Civil & Allied Technical Construction Pty Ltd v Resolution Institute - [2019] SASC 193

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application for Judicial Review)
CIVIL & ALLIED TECHNICAL CONSTRUCTION PTY LTD v RESOLUTION INSTITUTE & ORS
[2019] SASC 193
Judgment of The Honourable Chief Justice Kourakis
14 November 2019
ADMINISTRATIVE LAW - JUDICIAL REVIEW
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - ADJUDICATION OF PAYMENT CLAIMS
Application for judicial review by the plaintiff (CATCON) seeking orders setting aside the first defendant’s (Resolution Institute) referral of the adjudication to the second defendant (Mr Riddell) and his acceptance of it and a related application for a stay of the decisions and acts of Resolution Institute and Mr Riddell under the Building and Construction Industry Security of Payment Act 1999 (NSW) (Security of Payment Act) .
On 1 November 2019, CATCON brought proceedings against Sarens (Australia) Pty Ltd (Sarens), and later joined Resolution Institute as a defendant, to the effect that a payment claim made against it by Sarens pursuant to the Security of Payment Act was not a valid and effective payment claim. Sarens subsequently filed an application for adjudication of the payment claim pursuant to the Security of Payment Act with Resolution Institute. On 6 November 2019, Blue J ordered a separate trial on preliminary issues, fixed for December 2019.
On 8 November 2019, Resolution Institute, without giving CATCON notice, referred the adjudication to Mr Riddell, which he accepted. The referral and the acceptance are the decisions the subject of the judicial review proceedings initiated on 11 November 2019 by CATCON.
The applications were heard before Kourakis CJ on 12 and 13 November 2019. His Honour ordered an interim stay order over the referral and acceptance until 1.00 pm on 13 November 2019, which was extended nunc pro tunc until 1.00 pm on 14 November 2019.
Held:
1. The interim stay order be extended until the hearing and determination of the preliminary issues.
Building and Construction Industry Security of Payment Act 1999 (NSW) ss 3, 4, 8, 9, 10, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 25, 26, 28; Building and Construction Industry Security of Payment Act 2009 (SA) s 13; Building and Construction Industry Payments Act 2004 (Qld) s 17, referred to.
Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421; Built Environs Pty Ltd v Tali Engineering Pty Ltd [2013] SASC 84; Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393; Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190; Energetech Australia Pty Ltd v Sides Engineering Pty Ltd (2005) 226 ALR 362; John Holland Pty Ltd v Schneider Electrical Buildings Pty Ltd [2010] QSC 159; Lifestyle Retirement Projects No 2 Pty Ltd v Parisi Homes Pty Ltd [2005] NSWSC 411; Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340; The University of Sydney v Cadence Australia Pty Ltd [2009] NSWSC 635; Urban Traders Pty Ltd v Paul Michael Pty Ltd [2009] NSWSC 1072, discussed.
Australian Remediation Services Pty Ltd v Earth Tech Engineering Pty Ltd [2005] NSWSC 362; Paynter Dixon Constructions Pty Ltd v JF & CF Tilston Pty Ltd [2003] NSWSC 869, considered.

CIVIL & ALLIED TECHNICAL CONSTRUCTION PTY LTD v RESOLUTION INSTITUTE & ORS
[2019] SASC 193
Civil

KOURAKIS CJ: This is an application for judicial review and a related application for a stay of decisions and acts made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Security of Payment Act). On 1 November 2019, the plaintiff, Civil & Allied Technical Construction Pty Ltd (CATCON), brought proceedings in the general civil jurisdiction of the Court (SCCIV‑19‑1327) seeking orders, as between it and the defendant, Sarens (Australia) Pty Ltd (Sarens), to the effect that a payment claim made against it by Sarens on 4 October 2019, pursuant to the provisions of the Security of Payment Act, was not a valid and effective payment claim pursuant to that Act.
The contract between CATCON and Sarens was for the erection of some 58 wind turbines, which were to be supplied by General Electric, close to the township of Broken Hill in New South Wales (Silverton Wind Farm). Sarens was a supplier of heavy lifting equipment. It subcontracted the provision of mechanical and electrical services to another entity.
On 4 November 2019, after those proceedings were commenced, Sarens filed an application for adjudication of the payment claim pursuant to the Security of Payment Act with Resolution Institute (Resolution), an authorised nominating authority under the Security of Payment Act. A flurry of correspondence between Sarens’ and CATCON’s solicitors and Resolution then followed. In order to protect its position, CATCON amended its Statement of Claim to join Resolution as a second defendant.
On 6 November 2019, Blue J ordered that there be a separate trial of the issue raised in CATCON’s Statement of Claim as to whether Sarens’ payment claim was invalid because it was a second claim made with respect to the same reference date (the payment claims). A reference date is a date, in respect of which the Security of Payment Act creates a statutory entitlement to a progress payment and a procedure for its summary enforcement.[1] A threshold question, raised by Sarens, whether the Court should entertain an application to declare the 4 October 2019 payment claim invalid, was also to be heard at that time. The hearing was fixed for 3 December 2019.
[1] See s 8(2) of the Security of Payment Act.
On 7 November 2019, CATCON’s solicitors wrote to Resolution asking it to confirm that it had not sent the matter to an adjudicator and that it would be accorded ‘procedural fairness’. Resolution had referred the application to an adjudicator, Mr Riddell, but withdrew the referral before Mr Riddell had accepted it. CATCON’s solicitors asked that Resolution give it three business days’ notice of any intention to again refer the matter to an adjudicator.
On 7 November 2019, Resolution sent an email to Sarens’ and CATCON’s solicitors referring to earlier correspondence, and the proceedings in the Supreme Court, which advised that the matter would be ‘placed on hold pending orders made on 3 December 2019’. However, at 10.30 am on the following day, 8 November 2019, without giving CATCON notice, Resolution again referred the adjudication to Mr Riddell. In a further email sent one minute later, Resolution stated that it would ‘proceed to give effect to its statutory duty … to refer the application to an adjudicator as soon as practicable’.
On 11 November 2019, CATCON brought this application for judicial review in SCCIV-19-1348, seeking orders setting aside Resolution’s referral of the adjudication to Mr Riddell and Mr Riddell’s acceptance of it. The grounds on which the application is brought are that the payment claim was invalid because it was a second claim in respect of the same reference date, and because Resolution denied it an opportunity to make submissions on that issue. CATCON sought interlocutory relief, in related civil proceedings between it and Sarens, by way of a stay of the decisions and acts of Resolution and Mr Riddell.
The interlocutory application was brought on before me and argument commenced on the afternoon of Tuesday 12 November 2019. I made an interim stay order until 1.00 pm on Wednesday 13 November. Argument was completed at about 1.00 pm on that day. I reserved my decision until 11.00 am today, Thursday 14 November, and made a further interim stay order until 1.00 pm today. I subsequently postponed the time for handing down my decision to 12.00 pm.
For the reasons given below, I extend the stay until the hearing and determination of the preliminary issues. The stay is granted in the judicial review proceedings (SCCIV-19-1348) and insofar as is necessary in the civil proceedings (SCCIV-19-1327).
The contract
The contractual arrangements between CATCON and Sarens comprise various layers of standard form contracts and general conditions. The general terms and conditions appear in a template contract referred to as GF-08. The precedence of the documents established by cl 3 of GF-08 is:
1Special Conditions.
2The PO face sheet.
3These terms and conditions (i.e. those appearing in GF-08).
4Terms and conditions contained in any enclosed agreement or conditions (i.e. those in GF-07).
5Specifications.
6Drawings.
7Any vendor referenced documents.
Clause 8 of GF-08 provides for terms of payment. It provides that CATCON is to pay the price of any invoice in the month following its receipt, subject to conditions which include that any payment is made on an on-account basis. Clause 8(g) provides that Sarens is only entitled to one payment claim per month.
The subcontract agreement referred to as GF-07 defines, in cl 1.1, a ‘Final Claim’ to mean the ‘statement setting out exhaustively all outstanding claims by the Subcontractor under or arising out of the Subcontract or the Subcontract work’. Clause 5 of GF-07 defines ‘practical completion’ to mean the completion of the subcontract works, which is taken to be when CATCON certifies in writing that the works are substantially completed to its satisfaction.
Clause 15 of the Special Conditions, which are Annexure G to GF-07, replaces clause 4.2 of GF-07 and provides that ‘[a]ny delay caused by CATCON … shall entitle the Subcontractor to an extension of time and additional costs except. [sic] Any delays caused or insofar contributed by the Subcontractor will not entitle the Subcontractor to an extension of time or cost’.
Clause 14 of GF-07 provides for variations to the contract and the works and the charging for that.
The payment claims are for contractual sums due primarily on account of variations and delay caused by General Electric’s direction that the fan blades for the rotor of the wind turbines be lifted and attached individually, instead of being assembled on the ground before being lifted for attachment to the tower. Counsel for CATCON submits that that requirement necessitated a threefold increase, at least, in the number of crane movements, and also resulted in the need for more time in which to complete the works, which was further exacerbated by restrictions on when the blades could be lifted, because the lifting could not occur in strong wind conditions.
Clause 16.6 of GF-07 provides:
Within 30 days of completion of the Subcontract Works, the Subcontractor shall submit to CATCON the Final Claim. CATCON shall not be liable for any claim which is not included in the Final Claim. CATCON shall not be liable to make payment of the balance due under the Final Claim unless the Subcontractor simultaneously delivers to CATCON a duly executed valid and enforceable Release.
In an affidavit sworn by Mr Moreau, the Chief Executive Officer of CATCON, on 1 November 2019, he states that on 28 March 2019 a Turbine Mechanical Completion Certificate, which was exhibited to his affidavit, was issued with respect to the last of the turbines erected at the Silverton Wind Farm. The Certificate was provided by General Electric and certified that the turbine had been physically completed in accordance with the requisite and applicable technical specifications, and that it had been inspected and had successfully completed the Turbine Mechanical Completion Protocol. I have proceeded on the basis that it is at least arguable that the provision of the Certificate satisfies clause 18 of the Special Conditions.
