Denham Constructions Pty Ltd v Islamic Republic of Pakistan (No 2)

[2016] ACTSC 215

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Denham Constructions Pty Ltd v Islamic Republic of Pakistan (No 2)

Citation:

[2016] ACTSC 215

Hearing Dates:

18 – 19 July 2016

DecisionDate:

12 August 2016

Before:

Mossop AsJ

Decision:

The plaintiff to bring in short minutes to give effect to reasons.

Catchwords:

BUILDING AND CONSTRUCTION – Claim of debt arising under the Building and Construction Industry (Security of Payment) Act 2009 (ACT) from a failure to serve a payment schedule in response to a payment claim – Whether an email was sufficient to constitute a payment schedule for the purposes of the Act – Email failed to comply with the requirements set out in ss 16(2) and (3) – Email not a payment schedule – Whether progress claim invalid under s 15(5) of the Act – Where amounts claimed related to work or entitlements under the contract which arose prior to the date of the progress claim – Where contract provided for monthly progress payments – No invalidity under s 15(5)

BUILDING AND CONSTRUCTION – Whether payment claim amounted to an abuse of process – Whether repeating of variation claims previously accepted or rejected in an earlier payment claim was an abuse of process – Even where a claim has previously been made, unless it has been the subject of adjudication, it may be claimed again subsequently – Whether adjusting the costs arising from extension of times claims was an abuse of process – No abuse of process

CONSTITUTIONAL LAW – Whether the Building and Construction Industry (Security of Payment) Act 2009 (ACT) applies to building work on the Pakistani High Commission – Scope of legislative power of the Australian Capital Territory legislature in relation to areas classified as National Land – Restrictions on Territory’s legislative power under self-government legislation not applicable – Commonwealth power to make laws with respect to National Land does not amount to a qualification on powers given under s 22 of the Constitution –  

CONSTITUTIONAL LAW – Seat of government – Exclusive legislative power of Commonwealth Parliament – Scope of the seat of government for the purposes of s 52(i) – Significance of Territory being surrendered and accepted under s 111 – Legislation relating to the seat of government empowered by plenary power

Legislation Cited:

A.C.T. Self-Government (Consequential Provisions) Act 1988 (Cth)

Australian Capital Territory (Planning and Land Management) Act 1988 (Cth)
Australian Capital Territory (Self-Government) Act 1988 (Cth), ss 22, 23, 27, 28, 34
Australian Capital Territory (Self-Government) Regulations 1989 (Cth), r 3B
Constitution, ss 52(i), 111, 122, 125
Building and Construction Industry (Security of Payment) Act 2009 (ACT), ss 10, 13, 14, 15, 16, 38
Building and Construction Industry Payment Act 2004 (Qld), s 18
High Court of Australia Act 1979 (Cth), s 14
Interpretation Act 1987 (NSW), s 21
Judiciary Act 1903 (Cth), s 78B
Legislation Act 2001 (ACT), Dictionary
National Land Ordinance 1989 (Cth), ss 2, 4, 5, 7
Seat of Government Acceptance Act 1909 (Cth)
Seat of Government Act 1904 (Cth)
Seat of Government Act 1908 (Cth), s 3

Seat of Government (Administration) Act 1910 (Cth), s 12

Cases Cited:

Broadview Windows Pty Ltd v Architectural Project Specialists Pty Ltd [2015] NSWSC 955

Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421
Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248
Commonwealth v Australian Capital Territory (2013) 250 CLR 441
Denham Constructions Pty Ltd v Islamic Republic of Pakistan [2016] ACTSC 67
Doolan v Rubikon (Qld) Pty Ltd [2008] 2 Qd R 117
Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190
Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2007) 23 BCL 292
Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582
Grid Projects NSW Pty Ltd v Proyalbi Organic Set Plaster Pty Ltd [2012] NSWSC 1571
ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140
Jacka v Australian Capital Territory (2014) 290 FLR 200
Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333
Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) (2003) 219 CLR 325
Paterson v O’Brien (1978) 138 CLR 276
Re Governor, Goulburn Correctional Centre; Ex parteEastman (1999) 200 CLR 322
Silent Vector Pty Ltd t/as Sizer Builders v Squarcini [2008] WASAT 39
Spankie v James Trowse Constructions Pty Ltd [2010] QCA 355
Spratt v Hermes (1965) 114 CLR 226
Svikartv Stewart (1994) 181 CLR 548
Teori Tau v Commonwealth (1969) 119 CLR 564
The Trustees of the Roman Catholic Church for the Diocese of Lismore v TF Woollam & Son Pty Ltd [2012] NSWSC 1559

Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89

Texts Cited:

Attorney-General’s Department, Opinions of Attorneys-General of the Commonwealth of Australia, vol 1:1901-14

Blackshield, Tony, Michael Coper and George Williams (eds), Oxford Companion to the High Court of Australia (Oxford University Press, 2001)
Ewens, JQ, “Where is the seat of government?” (1951) 25 Australian Law Journal 532
Quick, John and Robert Garran, The Annotated Constitution of the Australian Commonwealth (Legal Books, 1976)
Sugerman, Bernard, “The Seat of Government of the Commonwealth” (1973) 47 Australian Law Journal 344

Watson, Frederick, History of Canberra (Federal Capital Press of Australia, 1934)

Parties:

Denham Constructions Pty Ltd (Plaintiff)

Islamic Republic of Pakistan (Defendant)

Attorney-General of the Australian Capital Territory (Intervener)

Representation:

Counsel

Mr P Walker SC, Mr G Blank (Plaintiff)

Mr A.J. Greinke (Defendant)

Mr P Garrisson SC SG (Intervener)

Solicitors

KWS Legal (Plaintiff)

Meyer Vandenberg (Defendant)

ACT Government Solicitor (Intervener)

File Number:

SC 428 of 2015

MOSSOP AsJ:

Introduction

1.     In April 2013 the plaintiff and defendant entered into a building contract in relation to building work at the High Commission of Pakistan in Canberra (the High Commission).  The works were completed in June 2015.

2.     During the course of the works the plaintiff made claims for variations under the building contract.  Those variations were identified by codes DCV001 to DCV075.  The architects under the contract, who were appointed as the agents of the owner to administer the contract, approved only in part or rejected each of the relevant claims.  

3.     The plaintiff also made regular Progress Claims, which were assessed by the architects who issued Progress Payment Certificates.  Progress claims 1 to 25 are not in dispute in this proceeding.  Each of these claims was paid as certified.

4.     On 16 June 2015 the plaintiff served Progress Claim 25.

5.     On 11 September 2015, the plaintiff submitted Progress Claim 26 seeking payment for $1,027,054.89, which included a claim for variation for an adjustment of time cost (DCV075) for $708,880.90.  DCV075 related to extension of time claims described as EOT 1, EOT 8, EOT 10, EOT 11 and EOT 13.

6.     Progress Claim 26 stated that it was a payment claim pursuant to the Building and Construction Industry (Security of Payment) Act 2009 (ACT) (SOP Act).

7. By email sent to the plaintiff on 15 September 2015, the architects rejected the adjustment of time claim (DCV075). The defendant contends this email constituted a payment schedule pursuant to s 16 SOP Act in relation to Progress Claim 26.

8. On 30 September 2015 the architects issued Progress Payment Certificate 26, certifying that the defendant was to pay only $750.18. This was outside the 10 business day period in which a payment schedule under the SOP Act is required to be given.

9. On 5 November 2015 the plaintiff commenced these proceedings for judgment under s 16(4) SOP Act. On 25 January 2016 the defendant filed its defence.

10.   On 8 February 2016 the plaintiff filed an application for summary judgment, which was unsuccessful: Denham Constructions Pty Ltd v Islamic Republic of Pakistan [2016] ACTSC 67.

11.   Because the defendant raised a matter involving the interpretation of the Constitution, notices were given under s 78B of the Judiciary Act 1903 (Cth). The Attorney-General for the ACT has intervened in the proceeding.

The Payment Claim

12.   In order to understand some aspects of the arguments put in these proceedings, it is necessary to identify with more precision the structure of Progress Claim 26 and the documents which were relied upon for the purposes of some components of the claim. 

13.   There were essentially two categories of additional claims made in Progress Claim 26.  First, there were a series of claims for variations previously made which had been disallowed or allowed only in part.  Those claims were claims which were being re-agitated in the sense that they claimed the balance of the amount previously claimed that had not been allowed previously.  This involved 15 items which in total amounted to $146,714.45.  Second, there were additional claims which arose from DCV075 which was sent on the same day as Progress Claim 26.  Each of the five elements of DCV075 involved time costs claimed at a daily rate for each day in relation to which an extension of time was claimed.  The structure of each of the five elements was to identify a claim for an extension of time for practical completion and then to make a claim at the rate of $3894.95 per day for such extension.  The total number of days claimed was 182.  Therefore the total amount claimed (ex GST) was $708,880.90 (182 x $3894.95).  The basis upon which the rate of $3894.95 per day was arrived at was not explained in the document or otherwise explained in the evidence.

14.   All of the extension of time claims related to the events well prior to the date of DCV075.

15.   The various items which made up DCV075 were as follows:

(a)Item 1 related to EOT 1.  That was a claim dated 19 June 2013 which sought an extension of the date for practical completion by 54 days.  It identified the reason as “Waiting for BA to commence work.”  On that claim the “adjustment of time costs” (required to be identified by clause H2.1(g) of the contract) were identified as “Nil”.  As a consequence, the claim in the DCV075 which made a substantial claim for such costs was inconsistent with the notice that had been given at the time the extension of time was first claimed.

