Modscape Pty Ltd v Sive - [2017] TASSC 71

[2017] TASSC 71

COURT: SUPREME COURT OF TASMANIA

CITATION: Modscape Pty Ltd v Sive [2017] TASSC 71

PARTIES:  MODSCAPE PTY LTD
  v
  SIVE, Jonathan

FILE NO:  50/2017
DELIVERED ON:  11 December 2017
DELIVERED AT:  Hobart
HEARING DATE:  17 October 2017
JUDGMENT OF:  Blow CJ

CATCHWORDS:

Contracts – Building, engineering and related contracts – Remuneration – Statutory regulation of entitlement to and recovery of progress payments – Adjudication of payment claims – Adjudicator deciding dispute on points not contended for by either party – Inadequate reasons – Denial of natural justice.

Building and Construction Industry Security of Payment Act2009 (Tas), s 25(2), (4)(b).
Musico v Davenport [2003] NSWSC 977; Coordinated Constructions Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229, 21 BCL 364; Procorp Civil Pty Ltd v Napoli Excavations and Contracting Pty Ltd [2006] NSWSC 205; Brodyn Pty Ltd v Davenport [2004] NSWCA 394, 61 NSWLR 421; Timwin Construction v Facade Innovations [2005] NSWSC 548, 21 BCL 383; Laing O'Rourke Australia Construction Pty Ltd v H & M Engineering & Construction Pty Ltd [2010] NSWSC 818; Clyde Bergemann v Varley Power [2011] NSWSC 1039; Theiss Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2012] QSC 373, referred to.
Aust Dig Contracts [279.6]

REPRESENTATION:

Counsel:
             Applicant:  C Groves
             Fairbrother Pty Ltd:  B J Murphy
Solicitors:
             Applicant:  Dobson Mitchell Allport
             Fairbrother Pty Ltd:  Tierney Law

Judgment Number: [2017] TASSC 71
Number of paragraphs: 62

Serial No 71/2017
File No 50/2017

MODSCAPE PTY LTD v JONATHAN SIVE

REASONS FOR JUDGMENT BLOW CJ

11 December 2017

This case concerns a dispute as to the validity of an adjudication determination made, or purportedly made, pursuant to the Building and Construction Industry Security of Payment Act 2009 ("the Act"). The determination related to a dispute between Modscape Pty Ltd, the applicant in these proceedings, and a company named Fairbrother Pty Ltd. The respondent to this application, Jonathan Sive, was the adjudicator who made the impugned determination. The applicant is seeking an order in the nature of certiorari for the quashing of the determination. Alternatively, it seeks a declaration that the determination is void.
On 22 February 2017, Holt AsJ made a general order requiring the respondent to show cause why the relief sought should not be granted. The respondent has advised that he does not intend to participate in the proceedings, and that he will submit to the orders of the Court, except in relation to costs. Fairbrother Pty Ltd was represented by counsel at the hearing before me. It contends that the determination was unimpeachable and that the proceedings should therefore be dismissed.
The background to this dispute can be summarised as follows:
·     Some years ago the Tasmanian Government decided to redevelop the Royal Hobart Hospital.
·     The State engaged Fairbrother Pty Ltd as a head contractor to construct a temporary building for the purpose of the redevelopment work.
·     Fairbrother entered into a subcontract with Modscape. That subcontract required Modscape to construct and install certain modules, including joinery works.
·     Modscape entered into a sub-subcontract with Fairbrother. That sub-subcontract required Fairbrother to undertake the joinery works.
·     Mould was found on the site. A dispute arose between Fairbrother, in its capacity as the head contractor, and Modscape about the mould, its remediation, and alleged defects in Modscape's work. On 26 May 2016 Fairbrother, relying on a provision in its subcontract with Modscape, elected to carry out remediation work in respect of some of the work that Modscape had contracted to carry out. The extent of the work that was subsequently carried out by Fairbrother in its capacity as the head contractor is in dispute.
·     From 26 May 2016 or thereabouts, as a result of Fairbrother electing to carry out remediation work, Modscape ceased to undertake work pursuant to the subcontract.
· On 31 October 2016 Fairbrother, in its capacity as Modscape's sub-subcontractor, served a payment claim on Modscape, relying on s 17 of the Act. That payment claim sought a progress payment of $210,560.25. It related to joinery work that Fairbrother claimed to have undertaken pursuant to the sub-subcontract.
· On 14 November 2016 Modscape served a payment schedule, relying on s 18 of the Act. It contended that it was not liable to pay anything to Fairbrother.
· On 28 November 2016 Fairbrother made an adjudication application, relying on s 21 of the Act. The application was made to a nominating authority known as Australian Building & Construction Dispute Resolution Service.
·     On 30 November 2016 that nominating authority appointed the respondent, Mr Sive, as the adjudicator. Mr Sive accepted that appointment.
·     On 12 December 2016 Modscape lodged its adjudication response. It continued to deny liability.
·     On 20 December 2016 the adjudicator made the impugned determination. He determined the value of the payment claimed to be $210,560.25. That is to say, he allowed the payment claim in full.
Modscape's contentions in relation to the impugned determination can be summarised as follows:
·     It contends that the adjudicator failed to address and determine the issues that were put forward by the parties for determination.
·     It contends that the determination was based on findings that were not contended for by either party.
· It contends that the adjudicator's failure to address the issues put forward by the parties amounted to a breach of an obligation to act in good faith, as well as a contravention of s 25(2) of the Act, and that the adjudication determination is therefore a nullity.
·     It contends that the adjudicator denied the parties natural justice by basing his determination on matters that the parties had not addressed, and were not invited by him to address.
·     It contends that he gave inadequate reasons for his determination.
Fairbrother contends that the adjudicator made no such errors.

