INTEN CONSTRUCTIONS V REFINE ELECTRICAL SERVICES AND ANOR [2006] NSWSC 1282
Supreme Court of New South Wales – 1 December 2006
FACTS
Inten Constructions Pty Ltd (“Inten”) engaged Refine Electrical Services Pty Ltd (“Refine”) as subcontractor to perform electrical works at a project at Neutral Bay. Some months after the project had been completed, Refine served on Inten a Payment Claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) (“the Act”). The majority of the claim was for what Refine described as “Commercial Costs”, and included claims for prolongation, loss of productivity and interest. Inten disputed Refine’s contractual entitlement to these costs in its Payment Schedule and denied liability for all but $14,000 of the claim.
Refine referred the dispute to adjudication. The Adjudicator decided that the Commercial Costs were allowable under the contract, characterising the claims as variations which were permitted under the contract rather than claims for “cost, expense or loss” arising from delay to the works which were not. The Adjudicator determined that Refine was entitled to $181,000 including about $147,000 in respect of Commercial Costs.
Inten commenced proceedings in the Supreme Court to have the determination set aside. It contended that it had been denied natural justice, on the basis that in finding that the claims were variations, the Adjudicator had decided the matter on a basis for which neither party had contended without allowing each of them an opportunity to respond.
ISSUES
Had the Adjudicator afforded the parties the level of natural justice required under the Act?
FINDING
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