CO-ORDINATED CONSTRUCTION CO V CLIMATECH (CANBERRA) PTY LTD
 NSWSC 312
Supreme Court of New South Wales – 13 April 2005
Co-ordinated Construction Co Pty Limited (‘Co-ordinated’), as contractor, retained Climatech (Canberra) Pty Ltd (‘Climatech’), as subcontractor, to provide air conditioning and mechanical services for the refurbishment project of the Gazebo Hotel in Elizabeth Bay, Sydney.
Climatech submitted Payment Claims under the Building and Construction Industry Security of Payment Act 1999 (NSW) (‘the Act’). The Payment Claims contained claims for delay damages or delay costs arising from EOTs, that is, for “site supervision costs” and “office overheads” as a result of a delay. These Payment Claims were not paid, Climatech submitted an Adjudication Application and the matter was determined in favour of Climatech in the sum of $588,275.15. In determining the matter the Adjudicator concluded that the claims were variation claims and therefore payable.
Co-ordinated sought a permanent injunction restraining Climatech on the basis that, in allowing the claims arising out of EOTs, the Adjudicator failed to comply with the basic and essential requirements of the Act. The failure was said to have arisen in the following way: (1) the Act requires Payment Claims to identify the “construction work to which the progress payment relates” and requires that the claimed amount and the progress payment be “for construction work carried out”; (2) that the delay damages arising from EOTs are not amounts due “for construction work carried out”; and (3) a basic and essential requirement of the Act – that the claimed amount and the amount awarded be for construction work carried out – has not been complied with by the awarding of the determination.
Whether claims for delay damages are properly the subject of Payment Claims under the Act.