Clause 32 of GF-07 provides that the governing law of the contract is the law of South Australia, and that the parties agree to submit to the jurisdiction of this Court. However, a contract particular in Annexure A to GF-07, which has precedence over the general provisions of GF-07, provides that the applicable law is that of New South Wales. It is for that reason that it is the Security of Payment Act which applies. Nonetheless, the agreement to submit to the jurisdiction of this Court remains unaffected by any Special Condition.
Clause 27 of the Special Conditions is of central importance on this application. It provides for the making of payment claims:
1)The subcontractor may claim one payment claim per month.
2)Payment Claim and tax invoice for completed milestones in a certain month must be received by the 7^th day of the following month.
3)Payment terms for completed milestones claimed will be 30 days from the later of; the 1^st of the month following completion of the claimed milestone event or 1^st of the month in which the payment claim and invoice has been received by CATCON (provided that the invoice is received before the 7^th of that month)
4)If the invoice is received after the 7^th of the month, the payment claim and tax invoice will be processed as if it was a claim for works completed in that month.
5)The Subcontractor may claim any combination of completed milestone payment in a month’s payment claim which may be part of the total quantities contained in below schedule (providing that each number is a complete as per the Condition Precedent description.)
Set out beneath those provisions is a table which details the events that entitle Sarens to a progress payment. It describes deliverables in the assembly and erection of the towers and the quantities to be delivered. The deliverables are 58 pre-assemblies, main erections, mechanical completions and electrical completions. Clause 27(5) of the Special Conditions probably allows the amount set out for each deliverable to be paid on a pro-rata basis as each turbine is erected. Two lump sum payments, unrelated to the number of turbines, are included in the table. They are an advance payment of just over $1,000,000 and a demobilisation payment of $184,150.
The total payable is $10,193,500. The text beneath the table provides that additional amounts by way of demobilisation are payable if CATCON does not engage Sarens to perform work on the other specified wind farm.
I find that it is arguable, on the contractual provisions to which I have referred, that clause 27 of the Special Conditions provides contractual entitlements only to the progress payments set out in the table. On that construction, clause 27(1) limits the procedure by which those entitlements may be claimed to one claim per month but does not create an entitlement to a progress payment independently of the milestones set out in the table. Arguably, Sarens could have attached claims for variation and delay to those milestones but, because that did not occur, it is not necessary to consider that question any further. It is also arguable that the only other entitlement of Sarens to payment is the Final Claim provided for by clause 16.6 of GF-07. On that argument, the entitlement to a final payment accrues when the Final Claim is made. No argument was put on this application as to the legal significance of the 30 day limitation period fixed by clause 16.6.
Alternatively, if clause 27(1) of the Special Conditions provides an entitlement to claim whatever is owing under the contract at any point in time, but, procedurally, by no more than one claim per month, it is nonetheless arguable that clause 27(1) must be read together with clause 16.6 of GF-07. Arguably, the effect of so reading clause 27(1) is that a claim, which is not a claim for a progress payment, made before the completion of the works, can only be made by way of the Final Claim allowed by clause 16.6. Again, it would follow on that construction that the entitlement accrues when the Final Claim is made.
Accordingly, on all of those possible constructions, it is arguable that Sarens’ entitlement accrued when the work ended and the contract required it to make a Final Claim in the time stipulated.
Sarens made the first of its payment claims for contractual sums due, other than by reference to the table on 4 September 2019, by letter from Sarens’ solicitors direct to Mr Moreau at CATCON (the first payment claim). It was for a sum of $24,759,627.80. The reference date is said to be 1 September 2019 and the due date for payment 1 October 2019. The summary of the first payment claim referred to a subcontract agreement between CATCON and Sarens for the construction of 58 wind turbine generators. It complained of delays in CATCON delivering tools necessary for the lifting of blades. It referred to extra unplanned work required by variations, delays caused when high winds presented a safety risk, and interruptions to the logical sequence of the work. The final paragraph states:
This Payment Claim sets out the increased costs incurred by the Claimant as a direct result of the additional work and services carried out or provided but not contemplated by the scope of the Subcontract Agreement and caused by the conduct of the Respondent and outstanding payments for stand downs under the Subcontract Agreement.
A schedule described as a ‘Contract Reconciliation Summary’ stated that the claim was made for the ‘Original Contract Amount’ in the sum of $10,193,500. It acknowledged an earlier payment or payments of $13,195,968.80. However, it then added claims for variations in the sum of $24,923,502.64, with a deduction for ‘Back Charges’ in the sum of $224,556.49. It left a difference in what was described as the ‘Total Payable Amount (inc GST)’ of $24,952,085.83. After allowing for a proper deduction, the total claimed was $24,393,721.97. Costs for the preparation of the first payment claim in the sum of $365,905.83 were added. The schedule appears to describe the claims as representing ‘100.00%’ of what was due.
It is arguable, therefore, that the first payment claim was the Final Claim contemplated by clause 16.6 of GF-07.
A second payment claim was forwarded by Sarens’ solicitors to CATCON’s solicitors on 4 October 2019 (the second payment claim). The reference date was said to be 1 October 2019 and the due date for payment was said to be 1 November 2019. On the face of it, the cover sheet of the claim remained unchanged. However, further paragraphs were added to the summary and existing paragraphs were elaborated on. The Contract Reconciliation schedule was in the same terms.
The Security of Payment Act
In Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (Chase Oyster Bar), McDougall J summarised the scheme provided by the Security of Payment Act as follows: [2]
[207]The Security of Payment Act operates to alter, in a fundamental way, the incidence of the risk of insolvency during the life of a construction contract. As Keane JA said, of the not dissimilar Queensland statute, the Building and Construction Industry Payments Act 2004 (Qld), in RJ Neller Building Pty Ltd v Ainsworth [2008] QCA 397 at [40], the statute ‘seeks to preserve the cash flow to a builder notwithstanding the risk that the builder might ultimately be required to refund the cash in circumstances where the builder’s ... inability to repay could be expected to eventuate’. It followed, his Honour said, that the risk of inability to repay, in the event of successful action by the other party, must be regarded as one that the legislature has assigned to that other party. The same is true of the regime established by the Security of Payment Act.
[208]Further, the Security of Payment Act operates in a way that has been described as ‘rough and ready’ or, less kindly, as ‘Draconian’. It imposes a mandatory regime regardless of the parties’ contract: s 34. It provides extremely abbreviated time frames for the exchange of payment claims, payment schedules, adjudication applications and adjudication responses. It provides a very limited time for adjudicators to make their decisions on what, experience shows, are often extremely complex claims involving very substantial volumes of documents (see for example my decision in Laing O’Rourke Australia Construction v H&M Engineering and Construction [2010] NSWSC 818 at [8]).
[209]The Security of Payment Act gives very valuable, and commercially important, advantages to builders and subcontractors. At each stage of the regime for enforcement of the statutory right to progress payments, the Security of Payment Act lays down clear specifications of time and other requirements to be observed. It is not difficult to understand that the availability of those rights should depend on strict observance of the statutory requirements that are involved in their creation.
[2] Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393 at [207]-[209].

Section 8 of the Security of Payment Act confers an entitlement to progress payments on a person who has undertaken to carry out construction work (or to supply related goods and services) under a construction contract. It is accepted in these proceedings that Sarens is such a person. At the relevant time,[3] s 8 provided:
[3] Historical version (27 June 2017 to 20 October 2019). Some of the provisions of the Security of Payment Act in question in these proceedings have recently been amended.
8Rights to progress payments
(1) On and from each reference date under a construction contract, a person:
(a)who has undertaken to carry out construction work under the contract, or
(b)who has undertaken to supply related goods and services under the contract,
is entitled to a progress payment.
(2) In this section, reference date, in relation to a construction contract, means:
(a)a date determined by or in accordance with the terms of the contract as the date on which a claim for a progress payment may be made in relation to work carried out or undertaken to be carried out (or related goods and services supplied or undertaken to be supplied) under the contract, or
(b)if the contract makes no express provision with respect to that matter — the last day of the named month in which the construction work was first carried out (or the related goods and services were first supplied) under the contract and the last day of each subsequent named month.
A ‘progress payment’ is defined, non-comprehensively, by s 4 of the Security of Payment Act to include a final payment for construction work and certain single, or one-off, payments which might not have fallen within the generally accepted concept of successive progress payments payable by reference to the completion of particular milestones in, or proportions of, a construction project.
Section 8 of the Security of Payment Act confers a statutory entitlement to a progress payment, the amount of which, we shall shortly see, is determined by s 9. Section 8(2)(a) provides that the reference date is the date on which the entitlement to a progress payment accrues under a construction contract. If the construction contract fails to make any provision for progress payments, s 8(2)(b) of the Security of Payment Act confers a new statutory entitlement to a progress payment for work done in any particular month, which entitlement accrues on the last day of that month. It is important to keep steadily in mind that a reference date is more than a date on an invoice or payment claim. It is the date on which an entitlement accrues either by operation of a construction contract or s 8(2)(b) of the Security of Payment Act.
Section 9 of the Security of Payment Act provides:
9      Amount of progress payment
The amount of a progress payment to which a person is entitled in respect of a construction contract is to be:
(a)     the amount calculated in accordance with the terms of the contract, or
(b)     if the contract makes no express provision with respect to the matter, the amount calculated on the basis of the value of construction work carried out or undertaken to be carried out by the person (or of related goods and services supplied or undertaken to be supplied by the person) under the contract.
Like s 8 of the Security of Payment Act, s 9 picks up any provision in the construction contract and quantifies the statutory entitlement to a progress payment which accrues on the reference date in accordance with the terms of the contract. With respect to construction contracts which make no such provision, the quantum of the entitlement to the progress payment is the value of construction work undertaken or related goods and services supplied. Section 10 elaborates on how that work is valued.
Part 3 of the Security of Payment Act is enacted in furtherance of the object, declared in s 3(3), to establish a statutory procedure for the making of a payment claim on an entitlement to a progress payment which has accrued on a reference date. The statutory procedure applies both to the statutory entitlements based on existing contractual rights and to those created only by s 8(2)(b) of the Security of Payment Act. The procedure deals with the form and service of the payment claim, the service of a responding payment schedule by the person against whom the claim is made, and the referral of any resulting dispute for adjudication. As we shall see, the adjudication is not a final judgment in the exercise of a judicial power. Its effect is to require a payment or payments to a contractor but in the event of a controversy, a party may seek a judicial determination in the ordinary way.
