Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture (No 2)

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
TECHNOLOGY ENGINEERING AND CONSTRUCTION LIST

No. 8095 of 2009

GROCON CONSTRUCTORS PTY LTD (ACN 006 703 091)	Plaintiff
AND
PLANIT COCCIARDI JOINT VENTURE (ACN 126 558 754)	Firstnamed Defendant
AND
JOHN O’BRIEN	Secondnamed Defendant
AND
PHILLIP DAVENPORT	Thirdnamed Defendant

---

JUDGE:	VICKERY J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	20 AND 21 AUGUST 2009
DATE OF JUDGMENT:	25 SEPTEMBER 2009
CASE MAY BE CITED AS:	GROCON CONSTRUCTORS v PLANIT COCCIARDI JOINT VENTURE [No. 2]
MEDIUM NEUTRAL CITATION:	[2009] VSC 426	1^st Revision

---

Building Contracts - Building and Construction Industry Security of Payment Act 2002 (Vic) – Circumstances in which decisions of an adjudicator and review adjudicator are subject to judicial review - Brodyn Pty Ltd v Davenport [2004] NSWCA 394 considered and not followed in part.

Administrative Law – Judicial review – Extension of time to commence proceedings for judicial review - Decisions of adjudicator and review adjudicator appointed under Building and Construction Industry Security of Payment Act 2002 (Vic) – Whether certiorari available – Grounds for certiorari - Section 85 Constitution Act 1975 (Vic) considered and applied.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M.A. Robins with Ms A. Golding	Nathan Kuperholz
For the Defendant	Mr G. John Digby QC with Mr R. Andrew	LAC Lawyers

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Progress Payment Claim History.................................................................................................... 2

Litigation History............................................................................................................................... 4

Originating Motion for Judicial Review - Extension of time to Commence.......................... 6

The Building and Construction Industry Security of Payment Act 2002 (Vic)........................ 9

Whether an Adjudicator is Amenable to Certiorari.................................................................. 10

The Prerogative Writ of Certiorari..................................................................................... 10
Adjudicator Not an ‘Inferior Court’................................................................................... 11
Adjudicator Exercises Power which is Amenable to Certiorari..................................... 12
Whether Adjudicators Satisfy the “Legal Rights Test”................................................... 15
Adjudicator is not a Private Body....................................................................................... 17
A Private Body Performing a Public Function................................................................. 22

Is an Implied Ouster of Certiorari Precluded by the Victorian Constitution?.................... 29

Jurisdictional Error.......................................................................................................................... 37

Error of the Face of the Record...................................................................................................... 42

The Principles........................................................................................................................ 42
Errors of Fact.......................................................................................................................... 44

Duty of Adjudicator to Provide Procedural Fairness (Natural Justice)................................. 45

Function of the Court on Judicial Review................................................................................... 51

What Constitutes the ‘Record’ Under the Act............................................................................ 53

Certiorari a Discretionary Remedy............................................................................................... 57

Declaratory Relief............................................................................................................................ 57

Background to the Adjudication Determinations..................................................................... 59

The O’Brien Determination................................................................................................. 59
The Davenport Review Determination.............................................................................. 61

The O’Brien Determination - Grounds for Judicial Review................................................... 62

The Service Grounds............................................................................................................ 62
Finding as to a “Final Payment Claim”............................................................................. 63
Whether “Final Payment Claim” Served Within Time................................................... 65
The Section 14 Grounds....................................................................................................... 70
The Claimable Variation / Excluded Amount Grounds................................................. 72
The Natural Justice Grounds............................................................................................... 78

Conclusion as to the Grounds for Judicial Review of the O’Brien Determination............ 82

The Davenport Review Determination - Grounds for Judicial Review............................... 82

Conclusion as to the Grounds for Judicial Review of the Davenport Review Determination 92

Orders................................................................................................................................................. 93

HIS HONOUR:

Introduction

This matter raises important issues as to the operation in Victoria of the Building and Construction Industry Security of Payment Act 2002 (as amended) (the “Act”). More particularly, the proceeding questions the circumstances in which determinations of an adjudicator and review adjudicator appointed under the Act may be the subject to judicial review. The Plaintiff, Grocon Constructors Pty Ltd (“Grocon”) seeks a declaration that the determinations of an adjudicator and review adjudicator appointed under the Act, which directed that it pay a progress payment to the defendant Planit Cocciardi Joint Venture Pty Ltd (“PCJV”), be declared void or alternatively be quashed. The form of relief sought in each case is by way of certiorari and declaration.

As I observed in Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd and Anor,[1] the Act has had a substantial effect in shifting the power balance between principals and subcontractors in construction contracts in Victoria and in other States and Territories, where legislation in similar terms and with the same objects has been enacted.[2] Subcontractors are now in a position to promptly secure payments of progress claims with the aid of a statutory mechanism which compliments the provisions of the construction contract. Outstanding claims of the principal under the contract, arising, for example, from poor workmanship or delay, are preserved as future enforceable claims, but cannot stand in the way of prompt payment of a progress claim found to be due under the expeditious process provided for in the Act.
[1][2009] VSC 156 at [2].
[2]Building and Construction Industry Security of Payment Act 1999 (NSW), Construction Contracts Act 2004 (WA); Construction Contracts (Security of Payments) Act (NT); and Buildingand Construction Industry PaymentsAct 2004(Qld).

The Act came into operation in Victoria on 31 January 2003. It has since been amended by Act No. 42 of 2006. The first of the amendments came into operation on 26 July 2006. These were relatively minor. The second and more substantial group of amendments commenced on 30 March 2007. The Act, in its present amended form, applies to construction contracts entered into on or after 30 March 2007. For construction contracts entered into on or after 31 January 2003 but prior to 30 march 2007, the Act in its unamended form applies, save for the minor amendments which became operative on 26 July 2006.[3]
[3]See the transitional provision: s.53 Building and Construction Industry Security of Payment Act 2002 (as amended).

The proceedings in this matter arise out of an agreement made on or about 5 May 2008 (the “Engineering Design Agreement”), pursuant to which PCJV agreed to provide design works for Grocon in respect of the roofing and light tower design for a construction project known as the Melbourne Rectangular Stadium at Olympic Park in Melbourne, Victoria (the “Project”). Between about November 2007 and December 2008, PCJV provided electronic and hard copy shop drawing services for Grocon in respect of the steel roof and light towers for the Project, with further materials being provided in early February 2009. Grocon paid to PCJV, up to and including the period of January 2009, the sum of $2,482,869 (plus GST) for services in respect of the Project.

The Act in its present form, as amended by the Building and Construction Industry Security of Payment (Amendment) Act 2006 (Act No. 42 of 2006), therefore applies.

Progress Payment Claim History

The matter which is the subject of the present application for judicial review has its origin in claims made by PCJV for the payment of progress payments under the Engineering Design Agreement which PCJV says are due and payable to it under the Act.

By payment claims made progressively by PCJV against Grocon during the operation of the Engineering Design Agreement, PCJV claimed payment for progress payments pursuant to the Act for the months of September, October, November and December 2008. The payment claims related to work said to have been performed during the periods ending 26 September 2008 (invoice 00000015), 24 October 2008 (invoice 00000016), 28 November 2008 (invoice 00000017) and 5 December 2008 (invoice 00000018). The total of the sums claimed amounted to $544,841.

PCJV made a further payment claim against Grocon dated 24 April 2009 claiming the sum of $544,841 pursuant to the Act (the “24 April Payment Claim”). The invoice constituting the payment claim dated 24 April 2009 comprised PCJV’s invoice 00000020 which related to and claimed for work performed during the periods ending 26 September 2008 (invoice 00000015), 24 October 2008 (invoice 00000016), 28 November 2008 (invoice 00000017) and 5 December 2008 (invoice 00000018).

On 8 May 2009 Grocon issued a payment schedule in respect of the 24 April Payment Claim pursuant to the Act, denying any sum was due from it to PCJV. Grocon’s payment schedule stated that the sum due to PCJV was nil, and identified in that schedule an “excluded amount” of $544,841.

On 21 May, 2009, PCJV then lodged an application for an adjudication determination pursuant to the Act. The second defendant (“O’Brien”) was appointed as the adjudicator. Both Grocon and PCJV lodged written submissions with O’Brien.

O’Brien delivered his adjudication determination on 28 May 2008 (“the O’Brien determination”). O’Brien determined that PCJV was entitled to be paid by way of interim payment under the Act the amount of $544,841 (“the adjudicated amount”) together with costs of the adjudication.

On 23 June 2009 and subsequently, Grocon informed PCJV in writing that it objected to the O’Brien determination, stating it was contrary to law, and affected by jurisdictional error and/or breaches of procedural fairness.

On 26 June 2009, in compliance with the statutory pre-conditions for the conduct of an adjudication review, Grocon paid $552,305 into a designated trust account pursuant to s.4 and s.28F of the Act, to be held with the National Australia Bank branch at 330 Collins Street Melbourne. Grocon also gave to PCJV the required notice of the payment pursuant to s.28F of the Act. On the same day, Grocon issued a review application of the O’Brien determination pursuant to s.28B of the Act on the sole ground that the adjudicated amount was in respect of a variation which was not a claimable variation under s.10A of the Act and was accordingly an excluded amount of $544,841 as defined by s.10B(2)(a) of the Act.

The third defendant (“Davenport”) was appointed as the review adjudicator under the Act. Grocon and PCJV both lodged written submissions with Davenport in the course of the review adjudication.

On 5 July 2009, Davenport delivered his review adjudication determination (“the Davenport review determination”). By his review determination Davenport confirmed the O’Brien determination. He further determined that Grocon was to pay the review determination fees.

Litigation History

The plaintiff in this proceeding ("Grocon"), issued a generally indorsed writ against the defendant ("PCJV") dated 6 January 2009 (the “Principal Proceeding”). The claim made by Grocon in summary is that by an agreement made on or about 5 May 2009 (the “Engineering Design Agreement”) PCJV agreed to provide electronic and hard copy shop drawings for Grocon in respect of the steel roof and light towers for the construction project known as the Melbourne rectangular Stadium at Olympic Park in Victoria (the “Project”).

Grocon alleges breaches of the Engineering Design Agreement in that PCJV is said to have failed to provide the design drawings required under the agreement. Grocon claims relief which includes damages. A statement of claim was filed in the Principal Proceeding dated 19 February 2009. The statement of claim alleged a further agreement said to have been made on 8 January 2009, whereby PCJV is alleged to have agreed to provide to Grocon a body of electronic documents in return for payment of a sum of $175,690.90. Grocon alleges breaches of the further agreement. PCJV subsequently filed its defence and counterclaim dated 23 March 2009. PCJV seeks payment for variations both on the basis of a contractual variations and representations allegedly made in breach of s.52 Trade Practices Act 1974 (Cth) (the “TPA”). It also seeks relief by reason of alleged unconscionable conduct arising from alleged breaches of s.51AA and 51AC TPA, and in equity. A claim founded on quantum meruit and restitution then follows. Also included in PCJV’s counterclaim was a claim for progress payments said to have been payable pursuant to the Building and Construction Industry Security of Payment Act 2002. Grocon delivered its reply and defence to counterclaim on 29 May 2009. Following an interlocutory hearing before me on 6 May 2009, the paragraphs of PCJV’s counterclaim which pleaded the entitlement to progress payments under the Act were discontinued in the Principal Proceeding.

The present matter had its origin in an application made by Grocon in the Principal Proceeding seeking an interlocutory injunction. It did so by its summons filed in the Principal Proceeding dated 16 July 2009 (the “Injunction Proceeding”). Grocon's summons sought to restrain PCJV from seeking to take action in respect of the Davenport review determination dated 5 July 2009. It also challenged the O’Brien determination dated 18 June 2009 and sought similar orders in respect of it.

