Southern Han Breakfast Point Pty Ltd v Lewence Construction Pty Ltd & Ors
[2016] HCATrans 173
[2016] HCATrans 173
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S222 of 2015
B e t w e e n -
SOUTHERN HAN BREAKFAST POINT PTY LTD
Applicant
and
LEWENCE CONSTRUCTION PTY LTD ACN 155 305 507
First Respondent
IAN HILLMAN
Second Respondent
AUSTRALIAN SOLUTIONS CENTRE
Third Respondent
Application for special leave to appeal
KEANE J
NETTLE J
TRANSCRIPT OF PROCEEDINGS
AT BRISBANE ON THURSDAY, 28 JULY 2016, AT 9.31 AM
Copyright in the High Court of Australia
MR M. CHRISTIE, SC: May it please the Court, I appear with my learned friend, MR D.P. HUME, for the applicant. (instructed by CCS Legal Pty Ltd)
MR S. ROBERTSON: May it please the Court, I appear with my learned friend, MR P.F. SANTUCCI, for the first respondent. (instructed by Maddocks Lawyers)
KEANE J: Mr Christie, you have a summons to amend the name of the appellant?
MR CHRISTIE: That is so, your Honour.
KEANE J: Is there any opposition?
MR ROBERTSON: No opposition to that, your Honour.
KEANE J: Very well. There will be an order in terms of the summons filed on 25 July 2016. Yes, Mr Christie.
MR CHRISTIE: Your Honours, I also mention the matter on behalf of the second and third respondents, who have filed submitting appearances.
KEANE J: Thank you.
MR CHRISTIE: Your Honours, this application concerns the Building and Construction Industry Security of Payment Act (NSW). There is legislation relevantly to the same effect in all States except for Western Australia. The Act has assumed great commercial significance. Billions of dollars’ worth of claims have been adjudicated under this legislation. The legislation extends beyond the construction industry to related industries and to related occupations. Statutory adjudication under this legislation now sits alongside arbitration and litigation as a primary form of dispute resolution in the construction industry, and I should add that this Court has yet to consider this scheme.
This application raises two narrow points of statutory construction of fundamental importance to the operation of the Act. The first concerns the concept of “reference date” which is found in section 8 of the Act which I will take your Honours to in a moment. The question is whether the existence of a reference date is a jurisdictional fact. There is now divergence between the Queensland and New South Wales courts on this issue.
The Queensland approach, if I might call it that, is to the effect that it is a jurisdictional fact, and that was the approach adopted by single instance decisions in New South Wales until the decision of the court below. In our respectful submission, consistency in the operation of these Acts is important, given the significance of the construction industry to the national economy.
The second issue is whether certiorari is available for non‑jurisdictional error on the face of the record. The New South Wales Court of Appeal has held in a line of authority referred to in our supplementary submissions that it is not. It is further emphatically stated that it does not propose to revisit this question and it has expressly stated that if its position is to be challenged, the High Court is the place to do so.
KEANE J: It only arose in this case though as – I will not say a throwaway line – but it arose in Justice Sackville’s judgment. Your client sought a declaration. If your client is right about the section 13 point - section 8 and section 13 point – then your client would be entitled to a declaration.
MR CHRISTIE: Yes.
KEANE J: What purpose really is served by pursuing what started as a bit of a sideshow really and certainly was not the relief that you originally sought?
MR CHRISTIE: It is very much in the alternative, your Honours, because in the event that your Honours were to decide or the Court were to decide, were special leave granted, that in fact the existence of a reference date is a matter for the adjudicator and not for the court, then we would be saying that the adjudicator made an error on the face of the record and, indeed, the same error that the court below in the Court of Appeal made as to whether there was a reference date or not.
KEANE J: Well, if he made an error, it was an error that meant that he had no authority to do what he did. So what he did was, in the eye of the law, nothing.
MR CHRISTIE: I accept that, your Honour. I do embrace that. But we would still submit that this would be an appropriate vehicle to determine that point for the precise reason that the reasoning that the Court of Appeal gave in the alternative as to why there was a reference date was almost exactly the same reasoning adopted on the face of the record by the adjudicator.
NETTLE J: But you accepted before the Full Court, did you not, or before the Court of Appeal, that error of law on the face of the record was not a basis for certiorari unless it were jurisdictional error?
