Tianqi Lithium Kwinana Pty Ltd v MSP Engineering Pty Ltd [No 2] - [2020] WASCA 201

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   TIANQI LITHIUM KWINANA PTY LTD -v- MSP ENGINEERING PTY LTD [No 2] [2020] WASCA 201
CORAM:   BUSS P
MURPHY JA
MITCHELL JA

HEARD:   8 SEPTEMBER 2020 & SUPPLEMENTARY SUBMISSIONS 9, 16 & 23 OCTOBER 2020
DELIVERED          :   3 DECEMBER 2020
FILE NO/S:   CACV 84 of 2020
BETWEEN:   TIANQI LITHIUM KWINANA PTY LTD
Appellant
AND
MSP ENGINEERING PTY LTD
Respondent

FILE NO/S: CACV 85 of 2020
BETWEEN: TIANQI LITHIUM KWINANA PTY LTD
Appellant
AND
MSP ENGINEERING PTY LTD
Respondent

ON APPEAL FROM:
Jurisdiction              :   SUPREME COURT OF WESTERN AUSTRALIA
Coram:   MASTER SANDERSON
Citation: MSP ENGINEERING PTY LTD -v- TIANQI LITHIUM KWINANA PTY LTD [2020] WASC 251
File Number            :   CIV 1319 of 2020, CIV 1318 of 2020

Catchwords:

Contracts - Construction contracts - Dispute between principal and contractor under construction contracts - Contractor's application for summary judgment in respect of certified payment claims - Where principal contended proceedings were required to be stayed pursuant to s 8(1) Commercial Arbitration Act 2012 (WA) - Where primary court refused to grant stay

Contracts - Arbitration agreement - Whether primary court ought to have ordered stay under s 8(1) Commercial Arbitration Act 2012 (WA) - Whether proceedings brought in 'a matter which is the subject of an arbitration agreement'

Contracts - Proper construction of contracts - Where arbitration clause is expressed not to prejudice the right of a party to 'institute proceedings to enforce payment due under the Contract' - Whether reference to 'proceedings to enforce payment due' is to proceedings which are capable of summary determination - Whether primary court erred in failing to find that the claim was not capable of summary determination - Whether triable issue raised before primary court

Legislation:

Commercial Arbitration Act 2012 (WA), s 1C, s 2, s 4, s 7(1), s 7(2), s 8, s 8(1), s 9, s 17

Result:

Appeal dismissed

Category: A

Representation:

CACV 84 of 2020

Counsel:

Appellant	:	J K Taylor SC
Respondent	:	G R Donaldson SC

Solicitors:

Appellant	:	Clayton Utz
Respondent	:	Squire Patton Boggs

CACV 85 of 2020

Counsel:

Appellant	:	J K Taylor SC
Respondent	:	G R Donaldson SC

Solicitors:

Appellant	:	Clayton Utz
Respondent	:	Squire Patton Boggs

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

Algons Engineering Pty Ltd v Abigroup Contractors Pty Ltd (1998) 14 BCL 215
Amcor Packaging (Aust) Pty Ltd v Baulderstone Pty Ltd [2013] FCA 253
Aquatec‑Maxcon Pty Ltd v Minson Nacap Pty Ltd [2004] VSCA 18; (2004) 8 VR 16
Bayside Civil & Drainage Pty Ltd v Marinestar Holdings Pty Ltd [2000] WASC 17
Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219
Bulkbuild Pty Ltd v Fortuna Well Pty Ltd [2019] QSC 173
Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66; (2013) 298 ALR 666
Casaceli v Natuzzi SpA [2012] FCA 691; (2012) 292 ALR 143
Comandate Marine Corporation v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45
CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [No 2] [2017] WASCA 123
CPD Contractors Pty Ltd v Celsus Pty Ltd (fka SA Health Partnership Nominees Pty Ltd) [2017] FCA 1620; (2017) 353 ALR 84
Cufone v Cruse [2000] SASC 17
Cufone v Cruse [2000] SASC 304; (2000) 210 LSJS 238
Daysea Pty Ltd v Watpac Australia Pty Ltd [2001] QCA 049; (2001) 17 BCL 434
Devaugh Pty Ltd v Lamac Developments Pty Ltd [1999] WASCA 280; (2000) 16 BCL 378
Ecosse Property Holdings Pty Ltd Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640
Eriez Magnetics Pty Ltd v Duro Felguera Australia Pty Ltd [2017] WASC 304
Fitzpatrick v Emerald Grain Pty Ltd [2017] WASC 206
Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd [2014] VSCA 166; (2014) 44 VR 64
Four Colour Graphics Australia Pty Ltd v Gravitas Communications Pty Ltd [2017] FCA 224
Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160
Gilgandra Marketing Co-Operative Ltd v Australian Commodities & Marketing Pty Ltd [2010] NSWSC 1209
Glenview Home Inc v Digital Telecommunications Systems Pty Ltd [2003] TASSC 62
GR Engineering Services Ltd v Eastern Goldfields Ltd [2018] WASC 19
Joint Stock Co 'Aeroflot Russian Airlines' v Berezovsky [2013] EWCA Civ 784; [2013] 2 Lloyd's Rep 242
Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [No 3] [2013] VSC 435
Main Roads Construction Pty Ltd v Samary Enterprises Pty Ltd [2005] VSC 388
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104
MSP Engineering Pty Ltd v Tianqi Lithium Kwinana Pty Ltd [2020] WASC 251
Nearmap Ltd v Spookfish Pty Ltd [2014] NSWSC 1790
Queensland University of Technology v Project Constructions (Aust) Pty Ltd [2002] QCA 224; (2003) 1 Qd R 259
Re Concrete Constructions Group Pty Ltd [1996] QCA 086; (1997) 1 Qd R 6
Recyclers of Australia Pty Ltd v Hettinga Equipment Inc [2000] FCA 547; (2000) 100 FCR 420
Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 366 ALR 635
Rinehart v Rinehart (No 3) [2016] FCA 539; (2016) 257 FCR 310
Rinehart v Welker [2012] NSWCA 95; (2012) 95 NSWLR 221
Robotunits Pty Ltd v Mennel [2015] VSC 268; (2015) 49 VR 323
Saldanha v City of Belmont [2018] WASCA 7
Samsung C&T Corporation v Duro Felguera Australia Pty Ltd [2016] WASC 193
Seeley International Pty Ltd v Electra Air Conditioning BV [2008] FCA 29; (2008) 246 ALR 589
Straits Exploration (Australia) Pty Ltd v Murchison United NL [2005] WASCA 241; (2005) 31 WAR 187
Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 322
The Property People v Housing New Zealand Ltd (1999) (HC) 14 PRNZ 66
Vantage Holdings Pty Ltd v JHC Developments Group Pty Ltd [2011] QSC 155
Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392
Viridian Noosa Pty Ltd v Neumann Contractors Pty Ltd [2009] QSC 398

Table of contents

Introduction

The contract

The commencement of proceedings, dispute notices and the appointment of an arbitrator

Tianqi's application for a stay

The master's findings in the primary decision

The appeal

Tianqi's grounds and contentions

Ground 1

Ground 2

Ground 3

Ground 4

MSP's answer and notice of contention

Further submissions of the parties

The Arbitration Act

The Arbitration Act provisions

Section 8(1) of the Arbitration Act

Burden and standard of proof

Need for a sustainable argument for there to be a matter

The proper construction of the contracts

Constructional choices

Clause 37

Clause 42.4

Consistency with commercial purpose

Authorities

Conclusion as to proper construction

Characterisation of the matter in which the primary proceedings were brought

Certification of amount payable under cl 37.2 and availability of set-off

Tianqi's contentions concerning avoidance of the contracts ab initio

Tianqi's notices of dispute

Tianqi's submissions on the stay application

The master's decision

Tianqi did not establish that MSP's claim was not capable of summary determination

Disposition of the appeal

Conclusion

JUDGMENT OF THE COURT:

Introduction

This is an appeal against a decision of Master Sanderson in MSP Engineering Pty Ltd v Tianqi Lithium Kwinana Pty Ltd[1] (primary decision).
[1] MSP Engineering Pty Ltd v Tianqi Lithium Kwinana Pty Ltd [2020] WASC 251.
The master dismissed an application by the appellant (Tianqi) to stay proceedings commenced by the respondent (MSP) in relation to moneys allegedly owing by Tianqi to MSP pursuant to two (relatively identical) contracts, under which Tianqi engaged MSP to design and construct a lithium hydroxide processing plant in Kwinana. The two contracts are referred to as 'LHPP1' and 'LHPP2'. MSP claims that, under LHPP1, a payment of $26,969,407.88 has been certified by the Superintendent as due by Tianqi to MSP, and that, under LHPP2, a payment of $5,643,951.49 has been certified by the Superintendent as due by Tianqi to MSP. In each case the certification was made under cl 37 of the relevant contract.
There was no dispute before the master that (1) the contracts were on foot, and (2) the relevant payments had been duly certified by the Superintendent.[2]
[2] Primary decision [5].
Tianqi contends that the claims the subject of the primary proceedings are required to be dealt with by arbitration in accordance with s 8 of the Commercial Arbitration Act 2012 (WA) (Arbitration Act). Tianqi applied to stay the primary proceedings on that basis. Master Sanderson dismissed the stay application and made programming orders for a summary judgment application by MSP in relation to the claims.
Tianqi seeks leave to appeal against the orders dismissing its application to stay the primary proceedings. MSP resists the grant of leave and has filed a notice of contention in the appeal. By its notice of contention, MSP alleges in effect that the master's decision should be upheld because (1) on the proper construction of the contracts, the proceedings brought by MSP are to enforce payment due under the contracts in accordance with cl 42.4, and (2) even if Tianqi advanced an argument before the master that the contracts are void by reason of pre‑contractual misleading and deceptive conduct, the relevant clause relating to the enforcement of payments due under the contracts could not be void.

The contract[3]

[3] The contract which (according to the parties) is relevant for present purposes is annexed to the affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑1, GB 70 ‑ 273. A distinction was not drawn by the parties for present purposes between LHPP1 and LHPP2.