On 27 July 2009 I determined Grocon’s application in the Injunction Proceeding in its favour and granted an injunction in the following terms:

Until the final determination of this proceeding or further order, the defendant by itself, its servants or agents is restrained from seeking to enforce by judgment or otherwise any alleged entitlement arising pursuant to a review adjudication determination made by Phillip Davenport dated 5 July 2009, or any adjudication determination made by John O'Brien dated 18 June 2009, other than by a final order made in this proceeding.

Ancillary orders were also made in the Injunction Proceeding which included an order that Grocon was to issue, file and serve an application for judicial review of the adjudication decision and the adjudication review decision, the subject of this proceeding. I also made orders for the speedy hearing of the application for the judicial review in the Technology, Engineering and Construction list, and consequential orders to facilitate this course.

Originating Motion for Judicial Review – Extension of time to Commence

Grocon now seeks judicial review of both the O’Brien determination and the Davenport review determination.

On 31 July 2009 Grocon issued its originating motion and a summons on the originating motion in proceeding No. 8095 of 2009 in accordance with Rule 56, Supreme Court General Civil Procedure Rules 2005 (the “Judicial Review Proceeding”). The originating motion seeks orders that the adjudication determination, being the O’Brien determination, and the adjudication review determination, being the Davenport review determination, be declared unlawful and void; or alternatively that they be quashed.

A proceeding for judicial review must be commenced within 60 days after the date when grounds for the grant of the relief or remedy claimed first arose: r.56.02(1). If the relief or remedy claimed is in respect of, inter alia, a determination, time commences to run from the date of the determination: r.56.02(2). Time shall not be extended except in special circumstances: r.56.02(3).

In this case, the relevant dates of each determination were 28 May 2009 in respect of the O’Brien determination, and 5 July 2009 in respect of the Davenport review determination. Grocon was within time in filing its originating motion in respect of the Davenport review determination, but was 4 days out of time in respect of the O’Brien determination. Should, therefore, an extension of time be permitted to entertain judicial review of that decision?

The question as to whether special circumstances exist which might justify an order extending time, has been the subject of consideration by this Court in a number of cases: Denysenko v Dessau;[4] Lovejoy v Myer Stores Ltd;[5] Lednar v Magistrates’ Court;[6] Mann v Medical Practitioners Board of Victoria;[7] and Mokbel v DPP[8]. In Denysenko v Dessau[9] Beach J held that in the context of r.56.02(3) the existence of even a demonstrable error on the part of the tribunal at first instance did not satisfy the test. “Special circumstances” were said to be limited to those which related to the plaintiff’s failure to commence a proceeding within the time provided for, and not the decision sought to be reviewed. However, the trend of authority has since moved away from this position.
[4][1996] 2 VR 221.
[5][1999] VSC 271.
[6][2000] VSC 549; (2000) 117 A Crim R 396.
[7][2002] VSC 256 at first instance and on appeal, [2004] VSCA 148.
[8][2005] VSC 476.
[9]Ibid at 224.

In Mokbel v DPP, Gillard J cited with approval the approach of Osborn J in Mann v Medical Practitioners Board of Victoria,[10] in which his Honour observed in Mann:

It is not, in my view, appropriate to seek to judicially define the meaning of the phrase “special circumstances” in the relevant rule. The phrase is deliberately flexible and designed to encompass cases which might not easily be anticipated by more prescriptive words.

[10][2002] VSC 256 at [18].

On the appeal in Mann v Medical Practitioners Board of Victoria,[11] Hansen AJA, with whom Chernov and Nettle JJA agreed, could see no error of principle in the trial Judge’s consideration of the meaning of the phrase “special circumstances”. His Honour said:[12]

His Honour's concluding observations on the application of the phrase concerned the question whether error in the decision under review could constitute a special circumstance. His observations were obiter in view of his conclusion that the decision of the Board was not affected by error. Nevertheless, as his observation conflicts with the absolute statement of Beach J in Denysenko, I should say something about the issue. There were two reasons for Beach J's conclusion. First, a holding that an erroneous decision constituted a special circumstance would result in an aggrieved party being able to ignore the 60 day requirement knowing that he or she could successfully apply for an extension of time when minded to do so. Secondly, error in decision making by a judicial officer, whether of fact or law, was not "special". Neither of those factors can be denied, at least in the absence of other factors. It may however be considered that the generality of the phrase, for the evident purpose of comprehending an infinite and unforeseeable range of circumstances, would indicate that Beach J expressed the proposition in terms that were too absolute. In other words, in a particular case an approach that absolutely excluded error as a factor, no matter what the circumstances and nature of the error, may produce unintended injustice. I would leave the question open for consideration in an appropriate case.

[11][2004] VSCA 148.

[12] Ibid at [71].

I respectfully adopt the observations of Osborn J In Mann at first instance and those of Hansen AJA on the appeal. The phrase “special circumstances”, as it is used in r.56.02(3), are words of considerable width, generality and flexibility. They defy an exhaustive definition, and do not warrant specific limitation. The concept encompasses an infinite and unforeseeable range of circumstances. Provided such “special circumstances” exist, the gateway may be opened to ensure that a plaintiff is not shut out from making an application for judicial review in cases where an extension of time should be granted in the interests of justice.

In this case I am satisfied that there are special circumstances within the meaning of r.56.02(3) which justify the grant of an extension to file the originating motion seeking judicial review of the O’Brien determination out of time. In the first place, the filing of the originating motion was only 4 days out of time. Second, the challenge made by the plaintiff to the Davenport review determination, is founded in part upon the alleged invalidity of the O’Brien determination. This ground for reviewing the Davenport review determination could have been advanced, whether or not the O’Brien determination was also the subject of a discrete application for judicial review. Third, the proceedings in this matter have had a somewhat unique history. The present matter had its origin the Injunction Proceeding which I have described. This commenced upon Grocon issuing its summons on 16 July 2009; I determined that application on 27 July 2009. In the course of the hearing, Grocon delivered a draft of its proposed grounds for judicial review of both the O’Brien and the Davenport determinations. Orders were made in the Injunction Proceeding on 27 July 2009 which included an order that Grocon was to issue, file and serve an application for judicial review of the adjudication decision and the adjudication review decision, the subject of this proceeding. Grocon did not delay unreasonably in undertaking this exercise, and filed its originating motion on 31 July 2009. Finally, no point was taken by PCJV that Grocon’s originating motion was out of time in respect of the O’Brien determination.

In the interests of justice, I will make an order that, pursuant to r.56.02(3), having found the presence of special circumstances, the time for the plaintiff to file and serve its originating motion insofar as it relates to the O’Brien determination, be extended to 31 July 2009.

The relief claimed by Grocon is on the following bases:

As to the O’Brien determination, it:

(i)was contrary to law,
(ii)demonstrated an error of law on the face of the record constituted by the O’Brien determination,
(iii)was tainted by jurisdictional error; and/or
(iv)was in breach of O’Brien’s obligation to give procedural fairness.

As to the Davenport review determination, it:
(v)was contrary to law,
(vi)demonstrated an error of law on the face of the record constituted by the Davenport review determination,
(vii)was tainted by jurisdictional error, and/or
(viii)was in breach of Davenport’s obligation to give procedural fairness.

The trial of the Judicial Review Proceeding was conducted on 20 and 21 August 2009. These reasons relate to the determination of that matter.

The Building and Construction Industry Security of PaymentAct 2002 (Vic)

The Building and Construction Industry Security of Payment Act 2002 was introduced in Victoria to allow for the rapid determination of progress claims under construction contracts or sub-contracts, and contracts for the supply of goods or services in the building industry. The process was designed to ensure cash flow to businesses in the building industry, without parties get tied up in lengthy and expensive litigation or arbitration. It was intended to establish a process for the fast recovery of progress payments payable under a construction contract. This was to be achieved by a novel procedure which provided for the rapid adjudication of payment disputes at a low cost to the parties. The amendments introduced into the Act which operate from 31 March 2007 reinforce the scheme by creating, inter alia, a fast track system for enforcing payment in the courts through an expedited process for the entry of judgment founded on a certificate evidencing the adjudication determination and an affidavit of non-payment.[13]
[13]See: s.28R.

These observations find support in the outline of the Act provided in Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd[14] where I canvassed the purposes and objects of the Act, and the procedures designed to implement them, in some detail.
[14](2009) VSC 156 at [36-65].

Whether an Adjudicator is Amenable to Certiorari
The Prerogative Writ of Certiorari

A review of the history of the prerogative writ of certiorari is to be found in Re McBain; Ex parte Australian Catholic Bishops Conference.[15] To this I would add a reference to the historical analysis of Denning LJ in R v Northumberland Compensation Appeal Tribunal; ex Parte Shaw[16] in which the origins of the writ were chronicled. His Lordship said:

The origin of this controlling power was the writ of certiorari, by which the King commanded the judges of any inferior Court of Record to certify the record of any matter in their court with all things touching the same, and to send it to the King's Court to be examined. The wording of the writ was for many centuries as follows, being originally in Latin and afterwards in English: "We being willing for certain reasons that all and singular orders made by you (as is said) be sent by you before us, do command that you do send forthwith before us all and singular the said orders with all things touching the same, as fully and perfectly as they have been made by you and now remain in your custody or power, together with this our writ, that we may cause further to be done thereon what of right and according to "the law and custom of England we shall see fit to be done." I would pause for a moment to notice the amplitude of this writ. The record of the inferior court is to be sent up so that the King's Bench may cause to be done thereon "what of right and according to the law and custom of England" ought to be done. The width of these words is only matched by the width of the words used by the great masters of the law in speaking of certiorari. Thus Joseph Chitty in his book on practice written in 1833, vol. 2, at p.353, said: "As an essential mode of exercising a control over all inferior courts, the Court of King's Bench has a most extensive power to bring before it their proceedings and fully to inform itself upon every subject essential to decide upon the propriety of the proceedings below. This is effected by a writ called certiorari. The writ issues in civil as well as criminal cases ..." Thus such a writ was ordered to be issued to the judge of an inferior jurisdiction to return and certify the practice of his court: see Williams v Bagot. Ninety years later Lord Sumner used words of equal width: The supervision by certiorari "goes to two points: one is the area of the inferior jurisdiction and the qualifications and conditions of its exercise; the other is the observance of the law in the course of its exercise": see Rex v Nat Bell Liquors Ltd.

These generous observations, with the greatest of respect, understate the legal strictures in the path of the remedy in its contemporary form.

[15] (2002) 209 CLR 372 at 417–423 per McHugh J; and at 462–465 per Hayne J.

[16][1952] 1 KB 338 at 347–348.

A central issue which arises in this case is whether the determinations of an adjudicator or a review adjudicator appointed under the Act are amenable to certiorari. Save where it is necessary to do so for the purposes of these reasons, I will not deal with all of the applicable principles which pertain to prerogative relief in the nature of certiorari.

Adjudicator Not an ‘Inferior Court’

In Craig v South Australia[17] the High Court said:

In considering what constitutes "jurisdictional error", it is necessary to distinguish between, on the one hand, the inferior courts which are amenable to certiorari and, on the other, those other tribunals exercising governmental powers which are also amenable to the writ. Putting to one side some anomalous exceptions, the inferior courts of this country are constituted by persons with either formal legal qualifications or practical legal training. They exercise jurisdiction as part of a hierarchical legal system entrusted with the administration of justice under the Commonwealth and State constitutions. In contrast, the tribunals other than courts which are amenable to certiorari are commonly constituted, wholly or partly, by persons without ordinary hierarchical judicial structure. While normally subject to administrative review procedures and prima facie bound to observe the requirements of procedural fairness, they are not part of the ordinary hierarchical judicial structure. [Emphasis added]

[17](1995) 184 CLR 163 at 176–177.