(b)Item 2 related to EOT 8.  Although it was referred to in DCV075 as dated 6 March 2014, the document in evidence which relates to the claim is dated 17 February 2014 and identified the reason for the adjustment as “Unforeseen delays during the structural steel shop-drawing and fabrication phases.”  It sought an extension of the date for practical completion by 18 working days.  It identified the “Adjustment of Time Costs” as “Nil”.  Once again the claim in DCV075, which made a substantial claim for such costs, was inconsistent with the notice that had been given at the time the extension of time was first claimed.

(c)Item 3 related to EOT 10.  Although it was identified in DCV075 by reference to a form dated 10 June 2014, the document in evidence which corresponds to the claim is dated 27 May 2014.  It sought an adjustment of the date for practical completion by 16 working days and identified the “Adjustment of Time Costs” as “Nil”.  The reason identified for the delay is summarised in DCV075 as “Unforeseen delays due to fabrication and installation of pre-cast units”.  Once again the claim in DCV075, which made a substantial claim for such costs, was inconsistent with the notice that had been given at the time the extension of time was first claimed.

(d)Item 4 related to EOT 11, which was sent on the same day as Progress Claim 26, namely, 11 September 2015.  It was summarised in DCV075 as “Glazing Redesigned due to inability to install”.  EOT 11 sought an extension of the date for practical completion by 25 working days.  The entry on DCV075 refers to an email dated 30 October 2014 from the plaintiff to the architects providing a revised completion program.  That email referred to a five-week delay due to the re-ordering of glazing.  It is therefore clear that the delay was something which occurred well prior to EOT 11 and Progress Claim 26.

(e)Item 5 related to EOT 13, which was sent on the same day as Progress Claim 26, namely, 11 September 2015.  DCV075 summarised the basis for the claim as “Pre-final Inspection-Compliance Issues”.  EOT 13 sought an extension of the date for practical completion by 69 days.  EOT 13 also identified particular extra costs incurred due to the compliance issues.  They were identified by reference to particular claim numbers between DCV024 and DCV063A.  It should be noted therefore that the claim based on EOT 13 in DCV075 was for per day costs on top of the specific costs that had been identified in EOT 13.

Statutory provisions

16. The relevant provisions of the SOP Act are as follows:

10Right to progress payments

(1)On and from each reference date under a construction contract, a person is entitled to a payment (a progress payment) if the person has undertaken, under the contract, to—

(a)  carry out construction work; or

(b)  supply related goods and services.

(2)...

(3)In this section—

...

reference date, for a construction contract, means—

(a)a date stated in, or worked out under, the contract as the date when a claim for a progress payment is to 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 does not provide a date mentioned in paragraph (a)—

(i)the last day of the calendar month in which the construction work was first carried out, or the related goods and services were first supplied, under the contract; and

(ii)the last day of each subsequent named month.

NoteCalendar month—see the Legislation Act, dictionary, pt 1.

13Due date for payment

(1)    A progress payment under a construction contract is payable—

(a)on the day when the payment becomes payable under the contract; or

(b)if the contract does not set a day—10 business days after a payment claim is made under part 4 in relation to the payment.

(2)Interest is payable on the unpaid amount of a progress payment that is payable under subsection (1) at the greater of the following:

(a)the rate of interest applying from time to time under the Court Procedures Rules 2006, schedule 2, part 2.2 (Interest after judgment);

(b)   the rate stated under the construction contract.

...

Part 4Procedure for recovering progress payment

Division 4.1       Payment claim and payment schedule

15Payment claim

(1)A person who is or who claims to be entitled to a progress payment under section 10(1) (the claimant) may give a claim (a payment claim) to the person who, under the construction contract concerned, is or may be liable to make the payment (the respondent).

Note 1If a form is approved under s 47 for a payment claim, the form must be used.

Note 2For how documents may be served, see the Legislation Act, pt 19.5.

(2)    A payment claim must—

(a)identify the construction work or related goods and services to which the progress payment relates; and

(b)state the amount of the progress payment that the claimant claims is payable (the claimed amount); and

(c)state that it is made under this Act.

(3)    The claimed amount may include any amount—

(a)that the respondent is liable to pay the claimant under section 29(3); or

(b)that is held under the construction contract by the respondent and that the claimant claims is due for release.

(4)A payment claim may be given only before the later of—

(a)the end of the period worked out under the construction contract; and

(b)the end of 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.

(5)A claimant must not give more than 1 payment claim for 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.

16Payment schedule

(1)A respondent who is given a payment claim may reply to the claim by giving a schedule of proposed payment (a payment schedule) to the claimant.

Note 1If a form is approved under s 47 for a payment schedule, the form must be used.

Note 2For how documents may be served, see the Legislation Act, pt 19.5.

(2)A payment schedule must—

(a)identify the payment claim to which it relates; and

(b)state 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—

(a)why the scheduled amount is less; and

(b)if the scheduled amount is less because the respondent is withholding payment for any reason—the respondent's reasons for withholding payment.

(4)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 if—

(a)the claimant gives a payment claim to the respondent; and

(b)the respondent does not provide a payment schedule to the claimant within the earlier of—

(i)the time required by the relevant construction contract; or

(ii)10 business days after the payment claim is given to the respondent.

17Consequences of not paying claimant—no payment schedule

(1)This section applies if a respondent—

(a)becomes liable to pay a claimed amount to a claimant because the respondent failed to provide a payment schedule to the claimant within the time allowed under section 16(4); and

(b)fails to pay the whole or any part of the claimed amount on or before the due date for the progress payment to which the payment claim relates.

(2)The claimant—

(a)may—

(i)    recover the unpaid portion of the claimed amount from the respondent, as a debt due to the claimant, in any court of competent jurisdiction; or

(ii)    make an adjudication application under section 19(1)(b) in relation to the payment claim; and

(b)may give notice to the respondent of the claimant's intention, under section 29, to suspend;

(i)carrying out construction work under the construction contract; or

(ii)supplying related goods and services under the construction contract.

NoteIf a form is approved under s 47 for a notice, the form must be used.

(3)If the claimant starts a proceeding under subsection (2)(a)(i)—

(a)the court must not enter judgment in favour of the claimant unless the court is satisfied the circumstances mentioned in subsection (1) exist; and

(b)the respondent is not entitled—

(i) to bring a cross-claim against the claimant; or

(ii)    to raise a defence in relation to matters arising under the construction contract.

17.   On the assumption that Progress Claim 26 was validly made, the effect of these provisions is that if the defendant has failed to give a payment schedule then, by reason of the operation of s 17, the plaintiff became entitled to recover the unpaid portion of the claimed amount from the defendant as a debt due to the plaintiff in any court of competent jurisdiction. 

18.   The defendant has raised a number of defences to the plaintiff’s claim which may be summarised as follows:

(a)the email from the architect on 15 September 2015 was in fact the payment schedule for the purposes of the Act and hence the plaintiff was not entitled to recover either the whole or part of the amount claimed;

(b)Progress Claim 26 related to the same reference date as Progress Claim 25 and hence was contrary to s 15(5) and invalid;

(c)Progress Claim 26 amounted to an abuse of process and hence was invalid;

(d)the SOP Act did not apply to the contract because the legislative power of the Territory does not extend to regulating a contract at the site of the High Commission.

19.   I will deal with the issues raised by each of these contentions separately.

Was there a payment schedule?

20.   The plaintiff sent a number of communications to the architects on 11 September 2015. 

21.   At 4:48 pm on 11 September 2015 an employee of the plaintiff sent an email which provided:

Please find attached EOT 011, 012 and 013 for your review and approval.

22.   Annexed were three documents each headed “Claim to Adjust Contract” which involved claims for extension of time.  It should be noted that each of these claims were picked up and relied upon in DCV075.

23.   At 5:17 pm the same day, the employee of the plaintiff wrote to the architects as follows:

Please find attached variation for your review and approval:

1.  DCV075 - Claim for adjustment of time cost in respect to delays affecting work days.

For any queries, please do not hesitate to contact myself in the office on [telephone number].  Thanks. 

24.   Sent with the email was a PDF file containing the details of the variation claim.

25.   At 5:48 pm the same day, Progress Claim 26 was sent by facsimile.

26.   The defendant placed some significance on the temporal proximity of these communications for the purposes of characterising the subsequent communication from the architects.  

27.   On 15 September 2015 at 10:44 am the architects responded by email to the email of 5:17 pm which contained DCV075.  The email incorporated the body of the earlier email and provided:

Under clause H1 of the contract, time for making a claim to adjust the contract, has expired in every instance claimed (20 working days).  Therefore your claim to adjust the contract cannot be considered.

28. A progress payment certificate in response to Payment Claim 26, dated 30 September 2015, was issued by the architects to the plaintiff. It certified an amount of $750.18 as due and owing to the contractor. It was outside the 10 business day period provided for under s 16(4) of the SOP Act and hence could not perform the statutory function of a payment schedule.

29. The defendant submitted that the provisions of the Act emphasised speed and informality, that no particular form was required for a payment schedule and that the email complied with the requirements of ss 16(2) and (3).

30.   In support of the defendant’s contention, the defendant relied upon the decision of Chesterman J in Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333 (Minimax).