The general conditions of the contract comprised, with amendments, AS4902‑2000, and included the following provisions.
The term 'WUC' is defined under the contract to mean 'the work which the Contractor is or may be required to carry out and complete under the Contract and includes the FEED Works, variations, remedial work, construction plant and temporary works'.
By cl 20, Tianqi is obliged (amongst other things) to ensure that at all times there is a Superintendent, and to use reasonable endeavours to ensure that the Superintendent fulfils all aspects of the independent certifying role and functions (a) honestly and fairly, (b) within the prescribed contractual time, and (c) by arriving at a reasonable measure or value of work, quantities or time.
Clause 37.1 and cl 37.2 provide:
37.Payment
37.1 Progress claims
The Contractor shall claim payment progressively in accordance with Item 33.
An early progress claim shall be deemed to have been made on the date for making that claim.
If the time for any progress claim falls due on a day which is Saturday, Sunday, statutory or public holiday the Contractor shall submit the claim either on the day before or next following that date which itself is not a Saturday, Sunday, statutory or public holiday.
Each progress claim shall be given in writing to the Superintendent and shall include details of the following, calculated in accordance with Annexure Part J:
(i)the value of WUC carried out to the end of the previous month and the amount forecast in accordance with Annexure Part P together with all amounts then otherwise due to the Contractor arising out of or in connection with the Contract;
(ii)the total amount previously certified pursuant to this subclause 37.1;
(iii)the amount being claimed by the Contractor;
(iv)separately identify work attracting GST and work which does not attract GST; and
(v)a written report on the progress made in carrying out the Works during the preceding period since the last progress report in a form approved by the Principal and containing as much detail as the Principal reasonably requires.
37.2Certificates
The Superintendent shall, within 10 business days after receiving such a progress claim, issue to the Principal and the Contractor, assessed in accordance with Annexure Part J:
(a)a progress certificate identifying the progress claim to which it relates and evidencing the Superintendent's opinion of the moneys due from the Principal to the Contractor pursuant to the progress claim and reasons for any difference ('progress certificate'); and
(b)a certificate identifying the progress claim to which it relates and evidencing the Superintendent's assessment of retention moneys and moneys due from the Contractor to the Principal pursuant to the Contract.
If the Contractor does not make a progress claim in accordance with subclause 37.1, the Superintendent may issue the progress certificate with details of the calculations and shall issue the certificate in paragraph (b) of this subclause 37.2.
If the Superintendent does not issue the progress certificate within 10 business days of receiving a progress claim in accordance with subclause 37.1, that progress claim shall be deemed to be the relevant progress certificate.
The Principal shall on the first day of the following month after the Superintendent receives the progress claim, pay to the Contractor the balance of the progress certificate after setting off such of the certificate in paragraph (b) of this subclause 37.2 as the Principal elects to set-off. If that setting off produces a negative balance, the Contractor shall pay that balance to the Principal within 7 days of receiving written notice thereof.
Neither a progress certificate nor a payment of moneys shall be evidence that the subject WUC has been carried out satisfactorily. Payment other than final payment shall be payment on account only.
At any time and from time to time, the Superintendent may by a further certificate correct any error which has been discovered in any previous certificate, other than a certificate of practical completion or final certificate.
Clause 37.4 provides, relevantly:
37.4Final payment claim and certificate
Within 28 days after the expiry of the last defects liability period, the Contractor shall give the Superintendent a written final payment claim endorsed 'Final Payment Claim' being a progress claim together with all other claims whatsoever in connection with the subject matter of the Contract including all claims which the Contractor considers exist under or arising out of any alleged breach of the Contract whether or not such claims have been made at any time previously.
Within ~~42 days~~ 10 business days of after the expiry of the last defects liability period the Contractor's final payment claim, or where the Contractor fails to provide such claim, the expiration of the period for lodging the final payment claim, the Superintendent shall issue to both the Contractor and the Principal a final certificate evidencing the moneys finally due and payable between the Contractor and the Principal on any account whatsoever in connection with the subject matter of the Contract.
Those moneys certified as due and payable shall be paid by the Principal or the Contractor, as the case may be, within 14 7 days after the debtor receives the final certificate. (original emphasis)
Clause 38.1 provides that at the time stipulated for submission of progress claims, MSP should give the Superintendent documentary evidence of the payment of moneys due and payable to workers, consultants and subcontractors, and that such documentary evidence, except where the contract provides otherwise, is to be to the Superintendent's satisfaction. Clause 38.2 reads:
38.2Withholding payment
~~Subject to the next paragraph, the Principal may withhold moneys certified due and payable in respect of the progress claim until the Contractor complies with subclause 38.1.~~
~~The Principal shall not withhold payment of such moneys in excess of the moneys evidenced pursuant to subclause 38.1 as due and payable to workers, Consultants and subcontractors.~~ (original emphasis)
Clause 39 deals with default or insolvency. By cl 39.1, if a party breaches (including repudiates) the contract, nothing in cl 39 prejudices the right of the other party to recover damages or exercise any other right or remedy. By cl 39.2, if MSP commits a substantial breach of the contract, Tianqi may give MSP written notice to show cause. Clause 39.4 provides:
39.4Principal's rights
If the Contractor fails to show reasonable cause by the stated date and time, the Principal may by written notice to the Contractor:
(a)take out of the Contractor's hands the whole or part of the work remaining to be completed and suspend payment unless or until it becomes due and payable pursuant to subclause 39.6; or
(b)terminate the Contract.
Clause 39.5 provides that Tianqi shall complete or procure completion of work taken out of MSP's hands.
Clause 39.6 provides:
39.6Adjustment on completion of work taken out
When work taken out of the Contractor's hands has been completed, the Superintendent shall assess the cost thereby incurred and shall certify as moneys due and payable accordingly the difference between that cost (showing the calculations therefor) and the amount which would otherwise have been paid to the Contractor if the work had been completed by the Contractor.
If the Contractor is indebted to the Principal, the Principal may retain construction plant or other things taken under subclause 39.5 until the debt is satisfied. If after reasonable notice, the Contractor fails to pay the debt, the Principal may sell the construction plant or other things and apply the proceeds to the satisfaction of the debt and the costs of sale. Any excess shall be paid to the Contractor.
By cl 39.7, if Tianqi commits a substantial breach, MSP may give Tianqi written notice to show cause. Substantial breaches include Tianqi's failure to make a payment due and payable pursuant to the contract. By cl 39.9, if Tianqi fails to show reasonable cause by the stated date and time, MSP may suspend the whole or any part of the works. MSP is to remove the suspension if Tianqi remedies the breach. MSP may, by written notice, terminate the contract if within 28 days of the date of suspension, Tianqi fails to remedy the breach or, if the breach is not capable of remedy, to make other arrangements to the reasonable satisfaction of MSP. Damages suffered by MSP by reason of a suspension shall be assessed by the Superintendent, who shall certify them as moneys due and payable to MSP.
Clause 39.10 deals with termination of the contract pursuant to cl 39.4(b) (by Tianqi) or by cl 39.9 (by MSP). The first paragraph of cl 39.10 provides:
39.10Termination
If the Contract is terminated pursuant to subclause 39.4(b) or 39.9, the parties' remedies, rights and liabilities shall be the same as they would have been under the law governing the Contract had the defaulting party repudiated the Contract and the other party elected to treat the Contract as at an end and recover damages.
Clause 39.10 also refers to situations where there is wrongful termination by Tianqi or lawful termination by MSP:
If the Contract is wrongfully terminated by the Principal or rightfully terminated by the Contractor under clause 39.9, the Contractor shall then be entitled to a claim for:
(i)WUC which will include all direct costs, indirect costs, EPCM costs and Fixed Margin incurred up to and including the date for termination minus any payments that have already been made;
(ii)demobilisation costs, cancellation fees and other reasonable expenses and[/]or costs applicable in complying with or as a consequence of the termination; and
(iii)pro‑rata of the Performance Margin being 4.5% of all direct costs, indirect costs and EPCM costs incurred up to and including the date for termination.
Clause 39.10 then refers to a situation where Tianqi rightfully terminates the contract:
If the Principal rightfully terminates the contract pursuant to clause 39.4 prior to the date of Practical Completion, then the Principal shall not be required to pay the Performance Margin and the Contractor shall reimburse to the Principal amounts paid by the Principal for WUC that has not yet been performed but the Contractor shall be entitled to claim for:
(i)WUC which will include all directs costs, indirect costs, EPCM costs and Fixed Margin incurred up to and including the date for termination minus any payments that have already been made;
(ii)demobilisation costs, cancellation fees and other reasonable expenses and or costs applicable in complying with or as a consequence of the termination.

Clause 39.10 then provides (in its concluding paragraph):
A party may deduct from moneys due to the other party, any money due or which may become due from that other party under the Contract or otherwise.
Clause 41.1 provides, relevantly and in effect, that a party must, as soon as practicable after it could reasonably have been aware of any claim, give the other party and the Superintendent the prescribed notice or a notice of dispute under cl 42.1, but this requirement does not apply to any claim the communication of which is required by another provision of the contract, including a progress claim under cl 37.
Clause 42 of the contract deals with dispute resolution and provides:
42.Dispute resolution
42.1Notice of Dispute
If a difference or dispute (together called a 'dispute') between the parties arises in connection with the subject matter of the Contract, including a dispute concerning:
(a)a Superintendent's direction; or
(b)a claim:
(i)in tort;
(ii) under statute;
(iii)for restitution based or unjust enrichment or other quantum meruit; or
(iv)for rectification or frustration,
or like claim available under the law governing the Contract,
then either party shall, by hand or by registered post, give the other and the Superintendent a written notice of dispute adequately identifying and providing details of the dispute.
Notwithstanding the existence of a dispute, the parties shall, subject to clauses 39 and 40 and subclause 42.4, continue to perform the Contract.
42.2Conference
Within 14 days after receiving a notice of dispute, the parties shall confer at least once to resolve the dispute or to agree on methods of doing so. At every such conference each party shall be represented by a person having authority to agree to such resolution or methods. All aspects of every such conference except the fact of occurrence shall be privileged.
If the dispute has not been resolved within 28 days of service of the notice of dispute, that dispute shall be and is hereby referred to arbitration.
42.3Arbitration
If within a further 14 days the parties have not agreed upon an arbitrator, the arbitrator shall be nominated by the person in Item 37(a). The arbitration shall be conducted in accordance with the rules in Item 37(b).
42.4Summary relief
Nothing herein shall prejudice the right of a party to institute proceedings to enforce payment due under the Contract or to seek injunctive or urgent declaratory relief.
For the purposes of cl 42.3, under item 37(a) the nominating person is the president of the Institute of Arbitrators and Mediators of Australia.
The term 'claim' is inclusively defined by cl 1 of the contract to include any claim for payment of money under, or arising out of, or in any way connected with, the contract, including any claim in equity.
By cl 1(c), headings do not form part of and are not to be used in the interpretation of the contract.
Clause 46.6 provides that the rights, duties and remedies granted or imposed under the provisions of the contract operate to the extent not excluded by law.

The commencement of proceedings, dispute notices and the appointment of an arbitrator

On 4 March 2020, MSP commenced the primary proceedings, claiming payment of the outstanding certified amounts. Service of those proceedings on Tianqi was effected on 5 March 2020.
Notices of dispute were first issued by Tianqi on 6 March 2020.[4]
[4] Primary decision [10].
The notice of dispute in relation to the LHPP1 contract outlined amounts claimed by Tianqi against MSP, but did not expressly contend that Tianqi's claims gave rise to any equitable set-off against MSP's claims for payment under the payment certificates.[5] The notice of dispute in relation to the LHPP2 contract expressly included a claim for equitable set-off.[6] Both notices of dispute also alleged claims by Tianqi for misleading and deceptive conduct.
[5] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑15, GB 312 ‑ 328.
[6] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑16, GB 329 ‑ 331. The reference to 'equitable set-off' is at GB 331. Despite the express reference to 'equitable set-off', Tianqi in its written submissions referred to this as 'legal set-off': appellant's written submissions, par 29; WB 19.
Tianqi's notice in relation to the LHPP1 contract included certain allegations with respect to misleading and deceptive conduct. They are summarised later, in [139] below.
Tianqi's notice in respect of the LHPP2 contract also included claims for misleading and deceptive conduct. They are outlined in [140] below.
Neither notice of dispute contended that Tianqi was entitled to set aside the contracts for misleading or deceptive conduct.
There was evidence before the master to the effect that prior to the issue of the notices of dispute by Tianqi on 6 March 2020:
1.The parties had executed a 'Deed of Variation (No 3)' in May 2019 and a 'Deed of Variation (No 4)' on 8 October 2019, and that in each case, the deed stated, in effect, that save for the express terms of the variation, the parties agreed that 'the Contract is expressly ratified and confirmed'.[7]
2.The payment certificates sought to be enforced by MSP in the primary proceedings included certification by the Superintendent for WUC by MSP in excess of the specified 'Target Cost Estimate'.[8]
3.Tianqi had agreed to a payment plan to pay the moneys certified as due, pursuant to which Tianqi made a number of payments but thereafter ceased making payments, as it was unable to meet the agreed payment plan.[9]
4.Tianqi acknowledged that it was not in a position to pay its creditors.[10]
[7] See cl 2 of each deed of variation, affidavit of R F van Erp sworn 30 March 2020, annexure RVE‑6, RVE‑7; GB 283, 297.
[8] Affidavit of A Rowe sworn 1 May 2020, GB 367.
[9] Affidavit of A Rowe sworn 1 May 2020, pars 31 - 34, 47 - 52; GB 341, 344 - 352; affidavit of J Dunbar dated 1 May 2020, pars 7 - 14; GB 412 - 413.
[10] Affidavit of A Rowe sworn 1 May 2020, par 51; GB 345.
At the time of the primary proceedings, MSP accepted that the dispute resolution procedure under cl 42 of the contract had been activated by the notices of dispute. An arbitrator had been appointed to deal with the issues raised in the notices of dispute.[11]
[11] Primary decision [10].

Tianqi's application for a stay

By chamber summons dated 30 March 2020, Tianqi sought orders for a stay of the primary proceedings and that the proceedings be referred to arbitration pursuant to s 8(1) of the Arbitration Act. In the alternative, Tianqi sought a stay in the court's inherent jurisdiction.[12]
[12] Primary decision [1].
In the application before the master, Tianqi contended that as the arbitration process had been initiated by the notices of dispute, the question of whether payment of the certificates ought to be made was a matter which ought to be referred to arbitration and the primary proceedings consequently stayed.[13] Tianqi relied on two cases dealing with similar dispute resolution clauses to support its submission:[14] Eriez Magnetics Pty Ltd v Duro Felguera Australia Pty Ltd[15] and GR Engineering Services Ltd v Eastern Goldfields Ltd.[16] Tianqi also submitted that s 8(1) of the Arbitration Act was in mandatory terms, and that as there was a 'matter' which was the subject of an arbitration agreement and as the agreement was not null and void, inoperative or incapable of being performed, the question of payment on the certificates had to be referred to arbitration.[17]
[13] Primary decision [11].
[14] Primary decision [12].
[15] Eriez Magnetics Pty Ltd v Duro Felguera Australia Pty Ltd [2017] WASC 304.
[16] GR Engineering Services Ltd v Eastern Goldfields Ltd [2018] WASC 19.
[17] Primary decision [15].
MSP contended that cl 42.4 of the contracts provided a 'carve out' from arbitration proceedings which allowed enforcement of a payment 'due' under the contract. Therefore, payment on the certificate was due and MSP was entitled to prosecute the primary proceedings.[18] MSP also submitted that both Eriez Magnetics and GR Engineering were wrongly decided and that the approach adopted by Vickery J in the Victorian Supreme Court decision in Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd[No 3][19] was the correct approach.[20]
[18] Primary decision [11], [16].
[19] Lysaght Building Solutions Pty Ltd v Blanalko Pty Ltd [No 3] [2013] VSC 435.
[20] Primary decision [19].

