CAPE RANGE ELECTRICAL CONTRACTORS PTY LTD -v- AUSTRAL CONSTRUCTION PTY LTD [2012] WASC 304

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2012] WASC 304
Case No:	CIV:1395/2012	Heard:	1 MAY 2012
Coram:	PRITCHARD J	Delivered:	29/08/12
No of pages:	60	Judgment Part:	1 of 2
Result:	Declaration refused Leave to enforce granted
Category:	B	Other Parts:	Pages 51 to 60
PDF Version

Parties:	CAPE RANGE ELECTRICAL CONTRACTORS PTY LTD AUSTRAL CONSTRUCTION PTY LTD DENNIS OON
Catchwords:	Administrative law Privative clauses Construction of s 46(3) Construction Contracts Act 2004 (WA) Whether s 46(3) is a privative clause Whether s 46(3) excludes an application for a declaration that an adjudicator's determination is invalid Administrative law Jurisdictional facts Different standards of review Whether matters in s 31(2)(a) Construction Contracts Act 2004 (WA) are jurisdictional facts in the broad or narrow sense Building and construction Construction Contracts Act 2004 (WA) Whether adjudicator's determination is invalid because adjudicator erred in holding that adjudication application had been prepared and served in accordance with s 26 Whether adjudicator's failure to consider alleged set offs was a jurisdictional error Whether adjudicator's failure to consider alleged set offs was a denial of procedural fairness Building and construction Construction Contracts Act 2004 (WA) s 43(2) Application for leave to enforce adjudicator's determination as a judgment Principles to be applied Whether existence of alleged set offs is a ground for refusing leave to enforce
Legislation:	Building and Construction Industry Security of Payment Act 1999 (NSW) Building and Construction Industry Security of Payment Act 2004 (Qld) Construction Contracts Act 2004 (WA) Construction Contracts (Security of Payments) Act 2004 (NT)
Case References:	Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes (WA) Pty Ltd [2009] WASAT 133 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 Chase Oyster Bar Pty Ltd v Hamo Industries Ltd (2010) 78 NSWLR 393 CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 Commissioner of Taxation (Cth) v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520 Craig v State of South Australia (1995) 184 CLR 163 Davies v Minister for Urban Development and Planning (2011) 109 SASR 518 Dickinson v Perrignon [1973] 1 NSWLR 72 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 197 ALR 389 Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264 Gedeon v New South Wales Crime Commission (2008) 236 CLR 120 Halkat Electrical Contractors Pty Ltd v Holmwood Holdings Pty Ltd [2007] NSWCA 32 Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110 Kirk v Industrial Relations Commission (NSW) (2010) 239 CLR 531 Laing O'Rourke Australia Construction Pty Ltd v H&M Engineering & Construction Pty Ltd [2010] NSWSC 818 Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2011] QCA 22 O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2008] WASC 58 Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217 Police and State of South Australia v Lymberopoulos (2007) 98 SASR 433 Project Blue Sky In v Australian Broadcasting Authority (1998) 194 CLR 355 QCLNG Pipeline Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2011] QSC 292 R v Connell; Ex parte Hetton Bellbird Collieries Ltd (No 2) (1944) 69 CLR 407 Re Graham Anstee-Brook; Ex parte Mount Gibson Mining Ltd [2011] WASC 172 Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372 Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59 Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 Stead v State Government Insurance Commission (1986) 161 CLR 141 Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80 Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55 Timwin Construction Pty Ltd v Facade Innovations Pty Ltd [2005] NSWSC 548

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION : CAPE RANGE ELECTRICAL CONTRACTORS PTY LTD -v- AUSTRAL CONSTRUCTION PTY LTD [2012] WASC 304 CORAM : PRITCHARD J HEARD : 1 MAY 2012 DELIVERED : 29 AUGUST 2012 FILE NO/S : CIV 1395 of 2012 BETWEEN : CAPE RANGE ELECTRICAL CONTRACTORS PTY LTD

Plaintiff

AND

AUSTRAL CONSTRUCTION PTY LTD

Defendant

FILE NO/S : CIV 1061 of 2012 BETWEEN : AUSTRAL CONSTRUCTION PTY LTD

Plaintiff

AND

CAPE RANGE ELECTRICAL CONTRACTORS PTY LTD

First Defendant

DENNIS OON

Second Defendant

(Page 2)

Catchwords:

Administrative law - Privative clauses - Construction of s 46(3) Construction Contracts Act 2004 (WA) - Whether s 46(3) is a privative clause - Whether s 46(3) excludes an application for a declaration that an adjudicator's determination is invalid

Administrative law - Jurisdictional facts - Different standards of review - Whether matters in s 31(2)(a) Construction Contracts Act 2004 (WA) are jurisdictional facts in the broad or narrow sense

Building and construction - Construction Contracts Act 2004 (WA) - Whether adjudicator's determination is invalid because adjudicator erred in holding that adjudication application had been prepared and served in accordance with s 26 - Whether adjudicator's failure to consider alleged set offs was a jurisdictional error - Whether adjudicator's failure to consider alleged set offs was a denial of procedural fairness

Building and construction - Construction Contracts Act 2004 (WA) s 43(2) - Application for leave to enforce adjudicator's determination as a judgment - Principles to be applied - Whether existence of alleged set offs is a ground for refusing leave to enforce

Legislation:

Building and Construction Industry Security of Payment Act 1999 (NSW)

Building and Construction Industry Security of Payment Act 2004 (Qld)
Construction Contracts Act 2004 (WA)
Construction Contracts (Security of Payments) Act 2004 (NT)

Result:

Declaration refused

Leave to enforce granted

(Page 3)

Category: B

Representation:

CIV 1395 of 2012

Counsel:

Plaintiff : Mr P G Clifford

Defendant : Mr M Feutrill

Solicitors:

Plaintiff : Alan Rumsley

Defendant : Macpherson & Kelley

CIV 1061 of 2012

Counsel:

Plaintiff : Mr M Feutrill

First Defendant : Mr P G Clifford

Second Defendant : No appearance

Solicitors:

Plaintiff : Macpherson & Kelley

First Defendant : Alan Rumsley

Second Defendant : No appearance

Case(s) referred to in judgment(s):

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199
Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes (WA) Pty Ltd [2009] WASAT 133
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
Chase Oyster Bar Pty Ltd v Hamo Industries Ltd (2010) 78 NSWLR 393
CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384

(Page 4)

Commissioner of Taxation (Cth) v Sara Lee Household & Body Care (Australia) Pty Ltd (2000) 201 CLR 520
Craig v State of South Australia (1995) 184 CLR 163
Davies v Minister for Urban Development and Planning (2011) 109 SASR 518
Dickinson v Perrignon [1973] 1 NSWLR 72
Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 197 ALR 389
Elvidge Pty Ltd v BGC Construction Pty Ltd [2006] WASCA 264
Gedeon v New South Wales Crime Commission (2008) 236 CLR 120
Halkat Electrical Contractors Pty Ltd v Holmwood Holdings Pty Ltd [2007] NSWCA 32
Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd (1988) 5 BPR 11,110
Kirk v Industrial Relations Commission (NSW) (2010) 239 CLR 531
Laing O'Rourke Australia Construction Pty Ltd v H&M Engineering & Construction Pty Ltd [2010] NSWSC 818
Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611
Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611
Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2011] QCA 22
O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2008] WASC 58
Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369
Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217
Police and State of South Australia v Lymberopoulos (2007) 98 SASR 433
Project Blue Sky In v Australian Broadcasting Authority (1998) 194 CLR 355
QCLNG Pipeline Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2011] QSC 292
R v Connell; Ex parte Hetton Bellbird Collieries Ltd (No 2) (1944) 69 CLR 407
Re Graham Anstee-Brook; Ex parte Mount Gibson Mining Ltd [2011] WASC 172
Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372
Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 (2003) 198 ALR 59
Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82
Stead v State Government Insurance Commission (1986) 161 CLR 141
Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80
Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55
Timwin Construction Pty Ltd v Facade Innovations Pty Ltd [2005] NSWSC 548

(Page 5)

Table of Contents

HYPERLINK \l "_Toc333920040" The litigation PAGEREF _Toc333920040 \h 8

HYPERLINK \l "_Toc333920041" Matters for consideration PAGEREF _Toc333920041 \h 10

HYPERLINK \l "_Toc333920042" 1.The statutory framework for the Determination and the factual background relevant to the claims for payment which were the subject of the Adjudication PAGEREF _Toc333920042 \h 11

HYPERLINK \l "_Toc333920043" 2.Whether Austral's challenge to the validity of the Determination is excluded by s 46(3) of the CC Act PAGEREF _Toc333920043 \h 14

HYPERLINK \l "_Toc333920044" 3.Whether affidavit evidence relied upon by Austral at the hearing is admissible in the enforcement proceedings and in the invalidity proceedings PAGEREF _Toc333920044 \h 17

HYPERLINK \l "_Toc333920045"

(a)

Whether paragraph 9 and Annexure BJA 3 to the Archer affidavit are inadmissible by virtue of s 45(3) of the CC Act

PAGEREF _Toc333920045 \h 18

HYPERLINK \l "_Toc333920046"

(b)

Whether paragraphs 15, 24, 25, 26, 27, 29, 30, 32, 33, 40 – 49, 53 – 56, 69 – 79 of the Turner affidavit were inadmissible on the grounds of irrelevance.

PAGEREF _Toc333920046 \h 21

HYPERLINK \l "_Toc333920047" 4.The requirement for leave to enforce and factors relevant to the exercise of that discretion PAGEREF _Toc333920047 \h 21

HYPERLINK \l "_Toc333920048" 5.The role of an adjudicator in making a determination under s 31(2)(b) of the CC Act, and implications for judicial review of determinations by adjudicators PAGEREF _Toc333920048 \h 22

HYPERLINK \l "_Toc333920049" 6.Whether the Determination is invalid either on the basis that: PAGEREF _Toc333920049 \h 25

HYPERLINK \l "_Toc333920050"

(i)

Are the criteria set out in s 31(2)(a) jurisdictional facts necessary to enliven the jurisdiction of the Adjudicator under s 31(2)(b)?

PAGEREF _Toc333920050 \h 26

HYPERLINK \l "_Toc333920051"

(ii)

Is the criterion in s 31(2)(a)(ii) of the CC Act a matter which must actually exist in order to enliven the Adjudicator's jurisdiction?

PAGEREF _Toc333920051 \h 29

HYPERLINK \l "_Toc333920052"

(a)

The process for, and purpose of, the characterisation of jurisdictional facts

PAGEREF _Toc333920052 \h 29

HYPERLINK \l "_Toc333920053"

(b)

Characterisation of the jurisdictional fact in s 31(2)(a)(ii)

PAGEREF _Toc333920053 \h 31

HYPERLINK \l "_Toc333920054"

(iii)

Was the criterion in s 31(2)(a)(ii) satisfied in this case?