MR CHRISTIE: Implicitly, your Honour. We did not press error of law on the face of the record precisely because the Court of Appeal stated that it will not entertain such an application. I can take your Honours to the Court of Appeal decision if your Honours would like me to do so.
NETTLE J: In previous authority?
MR CHRISTIE: Yes.
NETTLE J: So it is Justice Sackville in a sense on a frolic of his own in raising the point?
MR CHRISTIE: Exactly.
NETTLE J: Is there reason to think that what was previously said on the subject by the Court of Appeal is wrong?
MR CHRISTIE: We respectfully submit that it is wrong because it sits uncomfortably with the jurisprudence of this Court, which is to the effect that certiorari for non‑jurisdictional error of law on the face of the record can only be rendered unavailable in circumstances where the statute expressly states so or where, by necessary implication, such a construction is available.
NETTLE J: What is the reasoning – that it is necessarily implicit in the statute that it has been excluded, is it?
MR CHRISTIE: The reasoning adopted against our submission would be this is a fast‑track procedure and it would be – the legislature did not intend for the judiciary to get involved in questions like this; putting it in a nub.
NETTLE J: Or statutory implication or purposive construction or some such thing.
MR CHRISTIE: Correct. Correct, but that has been recently challenged by Acting Justice Emmett in a decision which my learned friend has drawn your Honours’ attention to in his supplementary submissions. It has also been challenged by Justice Basten in obiter dicta in Chase Oyster Bar in the case we have taken your Honours to. So your Honours should be under no misapprehension. The proposition that certiorari for non‑jurisdictional error of law on the face of the record has been challenged by at least two senior judges.
KEANE J: Well, there is no doubt it is a very interesting question. It is just that in this case it rather looks like an interesting issue that is rather like the tail wagging the dog ‑ ‑ ‑
MR CHRISTIE: Well, with respect ‑ ‑ ‑
KEANE J: ‑ ‑ ‑ where the central question is the operation of the legislation, and if you are right about that, then you are entitled to the relief you actually sought.
MR CHRISTIE: That is so, your Honour. I accept that.
KEANE J: We perhaps should not detain you from telling us what you want to tell us about that main question.
MR CHRISTIE: Yes, your Honours. Can I do so by just taking your Honours very quickly to the Act? The basic object of the Act is to ensure that those who carry out construction work or provide related goods and services receive timely payment for their work. The Act achieves that goal by creating the concept of a reference date which identifies the specific intervals at which payments are to be made.
The Act creates a scheme which entitles progress payments to be vindicated through an adjudication process and it is established that those adjudicators are subject to the Supreme Court supervisory jurisdiction. So, in that sense, the Act brings what is perhaps an increasingly common administrative overlay to what are commercial disputes.
Now, your Honours, I have copies of the Act, if I can just take your Honours to some key sections. The Act has as its starting point the existence of a construction contract which is defined broadly in section 4. In sections 5 and 6 your Honours will see that it applies to construction work and to related goods and services. Then turning to section 8 which is under the heading “Rights to progress payments”, your Honours will see that it states that, “On and from each reference date”, the persons who are identified there are entitled to progress payments. The entitlement is not an absolute entitlement, your Honours. It exists only on and from each reference date. Then “reference date” is defined in section 8(2) and it is defined to be:
a date determined by or in accordance with . . . the contract –
in 8(2)(a) or, if no such provision exists, then there are default provisions whereby the reference date is the last date of each month. If I can then take your Honours to Part 3 – excuse me, I will just go back a moment, your Honours, to sections 9 and 10 which deal with the valuation and calculation of progress payments, and we say this is the engine room of the Act. That is fundamentally what adjudicators are required to do – determine whether the work was performed, and to value it. The courts have emphasised that that is the primary function of adjudicators.
Then one turns to section 13, your Honours, which is under the heading “Procedure for recovering progress payments”. Your Honours will see that section 13(1) says:
A person referred to in section 8(1) who is or who claims to be entitled to a progress payment –
I would ask your Honours to note those words “or who claims to be entitled to a progress payment” because they are the words upon which the decision of the Court of Appeal has its foundation. Section 13(5) provides, importantly, that:
A claimant cannot serve more than one payment claim in respect of each reference date –
The Court of Appeal has held in other decisions that whether or not more than one payment claim has been served per reference date is a jurisdictional matter for the court to determine. Can I then take your Honours to Division 2 of Part 3 which commences with ‑ ‑ ‑
KEANE J: What is the consequence if it is concluded that there have been two claims? Are both null, or does one pick one or the other or ‑ ‑ ‑
MR CHRISTIE: The second is void, your Honour.
