FIFTY PROPERTY INVESTMENTS PTY LTD V BARRY J O’MARA & ANOR [2006] NSWSC 428
Supreme Court of New South Wales – 18 April 2006
FACTS
Maurice Tarabay entered into a contract with Fifty Property Investments Pty Ltd (“FPI”) for the construction of 42 home units and townhouses at Ashfield, the stonework being face brick. Some time after the project commenced, another company, Impero Stone, offered to supply and install natural stonework for the project. The cost of the stonework was included in a variation claim submitted to FPI by Mr Tarabay. A copy of Impero’s invoice, addressed directly to FPI, was attached to the variation claim.
Mr Tarabay later terminated his contract with FPI, and instituted court proceedings to recover the balance claimed to be owed under the contract, including the cost of the stonework. Soon after the termination, Impero served a payment claim directly on FPI in the amount of $76883.40. FPI provided a Payment Schedule proposing to pay $Nil on the basis that no contract existed between FPI and Impero. The matter was referred to an Adjudicator, who determined in favour of Impero after finding that an “arrangement” falling within the definition of a “construction contract” under the Act existed between the parties.
FPI applied to the Supreme Court to have the Determination set aside on several grounds, most significantly that the Adjudicator had failed to satisfy one of the basic and essential requirements of the Act, that is, the existence of a construction contract between the parties.
ISSUE
Whether the existence of a construction contract is a matter that can be reviewed by the Court.
FINDING
The Court held that the existence of a construction contract, being one of the basic and essential requirements of the Act, was a jurisdictional fact that could be reviewed by the court.
The Court found that the Adjudicator had wrongly decided that a construction contract existed between FPI and Impero, and accordingly, the Adjudication Determination was held to be void.
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