PAGEREF _Toc333920054 \h 33

HYPERLINK \l "_Toc333920055"

(a)

The Adjudicator's conclusions as to the terms of the Contract with respect to the system for the payment of invoices

PAGEREF _Toc333920055 \h 34

HYPERLINK \l "_Toc333920056"

(b)

Austral's contentions

PAGEREF _Toc333920056 \h 38

HYPERLINK \l "_Toc333920057"

(c)

Austral's contentions were not made out

PAGEREF _Toc333920057 \h 39

HYPERLINK \l "_Toc333920058"

Conclusions in relation to Issue 6

PAGEREF _Toc333920058 \h 45

HYPERLINK \l "_Toc333920059" 7.Whether the Determination is invalid on the basis that the Adjudicator failed to consider part of the Adjudication Response and thereby failed to make a determination of the kind contemplated by the CC Act, and/or breached a requirement for procedural fairness in s 32(1) of the CC Act PAGEREF _Toc333920059 \h 46

HYPERLINK \l "_Toc333920060"

(i)

The set-off claim and how it was dealt with by the Adjudicator

PAGEREF _Toc333920060 \h 47

HYPERLINK \l "_Toc333920061"

(ii)

The scope of judicial review of determinations of an adjudicator under the CC Act

PAGEREF _Toc333920061 \h 49

HYPERLINK \l "_Toc333920062"

(iii)

Whether the way in which the Adjudicator dealt with the set-off claim amounted to a jurisdictional error

PAGEREF _Toc333920062 \h 51

HYPERLINK \l "_Toc333920063"

(iv)

Whether the way in which the Adjudicator dealt with the set-off claim amounted to a denial of natural justice

PAGEREF _Toc333920063 \h 53

HYPERLINK \l "_Toc333920064"

(v)

If so, whether the set-off claim was material to the issues the Adjudicator had to determine in the adjudication

PAGEREF _Toc333920064 \h 53

(Page 6)

HYPERLINK \l "_Toc333920065" 8.Whether leave to enforce should be refused on the ground that, on the proper construction of s 39(1) of the CC Act, the Determination sum has been paid by virtue of Austral's set-off claim PAGEREF _Toc333920065 \h 54

HYPERLINK \l "_Toc333920066" 9.Having regard to my conclusions in respect of Issues 6 - 8 above, whether a declaration should be granted that the Determination is invalid PAGEREF _Toc333920066 \h 55

HYPERLINK \l "_Toc333920067" 10.Having regard to my conclusions in respect of Issues 6 - 9 above, whether leave to enforce the Determination should be granted PAGEREF _Toc333920067 \h 56

HYPERLINK \l "_Toc333920068" Appendix A: relevant terms from the Contract PAGEREF _Toc333920068 \h 57

HYPERLINK \l "_Toc333920069" Appendix B: PAGEREF _Toc333920069 \h 59

(Page 7)

1 PRITCHARD J: Austral Construction Pty Ltd (Austral) is an engineering company which has been constructing an accommodation village and related facilities at the Rio Tinto Koodaideri Mine in Western Australia (the Project). It contracted with Cape Range Electrical Pty Ltd (Cape Range) to be the electrical subcontractor for the Project, and to design, supply and install the electrical and communications services for the Project (the electrical works).

2 In about December 2010 Austral and Cape Range entered into a contract for the provision of the electrical works to the Project (the Contract). It was not in dispute in this case that the Contract was subject to the Construction Contracts Act 2004 (WA) (the CC Act). It was also not in dispute that Austral was the principal, and Cape Range was the contractor, under the Contract, for the purposes of the CC Act.

3 A dispute arose between Cape Range and Austral in relation to the payment of a number of invoices submitted by Cape Range for its performance of part of the electrical works under the Contract. Cape Range claimed that the dispute constituted a 'payment dispute' for the purposes of the CC Act and applied for an adjudication of the payment dispute by an adjudicator pursuant to the CC Act (the Adjudication Application). Austral filed a response to that application (the Adjudication Response) in which it contended that the Adjudication Application had not been made in the time required under s 26 of the CC Act and in which it disputed Cape Range's claims that Austral was liable to make a payment or payments to Cape Range.

4 Mr Dennis Oon (the Adjudicator) was appointed to adjudicate the dispute the subject of the Adjudication Application. On 10 November 2011 the Adjudicator delivered his determination in relation to the Adjudication Application (the Determination) in which he determined that Austral should pay Cape Range the sum of $327,114.15 plus GST and interest, by 17 November 2011 (the Determination sum).

The litigation

5 Austral did not pay Cape Range in accordance with the Determination. Cape Range then commenced proceedings in the District Court seeking to enforce the Determination pursuant to s 43 of the CC Act (the enforcement proceedings). Subsequently, Austral commenced proceedings in this Court, seeking, amongst other things, to challenge the validity of the Determination. Orders were then made remitting the enforcement proceedings to this Court so the actions could be managed together.

(Page 8)

6 In the enforcement proceedings, Cape Range seeks (amongst other things) the leave of the Court pursuant to s 43 of the CC Act for the Determination to be enforced in the same manner as a judgment or order of the Court, and that judgment be entered against Austral in the amount of the Determination sum.

7 Austral opposes the grant of leave and entry of judgment in the enforcement proceedings. Austral's case is that leave should not be granted because the Determination is invalid and, in addition or alternatively, because the Determination sum can properly be considered to have been paid for the purposes of s 39 of the CC Act by virtue of a contractual right to set-off amounts which Austral claims that Cape Range owes it, against amounts Cape Range claims from it (the set-off claim).

8 Austral also claims to have other rights, at common law or in equity, to withhold or set-off monies which it claims Cape Range owes it, against Cape Range's claims for payment, and that the amount it is entitled to set off exceeds the Determination sum. Austral claims that if Cape Range is able to enforce the Determination, Austral will be deprived of a benefit which would otherwise be available to it, namely of not having to pay Cape Range in respect of the monies the subject of the Determination sum. However, counsel for Austral indicated that this contention would be relied on only in the event that leave to enforce was granted, in which case it would seek a stay or suspension of the enforcement.

9 Austral also commenced proceedings by a writ of summons and statement of claim (the SOC proceedings). Austral seeks a declaration that the Determination is invalid and of no force and effect, and various other declarations in relation to whether it may withhold or set-off amounts for which it says Cape Range is liable under the Contract, a declaration that Cape Range is not entitled to suspend the performance of its obligations under the Contract pursuant to s 42 of the CC Act, and a declaration that Cape Range has repudiated the Contract, so that Austral is entitled to terminate the Contract.

10 Austral's challenge to the validity of the Determination concerns whether there was satisfaction of a condition (under s 31(2)(a) of the CC Act) on which the existence of the Adjudicator's jurisdiction to determine the Adjudication Application depended, and whether the Adjudicator fell into jurisdictional error in exercising his jurisdiction under s 31(2)(b) of the CC Act.

(Page 9)

11 Counsel for Cape Range submitted that s 46(3) of the CC Act precluded Austral's challenge to the validity of the Determination by an application for declaratory relief in the SOC proceedings, rather than by an application for a writ of certiorari to quash the Determination.

12 It was apparent that there would be a considerable overlap between that part of the SOC proceedings in which Austral sought to have the Determination declared invalid (the invalidity proceedings), and the enforcement proceedings, in which Austral sought to raise the alleged invalidity of the Determination as a basis for the refusal of leave to enforce the Determination. It was also apparent that no oral evidence would be required in either the invalidity proceedings or the enforcement proceedings and that the proceedings would be determined on affidavit evidence. Accordingly, I made orders pursuant to O 32 r 4 of the Rules of the Supreme Court 1971 (WA)that the invalidity proceedings be heard and determined at the same time as the enforcement proceedings, and orders permitting the evidence in each proceeding to be relied on as evidence in the other proceeding.

13 The Adjudicator was not a party to the SOC proceedings. Had Austral sought to challenge the validity of the Determination through an application for prerogative relief, the Adjudicator would necessarily have been a party to that application. In the circumstances, I concluded that this was an appropriate case for the joinder of the Adjudicator as a defendant in the SOC proceedings, so that if he saw fit to do so, he would have the opportunity to be heard in relation to the invalidity proceedings. Pursuant to orders I made on 27 March 2012, the Adjudicator was served with all relevant documents. The Adjudicator subsequently advised the Court that he did not wish to be heard.

Matters for consideration

14 Having regard to the issues raised by the parties, this judgment deals with the following matters:

1. The statutory framework for the Determination and the factual background relevant to the claims for payment which were the subject of the Adjudication.

2. Whether Austral's challenge to the validity of the Determination is excluded by s 46(3) of the CC Act.

(Page 10)

3. Whether affidavit evidence relied upon by Austral at the hearing is admissible in the enforcement proceedings and in the invalidity proceedings.

4. The requirement for leave to enforce and factors relevant to the exercise of that discretion.

5. The role of an adjudicator under s 31 of the CC Act.

6. Whether the Determination is invalid either on the basis that:

(a) the Adjudicator erred in concluding that a jurisdictional fact (upon which his jurisdiction to make the Determination depended) existed, namely, that the Adjudication Application was prepared and served in accordance with s 26 of the CC Act; or

(b) a fact on which the Adjudicator's jurisdiction to make the Determination depended, namely that the Adjudication Application was prepared and served in accordance with s 26 of the CC Act, was not established as a matter of fact.

7. Whether the Determination is invalid on the basis that the Adjudicator failed to consider part of the Adjudication Response and thereby failed to make a determination of the kind contemplated by the CC Act, and/or breached a requirement for procedural fairness in s 32(1) of the CC Act.

8. Whether leave to enforce should be refused on the ground that the Determination sum has been satisfied, in whole or in part, by Austral's set-off claim.

9. Having regard to my conclusions in respect of issues 6 - 8 above, whether a declaration should be granted that the Determination is invalid.

10. Having regard to my conclusions in respect of issues 6 - 9 above, whether leave to enforce the Determination should be granted.

1. The statutory framework for the Determination and the factual background relevant to the claims for payment which were the subject of the Adjudication

15 Under the CC Act, if a payment dispute arises under a construction contract, then (subject to qualifications which are not presently relevant)

(Page 11)

any party to the contract may apply to have the dispute adjudicated pursuant to the CC Act.

For the purposes of the CC Act, a 'payment dispute' arises if, relevantly, by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full, or the claim has been rejected or wholly or partly disputed.

A 'payment claim' includes a claim made under a construction contract by the contractor to the principal for payment of an amount in relation to the performance by the contractor of its obligations under the contract.

16 Cape Range made an application for the adjudication of two payment disputes which it claimed arose under the Contract. The two payment disputes arose from Austral's failure to pay 26 invoices, which collectively amounted to a claim for $356,402.85 (excluding GST).

17 The first payment dispute pertained to Invoice 1778 for the amount of $298,719.85 (excluding GST), which was lodged with Austral on 27 July 2011.

18 The second payment dispute pertained to Invoices 1782 - 1806 for a combined amount of $58,119.60 (excluding GST). Those invoices were lodged with Austral on 28 July 2011.

