Field Deployment Solutions Pty Ltd v SC Projects Australia Pty Ltd
[2015] WASC 60
•16 FEBRUARY 2015
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: FIELD DEPLOYMENT SOLUTIONS PTY LTD -v- SC PROJECTS AUSTRALIA PTY LTD [2015] WASC 60
CORAM: MITCHELL J
HEARD: 3 FEBRUARY 2015
DELIVERED : 16 FEBRUARY 2015
FILE NO/S: GDA 8 of 2014
BETWEEN: FIELD DEPLOYMENT SOLUTIONS PTY LTD
Appellant
AND
SC PROJECTS AUSTRALIA PTY LTD
First RespondentSEA TRUCKS AUSTRALIA PTY LTD
Second Respondent
ON APPEAL FROM:
Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA
Coram :MR T CAREY (MEMBER)
Citation :FIELD DEPLOYMENT SOLUTIONS PTY LTD and SC PROJECTS AUSTRALIA PTY LTD [2014] WASAT 101
File No :CC 816 of 2014
Catchwords:
Construction contracts - Status of Agreement as a construction contract - Nature of State Administrative Tribunal review
Legislation:
Constructive Contracts Act 2004 (WA), s 31, s 38, s 46
State Administrative Tribunal Act 2004 (WA), s 27, s 28, s 29, s 105
Result:
Leave to appeal granted
State Administrative Tribunal's decision affirmed
Declaration made
Category: B
Representation:
Counsel:
Appellant: Mr P G Clifford & Mr A P Rumsley
First Respondent : Mr S K Dharmananda SC
Second Respondent : Mr S K Dharmananda SC
Solicitors:
Appellant: Alan Rumsley
First Respondent : Jones Day
Second Respondent : Jones Day
Case(s) referred to in judgment(s):
Ainsworth v Criminal Justice Commission (1992) 175 CLR 564
Armstrong v Commissioner for Consumer Protection [2014] WASCA 71
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321
Cape Range Electrical Contractors Pty Ltd v Austral Construction Pty Ltd [2012] WASC 304
Development Consent Authority v Phelps [2010] NTCA 3; (2010) 27 NTLR 174
Diveva Pty Ltd v Nominal Defendant [2013] NSWCA 325
Driclad Pty Ltd v Federal Commissioner of Taxation (1968) 121 CLR 45
Field Deployment Solutions Pty Ltd v SC Projects Australia Pty Ltd [2014] WASAT 101
Gibson Motorsport Merchandise Pty Ltd v Forbes [2006] FCAFC 44; (2006) 149 FCR 569
Hamersley Iron Pty Ltd v James [2015] WASC 10
Kidd v Resource Management and Planning Appeal Tribunal [2011] TASSC 38; (2011) 20 Tas R 339
Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531
Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409
McGuirk v University of NSW [2009] NSWCA 321; (2009) 75 NSWLR 224
Osland v Secretary, Department of Justice [2010] HCA 24; (2010) 241 CLR 320
Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361
Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217; (2011) 43 WAR 319
Re Anstee‑Brook; Ex parte Karara Mining Ltd [2012] WASC 129
Re Anstee‑Brook; Ex parte Mount Gibson Mining Ltd [2011] WASC 172; (2011) 42 WAR 35
Re Ellis; Ex parte Triple M Mechanical Services Pty Ltd [No 2] [2013] WASC 161
Red Ink Homes Pty Ltd v Court [2014] WASC 52
Sydney Water Corporation v Caruso [2009] NSWCA 391; (2009) 170 LGERA 298
Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80
Tipene v Owners of Strata Plan 9485 [2015] WASC 30
WQube Port of Dampier v Philip Loots of Kahlia Nominees Ltd [2014] WASC 331
MITCHELL J:
Summary
The appellant and respondent are parties to a contract dated 2 December 2013 (Agreement).[1] In very broad terms the Agreement provides for the appellant to supply, maintain and operate Hagglund BV206 vehicles to haul fill material and various erosion control materials from a stockpile to designated works locations. The fill and erosion control materials are to be used for the rehabilitation of a right‑of‑way, on which a domestic gas pipeline associated with the Gorgon project has been constructed.
[1] The agreement is called the Domgas ITZ Completions Service Agreement for the Hire and Operation of Hagglund Units Subcontract No 05033-Y-8003.
On 22 May 2014 the appellant sought to engage the provisions of the Construction Contracts Act 2004 (WA) (Act) in respect of what it said was a payment dispute. Section 25 and s 26 of the Act provide for a party to a construction contract to apply to have a payment dispute which has arisen under the construction contract adjudicated under pt 3 of the Act (adjudication application). On 22 May 2014, the appellant purported to serve an application to have the dispute adjudicated under pt 3 of the Act (appellant's adjudication application).
Section 31(2) of the Act obliged the appointed adjudicator to dismiss the appellant's adjudication application if certain conditions were satisfied or, otherwise, to determine on the balance of probabilities whether any party to the payment dispute was liable to make a payment and, if so, the amount to be paid and the interest payable on that amount under s 33 of the Act.
On 8 June 2014 the adjudicator dismissed the adjudication application without determining its merits (adjudicator's decision). He acted on the ground that the adjudication application had not been served in accordance with s 26 of the Act. Section 31(2)(a)(ii) of the Act identifies this as one of the conditions which give rise to a duty to dismiss an adjudication application.
In the adjudicator's view, the payment dispute arose on 6 March 2014, so that s 26(1) of the Act required the appellant's adjudication application to be served by 3 April 2014 (being 28 days after the dispute arose). The adjudicator concluded that the appellant's adjudication application was served 49 days too late.
On 17 June 2014, the appellant applied to the State Administrative Tribunal (Tribunal) for a review of the adjudicator's decision (review application). Section 46(1) of the Act gave the appellant the right to make the review application, as a person aggrieved by a decision made under s 31(2)(a) of the Act.
On 21 August 2014 the Tribunal dismissed the review application and affirmed the adjudicator's decision to dismiss the adjudication application (Tribunal's decision).[2] The Tribunal gave two independent reasons for its decision.
[2] Field Deployment Solutions Pty Ltd v SC Projects Australia Pty Ltd [2014] WASAT 101.
First, the Tribunal concluded that the Agreement was not a 'construction contract' for the purposes of the Act. Section 31(2)(a)(i) of the Act identified that circumstance as one of the conditions which gave rise to the adjudicator's duty to dismiss the application. In dismissing the application on this ground, the Tribunal rejected the appellant's submission that the Tribunal could not affirm the adjudicator's decision to dismiss the adjudication application on a ground not relied upon by the adjudicator.
Secondly, the Tribunal concluded that the adjudication application was not prepared and served in accordance with s 26 of the Act. This was the condition provided for in s 31(2)(a)(ii) of the Act. However, in contrast to the position adopted by the adjudicator, the Tribunal concluded that the adjudication application was premature, because no payment dispute had arisen.
The appellant, as a party to the review proceeding, now applies for leave to appeal to this Court against the Tribunal's decision. Section 105 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) provides for an appeal to this court[3] from a decision of the Tribunal in the proceeding 'but only if the court to which the appeal lies gives leave to appeal'[4] and then only 'on a question of law'.[5]
[3] The appeal in this case is appropriately directed to this court under s 105(3)(b) of the SAT Act.
[4] Section 105(1) of the SAT Act.
[5] Section 105(2) of the SAT Act.
Grounds 1 ‑ 4 of the proposed appeal in effect challenge the Tribunal's conclusion that it could consider whether the Agreement was a construction contract and affirm the adjudicator's decision on that ground. Grounds 5 ‑ 6 in effect challenge the Tribunal's conclusion that the Agreement was not a construction contract. The grounds do not challenge the Tribunal's conclusion that the adjudication application was not prepared and served in accordance with s 26 of the Act.
