Equa Building Services Pty Ltd v KLG Trading Pty Ltd [2021] NSWSC 1674

Andrew Hales  | Maciej Getta  |  Cedric Barakat

Key takeouts

• When serving a copy of an adjudication application for the purposes of s 17(5) of the Building and Construction Industry Security of Payment Act 1999 (NSW) (Act), if the copy is different from the original it will still be considered a copy and thus validly served if the differences are trivial and insubstantial.  
• The key consideration is that of degree, and whether the copy that was provided constituted substantial and sufficient compliance with the requirements of s 17(5) of the Act.

Facts

On 29 October 2021, an adjudicator determined that Equa Building Services Pty Ltd (builder) pay KLG Trading Pty Ltd (façade subcontractor) the amount of $394,148.  The builder sought to overturn the determination.  The builder complained that the copy of the adjudication application lodged electronically with the authorised nominating authority was different to what was served on the builder in hardcopy.  The key differences were:

• a short 28 second video that the builder was unable to play due to software differences;
• 3 documents uploaded to the authorised nominating authority’s online lockbox system were not included in the hard copy documents served;
• 3 of the 833 pages in the 2 lever arch binders served were illegible; and
• 10 documents where the ‘tab numbering was mislabelled’.

As a result the builder said various errors followed.

Decision

The builder’s application was dismissed entirely.

The status of the copy served on the builder

The missing documents that were part of the original adjudication application but were missing in the copy served on the builder, were found to be entirely inconsequential to the adjudication.

The documents that were found illegible or ‘hard to read’ were able to be clearly read via the façade subcontractor’s online submission.

The tabs that were mislabelled were considered to be of no consequence, particularly as all the mislabelled documents were still contained in the copy served.

Therefore the court held that despite the copy having several discrepancies from the original, these differences were ‘trivial or inconsequential’ and therefore it was a valid copy of the original (for the purposes of s 17(5) of the Act). The purpose of s 17(5) of the Act was not to invalidate a determination for slight differences between the original application and the copy served on the builder. The purpose of the Act is to ensure that a person is able to recover a progress payment by establishing a procedure that includes the referral of any disputed claim to an adjudicator for determination.

Procedural fairness

The builder contended that it was denied procedural fairness because of the differences in the copy and the original, including the difficulty it had with viewing the video provided, the façade subcontractor’s decision to serve the notice to the registered office in Queensland (rather than the ordinary place of business in NSW), and choosing to wait a week before serving the application.  However, relying on Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd (2017) 95 NSWLR 82, the court found that there was no ‘practical injustice’ in the façade subcontractor’s actions due to the differences in the copy, nor was there any evidence that the façade subcontractor intended to maximise the delay to the builder preparing its adjudication response.