19 Cape Range claimed that Austral failed to pay all or any of these invoiced amounts by the due dates for payment.

20 An adjudicator's functions in relation to an adjudication application are relevantly set out in s 31(2) of the CC Act. It is convenient to set out that provision in full:

An appointed adjudicator must …

(a) dismiss the application without making a determination of its merits if -

(i) the contract concerned is not a construction contract;

(ii) the application has not been prepared and served in accordance with section 26;

(iii) an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract

(Page 12)

makes an order, judgment or other finding about the dispute that is the subject of the application; or

(iv) satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time or any extension of it is not sufficient for any other reason;

(b) otherwise, determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, or to return any security and, if so, determine -

(i) the amount to be paid or returned and any interest payable on it under section 33; and

(ii) the date on or before which the amount is to be paid, or the security is to be returned, as the case requires.

21 Much of the argument in this case concerned whether the Adjudication Application complied with s 26 of the CC Act. Section 26(1) provides:

(1) To apply to have a payment dispute adjudicated, a party to the contract, within 28 days after the dispute arises, or, if applicable, within the period provided for by section 37(2)(b), must -

(a) prepare a written application for adjudication;

(b) serve it on each other party to the contract;

(i) if the parties to the contract have appointed a registered adjudicator and that adjudicator consents, on the adjudicator;

(ii) if the parties to the contract have appointed a prescribed appointor, on that appointor;

(iii) otherwise, on a prescribed appointor chosen by the party;

and

(d) provide any deposit or security for the costs of the adjudication that the adjudicator or the prescribed appointor requires under section 44(8) or (9).

(Page 13)

Section 26(2) goes on to specify certain requirements for the content of the written application. Compliance with those requirements was not in issue.

22 In respect of Invoices 1797 - 1806 the Adjudicator determined that Cape Range had not submitted its Adjudication Application within the time frame required by s 26(1) of the CC Act. Accordingly the Adjudicator dismissed that part of the Adjudication Application and the Determination did not substantively deal with Cape Range's claims for payment of the amounts the subject of invoices 1797 - 1806. That part of the Determination was not in issue in these proceedings.

23 The Adjudicator found that insofar as it pertained to Invoices 1778 and 1782 - 1796, the Adjudication Application was prepared and served within the time required by s 26(1) of the CC Act.4 The Adjudicator went on to consider the merits of Cape Range's claims to the payment of these invoices, and found that Austral was required to pay the whole amount of Invoices 1778 and 1782 - 1796. For that reason, the Determination sum amounted to a total of $327,114.15 (excluding GST).

2. Whether Austral's challenge to the validity of the Determination is excluded by s 46(3) of the CC Act

24 Austral's attack on the validity of the Determination was pursued through the SOC proceedings in which it sought relief in the form of a declaration that the Determination was invalid. It did not make, nor did counsel for Austral foreshadow any intention to make, an application for a writ of certiorari to quash the Determination.

25 Counsel for Cape Range submitted that it was not open to Austral, by way of an application for declaratory relief, to challenge the validity of the Determination. He submitted that any challenge to the validity of a determination made by an adjudicator, other than one pursued by an application for a prerogative writ, was excluded by s 46(3) of the CC Act.

26 It is convenient to set out s 46 in its entirety. That section provides:

46. Review, limited right of

(1) A person who is aggrieved by a decision made under section 31(2)(a) may apply to the State Administrative Tribunal for a review of the decision.

(Page 14)

(2) If, on a review, a decision made under section 31(2)(a) is set aside and, under the

State Administrative Tribunal Act 2004

section 29(3)(c)(i) or (ii), is reversed the adjudicator is to make a determination under section 31(2)(b) within 14 days after the date on which the decision under section 31(2)(a) was reversed or any extension of that time consented to by the parties.

(3) Except as provided by subsection (1) a decision or determination of an adjudicator on an adjudication cannot be appealed or reviewed.

27 I am unable to accept Cape Range's submission. In Perrinepod Pty Ltd v Georgiou Building Pty Ltd5, the Court of Appeal held that s 46(3) of the CC Act was not a privative clause which purported to exclude the supervisory jurisdiction of the Court with respect to jurisdictional error and therefore did not purport to exclude judicial review of adjudication determinations.6 Had it purported to do so, s 46(3) of the CC Act would have been an invalid attempt to exclude the Court's supervisory jurisdiction.7

28 The Court concluded that the use of the word 'review' in s 46(3) of the CC Act refers only to a review by the State Administrative Tribunal (the Tribunal) of the kind referred to in s 46(1) of the CC Act.8 Insofar as s 46(3) refers to an 'appeal' against a decision or determination of an adjudicator, the Court noted that the CC Act does not contemplate a right of 'appeal' as such against a decision or determination of an adjudicator.9

29 The practical impact of s 46(3) of the CC Act in view of this construction appears to be that the only right of review to the Tribunal which is available in respect of a decision or determination of an adjudicator is the right of review referred to in s 46(1) of the CC Act.10 Any other rights of review by the Tribunal which might otherwise exist are excluded, as is any appeal against a decision or determination of an adjudicator (although no such appeal right in fact exists). In light of this construction of s 46(3) of the CC Act, any other means by which decisions or determinations of an adjudicator might be reviewed (other than by the Tribunal) remain open.

(Page 15)

30 Clearly, an application to this court for a declaration as to the invalidity of a determination made by an adjudicator is not a review of the kind contemplated by s 46(1) of the CC Act. Accordingly, s 46(3) does not preclude Austral's application for declaratory relief in respect of the Determination on the ground that the determination is invalid. Counsel for Cape Range ultimately accepted, albeit reluctantly, that this was so.11

31 Further, insofar as counsel for Cape Range submitted that Austral's application for judicial review should have been brought by an application for a prerogative writ, rather than by an application for a declaration, that submission must also be rejected. It was clearly open to Austral to pursue its application for judicial review by way of an application for declaratory relief in the SOC proceedings.12

32 It is appropriate to briefly mention one further issue, which received some attention at the hearing as a result of a submission made by counsel for Cape Range. The submission by counsel for Cape Range in relation to the effect of s 46(3) of the CC Act raised the question whether the power of the Court to grant a bare declaration in the course of a proceeding commenced by writ (rather than as ancillary relief in the context of an application for a prerogative writ) should properly be seen as part of the Court's supervisory jurisdiction, with the result that it could not be excluded by a statutory privative clause.13 The sources of the Court's power to grant declaratory relief and prerogative relief are different,14 and it is not entirely clear from the authorities whether the power to grant a bare declaration should now be regarded as part of the supervisory jurisdiction of the Court.15 However, having regard to my conclusion on the construction of s 46(3) of the CC Act, it is unnecessary for present purposes to determine this issue.

33 I have therefore proceeded on the basis that s 46(3) of the CC Act does not exclude an application for a declaration that a determination of an adjudicator is invalid for jurisdictional error. It was therefore open to

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Austral to challenge the Determination by an application for a declaration made in the course of the SOC proceedings, rather than by an application for prerogative relief.

3. Whether affidavit evidence relied upon by Austral at the hearing is admissible in the enforcement proceedings and in the invalidity proceedings

34 It was common ground that the terms of the Contract as originally agreed between the parties were set out in a number of documents including a document entitled the 'Koodaideri Exploration Village Installation Austral Contract 1017 Subcontract Agreement' (the Subcontract Agreement) and a document entitled 'Austral Construction Pty Ltd General Conditions of Contract' (the GCC). A copy of each of these documents was annexed to the Archer Affidavit. However, the copy of the GCC which was annexed to the Archer affidavit was dated 28 July 2010. That version of the GCC thus pre-dated the Contract. In the course of the hearing, counsel for Austral also tendered a bundle of documents containing a further copy of the documents comprising the Contract (exhibit D), and that bundle of documents included a copy of the GCC dated 13 December 2010.16 Counsel for Austral submitted that this was the version of the GCC in effect immediately prior to the date on which the Contract was executed.

35 Counsel for Cape Range did not dispute that the version of the GCC which formed part of the Contract when it was entered into was that dated December 2010. However, counsel for Cape Range objected to the tender of Exhibit D on the basis that he did not know (and had not had an adequate opportunity to confirm) whether the terms of the December 2010 version of the GCC were the same as the July 2010 version of the GCC.

36 I provisionally admitted Exhibit D into evidence, pending confirmation by Cape Range as to whether its objection was maintained following an inspection of exhibit D. Counsel for Cape Range did not make any further submissions in relation to the tender of Exhibit D. A comparison between the July 2010 version of the GCC and the December 2010 version of the GCC confirms that, at least in respect of the key clauses of relevance in these proceedings, namely clauses 39, 45 and 47, those clauses are in identical terms in each version. Accordingly, the objection by Cape Range falls away.

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37 At the hearing, counsel for Austral tendered an affidavit of Mr Brendan James Archer sworn 27 February 2012 (the Archer affidavit)17 and an affidavit of Mr Aaron Turner sworn 13 April 2012 (the Turner affidavit).18 These affidavits were provisionally admitted into evidence, pending the resolution of objections made by counsel for Cape Range to the admissibility of parts of the affidavits. A number of these objections were dealt with in the course of the hearing. However, there remained two objections to the admissibility of parts of the Turner affidavit and Archer affidavit, about which it is necessary to make rulings:

(a) Counsel for Cape Range objected to the admission into evidence of paragraph 9 and Annexure BJA 3 to the Archer affidavit. It was submitted that this material was inadmissible by virtue of s 45(3) of the CC Act;

(b) Counsel for Cape Range also objected to the admission into evidence of paragraphs 15, 24, 25, 26, 27, 29, 30, 32, 33, 40 – 49, 53 – 56, 69 – 79 of the Turner affidavit. The basis for this objection was that these paragraphs were directed to Austral's set-off claim. It was submitted that this set-off claim was irrelevant to the enforcement application because the basis for the application to enforce was the existence of a requirement to pay the Determination sum pursuant to s 39(1) of the CC Act.

38 I will deal with these objections in turn.

(a) Whether paragraph 9 and Annexure BJA 3 to the Archer affidavit are inadmissible by virtue of s 45(3) of the CC Act

39 Paragraph 9 of the Archer affidavit referred to the Adjudication Response made by Austral. Annexure BJA 3 to the Archer affidavit was a copy of the Adjudication Response. Counsel for Cape Range submitted that the Court could not refer to this material to determine the issues raised by Austral in relation to the enforcement proceedings or the invalidity proceedings because the Court was precluded by s 45(3) of the CC Act from having regard to anything said or done in an adjudication, with the result that par 9 and annexure BJA 3 to the Archer affidavit were inadmissible. Counsel for Cape Range submitted, however, that this prohibition did not apply when the Court was dealing with an application for prerogative relief.

40 Section 45 of the CC Act provides:

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(1) This Part does not prevent a party to a construction contract from instituting proceedings before an arbitrator or other person or a court or other body in relation to a dispute or other matter arising under the contract.

(2) If other such proceedings are instituted in relation to a payment dispute that is being adjudicated under this Part, the adjudication is to proceed despite those proceedings unless all of the parties, in writing, require the appointed adjudicator to discontinue the adjudication.

(3) Evidence of anything said or done in an adjudication is not admissible before an arbitrator or other person or a court or other body, except for the purposes of an application made under section 29(3) or an appeal made under section 46.

(4) An arbitrator or other person or a court or other body dealing with a matter arising under a construction contract -

(a) must, in making any award, judgment or order, allow for any amount that has been or is to be paid to a party under a determination of a payment dispute arising under the contract; and

(b) may make orders for the restitution of any amount so paid, and any other appropriate orders as to such a determination.