The master's findings in the primary decision

The master said that it was not in issue between the parties that MSP's claims in each of the proceedings were for an amount which had been certified under the payment regime under cl 37 of the contract.[21]
[21] Primary decision [3].
The master said that Tianqi accepted that it was liable to make payments of the amount certified by the Superintendent.[22]
[22] Primary decision [13].
The master said that it was not possible to reconcile the decision in Lysaght Building Solutions (relied on by MSP) with the decisions in Eriez Magnetics and GR Engineering (relied on by Tianqi). Therefore, the question was which line of authority he was to follow. The master said:[23]
In resolving that issue I am mindful there are two decisions of this court which support [Tianqi's] view against the submissions made by [MSP]. All of the relevant decisions are first instance decisions. I take as the starting point that I should only follow the [sic] [Lysaght Building Solutions], if I am clearly of the view that [Eriez Magnetics] and GR Engineering are wrongly decided.
[23] Primary decision [23].
The master was satisfied that he should follow the decision of Vickery J in Lysaght Building Solutions. He said that:[24]
[Clause 37] mandates a procedure for the certification of amounts payable. Once those amounts are payable then contractually they are not in dispute. A principal is given an opportunity to raise off setting claims for consideration by the superintendent. But if that is not done and an amount is certified then it must be paid. That is the point of Rolfe J's decision in Algons Engineering [Pty Ltd v Abigroup Contractors Pty Ltd (1998) 14 BCL 215] and it is a point which has been emphasised again and again in any number of cases.
[24] Primary decision [24].
The master said that the purpose of a provision such as cl 42.4 in the building context was to keep money flowing in a construction contract. He noted that this principle was also clearly expressed in the Constructions Contracts Act 2004 (WA), which, while not relevant in this case, acted as legislative acknowledgement of the importance of keeping money flowing in construction contracts.[25]
[25] Primary decision [25].
The master said that, properly viewed, cl 42.4 is a recognition of such a principle and that such an interpretation of the contract does not affect the integrity of the arbitration process. A reasonable business person would appreciate that if an amount which was required to be paid - which the parties had agreed would be paid - was not paid, then a resort to the courts for prompt enforcement was both reasonable and necessary. Such an interpretation did not affect the integrity of the arbitration process. Further, cl 37 anticipates that the process can follow through to completion and it may well be that the award will favour the principal, so that the contractor will be forced to disgorge some of the money they have received as progress payments.[26] The master concluded that, in the circumstances, he was not satisfied that a stay ought to be granted based upon the proper interpretation of cl 37 and cl 42 and the Arbitration Act.[27]
[26] Primary decision [26].
[27] Primary decision [27].
The master then turned to consider the question of whether, in the exercise of discretion, a stay ought to be granted. He considered that in exercising his discretion, account should be taken of the same considerations to which he had referred, namely maintenance of the integrity of the construction contract process entitling a contractor to claim payment of certified amounts. It followed that he was not satisfied it would be a proper exercise of discretion to refer a claim such as the present to arbitration. He noted that it may be that an arbitrator could make an interim award which would effectively enforce the certified amounts, but that question was not the subject of detailed submissions and counsel for MSP had suggested there was doubt about that issue. He concluded:[28]
But even if an arbitrator was able to make an interim award which required payment of the certified amount, it is a clumsy process. It offers no real benefit to any of the parties. There is no warrant for issuing a stay on that basis.
[28] Primary decision [28].
The master also addressed Tianqi's submissions that its construction of the contracts would avoid a multiplicity of proceedings. He said:[29]
[MSP] in this case has applied for summary judgment. Such applications are determined on affidavit evidence. Both counsels [sic] seemed to accept [Tianqi] would not be able to raise, in answer to the summary judgment application, a claim of equitable set-off. By referring matters to arbitration [Tianqi] has foreclosed that possibility [so MSP contended]. That may or may not be correct - this is the hearing of a stay application and not a hearing on the summary judgment application. In any event, it seems unlikely any of [Tianqi's] witnesses who might file affidavit evidence on the summary judgment application would need to appear in person to give evidence. In other words, I am not satisfied that duplication of proceedings - insofar as there is any duplication - would favour the exercise of discretion and warrant the grant of a stay. (emphasis added)
[29] Primary decision [29].

The appeal

Tianqi's grounds and contentions

There are four grounds of appeal. As developed in written and oral submissions, Tianqi's grounds and contentions were to the following effect.

Ground 1

Ground 1 alleges that the master misconstrued cl 42.4 of the contract insofar as he found that it applied to MSP's claim for summary judgment on the certified progress claims. Tianqi contended that, properly construed, cl 42.4 provides:
Nothing herein shall prejudice the right of a party to institute proceedings to enforce payment due under the contract not in dispute or to seek injunctive or urgent declaratory relief.
Tianqi contended that the underlined words in the phrase 'institute proceedings to enforce payment due under the contract not in dispute' give effect to the true meaning of that part of cl 42.4. Tianqi contends in that regard that the phrase refers, principally, to a right of a party to institute proceedings to enforce an arbitral award for payment, but may also (possibly) include other circumstances where the 'payment due under the Contract' is 'not in dispute', such as an admission that the payment is due.[30]
[30] Appeal ts 37, 40, 64.
Tianqi contended that the decisions of Eriez Magnetics and GR Engineering support its construction, and that insofar as Lysaght Building Solutions is to the contrary, it ought not be followed.
Tianqi also contended, in effect, in this context, that:
1.Dispute resolution clauses are to be given a broad and liberal interpretation.[31] Clauses 42.1 ‑ 42.3 of the contracts provide for a mandatory reference to arbitration of all disputes.[32]
[31] Reference was made to Francis Travel Marketing Pty Ltd v Virgin Atlantic Airways Ltd (1996) 39 NSWLR 160, 165; Rinehart v Welker [2012] NSWCA 95; (2012) 95 NSWLR 221 [118]; Comandate Marine Corporation v Pan Australia Shipping Pty Ltd [2006] FCAFC 192; (2006) 157 FCR 45 [164]; see also Rinehart v Hancock Prospecting Pty Ltd [2019] HCA 13; (2019) 366 ALR 635 [83] (Rinehart v Hancock).
[32] Appeal ts 40.
2.On the master's construction of cl 42.4, there would be fragmented and divided disputes in different fora - a consequence which reasonable commercial parties could not reasonably have intended.
3.Clause 42.4 ought not be seen through the prism of the enforcement of payments due under cl 37.2 because it was objectively foreseeable at the time of contracting that certified payments could be disputed following termination in accordance with cl 39.10. Also, there are other provisions to which cl 42.4 may apply.[33]
[33] Appeal ts 52 - 54, with reference to cl 15.1 - cl 15.2, cl 19.5(a) and (b), cl 27(e), cl 29.3, cl 30.7, cl 34.9, cl 35, cl 37.4, cl 37.6.
4.Whether Tianqi had an arguable defence on the merits of the summary judgment application to enforce payment under cl 37.2 is, itself, a matter for arbitration having regard to the operation of cl 42.1 ‑ cl 42.3 and s 8 of the Arbitration Act. Senior counsel submitted:[34]
[34] Appeal ts 40, 43 - 44.
The parties have chosen to refer the dispute to arbitration. That's the forum which has to deal with that matter and the court cannot simultaneously make a determination of that question.
…
We say the dispute is just a dispute as to whether or not payment is due and the question of whether or not there [is] a reasonably arguable defence is one, we say, that falls for determination for the arbitrator not for a court in determining the operation of s 8 and [cl 42.4].
…
[T]he appropriate course is not to engage in the merits of the defence but rather to permit that all disputes are referred to arbitration. [It is accepted] that a party must show there is a dispute so, to that extent, without … getting into the merits of it, the court must be able to see that there's a dispute.
5.Section 8 of the Arbitration Act requires the court to refer the parties to arbitration so long as the contracts allowed for the determination of a dispute in that manner, even if reference to arbitration was not required under the contracts on their proper construction.[35]
6.The parties cannot 'contract around' s 8.[36]
7.The master failed to take into account Tianqi's claims that the underlying contracts ought be set aside.[37]
8.The master's reference to the principles enshrined in the Construction Contracts Act was inapposite as that Act had no application.[38]

Ground 2

[35] Appeal ts 46 - 47, 65 - 66.

[36] Appeal ts 64; reference was made to Bulkbuild Pty Ltd v Fortuna Well Pty Ltd [2019] QSC 173 [18].

[37] Appellant's written submissions, par 25(c); WB 18. Tianqi's written submissions made no reference to where, in the materials before the master, Tianqi had raised before the master claims to set aside the contracts under the Australian Consumer Law, being sch 2 to the Competition and Consumer Act 2010 (Cth).

[38] Appellant's written submissions, par 27; WB 18.

Ground 2 alleges that the master proceeded on an erroneous understanding of Tianqi's position and therefore erred in law at [13] of the primary decision. Tianqi alleged that the master said, in error, that (1) Tianqi accepted that it is liable to make payments of the amount certified by the Superintendent; and (2) Tianqi's application was put on the basis that it had raised a dispute which was referred to arbitration, and that the stay was justified because the arbitrator might well find that MSP was in fact indebted to Tianqi.

Ground 3

Ground 3 alleges, in effect, that the master's interpretation of cl 37 and cl 42 of the contracts, and s 8 of the Arbitration Act, gave rise to an error of law at [27] of the primary decision in the master's finding that a stay of the proceedings ought not be granted. Tianqi contended that on the proper construction of cl 42.4 as advanced under ground 1, the master ought to have stayed the proceedings and referred them to arbitration under s 8(1) of the Arbitration Act. If the primary proceedings are brought in a 'matter' falling within the scope of the arbitration agreement in cl 42, there is not merely an option to arbitrate but an obligation to arbitrate, and the court must refer the parties to arbitration pursuant to s 8(1) of the Arbitration Act. Tianqi submitted that if this court accepted its construction of cl 42.4, it would be appropriate for this court to make orders for a stay in the exercise of those powers.[39]

Ground 4

[39] Appellant's written submissions, pars 34 - 37; WB 21.

Ground 4 alleges that the master erred in law at [28] - [29] of the primary decision in determining that it would not be a proper exercise of the court's discretion to refer the proceedings to arbitration. Tianqi submitted that even if its submissions as to the mandatory operation of s 8(1) of the Arbitration Act were rejected, this remains a case where cl 42.2 can be enforced by the court's inherent power to stay proceedings.[40] Accordingly, in the event that the court were not to grant a stay under s 8(1) of the Arbitration Act but came to consider whether a discretion should be exercised in its inherent power, the court should find that the master's exercise of discretion miscarried and should re‑exercise for itself the discretion in favour of Tianqi.[41] In oral submissions, Tianqi contended, in effect, that if the master erred in his construction of cl 37 and cl 42, the court should re‑exercise the discretion having regard to the matters raised by Tianqi in its other grounds of appeal.[42]

MSP's answer and notice of contention

[40] Appellant's written submissions, par 39; WB 21 - 22, with reference to Straits Exploration (Australia) Pty Ltd v Murchison United NL [2005] WASCA 241; (2005) 31 WAR 187 [15], [30].

[41] Appellant's written submissions, par 41; WB 22.

[42] Appeal ts 73.