The issues for determination by the adjudicator

Fairbrother's contentions in its adjudication application can be summarised as follows:
·     That, prior to 26 May 2016, Modscape breached the subcontract by failing to remedy defective work.
·     That on 26 May 2016 Fairbrother, pursuant to cl 12.2 of the subcontract, gave Modscape notice that it would engage others to "remedy the default".
·     That, at that time, the joinery works under the sub-subcontract were 80% complete.
·     That the sub-subcontract had not been terminated, discharged or abandoned.
·     That Fairbrother therefore remained bound to perform its obligations pursuant to the sub-subcontract.
·     That, by the time Fairbrother's payment claim was served on 31 October 2016, the joinery works were 100% complete.
·     That on 15 August 2016, pursuant to the subcontract, Modscape served on Fairbrother a payment claim that included a component in respect of the joinery works, claiming a further 17% of the sub-subcontract sum on the basis that the joinery works were then 97% complete.
·     That the service of that payment claim constituted an acknowledgement by Modscape that Fairbrother had supplied joinery works to Modscape pursuant to the sub-subcontract after 26 May 2016.
It is clear from Modscape's payment schedule and its adjudication response that its contentions were as follows:
·     That Fairbrother elected on 26 May 2016 to remedy defective work carried out by Modscape.
·     That Fairbrother had a right, pursuant to cl 12.3 of the subcontract, to suspend that subcontract by giving written notice to that effect.
·     That, whilst no such written notice was given, the parties by their conduct effected a suspension of the subcontract.
·     That the effect of that suspension was to revoke Modscape's licence to enter the site as a subcontractor, and therefore to revoke Fairbrother's right to enter the site as a sub-subcontractor.
·     That Modscape was not subsequently given access to the site to undertake any work.
·     That the fact that representatives of Modscape were permitted to attend meetings on the site after 26 May 2016 did not affect Modscape's inability to carry out work on the site.
·     That, since Fairbrother's only right of access was as the head contractor, any joinery work carried out by it after 26 May 2016 was carried out by it as the head contractor, and not as a sub-subcontractor.
·     That Fairbrother therefore was not entitled to make a payment claim pursuant to the sub-subcontract in respect of work done after 26 May 2016.
Modscape did not contend that the subcontract had been terminated, as distinct from suspended. I mention this because the adjudicator appears to have thought that Modscape contended that the subcontract had been terminated by Fairbrother.

