Estopped – NSW Supreme Court prevents contractor from proceeding with adjudication application in TWT Property Group Pty Ltd v Cenric Group Pty Ltd [2020] NSWSC 72

In TWT Property Group Pty Ltd v Cenric Group Pty Ltd [2020] NSWSC 72, the New South Wales Supreme Court has restrained a defendant from proceeding with an adjudication application, on the basis that to do so would constitute an abuse of process.

Facts

On 20 June 2017 the plaintiff, TWT Property Group Pty Ltd (TWT), engaged the defendant, Cenric Group Pty Ltd (Cenric), to demolish an existing structure on and excavate land at Harris Street, Pyrmont in Sydney.  Shortly after the defendant had commenced excavation works, TWT excluded Cenric from the site, and engaged a different contractor, Bundanoon Sandstone Pty Ltd to complete the works.

Cenric subsequently commenced proceedings in the NSW Supreme Court, claiming damages arising from its exclusion from site.  In those proceedings Cenric did not seek payment for work performed up until its exclusion from site.  A claim seeking to set off amounts owed pursuant to the Contract was raised by Cenric as part of its defence to TWT’s cross-claim, however, that aspect of Cenric’s defence was abandoned during final submissions.  Judgment was subsequently entered in favour of Cenric.

Shortly after the Court delivered judgment, Cenric submitted a payment claim pursuant to the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act), seeking payment for work performed up until Cenric’s exclusion from site.  TWT issued a payment schedule scheduling an amount of $Nil.  Cenric made an adjudication application, however, the adjudicator rejected Cenric’s claim on the basis that it was made out of time, and found there was an amount of $Nil payable by TWT.

Cenric subsequently sought to withdraw its adjudication application, and lodge a separate adjudication application, also based on the same payment claim.  Unsurprisingly, TWT commenced proceedings seeking to restrain Cenric from proceeding with its adjudication application. The basis on which TWT sought to restrain Cenric was that it was an abuse of the process of the Act for it to make the payment claim by reason of an Anshun estoppel arising from Cenric’s unreasonable failure to propound those issues in the proceedings before the NSW Supreme Court.

The Court’s Determination

The Court upheld TWT’s application to restrain Cenric from pursuing its adjudication application.  In doing so, the court noted:

Cenric’s claim for payment for work done on the site to 19 March 2018 arose out of the same facts as the claims it propounded before McDougall J in the 2018 Proceedings. On the face of it, it was unreasonable, indeed inexplicable, that Cenric did not include this claim in the 2018 Proceedings. The omission cannot have been a matter of oversight, as Cenric raised it as an answer to TWT’s cross-claim. That matter was abandoned by Cenric’s then counsel; presumably because he judged, correctly as it has turned out, that TWT’s cross-claim would fail.

While Cenric sought to rely on an alleged agreement that its claim for work performed should be determined in another forum after the proceedings in the Supreme Court had concluded, the Court found that the evidence did not support such a finding.  Accordingly, the Court made orders restraining Cenric form proceeding with its adjudication application.

The Court’s decision is a reminder to litigants who may wish to make a security of payment claim to carefully consider what entitlements it has in any litigation.  A failure to raise claims which arise out of the same facts can lead to later claims of estoppel, which may result in the litigant being prevented from further agitating such issues.

Bill Stephenson

Liability limited by a scheme approved under Professional Standards Legislation.

MTECC Breakfast Seminar

We would like to invite all our subscribers to MTECC’s inaugural breakfast seminar. The seminar will feature presentations by Nicholas Gallina (speaking on the High Court’s decision in Mann v Paterson Constructions Pty Ltd) and Andrew Downie (speaking on recent developments in limitation periods in building disputes) and will be chaired by Hugh Foxcroft QC.

Date: 11 March 2020 from 7:30am to 9:00am 
Location: Krimper Cafe, 20 Guildford Lane 

Please RSVP to miriam@chancery.com.au by Monday 2 March 2020 for catering purposes. 

More information can be found on our flyer here, or at our website https://mtecc.com.au/staging/.

We look forward to seeing you there.