31.   In that case the issue was whether or not a response to an invoice that constituted a payment claim was sufficient to amount to a payment schedule.  The response referred to the invoice number.  It provided some reasons for refusing an extension of time.  It said “For this reasons we accept not your invoice…” (sic).  The provisions of s 18 of the Building and Construction Industry Payment Act 2004 (Qld) were in relevantly similar terms to s 16(2) and (3). Chesterman J said:

[20] The Act emphasises speed and informality. Accordingly one should not approach the question whether a document satisfies the description of a payment schedule (or payment claim for that matter) from an unduly critical viewpoint. No particular form is required. One is concerned only with whether the content of the document in question satisfies the statutory description. To constitute a payment schedule the applicant’s email of 14 December had to:

(i)        identify the payment claim to which it related, and

(ii)state any amount which the recipient of the payment claim proposed to make in response to it.

(iii)Importantly, if that amount is less than the amount claimed the payment schedule must state why it is less.

[21] If these three criteria are satisfied the document will be a payment schedule. How they are expressed, with what formality or lack of it, and with what felicity or awkwardness, will not matter.

32.   Chesterman J considered that the express identification of the invoice number was sufficient to identify the payment claim to which it related.  Next he considered that, notwithstanding the incorrect grammar used in the letter (quoted above) the meaning was perfectly clear, namely, that no payment was being made pursuant to the payment claim.  However, his Honour was not satisfied that the reasons given addressed each of the elements of the invoice.  Two of the elements which comprised almost $88,000 out of the pre-GST total of $420,000 were not dealt with at all.  His Honour said (at [29]):

The machinery for prompt payment and enforcement of payment would break down if a document, said to be a payment schedule, took issue with only part of a claim but was silent as to what it proposed to pay in respect of the balance.  The contractor could not enter judgment.  The respondent’s reticence could frustrate the operation of the Act.

33. The issue is that which arises from ss 16(2) and (3). Does the document relied upon by the defendant in this case comply with the requirements in those provisions so that it constitutes a “payment schedule” by:

(a)identifying the payment claim to which it relates;

(b)stating the amount of the payment, if any, that the respondent proposes to make; and

(c)indicating why the amount to be paid is less than the claimed amount or explain the reasons for withholding payment.

34.   In my opinion the email does not identify the payment claim to which it relates.  That is because it is not directed to the payment claim at all.  Rather, it is directed to the claim for a variation which forms one component of the amounts claimed as part of Payment Claim 26.  Unlike Minimax, there is no coincidence between the document which is referred to and the contents of the claim.  While the amounts claimed as part of DCV075 form a significant component of the amounts claimed as part of Progress Claim 26, that is not sufficient to make it clear that it is a response to the payment claim as opposed to being a communication in relation to another document generated for the purposes of the underlying contract which happened to relate to one component of the payment claim.

35. While that conclusion is sufficient to dispose of the defendant’s argument I will also deal with the other elements required by ss 16(2) and (3). I do not consider that the document states the amount of the payment, if any, that the respondent proposes to make. Having regard to the terms of the email it would appear that the defendant proposed to make no payment. On the other hand, having regard to the fact that only part of the amounts claimed in the payment claim were addressed, it could be that only those portions of the amount claimed that were based upon DCV075 were refused. In my view, the uncertainty as to what the document was responding to means that it is not possible to draw an inference that the amounts to be paid is nil because significant aspects of the payment claim are not addressed at all, either expressly or by implication.

36.   Finally, so far as reasons are concerned, while the document does give reasons in relation to DCV075, it does not identify any reasons in relation to any other element of the payment claim.  The situation is, in that respect, analogous to that in Minimax and leads to the invalidity of the payment claim.  It would only be if the payment claim was taken as impliedly stating the amount of the payment that the respondent proposed to make as being the difference between the total of Progress Claim 26 and the amount in DCV075 that adequate reasons would have been provided.  However, as I have indicated above, the terms of the email are insufficient to draw that implication.

37. As a consequence, notwithstanding that the requirements of the SOP Act must be considered in a non-technical and practical way, the email of 15 September 2015 is not a payment schedule for the purposes of the Act.

Reference date

38. The defendant claimed that Progress Claim 26 was invalid because the amounts claimed related to previous reference dates and no new reference date had arisen after Progress Claim 25. It therefore contended that s 15(5) prohibited Progress Claim 26.

39. Section 15(5) of the SOP Act provides that a claimant must not give more than one payment claim for each reference date under the construction contract. This is a clear statutory prohibition and a payment claim given in breach of the prohibition will not be a payment claim under the Act.

40.   The operation of the prohibition has received some prominence as a result of the decision of Allsop P in Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190 (Dualcorp).  In that case his Honour, while agreeing with the majority judges (Macfarlan JA and Handley AJA), articulated a different reason for that conclusion.  While the majority judges decided the case on the basis that an issue estoppel prevented reliance upon previously adjudicated and rejected claims, Allsop P decided the case on the basis that what was involved was reliance upon two payment claims made in relation to a single reference date.  His Honour’s reasons were as follows:

8As can be seen from the Act, s 13(5) a claimant is limited to one payment claim in respect of each reference date. Section 13(6) permits, however, inclusion in another payment claim (necessarily by reference to another reference date) of an amount that has been the subject of a previous claim. Amongst other usual and uncontroversial examples, this permits the submission of cumulative payment claims by reference to later reference dates, which include an amount the subject of a previous claim. In such circumstances, if there has been an adjudication, s 22(4) will apply to require the same value to be given to such work, subject to the qualification in that subsection.

9Here, Dualcorp, after undertaking the works, left the site in November 2007. It claimed to have substantially completed the works under the contract in November 2007.

10A payment claim was made on 29 January 2008 attaching six invoices, four of which were dated 24 January 2008 and two of which were dated 29 January 2008. The relevant reference date was not identified on the claim or invoices.

11On 3 March 2008, Dualcorp purported to serve a second payment claim annexing the same invoices and claiming the same amount. Again, no reference date was identified on the documentation.

12Whether or not this was a final claim or a progress claim does not matter. The claim represented by the six invoices must have been in respect of only one reference date – either 15 December 2007 or 15 January 2008, if pursuant to Annexure A, Item 11 or the reference date pursuant to the operation of cl 8.13, if a final payment claim. In either case, there must have been one reference date under the contract or the last day of the month as provided for by the Act, s 8(2)(b).

13I 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”).

14Here, 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 Act and does not attract the statutory regime of the Act.

15For 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.

41.   The factual situation in Dualcorp is distinguishable from the present case because in Dualcorp the earlier payment claims had been the subject of an adjudication.  However, Dualcorp was relied upon by Stevenson J in Grid Projects NSW Pty Ltd v Proyalbi Organic Set Plaster Pty Ltd [2012] NSWSC 1571 (Grid Projects), a case in which there had been no previous adjudication.  The defendant in the present case relies upon Grid Projects because it did not involve any prior adjudication decision. Instead the first payment claim and the second payment claim repeated, with minor adjustments, the claim made in the earlier payment claim. Of critical importance to Stevenson J’s decision was his interpretation of the defined term “reference date”. As no date was specified in the contract, it was a case involving limb (b) of the definition of “reference date” which was in similar, but not identical, terms to the definition in the SOP Act set out above. Instead of referring to “calendar month”, limb (b) of the New South Wales Act referred to “named month”. Stevenson J interpreted the reference to the “named month” as being the month named in the claim for a progress payment during which the work referred to in the claim was undertaken. That was because if the month was “named” in the payment claim there was a better argument for construing the limb of the definition in a way that linked the month named in the payment claim to the work being carried out in that month. In Grid Projects, both payment claims had been issued after the cessation of work.  His Honour held that the second payment claim must, therefore, have related to the same reference date as the first payment claim and hence, based on the decision of Allsop P in Dualcorp, the second payment claim was not a valid one.

42.   The decision in Grid Projects turned on the fact that having regard to his Honour’s interpretation of limb (b) of the definition of reference date, the “named month” had to be a month in which work was undertaken under the contract.  If that interpretation of the definition of “reference date” was correct then it is clear that where work has ceased, new reference dates would not be created.  However, (as pointed out by McDougall J in Broadview Windows Pty Ltd v Architectural Project Specialists Pty Ltd [2015] NSWSC 955 (Broadview)) his Honour’s attention was not drawn to the definition of “named month” in s 21 of the Interpretation Act 1987 (NSW), which provided that “named month” meant the months January through to December.

43.   If the “named month” was not the month named in the payment claim itself, but instead was simply one of the calendar months, there was a weaker argument for interpreting limb (b) of the definition of reference date in a way that tied it to the carrying out of construction work in that month.

44.   Further, the conclusion reached in Grid Projects was inconsistent with the decisions of the New South Wales Court of Appeal in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421 and Falgat Constructions Pty Ltd v Equity Australia Corp Pty Ltd (2007) 23 BCL 292.  Both of those cases held that under limb (b) of the definition of reference date, the reference date was not tied to the performance of work in any given month and hence did not prevent reference dates arising after the completion of work: Brodyn at [63]; Falgat at [36].

45.   This analysis of Grid Projects and the course of authority was described by McDougall J in Broadview.  His Honour concluded in that case that successive reference dates could arise notwithstanding that work under the contract had finished.  Therefore in a case where limb (b) of the definition of “reference date” applied it was open to make a payment claim notwithstanding that work had finished.