The adjudicator's determination

Much of the reasoning in the adjudicator's determination concerns the question whether Fairbrother had terminated the subcontract. From my examination of the material before the adjudicator, there appears to be only one document from which he might have formed the incorrect view that Modscape was contending that there had been such a termination. Amongst the documents submitted by Modscape in support of its adjudication response there were documents relating to an earlier adjudication between Modscape and a company named Stowe Australia Pty Ltd. That company was another of Modscape's sub-subcontractors. Stowe's adjudication application included the following paragraphs:
"12The claimant [Stowe] submits that the respondent [Modscape] has not been on site or engaged with the project since 26 May 2016. Its involvement with the project has effectively ceased.
13For all intents and purposes with respect to the respondent's relationship with the claimant the respondent's (head) contract has been terminated."
The adjudicator appears to have thought that, because Modscape included Stowe's adjudication application in its material, it was adopting what Stowe had written. In the determination, in footnote 4, the adjudicator said:
"The Statement of Jan Gyrn of the respondent [Modscape] discusses an adjudication application made against the respondent by a different and other claimant. The different and other adjudication application submission is attached as 'C' to the Statement of Gyrn. The submission relied upon by Mr Gyrn simply recites [at paragraphs 12 and 13] conclusions without stating supporting analysis …".
However Modscape's adjudication response made it crystal clear that it contended that Fairbrother had suspended the subcontract, as distinct from terminating it. At page 3 of the adjudication response, Modscape's solicitors wrote:
"Fairbrother has not purported to terminate, however its conduct unequivocally constitutes a suspension of the Modscape contract …".
In his determination, the adjudicator began addressing the termination question without first making it clear that he thought that Modscape contended that the subcontract had been terminated. He eventually made that clear in his reasons at [21] where he said the following:
"Contrary to the suggestions being advanced by the respondent [Modscape] in its material, the breach here does not automatically terminate the Module Subcontract; rather, it conferred an elective right on the claimant [Fairbrother] in respect of a major breach of the Module Subcontract by the respondent."
In that passage, after the words "its material", the adjudicator included a reference to his footnote 5. That footnote refers to a passage in Modscape's adjudication response that read as follows:
"Fairbrother concedes that since 26 May 2016 it has carried out remediation work. It does not say at what point it returned the work to Modscape for Modscape to complete that work, and it is Modscape's submission that:
1    At no time did Fairbrother return possession of the site, or the works, to Modscape after 26 May 2016;
2    Rather, Fairbrother elected to complete the entirety of works under the Modscape Contract itself, using (as far as is known) Modscape's subcontractors as well as its own joinery labour, goods and materials;
3    Modscape has had no control over the carrying out of works, or of its subcontractors carrying out work. It has issued no instruction or direction to Fairbrother (in its capacity as joinery subcontractor) since 26 May 2016, and has been incapable of delivering possession of the site or any part of it to any subcontractor (including Fairbrother as the joinery subcontractor)."
There is nothing in the quoted passage to suggest that Modscape was asserting that Fairbrother had terminated the subcontract, as distinct from suspending it and not ending the suspension.
Apart from his conclusion that the subcontract had been suspended rather than terminated, the principal conclusions reached by the adjudicator were as follows:
·     At [19], that the suspension of the subcontract did not withdraw or otherwise revoke Modscape's licence to access the construction site.
·     At [20], that Modscape was waiting to recommence the subcontract works as soon as reasonably practicable following a direction by Fairbrother to do so.
·     At [23], that in June 2016 Modscape either wrongly neglected or deliberately refused to recommence the subcontract works following a direction by Fairbrother to do so.
·     At [26]-[28] that, since Modscape served the subcontract payment claim of 15 August 2016 and that payment claim included a component relating to joinery work undertaken after the suspension of works in May 2016, the suspension of works under the subcontract must not have involved joinery works.
·     At [35], that it followed that the adjudication application fell within "the jurisdiction of the Act".
·     At [59], that the parties "understood and agreed not to do anything which would deprive the other party thereto of the benefits of the joinery works subcontract [the sub-subcontract]".
Some of those conclusions involved the acceptance of contentions advanced by the parties. Fairbrother had contended that Modscape had retained some access to the construction site at all times. Modscape, having contended that the subcontract was suspended, should be taken to have contended that it remained willing to recommence the subcontract works. Fairbrother had contended that Modscape's payment claim of 15 August 2016 supported its case. However there was an element of originality to the adjudicator's conclusions at [23] and [59].
As to [23], Fairbrother did not argue that Modscape had neglected or refused to recommence the subcontract works after receiving a direction to do so. Its case was not based on any non-compliance with any such direction. In its adjudication response, Modscape provided the adjudicator with copies of its emails to and from Fairbrother. In an email sent on 21 June 2016, Fairbrother demanded that Modscape commence work on 11 specified items by the close of business on 24 June 2016. Modscape responded on 23 June to the effect that Fairbrother's conduct prevented it from performing any works. Those emails formed part of Annexure E to a statement of Mr Gyrn, a director of Modscape. His statement made it clear that those emails were provided as evidence that after 26 May 2016 Fairbrother had been working on the site and Modscape had not. The parties' contentions did not raise any issue as to whether Modscape had a contractual obligation to recommence work in accordance with the demand in Fairbrother's email of 21 June 2016.
In the material submitted to the adjudicator, neither party contended that any understanding had been reached or agreement made to the effect that neither party would do anything that would deprive the other of the benefits of the sub-subcontract. The adjudicator came to a conclusion to that effect at [59] without any evidence of the parties having communicated about such an arrangement.