KEANE J: The second claim is void?
MR CHRISTIE: The second one is void. But in an inquiry as to whether section 13(5) has been contravened, the court must obviously, with great respect, identify what the reference dates are. That is the first question the courts must do. So an anomaly arises out of the Court of Appeal’s decision whereby for some purposes the court decides the reference dates but for other purposes the adjudicator does, which, in our respectful submission, is not what Parliament could possibly have intended given that it can give rise to conflicting decisions.
Can I then take your Honours to the adjudication of disputes which commences with section 17? Your Honours will see that the adjudicational process is triggered by the making of an adjudication application, and in section 17(6) the application is referred to an adjudicator and that referral gives the adjudicator power to consider whether to award a progress payment.
Then, turning to section 22, your Honours will see that an adjudicator’s determination is made pursuant to that section, commencing with the words, “An adjudicator is to determine” – is to determine the amount, and I pause to note section 22(1) which gives the adjudicator power to determine the amount, which is a valuation exercise, and it will depend upon of course an assessment of what work was done and what the value of that was, and we submit that that is quite distinct from the determination of the matters in section 8(1). The matters in section 8(1), we respectfully submit, are essential statutory preconditions to an entitlement to a progress payment.
Now, just returning to the Act briefly, your Honours, section 23 requires the respondent to pay the adjudicated amount, if any, and by reason of section 25, the claimant can obtain a judgment debt. Then section 32 confirms that payments may be reversed in final proceedings, whether through court proceedings or arbitration. Of course, final proceedings might be years in the future, if at all.
In practice, payments will be final and irreversible in the not uncommon event that the contractor becomes available and, as your Honour Justice Keane held in RJ Neller, the Act expressly allocates the risk of contractor’s insolvency upon owners, and that is an important feature of the Act. So, although one often hears people refer to interim payments, they are in substance final unless otherwise challenged.
In this case, the learned primary judge held that the existence of a reference date was a jurisdictional fact. Can I take your Honours to application book page 8, paragraph 13? That was a submission which the court ultimately accepted and it was accepted in paragraph 40. Now, when the matter came to the Court of Appeal, the primary judgment was delivered by her Honour Justice Ward and Acting Justice Sackville and Justice Emmett added their own supplementary comments, very much in accord with her Honour’s reasoning.
If I can take your Honours very briefly to application book 49, her Honour there refers around the middle of the page to Queensland authorities which are consistent with or support the applicant’s position, and her Honour then also referred to, at application book page 51, paragraph 59, to New South Wales first instance decisions which also support the applicant’s position.
Her Honour’s reasoning focused upon section 13(1), the words “or who claims to be entitled”, and her Honour’s reasoning was in essence that a claim is sufficient for an adjudicator relevantly to have jurisdiction, and that an entitlement need not actually exist. Now, in our respectful submission, just returning to section 13(1), that section concerns who is entitled to serve a payment claim. At most, we would respectfully submit that it is a standing provision. It is not a provision which goes to the jurisdictional issues whatsoever.
Now, your Honours will have noted in our written submissions we have set out five reasons why we say, with respect, that the existence of a reference date is a jurisdictional fact. But the basic point is this, your Honours. The existence of a reference date is an essential aspect of the entitlement to payment, no less than the existence of a construction contract. The very point is that it is a progress payment, that is, something arising periodically, and it is the periodic nature of the payment which gives the reference date its central role in this legislation.
We respectfully submit that an adjudicator does not have the power to award an amount where no entitlement at all arises because there is no – there is an absence of this central requirement, and we emphasise that the Act draws a distinction between the questions of the amount of the progress payment, which is solely a matter for the adjudicator, a valuation exercise, and questions of entitlement in the first place.
KEANE J: Well, you say that after the contract is terminated, by whom does not matter, that it is terminated in futuro and after that has happened there is no reference date because there is no contract?
MR CHRISTIE: That is so, your Honour. May I just elaborate upon that? In the normal course, a standard construction contract will contain an express reference date which does survive the termination of the contract. Naturally, it will contemplate a claimant making a claim upon completion of the works and, indeed, there will normally be a further reference date upon the expiry of the fixed liability period where the claimant would wish cash retention to be released. But in cases where a party terminates the contract, so in this case on this scenario my friend’s client terminated for alleged breach by my client, in those circumstances there are no more reference dates.