MSP contended, in effect, that the master was correct essentially for the reasons he gave and that, in particular, the master was correct in the construction and operation he gave to cl 42.4 of the contracts.
MSP submitted, amongst other things, that the construction of cl 42.4 advanced by Tianqi is inconsistent with authority.[43]
[43] Respondent's written submissions, par 38; WB 37, with reference to Glenview Home Inc v Digital Telecommunications Systems Pty Ltd [2003] TASSC 62 [7]; Viridian Noosa Pty Ltd v Neumann Contractors Pty Ltd [2009] QSC 398 [9]; Bayside Civil & Drainage Pty Ltd v Marinestar Holdings Pty Ltd [2000] WASC 17 [10]; Main Roads Construction Pty Ltd v Samary Enterprises Pty Ltd [2005] VSC 388 [19] ‑ [20]; Vantage Holdings Pty Ltd v JHC Developments Group Pty Ltd [2011] QSC 155 [43] ‑ [45].
MSP also filed a notice of contention to the effect that:
1.The master's decision can be upheld on the ground that MSP's action is for the institution of proceedings to enforce payment due under the relevant contracts, in terms of cl 42.4, in that as a matter of construction of the contracts, once a progress certificate has been issued in terms of cl 37.2 and the time for payment had passed, payment of the certified sum is due in terms of cl 42.4.
2.Insofar as Tianqi advanced before the master the contention that the certified amounts cannot be due in terms of cl 42.4 because the contracts are void by reason of pre‑contractual misleading and deceptive conduct, the master's decision to reject this contention and dismiss the application for a stay can be upheld on the ground that cl 42, including cl 42.4, could never be void.
As to the first ground of the notice of contention, MSP relied in its submissions on the operation of cl 42.4 in answer to ground 1 of the appeal. As to the second ground of the notice of contention, MSP submitted:[44]
[C]lause 42 of the contracts survives any contention by [Tianqi] that the whole of the contracts are void. If clause 42.4 survives so as to enable [Tianqi] to bring the arbitration proceedings, clause 42.4 must also survive. It is in clause 42. [Tianqi] does not, and cannot on any principled basis, contend that clause 42.4 is void if clause 42 is not. Second, whatever parts of the contracts [Tianqi] eventually seeks to identify as being void (and those others that survive), the process of clause 42.4 enabling resort to municipal courts to enforce certified payments (in terms of clause 37.2) that are due will survive. There is no suggestion that [Tianqi], or their legal advisers who advised on and drafted the agreements, did not understand the operation of clauses 37 and 42. Furthermore, the essential design of the agreements is that clause 37 creates a pay now argue later regime. This regime will never be avoided as a result of the contentions advanced as to misleading and deceptive conduct.
[44] Respondent's written submissions, par 81; WB 45 - 46.
In its reply to ground 1 of the notice of contention, Tianqi's submissions included the contention that the cases referred to by MSP in [54] above are distinguishable and not authoritative in any event.[45]
[45] Appellant's reply to notice of contention, par 4; WB 51.
In relation to ground 2 of the notice of contention, Tianqi submitted (amongst other things) that the powers of the court under s 243 of the Australian Consumer Law are plainly broad enough to declare cl 42 of the contracts, with or without cl 42.4, to be void ab initio or for a specified period.[46] In circumstances where there is a dispute as to whether cl 37.2 is enforceable at all, or whether it is liable to be set aside or ordered unenforceable, Tianqi submitted that (1) there will be no payments due and no right in the contractor to enforce payments alleged to be due, and (2) the question whether or not there are any payments that are due does not fall within the terms of cl 42.4.[47]
[46] Appellant's reply to notice of contention, par 16; WB 54.
[47] Appellant's reply to notice of contention, par 17(b); WB 55.
Tianqi also submitted that it could not be said, at this point of the proceedings, that there was no prospect that Tianqi could obtain relief under s 243 of the Australian Consumer Law. Tianqi submitted that a monetary award would be inadequate relief in circumstances where it alleges that 'it would have built a different plant in China or contracted with someone else on different terms'.[48]
[48] Appeal ts 106 - 107.
Tianqi further submitted that it does not contend that cl 42 is void. It contended that cl 42, including cl 42.4, would survive any avoidance under s 243 of the Australian Consumer Law.[49] It submitted that insofar as cl 42.4 survived any avoidance of the contracts, the result would merely be that cl 42.4 would have limited operation, in that it would have no application to the enforcement of money due under the contract, or in relation to injunctive or declaratory relief in connection with the contract, its terms or its operation.[50]

Further submissions of the parties

[49] Appeal ts 106.

[50] Appeal ts 106 - 107.

The court sought, and was provided with, further submissions from the parties on the following matters:
1.The decision of the Full Court in Devaugh Pty Ltd v Lamac Developments Pty Ltd.[51]
2.Whether, on the proper construction of the contracts as a whole, including cl 37 and cl 42, the reference to 'proceedings to enforce payment due under the Contract' in cl 42.4 is a reference to proceedings which are capable of summary determination: ie, proceedings in which there is no triable issue which would form a proper basis for defending a summary judgment application.
3.In the event that the construction referred to in the preceding point were accepted, whether, on the materials before the master on the stay application, Tianqi had established that there was a triable issue as to whether the contracts should be set aside ab initio for misleading and deceptive conduct.
[51] Devaugh Pty Ltd v Lamac Developments Pty Ltd [1999] WASCA 280; (2000) 16 BCL 378.
It is unnecessary to record here the details of those submissions on the first two matters. The submissions, considered by the court, broadly cover the same points raised by the parties in their oral and written submissions. For the reasons given in [146] below, the third matter does not ultimately require determination in this appeal.

The Arbitration Act

The Arbitration Act provisions

The Arbitration Act includes provisions to the following effect.
Section 1C provides, relevantly in effect, that (1) the paramount object of the Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense, (2) the Act aims to achieve its paramount object by enabling parties to agree about how their commercial disputes are to be resolved and providing arbitration procedures that enable commercial disputes to be resolved in a cost‑effective manner informally and quickly, and (3) the Act must be interpreted so that, so far as practicable, the paramount object of the Act is achieved.
Section 4 provides (amongst other things) that a party who knows that any requirement under the arbitration agreement has not been complied with, and yet proceeds with the arbitration without stating that party's objection to such non‑compliance without undue delay, is taken to have waived the party's right to object.
By s 7(1), the term 'arbitration agreement' is defined as follows:
An arbitration agreement is an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.
Sections 8 and 9 of the Arbitration Act provide:
8.Arbitration agreement and substantive claim before court (cf. Model Law Art 8)
(1)A court before which an action is brought in a matter which is the subject of an arbitration agreement must, if a party so requests not later than when submitting the party's first statement on the substance of the dispute, refer the parties to arbitration unless it finds that the agreement is null and void, inoperative or incapable of being performed.
(2)Where an action referred to in subsection (1) has been brought, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court.
9.Arbitration agreement and interim measures by court (cf. Model Law Art 9)
It is not incompatible with an arbitration agreement for a party to request, before or during arbitral proceedings, from a court an interim measure of protection and for a court to grant the measure.
By s 2, the term 'interim measure' has the meaning in s 17(2).
By s 17(1) of the Arbitration Act, unless the parties agree otherwise, the arbitral tribunal may, at the request of a party, grant 'interim measures'.
By s 17(2), an 'interim measure' is any temporary measure (whether in the form of an award or other form) by which, at any time prior to the issuance of the award which finally determines the dispute, the arbitral tribunal orders a party to:
(a)maintain or restore the status quo pending determination of the dispute (ie, broadly speaking, an interlocutory injunction);
(b)take action that would prevent, or refrain from taking action that is likely to cause, current or imminent harm or prejudice to the arbitral process itself (ie, broadly speaking, an order for the preservation of the integrity of the arbitral process);
(c)provide a means for preserving assets, out of which a subsequent award may be satisfied (ie, broadly speaking, a Mareva injunction); and
(d)preserve evidence that may be relevant and material to the resolution of the dispute (ie, broadly speaking, an Anton Piller order).

Section 8(1) of the Arbitration Act

For the purposes of s 8(1) of the Arbitration Act, a party 'so requests' a referral to arbitration by the making of a stay application.[52]
[52] CPD Contractors Pty Ltd v Celsus Pty Ltd (fka SA Health Partnership Nominees Pty Ltd) [2017] FCA 1620; (2017) 353 ALR 84 [90] ‑ [91], [108] ‑ [109]; Gilgandra Marketing Co-Operative Ltd v Australian Commodities & Marketing Pty Ltd [2010] NSWSC 1209 [52]; The Property People v Housing New Zealand Ltd (1999) (HC) 14 PRNZ 66 [24]; Nearmap Ltd v Spookfish Pty Ltd [2014] NSWSC 1790 [50] ‑ [51].
Section 8(1) invites attention to whether the proceedings before the court are brought in 'a matter which is the subject of an arbitration agreement'. In determining this question, it is necessary to first identify the subject matter of the controversy which falls for determination in the proceedings before the court.[53] The 'matter' to be determined in a proceeding is to be ascertained by reference to the subject matter of the dispute in the curial proceeding and the substantive, although not necessarily the ultimate, questions for determination in the proceeding. The scope of the matter is to be ascertained from the pleadings and from the underlying subject matter upon which the pleadings, including the defence, are based.[54] As Tanning Research and Rinehart illustrate, the character of a matter in which an action is brought as a matter which is the subject of an arbitration agreement may arise from the nature of the defence to the claim in the curial proceedings as well as the nature of the claim in the curial proceedings.
[53] Tanning Research Laboratories Inc v O'Brien [1990] HCA 8; (1990) 169 CLR 322, 350 - 351; Rinehart v Hancock [67].
[54] See Recyclers of Australia Pty Ltd v Hettinga Equipment Inc [2000] FCA 547; (2000) 100 FCR 420 [18]; Tanning Research (343 - 344), (351 - 354); Flint Ink NZ Ltd v Huhtamaki Australia Pty Ltd [2014] VSCA 166; (2014) 44 VR 64 [31] ‑ [34], [88]; Hancock Prospecting Pty Ltd v DFD Rhodes Pty Ltd [2020] WASCA 77 [125] - [135].
A 'matter' for the purposes of s 8(1) may or may not comprise the whole dispute in any given court proceeding.[55]
[55] Tanning Research (348), (351); Four Colour Graphics Australia Pty Ltd v Gravitas Communications Pty Ltd [2017] FCA 224 [18]; Casaceli v Natuzzi SpA [2012] FCA 691; (2012) 292 ALR 143 [48]; Amcor Packaging (Aust) Pty Ltd v Baulderstone Pty Ltd [2013] FCA 253 [44].
As noted earlier, in this case, there was a further issue as to the proper construction of s 8 of the Arbitration Act. Tianqi submitted that s 8 of the Arbitration Act required the court to refer the parties to arbitration so long as the contracts allowed for the determination of the dispute in that manner, even if reference to arbitration was not required. We do not accept that submission. Section 8 refers to 'a matter which is the subject of an arbitration agreement'. This may be contrasted with the language of s 7(2) of the International Arbitration Act 1974 (Cth), which refers to a matter that 'is capable of settlement by arbitration'.
In Hancock Prospecting Quinlan CJ (with whom Beech and Vaughan JJA agreed on this point) observed, consistently with the paramount object identified in s 1C(2)(a) of the Arbitration Act:[56]
The emphasis in the Act is upon the voluntary submission by parties of their disputes to arbitration. By its terms, s 8 provides that when its preconditions are satisfied, the court must refer the parties to arbitration (subject to exceptions which are presently immaterial). Section 8 of the Act confers power on the court, together with a duty to exercise the power in a case where the power arises. If the statutory conditions are satisfied, the court 'must' make an order referring the parties to arbitration. Where, despite agreement by the parties to submit identified disputes to arbitration, one of those parties commences an action in a court in relation to such a dispute, s 8 provides the mechanism for making effectual the parties' agreement as to how their commercial disputes are to be resolved. The mandatory nature of s 8 ensures that the parties to an arbitration agreement are held to their bargain to resolve their disputes by arbitration rather than curial determination. (citations omitted)
[56] Hancock Prospecting [250].
It would be inconsistent with the paramount object of the Arbitration Act to construe it as requiring that a dispute which the parties agreed could, but was not required to be, determined by arbitration must nevertheless be referred to arbitration when a party to the dispute engages s 8. Read in light of that purpose, the reference in s 8 to 'a matter which is the subject of an arbitration agreement' is to a matter that an agreement requires be submitted to arbitration.