A failure to consider the adjudication response?

The applicant sought relief in the nature of certiorari on seven grounds, which are referred to in the general order to show cause as grounds (a) to (g). Ground (a) was abandoned. Grounds (b) and (c) read as follows:
"(b)In making the Determination the respondent failed to consider the applicant's adjudication response dated and lodged 12 December 2016;
(c)Alternatively, in making the Determination the Adjudicator failed to act in good faith in considering the applicant's adjudication response dated and lodged 12 December 2016".
Section 25(2) of the Act provides as follows:
"(2) In determining an adjudication application, an adjudicator is to consider only the following matters:
(a)the provisions of this Act;
(b)the provisions of the building or construction contract to which the application relates;
(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."
Modscape's adjudication response included submissions and documentation which the adjudicator was obliged to consider pursuant to s 25(2)(d). In grounds (b) and (c), Modscape contends that the adjudicator did not do what that provision required.
In Coordinated Constructions Co Pty Ltd v Climatech (Canberra) Pty Ltd [2005] NSWCA 229, 21 BCL 364, Hodgson JA said at [24]:
"… what is referred to an adjudicator for determination is a claimant’s payment claim, and what an adjudicator is to determine is the amount of the progress payment to be paid on the basis of that claim and on the basis of other considerations in s22(2) of the Act [the New South Wales equivalent of Tasmania's s 25(2)]. Accordingly, the task of the adjudicator is to make a determination within the parameters of the payment claim ...".
In Procorp Civil Pty Ltd v Napoli Excavations and Contracting Pty Ltd [2006] NSWSC 205 at [24], Einstein J referred to that passage as a statement "that the task of the adjudicator was in substance to determine the claimant's entitlement within the framework of the dispute that was propounded by the parties". [My emphasis.]
In Brodyn Pty Ltd v Davenport [2004] NSWCA 394, 61 NSWLR 421 at [55], Hodgson JA, with whom Mason P and Giles JA agreed, held that an essential requirement for the validity of a determination under the equivalent legislation in New South Wales was "a bona fide attempt by the adjudicator to exercise the relevant power relating to the subject matter of the legislation". His Honour went on to say:
"If the basic requirements are not complied with, or if a purported determination is not such a bona fide attempt, or if there is a substantial denial of this measure of natural justice, then in my opinion a purported determination will be void and not merely voidable, because there will then not, in my opinion, be satisfaction of the requirements that the legislature has indicated as essential to the existence of a determination."
In Timwin Construction v Facade Innovations [2005] NSWSC 548, 21 BCL 383, McDougall J said at [38]:
"There has not been any decision to my knowledge elaborating the requirement of good faith to which Hodgson JA pointed in Brodyn. Clearly, I think, his Honour was not referring to dishonesty or its opposite. I think he was suggesting that, as is well understood in the administrative law context, there must be an effort to understand and deal with the issues in the discharge of the statutory function".
In Laing O'Rourke Australia Construction Pty Ltd v H & M Engineering & Construction Pty Ltd [2010] NSWSC 818, McDougall J said at [34]:
"… the obligation of good faith requires at least that adjudicators should turn their minds to, grapple with and form a view on all matters that they are required to 'consider'."
His Honour was referring to the use of the word "consider" in the New South Wales equivalent of Tasmania's s 25(2).