Section 13 of the Security of Payment Act relevantly provides:
13    Payment claims
(1) A person referred to in section 8(1) who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment.
(2)     A payment claim:
(a)must identify the construction work (or related goods and services) to which the progress payment relates, and
(b)must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount), and
(c)if the construction contract is connected with an exempt residential construction contract, must state that it is made under this Act.
…
(4)     A payment claim may be served only within:
(a)the period determined by or in accordance with the terms of the construction contract, or
(b)the period of 12 months after the construction work to which the claim relates was last carried out (or the related goods and services to which the claim relates were last supplied),
whichever is the later.
(5)     A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract.
(6)     However, subsection (5) does not prevent the claimant from including in a payment claim an amount that has been the subject of a previous claim.
(7)     A head contractor must not serve a payment claim on the principal unless the claim is accompanied by a supporting statement that indicates that it relates to that payment claim.
Maximum penalty: 200 penalty units
…
(9)     In this section:
supporting statement means a statement that is in the form prescribed by the regulations and (without limitation) that includes a declaration to the effect that all subcontractors, if any, have been paid all amounts that have become due and payable in relation to the construction work concerned.
Subsections (2), (3) and (7) of s 13 of the Security of Payment Act deal with the content of the claim and prescribe how it must be particularised. The sufficiency of particularisation, and any error or misdescription in the particularisation, are often debatable. They are issues which are likely to arise, and constitute a substantial part of factual disputes, on adjudication. They are matters which are likely to be debated on an adjudication. Fact-sensitive questions as to whether there has been substantial compliance will arise. They do not lay down any bright clear lines and questions as to whether substantial compliance would be sufficient may arise. There is authority that the power to adjudicate a disputed payment claim is not conditional on full compliance with those provisions. Nor is the power to adjudicate dependent on the merits of the claim, for example, on whether the items claimed fall within an applicable construction contract.[4]
[4] See Paynter Dixon Constructions Pty Ltd v JF & CG Tilston Pty Ltd [2003] NSWSC 869.
The obligation to serve a claim within a certain period, if a claim is to be made, pursuant to ss 13(1) and (4) of the Security of Payment Act, on the other hand, is clearly prescribed in mandatory terms. Whether or not there has been compliance is a factual enquiry of narrow compass. In form and substance, it appears to be a precondition on which the power to adjudicate depends.
The primary dispute in this matter concerns sub-ss (5) and (6) of s 13 of the Security of Payment Act and the significance of the reference date in s 13(5).
In Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd[5] (Southern Han), the High Court considered the legal significance of the reference date to the validity of a payment claim made under the Security of Payment Act. The factual circumstances in Southern Han are set out in the judgment as follows:[6]
[27]On 4 December 2014, Lewence served on Southern Han a document which purported to be a payment claim for work carried out under the Contract. The document complied with the formal requirements of s 13(2) of the Act but it did not nominate a reference date. There is no dispute, however, that it claimed payment for work carried out by Lewence under the Contract up to 27 October 2014, including for work carried out to 7 October 2014 which had been the subject of a prior payment claim which Lewence had served on Southern Han on or after 8 October 2014. Southern Han replied by providing a payment schedule to Lewence indicating that the scheduled amount Southern Han proposed to pay was nil.
[28]Lewence subsequently purported to make an adjudication application to Australian Solutions Centre, an authorised nominating authority. Australian Solutions Centre referred the application to Mr Ian Hillman, an eligible adjudicator, who purported to accept it by giving notice to Lewence and Southern Han. Southern Han lodged a response which contained a submission arguing that Mr Hillman lacked jurisdiction to determine the application. Rejecting Southern Han’s argument that he lacked jurisdiction, Mr Hillman purported to determine the application.
[5] Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (2016) 260 CLR 340.
[6] (2016) 260 CLR 340 at [27]-[28].
Southern Han Breakfast Point Pty Ltd (Southern Han) sought a declaration that the adjudicator’s purported determination was void on the basis that the document Lewence Construction Pty Ltd (Lewence) served on Southern Han on 4 December 2014 was not a payment claim under the Security of Payment Act for want of a reference date. Southern Han contended that the document could not be a payment claim under the Security of Payment Act as the events of 27 and 28 October 2014, resulting in the suspension or termination of the contract, meant that no date for making a progress payment could have arisen under the contract after 8 October 2014.
The primary judge made the declaration sought. The Court of Appeal of New South Wales allowed the appeal, set aside the declaration and dismissed the originating summons. The Court was unanimous in holding that the existence of a reference date is not a precondition to the making of a valid payment claim under the Security of Payment Act.
Southern Han successfully appealed to the High Court. The first of the grounds on which it relied was that the Court of Appeal was wrong to conclude that the existence of a reference date is not a precondition to the making of a valid payment claim. The High Court held that a reference date is a precondition.[7] The High Court first considered the interrelationship between ss 8 to 13 of the Security of Payment Act:[8]
[44]There is no dispute between the parties that service of a payment claim under s 13(1) of the Act is an essential precondition to taking subsequent steps in the procedure set out in Pt 3 of the Act. There is accordingly no dispute that, unless a payment claim answering that description is served, there can be no adjudication application and hence no adjudication within the jurisdiction conferred by s 22 of the Act. That shared understanding of the relationship between ss 13(1) and 22 is undoubtedly correct.
…
[59]Within Pt 2 an important distinction is drawn between a progress payment to which a person is entitled and the amount of the progress payment to which that person is entitled. Cast in the present tense, s 8(1) makes clear that a person who meets the description of a person who has undertaken to carry out construction work or supply related goods and services under a construction contract is immediately by force of that provision ‘entitled to a progress payment’ on and from each reference date under the construction contract. Cast in the future tense, in contrast, s 9 makes clear that the amount of a progress payment to which the person is so entitled is not fixed by force of that section but ‘is to be’ ascertained in the manner prescribed by that section, and quantifies the amount of the progress payment to which a person is entitled by force of s 8(1). Section 9 in that way anticipates the procedure for recovery of a progress payment set out in Pt 3. Under that procedure, in the event of a dispute between a claimant and a respondent, the ascertainment of the amount, if any, of the progress payment to be recovered is committed to the jurisdiction of an adjudicator to determine under s 22.
[60]That distinction drawn in Pt 2, between a present entitlement to a progress payment and the future ascertainment of the amount of the progress payment to which that present entitlement relates, explains the two-part description in s 13(1) of a person who is able to make a payment claim so as to trigger the procedure for recovery set out in Pt 3. The first part of the description – ‘[a] person referred to in section 8(1)’ – refers to a person whom s 8(1) makes ‘entitled to a progress payment’. The second part of the description – ‘who is or who claims to be entitled to a progress payment’ – neither contradicts nor qualifies the first part of the description. The second part of the description rather recognises, consistently with s 9, that the amount of the progress payment to which that person is entitled might ultimately be ascertained, according to the procedure set out in Pt 3, to be less than the amount that the person claims to be due and might even be ascertained according to that procedure to be nothing.
[7] (2016) 260 CLR 340 at [2].
[8] (2016) 260 CLR 340 at [44], [59]-[60].
The High Court concluded that the existence of a reference date is a precondition to the making of a valid payment claim:[9]
[61]The construction of s 13(1) consonant with the structure of the Act is accordingly that advanced by Southern Han. The description in s 13(1) of a person referred to in s 8(1) is of a person whom s 8(1) makes entitled to a progress payment. Section 8(1) makes a person who has undertaken to carry out construction work or supply related goods and services under a construction contract entitled to a progress payment only on and from each reference date under the construction contract. In that way, the existence of a reference date under a construction contract within the meaning of s 8(1) is a precondition to the making of a valid payment claim under s 13(1).
[62]That construction of s 13(1) affords to s 13(1) an operation that is harmonious with s 13(5). Section 13(1) operates to require that each payment claim be supported by a reference date and s 13(5) operates to require that each reference date support no more than one payment claim. Section 13(5) has been held to produce the result that ‘a document purporting to be a payment claim that is in respect of the same reference date as a previous claim is not a payment claim under the [Act]’. Section 13(1) correspondingly produces the result that a document purporting to be a payment claim that is not in respect of a reference date is not a payment claim under the Act. The document is ineffective in either case to trigger the procedure established by Pt 3.
(Footnote omitted)
[9] (2016) 260 CLR 340 at [61]-[62].
The High Court then addressed how the reference date is to be identified:[10]
[69]That limitation [to amounts claimed to be payable in partial or total discharge of an obligation to pay for work under a construction contract and not for damages] implicit in the design of the Act explains the express temporal limitation in the opening words of s 8(1), by which a statutory entitlement to a progress payment exists only on and from each reference date. The reference date, defined for the purpose of s 8(1) in s 8(2), is the date for making a claim for payment of the whole or part of the amount contracted to be paid for work carried out or undertaken to be carried out, or for related goods and services supplied or undertaken to be supplied.
[70]The reference date for which s 8(2)(a) provides is a date set by contractual force as a date for making a contractual claim to be paid the whole or part of the contracted amount. The mention in s 8(2)(a) of ‘a date determined by or in accordance with the terms of the contract’ is of a date fixed by operation of one or more express provisions of the construction contract. The mention is not of a date that is determined independently of the operation of the contract merely having regard to the contractual terms.
[71]The reference date for which s 8(2)(b) provides is applicable only where a construction contract contains no express provision for determining a date for making a contractual claim to be paid the whole or a relevant part of the contracted amount. Absent an express contractual provision for determining a reference date, s 8(2)(b) operates of its own force to provide a reference date for the purpose of s 8(1). In so applying, s 8(2)(b) fulfils the statutory promise in s 3(2) of granting a statutory entitlement to a progress payment regardless of whether the relevant construction contract makes provision for progress payments. The provision does not, however, alter the nature of a progress payment in respect of which a claim can be made.
…
[72]From the preceding analysis of the Act, it follows that: the question whether the document served by Lewence on Southern Han on 4 December 2014 answered the description of a payment claim in s 13(1) turns on whether Lewence was on that date entitled under s 8(1) to a progress payment in relation to work carried out to 27 October 2014; and the question whether Lewence on that date had that entitlement under s 8(1) turns on whether a reference date under the Contract had then come to exist in relation to that work under s 8(2).