46.   The conclusion reached in Broadview is similar to that reached by the Queensland Court of Appeal in Spankie v James Trowse Constructions Pty Ltd [2010] QCA 355 (Spankie).  That case involved two payment claims, the second claiming only an unpaid amount that had been part of the earlier payment claim.  The earlier payment claim had been subject to an adjudication, but that adjudication had been declared void by the Supreme Court.  Therefore the issue was whether under the Queensland legislation consecutive payment claims for the same amount were permissible.  On that issue the trial judge in Spankie had declined to follow an earlier decision of the Supreme Court (Doolan v Rubikon (Qld) Pty Ltd [2008] 2 Qd R 117) which held that a payment claim that claimed only an amount that had been claimed in a previous payment claim was not authorised by the Queensland Act. The appellant’s argument accepted that, by reason of the provision equivalent to s 15(6), it would be open to “include” a previously claimed amount but only when some additional amount was also claimed.

47.   The decision of the Court of Appeal was given by Fraser JA.  Relevantly, his Honour made the following points:

(a)His Honour rejected the contention that the word “include” in the equivalent of s 13(6) (the equivalent of s 15(6)) required that some new amount beyond that the subject of a previous claim had to be included for a payment claim to be valid: [18].

(b)The reference dates were defined by the contract (that is, it was a limb (a) case) and the contractual provision permitted a claim for work done up to the end of the month whether or not the work was done in that month: [19].

(c)The definition of “reference date” did not cut down the broadly expressed entitlement created under the equivalent to s 10(1). Those provisions did not suggest that there was any relationship between a “reference date” and the time when the work under the contract was carried out: [20]. In particular there was nothing that required the work the subject of a particular progress payment to have been carried out after a previous reference date.

(d)The effect of s 17(6) (the equivalent of s 15(6)) was merely to ensure that no implication could be drawn from s 17(5) (the equivalent of s 15(5)) that would preclude the claimant from making a payment claim for an unpaid amount claimed in a previous claim. It did not prevent a claim which claimed only an unpaid amount the subject of a previous claim.

(e)The prospect of claimants causing respondents undue expense and inconvenience by repeating claims should not be exaggerated because claimants will ordinarily have a powerful interest in putting their best foot forward in their earliest payment claim.

48. Returning to the terms of the SOP Act, it should be noted that limb (b) of the definition of reference date in s 10(3) uses the term “calendar month” instead of “named month” (where first appearing). “Calendar month” is a term defined in the Dictionary of the Legislation Act 2001 (ACT). However, the second reference to “named month”, that which applies in relation to subsequent months, has been retained. “Named month” also happens to be defined in the Dictionary to the Legislation Act.  Finally, the definition of “calendar month” refers to “named month”.  Having regard to the existence of the definition of “named month” in the Legislation Act, the substitution of the term “calendar month”, the definition of which is somewhat more elaborate, appears unnecessary. However, for present purposes, it does not affect the applicability of the New South Wales authorities to the interpretation of the definition in the SOP Act. As a consequence, I accept the outline of the authorities provided in Broadview and follow that decision, which is consistent with the decision of the Court of Appeal in Spankie.

49.   The situation may well be different in a case involving limb (a) of the definition because necessarily where limb (a) is involved it is possible that the contractual provision defines the entitlement to make a progress payment by reference to work undertaken in a particular month, or defines it in a way that means that the entitlement to make a claim is limited after work on site is completed.  That is illustrated by the decision in The Trustees of the Roman Catholic Church for the Diocese of Lismore v TF Woollam & Son Pty Ltd [2012] NSWSC 1559. In that case the relevant contractual provision permitting the making of a payment claim was interpreted as permitting claims to be made in the period when work was being performed and then at the end of the defects liability period. As a consequence, a payment claim served after the completion of work but prior to the end of the defects liability period amounted to a further payment claim for the reference date in respect of which an earlier payment claim had been served. It was therefore invalid. What the case illustrates is that in a limb (a) case the terms of the contract may limit when reference dates arise to the period during which work is being undertaken (or limit their capacity to arise in some other way) and hence limit the entitlement to make a payment claim.

50.   The present case is a limb (a) case because the contract provides for monthly progress payments.  The relevant clauses of the contract are clauses N3.1 and N3.2. 

N 2 Owners obligation to pay*contract price

.1 The owner must pay the *contract price, adjusted in accordance with this contract, progressively in accordance with this section N.

N3 Progress claims-procedure for contractor

.1 The contractor may submit to the architect one claim for a progress payment in each month, on or after the date in each month shown in item 32 of schedule 1, unless a different date is agreed in writing between the contractor and the owner.  The claim is not a *tax invoice.

.2 The claim must set out of the contractor’s valuation of:

a the work completed

b materials and equipment delivered to the *site for incorporation in the *works, provided title has passed to the contractor

c subject to clause C 10, the value of *off-site planned or material

all in relation to the *cost of building work, has adjusted, up to and including the day of the claim.

…

51.   In my view the contract does not tie the entitlement to make a progress claim to the continuation of work on-site or limit the existence of reference dates in a manner that would prevent them from arising within the 12-month period after the construction work was completed.  That is because the progress claim must set out a valuation of the work completed etc up to the date of the claim and does not confine it to valuation of the work completed in that month.  It is consistent with a contractual valuation of the work up to the date of the claim, rather than only payment for the work done during the period since the last claim was made.

52. As a consequence, the fact that the amounts claimed related to work or entitlements under the contract that arose prior to the date of Progress Claim 25 did not involve any contravention of s 15(5).

53.   The defendant pressed an alternative claim that was based upon the statement in Spankie that the equivalent of s 15(6) was to ensure that no implication was drawn from the equivalent of s 15(5) to preclude a claimant from “making a payment claim for an unpaid amount claimed in a previous payment claim”. The defendant contended that Progress Claim 26 did not advance claims for “unpaid amounts claimed in a previous payment claim” and hence that it was not protected by the terms of s 15(6). The factual basis for that contention was that Progress Claim 26 claimed increased amounts for the same construction work claimed in Progress Claim 25 and in relation to certain other claim amounts that had not been claimed in any previous payment claim.

54. The defendant’s factual contentions have the effect that the amounts claimed had not been previously claimed. As a consequence s 15(6) had no operation. The factual contentions would be only relevant if there was a prohibition on claiming amounts that might have been subject to a previous claim or a requirement that the amount claimed related to work or events within the period between the last reference date and the reference date giving rise to the relevant progress claim. As I have indicated, there is no such requirement in the SOP Act generally or arising by reason of the terms of the particular contract in this case.

55. The defendant’s next argument was that Progress Claim 26 repeated variation claims which were claims for variations that had been rejected by the architects or approved only in part. The defendant claimed that any such claim was invalid because, until there was approval by the architect, any such claims fell outside the contract, could only be claimed by quantum meruit and hence did not satisfy the jurisdictional requirement in s 10 that there be a “construction contract”.

56. In the present case there was no doubt that there was a construction contract in existence. The only question was whether or not the variations were variations to which the plaintiff was entitled pursuant to the terms of that contract. If, as the defendant contended, the plaintiff had not obtained the approval of the architect for a variation, that may have the effect that the plaintiff was not entitled to any amount in relation to that variation. I do not need to decide that issue because the plaintiff was still entitled to make a claim for an amount arising under the contract. That is made clear by the terms of s 15(1) which, in relation to the making of a payment claim refers to “[a] person who is or who claims to be entitled to a progress payment …” It is therefore not a jurisdictional requirement for a valid progress claim that the claimant demonstrate the entitlement claimed.

Was Progress Claim 26 an abuse of process?

57.   The defendant claimed that the making of Payment Claim 25 amounted to an abuse of process in two respects.  The first was the repeating of variation claims which had been accepted, in full or in part, or rejected by the architect previously.  The second related to the adjustment of time costs incorporated in DCV075 by EOT 1, EOT 8 and EOT 10, EOT 11 and EOT 13.

Repeated variation claims

58.   In relation to the making of repeated variation claims, those claims were made in Progress Claim 25 and were accepted in full, in part or rejected by the architect.  The plaintiff did not press any of those claims by applying for adjudication or serving a notice of dispute pursuant to the contract.  The defendant submitted that the resurrection of those claims in Progress Claim 26 was “inconsistent with the policy of the legislation, applying the principles in Dualcorp and Grid Projects.”  It next submitted that the doctrine of election prevented the plaintiff from subsequently disagreeing with the architect’s rulings in relation to the amounts in question in Progress Claim 25.  Finally, it referred to the decision of the Western Australian State Administrative Tribunal in Silent Vector Pty Ltd t/as Sizer Builders v Squarcini [2008] WASAT 39 at [58] (Silent Vector) in which the Tribunal said:

58In our view, the purpose of the legislation would be defeated if a contractor could simply keep rolling over rejected claims from one month to the next, and then commence an adjudication application for his accumulated claims. If this were permissible, adjudication of all claims could be commenced after practical completion of works. If the legislation were to operate in that manner it would not achieve its objective in ensuring that payment is made in a timely manner during the carrying out of the works. There would be no benefit in having this imprecise and relatively arbitrary form of dispute resolution, if it could be used in this manner. We consider that this construction follows from the ordinary grammatical meaning of the legislation. The extrinsic material to which we have referred confirms that construction.

59. A decision not to seek adjudication of a claim which has not been paid does not involve an election to not further pursue that claim. First, everything that occurs under the SOP Act occurs on an interim basis without affecting substantive rights under the contract: s 38. Second, so long as it has not been adjudicated, an amount previously claimed may be claimed again subsequently: s 15(6). The Act does not imply a need to immediately adjudicate all claims or abandon them. Rather, claims may be repeated and adjudicated subsequently although this comes at the cost of delay so far as the claimant is concerned.