The meaning of s 45(3) is somewhat elliptical, not least because no appeals are able to be brought under s 46 of the CC Act. However, as the present issue concerns the opening words of s 45(3), it is unnecessary to resolve the meaning of the concluding words of that subsection.

41 If the opening words used in s 45(3) are read in isolation, then at first blush, there is some attraction to the meaning advanced by counsel for Cape Range. However, to read those words in isolation would be to ignore a fundamental rule of statutory construction, namely that statutory provisions must be construed having regard to their context.19 When regard is had to the context in which s 45(3) appears, the words in the subsection cannot be given the meaning advanced by counsel for Cape Range, for two reasons.

42 The first arises from a general contextual consideration. Section 45(1) makes clear that the parties to an adjudication remain

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entitled to seek the resolution of their substantive contractual dispute in other for a - whether in an arbitration or in litigation. If that right is to be effectively preserved, then what goes on in proceedings before the adjudicator should not be able to be admitted in those other proceedings other than to the extent that the sum awarded in an adjudication should be taken into account in determining any amount of an award, judgment or order which might be made in resolving the parties' contractual dispute. That is the work that is done by s 45(3) and s 45(4). (Section 45(3) also has the additional effect of facilitating the expeditious resolution of the adjudication because the parties to the adjudication can make frank submissions to an adjudicator without being concerned that those submissions would prejudice their position in any substantive proceedings about their contractual dispute before an arbitrator, court or other body.)

43 The second and more specific contextual consideration is that the opening words of s 45(3) mirror the words in s 45(1). That is, s 45(3) refers in a shorthand fashion to the proceedings referred to in s 45(1) of the CC Act. It is only in those proceedings (that is, in proceedings before an arbitrator or a court or other body to resolve the substantive dispute between parties to a construction contract) that anything said or done before an adjudicator will be inadmissible.

44 These two contextual considerations support the conclusion that when s 45(3) prohibits evidence of anything said or done before an adjudicator being placed before an arbitrator or a court or other body, the prohibition is on the use of that material in proceedings before any other body which is dealing with the merits of the contractual dispute between the two parties to the construction contract. A proceeding before this Court which is concerned with the validity of a determination made by an adjudicator - whether that proceeding is brought by an application for a prerogative writ, or for a declaration of invalidity, or whether the question of invalidity arises in the context of an application to enforce an adjudication determination as a judgment of the Court - is not a proceeding of that kind. In short, s 45(3) has no application to the present proceedings, and there is no reason why evidence of what was said or done before the Adjudicator - and specifically, in this case, the Adjudication Response submitted by Austral - cannot be admitted into evidence in the invalidity proceedings or the enforcement proceedings.

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(b) Whether paragraphs 15, 24, 25, 26, 27, 29, 30, 32, 33, 40 – 49, 53 – 56, 69 – 79 of the Turner affidavit were inadmissible on the grounds of irrelevance.

45 I am not persuaded that these paragraphs of the Turner affidavit are wholly irrelevant. The paragraphs are admissible because they assist to identify the various bases on which Austral says it is entitled to set-off amounts it claims Cape Range owes it, or for which it says Cape Range is liable, against amounts claimed from it by Cape Range.

46 However, beyond this limited relevance, these parts of the Turner affidavit had little bearing on the resolution of the matters in dispute, for two reasons. First, Austral relied only on the set-off claim (that is, its claim to a contractual entitlement to set-off) for the purposes of this hearing. Secondly, resolution of the question whether the determination is invalid by virtue of a jurisdictional error does not involve any analysis of the merits of the substance of any claim by Austral to an entitlement to set-off particular amounts.

4. The requirement for leave to enforce and factors relevant to the exercise of that discretion

47 Section 43 of the CC Act permits a determination of an adjudicator to be enforced in the same manner as a judgment or order of a court with jurisdiction to deal with a claim for the recovery of a debt of the same amount as the amount payable under the determination. However, the leave of the court is required before the determination may be enforced in this way, and is a prerequisite to the entry of judgment in terms of the determination.20 (The position under the CC Act may be contrasted with the position under similar legislation in the other States and Territories where the leave of the Court is not required before a contractor can enforce a determination of an adjudicator in the same way as a judgment for a debt.21)

48 The terms of s 43(2) of the CC Act indicate that the Court has a discretion as to whether to grant leave to permit a determination of an adjudicator to be enforced in the same manner as a judgment or order of the Court. However, s 43(2) does not expressly identify the factors which should be considered in the exercise of that discretion.

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49 The principles applicable to the grant of leave to enforce a determination were considered by Corboy J in Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd,22 and I respectfully adopt his Honour's analysis. For the reasons set out by his Honour, I agree that the scheme of the CC Act reinforces the proposition that prima facie, a party who has the benefit of a determination is entitled to enforce it. The existence of an arguable case that a determination is invalid and liable to be declared to be so, or to be set aside in the exercise of prerogative relief, would be a reason for refusing the grant of leave to enforce a determination. However, that is not necessarily the only reason why leave might be refused. What will be a sufficient reason for refusing leave to enforce a determination will depend on a consideration of all of the relevant circumstances, and must be assessed bearing in mind the scheme and policy of the CC Act.23 In this case, an additional reason (apart from the invalidity of the determination) was advanced by Austral, namely that the determination sum had been 'paid' for the purposes of s 39(a) of the CC Act by virtue of Austral's set-off claim. I deal with this submission in [152] - [157] below.

5. The role of an adjudicator in making a determination under s 31(2)(b) of the CC Act, and implications for judicial review of determinations by adjudicators

50 In assessing Austral's submissions as to why the Determination is said to be invalid, it is necessary to bear in mind some important contextual considerations which arise from the terms of the CC Act. These contextual considerations provide important guidance on the nature and role of an adjudicator. In turn, an understanding of the nature and role of adjudicators under the CC Act assists the court in assessing the merit of contentions made by a party to the effect that an adjudicator's determination is invalid.

51 The objects of the adjudication process are 'to determine the dispute fairly and as quickly, informally and inexpensively as possible'.24 It is not necessary that an adjudicator have legal qualifications, and adjudicators may instead have qualifications in a range of other fields, as well as experience in administering contracts or in dispute resolution in relation to construction contracts.25

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52 The CC Act also marks out the parameters of what an adjudicator is relevantly required to determine in dealing with the merits of a payment dispute. An adjudicator is required to determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, and if so, to determine the amount to be paid, any interest payable on that amount, and the date on or before which the amount is to be paid.26 Further, a determination by an adjudicator of a payment dispute does not prevent a party to a construction contract from instituting proceedings before an arbitrator or a court in relation to a dispute or other matter arising from the contract.27 An arbitrator or court dealing with such a dispute must in making an award, judgment or order, allow for any amount that has been paid, and may make orders for restitution of any amount so paid.28

53 The CC Act also addresses the process by which an adjudication is conducted. An adjudicator is required to act informally,29 is not bound by the rules of evidence,30 and is largely entitled to determine his or her own procedure.31 Although an adjudicator may inform himself or herself in any way he or she thinks fit,32 if possible an adjudicator must make the determination on the basis of the adjudication application and the adjudication response which the parties provide.33 In addition, an adjudicator is required to deal with an adjudication application within 14 days after the date of service of a response to an adjudication application.34 The need for expedition is reinforced by s 32(5) of the CC Act which makes clear that an adjudicator's power to make a determination is not affected by the failure of either or both of the parties to comply with a request by an adjudicator for more information.

54 These provisions, particularly when considered in light of the purpose of the CC Act as a whole,35 indicate that adjudications under the CC Act are intended to be a rapid process for the resolution of disputes within the context of construction contracts, the aim of which is to 'keep

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the money flowing in the contracting chain'.

The 'rapid adjudication process is a trade-off between speed and efficiency on the one hand, and contractual and legal precision on the other'.

55 Within that context, the role of an adjudicator in conducting an adjudication is intended to be relatively confined. The area of inquiry is confined to the subject of the payment dispute, and the questions for the adjudicator are similarly confined to whether a party to the dispute is liable to make a payment, and if so the amount and due date of the payment. The fact that the adjudication determination does not preclude the parties from litigating about broader issues of dispute under their construction contract also reinforces the limited scope of the adjudicator's inquiry. That would tend to suggest that questions of how the particular payment claim fits into broader disputes arising under the contract in question should be pursued in other fora.

56 Against this background, it cannot be said that the Parliament intended that an adjudicator would express himself or herself with the same degree of legal precision as would a court in examining the terms of a contract, or in applying the requirements of the CC Act in the context of a particular contract, or that an adjudicator would be expected to deal with arguments other than those expressly raised by the parties in relation to the construction of the contract the subject of the adjudication.

57 Other provisions of the CC Act and the CC Regulations concerning the content of a determination also reinforce this conclusion. It is clear from s 36 of the CC Act that a determination must be in writing, and must contain certain information of a limited nature, including information set out in the CC Regulations (including the name of the adjudicator, of the applicant and respondent, and the date of the adjudication),38 the amount to be paid and the date by which it is to be paid, and must give reasons for the determination. These provisions appear to be concerned with ensuring that the outcome of an adjudication is known with certainty by the parties to the payment dispute and by courts or arbitrators who may be called upon to resolve broader disputes arising under the construction contract (and which overlap with the subject of the payment dispute) and in doing so, will be required to take into account the outcome of an adjudication.

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58 These considerations suggest that, in assessing whether an adjudicator has made errors of a kind which would render a determination invalid, it would be entirely inapt to engage in a 'line by line' scrutiny of a determination. To do so would be to risk descending into a merits review of an adjudicator's determination. Further, an approach of that kind would have the potential to undermine the objectives of the CC Act to facilitate an informal and speedy means for resolving payment disputes between parties to construction contracts, while preserving a right to litigate or arbitrate about any substantive areas of dispute underlying those payment disputes.39

59 Bearing these considerations in mind, I turn to consider the bases upon which Austral contended that the Determination was invalid.

6. Whether the Determination is invalid either on the basis that:

(a) the Adjudicator misconstrued the CC Act in concluding that a jurisdictional fact (upon which his jurisdiction to make the Determination depended) existed, namely that the application was prepared and served in accordance with s 26 of the CC Act; or

60 Austral's case was that the Adjudication Application had not been prepared and served in accordance with s 26 of the CC Act in that Cape Range did not apply for an adjudication within 28 days after the payment dispute arose. Austral submitted that the Determination was, therefore, invalid. Austral's grounds for the invalidity of the Determination in this respect proceeded on two alternative bases, both of which were founded on the view that the reference in s 31(2)(a)(ii) to compliance with s 26 of the CC Act is a jurisdictional fact with respect to an adjudicator's exercise of power under s 31(2)(b) of the CC Act.

61 Austral contended, first, that the matter in s 31(2)(a)(ii) was a jurisdictional fact in what may be described as the 'narrow sense'.40 On that basis, counsel for Austral submitted that the Adjudicator's jurisdiction would only be enlivened if the criterion in s 31(2)(a)(ii) existed in fact.

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Counsel for Austral submitted that the matter in s 31(2)(a)(ii) did not, in fact, exist.

