Hunters Green Retirement Living Pty Ltd v J.G. King Project Management Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT
TECHNOLOGY, ENGINEERING AND CONSTRUCTION LIST

S ECI 2022 04325

HUNTERS GREEN RETIREMENT LIVING PTY LTD (ACN 107 006 520)	Plaintiff
v
J.G. KING PROJECT MANAGEMENT PTY LTD (ACN 095 695 079)	First Defendant
SUSAN LEECH	Second Defendant

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JUDGE:	Attiwill J
WHERE HELD:	Melbourne
DATE OF HEARING:	2 and 9 February 2023 and 1 May 2023 (further submissions of the parties 20 May 2023)
DATE OF JUDGMENT:	8 September 2023
CASE MAY BE CITED AS:	Hunters Green Retirement Living Pty Ltd v J.G. King Project Management Pty Ltd
MEDIUM NEUTRAL CITATION:	[2023] VSC 536

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JUDICIAL REVIEW – Whether determinations made by the second defendant under s 23 of the Building and Construction Industry Security of Payment Act2002 (Vic) (the Act) should be quashed or set aside or alternatively are void or of no effect – Whether the second defendant committed jurisdictional error – Whether the payment claims made by the first defendant upon the plaintiff are payment claims for the purpose of s 14(1) of the Act – Whether the payment claims are balancing claims and/or claims for retention moneys – Whether the payment claims are in respect of ‘construction work’ for the purposes of the Act – Whether the payment claims are in respect of a ‘reference date’ for the purposes of the Act – Whether the payment claims sufficiently identify the ‘construction work’ for the purposes of s 14(2)(c) of the Act – Whether the Court has jurisdiction to review the determinations for non-jurisdictional error of law on the face of the record in circumstances where judgment has not been entered pursuant to s 28R of the Act – Whether the second defendant committed non-jurisdictional error of law on the face of the record – Whether the contracts to which the payment claims relate contain terms for calculating the amount of a progress payment to which the first defendant is entitled and/or terms valuing the construction work and related goods and services – Adjudicator did not commit jurisdictional error – The payment claims are claims for the unpaid amounts for construction work retained by the plaintiff as security in the form of retention moneys under the contracts – The payment claims are in respect of ‘construction work’ in respect of a ‘reference date’ for the purposes of the Act – The payment claims sufficiently identify the ‘construction work’ for the purposes of s 14(2)(c) of the Act – Adjudicator committed non-jurisdictional error on the face of the record - The contracts to which the payment claims relate contain terms for calculating the amount of the progress payments to which the first defendant is entitled – Adjudicator erred in law in not calculating the progress payments in accordance with the terms of the contracts – The unpaid amounts for construction work retained by the plaintiff as security in the form of retention moneys under the contracts were not due for release and return on the reference date – The error was material – Relief granted – Building and Construction Industry Security of Payment Act2002 (Vic) ss 9, 10, 11, 14, 23 and 28R, Cat Protection Society v Arvio [2018] VSC 757, Punton’s Shoes Pty Ltd v Citi-Con (Vic) Pty Ltd [2020] VSC 514, John Beever (Aust) Pty Ltd v Paper Australia Pty Ltd [2019] VSC 126 and Façade Designs International Pty Ltd v Yuanda Vic Pty Ltd [2020] VSC 570.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr B G Mason	MinterEllison
For the First Defendant	Mr A R Morrison	Champions Lawyers
For the Second Defendant	No appearance

TABLE OF CONTENTS

INTRODUCTION.............................................................................................................................. 1

BACKGROUND................................................................................................................................. 1

GROUNDS OF JUDICIAL REVIEW........................................................................................... 20

THE ACT............................................................................................................................................ 21

GROUNDS 1 (STAGE 12), 2 (STAGE 12), 5 (STAGE 13) AND 6 (STAGE 13): DO THE PAYMENT CLAIMS ENGAGE THE ACT’S PROCESSES?................................................................... 33

The issues..................................................................................................................................... 33
Were the Payment Claims ‘balancing claims’ and/or claims for amounts of retention moneys which Hunters Green held by reason of the terms of the Contracts?........................ 34
Adjudicator’s Determinations......................................................................................... 34
Hunters Green’s submissions.......................................................................................... 35
JG King’s submissions...................................................................................................... 38
Analysis............................................................................................................................... 40

What consequences flow from the proper characterisation of the Payment Claims? Were the Payment Claims in relation to ‘construction work’ or ‘related goods and services’? 44
The issues............................................................................................................................ 44
Adjudicator’s Determinations......................................................................................... 45
Hunters Green’s submissions.......................................................................................... 45
JG King’s submissions...................................................................................................... 48
Hunters Green’s submissions in reply........................................................................... 51
Analysis............................................................................................................................... 53

Were the Payment Claims made in respect of a reference date for the purposes of the Act? 63
Adjudicator’s Determinations......................................................................................... 63
Hunters Green’s submissions.......................................................................................... 64
JG King’s submissions...................................................................................................... 64
Analysis............................................................................................................................... 65

Accordingly, were the Payment Claims ‘payment claims’ for the purposes of s 14(1) of the Act? What is the effect of the Adjudicator’s Determinations in respect of the Payment Claims, if any?...................................................................................................................................... 66

GROUNDS 3 (STAGE 12) AND 7 (STAGE 13): DO THE PAYMENT CLAIMS ‘IDENTIFY THE CONSTRUCTION WORK OR RELATED GOODS AND SERVICES’ TO WHICH THE PAYMENT CLAIMS RELATE WITHIN THE MEANING OF SECTION 14(2)(c) OF THE ACT?........................................................................................................................................................ 66

The issues..................................................................................................................................... 66
Do Grounds 3 (Stage 12) and 7 (Stage 13) arise for determination only if the Court finds that the Payment Claims are in respect of ‘construction work’ or ‘related goods and services’ within the meaning of the Act?.................................................................................................... 67
If Grounds 3 (Stage 12) and 7 (Stage 13) arise for determination, did the Payment Claims sufficiently identify the ‘construction work’ or ‘related goods and services’ to which they relate for the purposes of s 14(2)(c) of the Act?............................................................. 68
Adjudicator’s Determinations......................................................................................... 68
Hunters Green’s submissions.......................................................................................... 69
JG King’s submissions...................................................................................................... 71
Analysis............................................................................................................................... 72

Accordingly, were the Payment Claims ‘payment claims’ for the purposes of s 14(1) of the Act? What is the effect of the Adjudicator’s Determinations in respect of the Payment Claims, if any?...................................................................................................................................... 82

GROUNDS 4 (STAGE 12) AND 8 (STAGE 13): DID THE ADJUDICATOR INCORRECTLY CALCULATE THE ENTITLEMENT OF JG KING?........................................................... 82

The issues..................................................................................................................................... 82
Does the Court have jurisdiction to review a security payment adjudication determination for non-jurisdictional error of law on the face of the record in circumstances where judgment has not been entered pursuant to s 28R of the Act?..................................................... 83
Did the Contracts make express provision as to how the amount of a final ‘progress payment’ is to be calculated for the purposes of s 10(1)(a) of the Act; and/or how ‘construction work’ carried out or undertaken to be caried out or ‘related goods and services’ supplied or undertaken to be supplied under a ‘construction contract’ is to be valued for the purposes of ss 11(1)(a) or 11(2)(a) of the Act, in respect of a claim for final payment? If the Contracts did make such an express provision, is it relevant to the Adjudicator’s assessment of the Payment Claims?............................................................................................................... 86
If the Contracts did make such an express provision, was the Adjudicator required by clauses 5, 37.2, 37.4 and, or alternatively 37.7 to apply to set off in respect of any retention money which Hunters Green was entitled to retain? Was that set off requirement permitted by s 48(2) of the Act? Did the arrangements entitle Hunters Green to retain the final tranche of retention money in the amount certified for payment?................................................................ 86
Adjudicator’s Determinations......................................................................................... 86
Hunters Green’s submissions.......................................................................................... 88
JG King’s submissions...................................................................................................... 89
Hunters Green’s submission in reply............................................................................. 92
Analysis............................................................................................................................... 93
Relevant law.......................................................................................................... 93
Clause 37.4 of the Contracts makes express provision for the calculation of the progress payments to which JG King is entitled under the Act.................... 99
The calculation of the progress payments under the Act in accordance with clause 37.4 of the Contracts........................................................................................... 102
Clause 5.4 is not void......................................................................................... 108

Did the Adjudicator commit non-jurisdictional error of law on the face of the record when calculating the amount of the progress payment the subject of the claims for payment and valuing the ‘construction work’ or the ‘related goods and services’ the subject of the claims for payment? If so, was the error of a sufficient type and severity that, in the Court’s discretion, the adjudication determinations ought be quashed and should the Claims for Payment be remitted to the Adjudicator?.................................................................... 108
Parties’ submissions........................................................................................................ 108
Analysis............................................................................................................................. 109

CONCLUSION AND ORDERS.................................................................................................. 113

HIS HONOUR:

INTRODUCTION

The plaintiff (Hunters Green) seeks judicial review of two adjudication determinations made by the second defendant (the Adjudicator)[1] under s 23 of the Building and Construction Industry Security of Payment Act2002 (the Act). The Adjudicator’s determinations concern claims for payment made by the first defendant (JG King) upon Hunters Green for the construction of the Hunters Green Retirement Village in Cranbourne East (the Project).
[1]The Adjudicator, by letters to the Prothonotary filed 3 November 2022 and 9 January 2023, advised that she did not intend to be represented at the hearing as she did not intend to take any active role in the proceedings and would abide by the decision of the Court, save as to costs.

BACKGROUND

On 13 August 2018, Hunters Green, a developer, entered into contracts with JG King, a builder, for the construction of Stage 12 of the Project (Stage 12 Contract)[2] and Stage 13 of the Project (Stage 13 Contract)[3] (collectively, the Contracts).[4] Stage 12 related to the design and construction of twenty-one retirement village residential units and Stage 13 related to the design and construction of twenty-eight retirement village residential units. The Contracts are identical, other than details specific to the separate stages of construction.
[2]Exhibit NJM-1 to the affidavit of Nikki Miller sworn 26 October 2022 (‘Miller affidavit’) 10-143.
[3]Ibid 144-277.
[4]The Contracts have amendments that are tracked. In this judgment, where provisions from the Contracts are set out, the original tracking is included as it appears in the Contracts.

