Background
The NSW Department of Education engaged Built Pty Ltd to construct a new high school at Wee Waa under the NSW Government GC21 (Edition 2) General Conditions of Contract. The contract required disputes, defined as “Issues,” to pass through expert determination before litigation. Each expert determination was final and binding unless it did not involve payment of money or required one party to pay the other more than $500,000.
An expert considered eight Issues together and issued a separate certificate for each. Built later commenced proceedings concerning three of them: two extension-of-time disputes, EOT 4 and EOT 5, which included substantial delay and other costs, and an FF&E supply claim. The expert had awarded Built no money on those claims. The Department sought a permanent stay, arguing that each was a money-related Issue determined below the contractual threshold.
Built contended that the results of all eight Issues should be aggregated, because the expert’s overall determination required the State to pay approximately $2.3 million. It alternatively argued that determinations rejecting money claims did not “involve paying a sum of money,” that the extension-of-time Issues were not properly characterized as money claims, and that the Department had waived reliance on the litigation bar by filing a cross-claim.
The Court’s Holding
Rees J held that the $500,000 threshold applied separately to each Issue, not to the cumulative result of all Issues considered by the same expert. The contract required the expert to determine prescribed questions for “each Issue” and required the parties to treat “each determination” as final and binding. Aggregation would make access to litigation depend arbitrarily on whether multiple disputes happened to be assigned to one expert or decided together, and would undermine the clause’s function of filtering out minor disputes.
The Court held that the earlier Lahey litigation had not decided the aggregation question because the point had not been contested there. It followed CPB Contractors Pty Ltd v Transport for NSW [2021] NSWSC 537, concluding that a determination rejecting a money claim still “involves” payment of money because it concerns a claim that would have resulted in payment if successful. CPB Contractors was neither plainly wrong nor distinguishable: the EOT 4 and EOT 5 disputes as litigated included claims for delay, storage, or related costs and therefore involved money.
The Department had not waived the contractual bar. Before filing its response and cross-claim, it expressly obtained Built’s agreement that those filings would not be relied upon as waiver in opposing the stay application. The Court permanently stayed the specified portions of Built’s proceedings, ordered Built to pay the Department’s costs of the motion forthwith, and permitted the Department to file amended pleadings removing its own barred claims.
Key Takeaways
- Under the GC21 (Edition 2) clause considered here, the $500,000 litigation threshold applies separately to each Issue determined by an expert, even when several Issues are heard together.
- A determination dismissing a money claim still “involves” paying a sum of money; if the resulting amount is $500,000 or less, the determination is final and binding and the claim cannot be litigated.
- A party did not waive the litigation bar by filing pleadings where it first secured the opposing party’s agreement that the filing would not be treated as waiver.
Why It Matters
The decision clarifies how the widely used NSW Government GC21 (Edition 2) dispute-resolution regime operates when one expert determines multiple disputes. Parties cannot combine separate below-threshold Issues and rely on their aggregate value to obtain access to court proceedings.
The ruling also confirms that unsuccessful high-value money claims may remain conclusively resolved by expert determination: the relevant threshold turns on what the expert determines is payable for each Issue, including zero, rather than the amount originally claimed.