Coordinated Construction Co v JM Hargreaves & ORS

Coordinated Construction Co v JM Hargreaves & ORS


Court of Appeal of New South Wales – 13 July 2005

[2005] NSWCA 228


Coordinated Construction Co (‘Coordinated’) entered into a construction contract with J M Hargreaves (‘Hargreaves’) whereby Hargreaves agreed to carry out certain work in connection with the redevelopment of the former Gazebo Hotel at Elizabeth Bay. Hargreaves 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 “recovery of overheads, plant, staff and supervision costs……. due to architectural design changes which impacted on contract programme…” and a claim for interest. The dispute was referred to Adjudication and determined in favour of Hargreaves in the sum of $737,221.51. In determining the matter the Adjudicator reasoned that the delay damages and interest were sufficiently related to “for construction work” and, therefore, payable. Co-ordinated sought to set aside the AdjudicationDetermination on the basis that, in allowing the claims arising out of EOTs, the Adjudicator failed to comply with he 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. The Supreme Court dismissed Co-ordinated’s claim to set aside the determination, holding that delay damages can be the subject of Payment Claims under the Act, if provided for by the terms of the particular Contract between the parties. Co-ordinated appealed to the Court of Appeal.


Whether the Adjudicator’s Determination was void because of the inclusion of delay damages and interest.


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