The contract sum of the Stage 12 Contract is $4,637,944.41 (inclusive of GST) and the contract sum of the Stage 13 Contract is $6,406,597.96 (inclusive of GST) (Item 1A of Part A). Hunters Green is named as the both the ‘Principal’ and the ‘Superintendent’ under the Contracts (Items 1 and 5 of Part A). JG King is named as the ‘Contractor’ under the Contracts (Item 3 of Part A).

Clause 5 of the Contracts concerns security. It provides:

5 Security
5.1 Provision
Security shall be provided in accordance with Item 14 or 15. ~~All delivered~~
Security provided in accordance with this clause 5 must remain valid and enforceable until the date of its return, in accordance with the Contract.
Should an Insolvency Event occur, or be likely to occur, in relation to the approved issuer who provides the security, the party providing the security must:
(a)immediately notify the other ~~than cash or retention moneys, shall be transferred in escrow~~party; and
(b)as soon as practicable (but in any event within 5 business days or such later date as agreed by the parties) procure the issue to the other party a replacement security which:
(i)is in the form and in the amount of the security that it is replacing; and
(ii)otherwise satisfies and is governed by the terms and the requirements of this Contract for the provision of the security that it is replacing.

5.2 Recourse
Security shall be subject to recourse by a party (including by being converted into cash security that does not consist of cash, by a party who remains unpaid after the time for payment~~where at least 5 days have elapsed since that party notified the~~, including:
(a)any debt or other ~~party of intention~~moneys due from the Contractor to ~~have recourse~~the Principal; and
(b)any good faith claim to money which the Principal may have against the Contractor whether for damages (including liquidated damages), under an indemnity or otherwise relating to the Works of the WUC.

The Contractor shall not take any steps, including seeking an injunction or other order of any court, to prevent the Principal from calling upon or the issuer from paying under the security or to prevent the Principal from enjoying the benefit of the security. If the Principal calls upon the security and it is subsequently determined that the Principal was not entitled to do so then the Principal's sole liability to the Contractor shall be to return or reinstate the security.
5.3      Change of security
At any time a party providing retention moneys or cash security may substitute another form of security. To the extent that another form of security is provided, the other party shall not deduct, and shall promptly release and return, retention moneys and cash security.
5.4      Reduction and release
Upon the issue of the certificate of practical completion and compliance by the Contractor with subclause 34.6A a party's entitlement to security (other than in Item 14(e)) shall be reduced by the percentage or amount in Item 14(f) or 15(d) as applicable, and the reduction shall be released and returned within 14 days to the other party.
The Principal's entitlement to security in Item 14(e) shall cease 14 days after incorporation into the Works of the plant and materials for which that security was provided.
A party's entitlement otherwise to security shall cease 14 days after final certificate.
Upon a party's entitlement to security ceasing, that party shall release and return forthwith the security to the other party.
5.5      Trusts and interest
Except where held by a government department or agency or a municipal, public or statutory authority, any portion of security (and interest earned thereon) which is cash or retention moneys, shall not be held in trust for the party providing them until the Principal or the Contractor is entitled to receive them.
Interest earned on security not required to be held in trust shall belong to the party holding that security.
5.6      Deed of guarantee, undertaking and substitution
Where:
(a)a party is a related or subsidiary corporation (as defined in the applicable corporations law of the jurisdiction); and
(b)a form of deed of guarantee, undertaking and substitution was included in the tender documents, or is stated to be required in Item 14(g),

that party shall, within 14 days after receiving a written request from the other party, provide such deed of guarantee, undertaking and substitution in the form of Annexure Part G or as included in the invitation to tender (as applicable) duly executed and enforceable.

The word ‘security’ is defined in clause 1 of the Contracts:

security means:
(a) cash;
(b) retention moneys;
(c)bonds or inscribed stock or their equivalent issued by a national, state or territory government;
(d)interest bearing deposit in a bank carrying on business at the place stated in Item 9(c);
(e)an approved unconditional undertaking (the form in Annexure Part B is approved) or an approved performance undertaking given by an approved financial institution ~~or insurance company~~; or
(f)other form approved by the party having the benefit of the security;

The Contracts make provision for security to be provided by JG King as follows:

(a) JG King to provide security in the form of retention moneys or two unconditional bank guarantees each for 2.5% of the total contract sum (clause 5.1 and Item 14 of Part A(a));

(b) JG King to provide security to a maximum percentage of 5% of the contract sum (Item 14(b) of Part A);

(c) if the security is provided in the form of retention moneys then it is to be 10% of each progress certificate (Item 14(c) of Part A);

(d) the security upon the certificate of practical completion and compliance by JG King with clause 36.4A is reduced by 50% (clause 5.4 and Item 14(f) of Part A).

The Contracts make no provision for security to be provided by Hunters Green (Item 15 of Part A).

Clause 34.6 of the Contracts concerns practical completion. It provides:

34.6     Practical completion
The Contractor shall give the Superintendent at least 14 days written notice of the date upon which the Contractor anticipates that practical completion will be reached.
When the Contractor is of the opinion that practical completion has been reached, the Contractor shall in writing request the Superintendent to issue a certificate of practical completion. Within 14 days after receiving the request, the Superintendent shall give the Contractor and the Principal either a certificate of practical completion evidencing the date of practical completion or written reasons for not doing so.
If the Superintendent is of the opinion that practical completion has been reached, the Superintendent may issue a certificate of practical completion even though no request has been made.
34.6A Matters to be attended to after practical completion
Within 14 days of the issue of a notice of practical completion, the Contractor must:
(a)       deliver to the Principal the following:
(i)        all shop drawings and as built drawings;
(ii)       three sets of keys for:
(A)all locks for each apartment, forming part of the Works (including electronic swipe tags); and

(B) any other locks forming part of the Works,
fitted with plastic tags having approved label inserts have been supplied by the Contractor to the Superintendent and all construction locks have been replaced with the final lock barrels and have been checked and adjusted;

(iii) all original warranties,
as required by the Contract (including those set out in Annexure Parts I and J) or requested by the Superintendent;
(b)ensure that all appliance and fittings (where applicable) including, but not limited to, all kitchen appliances (where applicable) are installed, completed and fully operational; and
(c)provide evidence of compliance with all relevant aspects of the quality assurance system including having undertaken all final inspections and testing of the Works required by that system.

Nothing in this clause limits the Contractor’s obligation to provide these items as a condition of satisfying paragraph (c) of the definition of practical completion.

Clause 37 of the Contracts concerns payment. It is central to the dispute between the parties. It provides:

37       Payment
37.1     Progress claims
The Contractor shall ~~claim~~ give the Superintendent claims for payment (‘progress claims’) progressively in accordance with Item 33 while WUC is being carried out, at practical completion and at the time for making the final payment.
An early progress claim shall be deemed to have been made on the date for making that claim.
Each progress claim shall be given in writing to the Superintendent and be in a format the Superintendent reasonably requires and shall include details of the value of WUC done and ~~may include~~ details of other moneys then due to the Contractor pursuant to provisions of the Contract. and must include a deduction for any liquidated damages for which the Contractor is liable in accordance with clause 34.7.
37.2     Certificates
The Superintendent shall, within ~~14 days~~10 Business Days after receiving such a progress claim, issue to the Principal and the Contractor:
(a)a progress certificate evidencing the Superintendent's opinion of the moneys due from the Principal to the Contractor pursuant to the progress claim and reasons for any difference (‘progress certificate’); and
~~(e)~~(b)   a certificate evidencing the Superintendent's assessment of retention moneys and moneys due from the Contractor to the Principal pursuant to the Contract. This certificate may be separate to, or form part of, a progress certificate.

If the Contractor does not make a progress claim in accordance with Item 33, the Superintendent may issue the progress certificate with details of the calculations and shall issue the certificate in paragraph (b).
~~If the Superintendent does~~Notwithstanding any other term of this Contract, the Principal is not obliged to make any payment until the Superintendent receives a progress claim that complies with this subclause 37.2.
The Superintendent shall, within 10 Business Days of receiving a progress claim that complies with this subclause 37.2, issue ~~the~~to the Principal and the Contractor a progress certificate in final form (‘progress certificate’).
The Contractor shall, within 1410 business days of receiving a progress claim in accordance with subclause 37.1, that progress claim shall be deemed to be the relevant progress certificate, issue the Superintendent with a tax invoice which must be in the amount of the progress certificate.
If the tax invoice submitted by the Contractor is in an amount greater than the amount permitted by this subclause 37.2, the Principal shall not be required to pay the Contractor an amount in excess of the amount of the tax invoice permitted by this subclause 37.2.
The Principal shall ~~within 7 days after receiving both such certificates, or~~ within ~~21 days~~the time indicated in Item 33A after the Superintendent receives ~~the~~a progress claim and tax invoice that comply with this subclause 37.2, pay to the Contractor the balance of the ~~progress certificate~~ tax invoice after setting off such of the certificate in paragraph 37.2(b) as the Principal elects to set off. If that setting off produces a negative balance, the Contractor shall pay that balance to the Principal within ~~7 days~~the time indicated in Item 33A of receiving written notice thereof.
Neither a progress certificate nor a payment of moneys shall be an admission of liability or evidence that the subject WUC has been carried out satisfactorily. Payment other than final payment shall be payment on account only.
37.3 Unfixed plant and materials
The Principal shall not be liable to pay for unfixed plant and materials unless they are listed in Item 34 and the Contractor:
(a) provides the additional security in Item 14(e); and
(b)satisfies the Superintendent that the subject plant and materials have been paid for, properly stored, insured and protected, and labelled (and in fact) the property of the Principal.