60.   So far as the decision in Silent Vector is concerned, in my view, that decision can be given little weight in the context of the SOP Act because the Western Australian Act, while directed at the same general issue, is in a substantially different form to that in the SOP Act (and the New South Wales and Queensland Acts). Thus any question of abuse of process must be considered in the context of the authorities relevant to the operation of the SOP Act which permit, where there has been no adjudication, the repeating of claims that have not been paid.

61.   As a consequence I am not satisfied that the making of the repeated variation claims amounts to an abuse of process that would entitle the defendant to relief.

Adjustment of time costs arising from the extension of time claims

62.   EOT 1, EOT 8, EOT 10: The plaintiff had previously identified the costs arising from its extension of time claims in EOT 1, EOT 8 and EOT 10 as “nil”, but subsequently, as part of Progress Claim 26, claimed amounts arising from those extensions of time.  The defendant claimed that it is an abuse of process for the plaintiff to deploy the Act to claim retrospective adjustment of time costs.

63.   EOT 11: In relation to EOT 11, that was a claim which was rejected by the architect in October 2014 and the defendant contended that the plaintiff is bound by its election not to dispute that decision.

64.   EOT 13: EOT 13 quantified the extra costs due to delay.  The defendant claimed that all but three of these items had in fact been claimed and paid as part of Progress Claim 25.  The defendant submitted that the plaintiff was not entitled to claim generally for delays, but rather would only be entitled to claim for specific losses or expenses incurred by reason of that delay.  The contract does not entitle the plaintiff to be paid at some daily rate.  Therefore the defendant claimed that the maintenance of the claim for adjustment of time costs in EOT 13 amounts to an abuse of process.

65.   In relation to each of these categories of claim my conclusions are as follows:

(a)The adjustment of time costs in EOT 1, EOT 8 and EOT 10 may ultimately be precluded by the fact that they were identified as “Nil” in the original claim. That may be by reason of the doctrine of election or by reference to the particular notice requirements of the contract. However, those issues would be matters for an adjudicator to determine. It cannot be said that any such claim would be so manifestly unarguable as to indicate that it was an abuse of the process under the SOP Act.

(b)In relation to EOT 11, it is not clear that the plaintiff has not been required to make an election which would preclude it from making this claim.  There is no time limit on the notification of disputes under clause P of the contract.  In the absence of such a time limit, the point at which any election would be required to be made has not arisen.  In any event, any contention about election would be one that could be determined by an adjudicator.  The position is not so clear as to indicate that the making of a claim based on EOT 11 amounts to an abuse of process.

(c)In relation to EOT 13, as pointed out by the defendant, the particularised costs incurred as a result of the delay have largely been paid by the defendant.  However, the claim in DCV075 based on EOT 13 is for a daily rate for delay.  Therefore the payment of specific costs previously claimed does not mean that double counting is necessarily involved.  While the defendant contended that the definition of “adjustment of time costs” in clause S of the contract does not permit claims for other than “specific losses or expenses” that contention is not beyond argument having regard to the definition which includes “any loss expense or damage reasonably incurred…”.  Once again the issue is one which, for the purposes of the Act, could be determined by an adjudicator.

66.   As a consequence, I am not satisfied that these items individually, in aggregate or in combination with the repeating of payment claims amounts to an abuse of process which would entitle the defendant to relief.

Constitutional argument

67. The defendant contended that the SOP Act, as an enactment of the ACT Legislative Assembly, does not extend to building work on the High Commission. This argument is based on two overlapping contentions.

(a)First, the ACT Legislative Assembly does not exercise plenary legislative power within the entirety of the Australian Capital Territory, but rather its legislative powers are circumscribed and, in particular, do not apply to “National Land” as defined pursuant to the Australian Capital Territory (Planning and Land Management) Act 1988 (Cth), which is land reserved by the Commonwealth to its exclusive control. The High Commission is on “National Land” and hence the defendant contended that the SOP Act does not apply to the contract.

(b)Second, land within the “seat of government” of the Commonwealth is exclusively governed by the Commonwealth Parliament by operation of s 52(i) of the Constitution. The defendant contended that the High Commission was located on land within the “seat of government” and, as a result, the SOP Act could not apply to the contract for its construction.

68.   Both the defendant and the Attorney-General submitted that, unless essential to do so, I should not address these arguments.  That submission was based upon the principal that constitutional questions should not be decided unless it is necessary to do justice in the given case and to determine the rights of the parties: ICM Agriculture Pty Ltd v Commonwealth (2009) 240 CLR 140 at [141]; Jacka v Australian Capital Territory (2014) 290 FLR 200 at [15]. While that proposition is clearly correct, in the present case, because each of the defendant’s other arguments have failed, it is necessary to address the constitutional arguments that it advanced in order to determine the outcome of the case.

First argument – SOP Act does not apply to National Land

69.   In order to address the defendant’s first contention, it is necessary to set out in some detail the legislative arrangements which determine the scope of legislative power of the Legislative Assembly of the Territory in relation to areas which are classified as “National Land”.

70. Prior to self-government, the Territory was governed by the Commonwealth. In addition to Commonwealth statutes which applied in the Territory, there was power under s 12 of the Seat of Government (Administration) Act 1910 (Cth) (Administration Act) for the Governor General to make ordinances that applied in the Territory. Before self-government, s 12(1) of the Administration Act provided:

The Governor-General may make Ordinances for the peace, order and good government of the Territory.

71. Such Ordinances were subject to disallowance by the Parliament: s 12(2).

72.   In 1988, self-government for the Territory was achieved by the following package of Commonwealth legislation:

(a)Australian Capital Territory (Self-Government) Act 1988 (Cth) (SG Act);

(b)Australian Capital Territory (Planning and Land Management) Act 1988 (Cth) (PLM Act);

(c)A.C.T. Self-Government (Consequential Provisions) Act 1988 (Cth) (Consequential Provisions Act); and

(d)Australian Capital Territory (Self-Government) Regulations 1989 (Cth) (SG Regulations)

73. Section 22(1) of the SG Act provides:

Subject to this Part and Part VA, the Assembly has power to make laws for the peace, order and good government of the Territory.

74. This legislative power was made subject to Parts IV and VA of the SG Act. Particular topics were excluded from legislative power: s 23.

75. Importantly, s 27 of the SG Act provided:

Except as provided by the regulations, an enactment does not bind the Crown in right of the Commonwealth.

76. Pursuant to r 3B of the SG Regulations, the only Territory enactments that are binding on the Commonwealth are those listed in the Schedule to the SG Regulations, and only when those listed enactments are expressed to be binding on the Crown or the Commonwealth.

77. A provision of an enactment of the Legislative Assembly has no effect to the extent it is inconsistent with a Commonwealth law: s 28 SG Act.

78. Pursuant to s 34 of the SG Act, laws applying in the Territory as Imperial Acts, Acts of the NSW Parliament, particular Commonwealth Acts (listed in Schedule 2 of the SG Act) and certain Ordinances were converted into Territory enactments, such that they were able to be repealed or amended by the Legislative Assembly.

79. Section 34(5) of the SG Act preserved as Commonwealth laws the Ordinances listed in Schedule 5. Relevantly this included the National Land Ordinance 1989 (NLO).

80. The concept of National Land is a significant element of the self-government legislation. It is established by the PLM Act.

27 National Land

(1)The Minister may, by notice published in the Commonwealth Gazette declare specified areas of land in the Territory to be National Land.

(2)The Minister shall not declare an area to be National Land unless the land is, or is intended to be, used by or on behalf of the Commonwealth.

(3)If an Act vests the management (however described) of specified land in the Territory in a person or body, the land is National Land for the purposes of this Act.

(4)    Subsection (3) does not apply to the vesting of an estate in land.

28 Territory Land

At any time when any land in the Territory is not National Land, that land is Territory Land for the purposes of this Act.

29 Administration of Territory Land and the taking of water on National Land

(1) The Executive, on behalf of the Commonwealth:

(a)has responsibility for the management of Territory Land; and (b) subject to section 9 of the Seat of Government (Administration) Act 1910, may grant, dispose of, acquire, hold and administer estates in Territory Land; and

(c)       has responsibility for:

(i) the management of the taking of water on National Land; and

(ii) the regulation of the taking of water on National Land.(2) The Executive shall perform its functions under subsection (1) subject to enactment and in accordance with the principles: (a)      that new estates in Territory Land shall be granted only in accordance with procedures that are notified to the public; and

(b)that appropriate classes of decisions relating to the administration of estates in Territory Land shall be subject to just and timely review without unnecessary formality.

(3) The term of an estate in Territory Land granted on or after Self-Government Day shall not exceed 99 years or such longer period as is prescribed, but the estate may be renewed.

(4) The Authority may intervene in any proceedings for review of a decision relating to the administration of an estate in Territory Land.

30 Territory liable as manager

(1) Where, apart from this section, the Commonwealth would be liable in respect of an act done or omitted to be done by the Territory in the performance of its functions under section 29, the liability is vested in the Territory and ceases to be a liability of the Commonwealth.

(2) Where:

(a)a liability arises in respect of:

(i) land at a time when it is Territory Land; or

(ii) the management of the taking of water on National Land; or

(iii) the regulation of the taking of water on National Land; and

(b)the liability arises from a covenant given by the Commonwealth at any time in its capacity as owner of the land;

the liability is vested in the Territory and ceases to be a liability of the Commonwealth.

81.   The effect of the self-government legislation resulted in the creation of two legally distinct “zones” within the Territory, namely:

(a)National Land, under the control of the Commonwealth; and

(b)Territory Land, under the control of the ACT Government.