On any view an adjudicator appointed under the Act is not an inferior court, and cannot be amenable to certiorari on that score. Neither an adjudicator or a review adjudicator exercise jurisdiction as part of the hierarchical legal system entrusted with the administration of justice in the sense described in Craig. Although adjudicators perform a function analogous to the traditional task of a court, namely the ascertainment and enforcement of existing legal rights, they are not part of the ordinary hierarchical judicial structure. Further, there is no statutory requirement that they have formal legal qualifications or practical legal training.

Adjudicator Exercises Power which is Amenable to Certiorari

It was submitted by Grocon that certiorari does not apply to decisions of adjudicators under the Act because they do not exercise “governmental powers”. The NSW Court of Appeal in Brodynv Davenport[18] did not determine this issue, but questioned whether an adjudicator appointed under the Act is a tribunal exercising governmental powers to which the remedy in the nature of certiorari lies. The following was said by the Court of Appeal in obiter:[19]

However, it is to be noted that each of the three cases referred to in the passage from Craig v South Australia (1995) 184 CLR 163 was a case concerning tribunals exercising governmental powers; and Craig itself indicated that the remedy was limited to inferior courts and such tribunals. There is a real question whether an adjudicator is properly considered a tribunal exercising governmental power.

And further:[20]
…it is by no means clear that an adjudicator is a tribunal exercising governmental powers, to which the remedy in the nature of certiorari lies.

[18](2004) 61 NSWLR 421.

[19]Ibid at 438 [46].

[20]Ibid at 443 [58].

The passage in Craig referred to by the Court of Appeal in Brodyn is that referred to above.[21]
[21]Craig at 176–177.

“Governmental power” may be defined in common usage as power exercised by the State which enables it to carry out its proper functions.[22] An adjudicator appointed under the Act plays no part in making a decision which is regulatory or executive in nature. Rather the character of the decision making of an adjudicator is quasi-judicial. Nevertheless, in Craig this latter function was accepted by the High Court as involving the exercise of “governmental power”, provided the body in question falls within the well accepted accepted criteria which render it amenable to the prerogative writ.
[22]See: Butterworths Australian Dictionary, (1997) at p. 529 “Government purposes”; and Black’s Law Dictionary, at 6^th Ed. (1990) p. 696 “Governmental power”.

In Craig, the High Court said in an early passage in the judgment:[23]

That writ [the prerogative writ of certiorari] went only to an inferior court or to certain tribunals exercising governmental powers.

As to the “certain tribunals exercising governmental powers”, three seminal cases are cited by the High Court, namely: R v Electricity Commissioners; Ex parte London Electricity Joint Committee Co (1920) Ltd[24]; Ridge v Baldwin[25]; and O’Reilly v Mackman.[26]

[23] Ibid at 174–175.

[24][1924] 1 KB 171, at 205.

[25][1963] UKHL 2; [1964] AC 40, at 74-79.

[26][1983] UKHL 1; [1983] 2 AC 237, at 279.

In R v Electricity Commissioners Atkin LJ pronounced his much-quoted statement:[27]

The matter comes before us upon rules for writs of prohibition and certiorari which have been discharged by the Divisional Court. Both writs are of great antiquity, forming part of the process by which the King's Courts restrained courts of inferior jurisdiction from exceeding their powers. Prohibition restrains the tribunal from proceeding further in excess of jurisdiction; certiorari requires the record or the order of the court to be sent up to the King's Bench Division, to have its legality inquired into, and, if necessary, to have the order quashed. It is to be noted that both writs deal with questions of excessive jurisdiction, and doubtless in their origin dealt almost exclusively with the jurisdiction of what is described in ordinary parlance as a Court of Justice. But the operation of the writs has extended to control the proceedings of bodies which do not claim to be, and would not be recognized as, Courts of Justice. Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King's Bench Division exercised in these writs.[Emphasis added]

[27]Ibid at 204-205.

In Ridge v Baldwin,[28] Lord Reid reinforced the concept enunciated by Atkin LJ in R v Electricity Commissioners, but introduced a tectonic shift. The duty to act judicially was held not to be a pre-requisite for a body to be amenable to the prerogative writs.
[28] Ibid at 74-79.

Then in O’Reilly v Mackman,[29] Lord Diplock entrenched the position when he observed:

The pre-1977 Order 53, like its predecessors, placed under considerable procedural disadvantage applicants who wished to challenge the lawfulness of a determination of a statutory tribunal or any other body of persons having legal authority to determine questions affecting the common law or statutory rights or obligations of other persons as individuals. It will be noted that I have broadened the much-cited description by Atkin LJ in Rex v Electricity Commissioners, Ex parte London Electricity Joint Committee Co (1920) Ltd. [1924] 1 KB 171, 205 of bodies of persons subject to the supervisory jurisdiction of the High Court by prerogative remedies (which in 1924 then took the form of prerogative writs of mandamus, prohibition, certiorari, and quo warranto) by excluding Atkin LJ's limitation of the bodies of persons to whom the prerogative writs might issue, to those "having the duty to act judicially." For the next 40 years this phrase gave rise to many attempts, with varying success, to draw subtle distinctions between decisions that were quasi-judicial and those that were administrative only. But the relevance of arguments of this kind was destroyed by the decision of this House in Ridge v Baldwin [1964] AC 40, where again the leading speech was given by Lord Reid. Wherever any person or body of persons has authority conferred by legislation to make decisions of the kind I have described, it is amenable to the remedy of an order to quash its decision either for error of law in reaching it or for failure to act fairly towards the person who will be adversely affected by the decision by failing to observe either one or other of the two fundamental rights accorded to him by the rules of natural justice or fairness, viz. to have afforded to him a reasonable opportunity of learning what is alleged against him and of putting forward his own case in answer to it, and to the absence of personal bias against him on the part of the person by whom the decision falls to be made. [Emphasis added]

[29] Ibid at 279.

Then in Council of Civil Service Unions v Minister for the Civil Service (the “CCSU case”)[30] Lord Diplock expressed the opinion, which has been much quoted since, that:[31]

To qualify as a subject for judicial review the decision must have consequences which affect some person (or body of persons) other than the decision-maker, although it may affect him too. It must affect such other person either:
(a)By altering rights or obligations of that person which are enforceable by or against him in private law; or
(b)By depriving him of some benefit or advantage which either (i) he had in the past been permitted by the decision-maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment; or (ii) he has received assurance from the decision-maker will not be withdrawn without giving him first an opportunity of advancing reasons for contending that they should not be withdrawn.

[30][1985] A.C. 374.

[31] Supra at 408.

Although there is some contemporary case law which appears to favour a return to the earlier formulation of Atkin LJ in R v Electricity Commissioners,[32] that of Lord Diplock as stated in O’Reilly v Mackman[33] and the CCSU case[34] is preferably cited. I will call this the “legal rights test”. For example in Byrne v Marles,[35] Kaye J said this about the availability of prerogative relief generally:

During the last eighty years the courts have broadened the description of the bodies and persons who are subject to the supervisory jurisdiction of superior courts by exercise of the prerogative remedies. The high water mark of that process is the speech of Lord Reid in Ridge v Baldwin. It is now recognised that relief in the form of certiorari, prohibition, mandamus and quo warranto is available in respect of any determination of a statutory tribunal or other body of persons which has the legal authority to determine questions affecting the common law or statutory rights or obligations of persons or individuals. [Footnotes omitted]

[32]See for example: Palmer J in Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 at [14].

[33] Supra.

[34] Ibid at 408.

[35][2007] VSC 63 at [65].

Accordingly, and on the basis of the “legal rights test” as I have described it, “tribunals exercising governmental powers”, as the concept was used by the High Court in Craig, may be taken to refer to any statutory tribunal or other body of persons which has the legal authority to determine questions affecting the common law or statutory rights or obligations of persons or individuals. The determination of any such body will be amenable to the prerogative writs of certiorari, prohibition, mandamus and quo warranto.

Whether Adjudicators Satisfy the “Legal Rights Test”

In my opinion, an adjudication determination is susceptible to the writ of certiorari because it affects rights in the relevant sense and thereby satisfies the “legal rights test”. It follows that, prima facie, the determinations of adjudicators are amendable to the writ of certiorari. They are clothed with legal authority to make a binding determination for the purposes of the Act which affect the statutory rights or obligations of persons or individuals who are claimants for progress payments under the Act or who are respondents to such claims. A similar conclusion was arrived at by McDougall J in Musico & Ors v Davenport & Ors[36] and Palmer J in Multiplex Constructions Pty Ltd v Luikens[37] in considering the analogous legislation in New South Wales.
[36][2003] NSWSC 977 at [32].
[37][2003] NSWSC 1140 at [15].

An adjudication determination cannot finally resolve all of the rights of the parties under the applicable construction contract; they are left to be determined by later proceedings in the event of a continuing dispute. Nevertheless, an adjudication determination does have the effect of finally determining the right of a claimant to immediate payment of its progress claim. This has a discernable or apparent legal effect upon rights, sufficient to found certiorari: Hot Holdings Pty Ltd v Creasy.[38] In O’Donnell Griffin Pty Ltd v John Holland Pty Ltd.[39] Beach J pointed to a number of features of the equivalent statutory scheme which operates in Western Australia,[40] in arriving at a similar conclusion.[41]
[38](1996) 185 CLR 149 at 159 per Brennan CJ, and Gaudron and Gummow JJ.
[39][2009] WASC 19.
[40] Construction Contracts Act 2004 (WA).
[41]O’Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19 at [100].

In Victoria, the Act provides for the following legal effects of an adjudication determination:

(a)subject to a limited right of review by an appointed review adjudicator under Part 3, Division 2A, the amount determined by an adjudicator and a review adjudicator is binding, and the respondent must pay that amount to the claimant: s.28M and s.28N;
(b)if the respondent fails to pay the whole or any part of the adjudicated amount, the consequences provided for in the Act may follow: s.28O. These include:
(i)a right of the claimant to request, and the duty of the nominating authority to provide, an adjudication certificate: s.28O(i)(a) and s.28Q;
(ii)the right of a claimant to suspend further work: s.28O(1)(b) and s.29;
(iii)the claimant may obtain a judgment in a court of competent jurisdiction for the adjudicated amount, based on the adjudication certificate; and

(iv) the claim can then be enforced as a judgment debt: s.28R.
(c)Further, there is a facility to obtain a statutory assignment of monies due from a third party which are payable to a recalcitrant respondent: ss.29A–41.

Further, even if the added requirement is called for, so that an adjudicator is also required to act in a judicial manner before certiorari will apply, I make such a finding. The fact that adjudication proceedings under the Act are markedly circumscribed does not detract from their “judicial” character. The process is commenced because there is a dispute between the parties as to a monetary entitlement under a construction contract; an independent person, the adjudicator, is appointed to adjudicate the dispute: s.18(7) & (8); the adjudicator must be impartial at least to the extent that he or she is not directly interested in the construction contract as a party or as an employee of a party: s.19(2) (a) & (b); the issues are defined by a payment claim and a response to the claim: s.18 and s.21; submissions of the parties, including relevant documentation in support, are put before the adjudicator: s.22(2)(c) and (d); the adjudicator may call for further submissions, and must give the other party an opportunity to comment on those submissions: s.22(5)(a); the adjudicator is obliged to make a determination in writing and to give reasons for the determination: s.23(3); and an adjudicator is rendered immune from suit: s.46. Broadly the same procedures apply in relation to review adjudicators.

Accordingly, an adjudicator appointed under the Act exercises power which is prima facie subject to review by certiorari, and an adjudication determination or adjudication review determination made under the Act, is amenable to the writ.