Upon payment to the Contractor and the release of any additional security in paragraph (a), the subject plant and materials shall be the unencumbered property of the Principal.
37.4     Final payment claim and certificate
Within 28 days after the expiry of the last defects liability period and the satisfaction of all of the Contractor’s obligations under the Contract, the Contractor shall give the Superintendent a written final payment claim endorsed ‘Final Payment Claim’ being a progress claim together with all other claims whatsoever in connection with the subject matter of the Contract. The Contractor must provide an executed deed of release before making the final payment claim.
Within 4210 business days after the ~~expiry~~receipt of the last defects liability perioda valid payment claim, the Superintendent shall issue to both the Contractor and the Principal a final certificate evidencing the moneys finally due and payable between the Contractor and the Principal on any account whatsoever in connection with the subject matter of the Contract.
Those moneys certified as due and payable shall be paid by the Principal or the Contractor, as the case may be, within 75 business days after the ~~debtor receives~~Superintendent issues the final certificate.
The final certificate shall be conclusive evidence of accord and satisfaction, and in discharge of each party's obligations in connection with the subject matter of the Contract except for:
~~(f)~~(a)    fraud or dishonesty relating to WUC or any part thereof or to any matter dealt with in the final certificate;
~~(g)~~(b)   any defect or omission in the Works or any part thereof which was not apparent at the end of the last defects liability period, or which would not have been disclosed upon reasonable inspection at the time of the issue of the final certificate;
~~(h)~~(c)   any accidental or erroneous inclusion or exclusion of any work or figures in any computation or an arithmetical error in any computation; ~~and~~
~~(i)~~(d)    unresolved issues the subject of any notice of dispute by the Principal pursuant to clause 42, served before the 7th day after the issue of the final certificate; and
(e)third party claims brought against the Principal thereafter for damage, injury or death.

~~15.5~~37.5         Interest
Interest in Item 35 shall be due and payable after the date of default in payment.
Clause 37.5 is a cost escalation clause to which Section 15 of the Domestic Building Contracts Act applies. The Principal acknowledges receipt of the warning annexed to this Contract given by the Contractor explaining the effects of this clause.
Signed for and on behalf of the Principal [by Colin Greaves, Administration Manager, and Angela Victoria Elizabeth Buckley, EGM Retirement Living Communities].
~~37.5~~37.6         Other moneys due
The Principal may ~~elect that~~deduct from moneys ~~due and owing~~ otherwise ~~than in connection with~~due to the ~~subject matter of~~Contractor
(a)       any debt or other moneys due from the Contractor to the Principal, and
(b)any good faith claim to money which the Principal may have against the Contractor whether for damages (including liquidated damages), under an indemnity or otherwise relating to the Works or the WUC,

whether under the Contract ~~also~~or otherwise at law.
37.7Security of Payment

This subclause 37.7 applies where the Works are carried out in Victoria and the SOP Act applies.
The Contractor agrees that:
(a)the time prescribed in clause 37.2 for the Superintendent to receive a progress claim is the ‘reference date’ within the meaning and for the purposes of the SOP Act;
(b) the place specified in Item 35A is the Principal’s ‘ordinary place of business’ for the purposes of section 50 of the SOP Act and the place provided under this Contact [sic] for service of every SOP document and any SOP document delivered to another place shall not be due to the Principal validly served under the SOP Act;
(c) payment of moneys for which the Principal has become liable to pay to the Contractor by reason of the SOP Act (including amounts which have been determined by an adjudicator or which are the subject of an adjudication under the SOP Act) shall not be evidence of the value of work or an admission of liability or evidence that work has been executed satisfactorily, but shall be a payment on account only;
(d) in determining the value of the work carried out by the Contractor in the performance of the Contract pursuant to the Contractclause 37, the Superintendent may determine a value which is less than the amount previously paid or payable to the Contractor (including any amount for which the Principal has become liable to pay to the Contractor by reason of the SOP Act and any amount in respect of which security has been given under the SOP Act);
(e)in determining the amounts paid previously under the Contract as required by clause 37 the Superintendent may include, in that amount, the following:
(i)any amount which has been paid to the Contractor pursuant to the SOP Act;
(ii)any amount which has been paid to the Contractor in satisfaction of an adjudication under the SOP Act;
(iii)any amount in respect of which security has been given under the SOP Act; and
(iv)any amount that has been the subject of a debt certificate within the meaning of the SOP Act;

(f) in issuing any documents under the SOP Act (including payment schedules), the Superintendent acts as the Principal’s agent. The Superintendent is not the Principal’s agent for the purpose of receiving any documents under the SOP Act (including payment claims) and the Contractor must serve such documents on the Principal at the same time as the Superintendent; and
(g)for the purpose of section 18(4) of the SOP Act, any adjudication application is to be made to one of the following authorised nominating authorities:
(i)the Institute of Arbitrators and Mediators;
(ii)Rialto Adjudications Pty Ltd; or
(iii)the Australian Solutions Centre;

(h)the Contractor must, promptly and without delay, give the Superintendent a copy of any written communication of whatever nature in relation to the SOP Act that the Contractor receives from a subcontractor;
(i)the Contractor must indemnify the Principal against all damage, expense (including lawyers’ fees and expenses on a solicitor/client basis), loss (including financial loss) or liability of any nature suffered or incurred by the Principal arising directly or indirectly out of:
(i)a suspension pursuant to the SOP Act by a subcontractor of work which forms part of the Works;
(ii)a failure by the Contractor to comply with this clause 37.7; or
(iii)any lien claimed over unfixed plant or equipment forming part of the Works under section 12A of the SOP Act by a subcontractor of the Contractor.

37.8 GST
(a)Terms defined in the GST Act have the same meaning in this subclause 37.8 unless provided otherwise.
(b)The contract sum is, subject to this subclause 37.8, inclusive of all expenses of the Contractor, insurance, duties, imposts and taxes (other than GST). All such expenses, insurance, duties, imposts and taxes shall be paid by the Contractor.
(c)The Contractor warrants that it is, and will remain registered for the purposes of Parts 2-5 of the GST Act.
(d)The Contractor warrants that it has correctly disclosed its Australian Business Number to the Principal and shall immediately advise the Principal of any change to its Australian Business Number.
(e)If the Principal becomes entitled to any payment by reason of reimbursement, indemnity or compensation by the Contractor, then such payment by the Contractor should exclude GST to the extent that the Principal can claim an input tax credit on the reimbursed, indemnified or compensated amount.

(f) A tax invoice submitted under clause 37.2 must set out:
(i) the Contractor's Australian Business Number;
(ii)the amount claimed by the Contractor and the basis for calculation of that amount;
(iii)the amount of any GST paid or payable by the Contractor with respect to the amount claimed;

(iv) the Contractor’s address for payment; and
(v) the Principal's reference number.
(g)If a tax invoice does not include the details described above then the claim is not, for the purpose of this Contract, a claim for payment. The date of receipt of a claim for payment is taken to be the later of the date of the receipt of a compliant tax invoice or the date of receipt of the last of the details described above.
(h)If there is an Adjustment Event in relation to a Supply which results in the amount of GST on the Supply being less than the amount in respect of which GST was charged or recovered by the Contractor then the Contractor shall refund to the Principal the amount by which the GST charged or recovered exceeds the adjusted GST on the Supply. The amount of the refund is a debt due and payable by the Contractor to the Principal.

Clause 37.8 is a cost escalation clause to which Section 15 of the Domestic Building Contracts Act applies. The Principal acknowledges receipt of the warning annexed to this Contract given by the Contractor explaining the effects of this clause.
Signed for and on behalf of the Principal [by Colin Greaves, Administration Manager, and Angela Victoria Elizabeth Buckley, EGM Retirement Living Communities].

The times for submission of progress claims pursuant to clause 37.1 of the Contracts is the 25^th day of each month for ‘WUC’ (i.e. work under contract) done to the last day of that month during WUC, practical completion and at the time for making the final payment claim (Item 33(a) of Part A).

A draft deed of release, as provided for in clause 37.4 of the Contracts concerning the final payment claim, is set out as an annexure to the Contracts at Part F. Clause 4 of the draft deed of release provides:

4. Release
4.1The total money due under or in any way connected with or arising out of the Works Contract or the carrying out of the Works executed by the Contractor under the Works Contract (including any moneys which might be due to the Contractor from the Principal by way of damages for negligence, breach of contract or other obligation) is the Amount Claimed.
4.2Upon payment by the Principal to the Contractor of the Amount Claimed, the Contractor hereby releases and indemnifies the Principal, the Superintendent, or any employee, agent, servant or other contractor to the Principal or the Superintendent, from and against all claims which the Contractor, but for the execution of this Deed, may have had.
4.3The release and indemnity provided for in the preceding paragraph applies:
(a)irrespective of how or why a claim might have arisen, including any claim in respect of negligence, breach of contract or other obligation;
(b)irrespective of whether the Contractor is aware of the claim or the circumstances which would, but for the execution of this Deed, give rise to the claim; and
(c)in respect of all types of loss or damage including, without limiting the generality of his [sic] provision, direct, indirect or consequential loss or damage.

JG King made progress claims by issuing invoices to Hunters Green for Stage 12 prior to practical completion as follows:[5]
[5]Exhibit NJM-1 to the Miller affidavit 278-348. See also Miller affidavit [11].

Date

‘This Claim Invoice’

‘Retention Held’ (from this claim)

‘Amount due this invoice’

‘Less Retention Held’ (to date)

‘Balance Owed Inc GST’

11 October 2018[6] $79,953.52 $7,995.36 $79,153.96 $7,995.36 $87,149.32

11 October 2018[7] $160,766.06 $16,076.61 $159,158.38 $24,071.97 $262,384.31

12 November 2018[8] $332,555.06 $33,255.55 $329,229.50 $57,327.52 $386,557.02

11 December 2018[9] $565,122.64 $56,512.27 $559,471.41 $113,839.79 $673,311.20

24 January 2019[10] $777,299.47 $77,729.95 $769,526.47 $191,569.74 $961,096.21

4 February 2019[11] $731,343.03 $19,246.08 $783,306.67 $210,815.82 $1,763,648.96

4 March 2019[12] $715,871.85 None specified[13] $787,459.04 $210,815.82 $1,781,581.53

29 March 2019[14] $555,375.90 None specified $610,913.52 $210,815.82 $1,609,188.38

3 May 2019[15] $279,249.95 None specified $307,174.98 $210,815.82 $1,128,904.32

31 May 2019[16] $91,504.72 None specified $100,655.20 $210,815.82 $618,646.00
[6]See Exhibit NJM-1 to the Miller affidavit 278.
[7]Ibid 286.
[8]Ibid 293-294.
[9]Ibid 301-302.
[10]Ibid 309-310.
[11]Ibid 317-318.
[12]Ibid 325. Note: the Tax Invoice on page 325 has an ‘Invoice Date’ of 4 March 2019 but is ‘Dated by Claimant’ as 4 February 2019.
[13]No retention was specified. At this stage, the security (i.e. retention moneys) was already the maximum percentage of 5% of the contract sum under the Stage 12 Contract.

[14]See Exhibit NJM-1 to the Miller affidavit 331.
[15]Ibid 337.
[16]Ibid 343.

