Dickson Developments Precinct 1 Pty Ltd v Core Building Group Pty Ltd - [2023] FCA 1473

FEDERAL COURT OF AUSTRALIA
Dickson Developments Precinct 1 Pty Ltd v Core Building Group Pty Ltd [2023] FCA 1473

File number(s): ACD 64 of 2023

Judgment of: JACKMAN J

Date of judgment: 27 November 2023

Catchwords:
ADMINISTRATIVE LAW – application for judicial review of adjudication determination in relation to construction contract – whether there was a reference date for the payment claim, being a jurisdictional criterion for the making of the determination – whether the adjudicator’s decision in relation to liquidated damages was so illogical or irrational as to constitute jurisdictional error – whether the determination was affected by jurisdictional error by reason of taking an irrelevant consideration into account, namely unsolicited submissions – whether there was jurisdictional error in the adjudicator’s decision to release retention monies – application dismissed

STATUTORY INTERPRETATION – construction of “properly made” in s 24(2)(e) of the Building and Construction Industry (Security of Payments) Act 2009 (ACT) (the Act) – construction of s 15(3)(b) of the Act – whether any distinction between the use of “is” in s 11 of the Act and “is to be” in cognate legislation

Legislation:
Constitution ss 76, 77

Judiciary Act1903 (Cth) s 39B

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 9

Building and Construction Industry Security of Payment Act 1999 (NSW) ss 8, 9, 13, 22

Building and Construction Industry (Security of Payments) Act 2009 (ACT) ss 6, 10, 11, 15, 19, 20, 22, 23, 24, 29, 43

Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT) s 4

Supreme Court Act 1933 (ACT) ss 20, 34B

Cases cited:
Ceerose Pty Ltd v A-Civil Aust Pty Ltd (No 2) [2023] NSWSC 345

Crosby v Kelly [2012] FCAFC 96; (2012) 203 FCR 451

Demex Pty Ltd v McNab Building Services Pty Ltd [2023] NSWCA 261

Downer Construction (Australia) Pty Ltd v Energy Australia [2007] NSWCA 49; (2007) 69 NSWLR 72

Iskra v MMIR Pty Limited [2019] NSWCA 126

John Holland Pty Ltd v Roads & Traffic Authority of New South Wales [2007] NSWCA 19

Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2011] QCA 22; [2012] 1 Qd R 525

Patterson Building Group Pty Ltd v Holroyd City Council [2013] NSWSC 1484

Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; (2018) 264 CLR 1

Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd [2016] HCA 52; (2016) 260 CLR 340

Division: General Division

Registry: Australian Capital Territory

National Practice Area: Administrative and Constitutional Law and Human Rights

Number of paragraphs: 57

Date of hearing: 20 November 2023

Counsel for the Applicant: Mr P Walker SC and Mr B Buckland

Solicitor for the Applicant: HFW Australia

Counsel for the First Respondent: Mr D L Cook SC and Mr D Weinberger

Solicitor for the First Respondent: Crisp Law

Counsel for the Second Respondent: The Second Respondent entered a submitting appearance

ORDERS

ACD 64 of 2023

BETWEEN:
DICKSON DEVELOPMENTS PRECINCT 1 PTY LTD

Applicant

AND:
CORE…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] FCA 1473
Decision Date: 27 November 2023

CaseChat Overview and Summary

The case of Dickson Developments Precinct 1 Pty Ltd v Core Building Group Pty Ltd concerned a judicial review of an adjudication determination in relation to a construction contract. The primary issues for determination were whether the adjudication process had a reference date for the payment claim, whether the adjudicator's decision on liquidated damages was illogical or irrational, whether the determination was affected by taking into account unsolicited submissions, and whether there was jurisdictional error in the decision to release retention monies. The dispute centred around the interpretation of certain provisions of the Building and Construction Industry (Security of Payments) Act 2009 (ACT) and the proper application of statutory provisions.

The court considered the jurisdictional nature of the adjudicator's role under the Act, particularly focusing on the distinction between the entitlement to a progress payment and the ascertainment of the exact amount of that payment. The court held that the ascertainment of the amount of a progress payment is not a precondition to the exercise of the adjudicator's jurisdiction. Furthermore, the court found that the application of s 15(3)(b) of the Act was a matter for the adjudicator to determine, not the court. The court also rejected the argument that the adjudicator's decision on liquidated damages was irrational or illogical, and it found no jurisdictional error in the adjudicator's consideration of unsolicited submissions or the release of retention monies.

The court concluded that the adjudicator's determination was within their jurisdiction and that the application for judicial review should be dismissed. The court ordered that the costs of the proceedings be paid by the applicant and that the money held by the court be released to the respondent, with the respondent being released from its undertaking not to enforce the determination.

The court's final orders were that the originating application be dismissed, the applicant pay the first respondent’s costs, and the money paid into court by the applicant be released to the respondent forthwith. Additionally, the respondent was released from its undertaking not to take steps to enforce the determination. These orders were made in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The originating application be dismissed.

