MMIR Pty Limited v Iskra [2019] NSWSC 35

MMIR Pty Limited v Iskra [2019] NSWSC 35

The Adjudicator committed jurisdictional error because he treated the owner's failure to prove its objections as determinative and did not decide what was properly payable by reference to the true contractual basis and the merits of the claim. On a do and charge contract, the Adjudicator was required to assess the reasonable value of the builder's own charges and the reasonableness of the six per cent project management fee; the determination did not show that this was done.

Jurisdiction
Australia
Judgment Date
29 January 2019
Procedural Posture
Application for Review of an Adjudicator's Determination Under the Building and Construction Industry Security of Payment Act 1999 (nsw) / Principal Judgment; Ex Tempore Judgment Revised and Reissued
Outcome
The adjudication determination was quashed, money paid into Court was ordered to be paid out to the plaintiff, the first defendant was ordered to pay a further sum to the plaintiff and the plaintiff's costs, with a temporary stay on undertakings as to interest.
Legal Topics
['construction Contracts' 'security of Payment Adjudication' 'jurisdictional Error' 'valuation of Construction Work' 'do and Charge Contract' "reasonableness of Builder's Margin"]
['building and Construction' 'equity'] ['construction Contracts' 'security of Payment Adjudication' 'jurisdictional Error' 'valuation of Construction Work' 'do and Charge Contract' "reasonableness of Builder's Margin"]

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Procedural Posture

Application for Review of an Adjudicator's Determination Under the Building and Construction Industry Security of Payment Act 1999 (nsw) / Principal Judgment; Ex Tempore Judgment Revised and Reissued

Legal Issues

  1. 1 ['Whether the Adjudicator failed to determine the amount properly payable by valuing the construction work in accordance with the terms of the contract and the Act.' 'Whether a do and charge contract required an assessment of the objective reasonableness of the rates or charges claimed.' "Whether the Adjudicator's failure to consider the reasonableness of the builder's own charges and the six per cent project management fee amounted to jurisdictional error."]

Ratio Decidendi

The Adjudicator committed jurisdictional error because he treated the owner's failure to prove its objections as determinative and did not decide what was properly payable by reference to the true contractual basis and the merits of the claim. On a do and charge contract, the Adjudicator was required to assess the reasonable value of the builder's own charges and the reasonableness of the six per cent project management fee; the determination did not show that this was done.

Court Disposition

The adjudication determination was quashed, money paid into Court was ordered to be paid out to the plaintiff, the first defendant was ordered to pay a further sum to the plaintiff and the plaintiff's costs, with a temporary stay on undertakings as to interest.

Orders

  • ['Orders that the adjudication determination of the second defendant dated 15 October 2018, being reference number 2018ADJT451, purportedly pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) be quashed.' 'Orders that the sum of $138,135.59 paid into Court by the plaintiff on 30...