Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd
[2024] QSC 94
•17 May 2024
SUPREME COURT OF QUEENSLAND
CITATION: Bright Days Herston Pty Ltd v ATG Project & Property Solutions Pty Ltd [2024] QSC 94 PARTIES: BRIGHT DAYS HERSTON PTY LTD (ACN 601 164 309)
(applicant)
v
ATG PROJECT AND PROPERTY SOLUTIONS PTY LTD (ACN 160 517 493)
(first respondent) AND
CHRISTOPHER MORROW
(second respondent) AND
ADJUDICATION REGISTRAR APPOINTED UNDER SECTION 150 OF THE BUILDING INDUSTRY FAIRNESS (SECURITY OF PAYMENT ACT) 2017 (QLD)
(third respondent)
FILE NO: BS 5643 of 2024 DIVISION: Trial Division PROCEEDING: Application ORIGINATING COURT: Supreme Court at Brisbane DELIVEREDON: 17 May 2024 DELIVEREDAT: Brisbane HEARINGDATE: 9 May 2024 JUDGE: Brown J ORDER: 1. The application is dismissed.
2. The parties will be heard as to costs.
CATCHWORDS: BUILDING AND CONSTRUCTION – ADJUDICATION OF PAYMENT CLAIM DISPUTES – APPOINTMENT OF ADJUDICATOR – APPREHENSION OF BIAS – where the
applicant seeks an injunction to restrain an adjudicator appointed under the Building Industry Fairness (Security of Payment) Act 2017 (Qld) from making a determination in respect of a payment claim – where the appointed adjudicator is a named respondent in separate review proceedings between
the parties in relation to a different payment claim – whether there is an apprehension of bias on the part of the adjudicator
Building Industry Fairness (Security of Payment) Act 2017
(Qld), s 79, s 80, s 81 s 83, s 88, s 95, s 100B, s 150, s 161, s
170, s 186Austin BMI Pty Ltd v Deputy Premier [2023] QSC 95
Charisteas v Charisteas (2021) 273 CLR 289; [2021] HCA
29
CNY17 v Minister for Immigration and Border Protection
(2019) 268 CLR 76; [2019] HCA 50
Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63Quickway Constructions Pty Ltd v Hick [2017] NSWSC 830 QYFM v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs & Anor (2023) 409 ALR 65; [2023] HCA 15
COUNSEL:
T Ambrose for the applicant
J Mitchenson for the first respondent
SOLICITORS:
Helix Legal for the applicant Thomson Geer for the first respondent
The applicant, Bright Days Herston Pty Ltd (Bright Days), seeks an injunction to restrain the second respondent, Christopher Morrow (the Adjudicator), from making a decision in respect of an adjudication application made on 14 March 2024 by the first respondent, ATG Project & Property Solutions Pty Ltd (ATG) (the second adjudication). This follows Mr Morrow having determined an adjudication application on 29 January 2024 (the first adjudication). Bright Days has sought review of that decision and a declaration it is void and should be set aside. Mr Morrow is a named respondent to that application (the review proceedings). Bright Days contends that, given the review proceedings in relation to the first adjudication, the second respondent should be restrained from determining the second application as there is, in the circumstances, a reasonable apprehension of bias if the Adjudicator determines the second adjudication application. There is no allegation of actual bias.
The second respondent, Mr Morrow, the Adjudicator, and the third respondent, Adjudication Registrar appointed under s 150 of the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (BIF Act), both did not seek to appear and stated they would abide by the order of the Court.
ATG, who appeared in this matter, opposes the relief sought, contending that there is no reasonable apprehension of bias and, in the alternative, that even if that was the case, there has been waiver by Bright Days of its right to bring the application.
There are two issues for determination of the Court:
(a)whether there is a reasonable apprehension of bias in respect of the second respondent determining the second adjudication application; and
(b)whether Bright Days has waived its right to bring this application as a result of its failure to seek the disqualification of the Adjudicator at an earlier point in time and its alleged acquiescence to the second adjudication.
It is necessary to consider the factual circumstances and legal principles before considering each of these questions. Neither were the subject of dispute in this application.
Relevant background facts
Bright Days and ATG are parties to a contract under which ATG undertook to perform construction work as part of the development of a child-care centre located at Herston Road, Brisbane.
On 20 October 2023, ATG lodged an application pursuant to s 79 of the BIF Act for the nomination of an adjudicator to determine a disputed payment claim.
