Supreme Court New South Wales Medium Neutral Citation: Lendlease Engineering Pty Ltd v Timecon Pty Ltd [2019] NSWSC 685 Hearing dates: 22 to 24 May 2019 Decision date: 12 June 2019 Jurisdiction: Equity - Technology and Construction List Before: Ball J Decision: (1) Declare that the determination of the second defendant dated 2 January 2019 (the Determination) is void. (2) Order that the first defendant be restrained by itself and its servants and agents from doing either or both of the following in connection with the Determination: (a) Requesting the provision of an adjudication certificate pursuant to s 24(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act); (b) Filing an adjudication certificate as a judgment for a debt in any court pursuant to s 25 of the Act. (3) Order that the sum of $887,532.80 paid into court on 5 April 2019 and any interest thereon be paid to the plaintiffs. (4) Order that the first defendant pay the plaintiffs' costs of the proceedings. Catchwords: BUILDING AND CONSTRUCTION – adjudication – whether determination of adjudicator void – jurisdiction of adjudicator – Building and Construction Industry Security of Payment Act 1999 (NSW) – whether there was a construction contract – whether there was a construction contract under which there was an undertaking to carry out construction work or to supply related goods and services Legislation Cited: Building and Construction Industry Security of Payment Act 1999 (NSW) Income Tax and Social Services Contribution Assessment Act 1936-1950 (Cth) Protection of the Environment Operations Act 1997 (NSW) Cases Cited: Australian Competition and Consumer Commission v CC (New South Wales) Pty Ltd (No 8) (1999) 165 ALR 468 Class Electrical Services Pty Ltd v Go Electrical Pty Ltd [2013] NSWSC 363 IWD No 2 Pty Ltd v Level Orange Pty Ltd [2012] NSWSC 1439 Machkevitch v Andrew Building Constructions [2012] NSWSC 546 Newton v Federal Commissioner of Taxation (1958) 98 CLR 1 Okaroo Pty Ltd v Vos Construction and Joinery Pty Ltd [2005] NSWSC 45 Category: Principal judgment Parties: Lendlease Engineering Pty Ltd (First Plaintiff) Bouygues Construction Australia Pty Ltd (Second Plaintiff) Timecon Pty Ltd (First Defendant) Helen Durham (Second Defendant) (Submitting Appearance) AAE Nominations Pty Ltd t/as Expert Adjudication (Third Defendant) (Submitting Appearance) Representation: Counsel: S Robertson with F Ashworth (Plaintiffs) FC Corsaro SC with D Byrne (First Defendant) Solicitors: Minter Ellison (Plaintiffs) DC Balog & Associates (First Defendant) File Number(s): 2019/13190 Judgment Introduction 1. By a summons filed on 14 January 2019, the first plaintiff, Lendlease Engineering Pty Ltd, and the second plaintiff, Bouygues Construction Australia Pty Ltd, which together formed an unincorporated joint venture (the LLBJV), seek a declaration that a determination dated 2 January 2019 (the Determination) purportedly made by the second defendant (the Adjudicator) under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the SOP Act) is void, together with ancillary relief. 2. The Determination relates to an amount claimed by the first defendant, Timecon Pty Ltd, under a contract or arrangement said to have been entered into between the LLBJV and Timecon "from 24 February 2017" by which Timecon agreed for a fee of $4.00 per tonne to permit the LLBJV to store on a site at 40 Gindurra Road, Somersby, New South Wales (the Somersby Site) pending its disposal VENM (Virgin Excavated Natural Material) produced by excavation and tunnelling work for the NorthConnex Project. That project involves the construction of two nine kilometre road tunnels that will link the M1 Pacific Motorway at Wahroonga to the Hills M2 Motorway at Pennant Hills. The LLBJV is the principal contractor for the project. The Somersby Site is owned by 40 Gindurra Road Somersby Pty Ltd (40GRS). The sole director of both that company and Timecon is Mr Richard Clark. The amount of the Determination was $887,532.80 including GST. On 5 April 2019, the LLBJV paid that amount into Court as security for the adjudicated amount pending determination of these proceedings. 3. It is the LLBJV's contention that there was no "contract or other arrangement" between it and Timecon relating to the disposal of VENM at the Somersby Site, with the consequence that there was no "construction contract" between it and Timecon and therefore no right to claim a progress payment under the SOP Act. The LLBJV accepts that some of the waste generated from the NorthConnex Project (referred to in the industry as "spoil") was deposited at the Somersby Site. However, it says that that occurred pursuant to a contract for the haulage and disposal of spoil generated by the excavation and tunnelling work which it entered into with Laison Earthmoving Pty Ltd (Laison). Alternatively, the LLBJV contends that, if there was a contract or other arrangement between it and Timecon, that contract was not a "construction contract" within the meaning of the SOP Act, again with the consequence that the rights conferred by the SOP Act are not available in respect of it. Background 1. The LLBJV's main subcontract for the haulage and disposal of spoil for the NorthConnex Project was with Kingsfeld Contracting Pty Ltd. That contract was entered into on 11 March 2015. It only provided for the haulage and disposal of spoil from 7.00am until 6.00pm Monday to Friday and 8.00am until 1.00pm on Saturday. However, parts of the NorthConnex site operated 24 hours per day and, although the LLBJV had some storage for spoil, it was best for the efficient operation of the project if the spoil was moved from the storage areas overnight and during weekends. 2. On 19 January 2017, Mr Paul Postma, who at that time was the project manager with the LLBJV who was responsible for the spoil team, met with Mr Joe Keown and Mr Matthew Laison about using the Somersby Site for night and weekend tipping. Mr Keown was the managing director of Civil Team Pty Ltd and had previously worked for Kingsfeld. Mr Laison was the managing director of Laison, which had often been engaged as a haulage subcontractor by Kingsfeld on the NorthConnex Project. 3. Immediately following the meeting, Mr Keown sent a proposal to Mr Postma in relation to tipping at the Somersby Site, which was copied to Mr Laison. 4. Following that proposal and some correspondence in relation to it, Mr Postma met Mr Keown at the Somersby Site on 9 February 2017. Mr Clark was also present during the meeting. According to Mr Postma, whose evidence was not challenged on the point, Mr Keown introduced Mr Clark as the owner of the site. There is a dispute concerning what was said at that meeting. Mr Keown did not give evidence. According to Mr Postma, the conversation was largely between him and Mr Keown. Mr Keown told him that he (Mr Keown) "will manage the site". Mr Postma says that he observed that the site was not set up as an established site for the disposal of spoil. He discussed with Mr Keown what was necessary to make the site suitable for that purpose and what plant and equipment Mr Keown intended to use in that process. 5. Mr Clark, on the other hand, says that he participated in the conversation and that he explained to Mr Postma the equipment he had available to prepare the site to receive substantial quantities of spoil. 6. Following that meeting, there were further telephone discussions between Mr Postma and Mr Keown regarding the rates Civil Team proposed to charge. Mr Postma thought that they were too high and negotiations with Civil Team did not proceed. However, at about that time Mr Vincent Newton, the construction director of LLBJV, contacted Mr Clark directly and arranged to meet with him at the Somersby Site. That meeting occurred on 24 February 2017. They walked around the site and during the meeting Mr Clark handed Mr Newton a document titled "Heads of Agreement". Mr Clark said that he would have the LLBJV commercial managers and lawyers take a look at it. According to Mr Clark, they had a conversation which included words to the following effect: Newton: Richard – the site is not yet up to standard. The angles for LLBJV tipping trailers and access are all wrong Clark: Ok. Paul and I have previously spoken about this. I am prepared to carry out that work. Newton: Ok – if you carry out that work, we're prepared to pay $4 per tonne. Can we start with say 50,000 tonnes of VENM? Clark: Great. 