2. The applicant pay the first respondent’s costs of the proceedings.

3. In relation to the orders made on 3 November 2023:

(a) the amount of money held by the Court as a result of the applicant’s payment into Court pursuant to paragraph 1 of those orders be released to the first respondent forthwith; and

(b) the first respondent be released from its undertaking set out in paragraph 2 of those orders.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

For present purposes, the importance of that reasoning is the distinction drawn between a progress payment to which a person is entitled, and the amount of the progress payment to which that person is entitled. As the High Court said at [59], in the event of a dispute between a claimant and a respondent, the ascertainment of the amount, if any, of the progress payment to be recovered is committed to the jurisdiction of an adjudicator to determine under s 22 of the NSW Legislation (corresponding to s 24 of the Act). That is, the ascertainment of the amount in question is not a precondition to the exercise of jurisdiction by the adjudicator, nor would it be appropriate to use the label “jurisdictional fact” to describe any of the elements of the exercise of ascertaining the amount. Section 15(3) is concerned with what may be included in the claimed amount. The first element, set out in para (a) of that provision, is any amount that the respondent is liable to pay the claimant under s 29(3), being a claim for loss or expense incurred in exercising the right to suspend carrying out construction work or supplying related goods and services. That is plainly a matter for the adjudicator to determine in the event of a dispute. The second element, set out in para (b) of the provision, is any amount that is held under the construction contract by the respondent and that the claimant claims is due for release. That too is a matter for the adjudicator to determine in the event of a dispute, because it concerns the amount to which the claimant is entitled. The issues raised by that paragraph may well include questions of law, but they are not jurisdictional questions to be determined by the Court. Accordingly, it was a matter for the adjudicator to determine the application of s 15(3)(b) in the circumstances of the present case. Accordingly, I reject Dickson’s submission that the elements of s 15(3)(b) are for this Court to determine as a precondition to the exercise of jurisdiction by the Adjudicator.Conclusion Accordingly, in my view, the originating application should be dismissed with costs. Further, the interlocutory regime imposed on 3 November 2023 should be terminated such that the money paid into Court by Dickson should be released forthwith to Core, and Core should be released from its undertaking not to take, or cause to take, any steps to enforce the Determination.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number(s):	ACD 64 of 2023
Judgment of:	JACKMAN J
Date of judgment:	27 November 2023
Catchwords:	ADMINISTRATIVE LAW – application for judicial review of adjudication determination in relation to construction contract – whether there was a reference date for the payment claim, being a jurisdictional criterion for the making of the determination – whether the adjudicator’s decision in relation to liquidated damages was so illogical or irrational as to constitute jurisdictional error – whether the determination was affected by jurisdictional error by reason of taking an irrelevant consideration into account, namely unsolicited submissions – whether there was jurisdictional error in the adjudicator’s decision to release retention monies – application dismissed STATUTORY INTERPRETATION – construction of “properly made” in s 24(2)(e) of the Building and Construction Industry (Security of Payments) Act 2009 (ACT) (the Act) – construction of s 15(3)(b) of the Act – whether any distinction between the use of “is” in s 11 of the Act and “is to be” in cognate legislation
Legislation:	Constitution ss 76, 77 Judiciary Act1903 (Cth) s 39B Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) s 9 Building and Construction Industry Security of Payment Act 1999 (NSW) ss 8, 9, 13, 22 Building and Construction Industry (Security of Payments) Act 2009 (ACT) ss 6, 10, 11, 15, 19, 20, 22, 23, 24, 29, 43 Jurisdiction of Courts (Cross-Vesting) Act 1993 (ACT) s 4 Supreme Court Act 1933 (ACT) ss 20, 34B
Cases cited:	Ceerose Pty Ltd v A-Civil Aust Pty Ltd (No 2) [2023] NSWSC 345 Crosby v Kelly [2012] FCAFC 96; (2012) 203 FCR 451 Demex Pty Ltd v McNab Building Services Pty Ltd [2023] NSWCA 261 Downer Construction (Australia) Pty Ltd v Energy Australia [2007] NSWCA 49; (2007) 69 NSWLR 72 Iskra v MMIR Pty Limited [2019] NSWCA 126 John Holland Pty Ltd v Roads & Traffic Authority of New South Wales [2007] NSWCA 19 Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd [2011] QCA 22; [2012] 1 Qd R 525 Patterson Building Group Pty Ltd v Holroyd City Council [2013] NSWSC 1484 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4; (2018) 264 CLR 1 Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd [2016] HCA 52; (2016) 260 CLR 340
Division:	General Division
Registry:	Australian Capital Territory
National Practice Area:	Administrative and Constitutional Law and Human Rights
Number of paragraphs:	57
Date of hearing:	20 November 2023
Counsel for the Applicant:	Mr P Walker SC and Mr B Buckland
Solicitor for the Applicant:	HFW Australia
Counsel for the First Respondent:	Mr D L Cook SC and Mr D Weinberger
Solicitor for the First Respondent:	Crisp Law
Counsel for the Second Respondent:	The Second Respondent entered a submitting appearance