82. Under s 2 of the NLO, this Ordinance commenced on the date of commencement of s 22 of the SG Act. That was the same time as legislative power was granted to the Legislative Assembly, named “Self-Government Day”.

83.   Under s 5(1) of the NLO, particular Territory laws described as “relevant pre-Self-Government laws” took effect by the force of the NLO as Commonwealth laws applying to National Land from Self-Government Day. 

84.   Under s 4 NLO the relevant Commonwealth Minister manages National Land on behalf of the Commonwealth. The Minister also has delegated legislative power to make regulations: s 7 NLO.

85. The Consequential Provisions Act also amended the Administration Act so that pursuant to s 12(1)(d) of the Administration Act the Governor-General could make Ordinances for “the peace, order and good government of the Territory with respect to … National Land”.

86. The defendant submitted that pursuant to this regime the ACT Legislative Assembly does not possess power to make laws in respect of National Land. Rather, it submitted that this power had been retained by the Commonwealth. It then submitted that the SOP Act is a law with respect to National Land and hence the application of the SOP Act to National Land was beyond the powers of the Assembly. It did not submit that National Land was generally immune from Territory laws, but only Territory enactments “with the character of laws that are ‘with respect to’ National Land, because these are matters reserved to the Commonwealth under the Territory’s legislative arrangements”.

87.   If the defendant’s submissions on this point were accepted, then in order to determine whether an Act of the Legislative Assembly could apply to National Land it would be necessary to undertake a characterisation exercise in order to determine whether it was a law “with respect to” National Land.  This issue was considered in Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89 at 102, 120, 131, 136-137 (Worthing).  In that case the question was whether the Scaffolding and Lifts Act 1912 (NSW) was a law “with respect to” a Commonwealth place within s 52(i). The Court held it was. Although the reasons of the individual judges forming the majority varied slightly, the reasoning was consistent with a law regulating conduct or transactions upon such land being a law “with respect to” that land even if the law applied generally within the State in which the place was located. Having regard to the reasons of the majority judges in Worthing, it is clear that the defendant’s argument would involve a significant sterilisation of the legislative power of the Territory.  There is no doubt, following the reasoning in Worthing, that the SOP Act would be a law “with respect to” National Land.

88.   The false premise which underlies this limb of the defendant’s argument is that the Commonwealth, by maintaining a power to legislate with respect to National Land, qualified the powers of the Legislative Assembly.  The reasons that the premise is false are as follows:

(a)The starting point is that s 22 of the SG Act involves a grant of plenary power.

(b)The plenary power in s 22 is qualified by express restrictions on the Territory’s Legislative Assembly power in ss 22 and 23, none of which are relevant here.

(c)Section 27 is a significant qualification of the powers of the Legislative Assembly. The fact that the Commonwealth is not bound by Territory laws (both generally and in areas that happen to be National Land) protects the Commonwealth from Territory laws. It would affect the operation of the SOP Act in relation to construction contracts on National Land (as well as elsewhere) to which the Commonwealth was a party. However, the restriction does not have any relevance in the present case because the Commonwealth was not involved in the contract and its only involvement was, I assume, as lessor of the land and holder of the radical title to the land.

(d)Section 28 is also a substantial restriction on the powers of the Legislative Assembly as it qualifies the powers of the Assembly so that a Territory enactment is ineffective where:

(i)it is directly inconsistent with a Commonwealth law (as defined); or

(ii)it seeks to govern some aspect of a particular relation or thing when a Commonwealth law is a complete statement of the law governing that particular relation or thing, because in those circumstances the Territory law cannot operate concurrently with the federal law to any extent: Commonwealth v Australian Capital Territory (2013) 250 CLR 441 at [52].

(e)However, s 28 has no application in the present case because there is no inconsistency between either s 12(1)(d) of the Administration Act or the NLO and the SOP Act. In particular, the power to make ordinances “with respect to: ... National Land as defined by the [PLM Act]” is, having regard to the terms of Part V of the PLM Act, clearly not intended to be a “complete statement of the law” relating to National Land.  The same can be said of the NLO having regard to its terms and the subject matters with which it deals.  

(f)There is nothing otherwise arising from the Administration Act or the PLM Act which would give rise to an implication that the retention in the Administration Act of a power to make laws with respect to National Land amounted to a qualification on the powers given under s 22. There is no inconsistency with Territory laws that exists by reason of a power in the Administration Act to make laws on a particular subject matter. Inconsistencies might arise as a result of the exercise of that power, but as pointed out above, the terms of the NLO do not create an inconsistency affecting the applicability of the SOP Act to the parties in this case.

89.   As a consequence I do not accept the defendant’s first argument.

Second argument - exclusive powers in the seat of government

90. Section 52(i) of the Commonwealth Constitution provides:

The Parliament shall, subject to this Constitution, have exclusive power to make laws for the peace, order, and good government of the Commonwealth with respect to…the seat of government of the Commonwealth, and all places acquired by the Commonwealth for public purposes.

91. The defendant contended that the relevant land, the High Commission, lies within the “seat of government” within the meaning of s 52(i) and that because the power of Parliament is “exclusive”, it is exclusive of the legislative power of the Legislative Assembly.

92. What and where is the seat of government is a question which has been able to be largely avoided for 115 years. Section 125 of the Constitution provided that the seat of government of the Commonwealth “shall be determined by the Parliament and shall be within Territory which shall have been granted to all required by the Commonwealth”. While there were early indications that s 52(i) might be the source of legislative power for the government of the ACT, containing as it does, the seat of government (Federal Capital Commission v Laristan Building and Investment Co Pty Ltd (1929) 42 CLR 582 (Laristan)) that view appeared to be rejected in Spratt v Hermes (1965) 114 CLR 226 (Spratt) and was finally disposed of in Re Governor, Goulburn Correctional Centre; Ex parteEastman (1999) 200 CLR 322 at 333-334, 335,-336, 353, 365-370. Because of the acceptance of s 122 as the source, or principal source, of legislative power for the government of the Territory, and because that power is a plenary one, it has not been necessary for much attention to be paid to s 52(i) or to the precise location of the seat of government. The issue received some attention in Worthing because of the need to take account of the meaning of s 52(i) in relation to the seat of government when determining its operation in relation to places acquired by the Commonwealth in the States.

93.   The Seat of Government Act 1908 (Cth), the long title of which is “An Act to Determine the Seat of Government of the Commonwealth” provides in s 3 “[i]t is hereby determined that the Seat of Government of the Commonwealth shall be in the district of Yass-Canberra in the State of New South Wales.” It repealed the earlier Seat of Government Act 1904 (Cth) which determined that the seat of government was “within seventeen miles of Dalgety, in the State of New South Wales”. In his article “Where is the seat of government?” (1951) 25 ALJ 532, JQ Ewens identified that, following that Act, the selection of the actual site of the seat of government within the Territory was the subject of the executive action and not fixed precisely. In Spratt Taylor J (at 262) noted that although the Seat of Government Act 1908 (Cth) provided that the seat of government should be in the “district of Yass-Canberra” and the Seat of Government Acceptance Act 1909 (Cth) provided that the seat of government should be in the surrendered territory, the Parliament had not thought necessary to attempt to define its precise geographical limits.

94.   Differing views were expressed as to whether it was a place that might be identified by metes and bounds: Worthing at 97 (Barwick CJ), 114 (Menzies J), 124 (Windeyer J). In Svikartv Stewart (1994) 181 CLR 548 (Svikart) the plurality judgment recorded at [93]:

...there is now a Territory, the Australian Capital Territory, within which the seat of government has been located, although its limits have not been precisely determined by the Parliament. The seat of government is, however, not co-extensive with the Territory in which it is located nor, under s 125, is it intended to be.

95. The defendant submitted that it was not necessary for this case to fully define the scope of the seat of government for the purposes of s 52(i), but only to determine that the site of the High Commission was within it.

96. The defendant did not submit that the seat of government was necessarily coextensive with National Land. The defendant did submit that the National Capital Plan, a Commonwealth legislative instrument enacted and taking effect pursuant the PLM Act, was significant in determining the location of the seat of government. It pointed to the Introduction to the Plan which states:

Canberra's function as the Seat of Government and as the nation's capital have been the basis for the establishment of Australia's principal governmental, judicial, cultural, scientific, educational, and military institutions. It has resulted in foreign governments establishing legations and diplomatic residences, and in an increasing number of national organisations and institutions seeking a presence in the capital.

97.   The High Commission lies within the Central National Area of the Plan, in the zone designated for "Diplomatic Missions". The defendant submitted that diplomatic relations is a core function of any national government, ordinarily carried out in the seat of government.  As a consequence it submitted that the Court should find that the High Commission for Pakistan lies within the "seat of government" within the meaning of the Constitution.

98.   In my view the National Capital Plan is not a reliable basis upon which to identify the scope of the seat of government.  It does not purport to identify the location of the seat of government within the Territory and it is a document approved by a Commonwealth minister (PLM Act ss 19-21), rather than being an Act of the Parliament.  At best it is evidence of the planning controls which identify particular areas of significant for significant parts of the Commonwealth government. 

99. In my view, it is not necessary to finally determine this issue in order to resolve this case. That is because, for the reasons that follow, even if the High Commission formed part of the seat of government, that would not prevent the SOP Act operating in relation to the building contract for its construction.

100.    The defendant made the following submissions:

(a)The seat of government occupies a central position of importance within the federation and in the Constitution itself. 

(b)The seat of the High Court is legislatively required to be “at the seat of Government”: s 14 of the High Court of Australia Act 1979 (Cth).

