BGC CONSTRUCTION PTY LTD -v- CITYGATE PROPERTIES PTY LTD [2016] WASC 88 (18 March 2016)

Construction Contracts Act 2004 (WA) s 31(2)(b) - Whether determination dealt with claims that were out of time - Where insufficient evidence to determine if claims out of time

Construction Contracts Act 2004 (WA) s 31(2)(b) - Whether adjudicator made determination on balance of probabilities - Where arithmetical and other errors in determination - Errors were within jurisdiction - Where slip rule would apply - Whether adjudicator determined dispute other than by reference to terms of contract

Construction Contracts Act 2004 (WA) s 32(2)(a) - Where adjudicator accepted submissions in rebuttal from applicant - No jurisdictional error - Adjudicator entitled to request rebuttal materials

Construction Contracts Act 2004 (WA) 29(1) - Whether adjudicator had material personal interest in payment dispute - Meaning of material personal interest - Adjudicator had no interest in payment dispute

Construction Contracts Act 2004 (WA) s 26(2)(a) - Construction Contracts Regulations 2004 (WA) reg 4, reg 5 - Whether application for adjudication contained respondent's contact details - Where respondent's ABN appeared in attachments to application but not on application document itself - Sufficient that ABN appeared in attachments

Judicial review - Jurisdictional error - Construction Contracts Act 2004 (WA) s 36(d) - Whether adjudicator gave adequate reasons - Where sums of money did not add up - Where impossible to work out how totals calculated - Where treatment of some claims irrational and perverse - Where reasons inadequate - Whether jurisdictional error - Inadequate reasons constituted constructive failure to exercise jurisdiction

Construction Contracts Act 2004 (WA) - Application to enforce - Where determinations invalid - Application dismissed - Whether party may seek enforcement when it acknowledges that determination awarded incorrect amount

Construction Contracts Act 2004 (WA), s 26, s 29, s 31, s 32, s 36

Construction Contracts Regulations 2004 (WA), reg 4, reg 5

The application in CIV 1802 of 2015 for leave to enforce the determinations dismissed

The application in CIV 2028 of 2015 be allowed and the determination quashed

The application in CIV 2029 of 2015 be allowed and the determination quashed

1 TOTTLE J: These reasons concern three interrelated applications arising from a dispute about the construction of an extension to a shopping centre.

2 In proceedings numbered CIV 1802 of 2015, BGC Construction Pty Ltd (BGC), as plaintiff, seeks leave to enter judgment against Citygate Properties Pty Ltd (Citygate), as defendant, in respect of two determinations made by Mr Mark Jones (the Adjudicator) in his capacity as an adjudicator under the Construction Contracts Act 2004 (WA) (the Act). The first determination (the first determination) was made on 3 March 2015 and it was, relevantly, in the sum of $402,273.21 (exclusive of GST). The second determination (the second determination) was sent to the parties' solicitors on 8 May 2015 and it was in the sum of $392,145 (exclusive of GST).

3 In proceedings numbered CIV 2029 of 2015 and CIV 2028 of 2016 Citygate applies for judicial review of the first determination and the second determination respectively, and for writs of certiorari quashing them. In each of these proceedings the Adjudicator is named as the respondent and BGC is named as an 'other party'. The Adjudicator has played no part in the proceedings. Whilst acknowledging that Citygate contends that the determinations were merely 'purported determinations', for brevity I will refer to the determinations simply as the 'first determination' or the 'second determination' or 'the determinations'.

4 On 1 April 2014 Citygate entered into a contract with BGC for the construction of the expansion to the Eaton Fair Shopping Centre for the sum of $57,680,069 plus GST (the Contract). The Contract comprised a formal instrument of agreement, letter of award and related documents, special conditions, Australian General Conditions of Contract AS2124 of 1992 (the General Conditions) and an annexure, annexure A. The contract price was $57,680,069 exclusive of GST and 'subject to any variations, adjustments or alterations pursuant to the Contract'. I will refer to particular provisions of the General Conditions in my analysis of the grounds relied upon by Citygate.

5 On 28 November 2014 BGC submitted progress claim 14 in an amount of approximately $5.3 million.

6 The superintendent of works (Superintendent) issued a payment certificate on progress claim 14 on 10 December 2014 in the sum of $3.8 million which was paid on 23 December 2014.