On 13 December 2023, Mr Morrow, the Adjudicator, was appointed to adjudicate the first adjudication application.
On 22 January 2024, the Adjudicator issued the final determination in respect of the first adjudication application, which ultimately decided that:
(a)Bright Days was liable to pay ATG $1,004,306.52 plus GST in respect of the payment claim, the subject of the first adjudication application; and
(b)Bright Days was responsible for 100 per cent of the Adjudicator’s fees and expenses.
Between 30 January and 18 February 2024, Bright Days and ATG engaged in correspondence as to the effect of the first decision and how much (if any) of the adjudicated amount was payable. That included a letter of 19 February 2024, whereby Bright Days notified ATG that it considered no amount was due and payable, and that the entire adjudication decision was infected by jurisdictional error, and was liable to be set aside.
On 20 February 2024, ATG notified Bright Days that it disagreed with Bright Days’ position.
ATG subsequently lodged a charge, pursuant to the BIF Act, over the property on which the project at Herston Road, Brisbane was being developed.
On 14 March 2024, ATG lodged a new application pursuant to s 79 of the BIF Act for the nomination of an adjudicator to determine another disputed payment claim, served on 31 January 2024 (the second adjudication application).
On 25 March 2024, the Adjudicator notified the parties that he had been appointed to adjudicate the second adjudication application. On that same day, Bright Days applied to the Adjudicator for a 15-day extension of time, pursuant to s 83 of the BIF Act, using as justification for its application matters including the complexity of the issues
to be decided and the need to obtain further evidence so as to “assist the adjudicator in the resolution of the issues raised in the claimant’s submissions.”
On 28 March 2024, the Adjudicator granted Bright Days an extension of time.
On 18 April 2024, Bright Days provided its adjudication response to the second adjudication application.
On 22 April 2024, Bright Days filed an originating application to which ATG and the Adjudicator are named respondents, seeking a declaration that the first adjudication determination is void for jurisdictional error and an order for costs against ATG. No specific relief is sought against the Adjudicator.
On 23 April 2024, the Adjudicator notified the parties that he would not take part in the proceedings which was the subject of the originating application and would submit “to the making of all orders sought and the giving or entry of judgment in respect of all claims made, save as to costs.”
On 23 April 2024, Bright Days wrote to the Adjudicator, stating that, given he was a named respondent in the proceedings, a fair-minded lay observer might reasonably apprehend that he might not bring an impartial and unprejudiced mind to the second adjudication.
The Adjudicator, subsequent to receiving Bright Days’ correspondence, requested submissions in relation to the allegation of apprehended bias. Submissions were provided on 24 and 26 April 2024. On 26 April 2024, the Adjudicator notified the parties that he had considered the submissions and that it was his intention to continue with the determination of the second adjudication.
On 3 May 2024, Bright Days filed the present application.
Legal principles - apprehended bias
The test for apprehended bias is well-established, having been set out by the majority in Ebner v Official Trustee in Bankruptcy (and confirmed by the High Court in a number of subsequent decisions), as follows: 1
“…a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principles gives effect to the requirement that justice should both be done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial…”
The test for apprehended bias has aptly been referred to as the “double might” test.2
(2000) 205 CLR 337 at [6] per Gleeson CJ, McHugh, Gummow and Hayne JJ.
Austin BMI Pty Ltd v Deputy Premier [2023] QSC 95 at [8].
