Salini-Impregilo Spa v Floreani - [2020] WASC 358

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   SALINI-IMPREGILO SPA -v- FLOREANI [2020] WASC 358
CORAM:   HILL J
HEARD:   29 OCTOBER 2019
DELIVERED          :   15 OCTOBER 2020
FILE NO/S:   CIV 1957 of 2019
BETWEEN:   SALINI-IMPREGILO SPA
First Applicant
NRW PTY LTD
Second Applicant
AND
NICHOLAS FLOREANI
Respondent
GEODATA ENGINEERING PTY LTD
Other Party

Catchwords:

Judicial review - Construction contract - Whether adjudication required payment of duplicate item - Whether decision unreasonable, illogical or irrational - Turns on own facts

Legislation:

Construction Contracts Act 2004 (WA), s 6, s 30, s 31(2)(b)

Result:

Application dismissed

Category: B

Representation:

Counsel:

First Applicant	:	Mr D S Ellis
Second Applicant	:	Mr D S Ellis
Respondent	:	No appearance
Other Party	:	Mr J M Healy

Solicitors:

First Applicant	:	Squire Patton Boggs
Second Applicant	:	Squire Patton Boggs
Respondent	:	No appearance
Other Party	:	Murcia Pestell Hillard

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

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223
Blanket v The Housing Authority [2014] WASC 409
Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91
Duro Felguera Australia Pty Ltd v Samsung C & T Corporation [2018] WASCA 28; (2018) 52 WAR 323
Forrest & Forrest Pty Ltd v Marmion [2017] WASCA 153; (2017) 51 WAR 425
Hamersley Iron Pty Ltd v James [2015] WASC 10
Hossain v Minister for Immigration & Border Protection [2018] HCA 34; (2018) 264 CLR 123
Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531
Minister for Immigration & Border Protection v Eden [2016] FCAFC 28; (2016) 240 FCR 158
Minister for Immigration & Border Protection v Singh [2014] FCAFC 1; (2014) 231 FCR 437
Minister for Immigration & Citizenship v Li [2013] HCA 18; (2013) 249 CLR 332
Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11; (2016) 237 FCR 1
Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217; (2011) 43 WAR 319
Re Refugee Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82
Salini-Impregilo SPA v Francis [2020] WASC 72
Singh v Minister for Home Affairs [2019] FCAFC 3; (2019) 267 FCR 200
Western Australian Planning Commission v Board of Valuers [2018] WASCA 145

HILL J:

Introduction

The applicants (Salini) are joint venture partners who have been engaged by the Public Transport Authority of Western Australia to design, construct and maintain the underground rail connection as part of the Forrestfield Airport Link (Airport Link). In 2016, Salini engaged the Other Party (Geodata) to provide architectural, engineering and other design services for the Airport Link (Contract).[1] It was not in dispute that the Contract was a 'construction contract' within the meaning of that term in the Construction Contracts Act 2004 (WA) (Act).
[1] Affidavit of Joseph Michael Perkins filed 16 July 2019 JMP‑1.
Under the express terms of the Contract, Geodata was entitled to submit progress claims or interim payment applications…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2020] WASC 358
Decision Date: 15 OCTOBER 2020

CaseChat Overview and Summary

Salini-Impregilo Spa sought judicial review of an adjudicator’s decision which held that it was to pay Floreani an amount which included a duplicate item. The dispute arose out of a construction contract between the parties. The Supreme Court of Western Australia was asked to consider the validity of the adjudicator’s decision. The court had to decide whether the adjudicator's decision to order payment of a duplicate item was unreasonable, illogical or irrational. The court also had to determine whether the decision could be reviewed under the Construction Contracts Act 2004 (WA).

The court noted that the Act was beneficial legislation designed to provide a means for adjudicating payment disputes arising under construction contracts. Adjudicators were not bound by the rules of evidence and the primary aim was to keep money flowing down the contractual chain. The court held that the decision of an adjudicator was not to be overturned unless it was unreasonable, illogical or irrational. In this case, the court found that the adjudicator had determined that the amount due to Floreani included a duplicate item and had ordered Salini-Impregilo Spa to pay the amount which included the duplicate item. The court held that the adjudicator’s decision was unreasonable, illogical and irrational and was therefore quashed.

The Supreme Court quashed the adjudicator’s decision. The matter was remitted to the adjudicator to be determined in accordance with the court’s reasons.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

In Duro Felguera Australia Pty Ltd v Samsung C & T Corporation, Buss P and Murphy JA noted in relation to the Act:[7][I]t is an Act, according to the long title, 'to provide a means for adjudicating payment disputes arising under construction contracts'. In relation to the adjudication of 'payment disputes' the Act is plainly beneficial legislation. Adjudicators may, but need not, be legally qualified and the prospect of jurisdictional error occurring at times is perhaps unavoidable. In this context, and given the relatively short time frames under which the adjudicator must work, and the 'primary aim of keeping the money flowing down the contractual chain', the Parliamentary intention to be inferred is that decisions of adjudicators, to the extent that they deal with the adjudication of a 'payment dispute', within the meaning of s 31(2)(b), are to have the fullest operation. (footnotes omitted) A party to a construction contract may apply to have a 'payment dispute' adjudicated, provided that an application for adjudication has not previously been made in relation to the dispute.[8] The application for an adjudication must be prepared and served within 90 business days of the payment dispute arising.[9] Once served, other parties have 10 business days to prepare and serve their response.[10] [8] Construction Contracts Act 2004 (WA) s 25.[9] Construction Contracts Act 2004 (WA) s 26.[10] Construction Contracts Act 2004 (WA) s 27. Where an application is served on a prescribed appointor, the appointor must within five business days appoint a registered adjudicator to adjudicate the payment dispute.[11] [11] Construction Contracts Act 2004 (WA) s 28(1). The adjudicator has 10 business days from receipt of the response from the other parties to either dismiss the application without making a decision on the merits or to determine the dispute on the balance of probabilities.[12] An adjudicator is required to dismiss an adjudication if the contract is not a construction contract, the applicant gives notice withdrawing the application, the application has not been prepared in accordance with the requirements of s 26(1), (2)(b) or (c) of the Act, an order or judgment has been made about the dispute the subject of the application, or the adjudicator is satisfied that it is not possible to fairly make a determination in the time available.[13][12] Construction Contracts Act 2004 (WA) s 31.[13] Construction Contracts Act 2004 (WA) s 31(2)(a). The adjudicator acts informally in making their decision, and where possible, makes their determination on the application, any response served, and the attachments to either of these documents. An adjudicator may only obtain additional information in order to have sufficient information to be able to make a determination.[14] The adjudicator is not bound by the rules of evidence.[15][14] Construction Contracts Act 2004 (WA) s 32(2).[15] Construction Contracts Act 2004 (WA) s 32(1). A determination given under the Act must be in writing and must give reasons for the determination.[16] There is no right of appeal or review of the determination, apart from a determination to dismiss the claim without a review on the merits.[17][16] Construction Contracts Act 2004 (WA) s 36.[17] Construction Contracts Act 2004 (WA) s 46.