1. Mr Newton, on the other hand, denies that version of the conversation. According to him, Mr Clark said words to the effect that "I would like to trial 50,000 tonnes to begin with" and "[I]f I don't get 4 million tonnes from you I will get it from WestConnex". Also according to Mr Newton, it was Mr Clark who said that he wanted $4.00 per tonne for spoil delivered to the site. 2. The clause stating the rates to be charged by Timecon was blank in the Heads of Agreement that Mr Clark handed to Mr Newton. 3. On 27 February 2017, Mr Newton sent to Mr Clark an email attaching a draft form of agreement "for review". Recital B to the draft provides: The parties have agreed in principle that the Contractor [that is, LLBJV] shall deliver to the Supplier [Timecon] and the Supplier will accept, a minimum of 50,000 tonnes of excavated natural material (ENM) and virgin excavated material (VENM) compactible fill (Fill), with a view to the Supplier providing space for up to 650,000 tonnes or more of Fill. 1. The contract included general conditions to which was attached a schedule headed "Schedule A – Particulars". Against item 3 "Price" were the words "$..../tonne". 2. On 28 February 2017, Mr Clark sent an email to Ms Gianna Minato, a solicitor with the LLBJV, with a copy to Mr Newton, setting out his comments on the draft contract. Relevantly, the email said: 1. The consent allows us to fill for the base of buildings of which 50,000 will not complete this task… 2. I spoke with Vince and advised that to gain traction we would test out Lend Lease [sic] ability to work with us on this project and if at the end of the 50,000 tonnes we could not sort it out we would be going to Westconnex with our bulk of 4 million tonnes night works to increase their production and decrease their project timeframes. … 6. The schedule of rates is $4 per tonne for Somersby suburb or south towards Hornsby, $3 for Ourimbah and $2 for Tuggerah. 1. Ms Minato responded to that email on 28 February 2017, noting paras 1 and 2 and stating in relation to para 6 the following: The rate of $4/tonne is noted for Somersby. Should the quantity be varied and other sites be incorporated, the schedule would be adjusted, subject to the parties' agreement. That email attached a revised draft of the contract. 1. There was then a delay in finalising the terms of the contract. During that time, Mr Clark sought approval from the NSW Police for delivery of materials to the site over 24 hours each day, which was said to be a requirement of the development approval for the site. 2. On 21 March 2017, Ms Minato sent an email to Mr Clark, which was copied to Mr Newton, chasing Mr Clark up for a completed notice under s 143 of the Protection of the Environment Operations Act 1997 (NSW) (the POEO Act). That section creates an offence for a person who transports waste to a place that cannot lawfully be used as a waste facility for that waste. However, s 143(3A) provides a defence where the defendant establishes, among other things, that "an approved notice was, at the time of the alleged offence, given to the defendant by the owner or occupier of the place to which the waste was transported or was displayed at the place" and which "stated that the place could lawfully be used as a waste facility for the waste". 3. Following that email, on the same day, Mr Newton sent Ms Minato an email saying: Please hold off with agreement to send spoil. Reviewing other options, hope to close out this week. thanks 1. On or about 23 March 2017, Mr Clark provided the LLBJV with a notice under s 143 of the POEO Act in the name of 40GRS as owner of the land. 2. Nothing further happened until 27 April 2017, when Mr Newton sent an email to Mr Clark which said: I believe all the required approvals are in place to satisfy our enviro/legal department. When do you think you will be ready to proceed with the night shift operations. I will prepare an execution copy of agreement. 1. Mr Newton sent to Mr Clark an execution copy of the agreement on 27 April 2017. The covering email stated: Please find attached agreement for execution. Please sign and return for LL execution. Paul Postma will contact you re trucks commencing Monday night. 1. Mr Clark says that the following day he had a telephone call with Mr Newton in which words to the following effect were spoken: Clark: Vince – our agreement was only for VENM. Why does your draft agreement say ENM? That was not our arrangement. Newton: OK, we will proceed without supplying ENM and only supplying VENM. 1. Mr Newton denies having a conversation with Mr Clark in those terms. He says that when he did not receive an executed copy of the supply agreement back from Mr Clark within short order of it being sent to him, he decided that Timecon "would not be a good partner for LLBJV to do business with" and therefore decided not to follow Mr Clark up. That evidence is consistent with an exchange of emails between Mr Newton and Mr Paul Lewis, the commercial manager of LLBJV, in which Mr Lewis asked Mr Newton whether the agreement had been executed and Mr Newton replied on the same day (5 July 2017) saying "Contract was sent but Timecon would not execute, they are not a good partner to do business with". 2. Mr Clark says that in March or April 2017, LLBJV tipped several small batches of material at the Somersby Site. In his affidavit evidence, he says that that recollection is consistent with evidence given by Mr Postma before the Adjudicator. In fact, it is apparent that the evidence given by Mr Postma before the Adjudicator was mistaken and the batches were not delivered until late April or early May 2017 in circumstances which are explained below. 3. On or about 27 April 2017, Mr Postma had a telephone conversation with Mr Clark regarding Mr Newton's email dated 27 April 2017. According to Mr Postma, Mr Clark said words to the effect that "I am not ready to start night shift next week but I want to take some trial loads during the daytime at this stage". 4. Following the conversation between Mr Postma and Mr Clark, on 1 May 2017, Mr Postma arranged with Mr Clark for T&S Spiteri Pty Ltd trading as Signature Bulk Haulage (Signature) to provide two trucks to deliver a load of spoil each during the day to the Somersby Site. Two further loads were provided on 4 May 2017. That evidence is consistent with daily dockets provided to the LLBJV by Signature. Mr Postma says that it became evident from those test deliveries that it would not be possible for Timecon to manage the deliveries contemplated by the draft contract. Mr Postma says that, following those test runs, he heard nothing further from Mr Clark until 17 July 2017. 5. On 5 July 2017, Mr Clark sent Mr Newton an email saying: Are you still interested in placement of the sandstone or are you sufficiently catered for? Mr Clark accepted in cross examination that that query related to the Somersby Site. Mr Newton forwarded that email to Mr Lewis saying: Paul, can you please respond officially withdrawing any offer of contract. 1. Mr Lewis did nothing in response to that request. 2. On 17 July 2017, Mr Clark sent an email to Mr Newton and Mr Postma saying: Interested in running trucks at night with a very close tip site to speed up production? The email also forwarded copies of the correspondence that Mr Clark had had with the NSW Police in which the Police had given consent to the Somersby Site operating 24 hours per day. 1. The email is somewhat curious in light of the email dated 5 July 2017. Mr Clark denied that the email related to the Somersby Site. However, I do not accept that evidence. The only reasonable inference to draw from the fact that Mr Clark forwarded his correspondence with the NSW Police in relation to the Somersby Site is that he was referring to that site. Neither Mr Postma nor Mr Newton replied to that email. 