FIELD DEPLOYMENT SOLUTIONS PTY LTD and SC PROJECTS AUSTRALIA PTY LTD
[2016] WASAT 47
•9 MAY 2016
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: CONSTRUCTION CONTRACTS ACT 2004 (WA)
CITATION: FIELD DEPLOYMENT SOLUTIONS PTY LTD and SC PROJECTS AUSTRALIA PTY LTD [2016] WASAT 47
MEMBER: JUSTICE J C CURTHOYS (PRESIDENT)
HEARD: 9 FEBRUARY 2016
DELIVERED : 9 MAY 2016
FILE NO/S: CC 1836 of 2015
BETWEEN: FIELD DEPLOYMENT SOLUTIONS PTY LTD
Applicant
AND
SC PROJECTS AUSTRALIA PTY LTD
First RespondentSEA TRUCKS AUSTRALIA PTY LTD
Second Respondent
Catchwords:
Construction contract - Review of decision made by an adjudicator - Proper jurisdiction to review a determination under s 31(2) of the Construction Contracts Act 2004 (WA)
Legislation:
Construction Contracts Act 2004 (WA), s 26, s 31(2), s 31(2)(a), s 31(2)(b), s 46(1)
Result:
Application dismissed
Summary of Tribunal's decision:
The Tribunal received an application under s 46(1) of the Construction Contracts Act 2004 (WA) seeking a review of a decision made by an adjudicator in relation to a payment dispute existing under a services agreement between two parties.
Although s 46(1) of the Act provides that a person who is aggrieved by a decision made under s 31(2)(a) may apply to the Tribunal for a review of the decision, the Tribunal concluded that the determination in question in this matter was made under s 31(2)(b) of the Act. As such, The Tribunal does not have the jurisdiction to review a determination under s 31(2)(b) of the Act.
Category: B
Representation:
Counsel:
Applicant: Mr AP Rumsley and Mr PG Clifford
First Respondent : Mr CJ Steel
Second Respondent : Mr CJ Steel
Solicitors:
Applicant: Alan Rumsley Commercial Disputes Lawyer
First Respondent : Jones Day
Second Respondent : Jones Day
Case(s) referred to in decision(s):
Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
On 30 November 2015, Field Deployment Solutions Pty Ltd (FDS) filed an application under s 46(1) of the Construction Contracts Act 2004 (WA) (CC Act) seeking a review of a decision made by an adjudicator, Mr Michael Charteris (the Adjudicator), on 24 November 2015.
The grounds of the application were that:
1.The Reviewable Decision found that the application for adjudication was served within time at [92], then dismissed the application on the basis it was not served within time at [115.2], [126.2], [139.2], [152.2], [165.2], [172] and [183.2].
2.The Reviewable Decision did not apply the relevant provisions of the construction contract, under which the invoice was issued, being clause 14.6 of the General Conditions and clause 6(iv) of the Compensation Schedule.
3.The Reviewable Decision purports to make an order for costs other than the costs of the adjudication as defined in sections 3 and 44 of the Construction Contracts Act 2004.
The legislation
Section 31(2) of the CC Act provides:
An appointed adjudicator must, within the prescribed time or any extension of it made under section 32(3)(a)
(a)dismiss the application without making a determination of its merits if
(i)the contract concerned is not a construction contract;
(ii)the application has not been prepared and served in accordance with section 26;
(iii)an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract makes an order, judgment or other finding about the dispute that is the subject of the application; or
(iv)satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time or any extension of it is not sufficient for any other reason;
(b)otherwise, determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, or to return any security and, if so, determine
(i)the amount to be paid or returned and any interest payable on it under section 33; and
(ii)the date on or before which the amount is to be paid, or the security is to be returned, as the case requires.
Section 46(1) of the CC Act provides:
A person who is aggrieved by a decision made under section 31(2)(a) may apply to the State Administrative Tribunal for a review of the decision.
