Falgat Constructions PL v Equity Australia Corporation PL

FALGAT CONSTRUCTIONS P/L V EQUITY AUSTRALIA CORPORATION P/L [2005] NSWCA 49

Supreme Court of New South Wales – 3 March 2005

FACTS

Falgat Constructions Pty Ltd (‘Falgat’) entered into a construction contract with ‘Equity Australia Corporation Pty Ltd (‘Equity’) to carry out works for the construction of a residential building at 23-25 Chesterfield Parade Bronte. Falgat sued Equity in the District Court for debt and damages under the contract in the sum of $414,935.69. The action was stayed pending provision of security of costs in the sum of $50,000. Falgat then initiated proceedings under the Building and Construction Industry Security of Payment Act 1999 (NSW) (‘the Act’) by serving a Payment Claim under section 13 seeking payment of $232,114.30. A District Court granted an anti-suit injunction restraining Falgat from pursuing its remedies under the Act pending the final determination of the District Court proceeding. The District Court judge found:

• by inference that Falgat’s purpose was to harass Equity and those proceedings would be vexatious and oppressive;
• that the Adjudication, even though it only had interim affect, would “frustrate this Court’s task”;
• that Falgat had an elected to submit the dispute to the jurisdiction of the District Court and should be held to its election; and “at least generally”, the statutory proceedings should proceed and not follow the institution of Court proceedings and that “generally at least”, the Act was not intended to allow two concurrent adjudicative procedures to be on foot at the same time.

Falgat then applied for leave to appeal.

ISSUE

Whether proceedings under the Contract and under the Act can be on foot at the same time.