ENERGETECH AUSTRALIA PTY LTD V SIDES ENGINEERING PTY LTD & ANOR
Supreme Court of New South Wales – 5 August 2005
Energetech Australia Pty Ltd (‘Energetech’) entered into a construction contract with Sides Engineering Pty Ltd (‘Sides’)whereby Sides undertook to carry out construction work for Energetech. Under the contract, Sides was entitled to be paid upon the achievement of “Milestones”, the second of which was defined as “Practical Completion”.
Sides claimed to have reached Practical Completion and submitted a Payment Claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (‘the Act’). Energetech submitted a Payment Schedule in response asserting that nothing was payable because the milestone had not been reached. Sides thereupon made an Adjudication Application. The Adjudicator determined that Sides had reached Practical Completion and that it was entitled to a payment of $559,457.20.
Energetech submitted that the Adjudicator’s Determination was void on the grounds of section 13(4) of the Act, which provides that a Claimant may only serve a Payment Claim within the period determined by the terms of the construction contract, as the Adjudicator had incorrectly determined that Practical Completion had been achieved. That is, under the contract and section 13(4) of the Act, Sides was not entitled to serve the Payment Claim until after Practical Completion.
Therefore, Energetech submitted that the Payment Claim was invalid.
Sides submitted that the Adjudicator was correct to determine that Practical Completion had been achieved. However, Sides also submitted that even if the Adjudicator was incorrect in so determining, his determination was not void.
Whether Practical Completion had been achieved and whether the Payment Claim was valid.