In QYFM v Minister for Immigration, Citizenship, Migration Services and Multicultural Affairs (QYFM), Kiefel CJ and Gageler J observed that the “double might” serves to emphasise that the criterion is concerned with “possibility (real and not remote), not probability.”3
Kiefel CJ and Gageler J in QYFM further stated that:
“Application of the criterion was identified in Ebner, and has been reiterated, logically to entail: (1) identification of the factor which it is said might lead a judge to resolve the question other than on its legal and factual merits; (2) articulation of the logical connection between that factor and the apprehended deviation from deciding that question on its merits; and (3) assessment of the reasonableness of that apprehension from the perspective of a fair-minded lay observer”.4
In determining whether there is a reasonable apprehension of bias, the test for apprehended bias must be “firmly established” and the conclusion that there is reasonable apprehension of bias should not be drawn lightly. It is not enough that the fair-minded lay observer may have a “vague sense of unease or disquiet”.5 Conversely, as emphasised by Jagot J in QYFM, a judge has a duty to sit in the event of determining that there is no such reasonable apprehension.6
A number of observations have been made in the authorities as to the fair-minded lay observer, namely that he or she is taken to:
(a)know the nature of the decision, the circumstances which led to the decision and the context in which it was made;7
(b)understand the role of the judge within the judicial process, but recognise, relevant to this case, that an adjudicator is not necessarily a lawyer, but is a professional who can ordinarily be expected to be capable of discarding “the irrelevant, the immaterial and the prejudicial”; however, the fair-minded lay observer must also recognise that even a professional decision-maker is not a “passionless thinking machine” and that information consciously and conscientiously discarded might still sometimes have a sub-conscious effect, even on most professional of decision-makers;8
(c)have a “broad knowledge of the material objective facts…as distinct from a detailed knowledge of the law or knowledge of the character or ability of the [decision-maker]”;9
(d)be “neither complacent nor unduly sensitive or suspicious”;10
(2023) 409 ALR 65 at [37] (footnotes omitted) (QYFM).
(2023) 409 ALR 65 at [38] (footnotes omitted).
QYFM at [214] per Jagot J.
QYFM at [277]-[278] per Jagot J.
CNY17 v Minister for Immigration and Border Protection (2019) 268 CLR 76 at [58] per Nettle and Gordon JJ (CNY17).
CNY17 at [27]-[28] per Kiefel CJ and Gageler J, by reference to a number of established authorities, reference to which has been omitted.
CNY17 at [58] per Nettle and Gordon JJ, quoting from Webb v R (1994) 181 CLR 41 at 73 per Deane J.
QYFM at [47], quoting from Johnson v Johnson (2000) 201 CLR 488 at [53] per Kirby J.
(e)be reasonable;
(f)while not having a “detailed knowledge of the law, or of the character or ability of a particular judge, the reasonableness of any suggested apprehension of bias is to be considered in the context of ordinary judicial practice”;11
Thus, the fair-minded lay observer would in the present case have an appreciation of the material facts of the circumstances giving rise to the first adjudicated decision and the second adjudication, with an awareness of the statutory framework within which the adjudicator operates, although not necessarily the detail of every statutory provision. They would also appreciate that an adjudicator carries out a role that is akin to that carried out by a judge.
Statutory Framework
The applicant’s submissions, in conjunction with the respondent’s submissions, comprehensively set out the operation of the BIF Act. It is therefore only necessary to briefly outline the statutory framework of the BIF Act, under which the adjudication decision is made.
The BIF Act provides a mandatory regime by which an adjudicator is appointed to make a determination arising out of a disputed payment claim and the parties are required to comply in relatively short timeframes. The adjudication has potentially wide-ranging and onerous implications. A determination arising from an adjudication may be enforced as if it were a judgement for a debt of a court of competent jurisdiction. It gives a claimant a right to suspend work and may expose the responding party to prosecution if the adjudicated amount is not paid. It also entitles a successful claimant party to create a charge over land, as has been done in the present case.12
Upon an adjudication application being lodged, the Adjudicator Registrar must refer the matter to an adjudicator.13 The adjudicator is not required to be legally trained but must hold an adjudication qualification.14 The BIF Act provides that the adjudicator is not eligible to adjudicate if they have a conflict of interest.15
An adjudicator must accept a referral.16 Upon accepting the referral, the adjudicator is then obligated to meet certain statutory requirements. The adjudicator must make a decision within prescribed time limits, which are relatively short. Their role has been described as one which “mimics a judge” in material respects.17 He must and take into account submissions provided by the parties and address the considerations set out within the BIF Act in making a determination.18 The adjudicator’s function is to decide the amount of a progress payment which is payable by a respondent to a claimant and the date upon which it becomes due and payable together with the rate
Charisteas v Charisteas (2021) 273 CLR 289 at [12] per Kiefel CJ, Gageler, Keane, Gordon and Gleeson JJ, quoting from Johnson v Johnson (2000) 201 CLR 488 at [13].
Building Industry Fairness (Security of Payment) Act 2017 (Qld) s 100B (BIF Act).
BIF Act s 79(4).
BIF Act s 161(1).
BIF Act s 80; Building Industry Fairness (Security of Payment) Regulation 2018 (Qld) s 13.
BIF Act s 81(2).
