Grounds (2), (3) and (4) - Did the Adjudicator fail to consider Acciona's submissions, deny it procedural fairness or fail to form a view as to what was properly payable?
- The dispute before the Adjudicator in relation to V9 concerned the Cost Plus Works component of the claim.
- The Adjudicator deals with V9 at [210] to [223]. At [214] to [217], the Adjudicator refers to the reasons given in the Payment Schedule in relation to each of the components of the claim and notes that Acciona's reasons in relation to "Costs Plus Work" refer to an assessment of labour rates, found at Annexure K, and reliance on clause 29.1(c) of the sub-contract.
- At [219], the Adjudicator states:
Having regard to that material, I cannot see any justification for [Acciona's] very low assessment of the value of these works. The costs claimed appear to me to be reasonable, having regard to the amount of work required to complete this Variation.
- At [221] to [223], the Adjudicator states:
221. In the [Adjudication Response] submissions from page 44 to page 52, [Acciona] deals with its three separate categorisations of this claim to argue that [Chess Engineering] has failed to substantiate its costs by failing to provide verification as required; failed to apply reasonable rates, in accordance with the provisions of the [sub-contract]; claimed categories of costs, such as management costs, to which it has no entitlement under the [sub-contract] and, finally, claimed for replacement of a broken panel that it or its sub-contractors damaged.
222. I am not persuaded to accept [Acciona's] submissions, submissions that I may take into account, in relation to the argument that the amount previously paid together with the scheduled amount is adequate remuneration for the work completed by [Chess Engineering]. I do not accept that, for the work performed, the amount scheduled is adequate recompense. I do however accept that [Chess Engineering] is not entitled to charge "Management Costs" separately. I accept that pursuant to Schedule 4, those costs are not payable under Variation Order No.2.
223. In the absence of an assessment from [Acciona] which I regard as reasonable, for the purposes of an interim payment under the [SoP] Act, I am satisfied that [Chess Engineering] is entitled to the amount claimed for "Cost Plus Works" but not the amounts claimed for "Management Cost" and "Broken Panel"; an amount of $180,049.51.
- The essence of Acciona's submission is that the Adjudicator erred by accepting Chess Engineering's claim for Costs Plus Works having formed a view that the amount Acciona scheduled for the works was not an adequate or reasonable amount which was sufficient for the purposes of an interim payment under the SoP Act.
- Acciona contends that the Adjudicator's approach led to him to fail in his statutory duty to consider the matters referred to in s 22(2) and come to a view on the claim having assessed the merits and its value. As indicators of the Adjudicator's failures, Acciona points to the Adjudicator's references to what was "reasonable" in [219]; the amount scheduled by Acciona as not being "adequate" remuneration in [222]; the lack of any cross-reference to contractual allowances in Ms Haddo's statement compared to Acciona's contention of a contractual rate; and the Adjudicator's reference to an absence of any assessment that he regarded as "reasonable" in [223].
- I do not accept Acciona's submission on this variation. In my view, when read as a whole, the Adjudicator's reasons indicate that he considered and assessed the competing submissions including Acciona's, and accepted Chess Engineering's claim for Cost Plus Works having determined that the work had been carried out and its value as he was required to do, and not simply because he rejected Acciona's submissions.
- The Adjudicator formed a view that the V9 works had been undertaken and the basis on which they were to be valued, namely an agreed basis of cost plus 15% margin: at [210]. He satisfied himself as to how the costs were calculated, by reviewing Ms Haddo's account and the schedules of labour costs and breakdown: at [218]. He satisfied himself that the claim reflected the cost to Chess Engineering of the labour employed in performing the variation works and that Acciona's costs calculation did not, by reference to Ms Haddo's statement: at [218] and [220]. In addition to identifying the basis on which Chess Engineering calculated and valued the cost components and labour rates relied on, Ms Haddo's statement refers to the contractual basis for the claimed rates, namely Variation Order No 2, schedule 4, which the Adjudicator also considered. The Adjudicator also had regard to and applied the claim in accordance with the sub-contract having determined that cl 29.1(c) had no application as the costs did not relate to a time related claim: at [220].
- In addition to these matters, and as Acciona's Senior Counsel accepted at the hearing, the Adjudicator considered and rejected Acciona's materials and submissions, as he was entitled to do so. The Adjudicator's rejection of Acciona's submissions included its contentions that the labour rates claimed by Chess Engineering were "excessive" and "unreasonable" and not in accordance with Variation Order No 2. In that context, I do not consider that the Adjudicator's references to the costs claimed as appearing to be "reasonable" having regard to the work done, to Acciona's scheduled amount not being "adequate" or to the absence of an assessment that he regarded as "reasonable" are indicative of the Adjudicator being informed by some extraneous notion of fairness, as Acciona submits. While those words may not be legally apt, they should be read through the prism of language used by a lay decision maker dealing with and responding to Acciona's submissions that Chess Engineering's rates were "excessive" and "unreasonable". Their use does not evince error of a jurisdictional nature on the part of the Adjudicator but reflects, in my view, his determination of which rates were, and were not, reasonable and properly payable having considered the competing submissions about their quantification by reference to Variation Order No 2 and other sub-contract terms.
- As to the use by the Adjudicator in [223] of the words "for the purposes of an interim payment under the Act", to my mind, that phrase is no more than a short-hand recognition by the Adjudicator of the statutory context of the claim, consistent with his acknowledgement at [119]. I do not consider his adoption of those words in relation to V9 or other of Chess Engineering's variation claims (at [206], [238], [251], [264], [269], [274] and [278]) and Acciona's set off claims (at [283] and [287]) to indicate that the Adjudicator introduced some extraneous matter to his decision making to which he was not entitled to have regard.
- The Adjudicator was satisfied of Chess Engineering's entitlement to the amount claimed for V9. That satisfaction was arrived at after expressly directing his attention to the matters required for consideration in accordance with s 22(2) of the SoP Act and having determined the value of the Costs Plus Works component of V9 in accordance with the agreement between the parties and the relevant materials that calculated the value of those works.
- It follows that I do not consider that the Adjudicator made any jurisdictional error or denied Acciona procedural fairness in the way he dealt with V9.