RSA v VDM CCE and VDM CCE v RSA [2012] NSWSC 861

RSA v VDM CCE and VDM CCE v RSA [2012] NSWSC 861

A stay should be granted because VDM CCE had shut down its operations, did not need the judgment money to pay subcontractors, employees or suppliers or to fund ongoing operations, and the proffered bank guarantee protected VDM CCE against deterioration in RSA's financial position. By contrast, there was more than the ordinary risk that RSA would not recover the $3.3 million if it paid now and later succeeded, given VDM CCE's inability to repay from its own resources and significant uncertainties about VDM Group's financial capacity despite its proposed undertaking. In these circumstances the policy of prompt payment under the Queensland Act carried significantly less weight than in the...

Jurisdiction
Australia
Judgment Date
20 July 2012
Procedural Posture
Application for Stay of Judgment Recovered by Filing an Adjudication Certificate Under the Building and Construction Industry Payments Act 2004 (qld) / Ex Tempore Ruling After Proceedings Were Cross Vested From the Supreme Court of Queensland to the Supreme Court of New South Wales
Outcome
Stay to be granted on conditions as to security and diligent prosecution of RSA's claim.
Legal Topics
['stay of Judgment' 'adjudication Certificate' 'cross Vesting' 'risk of Non Payment' 'security by Bank Guarantee' 'diligent Prosecution of Claim']
['civil Procedure' 'building and Construction' 'security of Payment'] ['stay of Judgment' 'adjudication Certificate' 'cross Vesting' 'risk of Non Payment' 'security by Bank Guarantee' 'diligent Prosecution of Claim']

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Procedural Posture

Application for Stay of Judgment Recovered by Filing an Adjudication Certificate Under the Building and Construction Industry Payments Act 2004 (qld) / Ex Tempore Ruling After Proceedings Were Cross Vested From the Supreme Court of Queensland to the Supreme Court of New South Wales

Legal Issues

  1. 1 ['Whether the Court should exercise its discretion to stay a judgment recovered by filing an adjudication certificate under the Building and Construction Industry Payments Act 2004 (Qld).' "Whether RSA's rights in its unresolved proceedings would be rendered nugatory or substantially prejudiced if it paid the judgment debt and later succeeded against VDM CCE." "Whether the policy of prompt payment under security of payment legislation outweighed the risk of prejudice to RSA in the circumstances of VDM CCE's financial and operational position." 'Whether the undertaking offered by VDM Group was adequate assurance of repayment.']

Ratio Decidendi

A stay should be granted because VDM CCE had shut down its operations, did not need the judgment money to pay subcontractors, employees or suppliers or to fund ongoing operations, and the proffered bank guarantee protected VDM CCE against deterioration in RSA's financial position. By contrast, there was more than the ordinary risk that RSA would not recover the $3.3 million if it paid now and later succeeded, given VDM CCE's inability to repay from its own resources and significant uncertainties about VDM Group's financial capacity despite its proposed undertaking. In these circumstances the policy of prompt payment under the Queensland Act carried significantly less weight than in the...

Court Disposition

Stay to be granted on conditions as to security and diligent prosecution of RSA's claim.

Orders

  • ['The judgment in favour of VDM CCE should be stayed on condition, among other things, that the bank guarantee remain in place and that RSA prosecute its action in this Court with appropriate diligence.' 'The proceedings were stood over to enable the parties to draft formal orders.' 'The stand-over would also enable...