[10] (2016) 260 CLR 340 at [69]-[72].
Sarens contends that s 13(5) of the Security of Payment Act should be read quite literally as only precluding more than one payment claim in respect of the same date irrespective of when the entitlement accrued. On Sarens’ construction if, for example, in the case of a contract that did not make any provision for progress payments, two claims were made on the 30^th day of the same month for work done in that month, they are precluded by sub-s (5). However, Sarens contends that sub-s (5) does not preclude the making of a claim on 30 June in respect of work done in the month of June and the making of a further claim on 31 July for work done in both June and July. On Sarens’ construction of s 13(5) of the Security of Payment Act, the mischief it addresses is either the provision of copies of the same claim, or the provision of different work and/or claims for different amounts for the same month and based on the same reference date. Applying that construction to this case, Sarens argues that for so long as a payment claim made in one month is not paid, the claim can be made again in the following month(s).
In that respect, Sarens relies on certain paragraphs in the judgment of Blue J in Built Environs Pty Ltd v Tali Engineering Pty Ltd[11] (Built Environs). In that case, Blue J considered whether progress claims made pursuant to s 13(2)(a) of the Building and Construction Industry Security of Payment Act 2009 (SA), which is identical to s 13(2)(a) of the Security of Payment Act, must be calculated on an incremental basis:[12]
[89]The construction of section 13(2)(a) of the Act advanced by Built Environs is that, notwithstanding that a construction contract may require progress claims to be calculated on a cumulative basis, a payment claim under the Act must be calculated on an incremental basis of the value of work undertaken since the previous progress claim. I reject that contention.
[90]Sections 9(a) and 10(a) of the Act expressly provide that the amount of a progress payment to which a person is entitled under the Act is the amount calculated in accordance with the terms of the contract and the construction work is to be valued in accordance with the terms of the contract.[13] Built Environs’ construction would require the amount to be calculated and the valuation to be undertaken contrary to the terms of the contract.
[91]Section 13(2)(a) does not identify the construction work to which the progress payment relates, and in particular does not say that it is to be the construction work undertaken since the previous progress claim. In those cases governed by sections 9(a) and 10(1)(a), it leaves the question of what work is to be the subject of the progress payment to the contract where the contract addresses those matters.[14]
[92]The Act proceeds on the assumption that the term ‘progress payment’ has a pre‑existing understanding in the building industry.[15] This had already been reflected by section 30(1)(a) of the Building Work Contractors Act 1995 (SA) which referred (before enactment of the Act) to a ‘genuine progress payment in respect of work already performed’. Parliament can be expected to have known that it was common for progress payments to be calculated on a cumulative basis.
[93]Calculating the amount of a progress payment on a cumulative basis is inherently fair and reasonable in the interests of both parties. If a mistake has been made in favour of one party in the calculation of previous progress payments, there is no reason why that mistake should be perpetuated in future progress claims. This is especially so as progress payments are ‘on account’ of the final contract price for the work.
[94]By sections 3(4) and 32, the Act does not limit any other entitlement that a claimant may have under a construction contract. Great complexities might be introduced if a claimant had a contractual entitlement to one amount by way of a progress payment (calculated cumulatively) and a statutory entitlement to a quite different amount under the Act (calculated incrementally).
(Emphasis in original; footnotes in original)
[11] Built Environs Pty Ltd v Tali Engineering Pty Ltd [2013] SASC 84.
[12] [2013] SASC 84 at [89]-[94].
[13] See Jemzone Pty Ltd v Trytan Pty Ltd [2002] NSWSC 395; (2002) 42 ASCR 42 at [37] per Austin J; Quasar Constructions v Demtech Pty Ltd [2004] NSWSC 116; (2004) 20 BCL 276 at [21] per Barrett J.
[14] In Hawkins Construction (Australia) Pty Ltd v Mac’s Industrial Pipework Pty Ltd [2002] NSWCA 136 at [20] Davies AJA (Handley JA and Stein JA agreeing) said that as the terms used in s 13(2) ‘are used in relation to events occurring in the construction industry, they should be applied in a common sense practical manner’.
[15] Ibid.

Those paragraphs must be read subject to the relevant contractual provisions which are set out in paragraph [19] of Built Environs:[16]
[19]The Subcontract provided for progress claims on a monthly basis for work done to the 25^th day of each month except (relevantly) December which was 14 December. Such claims were to be made progressively based on the ratio of value of completed work to the Subcontract Sum ($1,235,000). Amounts previously certified/paid were to be subtracted. Monies due by Tali to Built Environs (by way of set-off or otherwise) were also to be deducted. Progress claims were to be submitted in the form of Appendix 7, which required work to be broken down into items, showing for each item the work completed to date (by value and percentage) and deduction of amounts previously paid. Variations were to be shown in a separate table with similar details.
(Footnote omitted)
[16] [2013] SASC 84 at [19].
Those provisions differ substantially with the terms of the statutory entitlement, which is for work done in a month, and not for a proportion of the construction completed. On provisions of the kind considered in Built Environs, in one monthly claim, a progress payment based on completion of 25 per cent of the work may be sought, when, in fact, 50 per cent of the work was completed. If so, in the next month, and on the next reference date, when 60 per cent of the work has been completed, the contractor’s entitlement may be for the value of 35 per cent of the work, and not just the additional 10 per cent completed since the last payment claim.
In any event, the precise scope of the capacity to correct mistakes adverted to by Blue J in paragraph [93] is not clear. An adjudicator may correct slips pursuant to s 22(5) of the Security of Payment Act. Blue J may have had in mind similar slips made in the payment claim. In any event, I doubt, with respect, that Blue J had in mind a wholesale review of an earlier adjudication.
CATCON, on the other hand, contends that s 13(5) of the Security of Payment Act precludes the making of what it describes as a duplicate claim with respect to the same work or goods or services which are the subject matter of an earlier claim. On its construction, again considering the case of a contract which does not provide for progress payments nor give a reference date, a claim could be made for work done in June relying on the 30^th of June, as the reference date, but a second claim could not be made for both the work done in June and the work done in July relying on the 31^st of July as a reference date. To do so would contravene the prohibition in s 13(5). On CATCON’s construction, the mischief to which sub-s (5) is directed is the amendment, and reformulation, of claims in order to improve the prospects of success on an adjudication, particularly in light of the objections made in a responding payment schedule. CATCON contends that Sarens’ construction is inconsistent with the purpose of the Security of Payment Act which is to provide a summary and expeditious procedure for the payment of interim amounts subject to a final accounting as to what is owing in the ordinary way in general law proceedings on the contract.
Sarens does accept that a subsequent claim could not be made following an adjudication of an earlier one. The mischief there, of course, is a different one. Adjudication of the same claim is analogous to re-litigation. However, if double adjudication is precluded by s 13(5) of the Security of Payment Act, but not duplications of the same payment claim, it becomes necessary to distinguish its operation between adjudicated and non-adjudicated claims in the absence of any express provision to that effect. It is not obvious which other provision or provisions of the Security of Payment Act could support such a distinction, or, alternatively, precisely how an implication to that effect could otherwise be drawn.
In Dualcorp Pty Ltd v Remo Constructions Pty Ltd,[17] the Court of Appeal of New South Wales held that a payment claim could not be adjudicated twice. It is useful to first set out s 22 of the Security of Payment Act because it delineates the adjudicator’s function.
[17] Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190.
Section 22 provides:
Adjudicator’s determination
(1)     An adjudicator is to determine:
(a)     the amount of the progress payment (if any) to be paid by the respondent to the claimant (the adjudicated amount), and
(b)     the date on which any such amount became or becomes payable, and
(c)     the rate of interest payable on any such amount.
(2) In determining an adjudication application, the adjudicator is to consider the following matters only:
(a)     the provisions of this Act,
(b)     the provisions of the construction contract from which the application arose,
(c)     the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim,
(d)     the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule,
(e)     the results of any inspection carried out by the adjudicator of any matter to which the claim relates.
(3)     The adjudicator’s determination must:
(a)     be in writing, and
(b)     include the reasons for the determination (unless the claimant and the respondent have both requested the adjudicator not to include those reasons in the determination).
(4)If, in determining an adjudication application, an adjudicator has, in accordance with section 10, determined:
(a)     the value of any construction work carried out under a construction contract, or
(b)     the value of any related goods and services supplied under a construction contract,
the adjudicator (or any other adjudicator) is, in any subsequent adjudication application that involves the determination of the value of that work or of those goods and services, to give the work (or the goods and services) the same value as that previously determined unless the claimant or respondent satisfies the adjudicator concerned that the value of the work (or the goods and services) has changed since the previous determination.
(5)     If the adjudicator’s determination contains:
(a)     a clerical mistake, or
(b)     an error arising from an accidental slip or omission, or
(c)     a material miscalculation of figures or a material mistake in the description of any person, thing or matter referred to in the determination, or
(d)     a defect of form,
the adjudicator may, on the adjudicator’s own initiative or on the application of the claimant or the respondent, correct the determination.
Allsop P relied on the prohibition, in s 13(5) of the Security of Payment Act, against making more than one claim in respect of the same reference date.[18] His Honour held:[19]
[13]I see no warrant under either the contract or the Act, s 8 for permitting a party in Dualcorp’s position to create fresh reference dates by lodging the same claim for the same completed works in successive payment claims. That is not the intended operation of the last phrase of s 8(2)(b) (‘and the last day of each subsequent named month’).
[14]Here, the work had been done; Dualcorp, the subcontractor, had left the site; it claimed payment by six invoices; six weeks later it repeated that claim by reference to the same invoices and, in my view, in respect of the same reference date. Dualcorp was prevented from serving the second payment claim. The terms of s 13(5) are a prohibition. The words ‘cannot serve more than one payment claim’ are a sufficiently clear statutory indication that a document purporting to be a payment claim that is in respect of the same reference date as a previous claim is not a payment claim under the Building and Construction Industry Security of Payment Act and does not attract the statutory regime of the Act.
[15]For these reasons, Dualcorp was not entitled to proceed to judgment on a claim founded on the operation of the Act premised on the second payment claim of 3 March 2008 being a payment claim under the Act.
[18] (2009) 74 NSWLR 190 at [14].
[19] (2009) 74 NSWLR 190 at [13]-[15].
