MRCN Pty Ltd (trading as West Force Construction) and Pindan Contracting Pty Ltd - [2016] WASAT 114

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

ACT: CONSTRUCTION CONTRACTS ACT 2004 (WA)

CITATION: MRCN PTY LTD (trading as WEST FORCE CONSTRUCTION) and PINDAN CONTRACTING PTY LTD [2016] WASAT 114

MEMBER: MR T CAREY (MEMBER)

HEARD: 24 AUGUST 2016

DELIVERED : 20 SEPTEMBER 2016

FILE NO/S: CC 758 of 2016

BETWEEN: MRCN PTY LTD (trading as WEST FORCE CONSTRUCTION)
Applicant
AND
PINDAN CONTRACTING PTY LTD
Respondent

Catchwords:

Review of dismissal of adjudication application under Construction Contracts Act 2004 (WA) Dismissal on basis application not prepared and served in accordance with the Act Return of retention Whether payment dispute arose Whether retention due to be paid under contract Whether clause for repayment a 'pay when paid' clause Relevance of previous adjudication decision

Legislation:

Construction Contracts Act 2004 (WA), s 6, s 9, s 25, s 26, s 27, s 30, s 31, s 31(1), s 31(2), s 32, s 32(1), s 37, s 46, s 46(2)

Result:

Application unsuccessful

Summary of Tribunal's decision:

The applicant sought review of a decision of an adjudicator under the Construction Contracts Act 2004 (WA) to dismiss its application for adjudication of a payment dispute. The applicant had sought to recover retention money held by the respondent to which it considered it was entitled under the contract between the parties. The adjudicator found that the time for release had not yet arisen under the relevant contractual term.
The applicant relied upon a number of alternative arguments in support of the adjudicator's decision being overturned:
a) the contractual term relied upon was ineffective as a 'pay when paid' provision;
b) the term was otherwise inoperative, or was to be construed other than in its literal sense;
c) the adjudicator's decision illegitimately brought into question the decision and reasoning of another adjudicator regarding release of an earlier tranche of the same retention money.
The Tribunal considered and found against each of the applicant's arguments.
It accordingly dismissed the application and affirmed the adjudicator's decision.

Category: B

Representation:

Counsel:

Applicant: Mr M Murrey
Respondent: Mr A Macpherson

Solicitors:

Applicant: N/A
Respondent: N/A

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

Nil

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

The applicant, MRCN Pty Ltd trading as West Force Construction (West Force), seeks review of the decision of an adjudicator to dismiss its application for adjudication of a payment dispute under the Construction Contracts Act 2004 (WA) (CC Act).
The relevant construction contract is a contract between West Force and the respondent, Pindan Contracting Pty Ltd (Pindan), for the provision of precast concrete rigging services for the Eastern Goldfields Regional Prison (EGRP) redevelopment in Boulder. The contract between the parties (contract) is a subcontract to the EGRP redevelopment contract (head contract).
The payment dispute asserted by West Force relates to the nonpayment of a final retention release in the sum of $62,889 exclusive of GST. West Force submits that this amount was due for payment on 17 April 2016.

