Posts

Dualcorp v Remo Constructions

Dualcorp Pty Limited v Remo Constructions Pty Limited [2008] NSWSC 749

FACTS:

Remo Constructions Pty Limited (“Remo”) was a contractor engaged on a development project at Five Dock and Dualcorp Pty Limited (“Dualcorp”) were the subcontractors on that project engaged to carry out demolition, excavation and piling works.

The dispute resolution clause in question purported to limit the parties right to seek relief from the courts in the event of a dispute, requiring the parties (on one view of its construction and interpretation) to adhere to a strict compliance with that expert determination clause to the exclusion of all other relief, save except judicial review in circumstances imprecisely defined.

ISSUE:

Whether the dispute resolution clause operates to limit the parties rights to litigate in circumstances where the dispute resolution mechanism is not properly and precisely drafted to reflect the parties intentions?

FINDING:

The Court found that the dispute resolution mechanism was so obscure [at 23, 26] and was so imprecisely drafted [at 22] that the court could not give effect to the clause to restrict the parties’ access to litigation in this case.

QUOTE:

McDougal J [at 22]

“In this case, I think, the words in question are so imprecise, and so devoid of any limitation (which, I repeat, they were clearly intended to have) that they cannot be given effect. …”

[at 24] “…the parties were intending to suggest that once an expert determination had been concluded, it could only be reviewed by the courts on the very limited bases described in that case. But if this is the case, there is no requirement for leave, let alone for leave to appeal. Ifthe requirement for leave to appeal is intended to be meaningful, it might suggest that the process of “judicial review” is in fact something far wider. If it is, the nature  of the review and its limits are left to the imagination.”

IMPACT:

This case demonstrates the importance of careful drafting of expert dispute determination clauses in contracts, so as to achieve the parties’ objective of expeditious and inexpensive resolution.

Dualcorp v Remo Constructions

Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69

(15 April 2009)

FACTS

Dualcorp subcontracted to Remo. After completing construction, Dualcorp issued 6 invoices endorsed as Payment Claims under the Building and Construction Industry Security of Payments Act 1999 (NSW). It proceeded to adjudication. It succeeded on 2 of the 6 invoices.

Dualcorp then issued a second payment claim comprising the same 6 invoices. Remo did not respond with a Payment Schedule. Dualcorp sought judgment in the Court as no Payment Schedule had been received in response to its second Payment Claim. The Court refused to grant judgment. Dualcorp appealed.

ISSUE

Was Dualcorp entitled to judgment on its second Payment Claim in the absence of a Payment Schedule when the first adjudicator had found that it was not entitled to be paid for that work?

FINDING

The Court of Appeal held that Dualcorp was not entitled to judgment. It found that the principle of “issue estoppel” applied to adjudication decisions under the Act. Once either an entitlement to a payment or a decision as to the value of construction work has been determined by one adjudicator, that decision is binding upon a subsequent adjudicator. It also binds the Court in the circumstances of this case, where Dualcorp was relying upon the absence of a Payment Schedule to its second Payment Claim to obtain judgment by default.

QUOTE

McFarlan JA at 67:

“…if questions of entitlement have been resolved by an adjudication determination, those findings my not in my view be reopened upon a subsequent adjudication.” [at 72]

“It is not unusual that persons seeking remedies in courts and other forums have a once only opportunity to bring forward evidence and submissions in support of their claim. This is in fact the usual situation and is consistent with what the High Court in D’Orta referred to as the “central and pervading tenet of the judicial system…that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances…”

IMPACT

Adjudication applications now have to be prepared very carefully to present the adjudicator with more than sufficient claims, submissions and evidence. There are now no second chances under the Act.