7 On 7 January 2015 BGC commenced an adjudication application in relation to payment certificate 14 in so far as it had disallowed progress claim 14, (the first application).

8 On 20 January 2015 the Superintendent issued a 'correcting' certificate for payments on progress claim 14.

9 On 5 February 2015 BGC submitted progress claim 16.

10 The last day available to the Adjudicator to dismiss or determine the first application was 5 February 2015. The parties consented to the time being extended to 26 February 2015.

11 On 19 February 2015 the Superintendent issued payment certificate 16.

12 On 25 and 26 February 2015 the Adjudicator and the parties' solicitors exchanged a number of emails discussing whether the parties would consent to an extension of the prescribed time for the delivery of the Adjudicator's determination in respect of the first application.

13 On 26 and 27 February and 3 March 2015 various versions of a determination were sent by email by the Adjudicator to the parties' solicitors. I set out the details of this and subsequent correspondence in my consideration of the first ground of Citygate's application in respect of the first determination.

14 On 19 March 2015 BGC served an adjudication application in respect of payment claim 16 (the second application).

15 On 2 April 2015 Citygate served its response to application for adjudication.

16 On 16 April 2015 BGC submitted a reply to Citygate's response.

17 On 23 April 2015 the Adjudicator requested an extension of time to 5 May 2015 to deliver his determination. Citygate's solicitors consented to the Adjudicator's request. BGC's solicitors did not consent to an extension of time to 5 May 2015 and stated that the determination must be provided by 30 April 2015.

18 On 28 April 2015 Citygate's solicitors wrote to the Adjudicator requesting that he disqualify himself from the adjudication on the second application. The Adjudicator responded by email that day and stated that he considered there was no reason for him to disqualify himself.

19 On 1 May 2016 BGC's solicitors wrote to Citygate's solicitors and recorded that they were not instructed to request the Adjudicator be disqualified.

20 On 30 April 2015 BGC's solicitors sent an email to the Adjudicator informing him that they consented to an extension of time within which the determination could be published to 'before midnight on Tuesday, 5 May 2015'.

21 At 3.37 pm on 5 May 2015 the Adjudicator sent an email to the parties saying he would not deliver the adjudication decision until payment of his fees was made. No previous request for payment of the fees had been made by the Adjudicator.

22 On 5 May 2015 BGC arranged for its bank to transfer its share of the Adjudicator's fees into his bank account. On the same day Citygate sent a cheque to the Adjudicator for its share of his fees. At 5.05 pm on 5 May 2015 Mr Geoff Prosser, a director of Citygate, sent an email to the Adjudicator advising that a cheque for Citygate's share of the Adjudicator's fees had been sent to him by post that afternoon. The email attached a copy of the letter enclosing the cheque and the cheque itself.

23 On 7 May 2015 the Adjudicator sent an email to Mr Prosser advising he had not received Citygate's cheque.

24 On 8 May 2015 the Adjudicator sent an email attaching the second determination to the parties. The determination was dated 5 May 2015.

Grounds relied upon in respect of the first determination

25 In support of its application in respect of the first determination, Citygate relies upon the following grounds:

(1) The first determination was delivered after the expiry of the time prescribed in s 31(1) of the Act and was thereby deemed dismissed under s 31(3) of the Act.

(2) 'Annexure A', which was sent to the parties at 11.52 pm on 26 February 2015, did not comply with s 36 of the Act in that it did not state an amount to be paid or give any reasons for the first determination and is therefore a nullity.

(3) In the alternative to (1), the first determination allowed payment claims (as defined in the Act) on which the Adjudicator had no jurisdiction to adjudicate, contrary to s 26 of the Act, in that those payment claims were out of time.

(4) The Adjudicator has failed to make the first determination on the balance of probabilities, contrary to s 31(2)(b) of the Act.

(5) In the alternative to (4), the Adjudicator received rebuttal material from BGC, contrary to s 32(1) of the Act.

26 These grounds must be considered in the context of the objects of the Act and its framework and by reference to the principles applicable to judicial review on the grounds of jurisdictional error.