Adjudicator is not a Private Body

A factor which may operate to exclude the application of certiorari turns on the question as to whether the relevant body is constituted as a private, as opposed to a public body. If it is the latter, provided that the power exercised is also amenable to certiorari, the writ will lie. On the other hand, if the body is purely private in nature, even though it may have legal authority to determine questions affecting the rights or obligations of individuals and a duty to act in a judicial manner, certiorari generally will not lie, save in the circumstance discussed hereafter.

The point is well illustrated by reference to a privately appointed arbitrator. On one view, the position of an adjudicator appointed under the Act is somewhat analogous to that of an arbitrator appointed by private parties pursuant to an arbitration agreement which commits their dispute to the determination of an arbitrator. It may be observed that even a private arbitration is a process is not without legislative support. Pursuant to the provisions of the Commercial Arbitration Act 1984 the award of an arbitrator may be enforceable as a judgment or order of the Court. Section 33 provides:

An award made under an arbitration agreement may, by leave of the Court, be enforced in the same manner as a judgment or order of the Court to the same effect, and where leave is so given, judgment may be entered in terms of the award.

However, it is well accepted that an arbitrator’s award, resulting from the appointment of a private arbitrator, is not amenable to prerogative writ. Lord Denning in R v Northumberland Compensation Appeal Tribunal, Ex Parte Shaw,[42] at one point in his judgment, referred specifically to awards of arbitrators and pointed out that:[43]

The Court of King’s Bench never interfered by certiorari with the award of an arbitrator, because it was a private tribunal and not subject to the prerogative writs.

[42][1952] 1 KB 338.

[43]p.351.

However, in the case of adjudicators appointed under the Act, there is a critical point at which the process of private arbitration, and the adjudication process, diverge. The source of the power of the privately appointed arbitrator is contractual and stems from the arbitration agreement arrived at by the parties. Indeed, the sole source of the arbitrator’s power is a consensual submission to his or her jurisdiction. On the other hand, the appointment of an adjudicator under the Act, and the exercise the adjudicator’s powers, has its source in the statute. Although the dispute in question will have emerged from a private construction contract, the resolution of any dispute arising out of a payment claim has been made under the Act, is governed entirely by the legislation.

In R v National Joint Council for the Craft of Dental Technicians (Disputes Committee) et al, Ex p. Neale,[44] (the “Dental Technicians case”) the question was whether the named Council was a private arbitration body constituted by agreement or a statutory entity. Lord Goddard CJ, after some general remarks on the scope of the prerogative writs, said:[45]

There is no instance of which I know in the books where certiorari or prohibition has gone to any arbitrator except a statutory arbitrator, and a statutory arbitrator is one to whom by statute the parties must resort. [Emphasis added]

[44][1953] 1 Q.B. 704.

[45]Supra at 708.

The observation of Lord Goddard in the cited passage is well illustrated by a Canadian case, Port Arthur Shipbuilding Co v Arthurs et al.[46] Here the Supreme Court of Canada considered the question whether the Court had by certiorari a power to review the award made by an employment board of arbitration, established under the provisions of The Labour Relations Act, RSO 1960 c.202. The parties to a collective agreement were required under the legislation to arbitrate their dispute. There was no alternative course of action open to them. The legislation compelled recourse to an arbitration board. It was held that the board, being a statutory creation to which the parties were compelled to refer their dispute, was subject to review in the courts by certiorari. Judson J, who delivered the judgment of the Court, said:[47]

The wording [of the statute] is clear and unambiguous. The parties to a collective agreement must arbitrate their dispute. There is no alternative course of action open to them. The legislation compels recourse to an arbitration board and that board is therefore a statutory creation and hence subject to review in the Courts by certiorari.

[46] [1969] S.C.R. 85.

[47]Supra at 95.

In approaching the matter in this way, the Supreme Court did not depart from the decision of the Court of Appeal for Ontario in Re International Nickel Co. of Canada Ltd and Rivando [48] in its consideration of the same statutory provision. Aylesworth JA, who delivered the judgment of the Court, said:[49]

Consideration of these statutory provisions makes it abundantly clear that the parties are under compulsion to arbitrate their differences. The parties are directed by statute as to the matters which must be governed by arbitration; they are told that they must abide by the award and they are also told, (a) that if they fail to include in their collective agreement an arbitration provision, then the statutory provision in subs.(2) will form part of their agreement, subject in proper cases to modification of the provision by the Labour Relations Board, and (b) that if they fail to appoint an arbitrator or to constitute a Board of Arbitration, the necessary appointments will be made by the Minister of Labour.
With respect, it seems to me that the element and degree of compulsion inherent in the Labour Relations Act regarding arbitration of industrial disputes establishes the instant Board of Arbitration as a statutory Board. If this be so, then admittedly certiorari may issue to it from this Court.

[48][1956] O.R. 379, 2 D.L.R. (2d) 700.

[49] Supra at 386-387.

The Act in this case also establishes a process which involves a level of compulsion. The system of adjudication established by Division 2 of the Act, and for review adjudication established by Division 2A, provides a singular statutory mechanism for resolution of a disputes as to payment claims made under the Act. There is to be no contracting out of the requirements of the Act or any of the procedures established under the Act: s.48.

The process includes the following features:

(a)an adjudication application must be made to an authorised nominating authority: s.18(3)(b);
(b)the nominating authority which selects and appoints adjudicators is a public statutory body authorised by the Building Commission: s.42 and s.47B;
(c)it is the duty of an authorised nominating authority to which an adjudication application is made to refer the application to an adjudicator as soon as practicable: s.18(7);
(d)following an adjudication determination, the respondent is required to pay any adjudicated amount: s.28M;
(e)payment must also be made following a review determination: s.28N;
(f)an unpaid claimant has a statutory entitlement to suspend the carrying out construction work under the construction contract or to suspend supplying related goods and services under the construction contract: s.28O; and
(g)an unpaid claimant may recover as a debt due to that person, in any court of competent jurisdiction, the unpaid portion of the amount payable following the delivery of a payment claim (where no payment schedule is delivered by a respondent disputing the claim) under s.16, or under s.28M or s.28N and s.28R if there has been an adjudication or a review adjudication.

In addition, the Act provides a further facility for the claimant to be paid, by conferring upon a claimant a statutory assignment or “garnishee” of monies which may otherwise be payable by a principal to the respondent under a relevant construction contract. Upon a judgement being entered in favour of a claimant in accordance with s.28R, an unpaid claimant may make application to the court for a debt certificate: s.33; upon serving a payment claim on the principal in the prescribed form, which includes the debt certificate, a statutory assignment of sums due from the principal to the respondent in favour of the claimant is created: s.32 and s.34; with the statutory assignment ranking in favour of a claimant who serves the principal first in time: s.36.

These methods of enforcement are in addition to other avenues which are open under the Act to assist an unpaid claimant. Having first served a notice of intention in the prescribed form, the claimant may exercise a lien in respect of any unpaid amount of a progress payment over any unfixed plant or materials supplied by the claimant in connection with the carrying out of construction work for the respondent: s.12A. The Act also provides a statutory facility for the claimant to suspend its works if an adjudicated amount has not been paid: s.28O (1)(b).

An adjudicator appointed under the Act is a statutory arbitrator of the type referred to by Lord Goddard CJ in the Dental Technicians case [50] and, pursuant to the statute, is one to whom the parties must resort if there is a dispute as to a progress claim made under the legislation. On this analysis, an adjudicator is not a private body, and the application of certiorari cannot be excluded on this ground.

A Private Body Performing a Public Function

[50]Ibid

If I am wrong in arriving at this conclusion, even in the case of a body which is private in nature, yet has legal authority to determine questions affecting the rights or obligations of individuals, certiorari may nevertheless have application if the private body exercises its powers in the performance of a public duty.

R v Panel for Take-overs and Mergers, ex parte Datafin plc [51] (“Datafin”) is a landmark case on point. It is of significance because it established that the decisions of a private body exercising public functions may be amenable to judicial review. The Panel on Take-overs and Mergers (the “Take-overs Panel”) was London’s self-regulating mechanism for dealing with mergers and acquisitions. The applicants complained to the Take-overs Panel about the conduct of their competitors in a take-over bid. The Panel made a decision in the matter which was adverse to the applicants. When they were refused leave to seek judicial review of the Take-overs Panel decision by the High Court, they appealed to the Court of Appeal. Sir John Donaldson MR, in emphasising that the Take-overs Panel was a private body, described it in the following terms:

The Panel on Take-overs and Mergers is a truly remarkable body. Perched on the 20th floor of the Stock Exchange building in the City of London, both literally and metaphorically it oversees and regulates a very important part of the United Kingdom financial market. Yet it performs this function without visible means of legal support.

[51][1987] QB 815.

The Master of the Rolls then proceeded to develop his point. He observed that the Panel was an unincorporated association without legal personality consisting of about 12 members. Those members were appointed by and represented a group of financial organisations. The Panel had no statutory, prerogative or common law powers and was not in contractual relationship with participants in the financial market or with those who deal in that market. The City Code on Take-overs and Mergers, which it applied in its determinations did not have the force of law, although it purported to set standards of conduct for those who wished to take advantage of the facilities of the securities markets in the United Kingdom in matters relating to Take-overs. The Take-overs Panel was a self-regulating body in the latter sense.

Nevertheless, although lacking any authority de jure, the Panel did exercise considerable power de facto by devising, promulgating, amending and interpreting the City Code on Take-overs and Mergers, by waiving or modifying the application of the code in particular circumstances, by investigating and reporting on alleged breaches of the code and by the application or threat of sanctions.

Further, the rulings generated in its Panel 20th floor London premises were not without legal consequence. The findings made by the Take-overs Panel were open to be enforced and applied by other statutory bodies to penalise transgressors. Thus, for example, rr.22 to 24 of the Stock Exchange Rules provided for severe penalties, up to and including expulsion, for acts of misconduct, and by r.23.1 provided:

Acts of misconduct may consist of any of the following ... (g) Any action which has been found by the Panel on Take-overs and Mergers (including where reference has been made to it, the Appeal Committee of the Panel) to have been in breach of The City Code on Take-overs and Mergers. The findings of the Panel, subject to any modification by the Appeal Committee of the Panel, shall not be re-opened in proceedings taken under Rules 22 to 24.

Reference was made by the Master of the Rolls in Datafin to Czarnikow v Roth Schmidt & Co.[52] This was a case concerning the validity of a contractual clause which sought to oust the jurisdiction of the court, and, although the proposition has been significantly modified in contemporary case-law,[53] the colourful observation of Scrutton LJ was thought to have general application:

In my view to allow English citizens to agree to exclude this safeguard for the administration of the law is contrary to public policy. There must be no Alsatias [54] in England where the King's writ does not run.

[52][1922] 2 KB 478, [1922] All ER Rep 45.

[53]See: Materials Fabrication Pty Ltd v Baulderstone [2009] VSC 405 and the cases cited therein.

[54]Alsatias. The colloquial (which first appears in Shadwell's plays in the time of Charles II) for recognized areas of sanctuary for criminals, survivals of the mediaeval sanctuaries, which lasted till the end of the seventeenth century in London. The one which gave its name to all the others was Alsatias or Whitefriars, between Fleet Street and the Thames, but the Southwark Mint, the Minories and other places were other convenient refuges for thieves ... : The Oxford Companion to Law (1980) p 50.

The Court of Appeal in Datafin then proceeded to apply the relevant case law of the United Kingdom. The Master of the Rolls described R v Criminal Injuries Compensation Board, ex p Lain [55] in the following terms:
[55][1967] 2 All ER 770 at 778, [1967] 2 QB 864 at 882.