2. On 17 August 2017, Mr Laison contacted Mr Postma. According to Mr Postma, Mr Laison said words to the effect: Laison will be running the Somersby Site. We have an agreement with Richard [Clark] to manage the site. You will be able to dispose out of hours at the site. 1. Following that conversation, on 24 August 2017, Mr Postma met with Mr Laison and Mr Tom Cooper, Laison's general manager, at the NorthConnex site office. During that meeting, there was a discussion concerning trial runs. Mr Postma stated that the LLBJV would use its own truck fleets for the trial and asked Mr Laison to provide a tip only rate for the trial. Following that meeting, Mr Cooper sent an email dated 25 August 2017 to Mr Postma which said: Thank you for meeting with myself and Mathew yesterday, as per our discussion yesterday regarding two trials. We would like the first [trial] to be on Sunday the 3rd of September through the day and the second trial to be advised which will be a night [trial]. These [trials] will be at a rate of $5.50 per tonne plus GST for tip fees. Please find attached all necessary Da and all approvals for the Somersby site as requested. Please don't hesitate to call if you have any more questions. 1. Mr Postma told Mr Newton of the proposed trial run. He also proposed that, contrary to his initial proposal, Laison "provide their own trucks to support ours as we will be down on truck number [sic] on the weekend". 2. On 1 September 2017, Mr Postma met with Mr Cooper at the Somersby Site. Mr Clark was also present. There was a discussion concerning the proposed trial run scheduled for 3 September 2017, including how many trucks would be expected, the hours of operation and the personnel and equipment that would be mobilised for it. Mr Postma gave evidence that he observed that there was a compactor and excavator carrying out work in anticipation of the trial run. 3. Following that meeting, Mr Postma sent an email to Mr Laison setting out the terms of the trial run. It stated "Agreed rate for Sunday only is $5.50/T – based on LLBJV weighbridge dockets". 4. Shortly beforehand, Mr Postma sent Timecon an email, which was copied to Mr Laison, asking Timecon to complete an s 143 certificate. Mr Clark replied later that day asking for a material classification certificate, a certificate of currency for public liability insurance and, if the LLBJV intended to have workers on site, "a current workers comp certificate". 5. It appears from a Laison document that the 60 loads totalling 2226.79 tonnes were delivered on 3 September 2017. 6. There was then further correspondence between Mr Postma and Laison concerning a second trial run that occurred on the nights of Saturday, 9 September 2017 and Sunday, 10 September 2017. 7. There were further trials on 11 and 12 September 2017 and 18 September 2017, which were arranged between Laison and Mr Postma. On at least one occasion, Ms Natalie Murina, who worked for Laison, copied Mr Clark in on correspondence between her and Mr Postma. 8. Mr Postma ceased to be the project manager for the spoil team on 20 September 2017. His role was taken over by Mr Rudi Diener. 9. On 25 September 2017, Laison sent the LLBJV a tax invoice for a total amount of $239,342.26 (excluding GST) for the period 24 August 2017 to 25 September 2017 which was broken down into two amounts – one for $117,032.81 for "truck hire" and the other for $122,309.45 for "tip fees". 10. It appears that no formal contract was entered into between Laison and the LLBJV. However, during the period from 6 October 2017 to 24 February 2018, Laison issued and the LLBJV paid invoices for "Tip Fees" at the Somersby Site. It is not disputed that, in all, approximately 201,700 tonnes of spoil was delivered to the Somersby Site during the period from September 2017 to January 2018. 11. Over the same period, there was some correspondence between Mr Clark and Mr David Wallis, Project Engineer for the LLBJV, in relation to the provision of s 143 certificates. Also during that period, 40GRS sent three invoices to Laison, or a related company, for "VEMN received at Somersby from NorthConnex" calculated at a rate of $1.00 per tonne. 12. Apart from references to the s 143 certificates, Mr Clark says nothing in his affidavit evidence about the events between August 2017 and late January 2018. Despite evidence given by Mr Newton that Mr Laison told Mr Newton that Laison was managing the Somersby Site, and despite the invoices issued by Laison, Mr Clark said nothing about the arrangements between him or the companies controlled by him and Laison, although that was obviously a matter within his knowledge. Mr Clark was cross-examined by Mr Robertson, who appeared for the LLBJV, on whether such an arrangement existed in relation to the Somersby Site. He gave a series of evasive answers before conceding, when it became apparent that Mr Robertson had documents consistent with such an arrangement, that it did. 13. On 29 January 2018, Mr Clark sent Mr Wallis an email in which he relevantly said: 1. We are happy to proceed with NCX [NorthConnex] directly for a spoil arrangement and RMS 3071 supply for select fill pavement installation, this will mean other contractors can focus on the transport and NCX get access to our three other sites, advise if NCX is interested. The contract is attached. 2. Please advise how many tonnes remaining and tonnes of RMS 3071 required. 1. In response to a request from Mr Clark, Mr Wallis also provided Mr Clark with the latest soil classification reports relating to the tunnelling and excavation works. 2. Mr Clark sent a further email dated 15 February 2018 to Mr Grant Sainsbery, who worked for the LLBJV, with a copy to Mr Wallis, in which he said: We have been over the last few months and still are seeking stability under an import and export contract from NCXLLJV, where the import has an extra 30% wastage to allow for the processing of RMS 3071, that NCXLLJV may require for Select Material Zone road pavement, once the borers have completed their tunnel excavation works. Previous notice has been sent offering a contracted position, it may be that NCXLLJV decide not to proceed further and advice today regarding that is also suitable, I am sure that you can understand between vascillating [sic] between having surplus material and not enough to supply clients like yourselves is a difficult tightrope to walk and we can seek clarity either way. Complying certificates have been supplied to meet the specification and are attached. The action for today; halt sending any trucks to Somersby until a complying s143 notice is achieved through a resolution being passed to continue or part ways at the Somersby site. At the moment the s143 liability sits squarely with NCLLJV. We seek to have the s143 liability transferred off NCXLLJV by ensuring a temporary halting of delivery of sandstone VENM to 40 Gindurra Road Somersby site until a resolution on the above can occur. 1. On 16 February 2018, Mr Diener sent an email to Laison and Timecon stating: Please take note that Somersby will no longer be used as a tip site by NCX due to various reasons which affects the performance thereof. Over and above that, due to ongoing interference from others – NCX would like to distance itself from this tip site for the remainder of the project. Under no circumstances will any negotiations be entertained by NCX w.r.t. the operating rights and/or license in any form, from anyone. In addition, NCX will not be interested in the procurement of any recycled material from this tip site. 1. Following that email, there were no further deliveries from the NorthConnex Project to the Somersby Site. 2. On 8 August 2018, Mr Clark sent Mr Newton an email which was copied to "NCX Legal" asking LLBJV to choose from the following two options: Option A is NCXLLBJV contracts a suitable commercial rate for supply of slurry wall shotcrete sandstone mix at an agreed tonnage rate for supply and deliver or Option B is NCXLLBJV removal of any NCXLLBJV material on site under condition D55 to rehabilitate the site to preconstruction condition or better. The email also asserted that the Somersby Site was an "Ancillary Facility" under the conditions of "State significant infrastructure application (SSI 6136)". It is not easy to understand the email. Mr Newton says, and I accept, that that was the first contact he had had with Mr Clark since July 2017. Mr Clark does not refer to the email in his affidavit evidence. 1. On 10 August 2018, Ms Michelle Sultana, senior legal counsel for LLBJV, responded to that email denying that the Somersby Site was an ancillary facility of the NorthConnex Project and rejecting Mr Clark's demands. Following that, there was further correspondence between Mr Clark and Ms Sultana. 