Probuild Construction (Aust) Pty Ltd v Shade Systems Pty Ltd (No 2) [2016] NSWSC 878

Supreme Court New South Wales

Medium Neutral Citation: Probuild Construction (Aust) Pty Ltd v Shade Systems Pty Ltd (No 2) [2016] NSWSC 878 Hearing dates: 20/06/2016 Date of orders: 20 June 2016 Decision date: 20 June 2016 Jurisdiction: Equity - Technology and Construction List Before: Emmett AJA Decision: Order that the monies in Court be paid out to the Plaintiff or its solicitor. Catchwords: NOTICE OF MOTION – application for money paid into court by consent be paid out to successful defendant – whether a stay should be ordered pending outcome of an appeal – where defendant is a liquid company with significant assets Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW) Category: Procedural and other rulings Parties: Probuild Constructions (Aust) Pty Ltd (Plaintiff) Shade Systems Pty Ltd (First Defendant) Doron Rivlin (Second Defendant) Representation: Counsel: S Robertson (Plaintiff) S Goldstein (First Defendant) Submitting Appearance (Second Defendant)

Solicitors: Maddocks Lawyers (Plaintiff) Moray & Agnew (First Defendant) File Number(s): 2016/64368

Judgment (ex tempore – revised 23 June 2016) 1. HIS HONOUR: These proceedings are concerned with an adjudication made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (Security of Payment Act). On 15 June 2016, for reasons that I published on that day (Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2016] NSWSC 770), I ordered that a determination made on 15 February 2016 by the second defendant be quashed and that the matter of the adjudication be remitted for further consideration and determination according to law. I shall use terms in these reasons as I defined them in my earlier reasons. 2. Following the commencement of the proceedings, orders were made by consent whereby, upon Probuild giving the usual undertaking as to damages, and complying with an undertaking, to which I shall refer in a moment, Shade Systems undertook to the Court that it would not take certain steps until further order of the Court. The undertaking given by Probuild was to pay into court the sum of $296,880.59 pending further order of the Court, and to prosecute the proceedings with due expedition and diligence. Probuild complied with the undertaking and paid the sum into Court. 3. Following the orders made on 15 June 2016, Probuild has now applied for an order that the sum that was paid into Court be paid out to it. Shade Systems has consented to the making of that order, but seeks a stay of the order pending the filing of an application for leave to appeal from my orders of 15 June 2016, and making an application to the Court of Appeal for a further stay. 4. The stay is sought on the basis that Shade Systems has at least an arguable case and that, having regard to the consequences of the conclusion that I reached, there is a reasonable prospect that leave to appeal will be granted. Shade Systems contends that, in those circumstances, the status quo ante should be maintained pending any appeal. The stay is opposed, on the basis that Probuild is entitled to the benefit of success in the proceedings to date. 5. Probuild is part of a substantial group, which commenced operations in Australia in 1987 and has more than 1300 employees, with operations in New South Wales, Victoria, Western Australia and Queensland. It currently has net assets of over $60 million and a current work book of over $4 billion in projects and has delivered over $600 million in projects in the first half of calendar year 2016. There is no evidence as to liquid assets of Probuild, but Shade Systems does not suggest that there is any risk that, if it succeeds in an appeal, there would be any difficulty in obtaining payment from Probuild of the amount determined by the Adjudicator. Counsel for Shade Systems acknowledges that there is no basis for suggesting, on the material presently available, that Probuild would not be able to pay any amount that might ultimately become payable pursuant to the adjudication, if the adjudication is upheld. 6. In proceedings such as the present, s 25(4) of the Security of Payment Act has no application. If it did, there would be a requirement for money to be paid into Court. Nevertheless, in proceedings where a determination by an adjudicator is impugned, it is the usual practice, having regard to the key objects of the Security of Payment Act and its underlying policy, that orders for payment into court be made by analogy with s 25(4). For that reason, orders were made by consent on 1 March 2016 for the payment of the relevant sum into Court. 7. In circumstances where the giving of consent today indicates that Shade Systems accepts that the result of the proceedings is that the money in Court should be paid out, I do not consider that it is appropriate to stay the order that is to be made by consent. An application could have been made to me to stay the order for payment out until the final resolution of any appeal. However, in circumstances where there appears to be no question as to the capacity of Probuild to pay the sum that might be found ultimately to be payable following the adjudication, I do not see any basis for staying the order that I have been asked to make by consent. Accordingly, I decline to make a stay and I confirm that I make an order in terms of prayer 1 of the notice of motion dated 15 June 2016.