Quickway Constructions Pty Ltd v Hick [2017] NSWSC 830 at [30]
BIF Act s 88(2).
of interest. The adjudicator is bound by a statutory code of conduct which requires that they remain impartial.19 It is well-established that the adjudicator must accord the parties procedural fairness and detachment, which involves the absence of actual, or perceived bias.20
The adjudicator is immune from liability21 and their remuneration will not be affected in the event a court determines the adjudication is invalid, subject to acting in good faith, the absence of which is not suggested to be the case here.22
An adjudicator is generally named as a party in any proceedings seeking to set an adjudication aside, although, in the usual course, does not take an active role in the proceedings.
Consideration
Bright Days contends that the factors which may lead the Adjudicator to decide the second adjudication application other than on an independent and impartial evaluation of the merits are that:
(a)the Adjudicator is a named respondent in the review proceedings of the first adjudication decision;
(b)in the first adjudication decision, the Adjudicator made a determination involving the same parties whereby Bright Days was liable for 100 per cent of the Adjudicator’s fees and expenses, contrary to the presumptive position in s 95 of the BIF Act;
(c)the Adjudicator’s decision that he would proceed with the second adjudication determination, contrary to the submission of Bright Days, was given without any reasons; and
(d)prior to the Adjudicator making a ruling in relation to the question of apprehended bias, Bright Days:
(i)had put him on notice that one of the grounds for challenging the first adjudication decision was that he did not account for previous overpayments made by Bright Days to ATG when deciding the adjudicated amount, which are referred to in Bright Days’ payment schedule and adjudication response but not mentioned in the decision; and
(ii)had informed him that another ground of challenge to the first adjudication decision was on the basis that his appointment to adjudicate the first adjudication application was invalid because of the existence of an earlier decision by another adjudicator which is said to have resulted in the appointment of the second adjudicator being invalid, in that the application that he purported to decide had already been decided.
According to the applicant, there are “obvious reasons” as to how those matters might lead the Adjudicator to decide the second adjudication application other than on an
BIF Act s 170.
Quickway Constructions Pty Ltd v Hick [2017] NSWSC 830 at [32].
BIF Act s 186.
BIF Act s 95(8).
independent and impartial evaluation of the merits. In particular, the grounds of review raise questions as to the sufficiency of the decision-making process of the Adjudicator. The applicant contends that fact that the Adjudicator is a named respondent in the proceedings and may be exposed to a published decision which, if the applicants were successful, would show that the Adjudicator had made an error in his decision, such that it is afflicted by jurisdictional error, makes him more susceptible to unconscious feelings against the party bringing the application. The applicant contends that, unlike a judge, an adjudicator does not have the training to put such feelings aside and does not work in a system where their decisions are regularly subject to scrutiny and being set aside. Accordingly, the applicant submits that the review proceedings initiated by Bright Days would likely cause the Adjudicator a level of embarrassment.
The applicant further contends that the fact the Adjudicator did not give reasons for not recusing himself for apprehended bias also suggests non-engagement with the submissions of Bright Days and unconscious feelings against them. Similarly, the fact that the Adjudicator determined in the first adjudication decision that the applicant pay 100 per cent of the fees and costs, contrary to the statutory presumptive position that each party bears 50 per cent of the costs, is said to be indicative of the Adjudicator having negative feelings towards Bright Days.
According to the applicant, a fair-minded lay observer would recognise that the Adjudicator was a person who was not a “passionless thinking machine” and, in contrast to a judicial officer, is not equipped with the same training, tradition and oath to place them in a position to discard the irrelevant information in the decision- making process. Therefore, the Adjudicator is alleged to be more susceptible to being subconsciously affected by the initiation and outcome of the review of the first decision. According to the applicants, a fair-minded lay observer would recognise that an adjudicator, having been paid for the first adjudication decision and spent considerable time in its preparation, would have a personal, if indirect, interest in the outcome of the review of the first adjudication decision and would not wish it to be set aside. The applicant places emphasis on the respondent being a named party in the review proceeding and contends that a fair minded lay observer would not appreciate that was a procedural requirement he be joined as a party as a matter of course, nor would he or she be aware of the protections afforded to the Adjudicator under the BIF Act. A fair-minded lay observer would particularly be influenced by the fact that the Adjudicator is being sued by one of the parties to an adjudication that he is tasked with deciding.