Statutory framework

Under s 6 of the CC Act, a 'payment dispute' arises if, among other things:
…
(b)by the time when any money retained by a party under the contract is due to be paid under the contract, the money has not been paid[.]
Section 9 of the CC Act, dealing with 'pay if paid/when paid provisions', is relevant to the current dispute. The section states:
A provision in a construction contract has no effect if it purports to make the liability of a party (A) to pay money under the contract to another party contingent, whether directly or indirectly, on A being paid money by another person (whether or not a party).
If a payment dispute arises under a construction contract, a party to the contract has a right to apply to have the dispute adjudicated: s 25 of the CC Act.
Section 26 of the CC Act provides:
(1)To apply to have a payment dispute adjudicated, a party to the contract, within 28 days after the dispute arises or, if applicable, within the period provided for by section 37(2)(b), must
(a)prepare a written application for adjudication; and
(b)serve it on each other party to the contract; and
(c)serve it
(i)if the parties to the contract have appointed a registered adjudicator and that adjudicator consents, on the adjudicator;
(ii)if the parties to the contract have appointed a prescribed appointor, on that appointor;
(iii)otherwise, on a prescribed appointor chosen by the party;
and
(d)provide any deposit or security for the costs of the adjudication that the adjudicator or the prescribed appointor requires under section 44(8) or (9).
(2)The application
(a)must be prepared in accordance with, and contain the information prescribed by, the regulations; and
(b)must set out the details of, or have attached to it
(i)the construction contract involved or relevant extracts of it; and
(ii)any payment claim that has given rise to the payment dispute;
and
(c)must set out or have attached to it all the information, documentation and submissions on which the party making it relies in the adjudication.
(3)A prescribed appointor that is served with an application for adjudication made under subsection (1) must comply with section 28.
Section 27 of the CC Act provides for the giving of a response within 14 days after the date of service of the adjudication application.
Section 30 of the CC Act describes the object of the adjudication process in the following terms:
The object of an adjudication of a payment dispute is to determine the dispute fairly and as quickly, informally and inexpensively as possible.
Section 31 of the CC Act specifies the adjudicator's functions. Section 31(2) provides:
An appointed adjudicator must, within the prescribed time or any extension of it made under section 32(3)(a)
(a)dismiss the application without making a determination of its merits if
(i)the contract concerned is not a construction contract; or
(ii)the application has not been prepared and served in accordance with section 26; or
(iii)an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract makes an order, judgment or other finding about the dispute that is the subject of the application; or
(iv)satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time or any extension of it is not sufficient for any other reason;
(b)otherwise, determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, or to return any security and, if so, determine
(i)the amount to be paid or returned and any interest payable on it under section 33; and
(ii)the date on or before which the amount is to be paid, or the security is to be returned, as the case requires.
The prescribed time for the purposes of s 31(2) where a response is served (as was the case here) is 14 days after service of the response: s 31(1) of the CC Act.
Section 32(1) of the CC Act provides:
For the purposes of making a determination, an appointed adjudicator
(a)must act informally and if possible make the determination on the basis of
(i)the application and its attachments; and
(ii)if a response has been prepared and served in accordance with section 27, the response and its attachments;
and
(b)is not bound by the rules of evidence and may inform himself or herself in any way he or she thinks fit.
Where an adjudicator dismisses an application for adjudication under s 31(2) of the CC Act (which occurred here), he must give reasons for doing so and communicate the decision and the reasons in writing to the parties: s 37 of the CC Act.
A limited right of review of an adjudicator's decision is provided by s 46 of the CC Act. Section 46(2) states:
If, on a review, a decision made under section 31(2)(a) is set aside and, under the State Administrative Tribunal Act 2004 section 29(3)(c)(i) or (ii), is reversed the adjudicator is to make a determination under section 31(2)(b) within 14 days after the date on which the decision under section 31(2)(a) was reversed or any extension of that time consented to by the parties.

Issues

In light of the submissions, written and oral, of the parties, the primary issues which arise for determination are:
1)Is the clause in the contract dealing with retention release a 'pay when paid' provision, and therefore ineffective under s 9 of the CC Act?
2)Is clause 11(ii) otherwise inoperative?
3)If the answer to issues 1) or 2) is yes, what, if any, contractual provision governs return of retention?
4)Did a payment dispute arise?
5)What is the relevance of a previous adjudication decision dealing with an initial release of the same retention?

Is clause 11(ii) a 'pay when paid' clause?

