to be let in to defend. 38 I propose the following orders: (1) Grant leave to appeal. (2) Direct the notice of appeal be filed and served within seven days. (3) Allow the appeal. (4) Set aside the orders of the primary judge made on 1 December 2009. (5) In lieu thereof, order that the default judgment entered on 10 June 2009 be set aside and that the applicant be let in to defend. (6) Order the respondent to pay the applicant's costs of the application for leave to appeal and the appeal, but to have a certificate under the Suitors' Fund Act 1951 (NSW) if otherwise qualified. 39 I would hear the parties on the question of costs of the application before the primary judge and as to the further conduct of the proceedings. 40 MACFARLAN JA: I agree with Justice McDougall. I add the following observations by way of emphasis and reinforcement of what his Honour has said. 41 The opening words of s 13(1) of the Security of Payment Act give the right to serve a payment claim only to a "person referred to in s 8(1)". Section 8(1) in turn confers a right to progress payments only upon someone who has undertaken to carry out work under a "construction contract". It is implicit in that section that that must be a construction contract to which the person liable to make progress payments is a party. 42 Section 13(1) in my view requires the claimant to be a person of the character described in s 8(1), and not simply arguably so. The position is different in relation to liability under the contract, once it is accepted that a relevant contract exists. In that case, it is sufficient, as s 13(1) says, that the person on whom a claim is made "may be liable" to make the payment, that is, is arguably liable to do so. 43 ALLSOP P: I also agree with the orders proposed by Justice McDougall and in substance with his reasons. I would only add the following which should not be seen as any substantive variation therefrom. 44 The objects, text and structure of the Building and Construction Industry Security of Payment Act 1999 (NSW) make it plain that the Act is concerned with subject matter which includes providing a regime for payment of progress payments under construction contracts. That purpose does not extend to making strangers to construction contracts liable for progress payments. 45 The phrase "construction contract" has a degree of width and flexibility as it appears in s 4 of the Act. It is unnecessary for the disposition of today's application and appeal to deal with any width in those words and in particular its reach to claims that may be characterised as restitutionary claims. However, the definition is predicated on there being a contract or arrangement under which one party "undertakes to carry out construction work ... for another party." 46 Here it is asserted by the applicant that the contract was with his company and not him and that the work was undertaken for his company and not him. The learned primary judge, with the utmost respect, did not address the correct issue for the reasons given by Justice McDougall. I agree with Justice McDougall that the applicant should be let in to defend. The material before his Honour requires that conclusion. 47 These parties should, however, have a prompt resolution of this issue. Speaking for myself, one matter that I would wish to hear the parties on is whether the proceedings should not be removed into the Supreme Court, into the Technology and Construction List for prompt resolution of the issue as to whether there was a construction contract under which the respondent undertook construction work for Mr Grave. There is no reason why this issue could not be dealt with despatch and expedition, subject of course to the other calls on the time of the Technology and Construction List which of course is a matter for the list judge. I would also hear the parties on the question of costs identified by Justice McDougall. [Counsel addressed] 48 The parties have addressed on a number of issues. The first as to costs. Mr Garnsey has sought costs below on the basis that his client gave fair warning to the respondent, wrote a letter to the Registry and Mr Lozina is said to have led the judge into error. For these reasons Mr Garnsey presses an order for costs below, or in the alternative no order as to costs. 49 The one matter that persuades me that both sides should have costs in the cause is the letter written before proceedings indicating the issues in the case. The applicant should have moved the Court and a letter to the Registrar was not sufficient. Nor am I persuaded, looking at the transcript, that Mr Lozina misled the learned primary judge. I am not being critical of the learned primary judge but the transcript reveals a certain foreclosure of argument from time to time, no doubt in the spirit of having the matter dealt with as efficiently as possible. Nevertheless, there was a degree of foreclosure of argument which was unfortunate. 50 For those reasons, I would order that the costs in the District Court of both sides be costs in the cause. I would also stay the order for the costs on the appeal pending the resolution of the proceedings. I also consider that there is other sufficient reason for hearing the proceedings in the Supreme Court pursuant to the Civil Procedure Act 2005 (NSW), s 140 (3)(b)(ii). The matter has now been live for a considerable period of time. 51 It is unfortunate that the matter has misfired in the way it has. These commercial parties should be entitled to a prompt resolution of the issues. The Technology and Construction List is in a position to deal with this issue promptly and I would remove the proceedings from the District Court and place them in the Supreme Court in the Technology and Construction List and direct that the matter be listed for directions on Friday 26 November 2010. 52 There is also a question of an order of Justice Young concerning a bank guarantee. That order was made on 12 July 2010. It is order 3 of that date. There is no issue that that order should be set aside. 53 I am of the view that the matter should be transferred because of sufficient reason. In that light the applicant should not be trammelled or troubled with any argument that because of the size of the matter it should not be in the Supreme Court and I would implicitly take it from Mr Lozina's position that there would be no such submission made by the respondent. 54 As part of that transfer the applicant as defendant is ordered to file and serve his defence on or before 24 November 2010. 55 MCDOUGALL J: I agree with the additional orders proposed by the President and with his Honour's reasons. 56 MACFARLAN JA: As do I. 57 ALLSOP P: Therefore the orders of the Court are as follows: 1. Application for leave to appeal granted. 2. Notice of appeal be filed and served within 7 days. 3. Appeal allowed. 4. Set aside the orders of the District Court (Delaney DCJ) made on 1 December 2009 and in lieu thereof: (a) set aside the default judgment and let in the defendant to defend the proceedings; and (b) order that the costs of each of the plaintiff and defendant in the District Court relating to the motion to set aside the default judgment be costs in the proceedings. 5. Respondent pay the appellant's costs of the appeal including the application for leave to appeal. The respondent is to have a certificate under the Suitors' Fund Act 1951 (NSW) if otherwise entitled. Such order for costs be stayed until the resolution of proceedings. 6. The proceedings be removed from the District Court to the Supreme Court and placed in the Technology and Construction List. 7. The matter be listed for directions on Friday 26 November 2010 before the Technology and Construction List Judge with a view to the expeditious resolution of the question as to whether the applicant, Mr Grave, is a relevant party to the "construction contract" for the purpose of the Building and Construction Industry Security of Payment Act 1999 (NSW). 8. Set aside order 3 made by Young JA on 12 July 2010 concerning the provision of a guarantee. Any guarantee provided by or pursuant to order 3 of Young JA made on 12 July 2010 be delivered up to the applicant forthwith. 9. The applicant as defendant serve his defence on the respondent as plaintiff on or before 24 November 2010 and provide a copy to the Technology and Construction List Judge on 26 November 2010. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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