Burden and standard of proof

There is a burden on the party seeking a stay to show that the action is brought in a matter which is the subject of an arbitration agreement.[57] As to the standard to be applied in the discharge of that burden, the cases in different jurisdictions have considered the issue in terms of:[58]
(a)whether the applicant for the stay must establish on the balance of probabilities that the matter in which the court proceedings are brought is the subject of an arbitration agreement; or
(b)whether it is sufficient for the applicant to show what appears to be a valid arbitration agreement which prima facie covers the matters in dispute, without having to establish the matters in s 8 on the balance of probabilities.
[57] Rinehart v Rinehart (No 3) [2016] FCA 539; (2016) 257 FCR 310 [103] ‑ [115]; Fitzpatrick v Emerald Grain Pty Ltd [2017] WASC 206 [56]; Samsung C&T Corporation v Duro Felguera Australia PtyLtd [2016] WASC 193 [40] ‑ [44]; Joint Stock Co 'Aeroflot Russian Airlines' v Berezovsky [2013] EWCA Civ 784; [2013] 2 Lloyd's Rep 242.
[58] Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170; (2017) 257 FCR 442 (Hancock FFC) [141]; cf Rinehart (No 3) [103] - [115]; Fitzpatrick [56]; Samsung v Duro [40] ‑ [44].
The former view attracted the preponderance of first instance authority in Australia, including in Rinehart (No 3).[59] However, in an appeal from that decision, the Full Federal Court made the following comments:[60]
We think that any rigid taxonomy of approach is unhelpful, as are the labels 'prima facie' and 'merits' approach. How a judge deals with an application under s 8 of the CA Act will depend significantly upon the issues and the context. Broadly speaking, however, and with some qualification, aspects of the prima facie approach have much to commend them as an approach that gives support to the jurisdiction of the arbitrator and his or her competence, as recognised by the common law and by s 16 of the CA Act, whilst preserving the role of the Court as the ultimate arbiter on questions of jurisdiction conferred by ss 16(9) and (10), 34(2)(a)(iii) and 36(1)(a)(iii) of the CA Act. Broadly, the approach is consonant with the structure of the CA Act and the Model Law. However, it is difficult to see how the Court can exercise its power under s 8 without forming a view as to the meaning of the arbitration agreement. Further, it may be that if there is a question of law otherwise affecting the answer to the question of jurisdiction, especially one that is confined, which might be dispositive, it might be less than useful for the Court not to deal with it.
…
To understand whether a body of disputes being the 'matter', assessed and characterised (at the necessarily early stage of the proceeding), is the subject of an arbitration agreement, will generally require the Court to form a view as to the legal meaning of the arbitration agreement. Section 8 is an important power the purpose of which is to protect the practical legitimacy and authority of the arbitration process as reflected in the words of s 1C of the CA Act. It involves the referral to arbitration, by a stay of court proceedings. However, it will often not be possible fully to delineate the metes and bounds of a dispute without fully hearing the dispute. To do so, that is to hear the facts to decide the width of the dispute, would undermine the practical and effective operation of s 8. The application must be brought early (not later than when submitting the party’s first statement on the substance of the dispute). The boundaries of the dispute may be unclear, but it will have to be characterised on the material available to be assessed as to whether it can be seen to be the 'subject of' the arbitration agreement. That latter assessment will require some stability or clarity as to the meaning of the arbitration agreement. The Court is then required to construe the clause, at least to the point of being satisfied that the disputes forming the matter are the subject of the agreement, or not, as the case may be. That said, and it is relevant to the arguments here, not every legal question need be, or should be, decided by the Court about the rights and obligations of the parties. That too would tend to undermine the practice and effective operation of s 8.
[59] Rinehart (No 3) [103] - [115]; Fitzpatrick [56]; Samsung v Duro [40] ‑ [44].
[60] Hancock FFC [145] ‑ [146]. The CA Act refers to the Commercial Arbitration Act 2010 (NSW). Section 8(1) of the CA Act is in identical terms to s 8(1) of the Arbitration Act.

Nothing said in the High Court on appeal from the Full Federal Court's decision casts doubt on the above passages.
We will return to consider this issue in the context of the particular issues arising in the circumstances of this case later in our reasons.

Need for a sustainable argument for there to be a matter

A further question has arisen as to whether it is also necessary to show that the matter said to be the subject of an arbitration agreement is itself 'sustainable',[61] or has a 'reasonable chance of success'.[62] In Robotunits, Croft J held that a provision analogous to s 8 of the Arbitration Act does not impose a 'further threshold issue' concerning a 'sustainability requirement'.[63] Amongst other things, his Honour referred to the observations of McLure P in Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd,[64] where her Honour said, with reference to a relevantly analogous provision that a dispute 'does not have to satisfy any minimum merits threshold'.[65]
[61] Robotunits Pty Ltd v Mennel [2015] VSC 268; (2015) 49 VR 323 [20].
[62] Robotunits [32].
[63] Robotunits [20], [42].
[64] Cape Lambert Resources Ltd v MCC Australia Sanjin Mining Pty Ltd [2013] WASCA 66; (2013) 298 ALR 666.
[65] Cape Lambert [115].
On the other hand, in Rinehart (No 3), Gleeson J, having conducted a review of the authorities, concluded:[66]
In my view, the approach in Robotunits is consistent with the approach articulated in Berezovsky, which I respectfully consider to be correct for the reasons given by Aitkens LJ. Thus, in my view, the correct approach is to decide on the balance of probabilities whether, on the proper interpretation of the relevant arbitration agreement, a matter arising in the proceeding falls within the scope of the agreement. This will generally involve a characterisation of the matter, without an assessment of the merits of the disputes arising from the matter. However, in some cases, it may be necessary to consider the merits of a claim or defence said to be the subject of an arbitration agreement in order to be satisfied that there is a relevant 'matter'. For example, if the application of the release is a matter which falls within the scope of an arbitration agreement, the mere fact that the release's application is asserted will not justify a finding as to the existence of a matter the subject of the arbitration agreement if there is no sustainable argument that the release potentially operates to bar or preclude the claims the subject of the dispute.
[66] Rinehart (No 3) [115].
The observations of Gleeson J in Rinehart (No 3) have been referred to with approval by Le Miere J in Samsung v Duro [43] and Martin CJ in Fitzpatrick [56]. Both of these decisions were made before the publication of the judgment in Hancock FFC, where the Full Federal Court expressed the view that:[67]
There is a further difficulty in the approach of the primary judge insofar as it proceeded beyond a characterisation of the nature of the matter and whether it fell within the arbitration agreement. The requirement of an assessment as to whether there was a 'sustainable argument' that the matter falls within the arbitration agreement has its dangers. Of course, if there is no sustainable argument that a matter or dispute can be characterised as falling within the agreement, it should not be referred to arbitration. But difficulties arise if this enquiry becomes one directed to the strength of the case raised by the issue or matter. The importance of this will become more evident in due course ... It is sufficient to say at this point that it would generally be wrong for the Court to examine an argument in a form of summary disposal application, and, if it were thought that an asserted case, in terms otherwise falling within the scope of the agreement, was sufficiently weak not to be 'sustainable', not to refer the matter to arbitration. That would be to usurp the role of the arbitrator. The Court's role in s 8 is not to act as a court of summary disposal filtering the matters that are suitable for arbitration.
[67] Hancock FFC [149].
The Full Federal Court went on to conclude that Gleeson J had erred by, in effect, concluding a dispute under the deed on the basis that the assertion (that the deed operated as a release) was not sustainable when it was 'plainly sustainable' that the dispute was within the terms of the arbitration agreement. Gleeson J was held to have erred by undertaking a 'form of summary disposal'.[68]
[68] Hancock FFC [222].
Generally speaking, therefore, it is not appropriate for a court considering an application for a stay under s 8 to consider the merits or arguability of the parties' contentions in the dispute said to constitute a matter which is the subject of an arbitration agreement.
In identifying that general position, the position is not without possible exception. If, for example, a defendant to proceedings for breach of contract, properly commenced by the plaintiff in court, sought a stay on the basis that matters concerning the validity of the contract were the subject of an arbitration agreement, and in that context made the mere assertion that the contract ought be avoided ab initio without indicating on what conceivable basis or why, a court might not conclude that there was a 'matter' concerning the validity of the contract requiring referral to arbitration under s 8(1). Similarly, if the contention were that the contract should be set aside for some implausible reason (eg, that the contract was executed on a Tuesday), a court might conclude that there was no 'matter' which under s 8(1) of the Arbitration Act required referral to arbitration. It is unnecessary to determine these extreme examples, which do not arise in the present case.
However, in our view an exception to the above general position can arise where the arbitration agreement defines the matter which is required to be referred to arbitration by reference to the arguability or other merits of the parties' contentions in the dispute. As was noted in Hancock FFC,[69] the width or narrowness of the scope of the arbitration agreement is central to the ascertainment of the matter subject to it. In our view, such an exception arises under the arbitration agreements in the present case. We turn to the proper construction of the contracts in this case.
[69] Hancock FFC [156] - [157].

The proper construction of the contracts

Constructional choices

The critical question in this case concerns the scope of the operation of cl 42.4 of the contracts. In particular, what is the scope of 'proceedings to enforce payment due under' the contracts which cl 42.4 gives the parties a right to institute. There appear to us to be three reasonable constructional choices open in the application of those words to proceedings to enforce a payment obligation said to arise under cl 37.2 of the contracts:
(a)A party may institute proceedings to enforce payment due under cl 37.2 only so long as the obligation to make the payment is undisputed, irrespective of the merits (or lack thereof) on which the obligation to make the payment is disputed. On this construction, proceedings may not be instituted where the defendant disputes the obligation to make the payment, even if the defendant does not raise an objectively triable issue by way of defence. This is essentially the construction advanced by Tianqi at [46] ‑ [49] above.
(b)A party may institute proceedings to enforce payment due under cl 37.2 irrespective of whether the obligation to make the payment is disputed or the grounds on which the existence of the payment obligation is disputed. On this construction, proceedings may be instituted even where the defendant does raise an objectively triable issue by way of defence.
(c)The reference to 'proceedings to enforce payment due' under the contract is to proceedings which are capable of summary determination: ie, proceedings in which there is no objectively triable issue which would form a proper basis for defending a summary judgment application.
In our view, the third of these constructional choices is to be preferred, having regard to the following considerations.

Clause 37

The subject of cl 37.2 is a payment obligation which is, in the ordinary case, amenable to summary determination.
Subject to the potential qualification referred to in the next paragraph, the effect of cl 37.2, read in the context of cl 37 and the contract as a whole, is relevantly that a net payment in favour of one party, derived from the operation of the certification process under cl 37.2 and any exercise by the principal of its contractual right of set‑off thereunder, is a payment on account which is due and payable without recourse by the other party to equitable set‑off. That net payment (which for convenience may be referred to as a 'certified progress payment') is, at least in the ordinary case, thereby amenable to enforcement by summary judgment. Any counterclaim sought to be raised by the other party is to be taken into account when the Superintendent issues a final certificate pursuant to cl 37.4, evidencing 'the moneys finally due and payable between the Contractor and the Principal'. That construction of cl 37.2 is supported by longstanding authority concerning the proper construction of contracts with analogous provisions.[70]
[70] See, eg, Re Concrete Constructions Group Pty Ltd [1996] QCA 086; (1997) 1 Qd R 6, 11 ‑ 14; Algons Engineering Pty Ltd v Abigroup Contractors Pty Ltd (1998) 14 BCL 215; Daysea Pty Ltd v Watpac Australia Pty Ltd [2001] QCA 049; (2001) 17 BCL 434 [18] ‑ [21]; Main Roads Construction [26] ‑ [42]; Devaugh [42] ‑ [44], [132] ‑ [135]; Lysaght Building Solutions [29].
In this appeal, Tianqi submits that there is an exception to the above conclusion, in that set‑off is available where the contract has been terminated pursuant to cl 39.10.[71] For its part, MSP contends that Tianqi's submission proceeds upon an erroneous construction of cl 39.10 and, in particular, the 'bespoke' part of cl 39.10 which amends the effect of the standard form provision.[72] It is unnecessary for present purposes to reach a view on that question of set‑off pursuant to cl 39.10 as there was no issue before the master concerning contractual termination under cl 39.10.[73]

Clause 42.4

[71] Appeal ts 54. In an earlier stay application to this court Tianqi referred to Aquatec‑Maxcon Pty Ltd v Minson Nacap Pty Ltd [2004] VSCA 18; (2004) 8 VR 16 [53] ‑ [54] and Queensland University of Technology v Project Constructions (Aust) Pty Ltd [2002] QCA 224; [2003] 1 Qd R 259 [19] ‑ [24].

[72] Appeal ts 88.

[73] See appeal ts 71. The only relevance of cl 39.10 on Tianqi's case on appeal was that cl 39.10 formed part of the contractual context in which cl 42.4 is to be construed.

