Icon Co (NSW) Pty Ltd v AMA Glass Facades Pty Ltd  NSWSC 250
Sydney’s Opal Tower continues to attract attention. This time, the issue is an unusual security of payment (SOPA) tug-of-war between the builder and its glazing subcontractor, with the Supreme Court of NSW called upon to review successive SOPA determinations which had arisen from the same contract and which addressed substantially the same issues.
What can be learned from this tussle?
- Engage the right forum: The Court is the forum in which to challenge a determination. Repetitive payment claims and adjudication applications risk being viewed by the Court as unmeritorious.
- Don’t delay: The time limit for challenging a SOPA adjudication determination in NSW is 3 months.
- Conduct counts: Unmeritorious conduct militates against extending the time limit, particularly if the conduct is viewed as prejudicial. Perhaps more fundamentally, the Court’s review power is discretionary. Conduct that is perceived as unmeritorious militates against a successful challenge.
The subcontractor sought adjudication of its variation claims. Favouring the subcontractor’s case, the adjudicator determined that the absence of written instruction or confirmation did not defeat the variation claims and that the builder was not entitled to set off liquidated damages.
In a second determination upon fresh variation claims, a different adjudicator reached a conclusion different to that of the first, this time favouring the builder’s case that absence of written instruction or confirmation defeated the variation claims and that the builder was entitled to set off liquidated damages.
In a third determination, the initial adjudicator was asked to consider the same fresh variation claims, determining (in favour of the subcontractor) that absence of written instruction or confirmation was not fatal to the claims and that the builder was not entitled to set off liquidated damages.
At that point, the builder sought judicial review of the third determination, seemingly prompting the subcontractor to file a cross summons for review of the second determination and a declaration that it was void. The Court thus described the “spectacle”:
- on the one hand, [subcontractor] contends that [the second Adjudicator] should have found that [builder] was estopped from contending that [first Adjudicator’s] construction of the Contract was incorrect; and
- on the other hand, [builder] contends that [the Adjudicator], when considering that construction question for the second time in the [third Determination], should have found that [subcontractor] was estopped from contending that [second Adjudicator’s] construction was incorrect.
How then was the Court to resolve the spectacle?
Rather than unpicking each of the determinations, it was the causes of “this highly unsatisfactory situation” that drew the Court’s focus, particularly the subcontractor’s response to the second determination.
The subcontractor had not sought to challenge the second determination in the usual way, by Court proceedings for judicial review when first becoming aware of the determination. Instead, it served a fresh payment claim that was relevantly identical to the claim which had been the subject of the determination it belatedly sought to impugn. The subcontractor argued its estoppel point in its resultant adjudication application rather than before the Court.
Regardless of judicial misgivings as to the second determination, the Court declined the subcontractor’s challenge to it:
- The subcontractor’s application to impeach the second determination was made outside the Court’s 3 month time limit for judicial review applications. Seeking an order for declaratory relief did not rescue the situation for the subcontractor, with the Court following authority to the effect that the time limit also informed the Court’s approach to declaratory relief.
- The subcontractor’s application for an extension of time to seek relief did not find favour. The subcontractor’s knowledge of the second determination coupled with its decision inappropriately to challenge it by resubmitting the payment claim through the adjudication process was prejudicial to the builder and thus was fatal to the application to extend.
- The Court also withheld relief in favour of the subcontractor on discretionary grounds, inferring that the subcontractor decided to serve a repetitive payment claim in the hope of securing a more favourable determination rather than following the usual procedure for a challenge to a determination.
The Court restored the commercial position in favour of the builder by quashing the third determination. It did so based on the parties’ acceptance that if the second determination was valid, the third determination was invalid, as they both dealt with payment claims that were relevantly identical.
14 March 2019
 At .
 Buttrose v Attorney General of New South Wales  NSWCA 221; (2015) 324 ALR 562 at .
 At the date of publication the time for an appeal by the subcontractor has not expired.