The Decision
The Adjudicator's decision (the Decision) was in relation to a payment dispute existing under a services agreement between SC Projects Australia Pty Ltd and Sea Trucks Australia Pty Ltd (an unincorporated joint venture) (CSJV) and FDS entered into in December 2013 (the Contract). The Contract provided for the wet hire and support of a quantity of Hagglund BV206 vehicles and associated staff and equipment for the general cartage of aggregate fill on the Onslow Domgas Intratidal Zone.
The Contract is a construction contract within the meaning of the CC Act. The request for adjudication was filed, prepared and served in accordance with s 26 of the CC Act. Sections 32(a)(iii) and (iv) of the CC Act do not arise.
Section 46(1) of the CC Act provides that a person who is aggrieved by a decision made under s 31(2)(a), may apply to the Tribunal for a review of the decision.
Perrinepod
The provisions contained in s 31(2) of the CC Act were explained by the Court of Appeal in Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217 (Perrinepod).
President McLure held at [18] that:
The issue to be decided under s 31(2)(a) is whether the application must be dismissed. The only relevant decision of a dispositive kind in s 31(2)(a) is the dismissal of the application for adjudication. A failure or omission to dismiss is not a decision under s 31(2)(a).
Similarly, at [79][81], Murphy JA with Martin CJ agreeing held that:
79I have come to the conclusion that the reference in s 46(1) to a 'decision made under s 31(2)(a)' can only be to a decision to dismiss an adjudication application without making a determination on the merits. In my view, the following matters inform the proper construction of s 46(1).
80First and foremost, it seems to me, reading s 46(1) in conjunction with s 31(2)(a), that the construction I would give s 46(1) is achieved by giving the words in those provisions their ordinary and natural meaning. Section 31(2) provides for two alternatives, relevantly, that '[a]n appointed adjudicator ... (a) dismiss the application ... (b) otherwise, determine [the application]'. The use of the conjunctive 'otherwise', which is defined in the Macquarie Australian Dictionary (4th ed) to mean 'or else', confirms that the two subpars are dealing with alternatives. Further support for the proposition that subpars (a) and (b) are alternatives is found in s 31(3) which commences with the words '[i]f an application is not dismissed or determined under subsection (2)' (emphasis added). Accordingly, the subject of subpar (a) is the dismissal of applications, and the subject of subpar (b) is the determination of applications, and an adjudicator is required by s 31(2) to do one or the other.
81Section 46(1) refers, in terms, to a 'decision made under s 31(2)(a)', meaning a decision made 'pursuant to' or 'in accordance with' s 31(2)(a). See R v Tkacz [2001] WASCA 391; (2001) 25 WAR 77 [23] - [25]. It seems to me that the only decision that can be made pursuant to, or in accordance with, s 31(2)(a) is a decision to dismiss an application. That is what the express words in subpar (a) provide for, and that is the subject of the subpar. There is, in my view, no scope for the making of a decision 'not to dismiss' under s 31(2)(a) because subpars (a) and (b) are alternatives; there is either a decision to dismiss under s 31(2)(a) or, failing that, there is a determination under s 31(2)(b). In the latter case, there is, necessarily, no decision made under s 31(2)(a). To speak of a decision 'not to dismiss' is to recast the consequence of an adjudicator proceeding to make a determination under s 31(2)(b) in terms of a decision under s 31(2)(a), where the making of such a decision is not provided for expressly nor, in my view, by necessary implication.
It follows that s 46(1) of the CC Act applies only where a person is aggrieved by a decision to dismiss an adjudication application under s 31(2)(a). Further, if there is a determination under s 31(2)(b) of the CC Act then there is no decision made under s 31(2)(a). This follows from the fact that they are alternative statutory jurisdictions.
The Determination
The Adjudicator handed his determination down on 24 November 2015 (the Determination).
The Adjudicator determined that:
2.The application for adjudication is not dismissed under s 31(2)(a).