JG King made progress claims by issuing invoices to Hunters Green for Stage 13 prior to practical completion as follows:[17]
[17]Ibid 349-417. See also Miller affidavit [12].

Date

‘This Claim Invoice’

‘Retention Held’ (from this claim)

‘Amount due this invoice’

‘Less Retention Held’ (to date)

‘Balance Owed Inc GST’

12 October 2018[18] $381,314.36 $38,131.46 $377,501.18 $38,131.46 $415,632.64

12 November 2018[19] $234,671.81 $23,467.24 $232,325.06 $61,598.70 $293,923.76

11 December 2018[20] $849,070.96 $84,907.10 $840,580.24 $146,505.80 $987,086.04

14 January 2019[21] $709,238.10 $70,923.81 $702,145.74 $217,429.61 $919,575.35

4 February 2019[22] $859,858.62 $85,711.26 $851,562.07 $303,140.87 $1,856,848.62

4 March 2019[23] $1,046,683.26 $16,960.44 $1,132,695.08 $320,101.31 $2,304,358.46

29 March 2019[24] $704,564.21 None specified[25] $775,020.65 $320,101.31 $2,227,817.04

3 May 2019[26] $517,031.45 None specified $568,734.62 $320,101.31 $1,663,856.58

31 May 2019[27] $564,755.77 None specified $621,231.37 $320,101.31 $1,510,067.32
[18]See Exhibit NJM-1 to the Miller affidavit 349. Note: the Tax Invoice on page 349 has an ‘Invoice Date’ of 12 October 2018 but is ‘Dated by Claimant’ as 11 October 2018.
[19]Ibid 356-357.
[20]Ibid 365-366.
[21]Ibid 373-374.
[22]Ibid 381-382.
[23]Ibid 389-390. Note: the Tax Invoice on pages 389-390 has an ‘Invoice Date’ of 4 March 2019 but is ‘Dated by Claimant’ as 4 February 2019.
[24]Ibid 397.
[25]No retention was specified. At this stage, the security (i.e. retention moneys) was already the maximum percentage of 5% of the contract sum under the Stage 13 Contract.
[26]See Exhibit NJM-1 to the Miller affidavit 404.
[27]Ibid 411.

Each of the invoices for Stage 12 and Stage 13 are in a similar terms. It is convenient to set out the terms of one of the invoices. The first invoice issued by JG King on 11 October 2018 concerning Stage 12 (First Invoice) was, inter alia, in the following terms:[28]
[28]Ibid 278-285.

Contract Summary (Ex GST)

Original contract amount 4,216,313.10

Approved variations 0.00

Revised contract amount 4,216,313.10

Value of Works Completed 79,953.52

Less Value of Previous Claims 0.00

Less Retention Held 7,995.36

This Claim Invoice 79,953.52

Balance to Contract Completion 4,136,359.58

Percentage Billed 1.90%

GST 7,195.80

Retention Held 7,995.36

Amount due this Invoice 79,153.96

Invoiced to Date Inc GST 87,149.32

Received to Date Inc GST 0.00

Balance Owed Inc GST 87,149.32

The First Invoice:

(a) stated an amount for ‘Value of Works Completed’ which is the total value of the works completed to date;

(b) stated an amount for ‘This Claim Invoice’ which is the value of the works the subject of the invoice supported by an Excel spreadsheet that identified a trade breakdown in relation to the value of the works;

(c) stated an amount for ‘Retention Held’[29] which is the amount of retention moneys related to this invoice and stated an amount for ‘Less Retention Held’ which is the total amount of the retention moneys held to date;
[29]Except for those invoices issued after the security (i.e. retention moneys) was already the maximum percentage of 5% of the contract sum under the Contracts.

(d) stated an amount for ‘Amount due this Invoice’. This is calculated by adding the amount for ‘This Claim Invoice’ and deducting the ‘Retention Held’, plus GST;

(e) stated an amount for ‘Invoiced to Date Inc GST’. This is calculated by adding the ‘Amount due this Invoice’ and the amount for ‘Less Retention Held’. For subsequent invoices this is calculated by adding all the amounts in the invoices to date for ‘Amount due this Invoice’ and then adding the amount for ‘Less Retention Held’; and

(f) stated it was a payment claim under the Act.

There is no evidence that the parties followed the detailed procedure for progress claims set out in clause 37.2 of the Contracts. There is no evidence, for example, that:[30]
[30]Upon this issue being raised by the Court, Hunters Green did not submit that there was any such evidence and submitted that what the parties might have done in the past is of no consequence: Transcript of Proceedings 2 February 2023 (n 31) 32.6-32.19 and 35.23-35.28 (Mr Mason). Hunters Green confined its analysis of the terms of the Contracts and did not take the Court to any document issued or made pursuant to clause 37.2 of the Contracts: Transcript of Proceedings 2 February 2023 (n 31) 32.20-35.22 (Mr Mason).

(a) Hunters Green, in its capacity as Superintendent, issued any certificates, including any progress certificate (as defined in clause 37.2(a) of the Contracts) or any certificate concerning an assessment of retention moneys;

(b) JG King issued any invoice to Hunters Green in the amount of the progress certificate. The invoices I have referred to above were ‘progress claims’ made by JG King pursuant to clause 37.1 of the Contracts and not invoices issued pursuant to clause 37.2 of the Contracts subsequent to progress certificates. This was accepted by Hunters Green;[31] or

(c) Hunters Green paid any invoice after setting off any amount in any certificate concerning an assessment of retention moneys.

[31]See Miller affidavit [11]-[12]; Transcript of Proceedings, Hunters Green Retirement Living Pty Ltd v JG King Project Management Pty Ltd (Supreme Court of Victoria, S ECI 2022 04325, Attiwill J, 2 February 2023) 31.11-31.17 (Mr Mason) (‘Transcript of Proceedings 2 February 2023’).

Hunters Green accepted that the parties did not follow the process in clause 37.2 of the Contracts.[32] It is common ground between the parties that Hunters Green paid the invoices. The process adopted by the parties resulted in the following:
[32]Transcript of Proceedings 2 February 2023 (n 31) 71.19-72.8 (Mr Mason), especially at 72.1-12 (Mr Mason).

(a) JG King issued invoices to Hunters Green for the total amount of the value of the construction works it completed;

(b) JG King claimed lesser amounts from Hunters Green than the invoiced amounts as a result of deducting amounts for retention moneys;

(c) Hunters Green paid the amounts claimed.

Hunters Green submitted it “retained a sum amounting to 5% of the contract price from its payments to JG King as performance security”.[33] Hunters Green accepted, during the hearing, that JG King ‘deducted’ amounts for the retention.[34]
[33]Hunters Green’s submissions [5].
[34]Transcript of Proceedings 2 February 2023 (n 31) 65.15-65.17 (Mr Mason).

The retention moneys progressively deducted formed a separate and distinct fund constituting the ‘security’ under the Contracts.[35] The separate and distinct character of the fund is apparent from clause 5 of the Contracts, that provides, inter alia, for the provision of security, the circumstances in which a party may have recourse to it, and its reduction and release.[36] The Contracts make provision for the release and return of the final 50% of the retention moneys within 14 days of the issue of a final certificate upon a final payment claim under clause 37.4 of the Contracts. I address this further later in this judgment.[37]
[35]See Punton’s Shoes v Citi-Con [2020] VSC 514 [110] (Digby J) (‘Punton’s Shoes’).
[36]Ibid.
[37]Judgment [208]-[217].

On 28 June 2019, practical completion was certified by the Superintendent for JG King’s work for Stage 12 and Stage 13.[38] The certificate of practical completion provided for JG King to provide an invoice for the return of 50% of the retention moneys in relation to:

(a) Stage 12 in the sum of $115,948.66 (inclusive of GST); and

(b) Stage 13 in the sum of $176,055.67 (inclusive of GST).[39]

[38]Miller affidavit [13]; Exhibit NJM-1 to the Miller affidavit 418.

[39]Note: there is a typographical error in that the final two entries in the letter at page 418 of exhibit NJM-1 to the Miller affidavit both refer to the return of retention moneys in relation to Hunters Green Stage 12. However, it appears that the bottom entry should refer to Stage 13.

On about 3 July 2019, JG King issued invoices for ‘Retention Billed’ in the amount of $115,948.66 (inclusive of GST) for Stage 12[40] and $176,055.67 (inclusive of GST) for Stage 13.[41] The invoices for Stage 12 and Stage 13 were accompanied by schedules that stated they were a payment claim under the Act.[42] Hunters Green paid these invoices.[43] On about 8 July 2019, JG King issued further invoices in the amounts of $48,803.67 (inclusive of GST) for Stage 12[44] and $92,278.32 (inclusive of GST) for Stage 13.[45] Hunters Green paid these invoices.[46] Again, there is no evidence that the parties followed the detailed procedure for progress claims set out in clause 37.2 of the Contracts.
[40]Exhibit NJM-1 to the Miller affidavit 422-429.
[41]Ibid 433-441.
[42]Ibid 427, 438.
[43]Miller affidavit [15], [18].
[44]Exhibit NJM-1 to the Miller affidavit 419-421.
[45]Ibid 430-432.
[46]Miller affidavit [16], [19].

On 19 August 2022, JG King provided by email to Hunters Green:[47]
[47]Ibid [22]; Exhibit NJM-1 to the Miller affidavit 442-453. The email was sent to an email address for AVEO. AVEO was the entity that provided the certificate of practical completion, being a step required to be undertaken by the Superintendent, being Hunters Green: see Exhibit NJM-1 to the Miller affidavit 418. It also provided a final payment claim for Stage 11 but that is not the subject of these proceedings.

(a) a document titled ‘Final Payment Claim’ for Stage 12 that stated that the ‘Current Contract Claim’ was $115,948.66 (inclusive of GST) and was a claim under the Act and a deed of release that stated the ‘Amount Claimed’ was $115,948.66 (Stage 12 Payment Claim);[48]

(b) a document titled ‘Final Payment Claim’ for Stage 13 that stated that the ‘Current Contract Claim’ was $176,055.64 (inclusive of GST) and was a claim under the Act and a deed of release that stated the ‘Amount Claimed’ was $176,055.64 (Stage 13 Payment Claim);[49]

(collectively, the Payment Claims). There is no evidence that JG King issued any invoices to Hunters Green concerning the Payment Claims. This is in contrast to the previous progress claims I have addressed earlier in this judgment that were each supported by an invoice.[50]

[48]Exhibit NJM-1 to the Miller affidavit 442-447.