Clause 42.4 properly construed in the context of the whole contract is inconsistent with Tianqi's submission that the clause only applies to payments which are not in dispute in any sense.
A number of observations may be made about the construction and operation of cl 42.4. First, the opening words 'Nothing herein' refer to nothing in cl 42.1 ‑ cl 42.3.[74] The effect of the opening words is that despite the requirement that disputes be referred to arbitration, the requirement is not to be read as 'prejudicing' a party's 'right' to institute curial proceedings in three respects (1) proceedings 'to enforce payment due under the Contract', (2) injunctive relief, and (3) urgent declaratory relief.
[74] As senior counsel for Tianqi accepted: appeal ts 44.
Secondly, the reference to a party's 'right' to institute proceedings is consistent with the party's reservation of rights under cl 46.6.
Thirdly, the right to 'institute' proceedings must mean more than the right to file the writ. It must also mean the right to have the proceedings so instituted determined by a court, consistently with the scope and object of cl 42.4, without the need to go to arbitration. The right to initiate proceedings in respect of the second and third matters in cl 42.4 (injunction and urgent declaration), notwithstanding cl 42.1 ‑ 42.3, presupposes the existence of a dispute or disputes in that connection which would otherwise be required to go to arbitration. By cl 42.4, the parties contemplate that those disputes will be resolved in court, and not by arbitration. At least the third of those matters (declaratory relief) involves final relief, typically a declaration expressed by reference to 'the proper construction of the contract and in the events which have happened'. Tianqi accepted in this appeal that an arbitrator would be bound to accept a declaration made by the court, and that the disputes thereby resolved by curial determination could not be re‑agitated by a party in the arbitration.[75] These considerations inform the scope and nature of cl 42.4 and tend against a construction, as advanced by Tianqi, that the first of the three subject matters with which it deals stands apart as merely an adjunct to, rather than a substitution for, arbitration.
[75] Appeal ts 59.
Fourthly, while s 9 of the Arbitration Act provides that it is 'not incompatible' with an arbitration agreement for a party to request from a court 'an interim measure of protection' (as defined),[76] the real significance of cl 42 is that it is a contractual expression of the parties' intentions concerning the balance between arbitration and litigation which transcends the operation of s 9. Further, the agreement for the resolution of disputes by curial injunction or urgent declaration indicates that cl 42.4 has a not insignificant breadth of potential operation.
[76] See [68] above.
Fifthly, cl 42.4 is drawn in the context that the subclauses which immediately precede it indicate that the procedure for getting to arbitration takes time. It involves (1) a notice of dispute being given (to each of the other party and the Superintendent) by registered post or hand, (2) conferring about the dispute up to 14 days later, (3) the referral of the dispute to arbitration if the dispute is not resolved within 28 days of service of the notice of dispute, (4) a further 14 days to allow the parties to reach agreement on the appointment of an arbitrator, and (5) in the absence of agreement, appointment by the president of the Institute of Arbitrators and Mediators of Australia - a mechanism which would also presumably take some time before an appointment to arbitrate were accepted by an arbitrator.[77]
[77] See also in this regard, s 12 and s 13 of the Arbitration Act.
Sixthly, cl 42.4 operates in a context in which, at least where the contract is on foot, there is longstanding authority to the effect that a claim for the payment of certified progress payments under a provision such as cl 37 is amenable to summary judgment without recourse by the other party to equitable set-off (see [91] above).
Seventhly, the first and third of the matters referred to in cl 42.4 - proceedings to enforce payment of a sum due under the contract and declaratory relief - are in the nature of final orders. Prima facie (although it is not necessary to determine conclusively the matter in this appeal), the reference to injunctive relief also includes final injunctive relief. In any event, it is the character of either form of injunctive relief that damages are not an adequate remedy.[78] In other words, it is a remedy which does not require the forum to undertake an assessment (often time‑consuming and complex, particularly in construction disputes) of the consequences of the relevant breach in terms of damages. These considerations tend to indicate that cl 42.4 is not designed to refer the resolution of complex money claims and damages to the court.
[78] It is unnecessary to consider the availability of arbitral power to grant declarations or injunctions in this case. See, however generally, Seeley International Pty Ltd v Electra Air Conditioning BV [2008] FCA 29; (2008) 246 ALR 589 [26] ‑ [28]; Cufone v Cruse [2000] SASC 17 [50] ‑ [61], and on appeal Cufone v Cruse [2000] SASC 304; (2000) 210 LSJS 238.
Eighthly, it may be inferred from the nature of the three matters to which cl 42.4 refers (enforcement of payment due under the contract, injunction and urgent declaration) that the parties understood that each was not only appropriately amenable to curial determination, but that curial determination would likely provide an early and efficient vindication of the parties' accrued rights.
Ninthly, the words 'Nothing herein shall prejudice the right of a party' could have no sensible meaning in their application to the first of the three matters referred to in cl 42.4 if the words 'to institute proceedings to enforce payment due under the Contract' merely mean 'proceedings to enforce an arbitral award for payment due under the contract'. That is because nothing in cl 42.1 ‑ cl 42.3 could be read as prejudicing the right of a party to enforce an arbitral award.
Tenthly, the word 'due' in this context evidently means 'due and payable'. There could be no institution of proceedings to 'enforce' a payment which was due, but not payable.[79] That is so even though the contract in other clauses expressly uses the words 'due and payable'.[80]
[79] The concepts of 'due' and 'due and payable' are discussed in CPB Contractors Pty Ltd v JKC Australia LNG Pty Ltd [No 2] [2017] WASCA 123 [122].
[80] See, eg, cl 37.4, cl 37.5, cl 39.7, cl 39.9.
Eleventhly, the words 'to enforce payment due under the Contract' in their ordinary meaning indicate that there are payments 'due' under the contract itself, and invite attention to the contractual provisions providing for payments of that character. The words are not easily glossed to read 'to enforce payment due under an arbitral award'.
Finally, a reasonable business person[81] would understand that cl 37.2 is an obvious candidate for a contractual provision which provides for 'payment due under the Contract'. That is because:
1.Clause 37.2 provides a comprehensive contractual mechanism for payment by reference to (1) detailed information having been provided to the Superintendent, and (2) a determination having been made by the Superintendent - the person appointed to act honestly and fairly and arrive at a reasonable measure or value of work, quantities or time. Clause 37.2 operates in that sense to provide for a payment 'due under the Contract'.
2.The payment for which it provides is not only due and payable, but it is due and payable without set-off or deduction.[82]
3.Clause 37(2) whilst in its practical application is likely often to result in payments to the contractor, the provision nevertheless cuts both ways. A certified payment under cl 37.2 may result in money due and payable to the principal.
4.A payment that is due and payable to either party without set-off or deduction by the other is readily amenable to curial enforcement without having to interpose an arbitral award for payment, which in turn would then require curial intervention before enforcement.
[81] Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 [46] ‑ [51], [59]; Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392 [51]; Black Box Control Pty Ltd v TerraVision Pty Ltd [2016] WASCA 219 [42].
[82] See [91] above.
The above considerations combine to indicate that the first matter referred to in cl 42.4 denotes (and it is not necessary to determine whether this is its exclusive denotation) the institution of proceedings for the enforcement of a progress payment certified as due in accordance with cl 37.2 which is capable of summary determination.
The wide definition of the term 'dispute' in the contract, and the 'liberal approach' to the construction of arbitration clauses to which Tianqi referred may be accepted, but they do not assist Tianqi on this point. Clause 42.4 operates to preserve rights to curial relief notwithstanding the width of the disputes otherwise referable to arbitration. The parties have not 'submitted to arbitration' within the meaning of s 7(1) of the Arbitration Act the three matters in cl 42.4 to which they have reserved their rights of recourse to the court.

Consistency with commercial purpose

The construction postulated at [88](c) above - that the reference to 'proceedings to enforce payment due' under the contract is to proceedings which are capable of summary determination - also best fits the commercial purpose evident from the terms of the contracts.
Clause 42, on its proper construction, enables a party not only to 'institute' proceedings in respect of the three matters referred to in cl 42.4, but to have the proceedings determined consistently with the scope and object of cl 42. Having regard to the constructional matters referred to in [94] ‑ [105] above, the scope and object of a party's entitlement to institute proceedings to enforce a payment due under cl 37.2 is to enable the party to expeditiously obtain judgment on the sum due, at least typically by summary judgment. The constructional choice which best fits the object and scope of cl 42.4 in this context is the third construction postulated at [88](c) above.
The second possible construction postulated at [88](b) above, insofar as it envisages the court determining on its merits a defence raising a triable issue, is inconsistent with the scope and purpose of cl 42.4, at least in its first aspect ('the right of a party to institute proceedings to enforce payment due under the Contract'). If, for example, the court in which the proceedings were instituted found a triable issue as to whether the contracts ought be avoided ab initio, the character of the matter before the court at that point would, in substance, be whether there was a contract under which any money was due at all (there being no dispute, on this hypothesis, that if the contracts were not void ab initio, there would be no dispute as to payment). If the resolution of the proceedings required the determination of such an issue, the proceedings would not be proceedings for the enforcement of a 'payment due under the Contract'. The parties could not objectively have intended that cl 42.4 applied to the determination of such an issue, having regard to the scope and effect of cl 42 read as a whole in the context of the contract as a whole.
The first possible construction postulated at [88](a) above would undermine the utility of the contractual entitlement to institute proceedings under cl 42.4. If the court concluded that the postulated defence raised no objectively triable issue, a referral to arbitration would mean that the party to whom the moneys were due under the contract would be kept out of its money for no good reason. That is a construction which makes no commercial sense. Nor is it a construction which is consistent with the commercial objects of the contract read as a whole.[83]

Authorities

[83] See Ecosse Property Holdings Pty Ltd Gee Dee Nominees Pty Ltd [2017] HCA 12; (2017) 261 CLR 544 [17]; Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35]; Black Box [42(9)].