2. On 7 November 2018, Timecon served a payment claim on the LLBJV claiming $4.00 per tonne for the "Generation and recovery of spoil from NorthConnex project Tunnel" of 201,712 tonnes of VENM for a total price of $887,532.80 including GST. The payment claim is also expressed to be for "construction works and structures forming, or to form, part of land, site clearance, earth-moving, excavation, the laying of foundations, site restoration, landscaping at 40 Gindurra Road Somersby". No explanation was offered by Mr Clark for the delay in serving the payment claim. 3. On 21 November 2018, the LLBJV served a payment schedule certifying the scheduled amount as "nil". 4. On 5 December 2018, Timecon lodged an Adjudication Application with the third defendant, AAE Nominations Pty Ltd t/as Expert Adjudication, which led to the Determination. Relevant provisions of the SOP Act 1. Section 7(1) of the SOP Act provides: Subject to this section, this Act applies to any construction contract, whether written or oral, or partly written and partly oral, and so applies even if the contract is expressed to be governed by the law of a jurisdiction other than New South Wales. 1. Section 8(1) of the SOP Act provides: On and from each reference date under a construction contract, a person: (a) who has undertaken to carry out construction work under the contract, or (b) who has undertaken to supply related goods and services under the contract, is entitled to a progress payment. 1. Section 13 relevantly provides: (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; (b) must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount), and (c) … 1. Section 17(1) provides that "[a] claimant may apply for adjudication of a payment claim" in certain circumstances. 2. It is plain from these provisions that a claimant is not entitled to apply for adjudication of a payment claim, and an adjudicator has no jurisdiction to determine a payment claim, unless the claim is made by a person who has undertaken to carry out construction work under a construction contract or undertaken to supply related goods and services under the contract. 3. "Construction contract" is defined in s 4 of the SOP Act to mean "a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party." 4. "Construction work" is defined in s 5(1) in the following terms: In this Act, construction work means any of the following work: (a) the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures forming, or to form, part of land (whether permanent or not), (b) the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of any works forming, or to form, part of land, including walls, roadworks, power-lines, telecommunication apparatus, aircraft runways, docks and harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant and installations for purposes of land drainage or coast protection, (c) the installation in any building, structure or works of fittings forming, or to form, part of land, including heating, lighting, air-conditioning, ventilation, power supply, drainage, sanitation, water supply, fire protection, security and communications systems, (d) the external or internal cleaning of buildings, structures and works, so far as it is carried out in the course of their construction, alteration, repair, restoration, maintenance or extension, (e) any operation which forms an integral part of, or is preparatory to or is for rendering complete, work of the kind referred to in paragraph (a), (b) or (c), including: (i) site clearance, earth-moving, excavation, tunnelling and boring, and (ii) the laying of foundations, and (iii) the erection, maintenance or dismantling of scaffolding, and (iv) the prefabrication of components to form part of any building, structure or works, whether carried out on-site or off-site, and (v) site restoration, landscaping and the provision of roadways and other access works, (f) the painting or decorating of the internal or external surfaces of any building, structure or works, (g) any other work of a kind prescribed by the regulations for the purposes of this subsection. 1. Section 6 defines "related goods and services" in the following terms: (1) In this Act, related goods and services, in relation to construction work, means any of the following goods and services: (a) goods of the following kind: (i) materials and components to form part of any building, structure or work arising from construction work, (ii) plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work, (b) services of the following kind: (i) the provision of labour to carry out construction work, (ii) architectural, design, surveying or quantity surveying services in relation to construction work, (iii) building, engineering, interior or exterior decoration or landscape advisory services in relation to construction work, (c) goods and services of a kind prescribed by the regulations for the purposes of this subsection. (2) Despite subsection (1), related goods and services does not include any goods or services of a kind prescribed by the regulations for the purposes of this subsection. (3) In this Act, a reference to related goods and services includes a reference to related goods or services. The issues 1. As I have said, LLBJV contends that the Adjudicator did not have jurisdiction to determine Timecon's payment claim for two reasons: 1. there was no "contract or other arrangement" between the LLBJV and Timecon; and 2. if there was a contract or other arrangement between the LLBJV and Timecon it was not one under which Timecon undertook to carry out construction work or to supply related goods and services for the LLBJV. Was there a contract or other arrangement between LLBJV and Timecon? The relevant contract or arrangement 1. It is not easy to understand Timecon's submissions in relation to this issue. It submits that an arrangement need not be legally binding in order for it to be a "contract or other arrangement" for the purposes of the SOP Act. In particulars supplied on 17 May 2019 in accordance with directions given by the Court, it asserts that a contract or other arrangement for the purposes of the SOP Act "came into existence from 24 February 2017" (defined in the particulars as "the Arrangement"). It then gives extensive particulars of the facts, matters and circumstances on which it relies to establish the Arrangement. Those particulars are divided into two groups. First, there are those relating to the delivery of 50,000 tonnes of VENM. They consist of (1) the conversation between Mr Clark and Mr Newton on 24 February 2017; (2) the email dated 27 February 2017 attaching the draft agreement and subsequent correspondence on 27 and 28 February 2017; (3) the delivery of VENM to the Somersby Site in March 2017; (4) the fact that the site was modified, and Mr Clark sought the necessary approvals, to receive spoil at the site; and (5) subsequent conduct which is said to have "induced [Timecon] to continue to permit the receipt and storage of VENM onto the Site in circumstances where [Timecon] would suffer loss and damage if the [LLBJV] were not to honour those representations that induced [Timecon] to act to its detriment". 2. Second, there are those particulars relating to the delivery of approximately 151,712 tonnes of VENM. They consist of (1) the email dated 27 April 2017, which is said to contain a representation that the LLBJV intended to continue delivering VENM to the Somersby Site "for storage pending its disposal by the [LLBJV]"; (2) the email correspondence between 27 April and 5 July 2017, which is said to have contained a representation that the LLBJV desired to increase its entitlement to place spoil on the site by the delivery of ENM; (3) the fact that VENM continued to be delivered to the site from September 2017 until January 2018; (4) the fact that the representations that were made induced Timecon to continue to permit the receipt and storage of VENM in circumstances where Timecon will suffer loss and damage if the LLBJV was not to honour its representations. Relevant legal principles 1. There is a question whether for an arrangement to be an "other arrangement" for the purposes of the SOP Act, it must give rise to a legally binding obligation by which the claimant is entitled to be paid by the respondent for the services the claimant undertakes to provide. 