27 The objects of the Act were summarised by K Martin J in Re Graham Anstee-Brook; Ex parte Mount Gibson Mining Ltd [2011] WASC 172; (2011) 42 WAR 35 at [60] as follows:

It is of fundamental importance, in my view, to understand that the object of this legislation was to attempt to reform earlier unacceptable scenarios of inequality of bargaining power in the construction contract environment. Contractors were highly vulnerable to being hurt by being kept out of funds due to them by an ongoing legal dispute in circumstances where they had performed the contracted work, but had not been paid. It is easy to see how a contractor who is leveraged and pressed for funds may lack the time, opportunity or resources to press its position to a result in a drawn out fight for payment against a well resourced principal, in a protracted arbitration or contested litigation. The speedy and informal procedures delivered as reforms by the Construction Contracts Act do not make the adjudicator's decision on the payment of funds final (save as to the capacity to obtain and enforce payment).

28 The framework of the Act was set out by Murphy JA in Perrinepod Pty Ltd v Georgio Building Pty Ltd [2011] WASCA 217; (2011) 43 WAR 319 between [29] and [51]. My analysis of the issues in this case has been informed by his Honour's comprehensive review of the provisions. Where necessary to do so, I have set out the statutory provisions bearing directly on the issues I must decide.

29 A determination made by an adjudicator under s 31(2)(b) of the Act is amenable to judicial review for jurisdictional error: Perrinepod Pty Ltd v Georgio Building Pty Ltd.

30 Defining what constitutes jurisdictional error is often difficult. In Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 Hayne J observed at [163]:

In deciding whether writs of prohibition and certiorari (and analogous forms of relief) should be granted, a distinction is drawn between jurisdictional error and error within jurisdiction. This Court has not accepted that this distinction should be discarded. As was noted in Craig v South Australia, that distinction may be difficult to draw. The difficulty of drawing a bright line between jurisdictional error and error in the exercise of jurisdiction should not be permitted, however, to obscure the difference that is illustrated by considering clear cases of each species of error. There is a jurisdictional error if the decision maker makes a decision outside the limits of the functions and powers conferred on him or her, or does something which he or she lacks power to do. By contrast, incorrectly deciding something which the decision maker is authorised to decide is an error within jurisdiction. (This is sometimes described as authority to go wrong, that is, to decide matters within jurisdiction incorrectly.) The former kind of error concerns departures from limits upon the exercise of power. The latter does not. (footnotes omitted)

31 The critical question underlying Citygate's grounds is whether the Adjudicator exceeded the authority to make a decision conferred upon him by the Act.

32 As Mitchell J observed in Laing O'Rourke Australia Construction Pty Ltd v Samsung C&T Corporation [2015] WASC 237 at [98] and [99] the answer to that question:

Will turn on the identification of the limits of authority conferred by the relevant statutory provision, and an analysis of the facts to ascertain whether those limits have been exceeded. The identification of those limits may also be described as identifying the conditions for the valid exercise of the statutory power.

The identification of the conditions for the valid exercise of the relevant statutory power is entirely a question of statutory construction. The proper construction of the relevant statute is 'reached by the application of rules of interpretation accepted by all arms of government in the system of a representative democracy'. (footnotes omitted)

Ground 1 - was the application determined within the prescribed time? Relevant statutory provisions

33 The sections of the Act that bear on this issue are s 31and s 32(3).

(1) In this section -

prescribed time means -

(a) if the appointed adjudicator is served with a response under section 27(1) - 14 days after the date of the service of the response;

(b) if the appointed adjudicator is not served with a response under section 27(1) - 14 days after the last date on which a response is required to be served under section 27(1).

(2) An appointed adjudicator must, within the prescribed time or any extension of it made under section 32(3)(a):

(a) dismiss the application without making a determination of its merits if:

(i) the contract concerned is not a construction contract;

(ii) the application has not been prepared and served in accordance with section 26;

(iii) an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract makes an order, judgment or other finding about the dispute that is the subject of the application; or

(iv) satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time or any extension of it is not sufficient for any other reason;

(b) otherwise, determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, or to return any security and, if so, determine:

(i) the amount to be paid or returned and any interest payable on it under section 33; and

(ii) the date on or before which the amount is to be paid, or the security is to be returned, as the case requires.