62 In the alternative, Austral contended that the jurisdictional fact in s 31(2)(a)(ii) was a jurisdictional fact in what may be described as the 'broad' sense, in that the jurisdictional precondition was that an adjudicator be satisfied of the existence of the matter referred to in s 31(2)(a)(ii). Counsel for Austral submitted that the Adjudicator misdirected himself as to the proper construction of s 6 of the CC Act, relied upon the decision of the Tribunal in Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes (WA) Pty Ltd41which was irrelevant to the issues before him, and failed to take into account relevant considerations, namely the terms of the Contract itself and the possibility that Austral's response, or failure to respond, to Cape Range's invoices constituted an implied rejection of Cape Range's claims.42

63 Austral's case in relation to invalidity on these grounds raises several questions:

(i) Are the criteria set out in s 31(2)(a) jurisdictional facts necessary to enliven the jurisdiction of the Adjudicator under s 31(2)(b)?

(ii) If the criterion in s 31(2)(a)(ii) is a jurisdictional fact for the purpose of the jurisdiction of the Adjudicator under s 31(2)(b), is it a matter which must actually exist in order to enliven the Adjudicator's jurisdiction?

(iii) Was the criterion in s 31(2)(a)(ii) met in this case?

(i) Are the criteria set out in s 31(2)(a) jurisdictional facts necessary to enliven the jurisdiction of the Adjudicator under s 31(2)(b)?

64 The term 'jurisdictional fact' is generally used to identify a criterion the satisfaction of which enlivens the exercise of a statutory power or discretion. If the criterion is not satisfied then the decision purportedly made in the exercise of the power or discretion will have been made without the necessary statutory authority required by the decision-maker.43

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65 In Perrinepod, the parties agreed,44 and the Court accepted,45 that the matters in s 31(2)(a)(i) - (iv) were jurisdictional facts. However, the Court did not finally determine the question whether the matters in s 31(2)(a)(i) - (iv) were jurisdictional facts which enliven the jurisdiction of an adjudicator under s 31(2)(b) to deal with an adjudication on its merits. McLure P expressly accepted that they were.46 Murphy JA (with whom Martin CJ agreed) held that the matters in s 31(2)(a)(i) - (iv) were jurisdictional facts necessary to enliven the jurisdiction of an adjudicator under s 31(2)(a),47 but concluded that it was 'not helpful' to confine the issues of statutory construction raised by the appeal in that case by reference to whether the matters in s 31(2)(a)(i) - (iv) were jurisdictional facts for the purpose of the exercise of an adjudicator's power under s 31(2)(b) of the CC Act.48 The issue has not been addressed in other decisions of this Court in relation to the CC Act. The issue is now squarely raised by Austral's submissions in this case.

66 The question whether the matters in s 31(2)(a)(i) - (iv), and specifically, for present purposes, s 31(2)(a)(ii), constitute jurisdictional facts in relation to an adjudicator's exercise of power under s 31(2)(b) is a question of statutory construction.

67 At the outset, I note that the matters in s 31(2)(a)(i), (ii) and (iv) are expressed in the negative. That is, the adjudicator is required to dismiss an adjudication application, without making a determination of its merits, if the contract is not a construction contract, if the application has not been prepared and served in accordance with s 26, and if it is not possible to fairly make a determination because of the complexity of the matter or if the prescribed time is not sufficient. However, a jurisdictional fact need not be a 'fact' within the ordinary meaning of that term.49 The criterion specified by the Parliament for the exercise of a power may consist of a variety of elements including, for example, facts, states of affairs, the formation of an opinion or belief by a decision-maker, or a decision-maker being satisfied as to a particular matter.

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68 For present purposes, insofar as I refer to the question whether the matters in s 31(2)(a)(i) - (iv) are jurisdictional facts for the purposes of s 31(2)(b), the question is whether, on the proper construction of the CC Act, the non-existence of the matters referred to in each paragraph constitutes a jurisdictional fact for the purposes of the exercise of power in s 31(2)(b). Because the matters in s 31(2)(a)(i), (ii) and (iv) are expressed in the negative, the practical consequence of the non-existence of those matters will be the positive existence of those matters, but that is not, in terms, the criterion specified by the Parliament.

69 In my view, the matters in s 31(2)(a)(i) - (iv) should be regarded as jurisdictional facts for the purpose of the exercise of power in s 31(2)(b) of the CC Act, for two reasons.

70 First, the language used in s 31 itself indicates that the exercise of the power in s 31(2)(b) is a corollary of the power in s 31(2)(a). That much is clear from the use of the word 'otherwise' in s 31(2)(b), and from the reference in s 31(3) to an adjudication application being 'dismissed or determined under subsection (2)'. Further, under s 31(2)(a) an adjudicator is required to dismiss an adjudication application without making a determination of its merits if any of s 31(2)(a)(i) - (iv) apply. An adjudication application will therefore arise for determination on the merits (under s 31(2)(b)) only if it has not been dismissed (without any determination being made as to its merits) under s 31(2)(a) of the CC Act. Moreover, as the opening words of s 31(2) of the CC Act make clear, if an adjudicator does not dismiss an application for adjudication under s 31(2)(a), he or she must proceed to determine the application on its merits by determining whether a party to the payment dispute is liable to make a payment. Consequently, an adjudication application could only ever arise for determination under s 31(2)(b) if the matters set out in s 31(2)(a)(i) - (iv) do not apply.

71 Secondly, having regard to s 31 as a whole, it is apparent that one of the objectives of that section is to ensure that the determination of an adjudication application is conducted within a specified time frame, both by reference to the prescribed time within which the adjudicator must dismiss or determine the adjudication application,50 and by reference to the time between the commencement of the adjudication application and its overall resolution.51 It is consistent with that emphasis on timeliness that compliance with the time frame for the commencement of an adjudication application would be a factor on which the existence of the

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power to proceed to adjudicate the application on the merits (as much as the existence of the power to dismiss the application without making a determination of its merits) should depend.

(ii) Is the criterion in s 31(2)(a)(ii) of the CC Act a matter which must actually exist in order to enliven the Adjudicator's jurisdiction?

72 This question is concerned with the nature of the jurisdictional fact in s 31(2)(a)(ii). The answer to that question determines the inquiry in which the Court must engage in dealing with an argument based on the alleged absence of that jurisdictional fact.

(a) The process for, and purpose of, the characterisation of jurisdictional facts

73 Determining the nature of a jurisdictional fact is an exercise in statutory construction.53 Sometimes the outcome of that process of statutory construction is described, in shorthand, as a conclusion as to whether the jurisdictional fact is one in the 'narrow' sense or the 'broad' sense. The difference between jurisdictional facts in the narrow and broad sense was discussed in some detail by Murphy JA in Perrinepod54and it is unnecessary to repeat his Honour's observations. It suffices to say that in general terms, the distinction between a 'narrow' and 'broad' jurisdictional fact turns on whether or not the Parliament has made the exercise of the decision-maker's jurisdiction contingent upon the actual existence of the matter or state of affairs which constitutes the jurisdictional fact.55 If it has, the jurisdictional fact will be characterised as a jurisdictional fact in the 'narrow' sense. If the jurisdictional fact is a jurisdictional fact in the 'narrow' sense, a court exercising a judicial review jurisdiction will itself be required to determine whether the jurisdictional fact actually existed.56

74 Sometimes the Parliament will condition the exercise of a power on the mental state of the primary decision-maker - by requiring the decision-maker to form an opinion or belief, or to be satisfied about some state of affairs, for example. In such cases, the construction is often,

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although not necessarily, against a conclusion of a jurisdictional fact in the narrow sense.

Hence, a jurisdictional fact of this kind is sometimes referred to as a jurisdictional fact in the 'broad' sense. In such cases, the court exercising a judicial review jurisdiction does not inquire into the actual existence of the fact about which the opinion (for example) must exist. Rather, the court's task is to determine whether the opinion required by the relevant legislation has really been formed.

In making that inquiry the court will consider whether the opinion is one which would be formed by a reasonable person with an understanding of the legislation in question, or which was reached by taking into account irrelevant considerations or by misconstruing the terms of the legislation,

or which was the result of serious irrationality or illogicality.

If the opinion is marked by characteristics such as these, then the opinion will not be an opinion of the kind contemplated by the Parliament as the condition for the exercise of the statutory power.

The conclusion, in such a case, will be that there was a purported exercise of the statutory power in the absence of the necessary jurisdictional fact.

75 Sometimes the exercise of statutory construction to characterise a jurisdictional fact takes place in the context of a broader question of statutory construction, which is concerned with whether the Parliament intended that the decision-maker could authoritatively determine the existence or non-existence of certain matters. Sometimes an analysis of this kind will encompass the characterisation of what are said to be jurisdictional facts upon which the jurisdiction of the decision-maker depends. In those circumstances, a conclusion that the Parliament intended that the decision-maker would be entitled to authoritatively determine questions of law or fact may also (subject to any contrary indication in the legislation)63 be relied upon for the conclusion that the Parliament must have intended that the decision-maker should be able to authoritatively determine the existence or non-existence of a jurisdictional
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fact.

The kinds of decision-makers in relation to which an analysis of the latter kind typically arises are inferior courts and decision-makers which are analogous to inferior courts.

76 If this analysis leads to the conclusion that the decision-maker is authoritatively entitled to determine the existence of a jurisdictional fact on which his or her jurisdiction depends, then a court engaged in judicial review would examine the decision-maker's process of reasoning leading to the conclusion that the jurisdictional fact exists (in the manner I have described above) but would not inquire into the actual existence of that jurisdictional fact.65 I will also refer to jurisdictional facts of this kind as jurisdictional facts in the 'broad' sense.

(b) Characterisation of the jurisdictional fact in s 31(2)(a)(ii)

77 I turn, then, to the characterisation of the jurisdictional fact in s 31(2)(a)(ii). Counsel for Austral submitted that s 31(2)(a)(ii) should be construed as a jurisdictional fact in the 'narrow' sense, having regard to the language used in s 31(2)(a)(i) - (iii), in contrast with the language used in s 31(2)(a)(iv), of the CC Act.66 However, Austral ran an alternative case which was that s 31(2)(a)(ii) constituted a jurisdictional fact in the 'broad' sense. On either view, Austral's case was that the Determination was invalid, as the criterion in s 31(2)(a)(ii) was not satisfied in this case.

78 Section 31(2)(a)(ii) refers to an application not having been prepared and served in accordance with s 26. At first blush, that appears to be a reference to a fact the existence of which can be determined objectively, which might suggest that the criterion in s 31(2)(a)(ii) should be characterised as a jurisdictional fact in the 'narrow' sense. However, three considerations militate against this view.

79 First, the criterion in s 31(2)(a)(ii) requires the making of a judgment about whether the legal criteria set out in s 26 have not been met. Those legal criteria include the existence of a 'payment dispute' (as defined in the CC Act) and that the application for adjudication was brought within 28 days after the payment dispute arose. Determining whether those criteria are met will involve the construction of the contract between the parties in dispute. In some cases, the contract may be very clear as to

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when, and in what circumstances, a payment dispute arises. In other cases (and the present case is one example, as I discuss below) the answer to the question as to whether and when a payment dispute arises will be far from clear on the face of the contract, and may involve questions of contractual interpretation. Those considerations suggest that the criterion in s 31(2)(a)(ii) is unlikely to have been intended to be a jurisdictional fact in the 'narrow' sense.

