Seeing through the Façade – when matters are plainly wrong: The circumstances when a single judge is not obliged to follow intermediate appellate authority.
In today’s decision of Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2018] NSWSC 412, His Honour Justice Stevenson did not follow a recent decision of the Victorian Court of Appeal in Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd [2016] VSCA 247 (Warren CJ, Tate and McLeish JJA) which confirmed that an insolvent claimant is precluded from relying on procedures for recovering progress payments set out in the Building and Construction Industry Security of Payment Act 2002 (Vic).
Stevenson J provided that unless he concluded that the Victorian Court of Appeal in Façade was “plainly wrong” he was “obliged to follow it” in respect of interpreting the equivalent New South Wales legislation (Building and Construction Industry Security of Payment Act 1999 (NSW)). He so concluded. He provided detailed reasoning to support his conclusion. Contrary to their Honours’ conclusions, Stevenson J saw nothing in the equivalent New South Wales legislation that prevented companies in liquidation relying on the legislative recovery procedures.
In so doing, Stevenson J followed High Court pronouncements on the circumstances in which a single judge can depart from an intermediate appellate court’s legislative interpretation. Such a departure is warranted only where the single judge is convinced that that interpretation is plainly wrong (Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485 at 492; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [135]).
The judgment is also instructive in respect of applying the principles of restitution as recently restated by the High Court in Simic v New South Wales Land and Housing Corporation [2016] HCA 47, namely, that restitution requires discernment of the actual or true common intention of the parties (Gageler, Nettle and Gordon JJ), evidence of which must be “proved to a high standard” (Kiefel J at [41]). In this case, restitution was ordered because there was clear evidence of the parties’ common intention that a particular clause of the contract was a “non-negotiable”.
A full version of the judgment is available here.