(c)There is implied in the Constitution a freedom of access to the seat of government.

(d)It is wholly consistent with the special position of the Commonwealth within the seat of government, in the heart of the federation, that the legislative power of the Parliament be exclusive of the Territory.

(e)The decision in Svikart is distinguishable because the seat of government was required to be “within Territory” granted to or acquired by the Commonwealth and hence the reference to “exclusive” in s 52(i) should be interpreted as exclusive of any government which the Commonwealth Parliament might subsequently establish in the Territory.

(f)An important textual consideration is that “exclusive” in reference to the seat of government in s 52(i) necessarily refers to the government of the Territory, because under s 125 the seat of government “shall be within territory which shall have been granted to or acquired by the Commonwealth”. The reasoning in Svikart is accordingly distinguishable, as is the position of the Northern Territory.

(g)Applying Worthing in the manner discussed above produces the result that it is beyond the legislative power of the ACT Legislative Assembly to pass laws having operation with respect to land held by the Commonwealth within the seat of government, including in this case the High Commission.

101.    I note, that the submissions put at (e) and (f) above appear to pick up on the reasoning of Toohey and Gaudron JJ both of whom dissented in Svikart.

102. In my view this aspect of the defendant’s argument may be resolved by determining whether the word “exclusive” in s 52(i) means exclusive of the States or exclusive both of the States and a self-governing legislature of the Territory established by the Commonwealth. The defendant submitted that this was an issue that was left open by the decision of the High Court in Svikart.  However, in my view, that case determines that the power is exclusive of State legislatures but not of the Territory legislature.

103.    Svikart related to an air force base in Darwin. The question was whether Northern Territory laws were excluded by reason of s 52(i) in the same way that the Court in Worthing found them to be excluded from an air force base in New South Wales. The judgment of a majority of the members of the Court (Mason CJ, Deane, Dawson and McHugh JJ) found that, having regard to the legislative history of the provision, the reference to the exclusive power of the Parliament was to a “legislative power which is exclusive of the legislative power of the States”. It was significant that such territories would have already been subject to the “exclusive jurisdiction of the Commonwealth” as a result of s 111 and governed as the Commonwealth saw fit under s 122. There was therefore no necessity to make such places exclusively subject to the legislative power of the Commonwealth because that had already been achieved by the other provisions. There was, at the very least, some tension between that conclusion and the conclusion reached in Capital Duplicators Pty Ltd v Australian Capital Territory (1992) 177 CLR 248 (Capital Duplicators) that the use of the word “exclusive” in s 90 meant that s 122 could not authorise the Parliament to confer powers to impose duties of customs and excise or grant bounties of the production or export of goods. Their Honours (three of whom had dissented in Capital Duplicators) rationalised the difference in the operation of the term “exclusive” having regard to the fact that s 90 was not a source of legislative power and the fact that compelled the conclusion reached by the majority in that case was the nature of the powers and the evident intention of other sections of the Constitution to create a type of internal free-trade area embracing the geographical territory of the Commonwealth, rather than any considerations arising from s 52. 

104. Brennan J was the fifth member of the majority and wrote a separate judgment. His Honour did not need to finally determine the meaning of “exclusive” in s 52(i). Instead his Honour was able to determine the case based on the meaning of “places”. So far as the meaning of “exclusive” was concerned, his Honour recognised the historical fact that when the Constitution came into force the only other legislative power that might have operated concurrently was that of the State, suggesting that it was State legislative power that was excluded by s 52(i). However, he also said that there was no apparent policy reason “why matters should be outside State legislative power but within the power of a Territory legislature.”

105. In relation to the meaning of “places”, Brennan J found that “places” which had been created pursuant to s 111 of the Constitution could not be subject to the legislative power of a State because that section made them “subject to the exclusive jurisdiction of the Commonwealth”. He therefore found that the word “places” in s 52(i) should be interpreted as “places” outside a s 111 territory. That reasoning distinguished between s 111 territories and the Australian Capital Territory which his Honour found was granted to or acquired by the Commonwealth pursuant to s 125.

106. Toohey J, one of the two dissenting judges, reasoned (at 572) that, because the seat of government was to be within territory vested in the Commonwealth under s 125, s 52(i), in so far as it refers to the seat of government, must be taken as referring to a place within a territory. Therefore his Honour reasoned that in a paragraph which dealt both with the seat of government and places acquired by the Commonwealth there was no good reason for confining places to places in a State. Gaudron J, the other dissenting judge, also adopted that reasoning (at 578). Her Honour relied, inter alia, on the decision reached by the majority in Capital Duplicators as to the meaning of “exclusive”.

107.    In the course of both Brennan and Toohey JJ’s reasoning, reference was made to the decision of the Court in Paterson v O’Brien (1978) 138 CLR 276 at 280 (Paterson) where the Court referred to the Australian Capital Territory and that “s 125 contemplated that such a territory, vested in the Commonwealth by surrender or acquisition, should be geographically in New South Wales”. His Honour drew attention to the distinction between “surrender” under s 111 and the mode of acquisition contemplated by s 125. Brennan J said:

… but s 125 prescribes “granted to or acquired by the Commonwealth” as the mode of creating the Australian Capital Territory. The power of surrender of territory was vested by s 111 only in the Parliament of the surrendering State whereas s 125 contemplated compulsory acquisition of the Australian Capital Territory by the Commonwealth.

108. His Honour then referred to a letter from Bernard Sugerman, the then recently retired president of the New South Wales Court of Appeal to the Australian Law Journal in 1973: Sugerman, “The Seat of Government of the Commonwealth” (1973) 47 ALJ 344.

109. These matters were put forward in support of his Honour’s reasoning that so far as the seat of government was concerned, s 52(i) was designed to exclude New South Wales, that is, State laws.

110.    Toohey J also referred to the passage from Paterson in support of the proposition that, because of its terms, s 125 must be taken to be referring to “a territory” and hence if the seat of government component of s 52(i) necessarily involved the laws of the Parliament being “exclusive” in a territory, there was no good reason for limiting the “places” referred to in the other limb of s 52(i) to places in a State. I note that the effect of this contention would be, consistently with the defendants argument, that s 52(i) prevented laws of the Legislative Assembly from applying in the seat of government wherever that might be within the Australian Capital Territory.

111. Section 125 provides:

The seat of Government of the Commonwealth shall be determined by the Parliament, and shall be within territory which shall have been granted to or acquired by the Commonwealth, and shall be vested in and belong to the Commonwealth, and shall be in the State of New South Wales, and be distant not less than one hundred miles from Sydney.

112. The letter from Mr Sugarman, referred to in the judgment of Brennan J, identifies that if the reference to “territory” was used in s 125 as “merely a geographical term denoting a portion of the land surface of New South Wales” then there is no need to establish “a” territory under ss 111 and 122 in order to establish the seat of government. If that was the case then, consistently with the language of s 125, which refers to the seat of government being “in New South Wales”, the seat of government would have a status consistent with the other Commonwealth “places” referred to in s 52(i). The grammatical rationale for such an approach to the terms of s 125 is well articulated in the entry on “Seat of court” in Tony Blackshield, Michael Coper and George Williams (eds), The Oxford Companion to the High Court of Australia (Oxford University Press, 2001).

113. The interpretation of s 125 is significant because if s 125 did not compel (as oppose to permit) the establishment of a s 111 territory to accommodate the seat of government, it is not possible to rely upon the proposition that s 125 necessarily involved a s 111 territory and hence that the word “exclusive” necessarily contemplated exclusion of territory laws. That would tend to undermine the argument put forward by Toohey and Gaudron JJ which relied upon s 125 requiring the establishment of the seat of government in such a territory. It would also undermine the argument of the defendant in this case which is based upon the proposition that s 52(i) excludes laws of the Legislative Assembly from operating in the seat of government.

114. Quick and Garran’s commentary in relation to s 125 certainly recognise that its operation gave rise to “several difficult questions of interpretation”: The Annotated Constitution of the Australian Commonwealth (Legal Books, 1976) at 979. They noted that “the obscurity of the section makes it impossible, in the absence of judicial interpretation, to answer them with absolute confidence.” While recognising the uncertainty of the provision, the authors (at 181) contended that acquisition must be by surrender and acceptance under s 111 of the Constitution. 

115.    In 1904 the Parliament had passed the Seat of Government Act 1904 (Cth) which identified Dalgety as the seat of government. However, on 19 January 1905, giving advice as Secretary of the Attorney General’s Department, Robert Garran wrote:

There is nothing in the Constitution to suggest any distinction, as to area, between the “seat of government” and the “territory”.  The provision that the seat of Government shall be “within” territory granted to or acquired by the Commonwealth does not mean that a particular portion of the territory used to be the seat of Government, and that the rest of the territory is not.  The “seat of Government” is the Federal capital from the point of view of locality; the territory is the same Federal capital, looked at from the point of view of jurisdiction.  The locality of the Federal capital is to be within the exclusive jurisdiction of the Commonwealth.  This is borne out by section 52, which gives the Federal Parliament exclusive power to make laws with respect to the “seat of government of the Commonwealth”. 

(Attorney-General’s Department, Opinions of Attorneys-General of the Commonwealth of Australia, vol 1:1901-14  at 246 (Opinions))

116. He also considered the method of acquisition. He considered that the reference to “territory” in s 125 indicated that what was being acquired was territorial rights, namely, rights of jurisdiction or sovereignty over the area not necessarily proprietary rights in the estates held by individuals in the land comprised within that area. It is apparent that his opinion was that s 125 in conjunction with the incidental power in s 51(xxxix) provided the power to acquire the territory. No reference at all is made in the advice to the “surrender” and “acceptance” language used in s 111 of the Constitution or to s 111 itself.