80 Secondly, the context in which s 31(2)(a)(ii) appears also provides support for the conclusion that s 31(2)(a)(ii) should not be understood as a jurisdictional fact in the narrow sense. Section 31(2)(a)(ii) is one of four criteria set out in s 31(2)(a). Section 31(2)(a)(iv) expressly requires that the adjudicator must be satisfied as to a particular state of things. Although not necessarily conclusive of the question, the requirement that the adjudicator be satisfied of a state of things suggests that the Parliament intended that criterion to be a jurisdictional fact in the 'broad' sense. On the other hand, determining whether the requirement in s 31(2)(a)(iii) is met is more likely to involve an exercise in ascertaining the existence of a fact which can be objectively proved. That is not inconsistent with a conclusion that the criterion in s 31(2)(a)(iii) is a jurisdictional fact in the 'narrow' sense.

81 In view of the conclusion that the matters in s 31(2)(a) constitute jurisdictional facts, it seems to me to be unlikely that the Parliament would have intended that some of those matters be characterised as jurisdictional facts in the 'narrow' sense and others in the 'broad' sense. Given that some of the jurisdictional facts in s 31(2)(a) do not appear to be jurisdictional facts in the 'narrow' sense, the preferable conclusion is that the Parliament did not intend that any of the matters in s 31(2)(a) should be understood as jurisdictional facts in the 'narrow' sense.

82 The third consideration is the nature of the decision-maker required to undertake the task of determining whether the criteria in s 31(2)(a) are met. The CC Act does not make express provision in relation to an adjudicator's jurisdiction to authoritatively determine the questions of law, or mixed law and fact, which may arise in relation to whether the criteria in s 31(2)(a) are met in a given case. However, in O'Donnell Griffin Pty Ltd v John Holland Pty Ltd, Beech J concluded that the nature and effect of an adjudication under the CC Act, having regard to the scheme of the CC Act as a whole, supported the conclusion that an adjudicator has authority to decide questions of law authoritatively and wrongly, and that

(Page 32)

an adjudicator was therefore more analogous to an inferior court.

Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd

, Corboy J agreed with that conclusion.

So, too, did Murphy JA (with whom Martin CJ agreed) in

Perrinepod

I also respectfully agree with that characterisation for the reasons given by Beech J.

83 The fact that an adjudicator under the CC Act is analogous to an inferior court provides some support for the conclusion that the Parliament did not intend that the jurisdictional fact in s 31(2)(a)(ii) would be a jurisdictional fact in the 'narrow' sense.

84 In my view, the criterion in s 31(2)(a)(ii) of the CC Act should not be characterised as a jurisdictional fact in the 'narrow' sense. For present purposes, therefore, the question is not whether the criterion in s 31(2)(a)(ii) in fact existed. Rather, the focus is on the conclusion drawn by the Adjudicator that the criterion in s 31(2)(a)(ii) was met, and on the process by which the Adjudicator came to that conclusion.

(iii) Was the criterion in s 31(2)(a)(ii) satisfied in this case?

85 The criterion in s 31(2)(a)(ii) is that the adjudication application 'has not been prepared and served in accordance with section 26' of the CC Act. With respect to Invoice 1778 and Invoices 1782 - 1796, the Adjudicator concluded that the Adjudication Application was brought within the 28 day time period after a payment dispute arose, as required by s 26 of the CC Act.

86 Because I have determined that the jurisdictional fact in s 31(2)(a)(ii) is not a jurisdictional fact in the 'narrow' sense, it is not necessary to consider Austral's submission that the Adjudication Application was not, in fact, 'prepared and served in accordance with section 26'. It is necessary only to focus on Austral's case that the Adjudicator misdirected himself as to the proper construction of s 6 of the CC Act, relied upon an irrelevant decision of the Tribunal, and failed to take into account a relevant consideration, namely the terms of the Contract itself,70 in reaching the conclusion that the Adjudication Application was prepared and served in accordance with s 26 of the CC Act.

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87 Before dealing with Austral's contentions, however, it is necessary to examine how the Adjudicator construed the Contract, and in particular his findings as to the terms of the system for the payment of invoices.

(a) The Adjudicator's conclusions as to the terms of the Contract with respect to the system for the payment of invoices

88 The system for the payment of invoices was initially set out in the Contract in cl 39 and cl 45 of the GCC. The relevant terms of the Contract as originally agreed, including cl 39 and cl 45 of the GCC, are set out in Appendix A and Appendix B to these reasons.

89 Clauses 39 and 45, in summary, required that at the beginning of each month Cape Range would submit a progress claim setting out the Contract Value of the work performed since the preceding progress claim (or since the commencement of the work and which had not been the subject of a claim) (cl 39(a) of the GCC). Austral would then have 20 days to assess that progress claim, in which period Austral's representative would advise Cape Range of any part of the claim which was not approved or in respect of which further information was required in order to approve the claim, or of any amendments to the progress claim which Austral required (cl 39(e)(i) of the GCC). After any such amendments had been made, Austral's representative was to sign one copy of the claim and certify the value of the undisputed portion of the claim (which would then be known as a progress certificate) (cl 39(e)(ii) and (iii) of the GCC). Once Cape Range provided any further information which might be required by Austral's representative, an additional progress certificate would be issued by Austral's representative for the value of that portion of the claim which was then no longer in dispute (cl 39(e)(iv) of the GCC).

90 Once a progress certificate was issued, Cape Range would be entitled to issue a 'Correct Invoice' (cl 45(d) of the GCC), and within 35 days of the receipt of a Correct Invoice in respect of a Progress Certificate, Austral was required to pay Cape Range 95% of the value of the Progress Certificate (cl 45(e)(i) of the GCC). The balance of Cape Range's claim for payment would (subject to certain other clauses of the GCC) be paid within 35 days after the issue of a Certificate of Practical Completion or a Certificate of Final Completion (cl 45(j) and (k) of the GCC).

91 As the Adjudicator noted, however, 'both [Cape Range] and [Austral] … confirmed that the payment system under the Contract for certification

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has not been followed'.

Cape Range submitted to the Adjudicator that a modified system for claims and payments had been followed since the commencement of the Contract.

That modified system was that Cape Range would lodge an invoice each month for work done, and Austral had 20 days from the issue of the invoice to dispute the amount claimed or require further information. If no changes or further information were required in this period, the invoice was treated as a Correct Invoice under cl 45(e) of the GCC and payment would be due 35 days from the date the invoice was treated as a Correct Invoice.

92 Austral disputed that this was the modified payment system that the parties had agreed. Austral submitted to the Adjudicator that the payment system which applied was that set out in Item 5 of a document entitled 'Summary of Subcontract Conditions' and that the payment of an invoice was required within 35 days from the date of the invoice.74 An extract from that document, incorporating Item 5, is set out in Appendix A to these reasons.

93 The Adjudicator was thus faced with a situation where the parties, in effect, agreed that the Contract - insofar as it set out a system or procedure for payment of invoices - had been varied. There does not appear to have been any suggestion that the parties reached a subsequent agreement which replaced the Contract in its entirety. Rather, having regard to what the parties submitted to the Adjudicator, it appears that in their view, there was a subsequent agreement which varied the Contract insofar as it dealt with the payment procedure.75

94 Although the parties agreed that the Contract had been varied in relation to the payment procedure, there was nothing before the Adjudicator to suggest that there had been an express agreement as to what the new payment procedure was. However, a contract of variation can be inferred from conduct.76 In order to determine whether an agreement may be inferred from the conduct of parties to a contract, it is necessary to consider 'whether the conduct of the parties viewed in the

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light of the surrounding circumstances shows a tacit understanding or agreement'.

95 It seems to me that what the Adjudicator did was to accept the parties' submissions that a modified payment system had been applied between them, as opposed to that which was set out in cl 39 and cl 45 of the GCC. He then examined the past conduct of the parties, to ascertain whether it showed that they had reached a tacit understanding or agreement as to the payment procedure by which they would actually abide. The Adjudicator relied on the past conduct of the parties, as manifested in how they had approached the payment of four previous invoices78. Having regard to this information, the Adjudicator rejected Austral's contentions about the modified payment system which applied under the Contract79.

96 The Adjudicator then stated that he had decided to 'ignore' the Terms of Payment set out in the 'Summary of Subcontract Conditions' and stated that he intended 'to give effect to the payment procedure set out in clauses 39 and 45 of the GCC, save for the payment period greater than 50 days'.80 Having regard to the remaining paragraphs of this part of the Determination, however, it appears that what the Adjudicator in fact meant was that he accepted Cape Range's submission as to the modified way in which cl 39 and cl 45 of the GCC had been applied as between the parties. In other words, the Adjudicator proceeded on the basis that the parties' agreement in relation to the payment system which they would use was a modified version of cl 39 and cl 45 of the GCC, in the terms submitted by Cape Range. Insofar as the modified payment system for which Cape Range contended resulted in a payment period of more than 50 days, however, the Adjudicator applied s 10 of the CC Act, with the result that the payment period was read as within 50 days after payment was first claimed81.

97 The payment procedure which the Adjudicator found applied under the modified Contract was thus that Cape Range would issue an invoice, and Austral would have 20 days in which to dispute the amount claimed or to require further information. If no changes were sought (that is, if the claim were not disputed) or no further information was required within

(Page 36)

that 20 day period, the invoice would be treated as a Correct Invoice under cl 45(e) of the GCC and payment would be due 30 days from the date that the invoice was treated as a Correct Invoice. Accordingly, if the amount claimed in the invoice was not disputed, or if further information was not sought in relation to the invoice, within 20 days of the invoice being sent to Austral, payment would be required within a period of 30 days thereafter. It appears that payment in full of the invoice was required.

98 In my view, the Adjudicator's conclusion, having regard to the terms of the CC Act, amounted to a conclusion that once the invoices issued by Cape Range became treated as 'Correct Invoices' (that is, if within 20 days of the receipt of the invoice, Austral did not dispute the amount sought or seek further information) they constituted 'payment claims' for the purposes of the CC Act. I note that counsel for Austral indicated that the Adjudicator's finding - to the effect that the invoices were payment claims within the meaning of the CC Act - was not challenged for the purposes of Austral's application.82 The Adjudicator's conclusion was that payment became due under those invoices 30 days after the invoices were treated as 'Correct Invoices'.