Lord Parker CJ, who had unrivalled experience of the prerogative remedies both on the Bench and at the Bar, said that the exact limits of the ancient remedy of certiorari had never been and ought not to be specifically defined. I respectfully agree and will not attempt such an exercise. He continued:
‘They have varied from time to time, being extended to meet changing conditions. At one time the writ only went to an inferior court. Later its ambit was extended to statutory tribunals determining a lis inter partes. Later again it extended to cases where there was no lis in the strict sense of the word, but where immediate or subsequent rights of a citizen were affected. The only constant limits throughout were that the body concerned was under a duty to act judicially and that it was performing a public duty. Private or domestic tribunals have always been outside the scope of certiorari since their authority is derived solely from contract, that is from the agreement of the parties concerned ... We have, as it seems to me, reached the position when the ambit of certiorari can be said to cover every case in which a body of persons, of a public as opposed to a purely private or domestic character, has to determine matters affecting subjects provided always that it has a duty to act judicially. Looked at in this way the board in my judgment comes fairly and squarely within the jurisdiction of this court. The board are, as counsel for the board said, "a servant of the Crown charged by the Crown, by executive instruction, with the duty of distributing the bounty of the Crown". The board are clearly, therefore, performing public duties.'

Diplock LJ, who was later to make administrative law almost his own, said:[56]
The jurisdiction of the High Court as successor of the court of Queen's Bench to supervise the exercise of their jurisdiction by inferior tribunals has not in the past been dependent on the source of the tribunal's authority to decide issues submitted to its determination, except where such authority is derived solely from agreement of parties to the determination. The latter case falls within the field of private contract and thus within the ordinary civil jurisdiction of the High Court supplemented where appropriate by its statutory jurisdiction under the Arbitration Acts.
The earlier history of the writ of certiorari shows that it was issued to courts whose authority was derived from the prerogative, from royal charter, from franchise or custom, as well as from Act of Parliament. Its recent history shows that as new kinds of tribunals have been created, orders of certiorari have been extended to them too and to all persons who under authority of government have exercised quasi-judicial functions. True, since the victory of Parliament in the constitutional struggles of the seventeenth century, authority has been generally if not invariably conferred on new kinds of tribunals by or under Act of Parliament and there has been no recent occasion for the High Court to exercise supervisory jurisdiction over persons whose ultimate authority to decide matters is derived from any other source.
I see no other reason, however, for holding that the ancient jurisdiction of the court of Queen's Bench has been narrowed merely because there had been no occasion to exercise it. If new tribunals are established by acts of government, the supervisory jurisdiction of the High Court extends to them if they possess the essential characteristics on which the subjection of inferior tribunals to the supervisory control of the High Court is based. What are these characteristics? It is plain on the authorities that the tribunal need not be one whose determinations give rise directly to any legally enforceable right or liability. Its determination may be subject to certiorari notwithstanding that it is merely one step in a process which may have the result of altering the legal rights or liabilities of a person to whom it relates.
It is not even essential that the determination must have that result, for there may be some subsequent condition to be satisfied before the determination can have any effect on such legal rights or liabilities. That subsequent condition may be a later determination by another tribunal (see R. v. Postmaster General, Ex p. Carmichael ([1928] 1 KB 291) R. v. Boycott, Ex p. Keasley ([1939] 2 All ER 626, [1939] 2 KB 651)). Is there any reason in principle why certiorari should not lie in respect of a determination where the subsequent condition which must be satisfied before it can affect any legal rights or liabilities of a person to whom it relates, is the exercise in favour of that person of an executive discretion as distinct from a discretion which is required to be exercised judicially?

[56]([1967] 2 All ER 770 at 779-780, [1967] 2 QB 864 at 884-885).

Sir John Donaldson MR continued:

In all the reports it is possible to find enumerations of factors giving rise to the jurisdiction, but it is a fatal error to regard the presence of all those factors as essential or as being exclusive of other factors. Possibly the only essential elements are what can be described as a public element, which can take many different forms, and the exclusion from the jurisdiction of bodies whose sole source of power is a consensual submission to its jurisdiction.
In fact, given its novelty, the panel fits surprisingly well into the format which this Court had in mind in R v Criminal Injuries Compensation Board. It is without doubt performing a public duty and an important one.

Thus on the authority of Datafin, decisions of a private body exercising public functions may be amenable to judicial review. The Court of Appeal held that the powers exercised by the Take-overs Panel were essentially in the domain of public law and formed part of the Government's scheme to regulate the conduct of Take-overs in the market. It was thus performing part of the regulatory functions of government. Those affected had no choice but to submit to the Panel's jurisdiction. Consequently, the Panel had the duty to act judicially and its decisions could be checked by means of judicial review, including application of the remedy of certiorari. On the facts however, the Court of Appeal found that the grounds relied upon to quash the disputed decision had not been made out.

Datafin has been considered in Australia. In Victoria, for example, the Full Court approved and applied it in State ofVictoria v The Master Builders’ Association of Victoria.[57] In New South Wales it received attention in Masu Financial Management Pty Ltd v Financial Industry Complaints Service Ltd (FICS) and Julie Wong (No. 2),[58] where the trial Judge, Shaw J, in the course of finding that the FICS, although a private body, was empowered to make decisions of a public character, made the following observations:

In my view, the preponderance of Australian authority indicates that the English case of R v Panel on Take-overs and Mergers; Ex parte Datafin Plc [1987] QB 815 is applicable in this country, that is to say that companies administering external complaints schemes concerning participants in the finance industry are judicially reviewable. As Hoffman LJ said in relation to structures analogous with FICS in R v Disciplinary Committee of Jockey Club; Ex parte Aga Khan[1992] EWCA Civ 7; [1993] 2 All ER 853; [1993] 1 WLR 909 at 931 at 931: “What one has here is a privatisation of the business of government itself”.
Reasoning by analogy, Australian cases indicate the public character of bodies comparable to FICS; this is so in relation to the Advertising Standards Council: Typing Centre of New South Wales v Toose (unreported, 15 December 1998, SCNSW) per Matthews J; Dorf Industries Pty Ltd & Box Emery & Partners (a firm) v The Honourable P B Toose CBE QC(1994) 54 FCR 350, (1994) 127 ALR 654 at 664-666 per Ryan J; McClelland v Burning Palms Surf Life Saving Club[2002] NSWSC 470; (2002) 191 ALR 759 [115]-[117] at 790-791 per Campbell J. Thus, it seems to me clear that the Datafin principle applies in New South Wales, that FICS was exercising powers of a public nature, and this is susceptible to judicial review.

[57][1995] 2 VR 121 (Full Court – Tadgell, Ormiston and Eames JJ).

[58][2004] NSWSC 829.

An adjudication conducted under the Act has some elements which suggest that the process involves the exercise of powers of a private as opposed to powers of a public kind:

(a)An adjudicator is a private individual nominated by an authorised nominating authority. An authorised nominating authority is a person authorised by the Building Commission established under the Building Act 1993. Although it is conceivable that a governmental body could be authorised to act as a nominating authority, there is no requirement in the Act that this be the case. Private individuals and incorporated bodies may certainly be so authorised, as was the case in the present matter where Adjudicate Today Pty Ltd was engaged as the nominating authority.
(b)Pursuant to s.42 of the Act, the nominating authority is empowered to nominate persons to determine adjudication applications. Section 19(1) of the Act provides that a person is eligible to be an adjudicator if the person is a natural person and “if the person has any qualifications, expertise and experience that may be prescribed for the purposes of this section”. Again, although it is conceivable that an employee of government could be nominated to act as an adjudicator, there is no requirement in the Act that this be so. Indeed the facility provided for in the Act for the parties to pay the fees of an adjudicator suggest that the engagement of private individuals is intended.[59] In this case both the adjudicator, O’Brien, and the review adjudicator, Davenport, were private individuals.
(c)The processes prescribed by the Act provide a statutory overlay to facilitate the payment of progress payments provided for in private contracts. The well-spring of the jurisdiction of an adjudicator under the Act is the service of a payment claim pursuant to s.14 on a “person who, under the construction contract concerned, is or may be liable to make payment” under that contract. Where there is a dispute as to the entitlement of a claimant to a progress claim under the contract, the Act provides a process for the determination of that dispute and a means to enforce the outcome. As such, the Act provides a facility in aid of the exercise of a private right between contracting parties.
(d)An adjudicator is privately engaged by the parties to undertake the adjudication. The parties to an adjudication are jointly and severally responsible for the payment of the adjudicator’s fees and expenses: s.45(3). Further, pursuant to s.45(4) as between themselves, the claimant and respondent are each liable to contribute to the adjudicator's fees and expenses in equal proportions or in such proportions as the adjudicator may determine.

[59]Section 45 of the Act.

Nevertheless, one of the proper functions of government, particularly those of State governments, is regulation of the building industry, including making provision for the resolution of disputes within that industry. This function is reflected in key pieces of legislation which operate in Victoria, including the Building Act 1993 (as amended) and the Domestic Building Contracts Act 1995. One of the purposes of the Building Act is to provide an efficient and effective system for resolving building disputes,[60] and one of the purposes of the Domestic Building Contracts Act is to provide for the resolution of domestic building disputes and other matters by the Victorian Civil and Administrative Tribunal.[61]
[60] Building Act 1993 s.1(c).
[61]Domestic Building Contracts Act 1995 s.1(b).

In a similar mould, the means by which the Act is designed to ensure that a person is able to recover a progress payment under a construction contract is by the establishment of a procedure which includes the referral of any disputed claim to an adjudicator for determination.[62] The appointment, powers and duties of an adjudicator under the Act have their source in, and are regulated by, the statute. In this respect, the public function of an adjudicator appointed under the Act is more strongly emphasised than in the case of the Take-overs Panel in Datafin.
[62] Building and Construction Industry Security of Payment Act 2002 s.3(3)(c).

Although it could not be said that an adjudicator appointed under the Act is directly exercising “governmental power” in the sense that he or she is exercising an executive or regulatory function on behalf of the State, an adjudication conducted under the Act nevertheless involves the exercise of statutory power in a quasi judicial capacity in furtherance of one of the proper functions of government, undertaken within the legislative framework provided for.

Of significance is the fact that the determinations of an adjudicator, whether made at first instance or on a review adjudication, are the subject of direct statutory enforcement procedures which have the force of law, as earlier described. Again the position of an adjudicator as a public body is stronger than the position of the Take-overs Panel in Datafin.

Accordingly, after considering the functions of an adjudicator, even on the analysis that an adjudicator is a private body, certiorari will nevertheless have application to his or her determinations because an appointee under the Act performs functions of a public nature.

Is an Implied Ouster of Certiorari Precluded by the Victorian Constitution?

In Hickory Developments Pty Ltd v Schiavello (Vic) Pty Ltd,[63] I expressed the view in obiter dicta, that unlike the position in New South Wales, as determined by the New South Wales Court of Appeal in Brodyn Pty Ltd v Davenport,[64] certiorari was available to impugn the decision of an adjudicator appointed under the Act in Victoria.
[63](2009) VSC 156.
[64][2004] NSWCA 394.

However, Mr Digby QC, who appeared with Mr Andrew for PCJV, contended that, contrary to my view expressed in Hickory, certiorari was not available in Victoria to impugn the decisions of adjudicators made under the Act. In putting this submission he invited me to follow the Court of Appeal in New South Wales in Brodyn Pty Ltd t/as Time Cost and Quality v Davenport & Anor (“Brodyn”).[65]
[65][2004] 61 NSWLR 451.

Having considered the arguments advanced by PCJV in this matter, I remain content to adopt what I said earlier in Hickory on the matter. For completeness, the reasoning is set out below.