Now, her Honour accepted that from a contractual point of view there would be no entitlement to further progress claims. But her Honour adopted the wrong test in determining whether or not there was a reference date. Can I take your Honours to that very briefly? Your Honours will find that at application book page 56. At the fourth‑last line on the page her Honour says this:
There not being a contractual provision to preclude the exercise of the statutory right to make a progress payment claim on that date, I would have held that ground 2 of the appeal is made out on that basis.
In other words, what her Honour is saying is, unless we could establish that there was an express contractual provision which precluded a reference date arising, we lose. But that is not the test. The test is not whether there is an express contractual provision precluding them arising. The question is whether there is a contractual provision creating a reference date. Now, we respectfully submit that her Honour made essentially the same error that the adjudicator made. When one goes to page 117 just above line 30, the adjudicator said:
as the Contract fails to include express conditions that provide for the cessation of reference dates after termination I am satisfied that reference dates do continue –
Again, the question is not whether there is an express contract which provides for the cessation of a reference date. The question is whether the contract does contain a provision for a reference date; very different question, your Honours. So, in our respectful submission, both issues of special leave ultimately would require the Court to decide that final question, whether a reference date arises after termination where the contract makes no provision for that.
Your Honours, I do not propose to deal with ground 5 of the draft notice of appeal. We have dealt with that in oral submissions and I do not propose to add to that in oral submissions. But in conclusion, your Honours, the special leave questions are of fundamental importance to the operation of this legislation which is of great importance to the national economy.
I do emphasise that it extends beyond the construction industry to related industries and occupations. It is unsatisfactory, in our submission, that there should be divergence between Queensland and New South Wales which leaves other States in a very difficult position as to which approach to follow. So, in our respectful submission, for those reasons this is an appropriate case for special leave.
NETTLE J: What is the state of the law in Queensland as to non‑jurisdictional error on the face of the record?
MR CHRISTIE: I have just been reminded it is not available in Queensland, but is in Victoria, your Honour, on the current state of authority.
NETTLE J: So there is a three‑way split, as it were?
MR CHRISTIE: That is so, your Honour.
NETTLE J: Two/one split?
MR CHRISTIE: That is so.
NETTLE J: And the legislature is sufficiently comparable to mean that there are not necessarily differences on that point?
MR CHRISTIE: Certainly between New South Wales and Queensland, yes. There may be some minor differences in Victoria, your Honour.
NETTLE J: Thank you.
MR CHRISTIE: May it please the Court.
KEANE J: Thank you, Mr Christie. Yes, Mr Robertson.
MR ROBERTSON: Your Honours, in our submission, the proposed appeal does not enjoy sufficient prospects of success to warrant a grant of special leave. Can I deal first with the error of law on the face of the record question? Even if your Honours were to ignore or overlook the fact that the point was not raised below or, as I think your Honour Justice Keane put it, to allow the tail to wag the dog, and even if this Court was to find that Security of Payment Act determinations are amenable to judicial review for error of law in the face of the record, my learned friend would still fail, and the reason for that is, even if – which my client denies – there was an error, it is not an error which is apparent from the face of the record.
Can I take your Honours directly to the relevant part of the record which your Honours will see starting at application book 116, and could I note that under the Supreme Court Act (NSW) the reasons form part of the relevant record for this purpose. Your Honours see at page 116, starting at paragraph 13, this is the discussion by the adjudicator as to the very point that my learned friend seeks to raise here by way of proposed ground 4.
Your Honours see a detailed consideration of the law and the contractual background. Your Honours can see in particular from paragraph 17 that there is a consideration as to the contract and the adjudicator draws a distinction between the contract here in issue and the contract considered by Justice Ball in the Patrick Stevedores Case referred to in paragraph 14.
What your Honours will not see though in this passage or elsewhere is either a quotation from or a summary of the relevant contractual provisions. For my learned friend to ultimately succeed, even if he demonstrates that determinations are available for non‑jurisdictional error on the face of the record, he needs to demonstrate of, course, an error. In my respectful submission, there is nothing on the face of the record which would permit him to demonstrate that very error.
KEANE J: But he points to paragraph 21.
MR ROBERTSON: He does, and your Honour sees that that ‑ ‑ ‑
KEANE J: He submits that that is a misunderstanding of the operation of the Act.
