Allpro v Micos [2010] NSWSC 453

New South Wales Supreme Court

CITATION : Allpro v Micos [2010] NSWSC 453 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 11/5/10 JURISDICTION : Equity Division Technology & Construction List

JUDGMENT OF : McDougall J at 1

EX TEMPORE JUDGMENT DATE : 11 May 2010

DECISION : Injunction granted; orders in accordance with short minutes of order.

CATCHWORDS : BUILDING AND ENGINEERING CONTRACTS - interlocutory injunction - restraining enforcement of determination of adjudicator - apprehension of bias - denial of natural justice - extension of time for adjudication - short time limit for agreement - no actual or implied agreement to extension - payment of adjudicator's fees.

LEGISLATION CITED : Building and Construction Industry Security of Payment Act 1999 (NSW)

CATEGORY : Procedural and other rulings

Johnson v Johnson (2000) 201 CLR 488 CASES CITED : MPM Constructions v Trepcha Constructions [2004] NSWSC 103 Reiby Street Pty Ltd v Winterton [2005] NSWSC 545

Allpro Building Services Pty Limited (ACN 092 239 104) (Plaintiff) PARTIES : Micos Architectural Division Pty Limited (ACN 119 736 962) (First Defendant) Ian Hillman (Second Defendant) Australia Solutions Centre (ACN 085 917 219) (Third Defendant)

FILE NUMBER(S) : SC 2010/117065

COUNSEL : M A Ashhurst SC (Plaintiff) Dr A J Greinke (First Defendant)

SOLICITORS : DLA Phillips Fox (Plaintiff) Cara Marasco & Company (First Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY & CONSTRUCTION LIST

McDOUGALL J

11 May 2010 (ex tempore – revised 11 May 2010)

2010/117065 ALLPRO BUILDING SERVICES v MICOS ARCHITECTURAL DIVISION PTY LIMITED & ANOR

JUDGMENT 1 HIS HONOUR: This is an application for an interlocutory injunction that will have the effect of restraining enforcement of the determination of an adjudicator made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act). The ground of the application is that the second defendant, who was the adjudicator, denied the plaintiff natural justice because there was at least an appearance of bias. The appearance of bias is said to arise because, at the time the second defendant accepted the adjudication application, he was in dispute with the plaintiff over fees relating to another adjudication in which the plaintiff (but not the first defendant) had been involved. 2 Since it was not suggested that the evidence does not make out that there was a serious issue to be tried on the question of apprehension of bias it is unnecessary for me to do more than say that I would have required considerable persuasion that, on the facts as they presently appear, the test of apprehension of bias could not be made out. I take into account not only the test of apprehension of bias as it has been expounded by the High Court of Australia from time to time (see, by way of example only, Johnson v Johnson (2000) 201 CLR 488) but also the reasons of Master Macready (as the Associate Justice then was) in Reiby Street Pty Ltd v Winterton [2005] NSWSC 545 in another case of a dispute between a party and an adjudicator as to fees. 3 However, having regard to the way in which, on the evidence so far, the second defendant has conducted himself, there are two points that I do wish to make. 4 The second defendant appears to have taken the view that, when seeking an extension of time for him to complete his task (see s 21 (3)(b) of the Act), it was open to him firstly to impose a very short time limit on the parties to indicate their attitude to the request for an extension of time and secondly to assume that consent was given if the parties did not respond within the time so limited. There may conceivably be circumstances where a party to an adjudication application should be taken to have agreed to an extension of time under s 21 (3)(b) without expressly having so indicated. But that could not arise in circumstances such as those shown on the evidence in this case where, as I have said, the time limited by the adjudicator was extremely short. Section 21 (3)(b) requires agreement. That means real or actual agreement. It does not in my view entitle an adjudicator to purport to impose agreement of parties in the way that I have outlined. 5 The second matter relates to the adjudicator's fees. In this case in circumstances where, on the evidence, agreement to an extension of time under s 21 (3)(b) had not been given, the adjudicator appears twice to have proceeded with the adjudication (although, on the second occasion, he was interrupted because the first defendant seemed to realise the peril that it was in). On the first occasion, however, the adjudicator published his determination outside the time permitted by s 21 (3), there being no agreement for extension of time. In those circumstances, s 29 (4) of the Act is clear. An adjudicator is not entitled to be paid his or her fees or expenses where the determination is not made within the time allowed by s 21 (3). 6 I have held that a determination is valid notwithstanding that it is given out of time: MPM Constructions v Trepcha Constructions [2004] NSWSC 103. That has no impact on the entitlement to fees. It is in my view entirely inappropriate for adjudicators (who must know, or ought to know, the relevant requirements of the Act) to insist on payment of fees where, if s 29 (4) has operated, they have no entitlement. 7 Notwithstanding, as I have said, that there is no dispute that a serious question to be tried has been shown in relation to the issue on which the plaintiff relies I have sought to make my views clear on the underlying problems. I have done that firstly so that the second defendant can take a more considered and appropriate course on future occasions and secondly so that the profession generally can act in what in my view is the appropriate way and, perhaps more importantly, not act in what in my view is an inappropriate way. 8 I note that the plaintiff by Senior Counsel gives to the Court the usual undertaking as to damages and undertakes to the Court to provide a bank guarantee for, or to pay to the Registrar of the Court, in either case by 4.00 pm on 13 May 2010, the sum of $390,000. 9 I make orders in accordance with pars 1 to 6 as amended of the form of order initialled by me and dated today's date. 10 I direct that the orders be entered forthwith. 11 I note that the matter will be listed in the motions list on 14 May 2010.

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17/05/2010 - Parties - Paragraph(s) Coversheet

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