However, Macfarlan JA, with whom Handley AJA agreed, relied on the objects of the Security of Payment Act and general principles precluding re‑litigation. His Honour held:[20]
[20] (2009) 74 NSWLR 190 at [52]-56], [58]-[60], [68]-[70].
[52]First, the objects of the Act are relevant: see s 3. Clearly the overall intent of these is to provide a simple and quick means of contractors obtaining progress payments, with a mechanism being provided for the speedy resolution of disputes. It would be inconsistent with this objective to allow a claimant who was dissatisfied with an adjudication of its claim to obtain a reconsideration of the claim simply by serving another which was identical to, or included, the previous claim, especially if there was no limit to the number of times that a claimant could seek to have this reconsideration occur.
[53]Second, as earlier mentioned, under s 13(5) only one payment claim may be served in respect of each reference date under the construction contract. There is a qualification that the claimant may include in a payment claim an amount that has been the subject of a previous claim. However, taking into account the Act’s objectives and its provisions, I do not consider that that qualification can, or should, be read as authorising the inclusion in a payment claim of an amount which has been the subject of an earlier adjudication. It would in my view be inconsistent with the carefully structured procedures as to adjudication and the provisions, which I am in the course of mentioning, pointing towards finality of adjudication determinations to give it that construction.
[54]Third, in determining an adjudication application, an adjudicator is bound, unless he or she is satisfied that the value of the work has changed since the previous determination, to value construction work consistently with a valuation made in the course of a previous adjudication application: s 22(4). I will refer to this provision again later.
[55]Fourth, under s 23(2) a respondent is required to pay any amount determined by the adjudicator.
[56]Fifth, under s 24, failure to pay an adjudicated amount may have the consequence that construction work is suspended.
…
[58]Seventh, whilst s 26 permits a new application for adjudication to be made, it narrowly defines the circumstances in which it may be made: that is, to circumstances where an adjudicator’s notice of acceptance of appointment is not received within a defined time or the appointed adjudicator fails to determine the application within a defined time. It is implicit that new applications for determination may not be made in other circumstances. It would be curious if these constraints could be circumvented by the claimant simply lodging a new claim and basing a new application for adjudication on that claim, rather than on the earlier claim.
[59]Eighth, the argument in favour of inferring that adjudication determinations were intended to be conclusive is in my view strengthened when one has regard to the fact that they determine rights in relation to progress claims only and, by reason of s 32 of the Act, do not affect contractual rights. Thus, any inability of the claimant to reagitate the issues is confined to its rights as to progress payments. Its rights to put its case as fully and completely as it wishes in pursuit of a contractual claim are preserved.
[60]These various provisions in my view indicate a legislative intent to render adjudication determinations relevantly conclusive. Such determinations do not conclude contractual rights. Section 32 expressly so provides. The Act however creates special statutory rights to progress payments. When a claim is made, a dispute arises and an adjudication determination resolves that dispute. I consider that determination to be final and binding between the parties as to the issues determined, except to the extent that the Act allows the determination to be revisited. It would in my view be quite contrary to the scheme of the Act to permit claimants simply to resubmit the already adjudicated claims if they were dissatisfied with the adjudication.
…
Issue estoppel and abuse of process
[68]Thus the primary judge here was correct in considering that ‘principles akin to res judicata’ or ‘abuse of process’ were applicable. Consistent with that broad description, I conclude that the principles of issue estoppel were applicable. Primarily because temporal considerations are of particular significance in relation to progress claims, the analogy between an adjudicator’s determination and a completed cause of action which the principles of res judicata would require is an incomplete one. It is best that the applicable principles be recognised to be those of issue estoppel. The more general principle of abuse of process is probably also applicable but it is unnecessary to reach a final view about this. This principle involves a broad concept ‘insusceptible of a formulation comprising closed categories’ (Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at [9]) but certainly including within its ambit an attempt to ‘litigate anew a case which has formerly been disposed of by earlier proceedings’: Walton v Gardiner (1993) 177 CLR 378 at 393.
[69]As pointed out in Kuligowski (at 379 [40]) for the principle of issue estoppel to apply, the same issue must have been earlier determined as is later sought to be reagitated. Thus, if a progress claim were rejected by an adjudicator because it was premature by reason of the date stipulated for payment by the contract, a later claim made on a timely basis would not be precluded. However (to take as an example the issue which was before McDougall J in John Goss Projects) if a progress claim were rejected because it was not made in accordance with express requirements of the contract, that determination would be binding on a subsequent adjudicator before whom the same issue arose. Similarly, it would be an abuse of process for the claimant to rely upon a later progress claim in response to which no Payment Schedule was served to obtain judgment on a basis conflicting with issues resolved in the earlier determination.
[70]I thus disagree with the view ultimately arrived at by McDougall J in John Goss Projects that s 22(4) defines the extent to which an adjudicator is bound by an earlier adjudication. The view that the claimant once disappointed by an adjudicator can seek a different determination from another, or indeed from a succession of others, until a favourable decision is reached would in my view conflict with the policy of the Act to render adjudicators’ determinations final on issues which they resolved, subject only to provisions of the Act conferring limited rights of correction of determinations.
With respect, I prefer the reasoning of Allsop P.
The subsequent authorities which have prohibited a payment claim being made for items previously adjudicated include John Holland Pty Ltd v Schneider Electrical Buildings Pty Ltd[21] (John Holland). In John Holland, a payment claim dated 14 September 2009 was referred to adjudication and rejected because it contravened s 17(5) of the Building and Construction Industry Payments Act 2004 (Qld) as the only ‘reference date’ had already been used. In March 2010, a further payment claim was made, notwithstanding that there was no valid reference date available to the respondent. Applegarth J followed the decision in Dualcorp Pty Ltd v Remo Constructions Pty Ltd.[22] Applegarth J concluded:[23]
[51] The adjudicator determined a disputed issue concerning available reference dates under the construction contract. Section 17(5) precludes a further payment claim in respect of the same reference date. In accordance with the majority judgment in Dualcorp and the doctrines of issue estoppel and abuse of process that apply in the context of the Act, it is not open to Schneider to re-agitate the same issue of reference dates that was determined as a preliminary issue by Mr O’Sullivan.
[21] John Holland Pty Ltd v Schneider Electrical Buildings Pty Ltd [2010] QSC 159.
[22] [2010] QSC 159 at [48].
[23] [2010] QSC 159 at [51].
The decision in The University of Sydney v Cadence Australia Pty Ltd[24] (Cadence) is another example of a payment claim made in respect of claims previously adjudicated. Hammerschlag J held:[25]
[57]It was submitted that whether the second payment claim should be adjudicated upon should be left to the second defendant. Given the second defendant’s lack of jurisdiction, this submission is unsustainable.
[58]Leaving lack of jurisdiction aside, a similar submission was put to and dealt with by Rein J in Perform (NSW).
[59]His Honour pointed out, amongst other things, that the remedy for abuse of process is a dismissal or permanent stay of the proceedings and there is no mechanism for such an application before an adjudicator, that the respondent should not be vexed with a fresh process when it ought not to be, and that the intent of the Act is to provide a speedy determination of claims for payment on an interim basis, not to burden the parties to a construction contract with a prolonged quasi-judicial process.
[60]Similar considerations favouring the intervention of the Court to restrain the second claim and the present application apply here.
[24] The University of Sydney v Cadence Australia Pty Ltd [2009] NSWSC 635.
[25] [2009] NSWSC 635 at [57]-[60].
With respect, his Honour was correct to observe that there was no statutory mechanism available to an adjudicator to prevent a double adjudication. However, it remains necessary to identify the statutory basis on which a court can intervene. The most obvious basis is s 13(5) of the Security of Payment Act.
In Urban Traders Pty Ltd v Paul Michael Pty Ltd, McDougall J explained the basis on which a court may enjoin a second adjudication of the same claim as follows:[26]
[26] Urban Traders Pty Ltd v Paul Michael Pty Ltd [2009] NSWSC 1072 at [21]-[23], [25], [28], [58]-[59].
[21][In Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190], Macfarlan JA, with whom Handley AJA agreed, held that on the proper construction of the Act, an adjudicator’s determination possessed a sufficient degree of finality to raise an issue estoppel precluding subsequent reagitation (in another adjudication) of the same issue: see, in particular, at [68] to [70]. However, as Macfarlan JA pointed out at [68], an adjudicator’s determination does not attract the principles of res judicata, because ‘the analogy between an adjudicator’s determination and a completed cause of action is an incomplete one’. Thus, as his Honour said (again at [68]), ‘[i]t is best that the applicable principles be recognised to be those of issue estoppel’.
[22]The conclusion, that the determinations of adjudicators attract the principles of issue estoppel, was based upon considerations of finality. This is apparent from the review of those principles undertaken by Macfarlan JA: see (under the general law) at [42] to [50] and (under the Act) at [51] to [62]. That review led his Honour to the conclusion that the legislature intended to render the determinations of adjudicators ‘relevantly conclusive’: i.e., conclusive as to entitlements to progress payments. As his Honour said at [60], where a dispute is resolved by determination, the intention of the Act is that the ‘determination… be final and binding between the parties as to the issues determined, except to the extent that the Act allows the determination to be revisited’.
[23]Further, Macfarlan JA said that to permit reagitation, in a subsequent adjudication, of issues decided in an earlier adjudication might amount to abuse of process: …
…
[25]In Perform (NSW) Pty Ltd v Mev-Aus Pty Ltd [2009] NSWSC 416, Rein J held at [41] that the ground of the decision of the majority (Macfarlan JA and Handley AJA) in Dualcorp was based on estoppel.
…
[28]Rein J concluded in Perform that there was an issue estoppel, and that there was also an abuse of process, because the builder in that case had sought to reagitate, in a subsequent adjudication, claims decided by an earlier adjudication. In those circumstances, his Honour said, the Court could and should intervene to prevent the later adjudication from proceeding. His Honour gave five reasons for that at [47]. I paraphrase those reasons as follows:
(1)     a subsequent payment claim seeking to reagitate matters determined in an earlier adjudication ‘is not… within the intent of the Act’ and ‘is not… permitted by the Act’, and hence is not a payment claim for the purposes of the Act;
(2)     the remedies for abuse of process or issue estoppel are dismissal or permanent stay, remedies that an adjudicator cannot grant;
(3)     it is no answer to say that the respondent can raise the issue estoppel before the adjudicator, because requiring, or leaving, the respondent to do that is the very abuse that ought to be restrained;
(4)     the Act aims to provide a speedy determination of claims for payment on an interim basis, not to burden parties to construction contracts with a repetitious and quasi-litigious process; and
(5)     a determination under the Act is not final, but a means of enforcing interim payment; an unsuccessful party (claimant or respondent) retains all of its rights and remedies at law.