99 Accordingly, the Adjudicator found that in respect of Invoice 1778, which was dated 27 July 2011, Austral did not issue a notice of dispute within 20 days (that is, by 16 August 2011), with the result that payment became due 30 days later, on 15 September 2011.83 For the purposes of the CC Act, his conclusion was that a payment dispute arose on that date. The Adjudicator therefore concluded that the last day for Cape Range to submit an Adjudication Application, having regard to s 26 of the CC Act, was 13 October 2011.84

100 The Adjudicator found that in respect of Invoices 1782 - 1796, which were dated 28 July 2011, Austral did not issue a notice of dispute within 20 days (that is, by 17 August 2011) with the result that payment became due 30 days later, on 16 September 2011.85 Again, for the purposes of the CC Act, the Adjudicator's conclusion was that a payment dispute arose on that date. He therefore concluded that the last day for Cape Range to submit an Adjudication Application, having regard to s 26 of the CC Act, was 14 October 2011.86

155 Secondly, a related consideration is that if the word 'pay' in s 39(1) meant to satisfy an amount in a determination by means other than the payment of money (such as by a contractual entitlement to set-off) it would be possible for the objectives of the CC Act - for a quick, informal and inexpensive resolution of a payment dispute, so as to keep the money flowing under construction contracts - to be thwarted. The resolution of a claim to a contractual entitlement to set-off may involve complex questions of the construction of a contract, and disputed facts. The resolution of those issues may take some time. In my view, the Parliament clearly intended that claims of that kind should be resolved through litigation or arbitration in other fora, but that those claims would not affect a party's liability to give the amount specified in a determination to the other party to the contract, within the time specified in the determination.

156 Finally, in my view, even if Austral has a contractual entitlement to set-off under cl 47 of the GCC, that entitlement does not operate in respect of amounts that it is required to pay pursuant to a determination of

(Page 54)

an adjudicator. Clause 47 of the GCC (which is set out in Appendix B to these reasons) permits Austral to deduct various debts and moneys it claims Cape Range owes it from moneys due or payable 'pursuant to cl 45 [of the GCC]'. The amount that Austral is due to pay under the Determination is not a payment due to Cape Range pursuant to cl 45 of the GCC, but one which is due to Cape Range by virtue of s 39(1) of the CC Act. Section 39(1) of the CC Act in my view creates a quite separate liability (apart from any contractual liability) to give the amount of money set out in a determination to the other party to the payment dispute.

157 Accordingly, I would not refuse leave to enforce the Determination on this ground.

158 For completeness, I note that in the course of his submissions, counsel for Austral confirmed that for the purposes of its case that leave to enforce should be refused, Austral relied solely on the set-off claim (with the result that other evidence which it put before the Court in support of a claim to entitlement, at common law or equity, to set-off or withhold other amounts it says Cape Range owes it, would be relevant only to any application for a stay of enforcement of the Determination if leave were to be granted).

9. Having regard to my conclusions in respect of Issues 6 - 8 above, whether a declaration should be granted that the Determination is invalid

159 For the reasons set out in respect of Issues 6 - 8 above, Austral has not made out its case that a declaration should be granted to the effect that the Determination is invalid. I would refuse declaratory relief, and dismiss that part of the SOC proceedings which seeks a declaration of invalidity in relation to the Determination.

10. Having regard to my conclusions in respect of Issues 6 - 9 above, whether leave to enforce the Determination should be granted

160 Having regard to my conclusions in respect of Issues 6- 9, there is no reason why leave should not be granted to enforce the Determination and I would do so.

161 I will hear from counsel as to the form of orders which should be made to give effect to these reasons.

(Page 55)

Appendix A: relevant terms from the Contract

SUBCONTRACT AGREEMENT

A. Parties Involved in this Project:

Austral's Customer: Hamersley Iron Ltd (Company)

Contractor: Austral Construction Pty Ltd (herein referred to as Austral or the Contractor)

Austral's Subcontractor: Cape Range Electrical (Subcontractor) …

B PROJECT DETAILS:

…

3. Subcontract :The Agreement

Documents

-Austral Terms and Conditions of -Subcontract -Specification Pages: …

• Standard Specification - Rio Tinto

…

6. General Conditions

: Standard Rio Tinto Projects Terms

of Head Contract

...

SUMMARY OF SUBCONTRACT CONDITIONS

…

(Page 56)

IMPORTANT: This summary does not form part of the Contract between Austral and the Subcontractor. It has been provided solely for the assistance of the Subcontractor and does not alter, modify or amend any provisions contained in the Subcontract and cannot be relied upon by the Subcontractor as the basis of any claim under the Subcontract.

…

5. Terms of Payment

:The subcontractor shall submit to

(Clauses 39 and 45)

Austral a monthly progress claim covering all work completed in that month by the 28

^th

day of the month. The claim shall clearly delineate the value of works completed under the original scope and the value of work carried out under any instructed variations by Austral. The claim will provide reasonable detail to enable Austral to make an informed assessment of the value of works completed.

The subcontractor shall not carry forward claims for the value of work done in the current month into claims for subsequent months.

Austral will pay approved invoices 35 days from the end of the month in which the invoice is presented.

The final payment is contingent on the Subcontractor providing all the necessary Documentation … to Austral.

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Appendix B:

AUSTRAL CONSTRUCTION PTY LTD

GENERAL CONDITIONS OF CONTRACT

39. Progress claims and reports

Progress Claim

(a) At the beginning of each month during performance of the Works, the Subcontractor shall, after consultation with the Contractor's Representative, prepare in reasonable detail, typed on the form provided by the Contractor's Representative and signed and delivered to the Contractor's Representative for approval, a progress claim showing the Contract Value of:

(i) the work performed on the Site by the Subcontractor since the preceding progress claim, or, in the case of the first progress claim, since the date of commencement of the Works;

...

…

Additional Information and Amendments

(e) (i) The Contractor's Representative, within 20 days of receipt of a progress claim submitted by the Subcontractor pursuant to any of Sub-clauses (a), (b) and (c) shall advise the Subcontractor of any part of the claim of which the Contractor's Representative does not approve or what additional information the Contractor's Representative may require to approve the claim.

(ii) The Subcontractor shall make such amendments to the progress claim as the Contractor's Representative may reasonably require. If time will permit, all amendments to the progress claim will be initialled by the Subcontractor. If the Subcontractor fails to make such amendments or to initial the same, or if time does not permit it to initial the amendments, the Contractor's Representative may make whatever changes to the claim the Contractor's

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Representative considers necessary to have it conform with both the Contract and the relative circumstances.

(iii) After all such amendments and changes (if any) as aforesaid have been made, the Contractor's Representative shall sign one copy of the claim and shall certify to the value of the undisputed portion of the claim. Thereafter the claim shall be known as a Progress Certificate.

(iv) At such time as the Subcontractor provides sufficient information to the Contractor's Representative as the Contractor's Representative may require, the Contractor's Representative shall issue an additional Progress Certificate for the value of such portion of a claim which was previously in dispute or unsupported but of which the Contractor's Representative subsequently approves.

…

45. Payments

Payment by EFT

(a) Unless otherwise agreed by the Contractor and Subcontractor, all payments to the Subcontractor shall be made by EFT to an Australian bank account as nominated by the Subcontractor.

…

Invoice

(d) The Payment terms and conditions in this Clause only apply when the Contractor receives a Correct Invoice. A Correct Invoice is an invoice that:

(i) states the Contractor name as notified by the Contractor;

(ii) states the Contractor address as notified by the Contractor;

(iii) states the Contract title and number as notified by the Contractor;

(iv) complies with the requirements for a valid tax invoice under the GST Act;

(v) states the order number as generated by the Contractor's integrated SAP system;

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(vi) contains the correct calculation of all amounts due to be paid as set out in the applicable progress claim, including GST and retention amounts where applicable;

(vii) states the date that the invoice is issued, which shall not be later than the date on which the Contractor and Subcontractor agree on the amount to be paid under the relevant Certificate; and

(viii) is delivered to the Contractor's address within the time period specified in this Contract.

Progress Payments

(e) The Contractor shall, within 35 days after the receipt of a Correct Invoice in respect of a Progress Certificate issued pursuant to Clause 39(e) (iii), pay to the Subcontractor the following:

(i) if the Certificate relates to a claim pursuant to Clause 39(a), 95% of the value of the Certificate; or

…

Payment of Progress Certificate

(f) The Contractor shall, within 35 days after receipt of a Correct Invoice in respect of an additional Progress Certificate pursuant to Clause 39(e)(iv), pay to the Subcontractor the following:

(i) if the Certificate relates to a claim pursuant to Clause 39(a), 95% of the value of the Certificate; or

…

Payment on Certificate of Practical Completion

(j) Within 35 days after issue of the Certificate of Practical Completion, the Contractor shall pay the Subcontractor an amount equal to 100% of the Contract Price less any amounts already paid or payable to the Subcontractor.

Payment on Certificate of Final Completion

(k) Within 35 days after the issue of the Certificate of Final Completion, the Contractor shall pay to the Subcontractor the balance (if any) of the Contract Price less amount [sic] already paid or payable to the Subcontractor.

(Page 60)

...

47. Deductions from payment

The Contractor may deduct from any money due or becoming due to the Subcontractor pursuant to Clause 45 or from the Security referred to in Clause 10:

(a) all debts and moneys due from the Subcontractor or its Sub-contracts to the Contractor under or by virtue of any provision of the Contract;

(b) all costs, charges, damages, liquidated sums and expenses which the Contractor may have paid or incurred and which or for which the Subcontractor or its Secondary Subcontractors is or are liable to bear, pay or make reimbursement to the Contractor;

(c) any Taxes which the Contractor may be required by any applicable legislation or laws to deduct and remit from time to time.

Where there is no money due or becoming due to the Subcontractor pursuant to Clause 45, the Contractor may invoice the Subcontractor for any of the amounts represented at (a), (b) or (b) in this Clause 47.