2. Absent authority, it seems to me necessary that the arrangement gives rise to a legally binding obligation. Of course, the obligation need not arise under a contract. It could arise as a result of the conduct of the parties which fell short of a contract, such as conduct giving rise to an estoppel. 3. It is plain that the SOP Act is not intended to affect the ultimate rights and liabilities of the parties to whom it applies. Rather, its purpose is to provide a mechanism by which contractors who do work in the construction industry, or provide related goods and services, and are entitled to be paid for that work are able to make progress claims and to have those claims paid promptly. The purpose of the SOP Act is not to create an obligation to pay where one does not otherwise exist. That is made plain by s 32 of the SOP Act, which provides: 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. 1. In the light of that provision, it makes no sense to interpret the SOP Act as creating a right to a progress claim when the claimant has no underlying right to be paid any amount at any time by the person against who the claim is made for the work the claimant has undertaken to perform. Under s 32, any payment resulting from the adjudication of such a claim would have to be returned. In my opinion, that is not what the legislature could have intended. 2. However, that conclusion is not consistent with a number of authorities in this Court. The first is Okaroo Pty Ltd v Vos Construction and Joinery Pty Ltd [2005] NSWSC 45. In that case, Okaroo as the developer of an apartment complex entered into a contract with Consolidated Constructions Pty Limited (Consolidated) pursuant to which Consolidated agreed to perform all construction works associated with the project. Vos was the nominated sub-contractor under the contract for the supply and installation of the joinery items. Under cl 10.5 of the contract, Okaroo was to pay nominated subcontractors directly on behalf of Consolidated. Clause 10.5(b) provided that "if the Contractor [Consolidated] reasonably requests the Principal [Okaroo] in writing not to make a payment to the Nominated Subcontractor, the Principal shall withhold payment but under no circumstances, including bankruptcy or winding up of the Contractor, shall payment be made to the Contractor". 3. There was evidence that, in a meeting that was attended by representatives of Vos and Consolidated and a director of Okaroo before the subcontract was entered into, the representative from Vos had expressed concern about Consolidated's poor payment record on other projects and the director of Okaroo had replied that Okaroo would pay Vos directly. The subcontract recorded that progress payments were "Direct from Okaroo Pty Ltd". In all, Vos made 13 progress claims. Seven were paid directly by Okaroo. Consolidated then went into liquidation and Vos made a payment claim for the balance of the progress payments directly from Okaroo. Okaroo disputed the claim, which was referred to adjudication in accordance with the SOP Act. The adjudicator found in Vos's favour. The question before the Court was whether the adjudicator had jurisdiction to determine the dispute. That question turned on whether there was a "contract or other arrangement" between Vos and Okaroo. 4. Nicholas J held that there was. There is a question whether Nicholas J is to be understood as holding that it was not necessary that there be a legally enforceable obligation. Mr Robertson submitted that his Honour's judgment was not to be understood in that way. The passage relied on by Timecon for the opposite conclusion was para [41]. In that paragraph Nicholas J said: With regard to the authorities, and to its context in the Act, in my opinion the term "arrangement" in the definition is a wide one, and encompasses transactions or relationships which are not legally enforceable agreements. The distinction in the definition between "a contract" and "other arrangement" is intended by the legislature to be one of substance so that under the Act construction contracts include agreements which are legally enforceable and transactions which are not. Thus in distinguishing between these relationships I understand the legislature intends that "contract" is to be given its common law meaning and that "arrangement" means a transaction or relationship which is not enforceable at law as a contract would be. Accordingly I reject the submission for Okaroo that the term "arrangement" should be understood to mean an agreement which is tantamount to a contract enforceable at law. 1. As Mr Robertson pointed out, that passage is directed at the argument advanced by Okaroo that the term "arrangement" should be understood to mean an agreement tantamount to a contract enforceable at law. It was not directed at an argument that an "arrangement" was one that gave rise to legally enforceable obligations of some nature. However, the two authorities Nicholas J referred to support the broader proposition. One was Newton v Federal Commissioner of Taxation (1958) 98 CLR 1 at 7, which concerned s 260 of the Income Tax and Social Services Contribution Assessment Act 1936-1950 (Cth) (making void as against the Commissioner contracts, agreements or arrangements that purport to have the purpose or effect of avoiding tax). The other was Australian Competition and Consumer Commission v CC (New South Wales) Pty Ltd (No 8) (1999) 165 ALR 468 at 469, which concerned ss 45(2) and 45A of the Trade Practices Act 1974 (Cth) (which concerned anti-competitive contracts or arrangements). In both cases, the court took the view that the relevant "arrangement" need not be a legally enforceable one, although in contexts far removed from the present one. 2. Moreover, although it might have been said on the facts of the case that Vos had a legally enforceable right to recover from Okaroo on the basis of an estoppel, that is not the basis on which Nicholas J reached his conclusion. Instead, his Honour gave the following reason for his conclusion (at [55]): In my opinion there is nothing in the definition of construction contract itself, or read with s 13(1), which indicates the qualification for which Okaroo contends. As I have earlier held, the only requirement to satisfy the definition is that the contract or other arrangement be one under which "… one party undertakes to carry out construction work, or to supply related goods and services, for another party". The terms and conditions (if any) pursuant to which a liability is incurred to pay for the construction work carried out, or the related goods and services supplied, are entirely irrelevant to the requirement of the definition. Accordingly, I reject Okaroo's submission that a construction contract must be a contract or other arrangement under which liability to pay for the construction work is legally enforceable. His Honour did not refer to s 32 of the SOP Act. 1. McDougall J reached the same conclusion in Machkevitch v Andrew Building Constructions [2012] NSWSC 546 (see also Class Electrical Services Pty Ltd v Go Electrical Pty Ltd [2013] NSWSC 363). After referring to the decision of Nicholas J, his Honour said: 27 In my view, what is required is that there be something more than a mere undertaking; or something which can be said to give rise to an engagement, although not a legally enforceable engagement, between two parties; or a state of affairs under which one party undertakes to the other to do something; or an arrangement between parties to like effect. 28 In those circumstances, the court must look for a concluded state of affairs, which is bilateral at least, which can amount to an arrangement under which one party to it undertakes to perform construction work for another party to it. It is not necessary that the arrangement be legally enforceable; but an "arrangement" which is legally enforceable may be, a priori, a construction contract. 