…
[58]The majority view in Dualcorp requires the conclusion that the decision of the adjudicator on the claims in question creates an estoppel, the effect of which is that those same claims may not be reagitated in a subsequent adjudication.
[59]Were it necessary to do so, I would conclude also that the reagitation of the claims in question amounts to an abuse of process, insofar as that concept is capable of application to the scheme of interim dispute resolution contained in the Act. That is so for at least three reasons. First, the claim, being barred by issue estoppel, is foredoomed to fail. Secondly, the builder seems to be doing no more than seeking, from a second adjudicator, a better result than it got from the first. There is nothing in payment claim 21 to suggest that there are some new circumstances or material that might warrant reconsideration of the claims in question. Thirdly, the builder has obtained judgment for the amount determined by the first adjudicator. In essence, it now seeks to reopen the basis on which it obtained that judgment.

The application of issue estoppel and abuse of process to the statutory procedure enacted by the Security of Payment Act does not directly arise in this case. The question whether decisions, other than the valuation of building work, which arise in successive adjudications can be re-argued is a difficult one.
The problem of multiple determinations of the same issue by an administrative tribunal is usually addressed by a provision allowing the tribunal to dsimiss frivolous or vexatious applications. That power is absent in the Security of Payment Act. There is some difficulty in adopting the principles of issue estoppel and res judicata, which are applied in the exercise of judicial power, to the administrative decisions made under the Security of Payment Act. That difficulty is exacerbated by s 32 of the Security of Payment Act which provides:
32    Effect of Part on civil proceedings
(1)     Subject to section 34, nothing in this Part affects any right that a party to a construction contract:
(a)may have under the contract, or
(b)may have under Part 2 in respect of the contract, or
(c)may have apart from this Act in respect of anything done or omitted to be done under the contract.
(2)     Nothing done under or for the purposes of this Part affects any civil proceedings arising under a construction contract, whether under this Part or otherwise, except as provided by subsection (3).
(3)     In any proceedings before a court or tribunal in relation to any matter arising under a construction contract, the court or tribunal:
(a)must allow for any amount paid to a party to the contract under or for the purposes of this Part in any order or award it makes in those proceedings, and
(b)may make such orders as it considers appropriate for the restitution of any amount so paid, and such other orders as it considers appropriate, having regard to its decision in those proceedings.
It follows that the issue estoppel or abuse of process, which, on the reasoning of Macfarlan JA, operates on the adjudicative processes of Part 3 of the Security of Payment Act does not bind the parties in any subsequent judicial determinations of their contractual disputes.
An alternative solution to the double adjudication problem may be to treat the judgment entered in a court pursuant to s 25 of the Security of Payment Act on a second or subsequent adjudication as an abuse of process of that court.
Be that as it may, the difficulty in identifying an express provision on which to base those provisions is a reason for not assuming too narrow an operation for s 13(5) of the Security of Payment Act. I find that it is reasonably arguable that s 13(5) precludes the making of a second payment claim for the same entitlement.
Section 13(6) of the Security of Payment Act is not necessarily inconsistent with that construction. It may be limited to allowing items and amounts prematurely included in an earlier payment claim, and therefore disallowed, but in respect of which an entitlement has subsequently accrued on a later reference date, to be included in a subsequent payment claim based on that reference date.
Section 14 provides:
14    Payment schedules
(1)     A person on whom a payment claim is served (the respondent) may reply to the claim by providing a payment schedule to the claimant.
(2)     A payment schedule:
(a)must identify the payment claim to which it relates, and
(b)must indicate the amount of the payment (if any) that the respondent proposes to make (the scheduled amount).
(3)     If the scheduled amount is less than the claimed amount, the schedule must indicate why the scheduled amount is less and (if it is less because the respondent is withholding payment for any reason) the respondent’s reasons for withholding payment.
(4)     If:
(a)a claimant serves a payment claim on a respondent, and
(b)the respondent does not provide a payment schedule to the claimant:
(i)within the time required by the relevant construction contract, or
(ii)within 10 business days after the payment claim is served,
whichever time expires earlier,
the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment to which the payment claim relates.
Section 15 of the Security of Payment Act imposes certain consequences on a respondent who does not pay the whole or any part of the claimed amount for which he or she is liable pursuant to s 14(4). Section 16 provides remedies for the contractor if the respondent fails to pay the amount set out in the payment schedule.
Section 17 of the Security of Payment Act provides:
17    Adjudication applications
(1)     A claimant may apply for adjudication of a payment claim (an adjudication application) if:
(a)     the respondent provides a payment schedule under Division 1 but:
(i)the scheduled amount indicated in the payment schedule is less than the claimed amount indicated in the payment claim, or
(ii)the respondent fails to pay the whole or any part of the scheduled amount to the claimant by the due date for payment of the amount, or
(b)the respondent fails to provide a payment schedule to the claimant under Division 1 and fails to pay the whole or any part of the claimed amount by the due date for payment of the amount.
(2)     An adjudication application to which subsection (1)(b) applies cannot be made unless:
(a)the claimant has notified the respondent, within the period of 20 business days immediately following the due date for payment, of the claimant’s intention to apply for adjudication of the payment claim, and
(b)the respondent has been given an opportunity to provide a payment schedule to the claimant within 5 business days after receiving the claimant’s notice.
(3)     An adjudication application:
(a)must be in writing, and
(b)must be made to an authorised nominating authority chosen by the claimant, and
(c)in the case of an application under subsection (1)(a)(i)—must be made within 10 business days after the claimant receives the payment schedule, and
(d)in the case of an application under subsection (1)(a)(ii)—must be made within 20 business days after the due date for payment, and
(e) in the case of an application under subsection (1)(b)—must be made within 10 business days after the end of the 5-day period referred to in subsection (2)(b), and
(f)must identify the payment claim and the payment schedule (if any) to which it relates, and
(g)must be accompanied by such application fee (if any) as may be determined by the authorised nominating authority, and
(h)may contain such submissions relevant to the application as the claimant chooses to include.
(4)     The amount of any such application fee must not exceed the amount (if any) determined by the Minister.
(5)     A copy of an adjudication application must be served on the respondent concerned.
(6) It is the duty of the authorised nominating authority to which an adjudication application is made to refer the application to an adjudicator (being a person who is eligible to be an adjudicator as referred to in section 18) as soon as practicable.
Section 18 of the Security of Payment Act provides certain eligibility criteria for adjudicators. Section 28 of the Security of Payment Act empowers the Minister to authorise, on application, persons to be an authorised nominating authority. An adjudicator to whom an authorised nominating authority refers an adjudication application may accept the application by serving a notice of acceptance on the claimant and the respondent, after which they are taken to have been appointed as an adjudicator.[27]
[27] Security of Payment Act s 19.
The additional time to provide a payment schedule provided for by s 17(2)(b) of the Security of Payment Act is designed to give the benefit of the making of the payment to those who have received a payment claim in the proper form but who, for one reason or another, did not expect the matter to proceed to adjudication.
I note here the time limits set by ss 17(3)(c) and (d) for the adjudication of a payment claim by reference to the receipt of the payment schedule and the failure to pay the amount due by the date specified in the payment claim. Those time limits would be circumvented if a subsequent payment claim can be provided. The respondent to a claim has to set the matter down for adjudication.
I doubt that s 17(6) of the Security of Payment Act confers on the authorised nominating authority an authority to make a decision on any question of fact, law or mixed fact and law which alters, affects or in any other way operates on, the statutory rights otherwise conferred by the Security of Payment Act. In particular, it does not confer an authority to decide whether the application for an adjudication is made with respect to a valid payment claim. In this respect, it is important to observe that s 26 of the Security of Payment Act provides that a claimant who fails to receive an adjudicator’s notice of acceptance within four business days, after the application for the appointment of an adjudicator has been made, may withdraw the application and make a new application under s 17. It is unlikely that the Security of Payment Act allowed such a narrow window for what may be a complex question.
It would often be impractical for the authorised nominating authority to receive and consider submissions with the short timeframe in which it is required to refer the matter to an adjudicator. The fact that, in the circumstances of this case, CATCON’s solicitors were in a position to fire off correspondence is not necessarily reflective of the ordinary case.
Moreover, there is nothing to suggest that an authorised nominating authority is legally trained or will have any expertise in statutory construction and the identification of the preconditions to the exercise of power. They are more likely to be referral agencies with an understanding of the availability of adjudicators.
A preferable construction of s 17(6) of the Security of Payment Act may be that it confers a mere duty. That duty is enlivened if the authorised nominating authority receives a written application which appears, on its face, to conform with s 17(3). The duty once enlivened requires the referral of the application to an adjudicator.
On the information provided in accordance with s 17(3), it is very unlikely that the adjudicator will be in a position to decide questions like whether the claim was served within time and whether or not more than one claim has been made for an entitlement.
However, accepting, and it was not argued to the contrary by Sarens, that the authorised nominating authority has an authority to decide, then I accept that it is arguable that in the circumstances of this particular case, it should have given an opportunity, albeit a short and very limited one, for submissions to be made before it referred the application for an adjudication to an adjudicator.
There is another basis on which the application for judicial review of the referral of the adjudication may proceed. The fact of referral, its validity and its effectiveness in enlivening the power of the adjudicator pursuant to ss 19 to 22 of the Security of Payment Act is dependent on whether it is effective in law. If the payment claim is not a valid claim under the Act, and such a claim is a precondition to a valid adjudication, there can be no such authority. If it is arguable that the second claim made by Sarens is not a valid claim, then subject to the balance of convenience, orders preserving the status quo should be made.
Justiciability
On the threshold justiciability question, I find, for the reasons which follow, that it is at least arguable that this Court has the power and jurisdiction to, and should, determine the validity of the second payment claim.