3. Pursuant to s 31(2)(b), upon a determination of the merits of the submissions before me, the respondent [CSJV] is required to pay $NIL including interest and GST to the applicant [FDS] in respect of the payment dispute within the application. Refer to Part 8 of this determination my reasons and calculation of the determined amount.
The Determination further stated:
91.By this admission, the 'Final Invoice' at the very least in part does contain a new claim(s) hence I determine the payment dispute, at the very least for this new claim(s), arose on 23 September 2015.
92.Section 26 requires an application for adjudication to be served within 28 days after the dispute arises which is 21 October 2015. The applicant served its application for adjudication dated 14 October 2015 on 15 October 2015 hence it has been submitted within time.
93.For the preceding reasons, I determine that there are no jurisdictional issues under the Act requiring me to dismiss the entirety of the 'Final Invoice' being the payment claim for which a determination has been sought within the application for adjudication.
94.Having now determined that pursuant to s.31(2)(a) I do not need to dismiss the application, I can now proceed pursuant to s.31(2)(b) to otherwise determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, or to return any security to the other party.
The Adjudicator found that he had jurisdiction to determine the claim. Normally, this would be the end of the matter and s 31(2)(b) of the CC Act would apply. The Tribunal does not have the jurisdiction to review a determination under s 31(2)(b).
There were eight claims for payment by FDS (see Determination paragraph 101). The Determination sets out the Adjudicator's reasons for determining each of FDS' claims from paragraphs 104 to 194.
At the end of the Adjudicator's consideration of each claim, he summarised his findings. For example, at paragraph 115:
Consequently, I determine on the balance of probabilities that the respondent is not liable to make a payment in respect of the 'May 2014 Claim (Tax Invoice No: 114052701)' for the following reasons;
1.The applicant cannot apply for adjudication pursuant to s 25;
2.The applicant cannot apply for adjudication since the application was not served within 28 days of the payment dispute arising pursuant to s 26(1); and
3.In any event, the applicant has been partly paid for an amount within this Tax Invoice and cannot be paid twice for the same work.
4.I agree with the respondent's position that there is no merit to the claims under the provisions of the Agreement.
In each summary, the Adjudicator has concluded that:
I agree with the respondent's [CSJV's] position that there is no merit to the claim under the provisions of the Agreement.
In each of the summaries, with the exception of claim 8, the Adjudicator has found that:
The applicant cannot apply for adjudication since the application was not served within 28 days of the payment dispute arising pursuant to s 26(1)[,] [115.2], [126.2], [139.1], [152.2], [165.2] and [183.2]
The parties' submissions
FDS submits that:
15.A decision made under section 31 (2)(a) of the Act is a decision made by an adjudicator to dismiss an adjudication application on the jurisdictional grounds set out in s 31(2)(a)(i)(iv) of the Act.
16.The adjudication determination here is one where the Adjudicator dismissed the application, pursuant to section (31)(2)(a)(ii) of the Act, on the purported finding the application for adjudication had not been prepared and served in accordance with section 26 of the Act.
Error in Determination
17.The error in the finding is that the adjudicator has found that the final invoice contains claims which are 'recycled, rather than applying the express terms of the contract.
18.Clause 14.6 of the General Conditions requires FDS to 'submit a final invoice for the unpaid balance of the Agreement fee or price'. This clause is to be read with Clause 6(iv) of the Compensation Schedule, which provides; 'Upon termination by the Contractor, all amounts previously paid to Subcontractor at the time of notice of termination shall be retained by Subcontractor and non-refundable under any circumstances. Furthermore any outstanding invoices along with any amounts yet to be invoiced shall be paid'.
19.The invoicing and payment of outstanding invoices is 'expressly stipulated for by the relevant construction contract' (DPD Pty Ltd v McHenry [2012] WASC 140, at [47]).