The construction postulated at [88](c) above is also consistent with, but not dependent for its correctness upon, the observations of the Full Court in Devaugh. In that case, a subcontractor had obtained summary judgment against the main contractor in relation to progress claims pursuant to a provision broadly similar to cl 37.2 in this case. The main contractor had not appointed a superintendent (described as the 'Main Contractor's Representative' or 'MCR'), and the subcontractor relied on a part of the relevant provision to the effect that in the absence of a superintendent determining the progress claim, the amount claimed by the contractor was payable within a specified (35‑day) period. The main contractor appealed. The principal issue in the appeal concerned the main contractor's claim that the provision dealing with progress claims, including the time for payment thereunder, could not operate because the main contractor had not appointed a superintendent.[84] The court decided the principal issue adversely to the main contractor and held that there was an implied term that in the event of such default of appointment of a superintendent by the main contractor, the main contractor itself would be the 'MCR' for the purposes of the operation of the process for certifying progress claims. Accordingly, the provision regarding the certification of progress claims was capable of operation. The main contractor also raised other matters which it said precluded summary judgment being entered against it. These included that a number of the subcontractor's claims for payment related to alleged variations which had been referred to arbitration.[85] In relation to those matters Parker J (with whom Malcolm CJ and Murray J agreed) said, with evident reference to a provision such as cl 42.4 in this case:[86]
[84] Devaugh [3], [23], [34] - [36], [42], [64] - [66], [93] - [98].
[85] Devaugh [93].
[86] Devaugh [145], [147].
Before the learned master and on this appeal the appellant advanced a number of matters which it was submitted should have persuaded the master in any event not to order summary judgment. These may be summarised as:
(a)the claims were for progress not final payments,
(b)there was dispute whether the moneys were properly finally due to [the subcontractor],
(c)the capacity of [the subcontractor] to repay in the event of an ultimate finding against it was in doubt,
(d)there had been a reference to arbitration,
(e)there were a number of set off claims[.]
…
In my view, however, it is apparent from the nature of what is raised that [the main contractor] is in truth seeking to introduce issues as to its ultimate rights and liabilities under the subcontract into a claim based on a contractual obligation to make provisional payments. None of the matters agitated provides an answer in law to the obligation of the main contractor to have paid to the subcontractor the amounts which comprise the judgment sum. In this respect, I notice cl 47.5 of AS2545 1993 which includes a provision that 'Nothing herein shall prejudice the right of a party to institute proceedings to enforce payments due under clause 42'. (emphasis added)
The cases of Eriez Magnetics and GR Engineering, relied on by Tianqi, do not, properly understood, suggest a different conclusion to that reached above.
In Eriez Magnetics, there was a dispute between a subcontractor (Eriez Magnetics) and a main contractor (Duro Felguera). The subcontractor commenced proceedings in the General Division of this court claiming, amongst other things, payment for goods and services, restitution and damages for breach of subcontract.[87] The main contractor applied to stay the proceedings pursuant to a clause apparently similar to cl 42 in this case, but which included references to disputes concerning a 'Pass Through Claim' and 'Pass Through Provisions'. 'Pass Through Claims' in broad terms were claims by the subcontractor against the contractor which corresponded with an equivalent claim between the main contractor and the principal.[88] In resisting the application for a stay, the subcontractor contended that (1) the arbitration provisions in the relevant clause only applied to 'Pass Through Claims', and (2) alternatively, cl 42.5 entitled it to enforce its claims for payments and the other claims were only ancillary relief.[89]
[87] Eriez Magnetics [3].
[88] Eriez Magnetics [18] - [20].
[89] Eriez Magnetics [36], [38].
The most relevant provisions were cl 42.2 and cl 42.5 which respectively provided:
If the Dispute has not been resolved within 28 days of service of the notice of Dispute or such longer period as the parties may agree in writing, that Dispute shall, subject to the Dispute being a Pass Through Claim and the operation of the Pass Through Provisions, be and is hereby referred to arbitration.
…
Nothing herein shall prejudice the right of a party to institute proceedings to enforce payment due under the subcontract or to seek injunctive or urgent declaratory relief.
Martin CJ outlined the other relevant contractual provisions (in addition to the cl 42 equivalent) but made no mention of any clauses dealing with the certification of moneys pursuant to a clause such as cl 37.2 in this case.[90] Martin CJ said that the parties agreed that the application turned 'entirely' upon the proper construction of cl 42.2 and cl 42.5 referred to above. His Honour rejected the subcontractor's argument that cl 42.2 only applied to Pass Through Claims. With respect to the subcontractor's alternative argument, Martin CJ said:[91]
Turning to Eriez's alternative submission premised on cl 42.5, it does seem to me that the breadth of the disputes referable to arbitration is relevant to the proper construction of this clause. As I mentioned earlier, the breadth of disputes the subject of the dispute resolution clause is very wide, as it concerns any dispute arising in connection with, amongst other things, a claim. As I noted earlier, the expression 'claim' is defined to include any claim for payment of money under the subcontract. Consequently, any claim for payment of money under the subcontract is a dispute.
In that context, it seems to me to be clear that when cl 42.5 preserves the right of a party to institute proceedings to enforce payment due under the subcontract, it cannot be referring to the payment of amounts which are disputed. Rather, the provision is directed to the enforcement by the court of payment of moneys due and owing and no longer disputed under the subcontract.
That approach is consistent with, and supported by the other provisions of cl 42.5 which exempt from the operation of cl 42 proceedings seeking injunctive or urgent declaratory relief. A common characteristic, of course, of injunctive or urgent declaratory relief is that it is relief of a kind not easily or readily given by an arbitrator. Similarly, arbitrators are incapable of making orders enforcing payment of awards made by an arbitrator. So, cl 42.5 is directed to preserving the rights of parties to invoke the jurisdiction of the courts in circumstances in which an arbitrator could either not provide the relief sought, in terms of enforcement, or would have difficulty providing the relief sought, as is the case with urgent or injunctive declaratory relief. The clause has no application where there is a dispute, because otherwise its operation would entirely undermine all the provisions of cl 42 which precede it. As Eriez's claims for payment are disputed, it seems to me that cl 42.5 does not apply, and it cannot be seriously contended that the relief sought by Eriez in these proceedings is either injunctive or declaratory relief which is urgent.
[90] Eriez Magnetics [15] - [31], [53].
[91] Eriez Magnetics [58] - [60].
Martin CJ in Eriez Magnetics was not, apparently, addressing an issue concerning the institution of proceedings to enforce a payment due under a certified payment regime such as cl 37.2 of the contract in this case. His Honour's observations as to the scope of cl 42.5 in that case (analogous to cl 42.4 in this case) are to be read in that context. Accordingly, his Honour was not dealing with the question of construction raised in this appeal. If we were wrong in that, and his Honour's remarks are to be read more widely, we would respectfully consider that they are erroneous if and insofar as they are to be read as precluding the institution of proceedings to recover duly certified progress payments under a provision the same as cl 37.2 of the contract in this case.
Nor is the decision of GR Engineering of any relevant assistance. That case involved a construction contract between Eastern Goldfields as principal, and GR Engineering as contractor.[92] The contractor sued the principal, and the principal applied for a stay on the basis that the matters were required to be referred to arbitration. The contract included a payment regime for progress claims similar to cl 37 in this case,[93] and a dispute resolution clause similar to that of cl 42 in this case.[94] It was a case in which there was a dispute as to whether the progress payments claimed by the contractor had been duly certified under the contract, in that, the principal asserted, no superintendent had been appointed.[95] Other payments claimed by the contractor appeared to be payments allegedly arising under another contract and were not (it appears) contended by the contractor to be certified payments under the construction contract.[96] Tottle J in this context said that he was satisfied that there were 'disputes' between the parties which engaged a clause analogous to cl 42 in this case.[97] His Honour granted a stay and said that the cl 42 equivalent in that case must be construed on the basis that 'all disputes about whether payments are due under the Contract should be determined in arbitral proceedings. The construction … for which [the contractor] contends would create uncertainty as to which disputes must be resolved by arbitration and which disputes could be the subject of proceedings'.[98] His Honour said that his view was fortified by reference to the decision of Martin CJ in Eriez Magnetics.[99]
[92] GR Engineering [7].
[93] GR Engineering [9] - [12].
[94] GR Engineering [14].
[95] GR Engineering [40] - [41].
[96] GR Engineering [42].
[97] GR Engineering [43].
[98] GR Engineering [55].
[99] GR Engineering [56].
In GR Engineering, his Honour appears to have found, relevantly, that if there were a dispute about whether the payments had been duly certified in the absence of the appointment of a superintendent, that dispute was required to be arbitrated, as was any dispute about other (non‑certified) claims. That is not this case. The correctness of the decision in GR Engineering in relation to the facts of that case need not be considered, although it may be noted that the parties did not, it appears, refer his Honour to the decision in Devaugh. Again, if and insofar as his Honour's reasons should be read as precluding the institution of proceedings to recover duly certified progress payments under a provision the same as cl 37.2 of the contract in this case, we would respectfully consider it to be erroneous.
MSP relies on the decision of Vickery J in Lysaght Building Solutions. In that case:
1.The contractor commenced curial proceedings and sought summary judgment against the principal in respect of certain progress claims allegedly certified by the superintendent.[100]
2.The principal counterclaimed, including in respect of an allegedly certified payment sum due to it, and sought summary judgment on that certified payment claim.[101] The principal also alleged waiver by, and an estoppel against, the contractor in relation to the principal's claimed entitlement to payment under the alleged payment certificate.[102]
3.The principal also had other claims involving damages for breach of contract.[103]
4.The contractor, as well as applying for summary judgment on the certified progress claims due to it, sought to stay the principal's claims on the basis that they were required to go to arbitration.[104]
[100] Lysaght Building Solutions [3], [5].
[101] Lysaght Building Solutions [6] - [7].
[102] Lysaght Building Solutions [113(c)], [148].
[103] Lysaght Building Solutions [113(a)].
[104] Lysaght Building Solutions [8].
In relation to the contractor's application for summary judgment in respect of the certified progress claims due to the contractor, the principal contended that there had been no valid certification within the meaning of the relevant clause because of non‑compliance with its evidentiary provisions.[105] The court held that the principal had a 'real chance of success' on that issue, and that this was a triable issue. The court accordingly dismissed the contractor's application for summary judgment on those claims.[106] Whilst dismissing the application for summary judgment, his Honour evidently considered that the litigation of this issue should be continued in the curial proceedings, and did not require resolution in arbitration.[107] In relation to the principal's claim for summary judgment on the certified payment in its favour, the judge found (again) that there was a triable issue as to whether the payment certificate was a valid payment certificate in accordance with the relevant contract, and dismissed summary judgment on that claim.[108] Again, his Honour nevertheless considered that this issue should continue to be tried in court and did not require resolution by arbitration.[109] His Honour also considered that the principal's claims of waiver and estoppel, which were associated with its claim for payment under the alleged payment certificate, were properly part of the litigation and did not require resolution by arbitration.[110]
[105] Lysaght Building Solutions [34] - [86].
[106] Lysaght Building Solutions [87] - [88].
[107] Lysaght Building Solutions [89] - [90], [122].
[108] Lysaght Building Solutions [91] - [111].
[109] Lysaght Building Solutions [112], [122].
[110] Lysaght Building Solutions [113(c)], [148].
In this regard, Vickery J said:[111]
Clause 47.4 carves out claims for payments due under the Contract, in the following terms:
'Nothing herein shall prejudice the right of a party to institute proceedings to enforce payment due under the Contract or to seek injunctive or urgent declaratory relief in respect of a dispute under clause 47 of any matter arising under the Contract.' (original emphasis)
Accordingly, [the contractor's] action in respect of its three [certified] payment claims and [the principal's] action in respect of the payment claimed to be due [to it] under the [alleged payment certificate in its favour] are not subject to arbitration under the Contract.
[111] Lysaght Building Solutions[121] - [122].
His Honour further explained, with respect to the contractor's contention that the principal's claim for payment due to it under the alleged payment certificate and its associated waiver/estoppel claims ought be referred to arbitration:[112]
[I]n my opinion, the payment claimed by [the principal] under the [alleged payment certificate in its favour] is covered by the 'carve out' provided by cl 47.4 which provides that nothing in the Contract shall prejudice the right of a party to institute proceedings to enforce payment due under the Contract. As such, even though the parties did invoke the provisions of cl 47.2 in an attempt to resolve the issue as to whether any and what sum is payable pursuant to the [certificate], the parties specifically addressed the issue as to the forum to determine the dispute, in the event that it remained outstanding. They agreed not to preclude a party to the dispute to institute proceedings before a court to enforce the payment claimed to be due under the Contract. This is precisely what para 56A of the defence and para 67 of the counterclaim seek to do.
For this reason, no stay or other order ought to be made in relation to para 56A of the defence and para 67 of the counterclaim [concerning payment to the principal under the alleged payment certificate].
In relation to para 68 of the counterclaim which alleges various waivers and estoppels alleged in the defence, insofar as they relate to cl 42 of the Contract, and the payment claims made under that clause which are the subject of the present proceedings before the court, the allegations ought to remain for determination by the court. They constitute an issue for the decision of the court in the course of the determination of the payment claims which are excluded from the arbitration agreement by cl 47.4.
[112] Lysaght Building Solutions [146] - [148].
On the other hand, his Honour found that the principal's claims for damages for breach of contract were required to be referred to arbitration.[113]
[113] Lysaght Building Solutions [113(a)], [149] - [158].
His Honour's view that the questions of whether the disputed progress payments were duly certified, including whether estoppels or waivers operated to prevent denial of due certification, ought be tried in the court proceedings, appears to involve implicit conclusions about the proper construction of the contract and the scope of the 'carve out' provision (cl 47.4 in that case - see [122] above). His Honour appears to have found that once the court is seized of a progress payment claim in accordance with the relevant 'carve out' provision, the parties objectively intended that any triable issue in relation to certification would itself be determined by the court and not be a matter required to be submitted to arbitration.

That particular point concerning the validity of certification, and related issues of estoppel and waiver, do not arise for determination in the present proceedings. Otherwise, the construction postulated at [88](c) above is similar to the approach adopted in Lysaght Building Solutions.

Conclusion as to proper construction

Having regard to all of the matters referred to above, in our view the preferable construction of cl 42.4 is the third construction postulated at [88](c) above. That is, the reference to 'proceedings to enforce payment due' under the contract is to proceedings which are capable of summary determination: ie, proceedings in which there is no triable issue which would form a proper basis for defending a summary judgment application.

Characterisation of the matter in which the primary proceedings were brought

We return to the characterisation task required by s 8 of the Arbitration Act. Having regard to the construction of cl 37 and cl 42 which we have reached above, the arbitration agreements in this case will not require a claim for payment of amounts certified under cl 37.2 to be referred to arbitration where that claim is capable of summary determination.
The question for this court is therefore whether the master erred in failing to find, on the material before the master, that MSP's claim was not capable of summary determination.
We note that, in a case such as the present, it would ordinarily be desirable for a defendant's application under s 8 of the Arbitration Act and a plaintiff's application for summary judgment to be determined concurrently. That would avoid the potential for inconsistent findings as to whether the proceedings were capable of summary determination. However, that course was not adopted in the present case. We will return to the significance of this at the conclusion of our reasons.
We are not persuaded that the master erred in failing to find, on the material before the master, that MSP's claim was not capable of summary determination.