The expressed subject of clause 11 of the contract is 'Payment'. In addition to the entitlement of West Force to payment of the contract sum by progress payments on a monthly basis, it provides for retention of monies by Pindan as security for performance. Retention up to a maximum of 5% of the contract sum is permitted.
Clause 11(i) of the contract is the critical clause. It states:
Subject to clause 11(h) and the Subcontractor's full and satisfactory performance of its obligations under clauses 14 and 15, the Subcontractor shall be entitled:
(i)upon the Superintendent certifying practical completion of the Project Works, to the release by the Contractor of 50% of the remaining monies held against the Subcontractor on retention (or the balance thereof);
(ii)upon the Superintendent certifying final completion of the Project Works, to the release by the Contractor of the balance of monies held against the Subcontractor on retention (if any).
The current dispute concerns the 'balance of monies held against the subcontractor on retention' to which clause 11(i)(ii) of the contract refers. West Force successfully pursued adjudication of an earlier dispute regarding release of the initial 50% of monies held on retention by Pindan.
Each of the expressions 'Project Works' and 'Superintendent' found in clause 11(i) is defined in the contract.
The works for the redevelopment of the EGRP are the 'Project Works'. By contrast, the works performed by West Force under the contract are the 'Works'.
The contract identifies the 'Superintendent' as 'Strategic Projects Department of Treasury' in the context of the head contract.
The adjudicator found the balance of retention release, the subject of the current dispute, to be subject to expiry of the defects liability period under the head contract, and final completion of the works the subject of the head contract. These findings were based upon the terms of clause 11(i)(ii) of the contract, making return of the balance of retention contingent upon final completion of the 'Project Works', together with West Force's obligation under clause 15 to rectify defects during the defects liability period for those works.
West Force's first ground to overturn the adjudicator's determination is that the adjudicator overlooked its contention that clause 11(i)(ii) of the contract amounts in substance to a 'pay when paid' clause. It placed particular reliance on the terms of a letter from Pindan's contract administrator, responding to West Force's claim to the disputed retention, which (at least in West Force's view) appeared to suggest a confluence of release of retention to Pindan under the head contract with release of retention to West Force under the contract, both upon completion of the head contract project.
West Force submitted that any certification of final completion of the EGRP redevelopment would entail release of retention to Pindan as head contractor, thereby placing Pindan in the position of party 'A' in s 9 of the CC Act.
At the hearing, Mr Murrey, managing director of West Force, conceded this submission was based on an assumption that when final completion of the works under the head contract is achieved, Pindan would be entitled to its retention. (The relevant terms of the head contract were before neither the adjudicator nor the Tribunal). In its statement of issues, facts and contentions (Exhibit 3), the further assumption is made (at paragraph 82) that a company the size of Pindan would have a guarantee in place and its entitlement would be to a release of that guarantee, which, according to the statement, is equivalent to release of a cash retention.
Either way, according to West Force, the concurrence of the two events, triggered by certification of final completion of the EGRP project, is sufficient for an indirect contingency of the type contemplated by s 9 of the CC Act to arise.
The condition for release of the retention fixed by clause 11(i)(ii) of the contract is the event 'the Superintendent certifying final completion of the Project Works'. Even were the assumption relied upon by Mr Murrey to be accepted, the question is whether or not the clause itself 'purports to make' return of the retention 'contingent … indirectly … on [Pindan] being paid money by another person'. I have significant doubt that it does.
As counsel for the respondent pointed out, without knowing the relevant provisions in the head contract, a range of possible consequences for Pindan of certification of final completion of the head works exists, including the principal under the head contract refusing to release its retention. Once the condition of release under clause 11(i)(ii) of the contract occurs, West Force is entitled immediately to the balance of the retention. In those circumstances, it is difficult to argue that clause 11(i) of the contract itself makes return of retention to West Force contingent upon return of retention to Pindan.
In this case, it is in any event impossible, through lack of evidence, to know whether or not return of retention, or any other payment to Pindan, is the inevitable outcome of the common triggering event of certification under the head contract so as to give rise to an indirect contingency of the type required by the section. The contents of the contract administrator's letter to which I have referred do not fill that evidentiary gap. I therefore am not satisfied that clause 11(i)(ii) of the contract runs foul of s 9 of the CC Act. West Force's own mooted alternative of release of a guarantee underlines the tenuous nature of the argument that it does, given that the contingency required by s 9 is the payment of money.

Is clause 11(i) otherwise inoperative?