In Clyde Bergemann v Varley Power [2011] NSWSC 1039, McDougall J reviewed those authorities and said, at [64]:
"the obligation to act in good faith, insofar as it requires adjudicators to turn their minds to the statutory task entrusted to them, requires that they engage intellectually with the disputes that the parties have framed, and deal with those disputes in a way that is reasoned, and not perverse, arbitrary or capricious."
In Theiss Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2012] QSC 373, Ann Lyons J concluded that there had been a jurisdictional error on the part of an adjudicator who had read certain material but not "considered" it within the meaning of the Queensland equivalent of Tasmania's s 25(2). Her Honour said at [56]:
"I accept that the Adjudicator may well have 'read' those submissions and that recalculation at some point in time but when it came to the actual point of decision making he did not 'consider' them because he did not actively take them into his reasoning process and weight [sic] them up along with the other evidence he was considering at that point in time."
In this case the adjudicator clearly expended a lot of intellectual effort grappling with a question that he was not required to decide, namely the question whether the sub-subcontract had been terminated. No one contended that it had been. He concluded that it had not been. His expenditure of time and effort on that non-issue tends to indicate that he did not intellectually engage with the issues raised by the parties for determination.
Fairbrother was not contending that the sub-subcontract had been suspended. It contended that, although it had given Modscape notice under cl 12.2 of the subcontract that it would engage others to remedy Modscape's default, it remained both obliged and able to perform its obligations pursuant to the sub-subcontract. Modscape contended that the cl 12.2 notice and the subsequent conduct of the parties resulted in the suspension of all rights and obligations under the sub-subcontract. The adjudicator arrived at a conclusion not contended for by either party, to the effect that there had been a suspension of the sub-subcontract, but that that suspension was subject to an exception.
To have given proper consideration to Fairbrother's contentions, it would have been necessary for him to have analysed the scope of the work that was the subject of the cl 12.2 notice, and the extent to which the carrying out of remedial work pursuant to that notice would have precluded or hindered Modscape and its sub-subcontractors from completing the subcontract works. He did not undertake any such analysis.
To have given proper consideration to Modscape's contentions as to the effect of a suspension of the subcontract on the contractual rights and obligations of sub-subcontractors, it would have been necessary for the adjudicator to have undertaken an analysis of the nature of the suspension of contractual rights and obligations. He did not.
It is true that Fairbrother relied upon the submission of Modscape's payment claim. I do not think the adjudicator fell into jurisdictional error by taking the making of that payment claim into account.
However his findings at [23] that Fairbrother had given Modscape a direction to recommence the subcontract works, and that Modscape had either wrongly neglected or deliberately refused to do so, were not findings that either party had asked him to make. Similarly his finding at [59] that the parties "understood and agreed not to do anything which would deprive the other party" of the benefits of the sub-subcontract was an inference that neither party had asked him to draw, and was not based on any evidence produced by either party as to the communications passing between them. Those findings were made as the result of some process or processes other than intellectual engagement with the issues raised by the parties for determination.
Ground (b) asserts that the adjudicator "failed to consider" Modscape's adjudication response. For the reasons stated, I consider that this ground has been made out, and that jurisdictional error has been established in that respect. To the extent that the adjudicator did address the adjudication response, he did not act in "good faith" in the Brodyn sense, though I have no doubt he was acting honestly. Ground (c) is therefore also made out.