(3) If an application is not dismissed or determined under subsection (2) within the prescribed time, or any extension of it made under section 32(3)(a), the application is to be taken to have been dismissed when the time has elapsed.

...

(3) An appointed adjudicator may -

(a) with the consent of the parties, extend the time prescribed by section 31(2) for making a determination;

(b) with the consent of the parties, adjudicate simultaneously 2 or more payment disputes between the parties;

(c) with the consent of all the parties concerned, adjudicate the payment dispute simultaneously with another payment dispute.

34 It is common ground that the prescribed time for determining the first application was extended to midnight on 26 February 2015. It is also common ground that the determination was not made within that time.

35 In Alliance Contracting Pty Ltd v James [2014] WASC 212 Beech J stated (at [69]):

In my view, the scheme of the Act deliberately imposes strict time limits for all steps in respect of adjudication applications. To my mind, the Act does not reveal an intention that the strictness of these time limits is qualified by the potential revival of a right to obtain an adjudication determination after expiration of the time limit.

That is because of the operation of s 31(3) of the Act. That section provides that if an adjudicator does not make a determination within the prescribed time, 'the application is taken to have been dismissed when the time has elapsed'.

37 The following questions were raised by the facts and the submissions:

(a) Did the parties consent to extending the prescribed time and, if so, to when was the time extended?

(b) Did the Adjudicator consider that the parties had consented to an extension of the prescribed time?

(c) If the parties did not in fact consent to extending the prescribed time, was it sufficient that the Adjudicator acting reasonably concluded that the parties had consented to extending the prescribed time?

38 Citygate's position is that the parties did not consent to an extension of time beyond 26 February 2015.

39 In its written submissions, BGC's position was that the first determination was made within time because, as a matter of objective fact, the parties had consented to an extension of time.

40 In oral submissions, Mr Hodgkin, counsel for BGC, developed an alternative submission that the Adjudicator retained authority to determine the first application if he concluded, acting reasonably, that the parties had consented to an extension of the prescribed time (ts 66, 5 November 2015). The focus of this submission was not on whether the consent of the parties could be established as an objective fact, but on whether the Adjudicator 'reasonably understood' that the parties had consented to an extension of time.

41 Framed as a question of statutory construction, BGC's submission was that s 32(3)(a) of the Act should not be construed as requiring the existence of consent by the parties as a matter of fact, but as requiring a state of mind on the part of the Adjudicator, namely a satisfaction on his part that the parties had consented. Engaging in the 'nomenclature characterisation exercise' referred to by K Martin J in Delmere Holdings Pty Ltd v Green [2015] WASC 148 at [94], Mr Hotchkin for BGC submitted that the existence or otherwise of consent to an extension of the prescribed time was a 'broad' jurisdictional fact.

Did the parties in fact consent to an extension of time?

42 To answer this question it is necessary to return to the correspondence to which I have referred earlier in these reasons in greater detail.

43 The sequence starts with an email sent at 2.46 pm on 25 February 2015, by Mr Graeme Cantelo of the Department of Commerce Building Commission to the Adjudicator in which Mr Cantelo asked for a report on the first application. The Adjudicator responded by email sent at 7.16 pm on 25 February 2015. In the concluding paragraph the Adjudicator wrote:

Given the above, I will provide the determination tomorrow, and if the reasons are a bit thin, provide further supplementary reasons next week. That avoids me having to ask for any additional time.

44 Under cover of an email sent at 8.39 pm on 25 February 2015 the Adjudicator forwarded to the solicitors for the parties Mr Cantelo's email to him and his response. In the covering email the Adjudicator wrote:

Would what I have said below regarding providing the (financial) determination with basic reasons followed by more complete reasons a few days later satisfy the requirements of you and your clients? I would appreciate a joint response if possible. If so, I will provide it by email tonight with more complete reasons next week. If everybody intends to go away on the long weekend without reading the determination, and do not want it until they return, do not hesitate to tell me so.