29 I do not think that much more assistance is to be gained from considering how the word "arrangement" (or its plural form) has been construed in other statutory contexts. Ultimately, the meaning to be given to the word must depend on an analysis of its place in the particular legislative scheme which is under consideration, and by reference to the context in which it appears. In my view, considerations of legislative purpose and context indicate, in the present case, that the word "arrangement" denotes some engagement, or state of affairs, or agreement (whether legally enforceable or not) under which, perhaps among other things, one party undertakes to perform construction work for another. Again, McDougall J did not refer to s 32 of the SOP Act. 1. In Machkevitch, the defendant builder entered into a construction contract with the proprietor of a property. The proprietor went into liquidation during the course of the building work. Prior to entry into the building contract, the plaintiff had told the builder that he was a developer and that the proprietor was his company. The plaintiff also told the builder that if the proprietor did not have sufficient resources to pay all of the money payable to the builder, he would pay whatever sum remained owing by the proprietor out of his own funds. 2. In holding that there was a "contract or other arrangement" between the builder and the plaintiff, McDougall J said: In those circumstances, I find that there was an "arrangement" between Mr Machkevitch, both on his own behalf and on behalf of the proprietor, the proprietor and the builder, substantially in the terms pleaded (set out at [11] above). For the reasons that I have given, I conclude that this conversation amounted to an engagement, or agreement (not legally enforceable), under which Mr Machkevitch assured the builder that he had sufficient personal resources to pay it if the proprietor did not; that he would do so; and that the builder accepted and acted on this assurance by executing the building contract …. 1. Finally, in IWD No 2 Pty Ltd v Level Orange Pty Ltd [2012] NSWSC 1439 at [25], Stevenson J summarised the principles to be derived from the two earlier cases in these terms: It has been held that "arrangement": - (a) extends to something which goes beyond the concept of a "contract": per McDougall J in Machkevitch v Andrew Building Constructions [2012] NSWSC 546 at [18]; (b) encompasses transactions or relationships which are not legally enforceable: per Nicholas J in Okaroo Pty Ltd v Vos Construction and Joinery Pty Ltd [2005] NSWSC 45 at [41]; cited with approval in Machkevitch at [24]; (c) includes an arrangement enforceable by reason of the doctrine of estoppel; Machkevitch at [26]; (d) requires something more than a "mere undertaking" and which "can be said to give rise to an engagement"; although not necessarily a legally enforceable engagement: Machkevitch at [27]; (e) requires "a concluded state of affairs, which is bilateral at least" under which one party, relevantly to this case, agrees to supply services related to construction work: Machkevitch at [28]. 1. In that case, IWD was the developer of a property in Randwick who had engaged a builder, Link Constructions (NSW) Pty Limited, to design and construct premises on the property. IWD wanted Level Orange to carry out the design work. However, Level Orange was reluctant to do so because Link already owed it money in relation to a previous job. Stevenson J found that at a meeting in January 2011 attended by representatives of IWD and Level Orange, the representative of IWD made the following promises or representations to Level Orange (at [39]): (a) that he would "make sure" that Level Orange was paid for architectural services provided for the project; (b) that IWD would pay Level Orange a deposit; (c) that IWD would pay Level Orange, or ensure that Level Orange was paid fortnightly payments; and (d) that IWD would ensure that Level Orange was paid. His Honour also found that, in return, "[the representative of Level Orange] said that, in consideration for those promises, Level Orange would "do the job"; that is provide architectural services in respect of the project". 1. The contract between IWD and Link was later terminated and Link subsequently entered into external administration. The question was whether there was a contract or arrangement between IWD and Level Orange for Level Orange to perform the work that it did. Holding that there was, Stevenson J said (at [41]): In my opinion, what passed between Mr Christofidellis [of IWD] and Mr Salim [of Level Orange] amounted to a "construction contract". It was, at the very least, an "arrangement" between IWD and Level Orange under which Level Orange undertook to supply architectural services related to the project for IWD. It was probably more than that; a legally binding contract between the two companies. 1. Although in each of these cases, the Court had taken the view that the arrangement did not need to be legally binding, the facts of each case suggest that there was such an arrangement, although at least in the first two not of a contractual nature. 2. Moreover, in my opinion, McDougall J was correct to hold that the meaning given to "arrangement" in other cases dealing with different legislative provisions is of little assistance in interpreting the phrase "contract or other arrangement" in the SOP Act. In the cases referred to by Nicholas J, an interpretation that did not require a legally binding obligation promoted the purpose of the relevant legislative provisions. As I have explained, I do not think that that is so in the case of the SOP Act. 3. It appears that Nicholas J reached the conclusion that he did principally on the basis that the relevant contract or arrangement need not deal with payment at all because the obligation to make progress payments is supplied by the SOP Act. Consequently, there need not be any obligation to pay. There only needs to be a contract or other arrangement under which one party undertakes to carry out construction work or to supply related goods and services. With respect, however, that seems to me to confuse the subject-matter of the contract or other arrangement with its nature. It is plain that, in order for the SOP Act to apply, the subject of the contract or other arrangement must be the provision of construction work or the supply of related goods or services. But the question remains whether the expression "contract or other arrangement" connotes an arrangement which gives rise to a legal obligation to provide something in return for the construction work or related goods or services. For the reason I have given, I think it does. 4. Neither of the other decisions advances the position. Neither addresses s 32 of the SOP Act; and, as I have said, in both cases the facts are consistent with the existence of a legal obligation. 5. Mr Corsaro SC, who appeared for the first defendant, submitted that "arrangement" should be interpreted as including one that does not give rise to legally binding obligations because of the adjudication process contemplated by the SOP Act. Many adjudicators will not have legal training. They could not be expected to determine whether arrangements give rise to legal obligations or not. I do not accept that submission. Even on Mr Corsaro's approach, adjudicators would still have to determine whether a particular arrangement is a "contract or other arrangement" for the purposes of the SOP Act. That involves a mixed question of fact and law, just as the question whether an arrangement is legally binding does. It is unavoidable that adjudicators have to consider legal questions when considering whether they have jurisdiction. The only question is the nature of the issue they have to address. 6. One difficulty with the view that an arrangement does not need to be legally binding to be a "construction contract" is that there is no obvious principle that can be applied in drawing the dividing line between arrangements that do not give rise to legal obligations but nevertheless are treated as arrangements for the purposes of the SOP Act and those that are not, which is likely to make an adjudicator's task more difficult, not less difficult. In other areas of the law where some non-legally binding relationships are treated as "arrangements" to which the relevant legislation applies, it is possible to ask if the purpose of the legislation is advanced by treating arrangements of the type in question as arrangements for the purposes of the legislation. However, as I have sought to explain, it is not easy to see how the purpose of the SOP Act is advanced if the end result is that any arrangement which is not legally binding will produce a result where any adjudicated amount will have to be repaid. Accepting that, it is not easy to see what criteria can be used to determine which non-binding legal relationships fall within the scope of the SOP Act and which do not. 7. Having regard to those matters, I have reluctantly come to the conclusion that I should not follow the earlier cases. In my opinion, the relevant arrangement must give rise to a legally binding obligation, although, of course, that obligation need not be contractual in nature. Consideration 1. There are a number of difficulties with the proposition that there was a contract or other arrangement between the LLBJV and Timecon. 