[49]Ibid 442-443, 448-451.

[50]Judgment [12]-[13], [20]-[21].

The Payment Claims each contain a schedule that:

(a) states they are a ‘Final Payment Claim’;

(b) gives an itemised trade breakdown of the works (e.g. ‘preliminaries’, ‘civil works’, ‘site works’ etc) and lists them as being 100% complete and state a contract value for each item. They also list some works as being 0% complete but those works are struck through in the schedule;

(c) states a cumulative value and a total value of the completed works;

(d) states a total amount previously paid for the works;

(e) states a ‘current contract claim’, being the difference between the total amount of the value of the completed works less the total amount previously paid. The current contract claim in the Stage 12 Payment Claim is $115,948.66 (inclusive of GST). The current contract claim in the State 13 Payment Claim is $176,055.64 (inclusive of GST);

(f) gives an itemised breakdown of the variations and lists them as 100% complete and states a variation value for each variation;

(g) states a cumulative value and a total value of the completed variations;

(h) states a total amount previously paid for the variations;

(i) states a ‘current variation claim’, being the difference between the total amount of the value of the completed variations less the total amount previously paid. In each Payment Claim this is $0.00.

The schedules in the Payment Claims identify that no claim is made in relation to variations. This is because the amount claimed for variations (i.e. ‘Current Variation Claim’) is stated to be ‘$0.00’.

The amounts stated in the Payment Claims are in the amounts of the remaining 50% of the retention moneys. As I have already said in this judgment, Hunters Green had paid 50% of the retention moneys to JG King by this time pursuant to the certificate of practical completion and the invoices of JG King dated 3 July 2022.[51]
[51]Ibid [20]-[21].

There is no evidence that Hunters Green, in its capacity as Superintendent, issued certificates pursuant to clause 37.4 of the Contracts in relation to the Stage 12 Payment Claim or the Stage 13 Payment Claim.

Hunters Green accepted, during the hearing, that JG King was entitled to make a final payment claim under the Contracts.[52]
[52]Transcript of Proceedings 2 February 2023 (n 31) 50.18-50.21 (Mr Mason).

On 2 September 2022, Hunters Green issued responses to the Stage 12 Payment Claim[53] and the Stage 13 Payment Claim[54] disputing them.
[53]Miller affidavit [23]; Exhibit NJM-1 to the Miller affidavit 454-459.
[54]Miller affidavit [24]; Exhibit NJM-1 to the Miller affidavit 460-465.

On about 14 September 2022, JG King lodged, with the Resolution Institute, adjudication applications under s 18 of the Act in respect of the Payment Claims.[55]
[55]Miller affidavit [25]-[26].

Hunters Green, JG King and the Adjudicator then exchanged various communications, including notices and submissions, in the period 15 September to 11 October 2022.[56]
[56]Ibid [27]-[38].

On 13 October 2022, the Adjudicator made the following adjudication determinations pursuant to s 23 of the Act:[57]
[57]Note: both adjudication determinations are dated 13 October 2022, however Mr Miller gave evidence that these were issued on 18 October 2022.

(a) adjudication determination numbered RIVIC20221155 concerning the Stage 12 Payment Claim in which the adjudicated amount was $114,932.07 (including GST) (Stage 12 Determination);[58] and

(b) adjudication determination numbered RIVIC20221156 concerning the Stage 13 Payment Claim in which the adjudicated amount was $176,055.64 (including GST) (Stage 13 Determination);[59]

(collectively, the Adjudicator’s Determinations).

[58]Miller affidavit [39]; Exhibit NJM-1 to the Miller affidavit 859-893.

[59]Miller affidavit [40]; Exhibit NJM-1 to the Miller affidavit 894-928.

As at the date of the commencement of this proceeding, i.e. 26 October 2022:

(a) the Contract Sum under the Stage 12 Contract was $4,333,409.18 (excluding GST)[60] and the Contract Sum under the Stage 13 Contract was $5,951,077.95 (excluding GST)[61]; and

(b) Hunters Green held the amount of $105,407.87 (excluding GST) as security in the form of retention moneys under the Stage 12 Contract[62] and Hunters Green held the amount of $160,050.59 (excluding GST)[63] as security in the form of retention moneys under the Stage 13 Contract.[64]

[60]Miller affidavit [20(a)].

[61]Ibid [21(a)].

[62]Ibid [20(b)].

[63]Ibid [21(b)].

[64]Note: there is a typographical error in paragraph 21(b) of the Miller affidavit, as the reference to retention moneys under the Stage 12 Contract should be a reference to retention moneys under the Stage 13 Contract.

GROUNDS OF JUDICIAL REVIEW

Hunters Green relied upon the following grounds of judicial review in relation to the Payment Claims:[65]
[65]Hunters Green’s Originating Motion filed 26 October 2022.

(a) the Adjudicator’s Determinations should be quashed and, or alternatively, are of no effect by reason of the Adjudicator’s jurisdictional error when concluding that the Payment Claims were each in respect of ‘construction work’[66] within the meaning of s 5 of the Act and each therefore constituted a ‘payment claim’ for the purposes of s 14(1) of the Act (Grounds 1 (Stage 12) and 5 (Stage 13));
[66]There is no reference in any of the grounds of judicial review to ‘related goods and services’ within the meaning of s 6 of the Act. This is only addressed in the particulars to the grounds of judicial review. Upon this being raised by the Court with Hunters Green, Mr Mason confirmed that the grounds of review are limited to ‘construction work’, see Transcript of Proceedings 2 February 2023 (n 31) 8.20-9.4 (Mr Mason).

(b) the Adjudicator’s Determinations should be quashed and, or alternatively, are of no effect by reason of the Adjudicator’s jurisdictional error when concluding that a ‘reference date’ had arisen in respect of each of the Payment Claims and therefore that each of the claims constituted a ‘payment claim’ for the purposes of s 14(1) of the Act (Grounds 2 (Stage 12) and 6 (Stage 13));

(c) further, or alternatively, the Adjudicator’s Determinations should be quashed and, or alternatively, are of no effect by reason of the Adjudicator’s jurisdictional error when concluding that each of the Payment Claims sufficiently identified the ‘construction work’ to which they related for the purposes of s 14(2)(c) of the Act, and therefore that claim constituted a ‘payment claim’ for the purposes of s 14(1) of the Act (Grounds 3 (Stage 12) and 7 (Stage 13));

(d) alternatively, the Adjudicator’s Determinations should be quashed and, or alternatively, are of no effect by reason of the Adjudicator’s non-jurisdictional error of law on the face of the record when finding that the construction contracts to which each of the Payment Claims relate did not contain terms for calculating the amount of a progress payment to which JG King is entitled and, having regard to the matters set out in s 11(1)(b) of the Act, Hunters Green was not entitled to withhold retention moneys at any time from the point of view of the Act (Grounds 4 (Stage 12) and 8 (Stage 13)).

Hunters Green seeks the following relief:[67]
[67]Hunters Green’s Originating Motion filed 26 October 2022 and summons on originating motion filed 22 December 2022.

(a) an order or judgment pursuant to r 56 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (Rules) and, alternatively in the Court’s inherent jurisdiction, in the nature of certiorari in respect of the Adjudicator’s Determinations, or that the Adjudicator’s Determinations are otherwise quashed or set aside;

(b) further, or alternatively, in an exercise of the Court’s inherent jurisdiction, a declaration that the Adjudicator’s Determinations are void and of no effect;

(c) further, or alternatively, a final injunction restraining JG King from seeking to enforce against Hunters Green the Adjudicator’s Determinations or any certificate issued in respect of the Adjudicator’s Determinations under s 28Q of the Act.

THE ACT

The main purpose of the Act is to provide for entitlements to progress payments for persons who carry out construction work or who supply related goods and services under construction contracts.[68]
[68]Building and Construction Industry Security of Payment Act 2002 (Vic) (‘Act’) s 1.

The object of the Act is to ensure that any person who undertakes to carry out construction work or who undertakes to supply related goods and services under a construction contract is entitled to receive, and is able to recover, progress payments in relation to the carrying out of that work and the supplying of those goods and services.[69]
[69]Ibid s 3(1).

Pursuant to the Act, subcontractors are in a position to promptly secure payment of progress payments with the aid of a statutory mechanism which compliments the provisions of the construction contract.[70] As observed by Vickery J in Gantley Pty Ltd v Phoenix International Group Pty Ltd (Gantley):[71]

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 payment found to be due under the expeditious process provided for in the Act.[72]

[70][2010] VSC 106 [19] (Vickery J) (‘Gantley’).

[71]Ibid.

[72]Ibid. See also at [28] (Vickery J).

The Act was modelled on the New South Wales Building and Construction Industry Security of Payment Act 1999 (NSW) (the NSW Act).[73] There are important differences between the Act and the NSW Act, and, also other similar Acts in other states and territories. For example, the NSW Act, Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the Qld Actanueens), Building and Construction Industry (Security of Payment) Act 2009 (ACT), Building and Construction Industry Security of Payment Act 2009 (Tas) and Building and Construction Industry Security of Payment Act 2009 (SA) (the South Australian Act), provide, in effect, for a claimed amount to include an amount that is held under the construction contract by a respondent and that a claimant claims is due for release.[74] This includes retention moneys. The Act does not contain such a provision. The Act was amended by the Building and Construction Industry Security of Payment (Amendment) Bill 2006 (Vic) (the Bill). The Explanatory Memorandum to the Bill states:

Clause 9amends section 9(2) of the Principal Act to relate reference dates to specific items of construction work or related goods and services.
This clause also inserts new paragraph (c) and (d) into section 9(2) of the Principal Act to provide a method for calculating a reference date where a progress payment is a single, one-off or final payment and the contract makes no express provision for a reference date. Paragraph (d) refers to the fact that a final payment may include money retained by the respondent for the rectification or omission of works or the supply of goods and services under the construction contract.

[73]Ibid [21] (Vickery J).

[74]Building and Construction Industry Security of Payment Act 1999 (NSW) s 13(3)(b); Building Industry Fairness (Security of Payment) Act 2017 (Qld) s 68(2)(b); Building and Construction Industry (Security of Payment) Act 2009 (ACT) s 15(3)(b); Building and Construction Industry Security of Payment Act 2009 (Tas) s 17(3)(b); Building and Construction Industry Security of Payment Act 2009 (SA) s 13(3)(b).