45 The following morning at 10.12 am (26 February 2015) the Adjudicator sent a further email to the parties' solicitors. In that email the Adjudicator wrote:

Further to my email of 25 February 2015, if the parties do choose the option of deferring the requirement of the determination until Tuesday immediately after the long weekend, over the current alternative of a determination tonight and more complete reasons next week, I would commit to having the determination delivered by 11 am on Tuesday 3 May 2015. Of course that is entirely up to the parties to decide.

46 At about noon on 26 February 2015, Ms Michelmore of BGC's solicitors spoke to Mr Dunne of Citygate's solicitors. In her file note, Ms Michelmore recorded:

No agreement, they want in package and therefore are okay with waiting and we want decision this evening with reasons to follow.

No choice (all today) so therefore option one. agreed email and send.

47 At 12.08 pm on Thursday, 26 February 2015, Ms Michelmore wrote to the Adjudicator and said:

The parties have conferred and have not reached agreement. In those circumstances, the course to be adopted is option one, ie a determination provided this evening, with more complete reasons on Tuesday. If you have any queries please contact us.

49 At 12.44 pm on 26 February 2015 the Adjudicator responded by email to Ms Michelmore's email, and wrote:

Dear Parties,

Thank you for that advice.

50 At 11.52 pm on Thursday, 26 February 2015, the Adjudicator sent an email to Ms Michelmore and Mr Dunne which read in the following terms:

Dear Parties,

My preliminary determination is attached in PDF format. Annexure A is included in the determination PDF. The detailed variations are provided in Annexure B, which is provided in a second PDF.

Under s 41(1), determinations are final and I am not permitted to change any decision after I have issued it. However s 42(2) allows me to correct:

1. an accidental slip or omission;
2. a material arithmetic error; or

1. a material mistake in the description of a person, thing or matter.

Having rushed the completing, an arithmetic slip is possible and typographical errors are likely. I also found the treatment of GST to be inconsistent in some of the documents. Any slips or misinterpretations concerning GST should be brought to my attention. Please feel free to point out that you might see, but strictly limited to that categories. I cannot correct matters that a party may consider an error of law or logic.

Please also consider the contents of this email to be part of the determination itself.

51 Annexure B was not attached to the Adjudicator's email sent at 11.52 pm.

52 The document entitled annexure A, which was attached to the email sent at 11.52 pm on 26 February 2015, was a document of 12 pages. It was entitled 'Determination of a Payment Dispute' (Pursuant to the Construction Contracts Act 2004). The 'Determination Date' was recorded on page 1 of annexure A as '23 February 2015'. Under the heading 'DETERMINATION' the following paragraph appeared:

The respondent is liable to pay the applicant the amounts listed in Annexure B (plus GST) on account of the payment dispute within 5 working days of receiving my final determination.

53 Annexure A went on to record various items of information under headings and subheadings on matters such as appointment, what the Adjudicator had considered, comments on 'background', a description of the parties' general contentions, a description of the Adjudicator's functions, some remarks on jurisdictional issues and some general comments under the heading 'Consideration of the Merits'. Annexure A ends with the words:

Annexure B contains the detailed consideration of the variations that comprise this payment dispute.

54 No annexure B was attached to the email sent at 11.52 pm on 26 February 2015.

55 At 00.53 am on Friday, 27 February 2015, the Adjudicator sent an email in identical terms to that sent by him at 11.52 pm on 26 February, but this email attached both annexures A and B.

56 Annexure B took the form of an 88page schedule divided into three columns. In column one the Adjudicator set out details of each of the claims made by BGC in respect of variations, Citygate's contentions, BGC's responses and his assessment of the claims. In column two the Adjudicator set out the amounts (if any) conceded by Citygate as payable in respect of each item listed in column one. In column three the Adjudicator set out the additional amounts (if any) that he considered to be payable. The schedule was prefaced by a note which read as follows:

Note:

The amounts in the left column are those conceded by Citygate in its response to the adjudication application. The amounts in the right column are amounts I have determined separately to be payable.

My determination should be read to mean the entire amount in both columns have been assessed as payable, but the amounts in the left column conceded by Citygate may have already been paid independently of this adjudication determination. In that case the determination would be reduced by the amount paid. The amounts conceded are included in the determination to ensure Citygate does pay them, and to provide BGC with a mechanism for ensuring that Citygate does pay what it has committed to pay, but only pay once.