2. As particularised, Timecon's case appears to be that the contract or arrangement came into effect as a result of the conversation on 24 February 2017. Unless it did, it is difficult to see how the arrangement could have come into effect "from" that date. On that approach, the other particulars simply point to subsequent conduct as evidence of a pre-existing arrangement. 3. However, the difficulty with that case is that I do not accept Mr Clark's account of the meeting on 24 February 2017. In my view, for reasons I have already explained, Mr Clark was not a satisfactory witness. He failed to address critical matters in his affidavit evidence and, as I have said, he gave evasive answers concerning his relationship with Laison. He could only have done so with the intention of advancing a misleading picture of the relevant events. For that reason, I regard his evidence as being unreliable. 4. Moreover, it strikes me as inherently improbable that the conversation occurred in the terms suggested by Mr Clark or that the parties intended to be bound by what was said during that conversation. The evidence is that the Somersby Site was not ready to take substantial quantities of spoil. The LLBJV had had no experience with Mr Clark. Mr Newton came across as a straightforward and competent person who is unlikely to have said anything which committed the LLBJV to any course of action without proper investigation. Neither the Heads of Agreement provided by Mr Clark to Mr Newton on the day, nor the contract sent to Mr Clark subsequently set out the price that would be paid by the LLBJV. If the true position is that the price had been agreed at the meeting, the likelihood is that it would at least have been included in the draft contract sent to Mr Clark by the LLBJV. 5. It is Timecon's case that the agreement or arrangement was one by which Timecon agreed to store the spoil for an unspecified period of time. Why the LLBJV would agree to such an arrangement was never explained. In addition, even on Mr Clark's version of the conversation, there is no suggestion that an arrangement on those terms was discussed. Timecon planned to redevelop the site by constructing 89 warehouse units and associated facilities, including car parking. In paragraph 1 of his email dated 28 February 2017, Mr Clark said that "The consent allows us to fill the base of the buildings of which 50,000 will not complete this task". That statement is inconsistent with any suggestion that what was agreed was that Timecon would store the spoil for an unspecified period of time. 6. Both parties proceeded on the basis that it would be necessary to execute an agreement before they were legally bound and they exchanged drafts and comments on that basis. The first deliveries of spoil did not occur until after Mr Newton sent Mr Clark the final agreement to be executed. I accept Mr Postma's evidence that that came about as a result of a request from Mr Clark. It is reasonable to infer that Mr Clark did not want to sign the agreement and commit Timecon to take a substantial quantity of spoil until he was satisfied that Timecon had the capacity to deal with it. I also accept Mr Postma's evidence that the test runs demonstrated that Timecon did not have the capacity to take substantial quantities of spoil at that time. That explains why Mr Clark never signed the agreement and returned it to the LLBJV. The fact that neither party pursued the agreement following the test deliveries is inconsistent with the existence of a concluded agreement or arrangement as at 24 February 2017. 7. The existence of a concluded agreement or arrangement is also inconsistent with Mr Clark's emails dated 5 July and 17 July 2017 asking, in effect, whether the LLBJV was still interested in delivering spoil to the Somersby Site. Mr Clark would not have sent those emails if there was already an arrangement in place by which spoil from the NorthConnex project would be tipped at that site. 8. A further problem with the way in which the case is particularised is that the particulars proceed on a mistaken view of the facts. The case as particularised assumes that Mr Clark was correct when he said that the LLBJV tipped several small batches of spoil at the Somersby Site in March or April 2017. The case as particularised appears to be that agreement was reached on 24 February 2017 and consistently with that agreement the LLBJV commenced delivering spoil to the Somersby Site in March 2017. As I have explained, that is not what happened. 9. Similarly, the case as particularised is that the deliveries that occurred between September 2017 and January 2018 occurred pursuant to the unsigned agreement sent to Mr Clark on 27 April 2017. But that also does not correspond to what happened. On Timecon's case, there is an unexplained gap between the time when the terms of the (unsigned) contract were finalised and the time when there were any significant deliveries of spoil to the Somersby Site. 10. More significantly, the case as particularised is inconsistent with the relationship between the LLBJV and Laison. Timecon was on notice from evidence given by Mr Postma that it was the LLBJV's case that Mr Laison told Mr Postma on 17 August 2017 that Laison "will be running the Somersby Site" and that, as a result, the LLBJV reached an arrangement with Laison to tip spoil at that site. LLBJV's case is consistent with invoices rendered by Laison. Despite that, Timecon gave no evidence concerning its relationship with Laison. Mr Clark filed an affidavit and gave evidence. He did not deny that Laison was running the site from about August 2017. As I have said, he said nothing in his affidavit evidence about Laison's role at all, although that was something that was plainly within his knowledge. 11. Timecon submitted that the LLBJV did not inform Mr Clark that the material was being placed under an agreement with Laison. But that submission misses the point. The evidence is that Mr Clark through one of his companies had entered into an agreement directly with Laison to manage the site. If that is correct, there was no reason for the LLBJV to inform Mr Clark of its arrangement with Laison. It would have been natural for the LLBJV to assume that Mr Clark was aware of the arrangement because it knew that Laison was managing the site. The only conclusion that can be reached is that, to Mr Clark's knowledge, the LLBJV was tipping material at the site pursuant to an arrangement with Laison. Mr Clark's failure to address the evidence on that point supports that conclusion. Moreover, on 29 January 2018, Mr Clark sent Mr Wallis an email in which he relevantly said "We are happy to proceed with NCX directly for a spoil arrangement …" and attached a draft contract. That email is only consistent with the fact that Mr Clark understood that, up until that time, the spoil was being deposited pursuant to an arrangement with Laison. 