Inadequate reasons?

Ground (d) asserts that the adjudicator "failed to give any, or any adequate reasons" for six of the findings or conclusions contained in his determination. Section 25(4)(b) of the Act requires that an adjudicator's determination "must include the reasons for the determination" unless both parties have requested otherwise. There is no suggestion that any such request was made in this case.

In Clyde Bergemann v Varley Power (above) at [66]-[67], McDougall J said:
"The reasons should show that the adjudicator has turned his or her mind to the dispute entrusted to his or her determination, and has addressed the issues raised by the parties in support of or opposition to the payment claim. There is no requirement that they be lengthy, elaborate or detailed. On the contrary, it may be thought, the scheme of the Act tells strongly against any such requirement …
To put the matter compendiously, the reasons should be sufficient to show that the adjudicator has engaged actively with the dispute tendered for his or her decision, and dealt with it in a way that is reasoned, and not perverse, arbitrary or capricious."
As McDougall J said in Bauen Constructions v Westwood Interiors [2010] NSWSC 1359 at [23], "Just as there is with judges, so too with adjudicators there is a presumption that the stated reasons are all of the reasons for coming to the conclusion expressed."
The first conclusion to which this ground relates concerns the ultimate question of whether Fairbrother did the work in question as a sub-subcontractor. The adjudicator said, at [11], "I am satisfied that the claimant in its capacity as the respondent's joinery subcontractor continued to carry out joinery works under the respondent's Purchase Order RHH/2400." I am satisfied that the adjudicator fully stated his reasons for reaching that conclusion. The reasons may be defective, but they were adequately stated.
The second passage in the determination to which this ground relates is at [20], where the adjudicator concluded that Modscape "was waiting to recommence the Works as soon as reasonably practicable following a direction by the claimant so to do". That conclusion was immediately preceded by a reference to the evidence on which the adjudicator based that conclusion. He had concluded that the sub-subcontract was suspended, rather than terminated. There was evidence that representatives of Modscape had been attending "toolbox meetings" at the site after 26 May 2016. The full text of the sentence in which the relevant passage appears is as follows:
"The fact that an authorised person of the respondent attended the Project site on a regular basis assists in showing the suspension under clause 12 was operational and that the respondent was waiting to recommence the Works as soon as reasonably practicable following a direction by the claimant so to do."
It is clear that the adjudicator adequately stated his reasoning for the conclusion at the end of that sentence.
The third relevant passage in the adjudicator's determination is in footnote 4. The sentences in question referred to the email exchange between Fairbrother and Modscape in May and June 2016. The adjudicator wrote this:
"Curiously, however, attachment 'D' to the Statement of Gyrn tenders a communication (dated 6 June 2016 [sic]) exchanged between the parties in this payment dispute. The communication shows the respondent [Modscape] was afforded an opportunity to recommence 'the remaining Works' and responded to the claimant's notice by saying that 'Modscape will complete the works as soon as practicable having regard to the works being undertaken by Fairbrother'." [Original italics.]
The emails in question did not contain one dated 6 June 2016. The adjudicator appears to have quoted from an email sent by Modscape to Fairbrother on 23 June 2016. The expression "remaining works" appears to have been taken by the adjudicator from the following paragraph:
"The suggestion that Modscape can undertake its remaining works (such as plastering, floor and wall finishes, fit off works, doors and joinery) whilst Fairbrother is undertaking its alleged remediation works is entirely disingenuous. Fairbrother knows it is impossible for Modscape to undertake this works [sic] until Fairbrother's work is complete." [My italics.]
Later in that email, the writer said:
"Modscape will complete the works as soon as practicable having regard to the works being undertaken by Fairbrother."
That email was a response to Fairbrother's email of 21 June 2016, in which it demanded that Modscape commence work on 11 outstanding items. Clearly, Modscape was contending that the remediation activities undertaken by and for Fairbrother precluded a resumption of work. The adjudicator concluded that Modscape was in fact given an opportunity to recommence work, but there is nothing in his determination to explain why he rejected Modscape's assertions that it could not resume its subcontract work until Fairbrother's remediation activities were complete. In this respect, ground (d) is made out.
The fourth relevant passage in the adjudicator's determination is in the middle of [23]. The adjudicator wrote the following:
"… the suggestion by Mr Gyrn at paragraph 9 of his statement that 'No work has been carried out by Modscape or its subcontractors to the Project since on or about 26 May 2016, when the work was taken over by Fairbrother' is not accurate and for this reason is not justified." [Original italics.]
Ground (d)(iv) asserts that the adjudicator did not give reasons, or adequate reasons, for saying that Modscape, or its Mr Gyrn, was "not accurate" and "not justified" in asserting that Modscape and its subcontractors had not carried out work since 26 May 2016. In my view that contention involves a misinterpretation of what the adjudicator was saying. I do not read him as asserting that work was in fact carried out by Modscape or its subcontractors after 26 May 2016. In my view the words "not accurate" and "not justified" were intended to refer to the proposition that the cessation of work resulted from the taking over of work by Fairbrother. The adjudicator went on in [23] to give his reasons for taking the view that the cessation of work was not something that Modscape could blame on Fairbrother. Those reasons might not be good reasons, but ground (d)(iv) must fail because it is misconceived.
The fifth relevant passage in the determination concerns the next sentence in [23]. That sentence reads:
"Here the respondent [Modscape] is seeking to take advantage of the non-fulfilment of a condition under the Module Subcontract the performance of which was hindered, as revealed in the exchange of communications between the parties in June 2016, by the respondent itself."
That sentence asserts two things. The first assertion is that Modscape was seeking to take advantage of the non-fulfilment of a condition under the subcontract, not the sub-subcontract. The adjudicator did not say which clause in the subcontract he was referring to. After studying his reasons and the subcontract, I have no idea what clause he was referring to. Counsel for Fairbrother did not identify any clause as the clause that the adjudicator was referring to. In fact he submitted only that the adjudicator had thoroughly considered the issues raised by Modscape with reference to the materials before him. That was not a helpful submission. It follows that his reasons were inadequate in that they did not identify, or even provide a means for identifying, the contractual provision that the adjudicator was referring to.
The second assertion in the sentence in question was that Modscape had hindered performance of the subcontract. That assertion needs to be considered together with the sixth and final relevant passage in the determination. That passage is in the next sentence in [23]. That sentence reads as follows:
"A reasonable interpretation of the conduct revealed in the exchange of communications in June 2016 is that the respondent [Modscape] wrongly neglected, or deliberately, as a result of the mistaken view of the contractual state of affairs, refused to recommence the Works as soon as reasonably practicable following a direction by the claimant [Fairbrother] to do so."
The adjudicator made clear in his footnote 4 where he got the idea that Modscape had a "mistaken view of the contractual state of affairs". As I have already said, he saw that Mr Gyrn's statement had part of Stowe's adjudication submissions annexed to it, and inferred from those submissions that Modscape was contending in the adjudication before him that there had been a termination. He got that wrong, but the way in which he got it wrong was made perfectly clear. However the sentence in question also contained the finding that I have already discussed, to the effect that Modscape either wrongly neglected or deliberately refused to recommence the subcontract works following a direction by Fairbrother to do so. It is apparent that, just as he did in footnote 4, the adjudicator rejected Modscape's assertions that it could not resume its subcontract work until Fairbrother's remediation activities were complete. He gave no reasons for rejecting those assertions. In this respect also, ground (d) is made out.
However it is by no means clear whether the failure of an adjudicator adequately to state the reasons for his or her determination, as required by s 25(4)(b), will warrant an order, in the nature of certiorari, that the determination be quashed. Counsel did not refer me to any authority as to that point, and I am not aware of any. When administrative decision-makers fail to comply with statutory duties to give reasons, questions sometimes arise as to whether their determinations are invalid, or whether the appropriate relief is an order, perhaps in the nature of mandamus, for the provision of reasons, or better reasons. There is a useful discussion of the relevant authorities in Aronson, Groves and Weeks, Judicial Review of Administrative Action and Government Liability, 6^th ed (Lawbook Co, 2007) at [8.460]. It may be that, in accordance with the principles established in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, a court will one day have to examine the relevant statutory scheme to determine the consequences of non-compliance with a provision like s 25(4)(b). Because of the conclusions I have reached in relation to grounds (b) and (c), there is no need for me to undertake that task.