In Brodyn, the Court of Appeal[66] determined that Musico v Davenport[67] and cases which followed it, such as Abacus Funds Management v Davenport,[68] Multiplex Constructions Pty Ltd v Luikens,[69] and Transgrid v Walter Construction Group[70] were incorrectly decided, insofar as they held that relief in the nature of certiorari is available to quash an adjudicator’s determination which is not void and merely voidable. It was held by the Court of Appeal in Brodyn that there is no occasion where relief in the nature of certiorari would be available and required. This was decided as a matter of construction by necessary implication from the terms of the NSW Act.
[66]Mason P, Giles and Hodgson JJA.
[67][2003] NSWSC 977.
[68][2003] NSWSC 1027.
[69][2003] NSWSC 1140.
[70][2004] NSWSC 21.

The reasoning of Hodgson JA in Brodyn (with whom Mason P and Giles JA agreed) is set out in eight key passages of his Honour’s judgment.[71] The reasoning commences with the following proposition:[72]

I agree with McDougall J [in Musico v Davenport] that the scheme of the Act appears strongly against the availability of judicial review on the basis of non-jurisdictional error of law. The Act discloses a legislative intention to give an entitlement to progress payments, and to provide a mechanism to ensure that disputes concerning the amount of such payments are resolved with the minimum of delay.

His Honour then concludes with the following observations:
The question then is whether there is available a remedy in the nature of certiorari, in circumstances where the determination is not void by reason of defects of the kind I have been discussing [matters going to jurisdictional error]. In my opinion it is not, because the availability of certiorari in such circumstances would not accord with the legislative intention disclosed in the Act that these provisional determinations be made and given effect to with minimum delay and minimum court involvement; and because it is by no means clear that an adjudicator is a tribunal exercising governmental powers, to which the remedy in the nature of certiorari lies.
For these reasons, I disagree with the view expressed in Musico and the cases which followed it, to the extent that they hold that relief in the nature of certiorari is available to quash a determination which is not void.

[71] Ibid at 440–443 [51]–[59].

[72] Ibid at [51].

The Court of Appeal in Brodyn held further that it was open to challenge an adjudicator’s determination only if:

(a)the basic and essential requirements of the Act for a valid determination are not satisfied;
(b)the purported determination is not a bona fide attempt to exercise the power granted under the Act; or
(c)there is a substantial denial of the measure of natural justice required under the Act.

According to Brodyn, if any of these grounds is made out, then a purported determination will be void and not merely voidable, and would therefore be amenable to relief by way of declaration or injunction. In approaching the matter in this way, it appears that the Court of Appeal did not favour the grant of certiorari, even for jurisdictional error which rendered the determination void.

Brodyn has continued to be followed in New South Wales. It was followed by the Court of Appeal in Transgrid v Siemens Ltd[73] and leave to re-argue the case has been refused on a number of occasions.[74] However, Basten JA in Coordinated Construction Co Pty Ltdv JM Hargreaves (NSW) Pty Ltd[75] was of the view that some aspects of the reasoning in Brodyn might require reconsideration.[76] Rather than approaching the matter by asking whether a requirement being considered was intended by the legislature to be an essential pre-condition for the existence of an adjudicator's determination, Basten JA approached the matter on conventional lines by asking whether the legislature has imposed an objective requirement, rather than one which the adjudicator has power to determine. On this analysis, if the pre-condition is a matter for the objective determination of the court, a court may declare the determination to be void and order injunctive relief if the pre-condition is not satisfied. On the other hand, if the power to resolve questions said to be pre-conditions to the valid exercise of power by the adjudicator are, on a proper analysis, questions for the adjudicator, a subsequently made determination may still remain a valid determination.
[73][2004] NSWCA 395.
[74] Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd[2005] NSWCA 228; Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd[2005] NSWCA 229; and Downer Construction (Australia) Pty Ltd v Energy Australia[2007] NSWCA 49; (2007) 69 NSWLR 72.
[75][2005] NSWCA 228.
[76] Supra at [71–77].

As Giles JA (with whom Santow and Tobias JJA agreed) said in Downer Construction (Australia) Pty Ltd v Energy Australia & Ors:[77]

While Brodyn Pty Ltd v Davenport might bear elucidation, as has occurred in, for example Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd and Co-ordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd, I am not moved ... to regard it as wrong in substance, and I am not persuaded that reconsideration would expand availability of judicial review to the review for error of law or fact ... [contended for in this case]. The Act’s oft-recognised objective of speedy but interim resolution of claims, attendant with the possibility of error and confined curial intervention, in my view weighs heavily against substantive change in the current approach to challenges to determinations under the Act.
The amounts often at stake in the challenges which come before the court make an application for special leave to appeal to the High Court likely, whatever be the approach to the challenges determined in this Court. For the reasons stated above, I consider that the circumstances of this case do not warrant the grant of leave to re-argue Brodyn v Davenport; and more widely, I favour maintaining Brodyn Pty Ltd v Davenport until the High Court says otherwise.

[77][2007] NSWCA 49 at [98–99].

In John Holland Pty Ltd v Roads and Traffic Authority of NSW[78] Hodgson JA summarised the effect of Brodyn as being that although there was not, in the New South Wales Act, an explicit exclusion of the jurisdiction of the court by a privative clause, an intention was disclosed by the NSW Act to exclude intervention for errors of law or other errors short of errors causing invalidity. Basten JA, on the other hand reiterated his previously expressed view, and decided the case on the basis that the power to resolve the questions said to be pre-conditions to the valid exercise of power by the adjudicator in that case were, on a proper analysis, questions for the adjudicator and not for the objective determination of the court. His Honour said:[79]

The statutory example provided under s. 10A is as follows:

A building contractor enters into a construction contract. The consideration (contract sum) under the contract at the time the contract is entered into is $3 million. The contract contains a dispute resolution clause.
The contractor undertakes work at the direction of the other party. The contractor claims (the new claim) that the work is a variation to the contract. The other party does not agree that the work constitutes a variation to the contract (disputed variation). The contractor has already made a number of claims for disputed variations under the contract. The new claim brings the total amount of claims for disputed variations under the contract to $350,000.
This amount exceeds 10% of the contract sum. As the contract sum exceeds $150,000 and the contract contains a dispute resolution clause, the disputed variation in the new claim and all subsequent disputed variations under the contract will not be claimable variations under this Act.

Grocon contended before the adjudicator that the construction contract between it and PCJV, although the consideration under it exceeded $5,000,000, it contained a method of resolving disputes under the contract, within the meaning of s.10A(3)(d)(ii) of the Act. It followed that there were no claimable variations which PCJV could claim as part of a progress or final payment claim under the construction contract. Grocon relied upon a mediation clause which was contained in an unexecuted deed which the adjudicator found had been submitted by Grocon to PCJV on 21 November 2007. Grocon contended that this document comprised the construction contract between the parties.

PCJV contended in its written submission to the adjudicator that:

The parties differ as to whether the contract is the Claimant’s tender dated [6] June 2007 and the subsequent verbal agreement of 12 September 2008, or the Respondent’s draft unexecuted deed [supplied by Grocon to PCJV on 21 November 2007].

The adjudicator rejected Grocon’s contention that the construction contract was comprised in the unexecuted deed which it provided to PCJV on 21 November 2007. As the adjudicator found in his reasons:

According to the Claimant, the terms of the Deed in no way harmonised with the terms in the Quote and were unacceptable to the Claimant. Mr Cocciardi says: “[The Claimant] denies that this is the relevant contract ... discussions concerning the scope of works and the terms of the contract continued throughout the following months”.

The adjudicator further found that:
In fact on 5 May 2008 the Claimant returned the Deed to the Respondent with numerous marked up amendments and additions.

The adjudicator further found in conclusion that “The Deed was never agreed”. The adjudicator was entitled to make these findings of fact. There was some evidence available to him to do so arising from the submissions made to him by PCJV. Accordingly, the mediation clause said to be contained in the deed was able to be rejected by the adjudicator without falling into reviewable error on the face of the record.

As to the contention of PCJV that its tender dated [6] June 2007 and the subsequent verbal agreement of 12 September 2008 comprised the construction contract, the adjudicator also rejected this position in part. He found that, although the claimant’s tender of 6 June 2007 was a detailed document, it also provided for execution by the parties in the event that it was agreed to proceed on the basis of its terms, however, it was never executed.

The adjudicator found that the work carried out between September 2008 and December 2008 together with work previously commissioned that remained incomplete was performed pursuant to the “separate Arrangement of 12 September 2008”. The Adjudicator also found that the tender (which he described as the “Quote“) did not constitute a binding contract “certainly with regard to the work claimed for in the final payment claim; the arrangement [entered into on 12 September 2008] constitutes the contract and it contains no dispute resolution provision”.

The adjudicator was entitled to make these findings of fact and he fell into no error on the face of the record in doing so. There was some evidence available to him to make the findings arising from the submissions made to him by PCJV. Accordingly, the mediation clause said to be contained in the Quote was also able to be rejected by the adjudicator without falling into reviewable error on the face of the record.

The adjudicator further found in relation to other arguments pressed by Grocon before him under s.10A:

I reject the argument that the Payment Claim amounts to a claim for variations that exceed 10% of the purchase price within the meaning of section 10A(4) of the Act. The Payment Claim is for agreed work under the Arrangement. The alleged agreed contract price sum predating that Arrangement has no relevance to the present Payment Claim.

For these reasons too, the adjudicator found that s.10A(2) of the Act had no relevance.

Again, the adjudicator was entitled to make these findings of fact and he fell into no error on the face of the record in doing so. There was some evidence available to him to make the findings arising from the submissions made to him by PCJV.

As to the work for which the final payment claim was made was an “excluded amount” under s.10B of the Act. This was rejected by the adjudicator. In this respect he found that “All of the work required ‘to finish the Project’ was work agreed pursuant to the Arrangement [of 12 September 2008]. It is impossible to assess which of that work was variation work”.

Yet again, the adjudicator was entitled to make these findings of fact and he fell into no error on the face of the record in doing so. There was some evidence available to him to make the findings arising from the submissions made to him by PCJV.

There was no jurisdictional error arising from any of the s.10A or s.10B Grounds. The legislation, in my opinion, intended to confer findings of fact of this kind under s.10A and s.10B of the Act to an adjudicator for determination, such that even if an error was made in making the findings, an adjudicator would remain within jurisdiction. In other words, the adjudicator had jurisdiction to make wrong findings of this type.

Further, for these reasons, it could not be said that in making these findings the basic and essential requirements of the Act for a valid determination were not satisfied. Thus there is no basis for a declaration of invalidity.

The Procedural Fairness Grounds

Finally, Grocon challenged the O’Brien determination on grounds of alleged breaches of the priniples of procedural fairness. It said in Ground 10:

Ground 10: Further, insofar as O’Brien purported to make findings critical of Grocon and Grocon’s employee, Steve Richardson, and/or made findings against the credit of Grocon and Steve Richardson in the O’Brien determination then:
(a)O’Brien failed to accord Grocon procedural fairness in respect of such purported findings and criticisms;
(b)O’Brien failed to exercise the powers available to him under section 22(5) of the Act to ensure procedural fairness in respect of such purported findings and criticisms; and
(c)O’Brien made such purported findings and criticisms in his determination in breach of his statutory obligation of good faith as adjudicator under the Act.

In support of Ground 10, Grocon submitted that in his adjudication determination O’Brien made gratuitous and/or irrelevant criticisms, and/or adverse findings not based on evidence, against the credit of Grocon and Steve Richardson. These were said to be found on pages 3 (paragraph 7), 4 (paragraph 4), 5 (paragraph 3), 6 (paragraphs 4-6), 7 (paragraph 1), 19 (paragraphs 2 and 5) and 20 (paragraph 1) of the O’Brien determination.

I have examined each of the passages referred to by Grocon in support of its procedural fairness ground.