The applicant particularly relies upon the decision Quickway Constructions Pty Ltd v Hick (Quickway), where Hammerschlag J considered the position of an adjudicator and whether there was a reasonable apprehension of bias.23
The respondent contends that when one considers the four matters identified by the applicant as giving rise to apprehended bias in their proper context, none meet the second and third criteria laid out by the High Court in QYFM, given that the Adjudicator is not subject to any claim for relief in the review proceedings nor are costs sought against him. While a named party in the proceedings, a fair-minded lay observer would be aware that, in fact, the Adjudicator is not being sued for anything.
[2017] NSWSC 830 (Quickway).
He has stated he will take no active part in the proceedings, save as to costs, and would submit to the jurisdiction of the Court. The Adjudicator is also not exposed in terms of remuneration or liability if the decision is set aside by the Court under s 186 and s 95(8) of the BIF Act. Similarly, the fact that the Adjudicator in the first adjudication decided Bright Days would bear 100 per cent of the costs was based on the relative success of ATG’s claim and not any conduct of Bright Days, and the lack of reasons being provided for his determining to continue with the adjudication, notwithstanding Bright Days submitting he should not do so because of an apprehension of bias, was done by reference to him outlining the submissions made which were diametrically opposed and in the rough-and-ready context of decisions required to be made quickly under the BIF Act. The respondent therefore submits that these matters do not logically connect to factors and an apprehension that would lead an Adjudicator to decide other than on the merits.
I accept there is considerable weight in the respondent’s argument and those matters do reduce the strength, if any, of the logical connection between the factors relied upon by the applicant and the apprehension that the Adjudicator will decide the second adjudication application otherwise than on an independent and impartial evaluation of the merits. However, they do not entirely abrogate the existence of any logical connection and I will consider the matter on the basis that there is such a logical connection.
The respondent further contends that the factors relied upon by the applicant would not lead a fair-minded lay observer might reasonably apprehend that that the Adjudicator might not decide the second adjudication on its merits given the fair- minded lay observer would be aware:
(a)that the Adjudicator is carrying out a statutory task and is bound by a statutory code of conduct, by which he is required to remain impartial;
(b)that an adjudicator has an immunity from liability under s 186 of the BIF Act and that no relief is sought against the Adjudicator in the review of the first adjudication decision, nor is he exposed to costs;
(c)that even if the court found that the Adjudicator’s decision in the first application was void due to jurisdictional error, the Adjudicator would still be entitled to be paid any fees or expenses for adjudicating the application in accordance with s 95(8) of the BIF Act; and
(d)that adjudicators are named as respondents in applications to set aside adjudication determinations as a matter of course and that the Adjudicator had notified the parties that he would not participate in the review proceeding and would abide by the orders of the court and the entry of judgment in respect of all claims.
As to the decision being the subject of review, the respondent contends that a fair- minded lay observer would consider that the Adjudicator is in no different position from a judge who’s decision is appealed. The respondent therefore contends that given those circumstances none of the applicant’ matters relied upon by the applicant might lead a fair-minded lay observer to think that the Adjudicator might decide the second adjudication otherwise than on an independent review of the merits.
The respondent contends that the decision of Quickway is a case which turned on its own facts and is distinguishable in a number of respects. It further contends that the weight of the decision is affected by the fact that Hammerschlag J considered the arguments without the benefit of any contradictor.
I consider that the decision of Hammerschlag J in Quickway is of some assistance but, as is always the case in cases such as the present, turned on its own facts, some of which are not present here. In that case, his Honour did restrain an adjudicator in relation to a payment claim dispute on the basis he found a reasonable apprehension of bias. Like the present case, the adjudicator was joined in proceedings which sought to challenge a decision which he had previously made. The adjudicator submitted an appearance, save as to costs, and relied on the protection from liability provisions in circumstances where it was contended that there had been a denial of natural justice by the adjudicator in his determination as to the reference dates. Unlike the present case the ground raised challenged the fairness of the adjudicator’s decision, a matter to which his Honour attached some weight, given fairness in decision making is central to the adjudicator’s role. Upon the adjudicator accepting an appointment to adjudicate a subsequent payment claim, Quickway wrote to the adjudicator, drawing his attention to the fact that judgment in the challenged proceedings to which the adjudicator was a party was reserved, and asserting that it was not appropriate for the adjudicator to accept an appointment in relation in the second claim while those proceedings were pending. When the adjudicator called for the parties to provide submissions in relation to the matter raised by Quickway, he expressed his “preliminary view” (which His Honour did not consider a preliminary view) that there was not any conflict of interest or reason why he could not accept a nomination, notwithstanding the “threatened proceedings and the potential threat of seeking costs against me”.24 The adjudicator added that, having accepted the appointment, “it is not appropriate for me to withdraw simply because one party objects and threatens proceedings against me”.25 In the present case, the adjudicator simply called for submissions from the parties and made his decision after considering the submissions, albeit with no reasons. Similar to the present case, the adjudicator in Quickway had made findings adverse to Quickway in the decision which was under review, including that they pay 100 per cent of his fees and expenses, commenting that its submissions were “practically all jurisdictional challenges that failed and many had little merit”.26
In reaching the view that there was an apprehension of bias, Hammerschlag J found the following:27
“[38] A fair-minded lay observer might reasonably (indeed, in my opinion, in this case, would) apprehend that the adjudicator in this case might not bring an impartial and unprejudiced mind to the adjudication of the Bateau Bay application.