______________________________________

1 Section 25 of the CC Act.
2 Section 6 of the CC Act.
3 See the definition of 'payment claim' in s 3 of the CC Act.
4 Paragraphs 79 - 84 of the Determination.
5Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217.
6Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [122] (Murphy JA, Martin CJ agreeing), [8] (McLure P).
7Kirk v Industrial Relations Commission (NSW)(2010) 239 CLR 531, 581 [99] - [100].
8Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [123] - [125] (Murphy JA, Martin CJ agreeing), [8] (McLure P).
9Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [123] - [125] (Murphy JA, Martin CJ agreeing), [8] (McLure P).
10 That appears to be the only right of review to the Tribunal which exists under statute in any event.
11 ts 158.
12 cf Davies v Minister for Urban Development and Planning(2011) 109 SASR 518, 527 [28] (Bleby J).
13 cf Kirk v Industrial Relations Commission (NSW)(2010) 239 CLR 531.
14 Section 16 and s 25 of the Supreme Court Act 1935 (WA); Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd(2001) 208 CLR 199, 288 - 289 [223] (Callinan J); cf Kirk v Industrial Relations Commission (NSW)(2010) 239 CLR 531, 580 [97] (French CJ, Gummow, Hayne, Crennan, Kiefel & Bell JJ).
15 See Kirk v Industrial Relations Commission (NSW)(2010) 239 CLR 531, 581 [99] where it was recognised that the supervisory jurisdiction of the New South Wales Supreme Court encompassed the ability to grant prerogative relief and 'orders in the nature of that relief'; see also Ainsworth v Criminal Justice Commission(1992) 175 CLR 564, 581 (Mason CJ, Dawson, Toohey & Gaudron JJ); and see also the discussion in Dickinson v Perrignon[1973] 1 NSWLR 72, 82 - 83 (Street CJ in Eq). More generally, see the discussion in Aronson M, Dyer B & Groves M, Judicial Review of Administrative Action (4th ed, 2009) [15.75].
16 Exhibit D.
17 Exhibit B.
18 Exhibit C.
19CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, 408 (Brennan CJ, Dawson, Toohey & Gummow JJ); Project Blue Sky In v Australian Broadcasting Authority (1998) 194 CLR 355, 384 [74] (McHugh, Gummow, Kirby & Hayne JJ)
20 Section 43(2) of the CC Act.
21 See, for example, s 24(1) of the Building and Construction Industry Security of Payment Act 1999 (NSW). The same approach is adopted in the legislation of the other States and the Australian Capital Territory. The procedure for enforcement in the Northern Territory is slightly different, but nevertheless the leave of the Court is not required before a determination may be enforced as a judgment for a debt: see s 45 of the Construction Contracts (Security of Payments) Act 2004 (NT).
22Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd[2011] WASC 80 [24] - [29] (Corboy J).
23 See also O'Donnell Griffin Pty Ltd v John Holland Pty Ltd[2008] WASC 58 [13] (Beech J).
24 Section 30 of the CC Act.
25 CC Regulations, reg 9(1), reg 9(2) and reg 9(3).
26 Section 31(2)(b) of the CC Act.
27 Section 45(1) of the CC Act.
28 Section 45(4) of the CC Act.
29 Section 32(1)(a) of the CC Act.
30 Section 32(1)(b) of the CC Act.
31 To the extent that the practice and procedure of an adjudication is not regulated by the CC Act or the Construction Contracts Regulations 2004 (WA) (the CC Regulations): see s 32(6) of the CC Act.
32 Section 32(2)(b) of the CC Act.
33 Section 32(1)(a) of the CC Act.
34 Section 31(2) of the CC Act.
35 See the Second Reading Speech for the Construction Contracts Bill 2004, Western Australia, Parliamentary Debates, Legislative Assembly, 3 March 2004, 275 (the Hon AJ MacTiernan).
36 Explanatory Memorandum for the Construction Contracts Bill 2004, page 1.
37 See the Second Reading Speech for the Construction Contracts Bill 2004, Western Australia, Parliamentary Debates, Legislative Assembly, 3 March 2004, 275 (the Hon AJ MacTiernan).
38 CC Regulations, reg 7.
39Re Graham Anstee-Brook; Ex parte Mount Gibson Mining Ltd[2011] WASC 172 [102], [107] (Kenneth Martin J).
40 ts 101 - 103.
41Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes (WA) Pty Ltd [2009] WASAT 133.
42 ts 119.
43Gedeon v New South Wales Crime Commission(2008) 236 CLR 120, 139 [43] (the Court).
44 So much is confirmed in the judgment of McLure P in Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [10].
45Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [16] (McLure P), [115] (Murphy JA), [1] (Martin CJ agreeing).
46Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217 [16] (McLure P).
47Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [115].
48Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217 [112] (Murphy JA), [1] (Martin CJ agreeing).
49 See the discussion in Minister for Immigration and Multicultural Affairs v Eshetu(1999) 197 CLR 611, 651 (Gummow J).
50 See the definition of 'prescribed time' in s 31(1) of the CC Act.
51 See s 31(2)(a)(ii), together with s 26.
52Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [16] (McLure P).
53Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [106] (Murphy JA) and the cases cited therein; see also Timbarra Protection Coalition Inc v Ross Mining NL(1999) 46 NSWLR 55, 64 [39] (Spigelman CJ).
54Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [101] - [111] (Murphy JA), [1] (Martin CJ agreeing).
55Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [106] (Murphy JA), [1] (Martin CJ agreeing).
56Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55, 64 [40] (Spigelman CJ).
57Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [101] - [111] (Murphy JA), [1] (Martin CJ agreeing); Timbarra Protection Coalition Inc v Ross Mining NL (1999) 46 NSWLR 55, 64 [42] (Spigelman CJ).
58R v Connell; Ex parte Hetton Bellbird Collieries Ltd(1944) 69 CLR 407, 432 (Latham CJ).
59R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407, 430, 432 (Latham CJ).
60Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002(2003) 198 ALR 59, 66 - 67 [34], 67 [37] (McHugh & Gummow JJ); and see the discussion in Aronson M, Dyer B & Groves M, Judicial Review of Administrative Action (4th ed, 2009) [4.410] - [4.425].
61R v Connell; Ex parte Hetton Bellbird Collieries Ltd (1944) 69 CLR 407, 432 (Latham CJ).
62Minister for Immigration and Citizenship v SZMDS(2010) 240 CLR 611 620 - 621 [23] - [24] (Gummow ACJ & Kiefel J).
63 cf Craig v State of South Australia(1995) 184 CLR 163, 179; see also Chase Oyster Bar Pty Ltd v Hamo Industries Ltd(2010) 78 NSWLR 393, 428 [171] (McDougall J).
64Parisienne Basket Shoes Pty Ltd v Whyte(1938) 59 CLR 369, 391 (Dixon J); Timbarra Protection Coalition Inc v Ross Mining NL(1999) 46 NSWLR 55, 64 [41] (Spigelman CJ); Chase Oyster Bar Pty Ltd v Hamo Industries Ltd(2010) 78 NSWLR 393, 428 [167] (McDougall J); Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd[2011] WASC 80 [63] - [64] (Corboy J).
65Chase Oyster Bar Pty Ltd v Hamo Industries Ltd(2010) 78 NSWLR 393, 428 [169] (McDougall J); Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd[2011] WASC 80 [63] (Corboy J).
66 ts 102 - 103.
67O'Donnell Griffin Pty Ltd v John Holland Pty Ltd[2009] WASC 19 [102].
68Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd[2011] WASC 80 [56] - [59]. But cf Re Graham Anstee-Brook; Ex parte Mount Gibson Mining Ltd[2011] WASC 172 [18] (Kenneth Martin J).
69Perrinepod Pty Ltd v Georgiou Building Pty Ltd[2011] WASCA 217 [118] (Murphy JA), [1] (Martin CJ agreeing).
70 ts 119.
71 Determination par 53.
72 Determination par 54.
73 Determination par 55.
74 Determination pars 56 - 57.
75 cf Commissioner of Taxation (Cth) v Sara Lee Household & Body Care (Australia) Pty Ltd(2000) 201 CLR 520, 533 - 534 [22] (Gleeson CJ, Gaudron, McHugh & Hayne JJ).
76Elvidge Pty Ltd v BGC Construction Pty Ltd[2006] WASCA 264 [31] (McLure JA, Roberts-Smith & Buss JJA agreeing).
77Integrated Computer Services Pty Ltd v Digital Equipment Corp (Aust) Pty Ltd(1988) 5 BPR 11,110, 11,117 (McHugh JA, Hope & Mahoney JJA concurring); see also the discussion of the authorities in Brambles Holdings Ltd v Bathurst City Council(2001) 53 NSWLR 153, 176 - 179 [71] - [81] (Heydon JA).
78 Determination par 58.
79 Determination par 59
80 Determination par 62.
81 Determination par 71 - 72
82 Austral's outline of submissions in support of declaration par 25.
83 Determination par 82.
84 Determination par 82.
85 Determination par 83.
86 Determination par 83.
87 Determination pars 82 - 83.
88 ts 116.
89 ts 115.
90 Determination par 73.
91 Determination pars 55, 69.
92 Determination pars 55, 70 - 72.
93 Determination pars 75 and 76.
94 Determination pars 76 - 77.
95 Determination pars 76 - 77.
96 Austral Construction's Outline of Submissions in Support of Declaration par 38. Annexure BJA3 to exhibit B in these proceedings contains Austral's Adjudication Response. Copies of email correspondence passing between the parties, including the email of 23 August 2011, appear at Attachment 2 to that Response, and the argument concerning the rejection of Cape Range's invoice appears at page 11 of the Response.
97 Annexure BJA 3 to Exhibit B at p 208.
98 Annexure BJA 3 to Exhibit B at p 208.
99 Austral Construction's Outline of Submissions in Support of Declaration par 38.

100 ts 98 - 99.
101Halkat Electrical Contractors Pty Ltd v Holmwood Holdings Pty Ltd[2007] NSWCA 32; Timwin Construction Pty Ltd v Facade Innovations Pty Ltd[2005] NSWSC 548; Laing O'Rourke Australia Construction Pty Ltd v H&M Engineering & Construction Pty Ltd[2010] NSWSC 818; Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd[2011] QCA 22; QCLNG Pipeline Ltd v McConnell Dowell Constructors (Aust) Pty Ltd[2011] QSC 292.
102Laing O'Rourke Australia Construction Pty Ltd v H&M Engineering & Construction Pty Ltd[2010] NSWSC 818[26] - [27], [113]; Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd[2011] QCA 22 [127].
103 Determination pars 38 - 39.
104Craig v State of South Australia (1995) 184 CLR 163, 176 - 180 (the Court).
105 See Police and State of South Australia v Lymberopoulos(2007) 98 SASR 433, 439 - 440 [30] - [36] (Doyle CJ, Bleby & Sulan JJ agreeing) and the cases discussed therein; special leave to appeal to the High Court was refused: [2007] HCATrans 692.
106Re McBain; Ex parte Australian Catholic Bishops Conference(2002) 209 CLR 372 442 - 447 [88] (McHugh J).
107 See Craig v State of South Australia (1995) 184 CLR 163, 175 - 176; see also Police and State of South Australia v Lymberopoulos(2007) 98 SASR 433, 442 - 447 [44] - [69] (Doyle CJ, Bleby & Sulan JJ agreeing) and the cases discussed therein; see also Re Graham Anstee-Brook; Ex parte Mount Gibson Mining Ltd[2011] WASC 172 [43] (Kenneth Martin J).
108Stead v State Government Insurance Commission(1986) 161 CLR 141, 145 (the Court); see also Re Refugee Review Tribunal; Ex parte Aala(2000) 204 CLR 82, 122 [104] (McHugh J).
109Stead v State Government Insurance Commission(1986) 161 CLR 141, 145 - 146 (the Court).
110Re Refugee Review Tribunal; Ex parte Aala(2000) 204 CLR 82, 88 - 89 [4] (Gleeson CJ), 116 - 117 [80] (Gaudron & Gummow JJ), 130 - 131 [131] (Kirby J), 143 - 144 [169] - [172] (Hayne J), 153 - 155 [211] (Callinan J), cf, 122 [104] (McHugh J).
111 See Aronson M, Dyer B & Groves M, Judicial Review of Administrative Action (4th ed, 2009) [7.20] - [7.25] and the discussion of Dranichnikov v Minister for Immigration and Multicultural Affairs(2003) 197 ALR 389.
112 cf Dranichnikov v Minister for Immigration and Multicultural Affairs(2003) 197 ALR 389, 394 [24] (Gummow & Callinan JJ).
113Macquarie Dictionary (4^th ed, 2005).

Cape Range Electrical Contractors Pty Ltd v Austral Construction Pty Ltd

[2012] WASC 304

29 AUGUST 2012

CAPE RANGE ELECTRICAL CONTRACTORS PTY LTD -v- AUSTRAL CONSTRUCTION PTY LTD [2012] WASC 304