Some of the statements found in the reasons are merely findings of fact adverse to Grocon. In this regard I refer to page 3 (paragraph 7), page 6 (paragraphs 4-6), page 7 (paragraph 1), page 19 (paragraphs 2 and 5) and page 20 (paragraph 1) of the O’Brien determination. These could not possibly give rise to a complaint of beach of the rules of natural justice of the kind complained of.

This leaves two passages in the reasons which fall into a different category. As earlier discussed, this case was somewhat unusual in that there was not written construction contract between the parties. Further, there was disagreement, reflected in the submissions delivered by both of the parties to the adjudicator, as to what comprised the contract. The adjudicator was presented with two starkly different versions of events. Yet in carrying out his duty under the Act, and in considering only those matters he was required to take into account under s.23, and deliver a determination, he was compelled to come to a decision. In arriving at his conclusion as to what constituted the contract, one side’s version had to be accepted in preference to the other side’s version. Secondly, it was permissible for the adjudicator to draw reasonable inferences from the material before him in arriving at his conclusion.

With these observations in mind, I turn to the remaining passages complained of by Grocon found in the O’Brien determination.

At page 4 (paragraph 4) of his reasons, O’Brien said:

According to Mr Richardson: “Although neither I or anyone else on behalf of [the Respondent] expressly responded to [the Claimant’s] emails dated 5 May 2008 and 12 June 2008, from May 2008 [both parties] treated the document returned by [the Claimant] [being the unexecuted Deed amended by the Claimant] as embodying the written terms of the Subcontract at least insofar as performance by [the Claimant] of the preparation and submission in hard copy and electronic form of the drawings was concerned”. I find this scarcely credible considering the relationship of the parties at that stage and quite self serving in the inference that both parties were agreed as to what was required of the Claimant but not of the Respondent.

In relation to the passage on page 4 (paragraph 4) of the O’Brien determination which is complained of, they were findings made by the adjudicator as part of his reasoning in rejecting Grocon’s case as to what comprised the construction contract. This was a central issue which separated the parties. Given that they both had exchanged written submissions on the issue, it was hardly surprising that the adjudicator should arrive at a conclusion which rejected one version of events in favour of another. Properly advised, this ought to have been in the contemplation of both parties. Further, in arriving at his conclusion, it was or ought to have been within the contemplation of both parties that the adjudicator would arrive at a conclusion founded on a finding as to what was more likely than not to have occurred. Further, it must have been expected that in arriving at his conclusion, the adjudicator would be in a position to draw inferences, including inferences adverse to one party or the other, from the material provided to him. The expressions of the findings by the adjudicator at page 4 (paragraph 4) of O’Brien’s reasons I take to be no more than this.

Then at page 5 (paragraph 3) of his reasons, O’Brien said:

Mr Richardson says that he drafted the correspondence of 1 August 200[8]. The email seems to me to fit an ongoing strategy to keep the Claimant working whilst not actually committing the Respondent to payment of the Claimant’s assessments of and claims for the value of the work involved.

As to the finding at page 5 (paragraph 3) the parties had ample opportunity through the exchange of written submissions to advance their respective cases on the point in issue, including submissions as to why one body of evidence should be preferred to the other. PCJV in its submissions to the adjudicator included an affidavit of its managing director, Mr Peter Cocciardi dated 17 April 2009. Mr Cocciardi made specific reference to Grocon’s email of 1 August 2008, saying in relation to the promise for compensation to PCJV stated in the email:

Subsequently, Mr Richardson has tried to resile from this letter and has refused to compensate PCJV as promised.

Further, Mr Cocciardi alleged that Grocon proposed, at a meeting on or about 12 September 2008, that PCJV complete the project “at cost” and forgo all outstanding amounts to date. Accordingly, Grocon was put on notice of allegations surrounding the email of 1 August 2008, and its subsequent conduct in relation to it, including its attempts to keep the claimant working whilst not committing itself to full payment. The finding made by the adjudicator at page 5 (paragraph 3) of his reasons, was consistent with the thrust of the allegations made by PCJV in its submission material.

I have accepted the principle that where, after considering an adjudication application and an adjudication response, an adjudicator comes to the view that there was some matter, not traversed in them, that might cause him or her to deal with the application in a manner adverse to one or other party, the principle enunciated by McHugh J in Muin v Refugee Review Tribunal[134] would ordinarily require that the adjudicator request further written submissions and comments thereon.[135] However, the issue of what constituted the construction contract in this case was squarely raised in the adjudication application and the adjudication response. Further the parties addressed in their submissions the material upon which they relied in support of their respective positions on the matter. By this means Grocon was put on notice of the allegations contained in Mr Cocciardi’s affidavit of 17 April 2009, and was in a position to address the matters raised. In my opinion, this was not an occasion which called for the adjudicator to request further written submissions and comments on the matter before handing down his determination.
[134][2002] HCA 30; (2002) 76 ALJR 966, 989 at [123].
[135] Musico v Davenport [2003] NSWSC 977 at [59].

As to the complaint that the findings were personally adverse to Mr Richardson and Grocon, I am not satisfied that either individually or as a whole they would impact detrimentally upon his personal reputation or that of his company so as to require any special step to be taken to give him or Grocon any further opportunity to be heard on the matters before the reasons and determination were delivered.

No substantial breach of the rules of procedural fairness occurred in this case sufficient to amount to a denial of the standard required by the Act, and thus the intervention of certiorari.

Conclusion as to the Grounds for Judicial Review of the O’Brien Determination

None of the grounds contended for by Grocon in relation to the O’Brien adjudication determination have been made out.

The Davenport Review Determination - Grounds for Judicial Review

In seeking to quash the Davenport review determination, Grocon relied upon each of the grounds it advanced in relation to the O’Brien determination on the basis that, if the O’Brien determination was void, there would be no valid review adjudication before Davenport which could result in a valid review determination. A decision of this type founded on a nullity, would itself, be a nullity.

It follows from my findings in relation to the O’Brien determination that the Davenport review determination is not void on these grounds.

Grocon, however, pressed six further grounds in the judicial review of the Davenport review determination. Four of the six additional grounds for judicial review relied upon by Grocon in seeking to overturn the findings of the review adjudicator, being Grounds 1, 3, 5 and 6, in one way or another, relate to the ultimate factual finding made by Davenport that, on the material before him, he was not satisfied that the subject payment claim included an excluded amount. In relation to these four grounds it is not said that there was an error of law on the face of the record in making any of the findings of fact because there was no evidence to support those findings.

It needs to be born steadily in mind that on an adjudication review there is only one ground of review open under the Act. An application for an adjudication review may only be made on the ground that the adjudicated amount at the first instance adjudication included an “excluded amount”, as that term is described in s.10B: s.28B(3).

Further, an adjudication review is not an appeal. The process should not be used as such. In particular, an adjudication review should not be used as a basis for a re-evaluation of the findings of fact made by the adjudicator at first instance which were used by the adjudicator in reasoning towards making a finding as to the ultimate fact in question on a review, namely whether or not the payment claim included an excluded amount. On a review, the review adjudicator is bound by the findings of fact made by the adjudicator. The task on review is to determine, on the basis of the facts as found by the adjudicator at first instance, whether the payment claim includes an excluded amount. However, it is not open for a review adjudicator to overturn any of the other findings of fact as found by the adjudicator at first instance, because to do so would introduce a further and impermissible ground of review, namely that the adjudicator at first instance erred in making the findings in relation to those other facts.

In the course of determining this question, the review adjudicator must only consider the following matters, and these matters only:

(a) the provisions of the Act and any regulations made under the Act;
(b)the provisions of the construction contract from which the application arose; and
(c)the information provided by the authorised nominating authority which is listed under s.28H, namely all of the material which was before the adjudicator at first instance and the adjudication determination: s.28I (2) and s.28H (2).

The review adjudicator is prohibited from taking into account (a) any excluded amount; or (b) any other matter that is prohibited by the Act from being taken into account: s.28I(3). Accordingly, on a review, the review adjudicator is prohibited from taking into account any other material that was not before the adjudicator at first instance and beyond the reasons for determination. However, if the material falls within the description of the items listed in s.28H, the review adjudicator may take that material into account, even though it appears not to have been considered by the adjudicator at first instance on a reading of the reasons for the adjudication determination.

The point is well illustrated in this case. The adjudicator at first instance found as a fact that the construction contract between the parties was oral, and arose from the discussion between the parties which occurred on 12 September 2008. The adjudicator called this the “Arrangement of 12 September 2008”. The adjudicator then found as another fact that the detailed quotation submitted by the claimant dated 6 June 2007, was not part of the construction contract. He also found as a fact that the deed prepared and submitted by the respondent to the claimant on 21 November 2007, was similarly not part of the construction contract. On this basis he was able to make a further finding of fact that neither of the mediation clauses contained in those documents comprised part of the construction contract. These were findings of fact which could not be disturbed on an adjudication review, because to do so would be to introduce a further and impermissible ground of review, namely that the adjudicator erred in finding that the construction contract did not include the terms of the quote or the deed. These finding of fact were used by the adjudicator in his reasoning that the construction contract did not contain a “method of resolving disputes under the contract” within the meaning of s.10A(3)(d)(ii), and on this basis at least, the payment claim did not include an excluded amount.

There was therefore no necessity for the review adjudicator in this case to have embarked on a detailed interpretation and characterisation of the mediation clauses included in the quotation and the deed in the course of his review determination. He was bound to proceed in his review on the basis as found by the adjudicator, that those clauses were never part of the construction contract in question.

A number of the Grounds of review pressed by Grocon touched upon or arose from the issue as to what constituted the construction contract between the parties. There was no need for the review adjudicator to have engaged in a re-consideration of what constituted the construction contract. To do so would have involved considering a ground of review which was not open for him to consider. Nevertheless, he did engage in this exercise and independently arrived at the same conclusion as the adjudicator, in finding that the construction contract was constituted entirely by the conversation between the parties conducted on 12 September 2008, and that neither the claimant’s tender of 6 June 2007 or the respondent’s draft deed delivered 21 November 2007 comprised the contract or any part of it. These findings of the review adjudicator, and the process of reasoning he used to arrive at his conclusion, although technically beyond his power and irrelevant, having arrived at the same conclusion as the adjudicator at first instance, his approach did not taint the rest of his reasons with regard to the issue he was charged to determine, namely whether the claimant’s payment claim included or was comprised of an “excluded amount” as defined by the Act.

With these observations in mind, I deal with each of the Grounds relied upon by Grocon in the judicial review.

Ground 1 states:

Ground 1: Contrary to sections 10A and 10B of the Act, it was not open to Davenport to find, and he erred by finding, that the payment claim dated 24^th April 2009 arose in respect of claimable variations and/or did not include excluded amounts in circumstances where:
Each of Grocon and PCJV contended before him that the relevant construction contract was in writing;
Each of the said contended for contracts included a dispute resolution method complying with section 10A(3)(d)(ii) of the Act;
The original consideration agreed for the construction contract was $1,550,000 (plus GST) and the payment claim dated 24^th April 2009 claimed variations of $544,841 in total; and
Where Grocon had already paid to PCJV, inclusive of agreed variations, the sum of $2,482,869 (plus GST).

Ground 1 may be despatched shortly. Grocon by this ground seeks to put in issue the construction contract and the purported findings of the review adjudicator in relation to it.

As I have already found, it was not open to the review adjudicator to revisit the findings made by the adjudicator on the issue. To the extent that he did seek to review those findings, the review adjudicator’s reasons in this respect were surplusage. In any event he confirmed the findings of the adjudicator at first instance in relation to the construction contract, and accordingly, the balance of the reasoning of the review adjudicator in respect of the issue which he was confined to consider, namely whether the claimant’s payment claim included or comprised an “excluded amount”, was not affected.