Denial of natural justice

Ground (e) asserts that the adjudicator denied Modscape natural justice by making a series of findings without first inviting submissions from Modscape about their subject matter, in circumstances in which such submissions should have been invited.
As a general rule in any civil litigation, if a decision-maker contemplates making a determination on a different basis from that on which the parties have conducted the case, he or she must inform the parties of that prospect so that they have an opportunity to address any new or challenged issues that may arise, and a failure so to inform the parties will ordinarily result in a denial of procedural fairness: Seltsman Pty Ltd v Ghaleb [2005] NSWCA 208 per Ipp JA, with whom Mason P agreed, at [78]-[79].
An adjudicator under the Act therefore breaches the requirements of natural justice when an adjudication application is determined upon a basis not advanced by either party: Musico v Davenport [2003] NSWSC 977 at [107]-[108]; Procorp Civil Pty Ltd v Napoli Excavations and Contracting Pty Ltd (above) at [10]; Modscape Pty Ltd v Francis [2017] TASSC 55 at [14]-[21].
On the other hand, procedural fairness does not require a decision-maker to disclose his or her provisional conclusions: Sinnathambi v Minister for Immigration and Ethnic Affairs (1986) 66 ALR 502 at 506. As Lord Diplock said in F Hoffman-La Roche & Co AG v Secretary of State for Trade and Industry [1975] AC 295 at 369:
"… the rules of natural justice do not require the decision maker to disclose what he is minded to decide so that the parties may have a further opportunity of criticising his mental processes before he reaches a final decision. If this were a rule of natural justice only the most talkative of judges would satisfy it and trial by jury would have to be abolished."
Section 24(2)(a) of the Act gives an adjudicator the power to request further written submissions from a party to adjudication proceedings. The adjudicator made his findings at [23] and [59], as discussed above, without first inviting submissions from Modscape about their subject matter, namely the proposition that Modscape received a direction from Fairbrother to recommence the subcontract works but either wrongly neglected or deliberately refused to do so, and the proposition that the parties "understood and agreed not to do anything which would deprive the other party" of the benefits of the sub-subcontract. Those appear to have been matters that were material to the outcome of his determination. It follows that he denied Modscape natural justice, and that ground (e) is made out, to the extent that it relates to the findings at [23] and [59].
I see no need to analyse Modscape's contentions in relation to the other passages in the determination that are the subject of ground (e).

Grounds (f) and (g)

Ground (f) asserts that the adjudicator, in ten passages in his determination, made findings that were not contended for by either party, and thereby based his determination on matters beyond the scope of s 25(2) and/or deprived Modscape of natural justice. To some extent this ground involves a repetition of grounds (b), (c) and (e).
Ground (g) asserts that the adjudicator made four findings that were not open to him on the materials before him. The findings attacked include those at [23] and [59].
Having regard to the conclusions that I have reached in relation to grounds (b), (c) and (e), inclusive, there is no need for me to determine these grounds.

Conclusion

For the reasons stated in relation to grounds (b), (c) and (e), I am satisfied that the adjudicator fell into jurisdictional error, and that his determination is a nullity. I will therefore make an order in the nature of certiorari, quashing his determination, in accordance with r 627(2)(a) of the Supreme Court Rules 2000.
I order that the determination of the respondent dated 28 November 2016 number ABCDRS TAS 01 be quashed.