117.    On 14 December 1905 an appropriation bill was introduced so as to permit the more precise determination of the seat of government of the Commonwealth in the neighbourhood of Dalgety.  Clause 3 of the Bill provided:

The minister is empowered to accept, on behalf of the Commonwealth for the purposes of the seat of government, a grand by the state of New South Wales to the Commonwealth of the territory, described in schedule A to this Act, to the full extent to which the territory can be granted by the State within the meaning of section 125 of the Constitution.

118.  However notwithstanding a debate over three days on the second reading of the bill the Prime Minister, Alfred Deakin, indicated that he was prepared to compromise and to “listen to anything that may be said on behalf of the other sites”: see Frederick Watson, History of Canberra (Federal Capital Press of Australia, 1934) at 115-116. On 21 December 1905 Parliament was prorogued and the bill lapsed. The significant point to note about the drafting of the bill is that it maintained, consistently with the words of s 125, the formula of “granting” territory to the Commonwealth. It made no reference to, and was not consistent with, the language of surrender in s 111. Following the exhaustive ballots in the House of Representatives and Senate in October and November 1908 that selected Canberra as the site of the seat of government, the Seat of Government Act 1908 was passed.  That Act repealed the 1904 Act.  Sections 3 and 4 provided:

3.  It is hereby determined that the Seat of Government of the Commonwealth shall be in the district of Yass-Canberra in the state of New South Wales

4.  The territory to be granted to or acquired by the Commonwealth for the Seed of Government shall contain an area not less than 900 square miles, and have access to the sea.

119. The notable point is that s 4 repeated the “granted to or acquired by” formula consistent with the operation of s 125.

120.    Shortly after Alfred Deakin returned to power in June 1909, Patrick Glynn, the Attorney General, gave advice to the Minister for Home Affairs (George Fuller) following the agreement between the Minister for Home Affairs and the Premier of New South Wales as to the area to be granted: Opinions at 429-430. It was clear that what was contemplated was surrender of the territory and acceptance by the Commonwealth pursuant to s 111 of the Constitution. 

121. In July 1909 Mr Deakin requested the surrender of territory under s 111 of the Constitution, suggesting that the territory then become subject to the exclusive jurisdiction of the Commonwealth: Watson, History of Canberra at 132. The s 111 approach was repeated in advice given by Mr Glynn on 10 August 1909 which recorded that the proposal that the New South Wales legislature pass an Act to surrender the territory indicated by the government of the Commonwealth was free from difficulty”: Opinions at 438.  There then followed conferences that led to the agreement dated 18 October 1909 which formed the schedule to the Seat of Government Acceptance Act 1909.

122.    The Seat of Government Acceptance Act 1909 was assented to on 13 December 1909. The reliance upon s 111 as opposed to s 125 itself in conjunction with the incidental power is made clear by the terms of the Act. The long title referred to “the acceptance of the Territory surrendered by the State”. The preamble made express reference to “surrender to and acceptance by” the Commonwealth of the territory then part of the State. That language (“surrender to and acceptance by”) mirrors the language of s 111 and is distinct from the language of s 125 (“granted to or acquired by”). The agreement which was ratified by s 3 referred to the State “surrendering” and the Commonwealth “accepting” the territory referred to in the agreement: cl 1. Section 4 of the Act provided:

It is hereby declared and determined that the Seat of Government shall be in the Territory described in the Second Schedule to this Act. 

123. Section 5(1) referred to a proclamation accepting the territory surrendered by the State “as a Territory of the Commonwealth”. Section 5(2) bridged the gap between surrender and acceptance under s 111 and the terms of s 125 which referred to it being “granted to or acquired by” by providing:

The effect of the Proclamation shall be that, on and from the proclaimed day, the Territory shall be accepted by the Commonwealth and be acquired by the Commonwealth for the Seat of Government.

[Emphasis added.]

124. The effect of this exercise meant that the reference in s 125 to the seat of government being “in the State of New South Wales” would have to be read as a past historical fact as to its location rather than a statement of continuing truth as it might have been if the seat of government had remained the equivalent of a Commonwealth place.

125. Had the seat of government been granted or acquired under s 125 alone then the operation of s 52(i) would have been clearer. It would have served the function of empowering the making of all forms of legislation in the territory. Thus, the decision in Laristan, which proceeded on the basis that s 52(i) empowered the making of laws relating to curbing and guttering on Northbourne Avenue, would clearly have been correct. It would also have been clearer that judicial power in the Territory was within the central conception of ch III of the Constitution being a power immediately related to the seat of government and not reliant upon the “disparate and non-federal power” in section 122. It would have been much easier in those circumstances for the Court to have, in Spratt, accepted that the tenure requirements of s 72 should apply to a magistrate exercising judicial power in the territory.  It would have been possible to achieve that result without wreaking havoc upon the arrangements been in place for the exercise of judicial power in territories such as Papua New Guinea the different circumstances of which were so recently in the mind of the members of the Court as a result of having made the decision in Teori Tau v Commonwealth (1969) 119 CLR 564.

126. However, because the Territory was surrendered and accepted under s 111 rather than granted or acquired under s 125, legislation relating to the seat of government has been empowered by s 122 of the Constitution. Thus, legislation for the seat of government has been empowered by the same plenary power used to govern territories in all states of development including Antarctica, Papua New Guinea and Heard Island. This has resulted in the tension in the decisions of the High Court between the early unconstrained flexibility afforded by s 122 to accommodate the circumstances of the territories as then known to the members of the Court and the more recent desire, consistent with the changing factual circumstances of Australian territories, to integrate s 122 into the Constitution by making it subject to some of the constraints which operate outside territories. The tension is most readily apparent in the Australian Capital Territory an internal territory undoubtedly part of “the Commonwealth” which constitutionally is the centre of the government of the Commonwealth and yet a territory governed under s 122.

127.    The territory cases have produced “no coherent body of doctrine”: Spratt at 265 but are gradually evolving towards certainty if not elegance. So far as is 52(i) is concerned its operation has been rationalised in the light of the historical fact that the Territory was surrendered under s 111 by confining its operation to “political or constitutional aspects of the seat of government rather than with the government of the territory in which it is found”: Paliflex Pty Ltd v Chief Commissioner of State Revenue (NSW) (2003) 219 CLR 325 at [40].

128.    Having detoured into history it is necessary to return to the decisions of Brennan and Toohey JJ in Svikart. So far as the reasons of Brennan J are concerned, I would respectfully suggest that his Honour may be incorrect as to the manner in which the creation of the Australian Capital Territory was achieved. While it might have been achieved using only the powers implied by s 125, the Territory was validly created using the alternative mechanism available under s 111 in conjunction with s 125. However, his Honour’s reasons are correct insofar as they, consistent with the terms of s 125, rely upon the need for s 52(i) to make it clear that the power of the Parliament was exclusive of the power of the legislature of New South Wales. That the Territory was created by an alternative means does not undermine is Honour’s argument so long as it is recognised that grant or acquisition pursuant to the terms of s 125 itself was an available option because that is sufficient to explain the necessity for the laws of the Parliament becoming “exclusive.”

129. Similarly, Justice Toohey placed significance upon the fact that s 52(i) “must be taken as referring to a place in a territory” so as to interpret the provision as applying to places in all territories. That reasoning presumes that “territory” in s 125 means s 111 territory and that s 125 in combination with the incidental power would not have permitted the grant to or acquisition by the Commonwealth of “territory” for the seat of government. The terms of s 125 do not compel the conclusion necessary to support that reasoning even if, as an historical fact, the seat of government has been established within a s 111 territory.

130.    Finally it is necessary to return to the defendant’s argument.

131.    First, the seat of Government has not been “determined by the Parliament” with any more specificity than provided in reverse Seat of Government Act 1908.

132. Second, because of the manner in which the Australian Capital Territory was established, it has been governed as a s 111 territory pursuant to s 122. It has not been governed pursuant to s 52(i). The power in s 122 permits the forms of government to adapt to the various stages of development of territories including the grant of self-government. There is nothing that precludes the granting of powers to the Legislative Assembly that operate throughout the Territory.

133. Third, even if s 52(i) had an operation in relation to the seat of government, the interpretation of the word “exclusive” that commanded a majority of the Court in Svikart was that it was exclusive of the legislative power of the States (in particular New South Wales) and not exclusive of a self-governing territory established by a law of the Commonwealth Parliament.

134. For these reasons SOP Act is not invalid to the extent it applies to construction work on the High Commission.

Conclusion

135. The defendant has failed in its attempt to avoid the operation of the SOP Act in the circumstances of this case. As a consequence, the plaintiff is entitled to recover the unpaid portion of the claimed amount plus interest pursuant to the Court Procedures Rules 2006.

136.    The plaintiff will need to bring in short minutes of the orders which are necessary to give effect to this conclusion.  Those will need to accommodate any payment arising from the certificate dated 30 September 2015 as well as the accrual of pre-judgment interest.

Orders

137.    The orders of the Court are:

1.     The proceedings are listed on 17 August 2016 at 9.30am.   

2.     The plaintiff is to provide to the defendant and my associate no later than 4.00pm on 16 August 2016 the terms of orders which it will submit should be made to give effect to these reasons.

I certify that the preceding one hundred and thirty-seven [137] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Associate Justice Mossop.

Associate:

Date: 12 August 2016