Certification of amount payable under cl 37.2 and availability of set-off

Before the master, there was no dispute that MSP's progress claims had been duly certified, without any set-off, in accordance with cl 37.2 of the contracts.
As noted in [28] above, in the notice of dispute under the LHPP1 contract, Tianqi did not contend, at least in terms, that its claims gave rise to an equitable set‑off. Whilst the notice of dispute under the LHPP2 contract did expressly refer to equitable set‑off, the reference in that regard cannot affect the proper construction of cl 37 of the contracts.
On a proper construction of cl 37, in the context of the contracts as a whole, the parties agreed that a counterclaim, even if meritorious, coupled with the mere assertion that the counterclaim was capable of effectuating a set‑off, would not be an answer to MSP's right to payment of the certified progress claims under cl 37.2 of the contracts. Clause 37.2 provides for the extent to which a set-off may be applied to money due from the contractor to the principal. The only permissible set-off against the amount of the progress claim identified in a progress certificate is the amount certified by the Superintendent under cl 37.2(b). Subject to the possible operation of the last paragraph of cl 39.10 (which did not arise before the master), the principal cannot negate the right of the contractor to institute proceedings in court to enforce payment due under the contracts by claiming some other right of set-off. Of course, the payment obligation being enforced is an obligation to make a payment on account only, so the merits of a claim which allegedly founds some other right of set-off may be determined by arbitration. But the claimed other right of set‑off in and of itself does not qualify the payment obligation created by cl 37.2 by reference to amounts certified by the Superintendent under that clause of the contracts.

Tianqi's contentions concerning avoidance of the contracts ab initio

On appeal, Tianqi contends that a triable issue was established as to avoidance of the contracts ab initio, and other defences, under the Australian Consumer Law.[114] The conclusions referred to above are not affected by a consideration of Tianqi's claims concerning avoidance ab initio. Tianqi's contentions in that regard are referred to below.
[114] Appellant's submissions filed 9 October 2020, pars 15 - 17.
MSP contends that the matters before the master did not establish a triable issue as to whether the contracts should be set aside ab initio for misleading or deceptive conduct. MSP contends that there was no evidentiary foundation for the master to have considered this issue. MSP submits that the allegation that the contracts should be set aside ab initio was not advanced at all in Tianqi's notices of dispute, and that Tianqi did not raise a claim of avoidance in its written submissions filed in support of the stay application or in any clear way by the time of the hearing of that application.[115]
[115] Respondent's submissions filed 16 October 2020, pars 16 - 18.
Alternatively, MSP contends that, Tianqi having referred the claims under the Australian Consumer Law to arbitration, the claims cannot be raised in the primary proceedings. MSP also argues that the contracts remain valid until such time as a court declares otherwise. Hence, on MSP's submission, where there is no dispute as to the certification process, the certificates were validly issued. As such, MSP contends that the avoidance claims cannot defend against the obligation to pay on account under clause 37.2 of the contracts.[116]
[116] Respondent's submissions filed 16 October 2020, pars 20, 22.
For the following reasons, in our view MSP's submissions summarised at [136] above should be accepted. It is therefore unnecessary to resolve the issues arising from the submissions summarised at [137] above.

Tianqi's notices of dispute

In relation to the LHPP1 contract, Tianqi's allegations with respect to misleading and deceptive conduct were to the following effect:
1.MSP had made representations prior to entry into the contract, during the tender process, as to the nature and advantages of a 'Target Cost Estimate' (TCE) contract of the kind embodied in the LHPP1 contract (the Pre‑contractual representations).[117]
[117] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑15, pars 15(a), 16 - 17; GB 313 ‑ 314.
2.The Pre‑contractual representations were said to 'include' communications in emails dated 7 March and 10 March 2016 and at a 'project implementation strategy' on 8 March 2016 where MSP made a presentation with 'slides' (but no other representations were particularised).[118]
3.The Pre‑contractual representations were made in circumstances where MSP knew or ought to have been aware that Tianqi (1) 'lack[ed] familiarity' in contracting in large‑scale construction projects in Australia, (2) 'lack[ed] familiarity' with 'the mechanisms of a TCE contract', (3) had placed 'reliance on MSP to explain the TCE contracting mechanism', and (4) needed to 'finalise a contractor for LHPP1 in order to fast track the project due to commercial reasons'.[119]
4.MSP, during the presentation on 8 March 2016 and by email on 10 March 2016, also represented that 'normally the TCE cost is the highest price the client will pay' and 'normally the lump sum price is the lowest the client will pay' and these representations were as to future matters and were misleading in that MSP did not have a reasonable basis for making those representations.[120]
5.Had the misleading and deceptive conduct not occurred, Tianqi:[121]
(a)would have entered into 'a fixed price lump sum EPCM contract which it was familiar with';
(b)alternatively, would have ensured that costs were capped under the contract; and
(c)further or alternatively, would not have awarded the contract to MSP.
6.Further, MSP engaged in misleading or deceptive conduct 'by failing to accurately disclose the actual or forecast costs and the progress of the LHPP1 project as and when such information became known, or reasonably have become known, to MSP [causing] loss and damage to arise in respect of the LHPP2 Contract'.[122]
[118] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑15, par 17; GB 314 - 315.
[119] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑15, par 18; GB 315.
[120] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑15, par 21; GB 315 - 316.
[121] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑15, par 23; GB 316.
[122] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑15, par 24; GB 316.
In relation to the LHPP2 contract, Tianqi, by its notice of dispute:[123]
1.alleged that MSP had made the Pre‑contractual representations, as detailed in the notice in respect of the LHPP1 contract;
2.alleged that MSP had failed to 'accurately disclose the actual or forecast costs and progress of the LHPP1 project as and when such information became known, or ought reasonably [to] have become known, to MSP'.
3.alleged that had the misleading and deceptive conduct not occurred, Tianqi would not have:
(a)entered into the alleged LHPP2 contract; and/or
(b)engaged in further negotiations in raising the CAPEX for LHPP2.
4.said that it was not able to quantify its loss, but would endeavour to quantify loss and damage as soon as possible, and that it would 'recover [those] amounts in due course'.
[123] Affidavit of R F van Erp sworn 30 March 2020, annexure RFVE‑16, pars 5 - 12; GB 330.
Neither notice of dispute referred to s 237(1) or s 243 of the Australian Consumer Law, nor, more generally to the invocation of a statutory power to set aside the contracts ab initio.
The only evidence deposing as to the allegations concerning misleading and deceptive conduct was Mr van Erp's affidavit of 30 March 2020, where (at par 16) he said:[124]
I have read the Notices of Dispute which were prepared by the defendant with the assistance of its external lawyers in a short timeframe so as to respond to the Statutory Demand. Notwithstanding the timeframe, to the best of my knowledge and belief, each material assertion of fact in the Notices of Dispute is true.

Tianqi's submissions on the stay application

[124] Mr van Erp did not swear to those matters to the best of his 'information', knowledge and belief, or identify the sources of his knowledge.

Tianqi's 'Submissions in Support of Stay Applications (Proceedings CIV 1318 of 2020 and CIV 1319 of 2020)' filed 15 May 2020 made no reference to the potential application of s 237(1) or s 243 of the Australian Consumer Law. In oral submissions to the master, there appears to have been four principal references to misleading or deceptive conduct. Two referred to a 'defence that [Tianqi] would never have entered into the contract at all'.[125] Another was in the context that damages would be significant and in excess of the amount claimed by MSP and 'therefore, [Tianqi] disputes that [it is] liable to [MSP] for those amounts'.[126] The last referred to the legal right to payment being 'disrupted here by statute, namely the s 52 equivalents under the [Australian Consumer Law]. … The cases [referred to by MSP] don't deal with that issue, that is, how the court would deal with defence claims that are based in statute'.[127] There was no reference to or reliance on s 237(1) or s 243 of the Australian Consumer Law.

The master's decision

[125] Hearing 28/05/20; GB 7, 22 - 23.

[126] Hearing 28/05/20; GB 8.

[127] Hearing 28/05/20; GB 56.

The master did not refer to an argument by Tianqi to the effect that it had claims to set aside the contracts ab initio pursuant to s 237(1) and/or s 243 of the Australian Consumer Law. Having regard to the matters in [139] ‑ [143] above, the master would reasonably have understood that Tianqi's claims for misleading and deceptive conduct, albeit said to provide a 'defence', were (like its other counterclaims) claims for damages.
When the master's reasons are read as a whole,[128] the master evidently understood that the dispute before him concerned, in substance, whether there was a basis for a stay in circumstances where there was no dispute as to the validity of certification and no available set-off for any damages claim. We are not persuaded that, on the materials and arguments presented to the master by Tianqi, the master erred in his appreciation of the scope of the dispute.

Tianqi did not establish that MSP's claim was not capable of summary determination

[128] See, in particular, primary decision [3], [11], [13], [23] - [24], [27] - [29].

Having regard to the matters in [139] ‑ [143] above, we accept MSP's contention to the general effect that Tianqi did not advance a submission before the master that the contracts should be set aside ab initio for misleading and deceptive conduct. Given that the matter was not raised below, it is inappropriate for this court to deal with the argument on appeal, particularly given the paucity of evidence and the prospect of MSP adducing evidence going to the issue.[129]
[129] See, for example, Saldanha v City of Belmont [2018] WASCA 7[123] - [124].
Therefore, at the hearing of the stay application before the master, Tianqi failed to show that the primary proceedings were not properly characterised as proceedings for the enforcement of the payment of an amount certified in accordance with cl 37.2. Tianqi did not establish that MSP's claim for payment due under cl 37.2 was incapable of summary determination. Therefore, Tianqi did not establish that MSP's claim was other than a claim for 'payment due under the contracts' within the meaning of cl 42.4 of the contracts. Because the matter which was the subject of the primary proceedings was not shown to fall outside cl 42.4 of the contracts, it was not shown to be a matter which the arbitration agreement required be submitted to arbitration. Given the proper construction of the contracts, and the issues raised by Tianqi in support of its application, the material before the master did not establish that the primary proceedings were brought in a matter which 'is the subject of an arbitration agreement' for the purposes of s 8 of the Arbitration Act.

Disposition of the appeal

Ground 1 contends that the master erred in his construction of cl 37 and cl 42.4 of the contracts. The critical aspect of the ground is the contention that the master erred by failing to adopt the construction referred to at [88](a) above. For the above reasons, that error is not established. The master adopted the approach taken in Lysaght Building Solutions which is, as noted above, similar to the construction we have preferred (subject to the point concerning the validity of the certification, and related issues of estoppel and waiver, which does not arise in the present case). If, and to any extent that, the master erred by effectively adopting the construction referred to at [88](b) above, that error is not material in the circumstances of this case.
As to ground 2, properly construed, the master's reasons at [13] of the primary decision were to the effect that Tianqi (1) accepted that the progress payments were certified and that cl 37.2 gave rise to an obligation to pay, but (2) contended that the disputes it had raised required the matter to be referred to arbitration. There is no error in that approach. In any event, any error is immaterial to the outcome of the appeal.
As to ground 3, there was no material error in the master's construction of cl 37 and cl 42 of the contracts and of the operation of s 8 of the Arbitration Act in the relevant contractual context.
In relation to ground 4, there is no occasion for this court to re‑exercise the discretion in the court's inherent power to stay a proceeding. There was no material error by the master.
It is unnecessary to address the notice of contention.

Conclusion

For the above reasons, the appeal should be dismissed.
We note that, at the time of preparing these reasons, there was an undetermined summary judgment application pending in the primary proceedings. That application may raise issues which were not before the master when dealing with the application made under s 8 of the Arbitration Act. In the event that the court hearing that application were to determine that Tianqi had raised a triable issue and refused MSP's summary judgment application, it would then also have in effect determined that the action was brought in a matter which the arbitration agreement required be referred to arbitration. That is, it would have determined that MSP's claim in the primary proceedings was not capable of summary determination.
In that event, while Tianqi's application under s 8 of the Arbitration Act has been determined, it would be open (and at least ordinarily appropriate) for the primary court to refer the matter to arbitration in the exercise of its inherent jurisdiction.
We have found that Tianqi failed, on the material before the master, to establish that the action was brought in a matter the subject of an arbitration agreement, on the basis that it had not established MSP's claim to be incapable of summary determination. That is not equivalent to a finding that the action was not brought in a matter the subject of an arbitration agreement, or a finding that MSP's claim is capable of summary determination. Nothing in these reasons operates to preclude the refusal of summary judgment based on material or issues which were not before the master.
For example, these reasons do not preclude a finding in the primary court that MSP's summary judgment application should be dismissed based on:
1.the application of cl 39.10 of the contracts to the purported termination of the contracts after the dismissal of the s 8 application, or
2.a claim by Tianqi for rescission of the contracts for misleading and deceptive conduct to the extent that claim is advanced in the summary judgment application.
In noting these possibilities, we should not be taken to be indicating any view as to how the primary court should resolve those matters, to the extent that they may be raised by Tianqi in defence to MSP's summary judgment application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DM
Associate to the Honourable Justice Murphy
3 DECEMBER 2020