MR ROBERTSON: But your Honour sees that that very paragraph starts with the words “Based on the above” which, in my submission, must be taken to include paragraph 17. In my respectful submission, paragraph 21 is not to be misread as, in effect, reversing the onus, which is the way my learned friend puts it. Rather, he has considered the contract, he has considered the authorities, and he takes a view as a matter of contract that reference dates continue. That is a matter, in my submission, the Court cannot come to a view one way or another as to whether or not it is erroneous on the face of the record.
In any event, another factor that tends against granting a special leave on this very ground is, in my respectful submission, there is no intermediate appellate court authority which is contrary to the proposition that my learned friend seeks to put, that is to say, that errors of law on the face of the record are available for determinations of this sort.
KEANE J: There is just this bit of dicta?
MR ROBERTSON: There is just this bit of dicta which is obiter and which is not binding on anyone and if the Court needs in effect proof of that, I ran Mr Christie’s very argument in a case called Probuild v Shade Systems [2016] NSWSC 770 where Acting Justice Emmett sitting as a trial judge held that there was no authority. Brodyn 61 NSWLR 421, for example, was not authority for the proposition that jurisdictional error – I am sorry, non‑jurisdictional error on the face of the record was not a ground for review.
NETTLE J: What about Justice Basten’s observation on the point?
MR ROBERTSON: Justice Basten’s observations on the point are consistent with the proposition that relief on that ground is available.
NETTLE J: Is available?
MR ROBERTSON: Is available, your Honour.
NETTLE J: Yes.
MR ROBERTSON: So, in my respectful submission, the point that my learned friend wishes to argue before your Honours was available to him at first instance, was available to him before the Court of Appeal, he could have ran it if he wished to, he chose not to, and, if your Honours grant special leave, my principal defences will be based on matters pertaining to the contract and matters pertaining to the face of the record, rather than dealing with that point of principle, interesting or not.
There is now authority, in particular Justice Emmett’s authority, that says that that kind of relief is available. The position I accept is different in Queensland, but there are some statutory provisions that affect that. But, in my respectful submission, none of the authorities suggest at all, or are binding on any judge or any other court of the Commonwealth, to the effect that that relief is not available.
KEANE J: Do you accept that if it were held that the determination, the question whether there was a relevant reference date was not a matter which the adjudicator was entitled to get wrong, that Mr Christie’s client would not be entitled to a declaration?
MR ROBERTSON: I accept that if – I think the answer to your Honour’s question is yes, but let me make it clear. If my learned friend succeeds in saying that the reference date issue is a jurisdictional fact, I accept that that is then a matter that the Court should determine. I do not accept that he then wins, because he then also needs to overturn the finding of the Court of Appeal on the contractual construction‑type point which was ground 2 below and ground – proposed ground 4.
KEANE J: But they are both questions of substantive law - one, construction of the Act; the other construction of the contract.
MR ROBERTSON: For reasons I will come to in a moment, I do not accept that the second point is wholly a question of contractual construction; it is affected by the Act as well. But the general proposition, if my learned friend succeeds on both of those two arguments, I accept that he would be entitled to the declaratory relief, and I accepted that below. But, in my respectful submission, he will fail on that argument.
Can I take your Honours to the relevant provisions of the Act at page 153 of the application book? This now is dealing with the first of my learned friend’s special leave questions. In my respectful submission, my learned friend’s argument fails to properly accommodate what the Court of Appeal described as a fundamental distinction between section 8 on the one hand and section 13 on the other.
The way the argument was put below, both at first instance and before the Court of Appeal, was to say that the purported payment claim by my client was invalid and therefore could not engage the regime in Part 3 of the Act. It was said to be invalid because my client was not a person who was entitled to serve a payment claim under section 13.
The fundamental distinction that the Court of Appeal, with respect, correctly identified is between what Justice Sackville described as the substantive entitlement in section 8 and dealt with in more detail in Part 2, and what his Honour described as the procedural mechanism in section 13 and the remainder in Part 3. In my respectful submission, it is quite clear from section 13(1) that the legislature intended that a person in the position of my client could validly serve a payment claim if it was entitled as a matter of fact in law or “claims to be entitled” - see those words in the middle of the first line in subsection (1).