The appellant's proposed orders would not have the effect of setting aside the adjudicator's decision to dismiss the appellant's adjudication application. Rather the appellant seeks to vary the Tribunal's decision so that it varied the adjudicator's decision 'so that the adjudication application is dismissed on the basis that no payment claim has been made by [the appellant] in relation to the subject matter of [the appellant's adjudication application]'. The Appellant also seeks the grant of declaratory relief by this court in relation to alleged errors made by the Tribunal.
The application for leave to appeal and the appeal were listed together for hearing before me. In my view grounds 1 ‑ 4 and 6 are not reasonably arguable, and I would not grant leave to appeal on those grounds. However, in my view ground 5 has been made out, as the Tribunal erred in law in concluding that the Agreement was not a construction contract. In reaching the conclusion that the Agreement was not a construction contract, the Tribunal must have misconstrued the statutory term 'construction contract', and thereby misunderstood the nature of the power conferred by s 31(2)(a) of the Act to dismiss the appellant's adjudication application without making a determination of its merits.
While the appellant has made out ground 5, its success on that ground does not provide a basis for making any order setting aside or otherwise affecting the Tribunal's decision. This is because the error of law could not have affected the Tribunal's ultimate conclusion that the adjudication application must be dismissed without making a determination of its merits. That error is capable of affecting only one of the two alternative grounds on which the Tribunal's decision was based. The grounds of appeal do not challenge the other alternative ground which formed the basis of the Tribunal's decision. The error of law does not vitiate the Tribunal's decision.
In these circumstances the appropriate order of this court is that the Tribunal's decision be affirmed. However, I consider it appropriate to make a declaration that the Tribunal erred in law in finding that the Agreement is not a construction contract for the purposes of the Act.
My more detailed reasons for reaching these conclusions are as follows.
Provisions of the Act
General scheme of the Act
The Act is, by its long title, intended to provide a means for adjudicating payment disputes arising under 'construction contracts'. It achieves this purpose by providing for a party to a 'payment dispute' to apply to have the dispute adjudicated by an adjudicator,[6] who must either dismiss the application in prescribed circumstances or determine the liability of a party to the payment dispute to make a payment and interest thereon.[7] A determination is binding on the parties to the construction contract and creates a statutory liability to pay an amount under a determination on or before the date specified in the determination.[8] With the leave of a court of competent jurisdiction, a determination may be registered and enforced as a judgment of the court.[9]
[6] Section 25 and s 26 of the Act.
[7] Section 31 and s 33 of the Act.
[8] Section 38 and s 39 of the Act.
[9] Section 43 of the Act.
A determination under pt 3 of the Act does not finally determine the rights of the parties to the payment dispute under the construction contract. Part 3 does not prevent a party to a construction contract from instituting proceedings before an arbitrator or other person, or a court or other body, in relation to a dispute or other matter arising under the contract.[10] Subject to limited exceptions, evidence of anything said or done in an adjudication is not admissible in other proceedings.[11]
[10] Section 45(1) of the Act.
[11] Section 45(3) of the Act.
Section 45(4) of the Act provides that:
An arbitrator or other person or a court or other body dealing with a matter arising under a construction contract -
(a) must, in making any award, judgment or order, allow for any amount that has been or is to be paid to a party under a determination of a payment dispute arising under the contract; and
(b) may make orders for the restitution of any amount so paid, and any other appropriate orders as to such a determination.
That is, a court or arbitrator may determine a dispute arising under a construction contract on its merits without reference to what was said or done in an adjudication. If an adjudicator determines that a payment is due and a court or arbitrator subsequently determines that no payment or a lesser payment is due, then the court or arbitrator may make orders for the repayment of amounts payable under the adjudicator's determination.
An adjudicator's determination as to whether a party to a payment dispute is liable to make a payment does not, therefore, finally determine the rights, duties or liabilities of any party to a construction contract. A party who is dissatisfied with the adjudicator's determination that they are liable to make a payment may institute legal proceedings which might determine that no liability, or a lesser liability, arises. Those legal proceedings may result in an order for reimbursement of amounts paid under an adjudicator's determination. Equally, a claimant who is dissatisfied with an adjudicator's decision to dismiss their adjudication application, or an adjudicator's determination that a respondent is not liable to pay a claimed amount, is not precluded from instituting legal proceedings in support of their claim.
The Act provides for an expedited process for adjudication. An application for adjudication must be prepared and served within 28 days after the payment dispute arises.[12] Other parties to the contract have 14 days after the adjudication application is served on them to prepare and serve their response.[13] Both the application and response must set out or attach all the information, documentation and submissions on which the party making it relies in the adjudication.[14] The appointed adjudicator must either make a decision or determination within 14 days after service of the response or, if no response is served, 14 days after the last date on which a response is required to be served.[15] The time for the adjudicator to make his or her determination may only be extended with the consent of the parties to the payment dispute.[16] If the application is not dismissed or determined within time it is taken to have been dismissed.[17]
[12] Section 26(1) of the Act.
[13] Section 27(1) of the Act.
[14] Section 26(2)(c) and s 27(2)(c) of the Act.
[15] Section 31 of the Act.
[16] Section 31(2) and s 32(3)(a) of the Act.
[17] Section 31(3) of the Act. In the case of such a deemed dismissal the applicant may make another adjudication application within 28 days after the previous application is taken to have been dismissed: see s 26(1) and s 37(2) of the Act.
The adjudicator may have a law degree but need not be, and generally will not be, a legal practitioner.[18] The adjudicator must act informally and, if possible, make a determination on the basis of the application, the response and attachments to those documents.[19] The adjudicator is not bound by the rules of evidence.[20] The object of the adjudication is to determine the payment dispute as quickly, informally and inexpensively as possible.[21]
[18] Section 48(4) of the Act read with reg 9 of the Construction Contracts Regulations 2004 (WA).
[19] Section 32(1)(a) of the Act.
[20] Section 32(1)(b) of the Act.
[21] Section 30 of the Act.
Section 46 of the Act provides for a limited right of review of an adjudicator's decisions in the following terms:
(1) A person who is aggrieved by a decision made under section 31(2)(a) may apply to the State Administrative Tribunal for a review of the decision.
(2) If, on a review, a decision made under section 31(2)(a) is set aside and, under the [SAT Act] section 29(3)(c)(i) or (ii), is reversed the adjudicator is to make a determination under section 31(2)(b) within 14 days after the date on which the decision under section 31(2)(a) was reversed or any extension of that time consented to by the parties.
(3) Except as provided by subsection (1) a decision or determination of an adjudicator on an adjudication cannot be appealed or reviewed.
It is established that s 46 of the Act does not preclude this court from exercising its constitutionally protected supervisory jurisdiction to grant relief on account of jurisdictional error so as to enforce the limits on the exercise of State executive and judicial power by persons and bodies other than this court.[22]
[22] Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531 [99] ‑ [100]; Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217; (2011) 43 WAR 319 [121] ‑ [126].
The general object of the Act has been described by Kenneth Martin J in the following terms, with which I agree:[23]
It is of fundamental importance, in my view, to understand that the object of this legislation was to attempt to reform earlier unacceptable scenarios of inequality of bargaining power in the construction contract environment. Contractors were highly vulnerable to being hurt by being kept out of funds due to them by an ongoing legal dispute in circumstances where they had performed the contracted work, but had not been paid. It is easy to see how a contractor who is leveraged and pressed for funds may lack the time, opportunity or resources to press its position to a result in a drawn out fight for payment against a well resourced principal, in a protracted arbitration or contested litigation. The speedy and informal procedures delivered as reforms by the [Act] do not make the adjudicator's decision on the payment of funds final (save as to the capacity to obtain and enforce payment).