West Force contends that clause 11(i) of the contract in its literal sense is incapable of being complied with, and is therefore unenforceable. This is because when one considers the terms of the head contract concerned with completion, the head contract does not refer to 'practical completion', nor to any role undertaken by a 'superintendent'. By contrast, the contract contains specific provisions regarding practical completion, including the definition set out in clause 1 and the procedure for determining achievement of practical completion contained in clause 8. West Force argues that these are indicators that the references in clause 11(i) of the contract to 'Project Works' are mistaken, and that the clause makes sense only if that expression is interpreted as 'Works' (the subject of the contract). The outcome would be that return of the retention would occur upon practical and final completion of the works performed by West Force under the contract.
I will consider a number of aspects of the contract relevant to its construction before turning to the contractual provisions under the head contract, to the extent they were before the adjudicator and are before me.
The definitions of 'Works', 'Project Works' and 'Superintendent' to which I have previously referred appear in the schedule of the contract and are crossreferenced in the definitional clause 1. The schedule contains various details assembled under the following topics:
Subcontractor Details
Contractor Details
Project Details
Subcontractor's Works.
Under 'Subcontractor Details', details pertaining to West Force appear. Similarly, details relating to Pindan appear under 'Contractor Details'.
Under 'Project Details' appears identifying information relating to 'Project Works', 'Principal' and 'Superintendent'.
The category 'Subcontractor's Works' contains details of 'Works', 'Contract Sum', 'Daywork' and 'Special Conditions'.
Special condition 3 relating to liquidated damages, includes:
(a)If the Works do not reach Practical Completion by the latest date described under clause 6 ('Date for Practical Completion'), the Contractor shall be entitled, without limitation to any other right available to the Contractor under this Agreement, to certify as due and payable to the Contractor, liquidated damages in the sum of $54,000 for every day after the Date for Practical Completion to a maximum of ten (10) percent of the agreed contract value that the Works are incomplete[.]
Turning to the body of the contract, clause 6, entitled 'Time for Completion', includes:
(a)The Subcontractor shall progress and complete the whole of the Works:
(i)in accordance with the times and by the latest date(s) described by the Contractor in the construction program and fortnightly work schedules, displayed in the site office and updated from time to time (see clause (6)(b)); or
(ii)otherwise at the times and by the latest date(s) directed to the Subcontractor by the Contractor.
(b)The Subcontractor acknowledges that the Contractor may vary the construction programme and fortnightly work schedules from time to time and without notice to the Subcontractor.
…
Clause 8, entitled 'Practical Completion', states:
(a)When the Subcontractor is of the opinion that Practical Completion has been reached, the Subcontractor shall request in writing that the Contractor inspect and certify the Works.
(b)Within 14 days after receiving written request, the Contractor will either certify that Practical Completion of the Works has been achieved, or give a notice to the Subcontractor under clause 14(a) identifying which part of the Works is outstanding or unsatisfactory.
(c)If the latter occurs, the Subcontractor must remedy the items stated in the Contractor's notice within the time and in the manner prescribed in clause 14(a)(ii). Once complete, the Subcontractor shall issue a new written request to the Contractor under clause 8(a).
Clause 14, entitled 'Defective Work', includes:
(a)Where any of the Works performed or materials supplied by the Subcontractor are, in the reasonable opinion of the Contractor, defective or otherwise not in compliance with this Agreement:
(i)the Contractor shall as soon as practicable give the Subcontractor written details thereof; and
(ii)upon receipt, the Subcontractor must demolish, replace or otherwise remediate that work or materials to be to the Contractor’s absolute satisfaction within the time prescribed by the Contractor, or if no time is prescribed within 7 days.
…
Clause 15, entitled 'Defects Liability', includes:
(a)The 'defects liability period' for the Project Works commences on the date of practical completion of the Project Works and extends for 12 months thereafter.
(b)During the defects liability period, the Subcontractor must rectify all defects in the Works that are advised to it by the Contractor:
(i)within such time as is specified by the Contractor or, if no time is specified, immediately;
(ii)during such hours and in a manner which causes as little inconvenience to the occupants for users of the Project Works as is reasonably possible; and
(iii)otherwise to the absolute satisfaction of the Contractor.
…