It must follow from that, in my respectful submission, that whether or not as a matter of law according to a judge a person in the position of my client is entitled to a progress payment, he, she or it is nevertheless entitled to serve a payment claim and it is then a matter for an adjudicator to determine rather than a matter for a court to revisit on an application for judicial review.
That, in my submission, is confirmed by looking at section 22, which your Honours see on the next page, page 154. Section 22 identifies the job of the adjudicator or, put another way, the adjudicator’s jurisdiction, if it has been properly invoked, and that is to determine “the amount of the progress payment” and then in parentheses “(if any)”.
In the face of that, in my respectful submission, it is clear to demonstration that an adjudicator has the power and has the jurisdiction not just to determine the amount of the progress payment, but also has the power to determine whether there was an entitlement at all.
KEANE J: You do not think there is anything significant in the circumstance that section 22(1) does not authorise the adjudicator to determine the entitlement to a progress payment?
MR ROBERTSON: In my respectful submission, it in effect does by the use of the parenthetical words “if any”. If then determined that one person is entitled – is required to pay to another a million dollars, it is also entitled to say it is zero for various reasons, including that there was no reference date which gave an entitlement under section 8. In my submission, it is clear from the structure of the Act that questions of that sort were intended to be determined by adjudicators rather than by courts on judicial review.
KEANE J: Well, looking at the question of the structure of the Act, do you accept that the Act assumes the operation of the contractual provisions and seeks to give them particular effect in particular circumstances?
MR ROBERTSON: Yes, with a qualification. The particular context, to analyse that, in my submission, is in section 8(2) on page 153 of the application book. Subsection 2(a) does not simply say one goes to the contract and that is the end of it. What in effect paragraph (a) is doing is picking up provisions of the contract and applying them for the purposes of the statute. The possible analogy to draw is with section 79 of the Judiciary Act. One has a look at the contract. One construes it, picks up the contractual provisions and then applies them for the purposes of the statute.
KEANE J: But does not alter them, does not alter the substantive contractual provisions ‑ ‑ ‑
MR ROBERTSON: Well, they may ‑ ‑ ‑
KEANE J: ‑ ‑ ‑ for the benefit of the claimant?
MR ROBERTSON: They may, depending on the circumstances. For example, if a contract purported to say you cannot serve any payment claims at all subject to certain conditions, an adjudicator and, if necessary, a court might come to the view that they are picked up and in effect put down into the statutory scheme in exactly the same way, not dissimilar to the way in which under section 79 there might be a reference to the words “Supreme Court” and when applied to the Federal Court they might be construed to mean Federal Court. So I accept it is principally a matter of contractual construction, but the question is what is the date determined by or in accordance with the terms of the contract?
Justice Ward’s point in allowing the appeal on ground 2 was to say, well, when we proceed in that fashion, a date determined by or in accordance with the contract includes 8 November, and that is an available reference date in which a progress payment or a progress claim may be made. Another way of putting a similar argument is to keep in mind that the termination assumption of this case was on the assumption that my learned friend’s client repudiated the contract and that my client accepted that repudiation and terminated it.
A way of putting the same argument and reaching the same conclusion is to say that Parliament should not be taken to have intended, and the contractual parties should not have been taken to have intended, to prevent my client from claiming a progress payment for the period between, in this case, 9 October and 27 October in circumstances where the only reason the contract was terminated was by reason of the repudiation by the other party, in other words, in circumstances where the contract contemplated progressive progress payments and where the Act contemplates precisely the same thing. Why by reason of the default of the principal and repudiation of the principal should my client not be in a position to claim that progress payment?
KEANE J: I will answer your rhetorical question with another one. Why would we attribute to the Parliament an intention that the contractual rights of parties might be altered by a mistaken view by an adjudicator as to the existence of a reference date?
MR ROBERTSON: Because plainly in Part 3 the question of the entitlement to a progress payment, if any – see section 22 – has been put in the hands of the adjudicator rather than the hands of a court. These kinds of questions can raise quite difficult factual issues. Assume, for example, that the reference date is by reference to what is sometimes described as milestone payments.
Say, it says you are entitled to make a progress claim for each 10 per cent of the work that is done. With a contract of that sort, it would always be open to the principal to come to court and say, well, no, even though the contractor says that he has completed 10 per cent of the work, he has only finished 9.8 per cent of the work or 9 per cent of the work, and therefore he has no entitlement to make a payment claim. Therefore to the extent to which an adjudicator found to the contrary, it is invalid, we should not be obliged to pay and we will have a one‑week, two‑week, three‑week construction case as to whether the state of the works was at 10 per cent, 9 per cent or 11 per cent.