Fundamental concepts: 'construction contract'
[23] Re Anstee‑Brook; Ex parte Mount Gibson Mining Ltd [2011] WASC 172; (2011) 42 WAR 35 [60]; see also Perrinepod [60].
The subject to which the Act applies is a 'construction contract'. That term is defined by the detailed provisions of s 3 ‑ s 5 of the Act. While a proper understanding of the concept demands attention to the entirety of the definitional provisions, I will not recite the whole of the provisions due to their length. Rather, I will focus on the elements of the definition which are of most central importance to this appeal.
One kind of construction contract is a contract under which the contractor has an obligation to carry out 'construction work'.[24] Construction work includes constructing the whole or any part of 'civil works' on a site in Western Australia.[25] The term 'civil works' is defined to include a pipeline for gas.[26] Construction work also includes any work on a site in Western Australia that is preparatory to, necessary for, an integral part of, or for the completion of, that civil work, including 'site or earth works', 'earthmoving' and 'site restoration'.[27]
[24] Section 3 (paragraph (a) of the definition of 'construction contract') of the Act.
[25] Section 4(2)(c) of the Act.
[26] Section 4(1) (paragraph (c) of the definition of 'civil works') of the Act.
[27] Section 4(2)(f)(i) and s 4(2)(f)(v) of the Act.
A contract will also be a construction contract if it obliges the contractor to supply to the site where construction work is being carried out goods that comprise plant (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work at the site of the construction work.[28]
[28] Section 3 (paragraph (b) to the definition of 'construction contract') and s 5(1)(c) of the Act.
Further, a contract will be a construction contract if it obliges the contractor to provide, on the site where construction work is being carried out, on‑site services that relate directly to construction work, including the provision of labour to carry out construction work.[29]
[29] Section 3 (paragraph (d) to the definition of 'construction contract') and s 5(3)(b) of the Act.
The operation of the Act in relation to a contract depends, in many respects, on its status as a 'construction contract'. Part 2 of the Act makes various provisions as to prohibited terms, modified terms and implied terms of a construction contract. If a contract is not a construction contract then those terms will not be prohibited, modified or implied by operation of the Act. Section 25 of the Act only enables a party to apply to have a dispute adjudicated under pt 3 of the Act '[i]f a payment dispute arises under a construction contract'. The existence of the right of a party to a contract to make an adjudication application depends on the contract being a construction contract. Section 31(2)(a)(i) of the Act provides that an appointed adjudicator must dismiss an application without making a determination of its merits if the contract concerned is not a construction contract. Section 38 makes an adjudicator's determination 'binding on the parties to the construction contract', requiring that the relevant contract be a construction contract before the parties to it are bound by the adjudication.
Fundamental concepts: 'payment dispute'
The definition of the term 'payment dispute' is also critical to the operation of pt 3 of the Act. A party to a construction contract may only apply for adjudication under pt 3 if a payment dispute arises under that contract.[30] An adjudication application must be prepared and served within 28 days after the dispute arises.[31]
[30] Section 25 of the Act.
[31] Section 26(1) of the Act.
Section 6 of the Act relevantly defines when a payment dispute arises in the following terms:
For the purposes of this Act, a payment dispute arises if -
(a)by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full, or the claim has been rejected or wholly or partly disputed.
There is a potential element of circularity in this definition. If there is a genuine dispute about a payment under the contract then it must concern the question of whether the contract, on its proper construction, provides for the payment to be made at the time contended for by the contractor. However, if an adjudication application could only be made after payment was in fact due on the terms of the contract, the contractor would need to establish its right to payment before an adjudication could be commenced. The adjudication process provided for by the Act would then have no effective purpose. The intention to produce such an outcome cannot be attributed to Parliament.
In an appropriate case, the question would arise as to how s 6(a) of the Act should be construed. It may be that the provision should be construed as referring to the time when payment is claimed, in a payment claim, to be due under the construction contract. Alternatively, it may be that the provision should be construed as referring to the time when, on the proper objective construction of the contract, payment would be due if the contract were performed according to its terms.
As no party in these proceedings challenges the Tribunal's conclusion that no payment dispute arose in this case, there is no need for me to resolve those constructional issues in this appeal.
Section 31(2) of the Act
The terms of s 31(2) of the Act are critical to the grounds of appeal. That subsection 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.
There are a number of elements to the operation of s 31(2) of the Act:
(a)s 31(2)(a) confers a power to dismiss an adjudication application without making a determination of its merits;
(b)by using the term 'must', Parliament has imposed a duty on the adjudicator to exercise that power in a case where it arises;
(c)subparagraphs (2)(a)(i) ‑ (iv) identify the circumstances in which the power, and the duty to exercise the power, arises; and
(d)s 31(2)(b) imposes a duty on the adjudicator to make a relevant determination where the conditions giving rise to the duty to dismiss the application are not satisfied.
As Murphy JA noted in Perrinepod:[32]
Section 31(2)(a) itself is expressed in terms conferring jurisdiction on an appointed adjudicator - to dismiss an application. It is the proper exercise (or non‑exercise) of that power or function, in its own right, which determines whether s 31(2)(b) has any application. The statutory language is clear. The two are alternative functions. In s 31(2), an appointed adjudicator may not determine an application on its merits if it is required to be dismissed under s 31(2)(a). In other words, an appointed adjudicator may not proceed under s 31(2)(b) to determine an application on its merits if the application is one which must be summarily dismissed under s 31(2)(a). If an appointed adjudicator were purportedly to proceed to determine an application under s 31(2)(b) which ought to have been dismissed under s 31(2)(a), the adjudicator would be acting unlawfully and without power.
[32] Perrinepod [113].
In the present case it is unnecessary for me to reach any conclusion as to whether the condition for the existence of the adjudicator's duty to dismiss an adjudication application is the actual existence of a construction contract, or the formation by the adjudicator of an opinion (or some other state of mind) that a contract bears that character.[33]
[33] cf Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80 [60] ‑ [73]; Cape Range Electrical Contractors Pty Ltd v Austral Construction Pty Ltd [2012] WASC 304 [74] ‑ [75], [81] ‑ [84]; Re Ellis; Ex parte Triple M Mechanical Services Pty Ltd [No 2] [2013] WASC 161 [84] ‑ [88]; WQube Port of Dampier v Philip Loots of Kahlia Nominees Ltd [2014] WASC 331 [77] ‑ [83]; Red Ink Homes Pty Ltd v Court [2014] WASC 52 [85]-[90]; Hamersley Iron Pty Ltd v James [2015] WASC 10 [53] ‑ [54].
Grant of leave to appeal: principles
Leave to appeal from the Tribunal's decision should be granted if, in all the circumstances, it is in the interests of justice that there be a grant of leave.[34]
[34] Perrinepod [23].
In Armstrong v Commissioner for Consumer Protection,[35] Martin CJ, with whom other members of the court agreed, described the approach of the court in considering whether to grant leave to appeal from a decision of the Tribunal in the following terms:
It is now well established that leave to appeal from a decision of the Tribunal will be granted if, in all the circumstances, it is in the interests of justice that there be a grant of leave, and that there are no rigid or exhaustive guidelines governing the grant of leave: Zampatti v Western Australian Planning Commission [2010] WASCA 149 [34] (Buss JA); Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361 [16] – [18] (Buss JA, Wheeler & Pullin JJA agreeing). However, the observations made by Phillips JA in Secretary to the Department of Premier and Cabinet v Hulls (1999) VSCA 117; [1999] 3 VR 331 in an analogous context are generally applied. There his Honour observed:
'When leave is sought to appeal … it will be necessary for the applicant to identify a question of law which is relevant to the granting of the relief sought on appeal. The importance of the question, either generally or to the would-be appellant in the particular case, will probably be relevant. The applicant must show that there is a real or significant argument to be put on that question of law at least to this extent: that there is sufficient doubt about it to justify the grant of leave. Moreover, it may have to be shown that to allow the error to go uncorrected would impose substantial injustice, although, where the order below is final, that injustice will often be more readily discernible [16].'