The principal is [sic] provided in the main body of my determination have been applied to the claims in this Annexure. Due to time constraints, I have not been able to provide all of the detailed reasons for each individual variation claim tonight. The more detailed reasons will follow the same pattern as used for the variations where the reasons are complete and follow the same principles expressed in the body of the determination.

57 On 3 March 2015, at 5.31 pm, the Adjudicator sent an email to Ms Michelmore and Mr Dunne in the following terms:

Dear Parties

My final determination is attached with reasons and corrections permitted under s 41. I have to access my account package to obtain my hours which will follow as annexure C.

58 This email attached revised versions of annexures A and B as they had been sent to the parties on the night of 26/27 February 2015 (as attachments to the emails to which I have referred above).

59 Annexure A was in the same format as annexure A sent by email to the parties on 26 and 27 February 2015. Under the heading 'DETERMINATION' on page 3 of this document the following paragraphs appeared:

1. The respondent is liable to pay the applicant the amounts listed in Annexure B being $1,256,819.56 (Inc GST) within 5 working days of this my final determination, on account of the payment dispute.
2. I note $791,399.52 of the above amount has been agreed by Citygate and may have already been paid. For that reason, I will not calculate interest but leave that for the parties to do, based on the amounts paid and date paid.

60 The reasons in annexure A were, however, more extensive and detailed than those contained in annexure A sent on 26 and 27 February 2015.

61 The annexure B sent under cover of the Adjudicator's email of 3 March 2015 omitted the prefatory note which was in the annexure B attached to the 27 February 2015 email. It comprised, however, some 91 pages and on the final page there was a calculation of the totals of the amounts which the Adjudicator understood were conceded by Citygate and the amounts determined by him to be payable. Those amounts (inclusive of GST) were $791,399.52 and $465,420.04 respectively.

62 On 15 April 2015, Citygate's solicitors wrote to BGC's solicitors in response to the notice they had received from them to the effect that they, BGC's solicitors, had been instructed to register the first determination. In their letter Citygate's solicitors contended, amongst other things, that the first application was deemed to have been dismissed pursuant to s 31(3) of the Act as it had not been made within the prescribed time.

63 Although Citygate's solicitors' letter of 15 April 2015 was headed with the words 'Without prejudice save and except as to costs', BGC's solicitors took the view there was nothing in the letter of 15 April 2015 which attracted 'without prejudice' privilege. Under cover of a letter sent to the Adjudicator on 16 April 2015, but incorrectly dated 30 January 2015, BGC's solicitors provided the Adjudicator with a copy of Citygate's solicitors' letter of 15 April 2015. BGC's solicitors wrote as follows:

Please find enclosed a letter from solicitors for Citygate (incorrectly marked 'Without Prejudice'), informing us that their client takes the view that your previous determination is invalid, for the reasons set out in the letter. Their contentions are obviously of great concern to our client, given the legal costs it incurred in bringing the application, if it is unable to obtain registration of the purported determination.

On the face of it, their contentions appear to have some merit. However, before we respond to them, given the seriousness of the contention, we invite you to let us know by close of business next Tuesday, 21 April 2015 whether there is any reason or matter which ought to be brought to our attention as material to our response. If we do not hear from you by then, we will take it that you concede that your purported determination is invalid, or at least that you do not have any reason or matter which may suggest otherwise.

We look forward to your urgent reply within that time. We have prepared documents to register the purported determination in the Supreme Court, so your prompt response would be appreciated.

64 The Adjudicator responded to BGC's solicitors' letter sent on 16 April 2015 by email sent at 4.54 pm on 21 April 2015 to the solicitors for both parties. In his email the Adjudicator wrote as follows:

Dear Ms Michelmore

I refer to your email and attached letter dated 15 April 2015.

My comments on the issues raised are as follows.

The background is worth briefly noting.