In my respectful submission, the whole context of the Act is to have a fast and efficient way of making progress payments stick to construction contractors. Any error that is made can be fixed through the preservation of rights contemplated by section 32 which my learned friend, Mr Christie, took your Honours to. As a result of that, the intent that should be ascribed to the Parliament is to limit the grounds for judicial review, in particular in light of the fact that subsection (1) does not just say a person who is entitled to a progress payment may claim; it is a person who is or who claims to be entitled to that progress payment.
KEANE J: Do you accept that there is a conflict between this decision and the Queensland decisions?
MR ROBERTSON: No, I do not. In my respectful submission, there is but one intermediate appellate court decision that after argument considers this very point, and that is the case from which special leave to appeal is sought. I accept that in particular in a series of first instance decisions in New South Wales and in Queensland there is an assumption that reference dates are a jurisdictional matter, I accept that, but it is apparent from a close reading of those authorities that the point was not argued and it proceeded by way of an assumption and nothing else and, at least so far as I am aware, there are no Victorian authorities that are contrary to the position put in the Court of Appeal.
So, in my respectful submission, the Commonwealth now has the benefit of a well‑reasoned, well‑argued intermediate appellate court authority on this very point. One would expect the other courts of the Commonwealth to follow that very authority and, in my respectful submission, there is not a proper basis, or at least a properly arguable basis, for special leave on that very ground to be granted.
Can I just deal very briefly with my learned friend’s section 13(5) point, which is his proposed ground 5? Your Honours will see that on page 154 of the application book. It is put in favour of both that ground and in favour of what I might call special leave question 1 that there may be some inconsistency between the decision of the Court of Appeal in this case and the way in which section 13(5) should be dealt with. In my respectful submission, not so, essentially for the reasons that the Court of Appeal identified.
Subsection (5), in my submission, really raises a question of characterisation or really a question of fact rather than a question of law. I accept that it is a jurisdictional matter and I accepted that below. The effect of it is to say that if one has already served a payment claim in respect of, that is to say, which relates to a reference date, and then seeks to in effect repeat that claim by making a further payment claim in respect of that very same reference date then it would be invalid. That kind of analysis is not relevant for a factual scenario such as which is before your Honours where the impugned payment claim claimed for different work than the payment claim which was made on 8 October.
The impugned payment claim included a claim for work between 9 October and 27 October, and the Court of Appeal held that that could not
on any view be regarded as being in respect of the same reference date as the payment claim which was made in respect of 8 October. So, even if my learned friends were to obtain special leave on that very point, in my submission, they would fail and they would fail for the very reasons that the Court of Appeal identified, which is the reasons that I have just dealt with by way of summary.
So, for all of those reasons, in my respectful submission, even if your Honours were to consider the error of law on the face of the record point to be interesting, my learned friends would nevertheless fail, and that this is not an appropriate vehicle in which to determine that question. If there is an appropriate vehicle, it is probably the Shade Systems Case to which I have already referred.
As to the contractual construction point between section 8 and section 13, in my respectful submission, the unanimous decision of the Court of Appeal was plainly correct and there are insufficient prospects of having that disturbed on an appeal. If the Court pleases.
KEANE J: Thank you, Mr Robertson. Yes, Mr Christie.
MR CHRISTIE: May it please the Court. Your Honours, the first point my friend made was to the effect that the law is certain in New South Wales and that certiorari is available for non‑jurisdictional error of law on the face of the record. With great respect, for the reasons given in our supplementary submissions, there is a long line of authority in New South Wales completely contrary to that proposition. My friend states, well, Brodyn, which stated that certiorari is unavailable for error of law on the face of the record, was obiter dicta. But it has been followed in subsequent Court of Appeal cases.
Now, I would just like to hand up one case, your Honours, which really makes this point crystal clear. It is referred to in our supplementary submissions. It is a decision of the Court of Appeal in Downer. If your Honours go to page 97 of the judgment of his Honour Justice Giles, with whom the other judges agreed, your Honours will see that there was a notice of contention filed by the principal and at paragraph 93, the court said this:
The submissions in support of these grounds were tantamount to reviewing the merits of the adjudicator’s decision‑making for error in law or fact, and included that Brodyn Pty Ltd v Davenport “set the requirements for validity too low”.