It follows that the question of whether leave to appeal should be granted, and therefore whether time should be extended to enable an application for leave to appeal to be made, is inextricably connected with the merits of the arguments which the applicants would advance if granted an extension of time and leave to appeal, in the sense that there must be sufficient doubt as to the correctness of the Tribunal's decision to justify the grant of leave.
[35] Armstrong v Commissioner for Consumer Protection [2014] WASCA 71 [27] ‑ [28].
In considering the merits of the appellant's arguments it is necessary to bear in mind the nature and limits of the appeal provided for by s 105 of the SAT Act. As Buss JA, with whom other members of the Court agreed, noted in Paridis v Settlement Agents Supervisory Board:[36]
An appeal 'on a question of law' is narrower than an appeal that merely 'involves a question of law'. Where an appeal lies 'on a question of law' the subject matter of the appeal is the question or questions of law. If a question raised by a litigant, properly analysed, is not a question of law, linguistic gymnastics in the formulation of the grounds of appeal cannot convert it into a question of law. A question of mixed law and fact is not a question of law within s 105(2).
[36] [2007] WASCA 97; (2007) 33 WAR 361 [53].
Merits of grounds 1 ‑ 4
Grounds 1 ‑ 4 of the proposed appeal challenge the capacity of the Tribunal to consider whether the Agreement was a construction contract in reviewing the adjudicator's decision.
The appellant and respondent disagreed as to the formulation of the question or questions of law raised by these grounds. I shall consider the alternative formulations, beginning with the respondent's which, in my view, better captures the issue raised by these grounds of appeal.
Respondent's question
The common question of law raised by all of these grounds was identified in the respondent's written submissions in the following terms:
Was [the Tribunal] able to consider, as part of its de novo review, whether the Agreement was a 'construction contract' for the purposes of the [Act]?
For the reasons which follow it is, in my view, clear that the answer to this question is 'yes'. I do not consider the appellant to have raised any reasonable argument in favour of a negative answer to that question.
The appellant contends that the Tribunal does not have jurisdiction to deal with a matter that is different in essence from the matter that was before the original decision‑maker. It contends that a decision to dismiss an adjudication application on the ground provided for in s 31(2)(a)(i) (namely that the Agreement is not a construction contract) is different in essence from a decision to dismiss an adjudication application on the ground provided for in s 31(2)(a)(ii) of the Act. The appellant contends that the question of whether the Agreement was a construction contract was not before the Tribunal when it exercised its review jurisdiction under s 46 of the Act. It says that the only matter before the Tribunal was the appellant's application for review of the decision to dismiss the adjudication application because it was out of time. The appellant notes that the respondent did not contend that the Agreement was not a construction contract in its response to the adjudication application, and says that the adjudicator must have implicitly decided not to dismiss the adjudication application on the ground that the Agreement was not a construction contract. In those circumstances the appellant contends that the respondent was in substance seeking to review the adjudicator's decision not to dismiss the adjudication application on that ground, which s 46 of the Act did not permit.
I do not accept the appellant's submissions in this regard. In my view the appellant's argument conflates content of the power and duty under s 31(2)(a) of the Act with the occasion for its exercise. As I have noted, the power conferred by s 31(2)(a) of the Act is a power to dismiss an adjudication application without making a determination of its merits. The duty to exercise that power arises in circumstances specified in subparagraphs (i) ‑ (iv). However, when the duty to exercise the power arises, the power exercised is simply to dismiss the application without making a determination of its merits.
When an applicant seeks to review a decision to exercise that power, s 29 of the SAT Act gives the Tribunal, when dealing with the matter in the exercise of its review jurisdiction, functions and discretions corresponding to those exercisable by the decision maker in making the reviewable decision. In the present case, the function being exercised by the Tribunal was to consider whether the adjudication application should be dismissed without considering its merits. Section 27(1) of the SAT Act required the Tribunal to perform that function by way of a hearing de novo, in which the Tribunal is not confined to matters that were before the decision-maker but may involve the consideration of new material whether or not it existed at the time the decision was made.
Section 27(2) of the SAT Act provides that the purpose of such a review is to produce the correct and preferable decision at the time of the decision upon the review.
Section 27(3) of the SAT Act provides:
The reasons for decision provided by the decision-maker, or any grounds for review set out in the application, do not limit the Tribunal in conducting a proceeding for the review of a decision.
In my view, the appellant's submission that the Tribunal could not address grounds not relied on by the adjudicator is inconsistent with this provision.
In my view, there is no inconsistency between these provisions of the SAT Act and s 31 or s 46 of the Act. Section 46(1) of the Act refers to 'a decision made under section 31(2)(a)'. It does not refer to decisions made under individual subparagraphs of s 31(2)(a) of the Act. Further, the structure of the Act is to compel an adjudicator to dismiss an adjudication application if one or more of the conditions identified in s 31(2)(a)(i) ‑ (iv) exist, and to preclude the adjudicator from determining the application on its merits if it is required to be dismissed under s 31(2)(a) of the Act.
The scheme of the Act is that an adjudicator may only go on to determine an adjudication application on its merits if none of the conditions specified in s 31(2)(a)(i) ‑ (iv) are satisfied. It is inconsistent with that structure to construe s 46 as allowing the Tribunal to only consider whether one of the potentially available grounds for dismissing an adjudication application is established.
It may well be that an adjudicator who finds the existence of one of the circumstances creating the duty to dismiss an adjudication application will not find it necessary to consider whether the duty arises for another reason. An adjudicator who dismisses an adjudication application may not consider all subparagraphs of s 31(2)(a) of the Act. On the appellant's construction, the Tribunal could consider only the subparagraphs relied on by the adjudicator and must reverse the adjudicator's decision if not satisfied that the matter referred to in that subparagraph was established. The appellant's approach would then demand that the adjudication application proceed to determination on the merits in circumstances where the proper exercise of the power under s 31(2)(a) would require that it be dismissed. In my view that outcome is a compelling reason for rejecting the appellant's proposed construction.
The appellant seeks to counter this conclusion by suggesting that, in the circumstance postulated in the previous paragraph, it would still be open to the respondent to the adjudication application to seek prerogative relief in this court to, in effect, compel an adjudicator to deal with an unconsidered limb of s 31(2)(a) of the Act following a Tribunal determination. I do not think that this submission avoids the difficulty faced by the appellant's construction. On the appellant's submission the adjudicator would still be required to undertake a determination on remittal from the Tribunal even though s 31(2)(a) required the adjudicator to dismiss the adjudication application. On the appellant's construction there remains a fundamental incoherence in the Act which is not resolved by the possibility that a party to a payment dispute may seek prerogative relief.
The appellant's grounds place reliance on s 29(9) of the SAT Act, which provides:
To avoid doubt it is declared that this section and section 27 do not extend to requiring or enabling the Tribunal to deal with a matter that is different in essence from the matter that was before the decision-maker.
In my view, the Tribunal was not, in considering whether the Agreement was a construction contract, dealing with a matter which was different in essence from that matter that was before the adjudicator. The matter which was before the adjudicator was whether he was obliged to dismiss the appellant's adjudication application without making a determination of its merits. As I have noted, the adjudicator could answer that question negatively only if none of the conditions specified in s 31(2)(a)(i) ‑ (iv) of the Act were satisfied. In considering whether any one of those conditions was satisfied, the Tribunal was dealing with the very matter before the adjudicator.