12. Timecon also pointed to the direct correspondence between the LLBJV and Mr Clark, particularly in relation to the s 143 certificates. But that does not establish any arrangement between the LLBJV and Timecon. It was natural for the LLBJV to deal directly with Mr Clark in relation to the s 143 certificates because those certificates had to be provided by 40GRS. 13. There is some suggestion in the particulars provided by Timecon and in the submissions that it made that some form of estoppel operated to prevent the LLBJV from denying that there was an arrangement between it and Timecon. In particular, Timecon contends that the LLBJV made representations at the meeting on 24 February 2017 and on the faith of those representations it modified the site to be used to store spoil and continued to obtain all necessary approvals. It also contends that further representations were made concerning the LLBJV's intentions to deliver spoil to the site and that on the faith of those representations Timecon continued to permit the receipt and storage of spoil on the site. 14. There is a question whether that case is consistent with the one that was particularised. In any event, in my opinion, it must be rejected. On the findings I have made, the LLBJV did not make any representations to Timecon at the meeting on 24 February 2017 or subsequently. The meeting on 24 February 2017 was a preliminary meeting to investigate the possibility of using the Somersby Site as a place for tipping spoil at night and over weekends. Following that meeting the LLBJV conducted negotiations for an agreement that never eventuated. The conduct of those negotiations did not itself amount to a representation that the LLBJV would do anything. 15. Nor do I accept that Timecon acted to its detriment in the expectation of an agreement. There is scant evidence of what modifications were made to the Somersby Site. There is no evidence that those modifications were made by Timecon rather than, say, 40GRS. All Mr Clark says in his affidavit evidence on the topic is that "Over the weeks following [the conversation on 24 February 2017], I arranged for access and levelling construction work to be carried out". That evidence is difficult to reconcile with evidence given by Mr Postma that he observed work being done on the site on 1 September 2017. 16. Moreover, there is no evidence that those modifications were made in reliance on anything said or done by the LLBJV. The connection between the conversation of 24 February 2017 and the modifications, whatever they were, depends on a version of the conversation that I do not accept. The site was in the process of being redeveloped. The evidence suggests that fill was needed as part of that redevelopment. At one stage, Mr Clark said that if he could not reach an agreement with the LLBJV, he would take spoil from WestConnex. These matters suggest that the work would have been done whether or not an arrangement was reached with the LLBJV to take spoil from the NorthConnex project. In any event, the mere fact that a party incurs costs to put the party in a position where it can discharge its obligations under a contract for which it is negotiating does not mean that there is an existing arrangement between the negotiating parties for the payment of anything. 17. For those reasons, there was no "contract or other arrangement" between Timecon and the LLBJV within the meaning of the SOP Act. Did Timecon undertake to carry out construction work or to supply related goods and services? 1. Having regard to the conclusions I have reached, this question does not arise. However, I should say something about it in the event that I am wrong about whether there was a contract or other arrangement. 2. Timecon does not clearly identify the construction work or related goods and services it is said to have supplied. In its letter giving particulars of the construction contract, it says: The construction work or related goods or services comprised: (a) the earthmoving and excavation works undertaken by [Timecon] at the [Somersby Site] in preparation for the receipt of VENM; and (b) the receipt of VENM at the [Somersby Site]. 1. In my opinion, a fair reading of these particulars is that the relevant construction work was the work done at the Somersby Site and the related services was the receipt of VENM at that site. However, in final submissions Timecon sought to advance an alternative case that the relevant construction work was the work on the NorthConnex project and the receipt of VENM at the Somersby Site was the provision of a service related to that construction work. 2. Even if I had concluded that there was a contract or other arrangement between Timecon and the LLBJV, I would not have concluded that that contract or arrangement was for construction work at the Somersby Site. If there was an arrangement in relation to the Somersby Site it was an arrangement for the tipping of spoil at that site. In my opinion, on any view, it did not include the preparation of the Somersby Site to receive spoil. On the findings that I have made, at most that work was undertaken in anticipation of an arrangement. It did not form part of the arrangement. That conclusion is reinforced by the fact that Timecon's payment claim was not calculated by reference to the cost of doing that work but rather by reference to the amount of VENM that was tipped. 3. The receipt of spoil itself does not fall within paras 5(1)(a) to (d) of the definition of "construction work". If the relevant construction work is the work involved in preparing the site to receive spoil, it could not be said that the receipt of spoil was an operation "which forms an integral part of, or is preparatory to or is for rendering complete, work of the kind referred to in paragraph (a), (b) or (c)", so as to fall within paragraph 5(1)(e) of the definition. The tipping of spoil was not an integral part of that work. Nor could it be said to be preparatory to that work or necessary to render the work complete. The purpose of the work was to permit tipping to occur. They were separate activities. 4. For similar reasons, it could not be said that the tipping was a service related to the preparatory work so as to fall within the definition of "related goods and services". I did not understand Timecon to assert otherwise. 5. As I have said, Timecon does assert that the receipt of spoil was construction work because of its connection to the construction work that formed part of the NorthConnex project. It puts that submission in two ways. 6. It submits that the work on the NorthConnex project fell within para 5(1)(b) of the definition of "construction work". That much may be accepted. It then submits that the receipt of the spoil at the Somersby Site was an integral part of or was necessary for the rendering complete of those works. Alternatively, it submits that the supply of the spoil to the Somersby Site was the supply of goods arising from, and in relation to the construction work carried on as part of the NorthConnex project. 7. I do not accept either of those submissions. The delivery of spoil to the Somersby Site was not an integral part of the construction work on the NorthConnex project. The spoil could have been disposed of at any site authorised to accept it. For the same reason, it could not be said that the disposal of the spoil at the Somersby Site was necessary for rendering complete the work on the NorthConnex project. The excavation of the spoil and its disposal at a different location were independent activities. 8. As to Timecon's alternative case, it is difficult to see how the disposal of spoil could be described as "goods". Moreover, the question is not whether the spoil arose from or in relation to the construction work. Rather, in order to be related goods within the meaning of "related goods and services", the spoil must either be a component of the relevant building, structure or work or must be used in connection with carrying out construction work. Plainly, the spoil meets neither of those requirements. Orders 1. It follows that the orders of the Court are: 1. Declare that the determination of the second defendant dated 2 January 2019 (the Determination) is void. 2. Order that the first defendant be restrained by itself and its servants and agents from doing either or both of the following in connection with the Determination: 1. Requesting the provision of an adjudication certificate pursuant to s 24(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (the SOP Act); 2. Filing an adjudication certificate as a judgment for a debt in any court pursuant to s 25 of the SOP Act. 1. Order that the sum of $887,532.80 paid into court on 5 April 2019 and any interest thereon be paid to the plaintiffs. 2. Order that the first defendant pay the plaintiffs' costs of the proceedings. ********** 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: 12 June 2019