Ground 2 of the Grocon judicial review is in the following form:

Ground 2: The purported findings made by Davenport at paragraphs 33 to 36 of the Davenport review determination to the effect that Grocon could not at the same time argue that the alleged work which Grocon claimed was a variation was not actually carried out, were contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, were not open to him and/or constituted jurisdictional error.

Grocon submitted, and correctly so, that it was entitled at law to make contentions in the alternative in its submissions to the adjudicators. However, Grocon was not prevented by Davenport from making alternative submissions. In paragraphs [33]–[36] of his reasons, the review adjudicator was merely seeking to highlight a difficulty he perceived for the argument Grocon was seeking to put which arose from the alternative submissions it had advanced. However, I have considerable difficulty with the reasoning of the review adjudicator on this point. The problem, I think, arose from the definition of a “variation” found in s.10A of the Act. Both of the classes of claimable variations specified in the section relate to “work that has been carried out or goods and services that have been supplied”: s.10A(2)(a) and (3)(a). Section 10B, which deals with “excluded amounts”, includes in the definition of that term “any amount that relates to a variation of the construction contract that is not a ‘claimable variation’”: s.10B(2)(a). Grocon was seeking to put a case that the whole of the sum constituted by PCJV’s payment claim was an excluded amount, and therefore pursuant to s.10B(1) should not have been taken into account when calculating the amount of the progress claim. In order to make out this case, Grocon sought to establish that the amount claimed by PCJV was not a “claimable variation”. In order to achieve this, Grocon also sought to establish that the work to be done pursuant to the variation had not been done or the goods and services (if any) had not been supplied, and as such would not be a ‘claimable variation’ pursuant to s.10A(2)(a) and (3)(a), and therefore was an “excluded amount” pursuant to s.10B(2)(a). This is precisely what Grocon submitted to the review adjudicator. However, he took the view, erroneously in my opinion, that the statutory definition of “variation” in s.4 of the Act, as applied to s.10B(2)(a) of the Act (the excluded amounts provision), meant that “variation” as used in that sub-section applied only to work that had been done or goods and services which had been supplied. However, the s.4 definition of variation under the Act does not say that. It provides:

Variation in relation to a construction contract, means a change in scope of the construction work to be carried out, or the related goods and services to be supplied, under the contract. [Emphasis added]

The result is that the observation made by the review adjudicator, to the effect that Grocon could not have it both ways, was a comment which was, in my opinion, misplaced. Nevertheless, it did not matter. This is because the adjudicator at first instance in fact found that the claimant had carried out the work in question. Further, the review adjudicator, correctly recognising the limits of his jurisdiction, made the same finding, when he observed that:

I don’t think it is open to me to find that work which the Adjudicator found had been carried out was not, in fact, carried out. Section 28B(3) of the Act provides that an application for review can only be made on the ground that the Adjudicated amount is an excluded amount.

Accordingly, the comment of the review adjudicator which is the subject of Ground 2 of Grocon’s judicial review application, is surplusage. On the facts as found by the adjudicator at first instance, he rejected Grocon’s contention that the relevant work had not been done. His comment did not affect his final conclusion that the sum claimed by PCJV was not an excluded amount, and no error of law on the face of the record or jurisdictional error, or warrant for a declaration of invalidity, has been demonstrated.

Ground 3 of the Grocon judicial review is in the following form:

Ground 3: The purported findings made by Davenport at paragraphs 43 to 48 of the Davenport review determination that a mandatory contractual dispute resolution method requiring the parties to mediate disputes did not comply with section 10A(3)(d)(ii) of the Act, were contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, were not open to him and/or constituted jurisdictional error.

For the reasons already expressed, the purported construction of the mediation clause undertaken by Davenport was irrelevant and surplusage. The alleged mediation clause was found by the adjudicator at first instance to have never been part of the construction contract.

It is irrelevant whether or not Davenport’s conclusion as to the construction of the mediation clause is correct. He arrived at the same conclusion as the adjudicator at first instance on the issue, to the effect that the clause was not “a method of resolving disputes under the contract” within the meaning of s.10A(3)(d)(ii). The result would have been the same had the review adjudicator merely determined, as he should have, that no mediation clause existed at all in the construction contract within the meaning of s.10A(3)(d)(ii). Consequently, the further reasoning of the review adjudicator on the question before him to decide, was not affected. Applying the reasoning in Bond referred to above, the findings of the review adjudicator in the respects complained of by Grocon did not contribute to the decision. That decision must have been the same regardless of the error. It has not been shown that even if there was an error of law involved in the decision, which in any event I have not found to be the case, that the decision may have been any different if the error had not occurred.

Ground 4 of the judicial review pressed by Grocon is expressed as follows:

Ground 4: The purported findings by Davenport at paragraph 68 of the Davenport review determination to the effect that Grocon was impugning its own evidence in the adjudication and the sworn evidence of Steve Richardson by relying on PCJV’s allegations as to the form of the contract between the two parties, was contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, was not open to him and/or constituted jurisdictional error.

In the course of argument before the review adjudicator as to what constituted the construction contract, Grocon relied in part upon what it contended were admissions made by PCJV in court documents which it had filed in the Supreme Court proceedings, particularly Mr Cocciardi’s affidavit sworn 17 April 2009, which it was said evidenced PCJV’s admission that its tender dated 6 June 2007 constituted the written construction contract between PCJV and Grocon. In dealing with this issue in his reasons, Davenport said:

[67]However, in the adjudication the respondent relied upon the affidavit of Mr. Richardson. Mr. Richardson does not say that the claimant’s tender of 6/6/07 was accepted. At [23] of his affidavit he says:
I also note that Grocon never accepted Cocciardi’s draft contract dated June 2007 which was prepared by Cocciardi prior to its incorporation, and as alleged in Cocciardi’s letter to Grocon dated 18^th December 2008 more fully referred to below.

[68]In this review, the respondent is, in effect, impugning its own evidence in the adjudication and the sworn evidence of Mr. Richardson in the Supreme Court.

Grocon now contends that it was entitled at law to advance contentions in the alternative and to rely upon admissions made by PCJV against PCJV’s own interest, particularly in circumstances where Mr Cocciardi in his affidavit sworn 17 April 2009 deposed to the tender document constituting the written contract between PCJV and Grocon. It also contends that the finding made by Davenport at paragraph [68] of his reasons “was contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, was not open to him and/or constituted jurisdictional error”.

These submissions do not have substance. First, the matters raised by Grocon before the review adjudicator were irrelevant, because the review adjudicator had no power to determine the question as to what constituted the construction contract. He was bound by the findings of the adjudicator at first instance, and there was no valid ground of review before him to re-visit those findings. Second, even though the review adjudicator permitted submissions on those matters from both parties, he did not stop Grocon from fairly presenting its case on the matter and from relying on such evidence as it wished in seeking to make out its case, including making reference to what it contended where admissions against interest on the part of PCJV. Third, in paragraphs [67]-[68], the review adjudicator alludes to, what appeared to him, a contradictory position assumed by Grocon in the adjudication and the Supreme Court proceeding. Whether or not this is so, the finding has not been shown to have affected the determination of Davenport as to what constituted the construction contract, or any other finding made by him. Fourth, if in fact there was evidence which justified the inference drawn by the adjudicator in paragraphs [67]-[68] of his reasons, the comment would be justified. If there was not, as Mason CJ said in Bond, citing Reg v The District Court; Ex parte White:[136]

To establish some faulty (e.g. illogical) inference of fact would not disclose an error of law.

[136](1966) 116 CLR 644, at p 654; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 per Mason CJ at [88].

Ground 5 of the judicial review was:

Ground 5: The purported findings made by Davenport at paragraph 78 of the Davenport review determination that by PCJV’s reference to “the September 2008 variation” it was referring to a change in the inchoate arrangement between PCJV and Grocon, was contrary to law, demonstrated an error of law on the face of the record constituted by the Davenport review determination, was not open to him and/or constituted jurisdictional error.

In its submissions to this Court, Grocon challenged the finding complained of on the basis that the review adjudicator fell into error in making the finding that prior to September 2008 PCJV had performed work pursuant to an “inchoate arrangement”. It says that prior to September 2008 there was “not some inchoate agreement, but … [a] clear agreement”.

The description “inchoate agreement” used by the review adjudicator to describe the working arrangement between the parties prior to 12 September 2008, was in accordance with the findings of the adjudicator at first instance. The review adjudicator was bound by those findings of fact. There was no error of law in him describing those findings in the way he did.

Finally, Ground 6 of the Grocon judicial review was expressed as follows:

Ground 6: Insofar as Davenport purported to uphold the O’Brien determination in respect of the issues arising under sections 10A and 10B of the Act as to whether the payment claim dated 24^th April 2009 related to claimable variations and/or did not include excluded amounts, the Davenport review determination:
(a) Is void by operation of section 23(2B) of the Act;
(b)Was contrary to the Act and demonstrates an error of law on the face of the record constituted by the Davenport review determination and/or the O’Brien determination;

(c) Tainted by jurisdictional error; and/or
(d)Was made in breach of his obligation to accord procedural fairness to Grocon,

and ought to be quashed and/or declared void.

The submission made by Grocon under Ground 6 was essentially that if the O’Brien determination should be declared “void or invalid, or … [be] quashed, then it follows that the confirming adjudication must fall too”. I agree. But having found the O’Brien determination to be valid, the consequence contended for does not follow.

Conclusion as to the Grounds for Judicial Review of the Davenport Review Determination

In its payment schedule, Grocon alleged that the whole of the amount claimed in the payment claim by PCJV was an excluded amount and therefore could not be taken into account when calculating the amount of the progress payment under s.10B(1), namely $544,841.00 [including GST]. Grocon said in its submissions to the adjudicator that the sum claimed in the payment claim “arises from variations to the original contract price of $1,550,000 plus GST, which variations were neither approved nor agreed by Grocon, and Grocon alleges that the whole of the amount claimed of $544,841.00 is an excluded amount”. The adjudicator rejected Grocon’s submission and determined that the whole of the claimed amount was not an excluded amount.

Davenport, as the review adjudicator, also concluded that he was not satisfied that the payment claim included an excluded amount. This was the only finding of fact which the review adjudicator was entitled to make.

There was no jurisdictional error arising from this finding. The legislation, in my opinion, intended to confer findings of fact of this kind under s.10A and s.10B of the Act to an adjudicator and a review adjudicator for determination, such that even if an error was made in making the findings, an adjudicator would remain within jurisdiction. In other words, the adjudicator had jurisdiction to make even wrong findings of this type. Further, for these reasons, it could not be said that in making this finding the basic and essential requirements of the Act for a valid determination were not satisfied. Thus there is no basis for a declaration of invalidity.

The record for the purpose of considering non-jurisdictional error of law, in this case, comprises the formal documents initiating and defining the matter for adjudication under the Act at first instance. This consists of the payment claim made under s.14 of the Act and the payment schedule provided by the respondent under s.15 of the Act. Added to this is the decision of the adjudicator at first instance which includes the determination of the adjudicator and the reasons for the determination. Further, all of the submissions filed by the parties constitute part of the record because they assist to define the issues in the adjudication. In relation to the review determination, added to these documents are the adjudication review application of Grocon and the other submissions prepared and delivered by the parties for the adjudication review because they assist in defining the issues for the review.

As to any error on the face of the record, having considered the Davenport review determination, the documents which comprise the record for the purposes of certiorari, and each of the Grounds for judicial review relied upon by Grocon, I can see no error of law on the face of the record which can be made out on the plaintiff’s grounds for judicial review.

Accordingly, I find that none of the grounds for judicial review of the Davenport review determination have been made out.

Orders

I will dismiss the plaintiff’s proceeding and hear the parties on the question of costs.

---

[2009] VSC 426

25 SEPTEMBER 2009