I also do not accept the appellant's submission that the Tribunal's approach involved the Tribunal exercising its review jurisdiction other than on the application of the appellant. In Perrinepod, the Court of Appeal held that a respondent who was dissatisfied with a failure by an adjudicator to dismiss an application under s 31(2)(a) could not seek a review of that decision under s 46(1) of the Act. In the present case the Tribunal's review decision was invoked by the appellant not the respondent. In exercising that jurisdiction the Tribunal was required to consider whether the adjudication application ought to be dismissed without making a determination of its merits. A negative answer to that question could only be given if none of the conditions for the existence of the duty to dismiss existed. In considering each of the subparagraphs of s 31(2)(a) of the Act the Tribunal was engaged in the determination of the appellant's review application.
In my view, before the Tribunal could exercise its review jurisdiction under s 46 to reverse the adjudicator's decision it had to be satisfied that none of the conditions in s 31(2)(a)(i) ‑ (iv) were satisfied. It did not exceed its jurisdiction by considering whether the Agreement was a construction contract. I do not regard the appellant's argument to the contrary to be tenable.
Appellant's questions of law
The appellant identifies two questions of law which it says arise from grounds 1 ‑ 4.
The first question identified by the appellant is:
Does the Tribunal have jurisdiction to review an adjudication determination for jurisdictional error (grounds 1 and 4)?
This question readily admits of a negative answer. The Tribunal clearly does not exercise a judicial review function. However, in my view the answer to this question does not really go any way towards resolving the controversy between the parties in this case.
Even though the Tribunal does not have the judicial function of reviewing a decision for jurisdictional error, the Tribunal is still required to form its own view of the nature and limits of the relevant administrative power for the purposes of exercising that power. Identification of the conditions for the valid exercise of a statutory administrative power, or the conditions for the existence of a statutory duty, may be required in both the exercise of this court's judicial review jurisdiction and the Tribunal's review jurisdiction.
In exercising its administrative function of reviewing a decision made under s 31(2)(a) of the Act the Tribunal is required to determine that none of the conditions specified in s 31(2)(a)(i) ‑ (iv) are satisfied before reversing a decision to dismiss an adjudication application. In the present case when the Tribunal considered whether the Agreement was a construction contract it was exercising the administrative function conferred on it by s 31 and s 46 of the Act. To conclude that the Tribunal was not engaged in a judicial review of the adjudicator's decision for jurisdictional error does not deny that the Tribunal was properly exercising its review jurisdiction when it considered whether the Agreement was a construction contract.
The second question of law identified by the appellant is:
Does the Tribunal have jurisdiction to determine whether the adjudicator was right not to dismiss the application under section 31(2)(a)(i)?
Behind this question lies an assumption that the adjudicator in this case did decide not to dismiss the appellant's adjudication contract under s 31(2)(a)(i) of the Act. I am not satisfied that the adjudicator did make such a decision in this case. He did not do so expressly. The appellant postulates that the adjudicator must have implicitly not been satisfied that the Agreement was not a construction contract. However, there is nothing to exclude the possibility that the adjudicator did not consider the issue because he did not have to do so in order to determine that the appellant's adjudication application must be dismissed.
A further difficulty with this formulation is that it does not, in my view, properly reflect the nature of the Tribunal's review jurisdiction. In exercising that jurisdiction the Tribunal does not ask whether the decision‑maker was right or made an error. Rather the Tribunal itself undertakes a de novo exercise of the administrative function so as to reach its own view of the correct and preferable decision.
I therefore do not consider that this question admits of a 'yes' or 'no' answer. If I were to answer this question then, for the reasons explained above, I would say that the Tribunal was able to consider, as part of its review, whether the Agreement was a 'construction contract' for the purposes of the Act.
Merits of grounds 5 ‑ 6
Grounds 5 ‑ 6 seek to challenge the decision of the Tribunal that the Agreement was not a construction contract.
Tribunal's findings
The Tribunal made the following findings about the Agreement:[37]
[37] [2014] WASAT 101 [33] ‑ [37].
The agreement between CSJV and FDS arose from the widely publicised project for the development of gas fields located off the north-west coast of Western Australia known as the Gorgon Project. As part of that project, CSJV was awarded the contract for installation of a subsea and onshore pipeline to transport domestic gas from Barrow Island to mainland Western Australia (Domgas pipeline).
As part of CSJV's contractual obligations, it was required to rehabilitate a right of way corridor (ROW or ROW corridor) some 12 kilometres long traversing the Onslow Domgas Intra Tidal Zone (ITZ). The rehabilitation consisted of backfilling excavated trenches and gullies created during the installation of the pipeline along the ROW and reinstating creek features present prior to the beginning of construction. SCJV was required to transport some 40,000 m3 of quarried material and stabilisation products from the mainland to be installed in set locations along the ROW.
On 2 December 2013, CSJV entered into a 'Services Agreement' with FDS 'for the wet hire and support of a quantity of BV206 tipper units and personal carriers including associated staff and equipment for use at the DOMGAS ITZ by CONTRACTOR'. The vehicles were to be 'used for the general cartage of aggregate fill, to complete ROW reinstatement works'.
Although I was taken to various parts of the contract documentation, the best description of the services to be provided appears in the scope of works clause 4.3 as follows:
'SUBCONTRACTOR shall under the direction of CONTRACTOR be responsible for the haulage of fill material and various erosion control materials from a stockpile location to the designated work locations along the ROW where reinstatement works shall be taking place. These works shall be managed by CONTRACTOR, and supported by SUBCONTRACTOR to include but not necessarily be limited to the following:
•The supply, maintenance, servicing and operation of Hagglund type vehicles (all required plant and equipment) for the haulage of fill and erosion control materials as required by the CONTRACTOR;
•Supply of all required personnel and manpower to operate and maintain the Hagglund vehicles to be used during the operations;
•Supply all necessary spare parts and/or backup plant and equipment to ensure the reliable operability of the vehicles;
•The daily management of all SUBCONTRACTOR personnel and associated planning required to oversee and manage SUBCONTRACTOR's scope of Services on a day to day basis.'
It is clear that the main objective of CSJV's contract with FDS was the haulage of fill from the stockpile located elsewhere to the ROW, and deposit of the fill at designated locations, through the agency of the vehicles. The deposited fill would then be utilised by other parties to rehabilitate the ROW.
It is implicit in the above passages that the Tribunal found that the written terms of the Agreement comprised the document at annexure 2 to the respondent's response to the adjudicator, extracts of which were reproduced at annexure A to the adjudication application. No party before me contended that the findings of the Tribunal which I have set out above as to the terms and subject matter of the Agreement were incorrect. While the appellant sought to agitate certain factual questions, none of its submissions derogated from the findings of the Tribunal which I have set out above.
Question of law
The respondent's submissions seek to characterise the appellant's challenge to the Tribunal's conclusion that the Agreement was not a construction contract as raising an error of fact. Given the inelegant and ambiguous way in which the grounds are expressed, I can understand why the respondent makes that submission.
The appellant contends, and the respondent denies, that grounds 5 and 6 raise the question of whether the Agreement is a construction contract for the purposes of the Act. That, in my view, is the relevant question of law. The question is whether a contract having the features and terms found by the Tribunal meets the statutory definition of 'construction contract' contained in the Act. As Murphy JA noted in Perrinepod,[38] the question whether a contract is a 'construction contract' within the meaning of s 3 of the Act is ultimately a question of law.
[38] Perrinepod [75].
However, the respondent takes issue with whether that question is actually raised by the grounds of appeal. The respondent points out that the grounds assert that the Tribunal misapprehended 'the nature and functions of its powers' and made two findings where there was no material before the Tribunal upon which those findings could be based. While the formulation of the grounds tends to obscure rather than highlight the question of law, I am satisfied that the question is raised by ground 5. Ground 5 relevantly asserts that the Tribunal misapprehended the nature of its powers by reason of provisions of the Act which define a 'construction contract' and findings that the Tribunal made about the content of the Agreement.
