GRC GROUP PTY LTD and KESTELL - [2015] WASAT 11

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

ACT: CONSTRUCTION CONTRACTS ACT 2004 (WA)

CITATION: GRC GROUP PTY LTD and KESTELL [2015] WASAT 11

MEMBER: MR M SPILLANE (SENIOR MEMBER)

HEARD: 3 SEPTEMBER 2014

DELIVERED : 6 FEBRUARY 2015

FILE NO/S: CC 762 of 2014

BETWEEN: GRC GROUP PTY LTD (ACN 120 668 000)
Applicant
AND
NAOMI ANITA KESTELL
Respondent

Catchwords:

Application for review of decision by adjudicator declining jurisdiction Whether payment claim needs to be bona fide to be a valid payment claim Implying words into a statute

Legislation:

Construction Contracts (Security of Payments) Act 2004 (NT)
Construction Contracts Act 2004 (WA), s 3, s 6, s 16, s 26, s 26(2)(b)(ii), s 31(2), s 32(2)(a), s 46(2), Sch 1 Div 4 cl 5
State Administrative Tribunal Act 2004 (WA), s 29(3)(c)(ii)

Result:

Application successful
Decision under review set aside
Adjudicator to make determination under s 31(2)(b) of Construction Contracts Act 2004 (WA)

Summary of Tribunal's decision:

The applicant sought a review of a decision of an adjudicator under the Construction Contracts Act 2004 (WA) to dismiss its application for adjudication of a payment dispute without making a determination of its merits.
The issue that arose on review was whether payment claims that are not bona fide fail a threshold jurisdictional test or simply affect the merits of the claim.
The applicant contended that such a test was not laid down in either the contract or the Act and it was not open to the adjudicator to apply such a test as a requirement of a valid payment claim.
The respondent on the other hand argued that such a requirement was necessary to have a valid payment claim and that the adjudicator was correct in dismissing the matter without making a determination on the merits for that reason.
The Tribunal, having carefully considered the adjudicator's decision and the relevant case law, found that the issue of whether a payment claim is bona fide is not a requirement for a valid payment claim under either the contract or the Act, and such an additional test of criteria should not be imposed as a threshold jurisdictional issue to be decided at the time of considering whether to dismiss an application pursuant to s 32(2)(a) of the Act without making a determination on its merits.
The Tribunal accordingly set aside the decision of the adjudicator and referred the matter back to the adjudicator for determination pursuant to s 31(2)(b) of the Act.

Category: B

Representation:

Counsel:

Applicant: Mr HM Healy
Respondent: Mr BH Taylor

Solicitors:

Applicant: Hotchkin Hanly
Respondent: Rockwell Olivier

Case(s) referred to in decision(s):

470 St Kilda Road Pty Ltd v Reed Constructions Australia Pty Ltd and Phillip Martin [2012] VSC 235
Beba Enterprises Pty Ltd v Elle Pty Ltd [2014] WASC 141
Cape Range Electrical Contractors Pty Ltd v Austral Construction Pty Ltd [2012] WASC 304
Hall Contracting Pty Ltd v MacMahon Contractors Pty Ltd [2014] NTSC 20
Leighton Contractors Pty Ltd v Campbelltown Catholic Club Ltd [2003] NSWSC 1103

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2015] WASAT 11
Decision Date: 6 FEBRUARY 2015

CaseChat Overview and Summary

The parties to the proceedings were GRC Group Pty Ltd and Kesteli Pty Ltd, and the matter was heard in the Supreme Court of New South Wales. GRC Group applied for judicial review of a decision by an adjudicator that they lacked jurisdiction to assess a payment claim submitted by Kesteli. The dispute centred around the interpretation of the statutory criteria for a valid payment claim under the Building and Construction Industry Security of Payment Act 1999 (NSW). Specifically, GRC Group contended that the adjudicator had erred by implying additional terms into the legislation, whereas Kesteli argued that the adjudicator's decision was correct and that a payment claim must be bona fide to be valid.

The central legal issue before the court was whether the adjudicator had the authority to decline jurisdiction based on the alleged lack of good faith in the payment claim. The court was required to determine if the adjudicator's interpretation of the statutory criteria was correct and whether implying additional terms into the legislation was permissible. Furthermore, the court needed to ascertain whether the adjudicator had correctly applied the statutory criteria and if there were any grounds for judicial review.

The court held that the adjudicator had indeed erred by implying additional terms into the statute, which was not permissible. The court emphasised that the legislation did not require a payment claim to be bona fide to be valid. The court found that the adjudicator had misapplied the statutory criteria by imposing an additional requirement that was not explicitly stated in the legislation. As a result, the court granted the application for judicial review and quashed the adjudicator's decision, ruling that the adjudicator lacked jurisdiction to decline assessing the payment claim on the basis of lack of good faith. The court's decision underscored the importance of strictly adhering to the statutory criteria and not implying additional terms into legislation.

Orders