Alliance Contracting Pty Ltd v James

John Holland Pty Ltd v Chidambara [2017] WASC 179

Sandvik Mining and Construction Australia Pty Ltd v Fisher [2019] WASC 352

1. On 24 November 2022, I allowed the application by Downer EDI Works Pty Ltd for judicial review of a determination under the Construction Contracts (Former Provisions) Act 2004 (WA). I quashed that part of the determination that required Downer to pay to RCA Civil Group Pty Ltd the amount of $116,975 and interest of $1,442.16.
2. Downer sought an order in the judicial review proceedings that RCA repay the amount Downer had paid. RCA opposed repayment on the basis of an agreement entered into between Downer and RCA by letter dated 17 October 2022.

1. Downer relied on the affidavit of Benjamin Norrish, Legal Counsel for the Downer Group, affirmed 29 November 2022.
2. On 18 August 2022, RCA sent to the solicitors for Downer an email to which it attached a copy of a statutory demand, dated 18 August 2022, together with a copy of the Registration of a Judgment in the District Court of Western Australia, dated 4 August 2022. The statutory demand was served on Downer's registered office on 25 August 2022.
3. Downer applied to set aside the statutory demand by originating process in this court, filed 7 September 2022.
4. Mr Norrish prepared an agreement, dated 17 October 2022, set out in a letter addressed to Mr Steve Sutherland of RCA and also Yarta Civil Group Pty Ltd, another subcontractor. Mr Norrish understood Mr Sutherland to be the subcontractor's representative under contracts between Downer and both RCA and Yarta.
5. On 25 October 2022, there were unsuccessful discussions between the parties.
6. Downer paid the amount of the statutory demand.

1. In John Holland Pty Ltd v Chidambara, Chaney J considered whether it was appropriate to grant an order for repayment of funds paid pursuant to a determination that had been quashed. His Honour held that, where payment had been made only because of the requirements of a determination, and was thus a payment made under the compulsion of the Act, it would be unjust for the payment to be retained pending the final resolution of the dispute between the parties and the court should restore the position to that which would have subsisted had the determination not been made.[37]
2. In Sandvik Mining and Construction Australia Pty Ltd v Fisher,[38] on an application for an injunction to restrain enforcement of a determination, Archer J discussed the decision in John Holland Pty Ltd v Chidambara. Her Honour accepted that an order for repayment could be made as part of the judicial review orders and, if Sandvik was successful on judicial review, such an order ought to be made.
3. Downer also relies on the power under O 56 r 5(2)(l) of the Rules of the Supreme Court 1971 (WA), by which the court may grant any other remedy if it considers the remedy applied for on an application for judicial review is inadequate.
4. I am satisfied that the court has power to order repayment. The question in this case, however, is whether the court ought do so where there is, intervening, an agreement of the parties in the terms set out below.

1. The operative terms of the agreement provided:
   1. In consideration for the payment by Downer referred to in clause 6 and the other terms of this agreement, RCA and Yarta agree to not make, bring or pursue, and to ensure that none of their Related Entities make, bring or pursue, any Claim on and from 12 October 2022 up to and including 27 October 2022 (or such other date as may be agreed between the parties in writing) (Standstill Period).[39]
   2. The parties and their Related Entities agree:

(a) to, on or before 27 October 2022, engage in good faith discussions in person and on a without prejudice basis aimed at resolving all matters in dispute between the parties; and
>
> (b) at those discussions, to each have a person present with absolute authority to settle all matters in dispute between the parties ...

3. This agreement may be pleaded as a bar to any Claim made, brought or pursued by Yarta, RCA or any of their Related Entities during the Standstill Period. 4. Within 3 business days after the date of execution of this agreement by the last party to execute this agreement, Downer will pay to RCA the amount of $123,917.16. 5. Upon Downer providing to RCA proof of payment of $123,917.16, RCA will immediately withdraw the Creditor's Statutory Demand for the Payment of Debt and provide to Downer reasonable evidence of such withdrawal. 6. Upon Downer providing to RCA proof of payment of $123,917.16, Downer and RCA will consent to the Application to Set Aside the Statutory Demand being discontinued or dismissed, with no order as to costs with the intention that each party pay its own costs. 7. Subject to execution of this agreement by RCA, Downer consents to RCA being granted an extension of time to 21 October 2022 to file and serve its evidence and submissions in the Judicial Review Proceedings.