If a contract with the terms attributed to the Agreement by the Tribunal was properly characterised as a construction contract for the purposes of the Act, then the Tribunal could have arrived at the opposite conclusion only by misunderstanding the correct meaning of the statutory term 'construction contract'. If the Tribunal laboured under a misconstruction of that statutory term, then it would not have properly understood the nature of its power to dismiss an adjudication application under s 31(2)(a) of the Act. The power, and the duty to exercise the power, arises where the contract concerned is not a 'construction contract', as defined in the Act. A proper understanding of the nature of the power depends upon a proper understanding of the statutory term. On that basis the question identified by the appellant can be seen to arise from ground 5.
While I have managed to extract the relevant question from one of the grounds of appeal, the respondent can easily be forgiven for failing to initially perceive that this was the point which the appellant was seeking to make by the grounds. However, I am satisfied that the respondent has not been substantively prejudiced by the lateness of the appellant's clear articulation of the question. At an aborted hearing on 23 January 2015, I raised the issue of whether the question of law was appropriately formulated in this manner. Subsequently, the appellant, pursuant to my directions, filed a document setting out the questions it said were raised by its grounds of appeal, including the question of whether the Agreement was a construction contract for the purposes of the Act. My questions at the hearing on 23 January 2015, and the appellant's document of 28 January 2015, put counsel for the respondent on notice that they may have to deal with the question in their submissions. The respondent did not wish to take up an opportunity offered at the hearing to advance further submissions on this question. I do not see any prejudice to the respondent in proceeding to consider this issue at this time.
Despite the best endeavours of the person who drafted the grounds of appeal to obscure the question of law, and despite the dogged adherence of counsel for the appellant to the grounds as drafted, I am satisfied that the ground does raise the question of law identified above. To hold otherwise would allow form to triumph over substance. In my view the identification of where the interests of justice lie in this case is not dictated by the grammatical and other infelicities in the drafting of the ground of appeal.
Is the Agreement a construction contract?
In my view the construction of a gas pipeline, including the rehabilitation of the land on which the pipeline is constructed, is civil work,[39] and therefore construction work for the purposes of the Act.[40] In my view, moving earth to the location of the pipeline, and along the right of way on which the pipeline constructed, for use in the rehabilitation is an integral part of that civil work necessary for the completion of the construction of the pipeline. If the material for covering a pipeline trench is not hauled to the point where it is to be placed then the trench cannot be covered and the pipeline construction and site restoration cannot be completed. The Agreement, which imposed an obligation on the appellant to provide and operate vehicles carrying material required for that rehabilitation within an area that was clearly part of the 'site' (being the right of way on which the pipeline was constructed), in substance obliged the appellant to carry out construction work. It was, for that reason, a construction contract.[41] Further, the haulage of fill and erosion control materials can be regarded as part of the 'site restoration' of the site on which the pipeline was constructed, as well as 'earthmoving'.[42]
[39] Section 4(1) (paragraph (c) of the definition of 'civil works') of the Act.
[40] Section 4(2)(c) of the Act.
[41] Section 3 (paragraph (a) of the definition of 'construction contract') of the Act.
[42] Section 4(2)(f)(i) and s 4(2)(f)(v) of the Act.
The respondent submitted that when the use of the term 'earthmoving' is understood in the context of other terms used in the Act - 'earthworks', 'excavating', 'tunnelling' and 'boring' - the use requires more than just the movement of earth. I do not accept that submission. I see no reason why the use of vehicles to move earth within a site is not earthmoving.
Further, as the haulage of material for rehabilitation was part of the construction work, the supply of vehicles to undertake that haulage constituted the supply of plant for use in connection with the carrying out of construction work at the site of the construction work. I see no reason why the reference to 'plant' in the Act should not carry its ordinary meaning of the 'equipment … necessary to carry on any industrial business'.[43] The Agreement was, in those circumstances, also a construction contract by virtue of the obligation it imposed on the appellant to supply that plant to the site.[44]
[43] Macquarie Dictionary (6th ed), page 1124, definition 4.
[44] Section 3 (paragraph (b) of the definition of 'construction contract') and s 5(1)(c) of the Act.
In addition, the on-site services involving the maintenance and operation of vehicles used to haul fill and erosion control materials were, in my view, directly related to construction work. By obliging the appellant to provide those services the Agreement was properly to be characterised as a construction contract.[45]
[45] Section 3 (paragraph (c) of the definition of 'construction work') of the Act.
For some reason the Tribunal focused on the question of whether the Agreement provided for the construction of civil works comprising a road. It is not clear why the focus was on the construction of a road rather than a gas pipeline. It may be that this was a product of the way in which the appellant put its case in the Tribunal. Whatever the reason for the focus on a 'road', the Tribunal found, in the passage set out above, that the Agreement related to the rehabilitation of the trenches created as part of the construction of the pipeline corridor. The Tribunal's references to a road do not detract from the findings that the Agreement concerned the rehabilitation of the right of way on which the pipeline was constructed.
In explaining why the contract works provided for by the Agreement did not fall within par (f) of the definition of 'construction work' in s 4(2) of the Act, the Tribunal observed:[46]
In my view, the examples given in part (f) are illustrative of the intrinsic nature of the associated works to the core 'construction work' to which they relate. They point to a broader perspective of what might be regarded as fitting within the umbrella of construction work than the one FDS has urged upon me. Such a perspective requires the inclusion, within that umbrella, of site works, but not the mere supply of equipment and material; earthmoving within a particular site, but not bringing fresh material from an external site; and site restoration, but not haulage of fill to facilitate this.
[46] [2014] WASAT 101 [45].
However, the Agreement provides for more than the 'mere supply of equipment and material'. It required the appellant to undertake the haulage of the fill and erosion control material to the point where it was to be applied to the rehabilitation of the site. The Tribunal draws a distinction not contemplated by the language of the Act in distinguishing between earthmoving within a site and bringing fresh material from an external site. Whatever the precise scope of the 'site' in this case, the work which the appellant was required to undertake by the Agreement must have included, as a significant element, movement of earth within the site from the point of entry onto the site to locations within the site where it was to be unloaded (ie, along the right of way on which the pipeline was constructed). Haulage of material within a site to the location where it is to be used in site rehabilitation forms part of the site restoration even if the origin of the material was a location outside the site.
Before the Tribunal, the respondent contended that the Agreement fell within what it referred to as the 'mining exclusion' in s 4(3) of the Act. Section 4(3) of the Act provides that, despite s 4(2), construction work does not include certain kinds of work on a site in Western Australia. The exception on which the respondent relied, contained in s 4(3)(c), was 'constructing any plant for the purposes of extracting or processing … natural gas'.
As the Tribunal found that the Agreement did not oblige the appellant to undertake 'construction work', it did not need to consider whether the work provided for in the Agreement fell within this exception. The Tribunal did not make any findings of fact which would be necessary for a conclusion that the domestic gas pipeline was constructed for the purposes of extracting or processing natural gas. Counsel for the respondent did not, in his written or oral submissions to me, contend that the Tribunal should have found that the work provided for by the Agreement was not construction work because the construction of the domestic gas pipeline was construction of plant for the purposes of extracting or processing natural gas. If such a contention had been advanced, it would not have been an argument against the proposition that the Tribunal's actual conclusion involved an error of law.
Further, I have not been taken to any evidence or other factual material to support the conclusion that the domestic gas pipeline was constructed for the purposes of extracting or processing natural gas. Contrary to submissions of the respondent before the Tribunal, the construction of a pipeline for the transport of processed gas to a point where it could be consumed would not seem to me to fall within the exception. I can readily accept that the transport of natural gas involves regulation of the temperature, pressure and moisture content of the transported gas. However, that regulation of the physical properties of the gas does not, in my view, involve the 'processing' of the gas for the purposes of s 4(3)(c) of the Act. It is simply a necessary part of its transport. Nor have I been taken to any evidence or other material which establishes that the domestic gas pipeline performs a function so related to the extraction or processing of the natural gas as to make it part of plant used for that purpose.[47]
[47] See Re Anstee‑Brook; Ex parte Karara Mining Ltd [2012] WASC 129 [16].