In Built Environs,[28] Blue J considered a challenge by way of a judicial review of an adjudication made under the Building and Construction Industry Security of Payment Act 2009 (SA) (the Act). Built Environs Pty Ltd relied on six grounds for judicial review, including one that Tali Engineering Pty Ltd’s payment claim did not comply with s 13(2) of the Act and this deprived the appointed adjudicator of jurisdiction to undertake an adjudication.
[28] [2013] SASC 84.
It was common ground in Built Environs that ‘it is a precondition to the jurisdiction of an adjudicator that a payment claim complying with section 13(2) has been served by the applicant upon the respondent’.[29] However, Tali Engineering Pty Ltd claimed that the adjudicator had jurisdiction to determine that question and the adjudicator’s determination that a claim complies with s 13 of the Act is, absent the usual vitiating factors, final and conclusive.
[29] [2013] SASC 84 at [63].
Blue J rejected that contention, holding that ‘the adjudicator only has jurisdiction if the payment claim objectively complies with section 13 [and] [i]t is not sufficient merely that the adjudicator forms an opinion that the payment claim complies with section 13’.[30]
[30] [2013] SASC 84 at [64].
Blue J referred to Brodyn Pty Ltd v Davenport (Brodyn), in which Hodgson JA, Mason P and Giles JA agreeing, said:[31]
[31] Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at [52]-[55].
[52]However, it is plain in my opinion that for a document purporting to be an adjudicator’s determination to have the strong legal effect provided by the Act, it must satisfy whatever are the conditions laid down by the Act as essential for there to be such a determination. If it does not, the purported determination will not in truth be an adjudicator’s determination within the meaning of the Act: it will be void and not merely voidable. A court of competent jurisdiction could in those circumstances grant relief by way of declaration or injunction, without the need to quash the determination by means of an order the nature of certiorari.
[53]What then are the conditions laid down for the existence of an adjudicator’s determination? The basic and essential requirements appear to include the following:
1.    The existence of a construction contract between the claimant and the respondent, to which the Act applies (s 7 and s 8).
2.    The service by the claimant on the respondent of a payment claim (s 13).
3.    The making of an adjudication application by the claimant to an authorised nominating authority (s 17).
4.    The reference of the application to an eligible adjudicator, who accepts the application (s 18 and s 19).
5.    The determination by the adjudicator of this application (s 19(2) and s 21(5)), by determining the amount of the progress payment, the date on which it becomes or became due and the rate of interest payable (s 22(1)) and the issue of a determination in writing (s 22(3)(a)).
[54]The relevant sections contain more detailed requirements: for example, s 13(2) as to the content of payment claims; s 17 as to the time when an adjudication application can be made and as to its contents; s 21 as to the time when an adjudication application may be determined; and s 22 as to the matters to be considered by the adjudicator and the provision of reasons. A question arises whether any non-compliance with any of these requirements has the effect that a purported determination is void, that is, is not in truth an adjudicator’s determination. ...
[55]In my opinion, the reasons given above for excluding judicial review on the basis of non-jurisdictional error of law justify the conclusion that the legislature did not intend that exact compliance with all the more detailed requirements was essential to the existence of a determination. What was intended to be essential was compliance with the basic requirements (and those set out above may not be exhaustive), a bona fide attempt by the adjudicator to exercise the relevant power relating to the subject matter of the legislation and reasonably capable of reference to this power, and no substantial denial of the measure of natural justice that the Act requires to be given. If the basic requirements are not complied with, or if a purported determination is not such a bona fide attempt, or if there is a substantial denial of this measure of natural justice, then in my opinion a purported determination will be void and not merely voidable, because there will then not, in my opinion, be satisfaction of requirements that the legislature has indicated as essential to the existence of a determination. If a question is raised before an adjudicator as to whether more detailed requirements have been exactly complied with, a failure to address that question could indicate that there was not a bona fide attempt to exercise the power; but if the question is addressed, then the determination will not be made void simply because of an erroneous decision that they were complied with or as to the consequences of non-compliance.
(Emphasis added; citations omitted)
Early in its submissions, Sarens relied on the decision of Campbell J in Energetech Australia Pty Ltd v Sides Engineering Pty Ltd[32] (Energetech).In Energetech, Campbell J considered claims that a party to a contract was not entitled to apply for an adjudication of a payment claim because it purported to be in respect of a date which, in truth, was not a reference date under the construction contract.
[32] Energetech Australia Pty Ltd v Sides Engineering Pty Ltd (2005) 226 ALR 362.
The construction contract in Energetech provided for the payment of progress payments on the achievement of defined milestones. The milestones were mobilisation and practical completion. The defendant served a payment claim purportedly under the Security of Payment Act on 25 May 2005 nominating 18 May 2005 as the reference date. The payment schedule in response asserted that practical completion had not yet been achieved. The defendant lodged an adjudication application which was in due course adjudicated. The defendant obtained judgment for the adjudicated amount.
Subsequently, the defendant served another payment claim seeking $983,992.09 but giving credit for the amount of the judgment debt on the earlier adjudication. A declaration was sought that the defendant was not entitled to a further adjudication because one had already been made in respect of the practical completion.
Campbell J concluded that it was not appropriate for the Court to rule on whether the payment claim enlivened the powers of adjudication conferred by the Security of Payment Act.[33] Campbell J relied on the decision of the New South Wales Court of Appeal in Brodyn, which has since been overruled substantially.[34] Campbell J held that it was ‘not the [C]ourt’s proper role to answer the second question posed for decision [as to whether the payment claim entitled the defendant to apply for adjudication], when [it] is sought as a way of pre-empting the possibility that an adjudicator might make a mistake in coming to the determination’.[35]
[33] (2005) 226 ALR 362 at [111].
[34] See, eg, Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393.
[35] (2005) 226 ALR 362 at [106].
A similar approach was taken in Lifestyle Retirement Projects No 2 Pty Ltd v Parisi Homes Pty Ltd.[36] With respect, it is difficult to see why, accepting that the satisfaction of conditions precedent to the exercise of a legal power is a proper matter for the adjudication, a court should not, subject to discretionary matters, ensure that an adjudication is lawfully embarked upon. Moreover, the reliance on remarks by McDougall J in Australian Remediation Services Pty Ltd v Earth Tech Engineering Pty Ltd,[37] which were limited to the availability of review for jurisdictional error on the face of the record, and not preconditions to the exercise of the power, is misplaced. The decisions do not, with respect, grapple with issues of jurisdiction elucidated in Chase Oyster Bar to which I next turn.
[36] Lifestyle Retirement Projects No 2 Pty Ltd v Parisi Homes Pty Ltd [2005] NSWSC 411.
[37] Australian Remediation Services Pty ltd v Earth Tech Engineering Pty Ltd [2005] NSWSC 362.

In Chase Oyster Bar, the Court of Appeal of New South Wales considered the scope of the power of the Supreme Court to determine the legality and validity of proceedings under the Security of Payment Act.
The factual circumstances are set out in the following paragraphs of the judgment of McDougall J:[38]
[38] (2010) 78 NSWLR 393 at [114]-[121].
[114]Chase and the first defendant (Hamo) made a construction contract under which Hamo undertook to carry out fitout work for Chase at the Chase Oyster Bar in Chatswood Chase.
[115]Hamo made a number of payment claims. The claim at issue in these proceedings is constituted by a tax invoice dated 22 December 2009 but served on Chase on 31 December 2009. Chase did not provide a payment schedule in response to the payment claim.
[116]The due date for payment of the claimed amount was 13 January 2010.
[117]Chase’s failure to provide a payment schedule meant that it became liable to pay the claimed amount to Hamo on the due date (see s 14(4) of the Security of Payment Act). It did not do so. Thus, Hamo had the right either to sue for the claimed amount as a debt or to make an adjudication application (see s 15(2) of the Security of Payment Act). It sought to follow the latter course. By s 17(2)(a) of the Security of Payment Act, Hamo could not do so unless it had notified Chase, within 20 business days after 13 January 2010, of its intention to apply for adjudication. Hamo did not give that notice until 11 February 2010: well outside the 20 business day period for which s 17(2)(a) provides.
[118]Nonetheless, Hamo made an adjudication application. The adjudicator was appointed. Chase lodged with the adjudicator what was (or purported to be) an adjudication response. The adjudicator concluded that he should not consider the adjudication response, because Chase had not provided a payment schedule within the time provided by s 17(2)(b) of the Security of Payment Act.
[119]The adjudicator made a determination dated 18 March 2010. He concluded that Hamo was entitled to payment of the claimed amount, together with interest.
[120]Although there was no payment schedule, nor (according to the adjudicator) any valid adjudication response, nonetheless the adjudicator considered whether (among other things) Hamo’s notice pursuant to s 17(2)(a) of the Security of Payment Act had been given within the time required. He concluded that it had (see par [24] of the determination). That conclusion cannot be right, having regard to the facts that I have set out above. Nor could it be right, even on the findings of fact made by the adjudicator, which were that:
(1) The payment claim was served on 22 December 2009, by facsimile transmission (par [15]);
(2) The due date for payment of the claimed amount was 6 January 2010 (par [31]); and
(3) The notice pursuant to s 17(2)(a) was given, by facsimile transmission, on 11 February 2010 (par [19]).
[121]It will be seen from what I have said (at [8] and [9] above) that the adjudicator’s findings as to the date of service of the payment claim (22 December 2009) and the due date for payment of the claimed amount (6 January 2010) were erroneous. Nonetheless, his finding as to the date on which Hamo gave Chase notice pursuant to s 17(2)(a) of the Security of Payment Act (11 February 2010) was correct. On the findings of fact made by the adjudicator, there was no evidence to support his finding that the notice pursuant to s 17(2)(a) had been given within 20 business days of the due date for payment. Nor is there any evidence to support that finding if one looks at what I have said above is the correct due date for payment. On any view, the adjudicator’s finding was plainly wrong.
On the jurisdiction of the Supreme Court to determine the validity of the payment claim, Spigelman CJ said:[39]
[3]The supervisory jurisdiction of this Court under s 69 of the Supreme Court Act 1970 can be invoked with respect to the exercise of statutory powers and the conduct of statutory procedures, whether or not the person to whom any orders equivalent to the prerogative writs are to be directed is a public officer. The position is, if anything, more clear when, as here, that person is appointed by an ‘authorised nominating authority’ (s 17 of the Building and Construction Industry Security of Payment Act 1999 (Security of Payment Act)), which is itself appointed as such by a Minister of the Crown (s 28).
