H.M. Australia Holdings Pty Ltd v Edelbrand Pty Ltd T/As Domus Homes

H.M. AUSTRALIA HOLDINGS PTY LTD
v
EDELBRAND PTY LTD T/AS DOMUS HOMES
[2012] HCASL 156
S91/2012

The applicant ("H.M. Australia") and the respondent ("Domus ") entered into an agreement by which Domus agreed to provide project management services to H.M. Australia for a fixed project management fee and a bonus payment. The latter was to comprise 50 percent of "savings" achieved by reference to the budgeted sum for the works.
Under the Building and Construction Industry Security of Payment Act 1999 (NSW) ("the Act") there is provision for the adjudication of payment claims made by persons engaged in the supply of related goods and services under a construction contract. Domus served a payment claim on H.M. Australia in the sum of $195,376.00 plus GST, representing the bonus payment to which it claimed to be entitled. In due course, Domus obtained a favourable adjudication determination under the Act.
H.M. Australia succeeded in having the adjudication determination set aside in the Supreme Court of New South Wales. Einstein J held that the services Domus had undertaken to provide were not "related services" within the meaning of the Act.
Domus appealed to the New South Wales Court of Appeal, submitting that certain of the work required under the contract amounted to "building ... advisory services in relation to construction work" within s 6(b)(iii) of the Act. H.M. Australia filed a notice of contention submitting that the provision for the bonus payment operated to exclude the contract from the statutory scheme under s 7(2)(c) of the Act. On this analysis, the agreement was a profit-sharing arrangement by which the amount payable to Domus was calculated by means other than by reference to the value of the work carried out. The Court of Appeal unanimously rejected H.M. Australia's contention and allowed Domus' appeal. The orders made by Einstein J were set aside and in lieu thereof H.M. Australia's summons was dismissed.
H.M. Australia applies for special leave to appeal. It submits that the Court of Appeal erred in its construction of the scope of s 7(2)(c) and the services covered by s 6(b)(iii). The complaint being in each instance that the approach adopted by the Court was "too broad".
Bathurst CJ (with whose reasons McColl JA and Tobias AJA agreed) applied well-settled principles to the construction of this New South Wales statute. No question of public importance is raised by the application, nor do the interests of the administration of justice favour the grant of special leave.
The application is refused.
Pursuant to r 41.11.1 we direct the Registrar to draw up, sign and seal an order dismissing the application with costs.

J.D. Heydon
13 November 2012 V.M. Bell

CaseChat Overview and Summary

In the case of H.M. Australia Holdings Pty Ltd v Edelbrand Pty Ltd T/As Domus Homes, the dispute involved a contractual agreement between H.M. Australia and Domus, where Domus was to provide project management services in exchange for a fixed fee and a bonus based on savings. Domus submitted a payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW) for a bonus amount of $195,376.00 plus GST. After obtaining a favourable adjudication determination, H.M. Australia sought to have the determination set aside, arguing that the services provided by Domus were not covered by the Act and that the bonus payment arrangement excluded the contract from the statutory scheme. The Supreme Court of New South Wales initially ruled in favour of H.M. Australia, but the New South Wales Court of Appeal overturned this decision, finding that Domus' services fell within the Act's definition of "building... advisory services in relation to construction work" and that the bonus payment did not exclude the contract from the statutory scheme. H.M. Australia subsequently sought special leave to appeal to the High Court of Australia.

The central legal issues in this case were the interpretation of sections 6(b)(iii) and 7(2)(c) of the Building and Construction Industry Security of Payment Act 1999 (NSW). The first issue was whether Domus' services qualified as "building... advisory services in relation to construction work" under section 6(b)(iii). The second issue was whether the bonus payment arrangement constituted a profit-sharing agreement that excluded the contract from the statutory scheme under section 7(2)(c). The Court of Appeal held that Domus' services did fall within the scope of the Act and that the bonus payment did not exclude the contract from the statutory scheme. H.M. Australia argued that the Court of Appeal erred in its interpretation of these sections, claiming that the approach taken was too broad.

In dismissing the application for special leave to appeal, the High Court of Australia upheld the Court of Appeal's interpretation of the statutory provisions. The Court held that the statutory language was clear and unambiguous, and the Court of Appeal's interpretation was consistent with well-established principles of statutory construction. The High Court also found that no question of public importance was raised by the application and that the interests of the administration of justice did not favour granting special leave. Consequently, the application for special leave to appeal was refused, and the orders made by the Court of Appeal were upheld.

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