In my view the contract described at par [33] ‑ [37] of the Tribunal's reasons for decision is a 'construction contract' as that term is defined in s 3 of the Act. It follows that the Tribunal made an error of law when it concluded that the Agreement, having the terms and subject matter found by the Tribunal, was not a 'construction contract' within the meaning of s 3 of the Act. I consider that the appellant has made out ground 5, albeit that the ground is unhappily expressed.
This conclusion makes it unnecessary to deal with ground 6 in any detail. It is sufficient to state my conclusion that the ground is not made out because it does not identify any finding which, in my view, was actually made by the Tribunal.
Disposition of the application for leave to appeal
In my view, as the appellant has made out ground 5 of the appeal it is appropriate that it be given leave to appeal on that ground.
In my view, allowing the error of law made by the Tribunal as to the status of the Agreement as a construction contract to go uncorrected would impose a substantial injustice on the appellant. I accept that the identification of the error of law will not, for reasons explained below, lead to the Tribunal's decision being set aside. However, I am also of the view that the reasons of the Tribunal as to the status of the Agreement have had, and will continue to have, a detrimental effect on the appellant's rights and interests. The nature of that detrimental impact is explained in the section of these reasons which deal with the question of whether declaratory relief should be granted. In my view it is in the interests of justice that leave be granted so that the error can be corrected by the grant of declaratory relief.
Disposition of the appeal
While the appellant has succeeded in establishing an error of law by the Tribunal in concluding that the Agreement is not a construction contract, it does not follow that the appellant is entitled to have this court set aside or vary the Tribunal's decision.
Vitiating error
The Tribunal concluded that the adjudication application must be dismissed for two independent reasons. The Tribunal has been shown to have made an error of law in respect of one of those reasons. However, the other reason - that the adjudication application was not prepared and served in accordance with s 26 of the Act - has not been the subject of any challenge in this appeal.
In my view the power of the Court to set aside the decision of the Tribunal, conferred by s 105(9)(a) of the SAT Act, should not be exercised where no error of law has been demonstrated which might have affected the Tribunal's ultimate decision.
In my view, the position is akin to that identified by the Court of Appeal of the Northern Territory, in a similar statutory context, in Development Consent Authority v Phelps.[48] There the Court recognised (and it was not in dispute in that case) that, in order for an appeal to succeed, an appellant needs to identify an error of law which vitiates the decision concerned.[49] After reviewing cases considering the issue in a number of different contexts, the Court of Appeal concluded that an error of law vitiates a tribunal's decision where the reviewing court is satisfied, after an examination of the tribunal's reasons and any other relevant material, that there was a real possibility that the error of law could have affected the tribunal's decision.[50]
[48] [2010] NTCA 3; (2010) 27 NTLR 174.
[49] Phelps [11].
[50] Phelps [23].
The need for any error of law to be a vitiating error was also emphasised by the decision of the New South Wales Court of Appeal in Sydney Water Corporation v Caruso.[51] In that case the Court of Appeal was dealing with an appeal from the Land and Environment Court in a land compensation case, where the right of appeal was confined to an appeal on a question of law.[52] The Court divided as to whether the relevant passage of the primary judge's reasons disclosed an error of law. Allsop P and Sackville AJA found that it did; Tobias JA found that it did not. However, all members of the court found that any error should not lead to the appeal being allowed, applying the following passage of Moffitt P in Leichhardt Municipal Council v Seatainer Terminals Pty Ltd:[53]
It is not sufficient to show that some error of law appears in the judgment or during the course of the trial. The error has to be one upon which the decision depends, so the decision is vitiated by the error … It will not suffice to establish that one or some only of a number of alternative findings upon which the decision was given involved errors of law, if one alternative involved no error of law.
[51] [2009] NSWCA 391; (2009) 170 LGERA 298.
[52] Caruso [57].
[53] Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409, 419; applied in Caruso [8] ‑ [9], [108] ‑ [109], [191].
Members of the court in Caruso divided on the question of who bears the burden of persuasion that an error of law vitiates a decision and what discharging that burden of persuasion entails. In the view of Allsop P no mechanical or fixed approach was warranted. However, he observed that a decision will, at least in some circumstances, be vitiated if an error went to a central issue for consideration and the appellate court cannot be persuaded to a relevant degree of satisfaction that the resolution of the central issue has not been affected.[54] Tobias JA was of the view that it was for the party asserting error to satisfy the appellate tribunal that the error has affected the relevant decision in the sense that it was one on which the relevant decision depended.[55] Sackville AJA preferred to leave the resolution of that question to a case where it was important,[56] but noted that the answer to the question would not necessarily be the same in all circumstances and judicial observations made in one context will not necessarily provide reliable guidance in a different context.[57]
[54] Caruso [25] ‑ [26].
[55] Caruso [132].
[56] Caruso [193].
[57] Caruso [199].
The unresolved division of opinion in Caruso was not critical to the outcome of that case as all members of the court were satisfied that any error did not affect the result in that case.
In Kidd v Resource Management and Planning Appeal Tribunal,[58] Porter J, when dealing with an administrative appeal alleging an error of law, noted the division of views in Caruso and applied what was said by the High Court in Australian Broadcasting Tribunal v Bond,[59] to the effect that an error of law will be vitiating if it can be shown that the decision under review would have been, or might have been, different if the error had not been made.
[58] [2011] TASSC 38; (2011) 20 Tas R 339 [54].
[59] Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321.
I favour the approach adopted by the Northern Territory Court of Appeal in Phelps, which I regard as generally consistent with the approach adopted by Allsop P in Caruso and Porter J in Kidd. An applicant seeking review by an administrative tribunal may be regarded as having a right to have their review application determined according to law. If a tribunal makes a demonstrable error of law which might have affected the ultimate decision, but which cannot be positively shown to produce an adverse outcome, then the dissatisfied party has not received the kind of review to which they were entitled. I am of the view that the approach adopted in Phelps is appropriate for the exercise of this court's jurisdiction under s 105 of the SAT Act.
In this case the error of law which I have identified could not have affected the Tribunal's decision to dismiss the review application and affirm the adjudicator's decision. It could only have affected one of the two independent reasons which the Tribunal gave for making that decision. In my view, while the appellant has established an error of law, that error did not vitiate the Tribunal's decision.
Orders sought by the appellant
The order sought by the appellant, so far as it would vary the decision of the Tribunal, is as follows:
The orders of the Tribunal made 21 August 2014 be varied as follows:
(a)The review application be allowed in part; and
(b)The decision of the adjudicator … to dismiss the adjudication application is varied so that the adjudication application is dismissed on the basis that no payment claim has been made by [the appellant] in relation to the subject matter of [the appellant's] adjudication application.
In my view these proposed orders confuse the decisions of the adjudicator and Tribunal with the reasons for those decisions. The distinction between a decision which may be the subject of an appeal, and reasons which are not themselves subject to appeal, has been drawn in a number of cases. These include the decision of the High Court in Driclad Pty Ltd v Federal Commissioner of Taxation,[60] on which the appellant relied.
[60] (1968) 121 CLR 45, 64. See also Tipene v Owners of Strata Plan 9485 [2015] WASC 30 [127]; Diveva Pty Ltd v Nominal Defendant [2013] NSWCA 325 [74]; McGuirk v University of NSW [2009] NSWCA 321; (2009) 75 NSWLR 224 [18] ‑ [21]; Gibson Motorsport Merchandise Pty Ltd v Forbes [2006] FCAFC 44; (2006) 149 FCR 569 [122] ‑ [125].