Turning to the next page at paragraph 97, third line:
Certainty in the approach to such challenges will only come with a decision of the High Court.
Then after referring to error of law in the middle of paragraph 98, the court said:
The amounts often at stake in the challenges which come before the court make an application for special leave to appeal to the High Court likely –
Then his Honour concludes that he favoured:
maintaining Brodyn Pty Ltd v Davenport until the High Court [determines] otherwise.
So, with great respect, although the unavailability of certiorari has been doubted in obiter dicta by Justice Basten, it is completely incorrect to say that certiorari is available in New South Wales, and Justice Emmett’s decision at first instance made no reference to any of those authorities whatsoever.
The second point to note, your Honours, is we would emphasise the word “amount” in section 22(1). The role of the adjudicator is to determine the amount, to get his hands dirty, perhaps go onsite, see what work has been done, determine carefully what the value of that work is by reference to the criteria in sections 9 and 10. That is the fundamental role of the adjudicator.
Now, my learned friend gave what we would respectfully submit is an extreme example and extreme examples never make good law. He gave the example of a milestone payment according to which a reference date was determined. We acknowledge there will be cases in which determining a reference date may be difficult. But it will more often than not raise difficult questions of law, and all the cases which have come to the court concerning reference dates have concerned legal issues, including in the Queensland Supreme Court Court of Appeal in the John Holland Case we have referred to. It would be very rare, we would respectfully submit, that the type of case would arise that my friend has stated.
But, in any event, and just to finish, if your Honours go to the application book, your Honours will see that this Act does deal with very large sums of money. Now, if one goes the application book page 108, for example, these are the most recent statistics available from the Queensland Government. At page 108 your Honours will see near the bottom of the page that the average claim – this is five lines from the bottom – the average
claim, at least in Queensland, for that year was 5.2 million, and indeed there was one claim for 360 million.
The idea that a non‑legal adjudicator whose primary function is to measure and value work would be required to embark on a detailed legal analysis of reference dates, in our respectful submission, requires much stronger language than section 22 has. Section 22 expressly says what the adjudicator is required to do. Identifying the reference date is not one of those matters.
Finally, your Honours, we would respectfully submit that, if we are incorrect on the jurisdictional point, we can only succeed if we succeed on the non‑jurisdictional error or law point. That is why we respectfully submit that if special leave is given for one, it ought to be given for the other. They are our submissions, your Honours.
MR ROBERTSON: Would your Honours just permit me to say one sentence? Simply to note that the Downer Construction Case that was just referred to by my learned friend was decided before the decision of this Court in Kirk 239 CLR 531, and before the decision of the Court of Appeal in Chase Oyster Bar 78 NSWLR 393.
KEANE J: Thank you, Mr Robertson. There will be a grant of special leave in this matter confined to paragraphs 2, 4 and 5 of the draft notice of appeal at page 79 of the application book. Mr Christie, in terms of time, how long do you think the argument of the matter would require?
MR CHRISTIE: I think half a day, your Honour.
MR ROBERTSON: I would say half a day to a day. It took a fairly full day before the Court of Appeal.
KEANE J: Yes, I think half a day might be a little optimistic, Mr Christie.
MR ROBERTSON: Can I raise one other matter? At paragraph 10 of my learned friend’s supplementary submissions, they consent to an order that my learned friend’s client provide security for costs of the appeal and I seek an order in the terms identified in those submissions by the applicant.
KEANE J: I am sorry, this is?
MR ROBERTSON: It is a separate submission. It is not part of the application book.
KEANE J: I see.
MR ROBERTSON: Described as the applicant’s submissions in reply filed 28 June.
KEANE J: I see.
MR ROBERTSON: Your Honours will note from the summons that the applicant is now in liquidation.
KEANE J: Yes. Mr Christie, do you consent to the making of an order in those terms?
MR CHRISTIE: I do not oppose it, your Honour.
KEANE J: Very well then, we make an order in terms of paragraph 10 of the applicant’s supplementary submissions filed on 28 June 2016. The parties should obtain a copy of the directions for filing of submissions in relation to the hearing of this matter. Those directions are somewhat truncated, with a view to enabling the matter to be dealt with hopefully and possibly in the October sittings.
MR CHRISTIE: May it please the Court.
MR ROBERTSON: May it please the Court.
AT 10.17 AM THE MATTER WAS CONCLUDED
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