In Hanna v Kore [2026] NSWCA 106, the Court (Ball JA, Free JA and Griffiths AJA agreeing) dismissed the Builder's appeal and upheld the primary judge's determination which overturned an adjudication determination issued in favour of the Builder on the basis that it was interim only and unsupported by the facts found by the primary judge. However, the Court did not consider the primary judge's finding that an individual's breach of s 37 of the DBPA was not coextensive with the company's.
Case background
Kore owned property at Schofield. In August 2021 the Owners engaged Hanna's company, Intelligent Building, to construct a 2 storey dwelling. In March 2023 the Builder issued Progress Claim 3 for $94k. The Owners failed to pay and the Builder gave notice that the works would be suspended and lodged an adjudication application. In May 2023 the Builder filed an adjudication certificate for $94k which it registered as a judgment. In June 2023 the parties exchanged notices of substantial breach before they both terminated in July 2023. The Owners commenced proceedings against the Builder and the primary judge upheld the Owners' claim against for $361k. Among other things, the primary judge found that the Builder had not entitlement to issue progress claim 3 because at the time the payment claim was issued the Builder the works had not reached the requisite level of completion, and the Builders has failed to reach completion within time. Accordingly the Owners were entitled to terminate and the Builder's termination was unlawful. The primary judge also assumed the Hanna's liability for breach of the duty under s 37 of the DBPA was co-extensive with Intelligent's and damages was assessed the same way. The Builder appealed.
Builder's arguments rejected
The Builder argued that the District Court was not entitled to "revoke" the SOPA determination and Local Court judgment. The Court disagreed. A determination is an interim determination of the parties' rights to facilitate prompt payment. It does not affect any rights that parties have under the contract, or any civil proceedings arising under a contract. Indeed, s 32(3) expressly contemplates that it may be necessary for a court which reaches a different conclusion from an adjudicator when finally determining the parties' rights under the contract to make orders for the restitution of money paid or make allowance for such a payment in giving judgment.The Builder also argued that it was entitled to issue progress claim 3 for work actually performed, eg as quantum meruit. The Court disagreed. The Contract governed when progress payments were due and how they were to be calculated. Given that the lock up stage was incomplete as a matter of evidence there was no entitlement to payment under the Contract. The Court also disagreed that the primary judge was not entitled to rely on an admission of payment in the Builder's defence, and that the Owners termination was invalid because the project was significantly delayed without any extensions granted.