May 3, 2024

In the decision of Venture Spirits Pty Ltd v Adjudicate Today Pty Ltd [2024] TASSC 12 the Tasmanian Supreme Court considered whether monies owed under an adjudication determination must be paid into Court prior to the Court hearing an application to quash a determination under the Building and Construction Industry Security of Payment Act 2009 (Tas).

Jayspec Builders Pty Ltd submitted a payment claim under the Act to Venture Spirits Pty Ltd.  Venture rejected the payment claim and Jayspec referred the matter for adjudication.  The adjudicator determined the payment claim and granted an adjudication certificate ordering Venture to pay Jayspec the full amount claimed. Jayspec filed the certificate as a judgment debt in the Tasmanian Supreme Court and issued Venture a statutory demand for payment. Venture failed to pay the judgment debt and instead applied to the Court seeking an order quashing the adjudicator’s determination.  Jayspec joined the proceedings and sought to stay the hearing of Venture’s application pending payment into Court of the amount owed. Jayspec argued that it would undermine the ‘pay now, argue later’ purpose of the Act if Venture was permitted to proceed without paying the adjudication amount into Court as security.

Section 27(5)(b) of the Act requires a party who commences proceedings to have a judgment set aside, to pay into Court as security the unpaid part of the adjudicated amount. The issue before the Court was whether Venture’s application to quash the adjudicator’s determination amounted to “proceedings” for the purpose of section 27(5) and if not, whether the Court had discretion to stay proceedings anyway.

In deciding this matter, Brett J referred to prior decisions which had applied a narrow, literal interpretation of section 27(5). Those decisions held that the section only applies to an application to set aside a judgment. This was distinct from Venture’s application to quash the adjudicator’s determination. Whilst his Honour considered that it would be entirely consistent with the purpose of the Act to interpret the section as extending to other proceedings commenced for the sole purpose of preventing the judgment from being enforced, he accepted that it was appropriate to follow and apply these prior decisions.

However, his Honour went on to decide that the Court had a discretion to stay the proceedings pursuant to its inherent jurisdiction to control its proceedings and the Supreme Court Civil Procedure Act 1932 (Tas). In reaching a decision to grant a stay of proceedings pending payment into Court, Brett J placed considerable weight on:

  •  the close relationship between Venture’s proceedings to quash the adjudicator’s determination and an application to set aside a judgment; and
  • the impact of Venture’s application on the underlying legislative policy reflected in s 27(5) of the Act; being that a claimant is protected by payment into Court when a respondent seeks to inhibit a claimant’s enforcement of an adjudication.

Payment into Court is an interlocutory step and does not affect the parties’ underlying contractual rights and obligations the subject of the dispute.

The full decision can be found here.

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