This does not, however, assist with a proper construction of the Act. This is because the Explanatory Memorandum to the Bill is incompatible with the Bill. Clause 9(d) of the Bill does not provide that a final payment may include moneys retained by a respondent for the rectification or omission of works or the supply of goods and services under the construction contract. Clause 9(d) of the Bill inserted a new s 9(d) into the Act that is limited to deeming a ‘reference date’ for a final payment if the contract makes no express provision for a reference date. It does not refer to including money retained by a respondent.

The Act grants a statutory entitlement to make a payment claim in accordance with the Act.[75] The means by which the Act ensures a person is able to recover a progress payment is by establishing a procedure that involves:
[75]Act s 3(2).

(a) the making of a payment claim by the person claiming payment;

(b) the provision of a payment schedule by the respondent to the payment claim;

(c) the referral of any disputed claim to an adjudicator for determination;

(d) the payment of the amount of the progress payment determined by the adjudicator; and

(e) the recovery of the progress payment in the event of a failure to pay.[76]

[76]Ibid s 3(3).

The Act does not limit any other entitlement that a claimant may have under a construction contract or any other remedy that a claimant may have for recovering that other entitlement.[77] A ‘claimant’ means the person who serves a payment claim under s 14 of the Act.[78] As observed by Stynes J in Goldwind Australia Pty Ltd v Ale Heavylift (Australia) Pty Ltd (Goldwind):[79]

42 However, the SOP Act is not intended to limit:
(a)any other entitlement that a claimant may have under a construction contract; or
(b)any other remedy that a claimant may have for recovering that other entitlement.

[77]Ibid s 3(4).

[78]Ibid s 4.

[79][2021] VSC 625 [42] (Stynes J) (citations omitted) (‘Goldwind’).

In Grocon Constructors v Planit Cocciardi Joint Venture (No 2) (Grocon),[80] Vickery J said:[81]

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 getting 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.

[80](2009) 26 VR 172 (‘Grocon’).

[81]Ibid 180 [33] (Vickery J).

The Act places a claimant in a privileged position in the sense that the claimant acquires rights that go beyond the claimant’s contractual rights.[82] The premise that underlies the Act is that cash flow is the lifeblood of the construction industry and that the principal under a construction contract should pay now and argue later.[83]
[82]Protectavale Pty Ltd v K2K Pty Ltd [2008] FCA 1248 [7] (Finkelstein J) (‘Protectavale’).
[83]Ibid.

The term ‘construction contract’ is expansively defined and means a contract or other arrangement under which one party undertakes to carry out construction work, or supply related goods and services, for another party.[84]
[84]Act s 4.

Subject to particular exemptions, the Act applies to any construction contract, whether written or oral, or partly written and partly oral, and applies even if the contract is expressed to be governed by the law of a jurisdiction other than Victoria.[85] It was common ground between the parties that none of the exemptions in s 7(2)-(6) of the Act applied in the circumstances of this case.
[85]Ibid s 7(1).

Part 2 of the Act concerns rights to progress payments. Section 9(1) of the Act provides for a statutory right to a progress payment:

9 Rights to progress payments
(1)On and from each reference date under a construction contract, a person—
(a)who has undertaken to carry out construction work under the contract; or
(b)who has undertaken to supply related goods and services under the contract—

is entitled to a progress payment under this Act, calculated by reference to that date.

The term ‘progress payment’ is defined and means a payment to which a person is entitled under s 9 of the Act.[86] It includes, inter alia, the final payment for construction work carried out on a construction contract or related goods and services supplied under the contract.[87]
[86]Ibid s 4.
[87]Ibid.

Section 9(2) of the Act provides for the meaning of ‘reference date’:

(2)In this section, reference date, in relation to a construction contract, means—
(a)a date determined by or in accordance with the terms of the contract as—
(i)a date on which a claim for a progress payment may be made; or
(ii)a date by reference to which the amount of a progress payment is to be calculated—

in relation to a specific item of construction work carried out or to be carried out or a specific item of related goods and services supplied or to be supplied under the contract; or
(b)subject to paragraphs (c) and (d), if the contract makes no express provision with respect to the matter, the date occurring 20 business days after the previous reference date or (in the case of the first reference date) the date occurring 20 business days after—
(i)construction work was first carried out under the contract; or
(ii)related goods and services were first supplied under the contract; or

(c)in the case of a single or one-off payment, if the contract makes no express provision with respect to the matter, the date immediately following the day that—
(i)construction work was last carried out under the contract; or
(ii)related goods and services were last supplied under the contract; or

(d)in the case of a final payment, if the contract makes no express provision with respect to the matter, the date immediately following—
(i)the expiry of any period provided in the contract for the rectification of defects or omissions in the construction work carried out under the contract or in related goods and services supplied under the contract, unless subparagraph (ii) applies; or
(ii)the issue under the contract of a certificate specifying the final amount payable under the contract a final certificate; or
(iii)if neither subparagraph (i) nor subparagraph (ii) applies, the day that—
(A)construction work was last carried out under the contract; or
(B)related goods and services were last supplied under the contract.

In Watpac Constructions v CGM (Watpac),[88] Digby J said:[89]

156It is to be noted that s 9 of the SoP Act is centrally concerned with:
(a)progress payment claims for items of construction work carried out (or to be carried out) and items of related goods and services supplied;
(b)the date on which a claim for a progress payment may be made.

[88][2020] VSC 637 (‘Watpac’).

[89]Ibid [156] (Digby J) (citations omitted).

Section 10 of the Act provides for the calculation of a progress payment under s 9 of the Act:

10 Amount of progress payment
(1)The amount of a progress payment to which a person is entitled in respect of a construction contract is to be—
(a)the amount calculated in accordance with the terms of the contract; or
(b)if the contract makes no express provision with respect to the matter, the amount calculated on the basis of the value of—
(i)construction work carried out or undertaken to be carried out by the person under the contract; or
(ii)related goods and services supplied or undertaken to be supplied by the person under the contract—

as the case requires.

(2)Despite subsection (1) and anything to the contrary in the construction contract, a claimable variation may be taken into account in calculating the amount of a progress payment to which a person is entitled in respect of that construction contract.
(3)Despite subsection (1) and anything to the contrary in the construction contract, an excluded amount must not be taken into account in calculating the amount of a progress payment to which a person is entitled in respect of that construction contract.

The term ‘claimable variations’ in s 10(2) of the Act is defined and set out in s 10A of the Act. The term ‘excluded amount’ in s 10(3) of the Act is defined in s 10B of the Act and includes, inter alia, any amount claimed for damages for breach of the construction contract or for any other claim for damages arising under or in connection with the contract.[90]
[90]Act s 10B(2)(c).

Section 11 of the Act provides for the valuation of construction works and related goods and services:

11       Valuation of construction work and related goods and services
(1)Construction work carried out or undertaken to be carried out under a construction contract is to be valued—
(a)       in accordance with the terms of the contract; or
(b)if the contract makes no express provision with respect to the matter, having regard to—
(i)        the contract price for the work; and
(ii)       any other rates or prices set out in the contract; and
(iii)if there is a claimable variation, any amount by which the contract price or other rate or price set out in the contract, is to be adjusted as a result of the variation; and
(iv)if any of the work is defective, the estimated cost of rectifying the defect.

(2)Related goods and services supplied or undertaken to be supplied under a construction contract are to be valued—
(a)       in accordance with the terms of the contract; or
(b)if the contract makes no express provision with respect to the matter, having regard to—
(i)        the contract price for the goods and services; and
(ii)       any other rates or prices set out in the contract; and
(iii)if there is a claimable variation, any amount by which the contract price or other rate or price set out in the contract, is to be adjusted as a result of the variation; and
(iv)if any goods are defective, the estimated cost of rectifying the defect.

(3)For the purposes of subsection (2)(b), the valuation of materials and components that are to form part of any building, structure or work arising from construction work is to be on the basis that the only materials and components to be included in the valuation are those that have become (or, on payment, will become) the property of the party for whom construction work is being carried out.

Section 12 of the Act provides that a progress payment under a construction contract becomes due and payable on the date on which the payment becomes due and payable in accordance with the terms of the contract or if the contract makes no express provision with respect to the matter, on the date occurring 10 business days after a payment claim is made under Part 3 in relation to the payment.[91]
[91]Ibid s 12.

Part 3 of the Act sets out the procedure for recovering progress payments. Section 14 of the Act provides for payment claims. Sections 14(1) and (2) of the Act provide:

14 Payment claims
(1)A person referred to in section 9(1) who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment.

(2)       A payment claim—
(a)       must be in the relevant prescribed form (if any); and
(b)       must contain the prescribed information (if any); and
(c)must identify the construction work or related goods and services to which the progress payment relates; and
(d)must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount); and

(e) must state that it is made under this Act.

The term ‘claimed amount’ in s 14(2)(d) of the Act is defined and means “an amount of a progress payment claimed to be due for construction work carried out, or for related goods and services supplied, as referred to in section 14”.[92]
[92]Ibid s 4.

As observed by Digby J in Punton’s Shoes Pty Ltd v Citi-Con (Vic) Pty Ltd (Punton’s Shoes)[93] concerning ss 9 and 14 of the Act:[94]

99Consistent with the purpose and object of the SoP Act it is clear on the natural meaning of the language employed in the above sections of the Act that a potential claimant’s entitlement to a progress payment, and to serve a payment claim under s 14 of the SoP Act, is in respect of construction work and related goods and services undertaken under the relevant construction contract.
100Further, the requirement in s 14(2) of the SoP Act that a payment claim must identify the construction work and related goods and services to which the progress payment relates and the requirements in s 15(1)(c) and s 15(3) that any payment schedule responding to a payment claim must identify the amount of the claim which the respondent alleges is an excluded amount, and explain why (if applicable) a scheduled amount is less than the claimed amount, also reflect the intent of the Act that:
(a)a progress claim under the Act is to be a claim in respect of construction work or related goods and services undertaken or supplied under the construction contract; and
(b)the content of a progress claim is to be sufficiently detailed in relation to claimed construction work and related goods and services so as to enable the respondent by its payment schedule to comply with the above requirements of s 15(1)(c) and s 15(3) of the SoP Act.

[93]Punton’s Shoes (n 35).