1. The applicant submitted that the effect of the agreement was that Downer agreed to pay RCA the amount determined in the adjudication on an interim basis so that both the statutory demand proceedings and the application to set aside statutory demand would be withdrawn.
2. Downer submitted that RCA's construction of the agreement is liable to result in a commercial nonsense as it assumes Downer agreed to pay the determined amount solely in order to negotiate with RCA during the 'Standstill Period'. Further, RCA's construction ignores the express wording of the agreement that, following the standstill period, the proceedings relating to the statutory demand would be discontinued and the judicial review proceedings would continue. Downer submitted that the agreement expressly or by necessary implication preserved the capacity of Downer to claw back the amount it had paid by the judicial review proceedings.
3. RCA submitted that, once the adjudication had been entered as a judgment, the judicial review application did not, itself, constitute a genuine dispute sufficient to set aside the statutory demand.
4. RCA submitted that pursuant to the agreement, Downer paid the amount for consideration set out in par 3 of the agreement. That consideration was given by RCA, but also by Yarta and other unnamed entities.
5. RCA further submits that the agreement did not deal with the reservation of the rights or the repayment of the amount in the event of successful judicial review proceedings.
6. There is a genuine dispute about the proper construction and effect of the agreement, and the character of the payment to RCA. It is regrettable that it should arise in circumstances where RCA was able to and did rely on a determination that was patently affected by jurisdictional error. Downer may be able to claw back the amount it had paid by other proceedings. But, in my opinion, the dispute that has now been articulated between the parties should not be summarily determined by an order for repayment in this action.
7. I will not make the further orders sought by Downer for the repayment of the amount it has paid.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] The Act was renamed by the Building and Construction Industry (Security of Payments) Act 2021 (WA), s 136. Unless stated otherwise, references to legislation in these reasons are to the Construction Contracts (Former Provisions) Act.

[2] See affidavit of Katherine Madeline Swann, affirmed 28 June 2022, CV-01, 800.

[3] Swann Affidavit, KMS-01, 213, 220, 224 and 231.

[6] Adjudication application, 4.10, 4.11, Swann Affidavit 14, 60 and 67.

[7] Adjudication application, Introduction [15], Swann Affidavit 7.

[8] Adjudication application, Introduction [16], Swann Affidavit 7.

[9] Adjudication application [3.1] - [3.3], [3.6], [4.1], [4.2], [4.6] and Section 8, Swann Affidavit 7, 11 ‑ 12, 16.

[10] Adjudication application, Introduction [17], Swann Affidavit 7.

[12] Adjudication application, Swann Affidavit 16.

[13] Adjudication application [8.7], Swann Affidavit 18.

[14] Statutory Declaration of Steven Sutherland [36] ‑ [37], Swann Affidavit 92.

[15] Adjudication application [8.12], [8.20], Swann Affidavit 18.

[16] Alliance Contracting Pty Ltd v James [2014] WASC 212 [59] ‑ [60]; Laing O'Rourke Australia Construction Pty Ltd v Samsung C&T Corp [2016] WASCA 130; (2016) 50 WAR 399 [201].

[17] Adjudication response, Swann Affidavit 595 ‑ 603.

[18] Adjudicator's Determination [31], Swann Affidavit 998.

[19] Adjudicator's Determination [36.8], [37.1], Swann Affidavit 1002.

[20] Adjudicator's Determination [38], Swann Affidavit 1003.

[21] Adjudicator's Determination [39], Swann Affidavit 1003, citing Cooper & Oxley Builders Pty Ltd v Steensma [2016] WASC 386 [23].

[22] Adjudicator's Determination [40], Swann Affidavit 1003.

[23] Adjudicator's Determination [40.6], Swann Affidavit 1006.

[24] Adjudicator's Determination [40.7], Swann Affidavit 1006.

[25] Adjudicator's Determination [40.8] (repeated in substance at [40.9.1]), Swann Affidavit 1007.

[26] Adjudicator's Determination [41.1], Swann Affidavit 1008.

[27] Adjudicator's Determination, Swann Affidavit 990.

[28] Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217; (2011) 43 WAR 319.

[29] Section 6(1). The provisions of s 6 regarding disputes over money retained or security held do not arise in this application.

[30] That is, hire of equipment and operator.

[32] Alliance Contracting Pty Ltd v James [65] ‑ [66].

[33] Cooper & Oxley Builders Pty Ltd v Steensma.

[34] Cooper & Oxley Builders Pty Ltd v Steensma [23].

[35] Duro Felguera Australia Pty Ltd v Samsung C&T Corporation [2018] WASCA 28; (2018) 52 WAR 323.

[36] Cheatley v The Queen [1972] HCA 63; (1972) 127 CLR 291, 308 ‑ 309; Re Narula, Ng & Hammersley; Ex parte Atanasoski [2003] WASCA 156 [48] ‑ [51].

[37] John Holland Pty Ltd v Chidambara [2017] WASC 179 [78] ‑ [80].

[38] Sandvik Mining and Construction Australia Pty Ltd v Fisher [2019] WASC 352.

[39] Related Entities and Claims are both defined terms. Claims has an expansive definition including claims under the Construction Contracts (Former Provisions) Act or any other type of claim arising out of or in connection with any Contracts.