[39] (2010) 78 NSWLR 393 at [3].
In referring to the reasons of Hodgson JA in Brodyn, Spigelman CJ observed:[40]
[25]First, insofar as his Honour referred to the specific requirements of s 17, relevantly for present purposes s 17(2)(a), his remarks were obiter. The section did not arise in that case.
[26]Secondly, his Honour’s statement (at [55]) that the Parliament ‘did not intend that exact compliance with all the more detailed requirements was essential’ (emphasis added) may not mean that none of the detailed requirements are ‘essential’. It may leave open the possibility that some of these ‘detailed requirements’ could be found to be ‘essential’. His Honour made it clear that he was not purporting to set out all of the ‘essential requirements’ by using the word ‘include’, before identifying the list (at [53]), and by stating expressly that that list ‘may not be exhaustive’ (at [55]).
[27]The third consideration is of particular significance. The impact of the judgment in Kirk on his Honour’s reasons arises from his rejection (at [54]) of the applicability of the distinction between ‘jurisdictional’ and ‘non-jurisdictional’ error, on the basis that ‘it cast the net too widely’. His Honour went on to apply a test as to what statutory requirements constituted ‘an essential pre-condition’. That statement could be understood as the equivalent of ‘jurisdictional error’, but it appears from the passage quoted at [22] above that that may not be what his Honour had in mind. The concept of ‘an essential precondition’ may have been intended to be encompassed within, but narrower than, the scope of ‘jurisdictional error’.
(Emphasis in original)
[40] (2010) 78 NSWLR 393 at [25]-[27].
Basten JA concluded:[41]
[96]For the reasons given by the Chief Justice (at [31]-[53] above) and by McDougall J, I agree that compliance with the time limit specified in s 17(2)(a) is an essential condition for a valid adjudication application. The language of the provision (‘cannot be made unless’) is intractable; neither the structure nor the purpose of the Act suggests a different conclusion.
[41] (2010) 78 NSWLR 393 at [96].
The essential reasoning of Basten JA on the question appears in the following paragraphs:[42]
[97]The power to determine compliance with the essential requirements of an adjudication application could lie with the authorised nominating authority (to whom the application is made), the adjudicator (to whom the application is referred) or the Court exercising its supervisory jurisdiction.
[98]The structure of the Act might suggest that it would be inappropriate to refer an invalid adjudication application to an adjudicator; there would then be an implied obligation on the authorised nominating authority to consider the validity of the application made to it. Arguably the duty to refer an application to an adjudicator (see s 17(6)) is limited to a valid adjudication application. However, as no party before this Court argued for that construction, it may be put to one side.
[99]The second possibility is that power to determine the validity of an adjudication application lies with the adjudicator. In a practical sense, there is much to recommend the view that the adjudicator is able to determine whether the application complies with provisions such as s 17(2)(a), as the adjudicator sought to do in the present case. However, there are factors which support a contrary view. First, s 22(1), identifying that which the adjudicator is to determine, makes no reference to the validity of the adjudication application. Secondly, s 22(2) limits the matters which the adjudicator is entitled to consider to the Act, the provisions of the construction contract, the payment claim, the payment schedule, submissions in support of either and the results of any inspection. In a provision which renders the consideration of any other material impermissible, the absence of any reference to the circumstances in which the adjudication application was made is highly significant.
[100]Thirdly, the descriptions of the matters to which payment claims and payment schedules must relate and hence (at least implicitly) the matters to which the submissions in support can properly refer, do not expressly identify any aspect of the circumstances in which the adjudication application was made.
[101]For these reasons, the proper construction of the Security of Payment Act is that it does not permit the adjudicator to determine the validity of the adjudication application. The challenge in the present case must therefore be determined on the basis of facts found by the Court.
[42] (2010) 78 NSWLR 393 at [97]-[101].
I observe that in paragraph [98] Basten JA is not necessarily expressing an opinion that s 17(6) of the Security of Payment Act confers on the authorised nominating authority a power to decide on the validity of the payment claim. His Honour may, with respect, have been saying little more than that the authorised nominating authority was not duty bound to refer an invalid payment claim to an adjudicator. That course is open to the authorised nominating authority, if it is plain on the face of things that a payment claim is invalid.
Basten JA answered the questions posed as follows:[43]
[43] (2010) 78 NSWLR 393 at [108].
[108]I would answer the questions as follows:
Question 1: Whether the determination of the Second Defendant (the Adjudicator) on 18 March 2010 that he could hear and determine the first defendant’s adjudication application pursuant to the Building and Construction Industry Security of Payment Act should be set aside or quashed for jurisdictional error in circumstances where the adjudicator incorrectly concluded (on the facts found by him and on the facts subsequently found by the Court) that the notice required by Section 17(2)(a) of the Act had been served on the Plaintiff in the time required by the Act.
Answer: The Supreme Court, in exercise of its supervisory jurisdiction:
(a)has power to determine that –
(i) an adjudication application has not been made in compliance with s 17(2)(a) of the Building and Construction Industry Security of Payment Act 1999;
(ii) the determination of the adjudicator, made in the absence of a valid adjudication application, was invalid, and
(iii) there was non-compliance in the present case;
(b) has power to grant relief in the nature of certiorari and set the determination aside.
Question 2: Whether in light of the decision of the High Court in Kirk v Industrial Court of New South Wales (2010) 239 CLR 531, the decision in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421 should not be followed or was incorrectly decided so far as it held that:
a.the Supreme Court of New South Wales was not required to consider and determine the existence of jurisdictional error by an adjudicator in reaching a determination under the Act;
b.an order in the nature of certiorari was not available to quash or set aside a decision of an adjudicator under the Act;
c.the Act expressly or impliedly limited the Supreme Court of New South Wales’ power to consider and quash a determination for jurisdictional error by an adjudicator in reaching a determination under the Act.
Answer: To the extent that Brodyn held, in relation to an adjudication application which was not in compliance with s 17(2)(a) of the Act, the matters set out in the question at a, b and c, it was in error.
Question 3: Whether the Act, so far as it expressly or impliedly limits the power of the Supreme Court of New South Wales to review an adjudicator’s determination for jurisdictional error, is inconsistent with the requirement of the Constitution that there be a State Supreme Court with jurisdiction to grant relief in the nature of certiorari.
Answer: The Act contains no such limitation.
McDougall J made the following observations on the decision in Brodyn:[44]
[149]The decision in Brodyn appears to assume that there is a distinction between a basic and essential requirement for the existence of an adjudicator’s determination and a jurisdictional condition, or jurisdictional fact. However, the decision does not analyse the relevant requirements of the Act in terms of jurisdiction; the framework of analysis was restricted by the search for basic and essential conditions of validity.
[150]Hodgson JA suggested that the requirements of, among others, s 17 were not basic and essential requirements. As I have noted, his Honour said (at [55]) that the legislature did not fix exact compliance with (again among others) s 17 as essential to the existence of a determination. Thus, consistent with what his Honour said (at [58]), certiorari would not be available where a determination is given on an adjudication application brought without notification as required by s 17(2)(a).
[151]That Hodgson JA did intend that certiorari should be denied in cases of jurisdictional error of law falling short of breach of a basic and essential requirement is, I think, shown by his Honour’s observation (at [54]), that the approach of looking for jurisdictional or non-jurisdictional error ‘has tended to cast the net too widely’.
[152]In short, it seems to me that the essential issues in this case, as identified at [4] above, arise only if there are, among the more detailed requirements of the Security of Payment Act identified by Hodgson JA in Brodyn (at [54]), requirements, the satisfaction of which in fact is required as a condition of an adjudicator’s exercise of the statutory power to determine the amount of a progress claim.
[44] (2010) 78 NSWLR 393 at [149]-[152].
McDougall J concluded:[45]
[238]For the reasons that Basten JA gives (at [97] to [101] above), the power to determine compliance with s 17(2)(a) is not given to the adjudicator. The Court is not bound by his finding that the requirements of s 17(2)(a) had been met.
[239]In this case, the ultimate jurisdictional fact, as found by the adjudicator, was that set out in par 24 of what it remains convenient to call his determination. (For the reasons that I have given (at [192] above), the ‘actual determination’ is in fact the decision on the three matters referred to in s 22(1), not the reasons, as required by s 22(3)(b), for that decision.) That finding was, in relation to the notice under s 17(2)(a), that it had been served within time.
[240]The adjudicator’s finding was not correct. It is clear, from what I have said (at [115] and [116] above), that no notice was given in accordance with s 17(2)(a).
[241]Alternatively, even if satisfaction of the existence of the fact were a matter entrusted to the adjudicator for determination, the Court does not inquire into the existence of the fact itself but, rather, looks at the adjudicator’s reasoning.
[45] (2010) 78 NSWLR 393 at [238]-[241].
There can be no Alsatias in the application of the law. Powers conferred by statute must, consistently with the rule of law, have their limits. It is generally the duty and responsibility of the courts to patrol, and enforce, the boundaries of administrative power conferred by statute. It is, at least, arguable that this case calls for the Court to exercise that responsibility.
The balance of convenience
The balance of convenience lies heavily in favour of this Court determining whether the precondition to a valid adjudication imposed by s 13(5) of the Security of Payment Act has been satisfied, before the adjudication proceeds further.
The adjudication process will be burdensome and expensive. It requires a claim for many millions of dollars to be adjudicated by reference to 24 volumes, or boxes, of material within 10 days, or such longer period as the parties may agree to allow the adjudicator. Whatever the outcome of the adjudication, CATCON and Sarens are likely to engage in a substantial arbitration to finally and conclusively resolve their dispute.
Sarens delayed for some months after work was completed to make its first payment claim in September 2019. It did not request an adjudication but submitted a later payment claim in October 2019.
The determination of the validity of the claim is, therefore, a timely and cost‑effective way to resolve the parties’ dispute on the validity of the payment claim.
Conclusion
I order a stay of the referral of the second payment claim to Mr Riddell and his acceptance of it until the hearing and determination of the validity of Sarens’ second payment claim on the ground that it is invalid for non-compliance with s 13(5) of the Security of Payment Act.