[94]Ibid [99]-[100] (Digby J) (citations omitted).

In Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd (Southern Han),[95] the High Court said of s 13 of the NSW Act:[96]

44There is no dispute between the parties that service of a payment claim under s 13(1) of the Act is an essential precondition to taking subsequent steps in the procedure set out in Pt 3 of the Act. There is accordingly no dispute that, unless a payment claim answering that description is served, there can be no adjudication application and hence no adjudication within the jurisdiction conferred by s 22 of the Act. That shared understanding of the relationship between ss 13(1) and 22 is undoubtedly correct.

[95](2016) 260 CLR 340 (‘Southern Han’).

[96]Ibid [44] (Kiefel, Bell, Gageler, Keane and Gordon JJ).

A claimant cannot serve more than one payment claim in respect of each reference date under the construction contract.[97] This does not prevent a claimant from including in a payment claim an amount that has been the subject of a previous claim if the amount has not been paid.[98]
[97]Act s 14(8).
[98]Ibid s 14(9).

A person on whom a payment claim is served may reply to the claim by providing a payment schedule to the claimant.[99] Section 15(2) of the Act sets out the matters that must be included in a payment schedule.
[99]Ibid s 15(1).

Relevantly, a claimant may apply for adjudication of a payment claim if the respondent provides a payment schedule but the scheduled amount indicated in the payment schedule is less than the claimed amount indicated in the payment claim.[100] Section 18(3) of the Act sets out what an adjudication application must contain.
[100]Ibid s 18(1)(a)(i).

Section 23 of the Act provides:

Adjudicator's determination
(1) An adjudicator is to determine—
(a)the amount of the progress payment (if any) to be paid by the respondent to the claimant (the adjudicated amount ); and
(b)the date on which that amount became or becomes payable; and
(c)the rate of interest payable on that amount in accordance with section 12(2).

(2)In determining an adjudication application, the adjudicator must consider the following matters and those matters only—
(a)the provisions of this Act and any regulations made under this Act;
(b)subject to this Act, the provisions of the construction contract from which the application arose;
(c)the payment claim to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the claimant in support of the claim;
(d)the payment schedule (if any) to which the application relates, together with all submissions (including relevant documentation) that have been duly made by the respondent in support of the schedule;
(e)the results of any inspection carried out by the adjudicator of any matter to which the claim relates.

JG King submitted that it is implicit in clause 37.4 of the Contracts that JG King is entitled to the return of the security in the final payment process. It referred to the need for JG King to include all claims whatsoever in connection with the subject matter of the Contracts in its final payment claim (and the need for JG King to execute a deed of release) and that the final certificate is conclusive evidence of the ‘accord and satisfaction’ and ‘in discharge’ of each party’s obligations in connection with the subject matter of the Contracts (except for some exceptions in clause 37.4(a)-(e)).[432]
[432]JG King’s submissions [22].

In my view, the ‘accord and satisfaction’ referred to in clause 37.4 is an agreement between the parties, in place of the parties’ causes of action on their claims,[433] in the following terms as expressly provided in clauses 5 and 37.4 of the Contracts:
[433]See McDermott v Black (1940) 63 CLR 161, 183-184 (Dixon J); Able Demolitions and Excavations Pty Ltd v Barry Kenna & Co [2016] VSCA 312 [21]-[24] (Tate, Kyrou JJA and Riordan AJA).

(a) the Superintendent is to determine the moneys finally due and payable under the Contracts and issue a final certificate evidencing those monies;

(b) the moneys certified as due and payable are to be paid by JG King or Hunters Green as the case may be within 5 business days after the issue of the final certificate, except in the case of the matters in sub-clause 37.4(a)-(e);

(c) the issue of the final certificate triggers the release and return of the security within 14 days pursuant to clause 5.4;

(d) a party may have recourse to the security within 14 days of the final certificate pursuant to clause 5.2 if that party remains unpaid after the time for the final payment (i.e. after 5 business days from the date of issue of the final certificate).

This process applies with respect to all forms of security provided for in the Contracts, including retention moneys or bank guarantee, being the alternate form of security expressly provided for in the Contracts (see Item 14(a) of Part A of the Contracts). In Tomkins, as I have already said, clause 37.4 of the contract closely mirrored clause 37.4 of the Contracts. It provided “[t]he final certificate shall be conclusive evidence of accord and satisfaction, and in discharge of each party’s obligations in connection with the subject matter of the Contract…”.[434] Brown J said, in obiter, that if there is no dispute as to the final certificate and the contractor did not pay the amount in the final certificate within 5 business days then the principal and holder of the bank guarantee would have had time to give notice of its intention to have recourse to the bank guarantee before the expiry of 14 days after the certificate.[435] Again, in my view, her Honour’s reasoning is correct. As I have already said in the present case, it is also the issue of a final certificate that triggers the release and return of the retention moneys within 14 days pursuant to clause 5.4, subject to any prior recourse to them by Hunters Green pursuant to clause 5.2.
[434]Tomkins (n 428) [22] (Brown J).
[435]Ibid [100] (Brown J).

This construction of clauses 5 and 37.4 accords with the purpose of the Contracts to finally determine the monies due and payable by the parties except in the case of the matters in sub-clause 37.4(a)-(e) and to trigger the date for the release and return of the security upon the issue of a final certificate. The purpose of Contracts is not to obtain a return and release of the security as part of the payment to be made within 5 business days of the final certificate. This is expressly provided for by clause 5.4.

This construction also accords with the purpose of clause 5 to provide for a recourse by a party to the security if it remains unpaid after the time for the payment, including after the time for final payment.

JG King submitted that it was required to include within its final payment claim “all claims for payment due to it”.[436] This is undoubtedly correct. For reasons I have already addressed in this judgment, JG King did not have an entitlement to make a claim for the retention money as part of its claim for a final payment under clause 37.4 of the Contracts. JG King did not adequately explain how or when the unpaid amounts for construction work retained by Hunters Green as security in the form of retention moneys under the Contracts became due to it or why it was entitled to make a claim for them as part of the final payment claim. It relied upon this being implicit in clause 37.4.
[436]JG King’s submissions [39].

Finally, I do not accept JG King’s submission that it would be anomalous and entirely inconsistent with the primary purpose of the Act if, in a claim for a final payment expressly contemplated by the Act, a claimant was not permitted to recover a substantial part of the contract price for the work.[437] This is because in the context of the Payment Claims:
[437]Ibid [42].

(a) JG King was entitled to progress payments under the Act calculated by reference to ‘the reference date’ under the Contracts;

(b) the amount of the progress payments under s 10(1) of the Act to which JG King was entitled in respect of the Contracts was to be the amount calculated in accordance with the Contracts, or if the Contracts make no express provision with respect to the matter, the amount calculated based upon, inter alia, the value of the construction work;

(c) clause 37.4 of the Contracts makes express provision for the calculation of the progress payments to which JG King is entitled under the Act;

(d) JG King’s claims concern the unpaid amounts for the construction work retained by Hunters Green as security in the form of retention moneys under the Contracts. For the reasons I have already given, it was not a claim only for the unpaid amounts for the construction work;

(e) the unpaid amounts for the construction work retained by Hunters Green as security in the form of retention moneys under the Contracts formed a separate and distinct fund constituting the ‘security’ under the Contracts;

(f) upon a proper construction of clauses 5.4 and 37.4 of the Contracts, the unpaid amounts for the construction work retained by Hunters Green as security in the form of retention moneys under the Contracts were not, at the reference date under the Act, payable to JG King;

(g) upon a proper construction of clauses 5.4 and 37.4 of the Contracts, the unpaid amounts for the construction work retained by Hunters Green as security in the form of retention moneys under the Contracts are payable to JG King 14 days after the issue of final certificates. This is subject to any recourse to the security by Hunters Green pursuant to clause 5.2 as a result of JG King not paying any amount stated in the final certificate as being due and payable to Hunters Green;

(h) as a result, the amount of the progress payments under s 10(1) of the Act to which JG King was entitled in respect of the Contracts was a nil amount calculated in accordance with the Contracts.

Further, such an outcome upon a progress payment under the Act was expressly recognised by the High Court. In Southern Han, a majority of the High Court said of NSW Act:[438]

… the amount of the progress payment to which that person is entitled might ultimately be ascertained, according to the procedure set out in Pt 3, to be less than the amount that the person claims to be due and might even be ascertained according to that procedure to be nothing.

Clause 5.4 is not void

[438]Southern Han (n 95) [60] (Kiefel, Bell, Gageler, Keane and Gordon JJ).

I do not accept JG King’s alternate submission that clause 5.4 of the Contracts are void pursuant to s 48 of the Act. It submitted that this is because clause 5 of the Contracts has the effect of postponing JG King’s entitlement to recovery of a final payment under the Act to after the relevant releases have taken effect.[439] I refer to the matters I have addressed earlier in this judgment, including the operation of the accord and satisfaction provided for in clause 37.4.[440] As a result, in my view, clause 5 is not void pursuant to s 48 of the Act. The Adjudicator was required to calculate the moneys due and payable between JG King and Hunters Green as at the reference date, excluding any ‘excluded amounts’ under s 10B of the Act. As at the reference date, the unpaid amounts for the construction work retained by Hunters Green as security in the form of retention moneys were not due and payable.
[439]See Annotated List of Issues [15] 36.
[440]Judgment [212], [217].

As a result, JG King was entitled to nothing (i.e. a nil amount) for its payment claims under the Act as at the ‘reference date’.

Did the Adjudicator commit non-jurisdictional error of law on the face of the record when calculating the amount of the progress payment the subject of the claims for payment and valuing the ‘construction work’ or the ‘related goods and services’ the subject of the claims for payment? If so, was the error of a sufficient type and severity that, in the Court’s discretion, the adjudication determinations ought be quashed and should the Claims for Payment be remitted to the Adjudicator?
Parties’ submissions

Hunters Green submitted that the Adjudicator applied the wrong mechanism when calculating the amount of the progress payments under the Act the subject of the Payment Claims and valuing the ‘construction work’ and the ‘related goods and services’ the subject of the Payment Claims.[441] In particular, Hunters Green submitted that it was not open to the Adjudicator to disregard the provisions of the Contracts.[442] It submitted that it was only open to the Adjudicator to apply the alternative mechanisms if the Contracts did not make express provision with respect to the matter.[443] It submitted that this does not amount to reviewing the Adjudicator’s reasons with a ‘fine tooth comb’ in search of error.[444]
[441]Annotated List of Issues [16] 37.
[442]Ibid.
[443]Ibid.
[444]Ibid.