In Dricladthe appellant brought an appeal against an assessment of income tax which was heard by Taylor J sitting in the court's original jurisdiction. The appeal was allowed and the assessment set aside but for reasons which invited the Commissioner to re-assess on a basis contested by the taxpayer. The appeal was allowed on the basis that the taxpayer had sought orders which would preclude the making of a new assessment on the objected basis and that such an order had not been made. The High Court varied Taylor J's orders by vacating some orders and varying others by adding declarations. The case does not stand as authority for the proposition that a party dissatisfied by the reasons for a decision can appeal against those reasons without seeking to vary the orders made as a consequence.
The distinction between the decision of the Tribunal and the reasons for the Tribunal's decision is also drawn by s 105(5)(b) of the SAT Act, and by other provisions of the SAT Act which refer to the decision of the Tribunal and reasons for the Tribunal's decision.[61] The distinction between the decision of an adjudicator under s 31(2)(a) of the Act and the reasons for that decision is drawn by s 37 of the Act.
[61] See, for example, s 29 and s 74 - s 79 of the SAT Act.
In this case the decision which the adjudicator was required to make was to dismiss the appellant's adjudication application without determining its merits. On review the Tribunal could affirm, vary or set aside the adjudicator's decision under s 29(3) of the SAT Act. The Tribunal chose to affirm the decision under review. While there may be some difficulty in identifying the 'decision' which may be subject to an appeal under s 105 of the SAT Act in the case of interim determinations,[62] in the present case the 'decision' which is the subject of the appeal is the Tribunal's decision to affirm the adjudicator's decision.[63] It is that decision, not the reasons, which are the subject of the appeal and the decision has not been shown to be incorrect.
[62] See Tipene [129].
[63] Pursuant to s 29(3)(a) of the SAT Act.
I also note that the Tribunal, as constituted by a non-judicial member, would not have had the power to grant declaratory relief.[64] It cannot be said that the Tribunal should have declared that the Agreement was, or was not, a construction contract. In that regard the position of this court as regards the Tribunal differs from the position of the Full Court of the High Court as regards Taylor J (who was held to have erred in failing to make declaratory orders) in Driclad.
Conclusion
[64] Section 91(2) of the SAT Act.
In my view the error of law which I have identified did not vitiate the Tribunal's decision. The orders made by the Tribunal on 21 August 2014, dismissing the review application and affirming the decision of the adjudicator to dismiss the adjudication application, have not been shown to have been made in error. Rather, the appellant has shown only one of the Tribunal's two independent reasons for making that decision to involve an error of law. It follows that there is no basis for setting aside the Tribunal's decision. In my view the appropriate order in those circumstances is an order, pursuant to s 105(9)(a) of the SAT Act, to affirm the Tribunal's decision.
Declarations
The minute of orders proposed by the appellant also include two declarations.
The first proposed declaration is based on a view of the extent of the Tribunal's powers which I have rejected in dealing with grounds 1 ‑ 4 of the proposed appeal. My rejection of that view provides a sufficient basis for declining to make the first declaration sought by the appellant.
However, the second proposed order is a declaration that the Tribunal erred in finding that the Agreement is not a construction contract for the purposes of the Act.
Section 105(9) of the SAT Act enables me, when dealing with an appeal under that section, to make 'any order the court thinks appropriate'. I see no reason why, in an appropriate case, such other order could not be in the form of declaratory relief. Further, the appellant relies on the court's inherent jurisdiction to grant declaratory relief.
In Ainsworth v Criminal Justice Commission,[65] the plurality observed:
It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which '[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise.' However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have 'a real interest' and relief will not be granted if the question 'is purely hypothetical', if relief is 'claimed in relation to circumstances that [have] not occurred and might never happen' or if 'the Court's declaration will produce no foreseeable consequences for the parties'.
[65] (1992) 175 CLR 564, 581 ‑ 582 (citations omitted).
This is not a case where the making of a declaration could have no foreseeable consequences for the parties. The Tribunal's decision that there was no payment dispute leaves it open for the appellant to take steps which will cause a payment dispute to arise in the future. However, the Tribunal's decision that the Agreement is not a construction contract will operate as a barrier to the success of any further adjudication application. That is illustrated by a decision of an adjudicator, made subsequent to the Tribunal's decision, to dismiss a different adjudication application made in relation to the Agreement on the ground that the Agreement is not a construction contract.
Further, there have been a number of determinations made under s 31(2)(b) of the Act in payment disputes arising under the Agreement, the binding effect of which under s 38 of the Act is called into question by the Tribunal's reasons in the present matter. Section 38 of the Act makes an adjudicator's determination of the merits of a payment dispute binding on the 'parties to the construction contract'. If the Agreement were not a construction contract, as the Tribunal found, then there may be no 'parties to the construction contract' to be bound by an adjudicator's determination. Submissions before me explored the possibility that the reference to 'parties to the construction contract' in s 38 of the Act might be construed as a reference to parties to a contract which an adjudicator had found to be a construction contract, or a reference to the parties named in the adjudicator's determination. Either suggested formulation would involve placing a considerable gloss on the terms used in s 38 of the Act and, in my view, neither is obviously correct. There is at least a question as to the operation of s 38 of the Act in relation to the Agreement which would be resolved by a declaration to the effect that the Tribunal erred in law in determining that the Agreement was not a construction contract.
The exercise of a power to grant declaratory relief in a statutory appeal to a court is supported by the decision of the High Court in Driclad, where Taylor J was, in effect, held to have erred by failing to make declarations. The approach also finds support in the decision of the New South Wales Court of Appeal in McGuirk v University of New South Wales.[66]
[66] McGuirk [20] ‑ [21].
Support for the grant of declaratory relief can also be found by analogy in the decision of the High Court in Ainsworth, where a declaration was granted as an alternative to prerogative relief in circumstances where the prerogative relief was not available. The legislative description of the present proceedings as an 'appeal' must not disguise the fact that what is involved is the exercise of original, not appellate, jurisdiction and the proceedings are in the nature of judicial review.[67] If declaratory relief may be granted as an alternative to prerogative relief, there is no reason to think that declaratory relief cannot also be granted in the exercise of the court's review jurisdiction in the present statutory appeal.
[67] Osland v Secretary, Department of Justice [2010] HCA 24; (2010) 241 CLR 320 [18].
The appellant sought the declaration in a minute of orders filed only shortly prior to the hearing. However, I am satisfied that the respondent has not been unfairly prejudiced by the late identification of the order sought by the appellant. In the course of the hearing I inquired as to whether the respondent sought any further opportunity to advance submissions on the question of whether the Agreement was a construction contact and was informed by senior counsel for the respondent that it did not seek that opportunity. In those circumstances I am satisfied that the respondent has been afforded a reasonable opportunity to make a case that the Tribunal did not err in its conclusion that the Agreement was not a construction contract.
In my view the Tribunal did make an error of law when it concluded that the Agreement was not a construction contract for the purposes of the Act, and that error of law has had, and is continuing to have, an adverse effect on the interests of the appellant. In those circumstances it is, in my view, in the interests of justice that this court declares that the Tribunal erred in finding that the Agreement is not a construction contract.
Orders
For the reasons explained above, I would make the following orders:
1.The appellant have leave to appeal against the orders of the Tribunal made on 21 August 2014 on ground 5 in the amended appeal notice dated 2 October 2014.
2.The orders of the Tribunal made on 21 August 2014, dismissing the review application and affirming the decision of the adjudicator to dismiss the adjudication application, be affirmed.
3.It is declared that the Tribunal erred in law in finding that the Agreement is not a construction contract for the purposes of the Act.
I shall hear from the parties as to the costs of the appeal.
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