1. The adjudication work was stop/start due to additional submissions on jurisdiction issues and a medical issues [sic] I faced at the time. Extensions of time were formally approved until 26 February.
2. During that week, I was advised the parties were negotiating in an attempt to come to a resolution. Perhaps I was over-optimistic about that process.
3. At 8.39 pm on 25 Feb I emailed the parties advising I was still behind and suggesting if the parties were not going to deal with my determination on receipt due to the weekend being a long weekend, I would prefer to provide a complete determination the following week. Alternatively I could provide 'the (financial) determination with basic reasons'... 'tomorrow night' and a more complete document next week.
4. Having received no response, I repeated the request for advice in similar terms in an email at 10.12am on 26 February.
5. At 12.08pm on 26 Feb I received an email from the parties advising they had not been able to reach agreement and requesting a determination 'this evening, with more complete reasons on Tuesday'.
6. At 11.52pm that evening I emailed the financial determination to the parties, which for want of a better word I called a 'preliminary determination' along the lines commonly used in arbitrations. In that email I said due to rushing the completion there may be slips errors and ommissions [sic] and invited the parties to 'point out any that you might see, but strictly limited to those categories.'
7. An hour later I realised the annexure with the financial aspects of the determination had not been transmitted and I re-emailed the document. That was at 12.53am.

1. Despite considerable work being required to be undertaken by, the applicant based on the payment response, and the adjudicator based on the application for adjudication, the response conceded a considerable number of claims in its response. Unless I was being misled in the response, those items do not need any reasons or explanations having been conceded by the respondent and were included to avoid any double dipping as far as possible.
2. As far as adequacy of reasons for other claims is concerned;

1. The claims conceded by the respondent are covered above. 2. The communications indicated the reasons would initially be brief.

1. In any case, the principles for the reasons were provided in the preliminary determination.

1. Unlike arbitrations, there is no established standard for reasons in adjudications in WA. 2. The adjudicator 'must act informally' and is given a wide scope to follow his or her own procedures.
2. Regarding being 'out of time', the time communicated was informal using expressions 'this evening' and 'tonight' [sic]. A reasonable person would consider that to mean 'during the night' or 'before work tomorrow' or expressions to that affect [sic], unless it was specified more precisely.
3. Any missing information should be able to be corrected by the slip rule in s41. The number and type of corrections observed in determinations from all adjudicators has been extensive, but to the best of my knowledge, in the 84 appeals or reviews in the SAT or court to date, none have involved challenges to s41. [sic] corrections.
4. In particular, it is common for annexures in applications and responses to be mentioned in the submissions but missing in the bundle. In a process like the CC Act with such tight deadlines for preparing submissions, I am yet to encounter an adjudicator who would not simply bring it to the attention of the party and ask for the missing annexure. I would expect the same of a party to an adjudication.
5. If the respondent had any issue with the contents or validity of the determination, it should have taken the opportunity to voice it when invited to on 26 Feb, rather than wait until the time allowed in s37(2)(b) had run its course.

Please advise if you require any other issues to be addressed.

Kind regards

Mark Jones

65 Later on the same day, 21 April 2015, at 9.46 pm, the Adjudicator wrote to the parties' solicitors and stated:

I missed the most important issue from the list below. The issue is the cases are unanimous that an adjudicator can make a legal or material mistake, within jurisdiction. Furthermore, any lack of jurisdiction is determined issue by issue.

Did the parties consent to an extension of the prescribed time?

66 In my judgment, as a matter of objective fact, the parties did not consent to extending the time for the making of a determination in respect of the first application beyond 26 February 2015. The Adjudicator asked for an extension of time. The parties' solicitors conferred. As recorded in Ms Michelmore's file note and in her email to the Adjudicator, the parties were unable to reach agreement. Ms Michelmore informed the Adjudicator by email that the parties had not been able to agree to extend time and that a determination had to be provided that evening.

Did the Adjudicator consider the parties had consented to an extension of the prescribed time?

67 I infer from the fact that the Adjudicator attempted to send his determination to the parties on 26 February 2015 under cover of his email sent at 11.52 pm that he knew that the parties had not consented to an extension of time beyond midnight that day. That inference is reinforced by the references made by the Adjudicator, in both his email of 26 February 2015 at 11.52 pm and his email of 3 March 2015 at 5.31 pm, to the provisions of s 41 of the Act. Section 41(1)(a) of the Act provides that a determination made by an adjudicator cannot be subsequently amended or cancelled except with the consent of the parties. Section 41(2) of the Act provides that, despite s 41(1)(a), an Adjudicator may correct accidental slips or omissions, material arithmetic errors, and material mistakes in the description of any person, thing or matter made in the determination. The Adjudicator's references in his emails of 26 and 27 February to s 41(2) of the Act were pointed and they had relevance only if the Adjudicator considered that the documents he intended to attach to his emails constituted a 'determination' within the meaning of the Act.