[39]He was being sued by Quickway, one of the parties to the Bateau Bay adjudication, which was asserting that he had denied it natural justice, a
Quickway at [17]-[18].
Quickway at [17]-[18].
Quickway at [40].
Quickway at [38]-[42] and [44].
complaint which, as it happened, was upheld by Parker J in relation to the Leichhardt claim after I made orders in this case.
[40]In both the Canterbury and Leichhardt claims, the adjudicator had made findings adverse to Quickway including that Quickway was to pay 100% of his fees and expenses. He observed that its submissions were “practically all jurisdictional challenges that failed and many had little merit”.
[41]He had filed a submitting appearance in the challenge proceedings, but it was save as to costs and he claimed protection from liability under s 30 of the Act. A costs order against him thus remained a possibility, even if not a probability.
[42]In his Request for Further Submissions, he referred to the potential threat of seeking costs against him. Manifestly, he had a personal, if indirect, interest in the outcome of the challenge proceedings, adverse to that of Quickway.
…
[44]He had made a ruling (adverse to Quickway) on his own bias (or rather lack of it), which intromission he never communicated to the parties until his Request for Further Submissions. Knowledge of these facts would in itself give rise to a reasonable apprehension of bias. It is not necessary to consider whether actual bias is disclosed” (emphasis added).
In my view the circumstances relied upon by his Honour in Quickway in leading to such a conclusion were stronger than in the present case. The adjudicator in Quickway had by his comments demonstrated he was threatened by the review proceedings and had acted in responding to the decision to recuse himself that supported those matters giving rise to a reasonable apprehension of bias for the reasons outlined. Importantly, Quickway is not authority that when an adjudicator is a named respondent in review proceedings, that will necessarily lead to an apprehension of bias in relation to subsequent adjudications.
In the present case, I consider that the fair-minded observer would be aware that the Adjudicator, although joined in the proceedings, had no claim for relief being made against him personally, nor were costs claimed, accepting that a fair-minded observer would not appreciate the procedural requirements of the Adjudicator being joined to proceedings. I consider that the fair-minded observer would be aware that the Adjudicator had stated he would take no active role in the review proceedings, save as to costs, and would abide the order of the court. While I do not consider that the fair-minded observer would necessarily be aware of the detail of the statutory protections afforded to the Adjudicator, they would be aware that he was carrying out a statutory role governed by legislation, which involved a quasi-judicial process and that he had protections under the Act in terms of liability and his remuneration even
if a decision was overturned. Similarly, they would recognise that he was required to act impartially, and was qualified to do so. A fair-minded lay observer would also be aware that such decisions are susceptible for review by the courts and that reviews of a decision of an adjudicator is not out of the ordinary and that adjudicators would understand that their decisions are reviewable. A fair-minded observer would also be aware that the Adjudicator is obliged to act with fairness in relation to both parties in adjudicating a matter and that the decision-making under the BIF Act is subject to quick timetables. They would also be aware of the nature of the Adjudicator’s decision albeit not all the detail, that the basis of the costs order against Bright Days was on the basis of lack of success and the circumstances leading up to his determining to continue with the adjudication after the request to recuse himself was made by Bright Days.