There is one further defined term of significance which appears in clause 1 of the contract. It is 'practical completion', defined as follows:
'Practical Completion' means that stage in completion of the Works when:
(i)the Works are complete to the absolute satisfaction of the Contractor, save for any minor defects which do not prevent the Works from being reasonably capable of their intended use and which the Contractor believes the Subcontractor has grounds for not promptly rectifying;
(ii)those tests of the Works which are required by the Contractor to be carried out and passed, have been carried out and passed;
(iii)all necessary certificates and approvals from relevant authorities have been obtained and supplied;
(iv)all copies of drawings required under this Agreement have been supplied; and
(v)all documents and other information which are essential for the use, operation and maintenance of the Works (such as operating manuals and product warranty cards) have been supplied.
Unless clause 11(i) is construed as urged by West Force, reaching 'Practical Completion' under the contract is of no particular significance to West Force's entitlement to be paid, other than as signifying completion of the works it was obliged to perform to the point referred to in the definition. Pindan was not obliged to pay West Force a 'final amount' upon practical completion being obtained. However, as Mr Murrey pointed out, practical completion under the contract was significant for other matters, including the operation of the liquidated damages provision in the schedule.
As a matter of drafting technique, all references to practical completion as defined by the contract appear in the capitalised form 'Practical Completion'. Examples appear in clauses 8(a) and 8(b) and, in item 15 of the schedule, clauses 3(a) and 3(f).
The works the subject of the contract are referred to as 'Works', and appear in the capitalised form regularly throughout the contract.
The procedure for certification of achievement of practical completion under the contract, set out in clause 8, involves a request by West Force that Pindan inspect and certify the works. This procedure allows Pindan to consider the existence of any defective work and, if it considers there is, to notify West Force, in accordance with clause 14 of the contract. By contrast, clause 11(i) of the contract refers to the certification of 'practical completion' (undefined term) and 'final completion' (undefined term) of the 'Project Works' (defined term) by the 'Superintendent' (defined term). Although the Superintendent is defined in the contract's schedule as 'Strategic Projects - Department of Treasury', the entity so described is a functionary of the head contract, not the contract. Apart from clause 11(i), the only other reference to the Superintendent in the contract which I can find appears in clause 11(d), which vests authority in the Superintendent to approve tax invoices submitted by West Force as progress payment claims.
It is common ground that the contract incorporates a document entitled 'Head Contract Technical Completion Requirements'. The purpose of this document is explained in the first paragraph of the 'synopsis' to be:
This annexure details the main activities and obligations that the Contractor is responsible in relation to the EGRP project under the Head Contract. These activities and obligations are deemed to be back to back for the Subcontractor and below are the main aspects the Subcontract must be aware of but are not limited to the full extent of the Head Contract. This annexure C forms part of the Subcontract agreement and where in conflict supersede those of the standard form of Subcontract agreement.
Below the synopsis is a contents list comprising 16 items or parts. Part 8.0 of the Head Contract Technical Completion Requirements is 'Commercial Acceptance'.
When one goes to Part 8.0 of the Head Contract Technical Completion Requirements, 'Project Co' is required to meet requirements set out in clauses of the head contract, not before me, relating to technical completion as if those requirements are references to commercial acceptance, and one is to submit a draft Commercial Acceptance Plan for review by the 'Project Director'.
Clause 8.3 of the Head Contract Technical Completion Requirements contains the following description of 'Determination of Commercial Acceptance':
If in the opinion of the Project Director, Commercial Acceptance is achieved, the Project Director must issue to Project Co a certificate of Commercial Acceptance stating the date on which Project Co achieved Acceptance.
That part of the head contract containing the definitions included in the documentation before the adjudicator and me (Exhibit 1 tab 9) makes it clear that 'Project Co' is a reference to the joint venture contractor under the head contract, including Pindan. The same source contains the following definition of 'Project Director':
The person appointed to that position in Schedule 1 (Contract Particulars), or such other person as may be appointed from time to time to replace that person in accordance with Clause 5.2.