20.The determination also directly conflicts with findings of the Tribunal and the Supreme Court, in reaching the conclusion that the application was not prepared and served in accordance with section 26.
21.The determination relies on an FDS invoice dated 4 February 2014, as a previous payment claim alleged to be recycled (Determination at paragraph 181). That invoice was found not to be a payment claim by Member Carey (Field Deployment Solutions Pty Ltd and SC Projects Australia Pty Ltd [2014] WASAT 101, at [74]) and by Mitchell J on appeal (Field Deployment Solutions Pty Ltd [2015] WASC 60 at [9] and [101]).
CSJV submits that:
16.The adjudicator did not make a decision under s 31(2)(a) of the CC Act. Rather, the adjudicator made a determination pursuant to s 31(2)(b). In this circumstance, there is no s 31(2)(a) decision by reference to which the jurisdiction of the Tribunal under s 46(1) might be attracted.
17.If FDS considers that the adjudicator's determination of liability, under s 31(2)(b) was beyond power, for whatever reason, then it may apply for judicial review of that decision. Although in circumstances where it challenges only one of between 2 and 4 independent reasons given for the determination of liability in respect of each of the 8 sub-claims, there will be a question about the reasonable prospects of success of such an application (See Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 353: the error will not be material to the ultimate determination).
18.In its application, FDS states that it seeks a decision that the 'Reviewable Decision be set aside' and that the Tribunal 'substitute its own decision'. Again, the only jurisdiction the Tribunal has under s 46(1) is to review decisions to dismiss. So, where s 46(2) speaks of a reversal of a decision made under s 31(2)(a), that can only be a reference to a reversal of a decision to dismiss. The relief sought is futile.
19.In the circumstances it should be unnecessary to address each of FDS's grounds of review. For completeness, CSJV's submissions in respect of each of the three grounds are as follows:
(a)The first ground concerns the existence of a 'decision made under section 31(2)(a)', and is addressed by the submissions above.
(b)The second ground can only be a complaint about the manner in which the merits were determined. Accordingly, it has no relevance to the jurisdiction of the Tribunal under s 46(1).
(c)The third ground complains that the adjudicator 'purported to make an order for costs other than the costs of the adjudication as defined in sections 3 and 44 of the [CC Act]'. CSJV makes two submissions about this ground. First, the adjudicator expressly made the determination on costs under s 34(2) of the CC Act, which is concerned with the costs of parties to payment disputes. Second, a review of a determination made under s 34(2) of the CC Act does not fall within the scope of s 46(1).
Analysis
Ground 1
The substantive question that arises on this application is whether, having assumed jurisdiction and entered into a determination of the matter, the Adjudicator then divested himself of jurisdiction.
FDS' position is that on a proper analysis of the reasons, the Adjudicator never assumed adjudication. CSJV's position is that in having determined that he had jurisdiction, comments later in the reasons do not, in effect, divest the Adjudicator of his jurisdiction.
The Determination must be read as a whole.
The Adjudicator expressly found that he had jurisdiction and proceeded to determine the matter on the basis that he had jurisdiction under s 31(2)(b) of the CC Act. In particular, he made findings as to the merits of each claim.
The Determination is not a decision to dismiss the application. The Adjudicator determined the application under s 31(1)(b) of the CC Act (Perrinepod at [81]).
The Adjudicator, having proceeded to determine the applicant on its merits, this Tribunal does not have the jurisdiction under s 31(2)(a) of the CC Act.
If there is an error by the Adjudicator that provides a basis for judicial review, this Tribunal does not have jurisdiction. The appropriate forum is the Supreme Court of Western Australia.
Grounds 2 and 3
Review grounds 2 and 3, in effect, submit that the Adjudicator made an error in applying the law.
This Tribunal does not have jurisdiction to consider errors of law in the Determination.
Order
1.The application is dismissed.
I certify that this and the preceding [30] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUSTICE J C CURTHOYS, PRESIDENT
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