In determining whether a fair-minded lay observer might reasonably apprehend, in the totality of circumstances, that the Adjudicator might not bring an impartial mind to the second adjudication, it is “the court’s view of the public’s view, not the court’s own view, which is determinative”.28 In my view, the “double might” test is not satisfied and I do not consider that in the circumstances of this case, a fair-minded lay observer might reasonably apprehend that the Adjudicator might not bring an impartial and unprejudiced mind to determination of the second adjudication application because:
(a)While the fair-minded lay observer would be aware that the Adjudicator is a named respondent in the review proceedings, they would also know that no relief nor costs were sought against him in the review proceedings and he that he had submitted to the jurisdiction of the court. While he had stated that was “subject to any question of costs”, given no costs are being sought they would appreciate that reservation was precautionary. The fair-minded lay observer would therefore know that the Adjudicator is not being sued for anything and that the proceedings did not “threaten” to involve the Adjudicator or that he would be playing any role in the proceedings such that he might harbour subconscious feelings against Bright Days as the applicant.
(b)A fair-minded lay observer would appreciate that the review proceedings relate to an alleged failure by the Adjudicator to take into account the applicant’s submissions in the first adjudication and an alleged jurisdictional error on the basis of the Adjudicator’s failure to consider the effect of a prior decision, and that these allegations could lead to the Adjudicator’s decision being publicly overturned. However, they would also be aware that he has no personal exposure whatever in the outcome of the proceedings and that the decision of the Adjudicator was made under short timeframes. While the decision is liable to be overturned, and notwithstanding he is not a trained judicial officer, the fair-minded lay observer would be aware that the Adjudicator is qualified to carry out a quasi-judicial role which mimics that of a judge and his considerations in the adjudication are governed by statute. In that role, the fair- minded lay observer would also appreciate that the Adjudicator would understand that his decisions are susceptible to review by the court and that, while an adjudicator is not a “passionless thinking machine” nor a judicial officer, they would be aware that the basis of the review did not impugn the integrity or conduct of the adjudication or allege a lack of fairness on his behalf.
CNY17 at [21] per Kiefel CJ and Gageler J, quoting Webb v R (1994) 181 CLR 41 at 52.
The fair-minded lay observer would, given the lack of personal exposure of the Adjudicator and his appointed role as the Adjudicator, consider in the circumstances that he would discard the irrelevant in the decision-making process and would not consider that he might be affected by the review proceedings such that he might not bring an impartial mind to the merits, but might harbour subconscious feelings adverse to Bright Days.
(c)The fair-minded lay observer would be aware that Bright Days was not successful in the first adjudication decision and had costs awarded against it, but also that the Adjudicator made that decision based on Bright Days being unsuccessful in the adjudication, as was stated in paragraph 149 of the first adjudication decision, not any conduct of Bright Days. The fair-minded lay observer would appreciate that the award of those costs was a decision open to him under the BIF Act, and not a criticism of the conduct of Bright Days. In those circumstances, the fair-minded lay observer would not consider that he had formed an adverse view of Bright Days itself as opposed to not finding in its favour.
(d)While the fair-minded lay observer would be aware that the Adjudicator did not give reasons for his decision to continue adjudicating the second adjudication application, they would be aware that the Adjudicator had considered the question of apprehended bias following it being raised by the applicant and he had called for submissions rather than expressing any preliminary view in relation to the request. The fair-minded lay observer would have been aware he had received submissions from both parties which detailed opposing views and that he had identified those submissions in reaching a decision and such decisions had to be made quickly in light of the statutory time constraints under the BIF Act. They would also be aware that the Adjudicator accepted his appointment prior to any issue being raised by the applicant. In those circumstances, the fair-minded lay observer would not consider that the Adjudicator had made the decision in disregard of the applicant’s submissions.
In my view, the factors identified by the applicant, considered by a fair-minded lay observer acting reasonably, and in all of the circumstances, would not lead the fair- minded lay observer to reasonably apprehend that the Adjudicator might not bring an impartial mind to the second adjudication and that unconscious feelings may operate in the second Adjudication. I do not find that the contention that there is a reasonable apprehended bias in relation to the Adjudicator in determining the second adjudication is established and that he should restrained from making a decision in relation to the second adjudication.
Given my finding above, it is unnecessary for me to consider the question of waiver.
The application is therefore dismissed. Although prima facie it would appear that costs follow the event, such that the applicant should pay the first respondent’s costs, I will hear the parties as to costs.
I should note that both parties’ counsel made very appropriate, well-reasoned and considered submissions in this matter, which were of great assistance to the Court.
Orders
The application is dismissed. I will hear the parties as to costs.
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