Neither Schedule 1 nor clause 5.2 of the head contract was before the adjudicator nor me. They may or may not have contained a reference to the party identified in the contract schedule as the 'Superintendent'.
Part 9.0 of the Head Contract Technical Completion Requirements is concerned with 'Defects Liability Period'. It provides:
Each stage of the Works will have a Defective Liability Period as follows:
(a)In respect of the Stage 1 Works, a defects liability period commencing on the Date of Stage 1 Commercial Acceptance and ending 12 months after the Date of Stage 1 Commercial Acceptance[.]
I was informed by counsel for Pindan that the EGRP redevelopment constitutes the stage I works in the provision just referred to. He further indicated that those works were the subject of the issue of a Certificate of Commercial Acceptance on 7 August 2016.
In his decision, the adjudicator made the following finding en route to rejecting the adjudication application on the basis that the necessary condition of final completion had not been met:
'Commercial Acceptance' is a term used in the Head Contract Technical Completion Requirements, which form part of the [contract]. These head contract obligations are flowed back to back to the [contract] and in the event there is a conflict the head contract terms prevail over the terms of the [contract]. Commercial Acceptance is akin to Practical Completion in so much as the defect liability period for the Project Work commences upon a certificate of Commercial Acceptance.
The adjudicator footnoted the last comment with reference to clauses 8 and cl 9 of the Head Contract Technical Completion Requirements.
The task of contractual construction involves interpreting the written contract so as to ascertain the intention of the parties according to relevant contract law principles. It is necessary to approach the task by aiming for a logical and workable construction giving effect to the parties' intentions objectively obtained. Generally speaking, no extraneous evidence going to the parties' intention is admissible, although there are some exceptions to this. In my view, none of those exceptions applies in this case, thereby providing an additional reason for rejecting Mr Murrey's request to adduce extraneous evidence of intention (the other being that the evidence was not before the adjudicator).
In light of the clear distinctions in the contract between the works the subject of the head contract on the one hand, and the services and materials to be provided under the contract by West Force on the other, it is incumbent on West Force to justify the considerable rereading of the references in clause 11(i) to certification of practical completion and final completion of the 'Project Works' as being an intended reference to the (sub) contract works.
The asserted intention contradicts the references in clause 11(i) of the contract to: 'Project Works'; 'practical completion' as a descriptive, rather than defined expression; and 'the Superintendent', given the lack of involvement by any superintendent or other operative under the head contract in the process of certifying practical completion under the contract. Consistent with these references, clause 15 fixes commencement of the defects liability period under the contract as the date of practical completion of the head contract works. A rationale for this advanced by Pindan is that if some deficiency in West Force's works identified by the superintendent was holding up commercial acceptance, Pindan needed to know that West Force Field would remedy it. Be that as it may, the contractual provisions bind the parties to that position.
Unfortunately, clause 15 compounds the uncertainties flowing from other instances of infelicities of language in the contract documentation by purporting to provide for commencement of the defects liability period for the 'Project Works', when one of the parties to the contract (West Force) is a stranger to the head contract. The first reference in clause 15(a) of the contract to 'Project Works' is a clear error; it should have been 'Works' and is to be construed as such. No good reason, however, exists not to construe the remaining references literally.
I agree with the adjudicator that although the Head Contract Technical Completion Requirements speak of 'commercial acceptance' rather than 'practical completion', they are kindred concepts, evidenced by the commencement of the defects liability period upon certification of commercial acceptance. Any discordance between the two does not warrant abandoning the clear words in clause 11(i) of the contract in favour of a construction which suffers from even greater deficiencies in application. As for the argument that the head contract has no role for a superintendent, I cannot, in light of the lack of complete contractual documentation for the head contract at my disposal, be certain that this is so. And to the extent that the contract is inconsistent with the Head Contract Technical Completion Requirements, the latter's provisions apply.
For the above reasons, West Force's contentions based upon unworkability of clause 11(i) of the contract are rejected.