Hunters Green submitted that a remitter would serve no utility when, once the retention moneys are taken into consideration under the contractual arrangements the Adjudicator should have applied under sections 10(1)(a) and 11(1)(a) of the Act, the adjudicated amount in each case must be nil.[445]
[445]Ibid [17] 38.

JG King submitted that if the Adjudicator did commit error, it was an error within jurisdiction and is not reviewable.[446] It relied upon S.H.A. Premier Constructions in which Bond J said:[447]

… an adjudicator’s erroneous failure to appreciate the correctness of the contended-for construction of the contract would be an error within jurisdiction.

[446]Ibid [16] 37.

[447]S.H.A. Premier Constructions (n 241) [76] (Bond J).

It also submitted that while it is accepted that error of law is an available ground of review in Victoria in certain circumstances, it does not follow that every error ought to result in a decision being quashed.[448]
[448]Annotated List of Issues [16] 37.

JG King submitted that remitter to the Adjudicator is available.[449] It submitted that as the utility of a remitter depends upon the grounds on which the decision may be quashed, it submitted that any further submissions in relation to this matter ought to be made after any decision.[450]
[449]Ibid [17] 38.
[450]Ibid.

Analysis

In PPK Willoughby,[451] McDougall J stated:[452]
[451]PPK Willoughby (n 401).
[452]Ibid [59]-[60] (McDougall J) (citations omitted).

59 It is well established that courts, in reviewing administrative decisions, should not be too concerned with looseness in the language used, nor with unhappy phrasing, in the reasons given by the decision-maker. Such reasons "are not to be construed minutely and finely with an eye keenly attuned to the perception of error". See Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287, cited with approval by Brennan CJ, Toohey, McHugh, and Gummow JJ in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259 at 272.
60 In the latter case, Kirby J (who agreed with the orders proposed by the plurality) made a number of relevant points at 291 (I omit citations):
1.The reasons under challenge must be read as a whole. They must be considered fairly. It is erroneous to adopt a narrow approach, combing through the words of the decision-maker with a fine appellate tooth-comb, against the prospect that a verbal slip will be found warranting the inference of an error of law.
2.This admonition has particular application to the review of decisions which, by law, are committed to lay decision-makers, ie tribunals, administrators and others. This is not to condone double standards between the reasons and decisions of legally qualified persons and others. It is simply to recognise the fact that where, by law, a decision is to be made by a person with a different, non-legal expertise, or no special expertise, a different mode of expression of the decision may follow. It must be taken to have been contemplated by the lawmaker.
3.Specifically, the reviewing judge must be careful to avoid turning an examination of the reasons of the decision-maker into a reconsideration of the merits of the decision where the judge is limited to the usual grounds of judicial review, including for error of law.

The record for the purposes of considering non-jurisdictional error of law on the face of the record, in the circumstances of this case, each comprise, inter alia, for each of the Adjudicator’s Determinations the following:[453]
[453]Grocon (n 80) [159] (Vickery J).

(a) the Payment Claim;

(b) the Payment Schedule; and

(c) the Adjudicator’s Determinations.

I have concluded that the Adjudicator committed non-jurisdictional error of law on the face of the record when calculating the amount of the progress payment the subject of the Payment Claims. The Adjudicator did not apply clause 37.4 of the Contracts to calculate the amount of the Payment Claims pursuant to s 10(1)(a) of the Act. This was an error of law.[454] I do not accept JG King’s submission that, in relation to this matter, the Adjudicator had a ‘discretion’[455].
[454]See Transgrid (n 396) [34] (Hodgson JA, Mason P and Giles JA agreeing); S.H.A. Premier Constructions (n 241) [76] (Bond J). The parties also accepted that such an error was an error within jurisdiction and made submissions to the Court on this basis.
[455]See Transcript of Proceedings 9 February 2023 (n 152) 153.11-153.14 (Mr Morrison).

The jurisdiction of this Court to make an order in the nature of certiorari is an aspect of its jurisdiction as “the superior Court of Victoria” as provided for by s 85 of the Constitution Act.[456] The exercise of that jurisdiction is regulated by Order 56 of the Rules.[457] The High Court in Wingfoot Australia Partners Pty Ltd v Kocak said:[458]

The function of an order in the nature of certiorari is to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power. Thus, an order in the nature of certiorari is available only in respect of an exercise or purported exercise of power which has, at the date of order, an “apparent legal effect”. An order in the nature of certiorari is not available in respect of an exercise or purported exercise of power the legal effect or purported legal effect of which is moot or spent. An order in the nature of certiorari in those circumstances would be not simply inutile; it would be unavailable.

[456]Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480 [24] (French CJ, Crennan, Bell, Gageler and Keane JJ).

[457]Ibid. N.B. At that time, the relevant rules were the Supreme Court (General Civil Procedure) Rules 2005 (Vic).

[458]Ibid [25] (French CJ, Crennan, Bell, Gageler and Keane JJ) (citations omitted).

A material, non-trivial, error of law on the face of the record may attract relief in the nature of certiorari, subject to any applicable discretionary factors.[459] Keogh J in Combined Enterprises Pty Ltd v Brister[460] said:[461]
[459]Wilson v County Court & Anor (2006) 14 VR 461 [43] (Cavanough J). See also Grocon n (80) [121] (Vickery J); Combined Enterprises Pty Ltd v Brister[2016] VSC 807 [21] (Keogh J).
[460][2016] VSC 807.
[461]Ibid [21] (Keogh J) [21] (citations omitted).

Although relief in the nature of certiorari may not be available in respect of an error of law on the face of the record if the error in question is immaterial or trivial, it has been held that a ‘material, non-trivial error of law on the face of the record’ will attract such relief subject to ‘any applicable discretionary factors’. As Mason CJ said in Australian Broadcasting Tribunal v Bond:

A decision does not ‘involve’ an error of law unless the error is material to the decision in the sense that it contributes to it so that, but for the error, the decision would have been, or might have been, different.

And as Toohey and Gaudron JJ noted in the same case:

For an error of law to be involved in a decision something more than the mere occurrence of error is necessary. The error must have contributed to the decision in some way or, at the very least, it must be impossible to say that it did not so contribute. Conversely, an error is not involved in a decision if it did not contribute to the decision or if the decision must have been the same regardless of the error. Thus, to show that an error of law is involved in a decision it is necessary, at the very least, to show that the decision may have been different if the error had not occurred.

The grant of certiorari is discretionary, it is not a right.[462] As a result, I accept JG King’s submission that not every error of law ought to result in a decision being quashed.[463]
[462]Re McBain; Ex parte Australian Catholic Bishops Conference (2002) 209 CLR 372, 415 [95], 417 [98], 421 [106] (McHugh J). See also Jordan v Kotsios & Ors [2022] VSC 332 [31] (Cavanough J); Musico & Ors v Davenport & Ors [2003] NSWSC 977 [126] (McDougall J); Grocon (n 80) [161] (Vickery J).
[463]Annotated List of Issues [16] 37.

I am, however, satisfied that the errors of law are ‘material’ to the Adjudicator’s Determinations. This is because:

(a) the calculations of the Payment Claims were central to the Adjudicator’s Determinations;

(b) the Adjudicator did not calculate the amount of the progress payments to which JG King was entitled under the Act in accordance with clause 37.4 of the Contracts;

(c) but for the errors of law, the Adjudicator would have calculated the progress payments under the Act in accordance with clause 37.4 of the Contracts as nil.

As a result, I have concluded that it is appropriate to exercise my discretion and to grant certiorari and quash the Adjudicator’s Determinations. It is not appropriate to remit the Payment Claims for further determination by the Adjudicator or another adjudicator. This is because, as I have already said, but for the errors of law, the Adjudicator would have calculated the progress payments as nil.

Hunters Green has succeeded on Grounds 4 (Stage 12) and 8 (Stage 13).

CONCLUSION AND ORDERS

In conclusion, I have found Hunters Green has failed on Grounds 1-3 (Stage 12) and Grounds 5-7 (Stage 13) and succeeded on Grounds 4 (Stage 12) and 8 (Stage 13).

I will hear from the parties on the precise form of orders, including costs. The parties are directed to confer and provide a draft form of order to Chambers, or in the absence of agreement, forms of orders together with filed submissions in support (limited to 3 pages) by 4:00pm on 15 September 2023. The Court may then list the matter for hearing.

---

Date	‘This Claim Invoice’	‘Retention Held’ (from this claim)	‘Amount due this invoice’	‘Less Retention Held’ (to date)	‘Balance Owed Inc GST’
11 October 2018[6]	$79,953.52	$7,995.36	$79,153.96	$7,995.36	$87,149.32
11 October 2018[7]	$160,766.06	$16,076.61	$159,158.38	$24,071.97	$262,384.31
12 November 2018[8]	$332,555.06	$33,255.55	$329,229.50	$57,327.52	$386,557.02
11 December 2018[9]	$565,122.64	$56,512.27	$559,471.41	$113,839.79	$673,311.20
24 January 2019[10]	$777,299.47	$77,729.95	$769,526.47	$191,569.74	$961,096.21
4 February 2019[11]	$731,343.03	$19,246.08	$783,306.67	$210,815.82	$1,763,648.96
4 March 2019[12]	$715,871.85	None specified[13]	$787,459.04	$210,815.82	$1,781,581.53
29 March 2019[14]	$555,375.90	None specified	$610,913.52	$210,815.82	$1,609,188.38
3 May 2019[15]	$279,249.95	None specified	$307,174.98	$210,815.82	$1,128,904.32
31 May 2019[16]	$91,504.72	None specified	$100,655.20	$210,815.82	$618,646.00

Contract Summary (Ex GST)
Original contract amount	4,216,313.10
Approved variations	0.00
Revised contract amount	4,216,313.10
Value of Works Completed	79,953.52
Less Value of Previous Claims	0.00
Less Retention Held	7,995.36
This Claim Invoice	79,953.52
Balance to Contract Completion	4,136,359.58
Percentage Billed	1.90%
GST	7,195.80
Retention Held	7,995.36
Amount due this Invoice	79,153.96
Invoiced to Date Inc GST	87,149.32
Received to Date Inc GST	0.00
Balance Owed Inc GST	87,149.32

[2023] VSC 536

8 September 2023