If the answer to issues 1 or 2 is yes, what, if any, contractual provision governs return of retention?

By reason of my answers to the two previous issues, this question does not fall to be answered.

Did a payment dispute arise?

Consistent with my findings concerning construction of the relevant contractual terms, the balance of retention was not due to be returned before the adjudication application was made. Based on the advice of counsel for Pindan, that is likely to occur in August 2017, being 12 months from certification of the works under the head contract. No payment dispute has yet arisen.

What is the relevance of a previous adjudication?

West Force made the following written submission concerning the effect of the outcome of the previous adjudication:
The previous adjudicator found that practical completion was achieved on 17 April 2015 and determined that half of the retention be released and that an amount of $69,000 be withheld being 2.5% of the adjusted contract sum (including all variations) for the balance of the defects liability period ...
This finding was not disputed by Pindan until the current application. They paid the amount determined.
While the adjudicator in the current matter is not bound by the decision of a previous adjudicator he is not empowered to overturn the decision of a previous adjudicator. At clause 5.15 … he states 'I determine the criteria for 50% release of tension at practical completion of the project works (despite adjudication determination 03 15-03 releasing the retention) … have not yet been met.'
Clearly for consistency he was obliged to make this finding or he could not justify his argument that the balance of retention was not due for release.
We think it is arguable that he has exceeded his powers by this finding.
The effect of the previous finding is that with a 12 months defects liability period the balance of the retention was due for release on 17 April 2016. We say this is a matter of fact which [the adjudicator] has ignored. He had no authority to overturn the previous determination.
West Force was correct in observing that the adjudicator was not bound by the decision of a previous adjudicator. That this is so is clear from the description of the adjudicator's functions and procedure in s 31 and s 32 of the CC Act.
Where an adjudicator concludes that no payment dispute has arisen, he must dismiss the application for adjudication, because the application could not have been prepared and served in accordance with s 26 of the CC Act. It is for the adjudicator to reach such a conclusion based on his assessment of the case before him. This is so, regardless of another person having adjudicated another payment dispute under the same construction contract involving issues in common with the current matter.
West Force's submissions impose on the current adjudicator an obligation to apply the same process of reasoning as the previous adjudicator in relation to an issue of commonality. According to West Force, by not doing so, the adjudicator arguably 'exceeded his powers' and 'overturned the previous determination', for which he had no authority. This is tantamount to saying that the adjudicator was bound by the decision, or at least some part of the decision, of the previous adjudicator, contrary to West Force's opening observation.
The most fundamental misconception reflected in West Force's submissions regarding the effect of the previous adjudication is that the adjudicator, in reaching his decision, in some way interfered with the previous adjudicator's determination. He did nothing of the sort. The two decisions, relating to the two separate tranches of retention release contemplated by clause 11 of the contract, coexist. As West Force itself pointed out, Pindan did not dispute the previous adjudicator's decision and paid the amount determined. That was in circumstances where s 46 of the CC Act limits an aggrieved party's right of review to decisions to dismiss an adjudication application. As already explained, the adjudicator's decision, the subject of the current review application, cannot be properly criticised on the basis of inconsistency with findings of the previous adjudicator.
The adjudicator's reasoning discounted the relevance of the date of practical completion under the contract. It did so because the clause of the contract regulating release of retention refers to practical completion under the head contract. This seems to have been a point of difference between the two adjudicators. For the reasons I have given, I agree with the adjudicator's interpretation of the contractual provisions in the decision under review.

Conclusion

I concur with the decision of the adjudicator to dismiss the application without making a determination of its merits on the basis that the application had not been prepared and served in accordance with s 26 of the CC Act.

Order

The Tribunal will issue an order in the following terms:
1.The review application is dismissed.
2.The decision to dismiss the application for adjudication is affirmed.

I certify that this and the preceding [68] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR T CAREY, MEMBER