68 Moreover, it is clear from the terms of his email of 5.31 pm on 3 March 2015 that the documents the Adjudicator was sending under cover of that email constituted the determination he had provided on the night of 26/27 February 2015 amended to correct errors of the nature set out in s 41(2) of the Act. There is nothing in that email or, indeed, in any of the correspondence which suggests the Adjudicator considered the parties had consented to the prescribed time being extended to an unspecified time on 3 March 2015.

69 In his email to the parties' solicitors of 4.54 pm on 21 April 2015 the Adjudicator, presumably referring to Ms Michelmore's email to him of 12.08 pm on 26 February 2015, contended that a reasonable person would consider the expressions 'this evening' and 'tonight' to mean 'during the night' or 'before work tomorrow'. I pause to note that Ms Michelmore did not use the word 'tonight' in her email. In my view, the very fact the Adjudicator engaged in a discussion of what a reasonable person might consider these expressions to mean makes it clear beyond peradventure that he did not consider the parties had consented to the prescribed time being extended to 3 March 2015. If the Adjudicator had thought the parties had consented to the prescribed time being extended to 3 March 2015, he would have said so in his email of 21 April 2015 rather than focussing on what a reasonable person might understand by the words 'this evening'.

70 Taking the view most favourable to BGC, the Adjudicator might have concluded the prescribed time had been extended to some time on 27 February 2015, though, with respect to the Adjudicator, I consider his reliance on what a reasonable person might have thought is an attempt at rationalisation after the event rather than a reflection of his state of mind on 26 February 2015. As I have said above, I think the attempts made by the Adjudicator to give the parties his determination before midnight on 26 February 2015 give rise to the compelling inference that he understood the prescribed time expired at midnight on 26 February and not some time 'during the night' or 'before work tomorrow'.

71 I have concluded that the parties did not consent to the prescribed time being extended beyond midnight on 26 February 2015 and that the Adjudicator did not consider that the prescribed time had been extended to 3 March 2015. It follows that the first application was taken to have been dismissed at midnight on 26 February 2015. In those circumstances, it is unnecessary to consider BGC's alternative argument to the effect that the critical question is not whether the parties did, in fact, consent to extending the prescribed time to 3 March 2015 but whether the Adjudicator reasonably considered they had done so.

72 Citygate has made out ground 1 of its application with the consequence that the first determination should be quashed.

Ground 2 - did annexure A sent to the parties' solicitors at 11.52 pm on 26 February 2015 constitute a valid determination?

73 BGC did not contend that annexure A as sent to the parties on 26 February 2015, on its own, constituted a valid determination and thus it is unnecessary to consider this ground. As referred to above, BGC's case was that the first determination was sent to the parties on 3 March 2015 and that the prescribed time had been extended to permit this to occur. Ground 2 is subsumed into ground 1.

Ground 3 - did the first determination adjudicate upon claims that were out of time?

74 Citygate submits that 14 of the claims adjudicated in the first determination were the subject of payment disputes which arose more than 28 days before the first application was made, and thus the application was not prepared and served in accordance with s 26(1) of the Act. Relevantly, the claims were in respect of variations. The controversy between the parties centred upon whether the communications that had taken place more than 28 days before the first application was made were 'payment claims' within the meaning of s 3 of the Act as Citygate contends or, as BGC contends, merely one of the forms of notice that BGC was required by the General Conditions to give to Citygate in relation to variations.

75 This ground, and Citygate's submissions in support of it, require me to make findings of fact to the effect that, in relation to each of the specified variations, a payment dispute had arisen more than 28 days before the first application was made. It was submitted on Citygate's behalf that I should make those findings by reference to the summary of the events and correspondence provided by the Adjudicator in column one of annexure B (ts 70, 23 October 2015). It was submitted on BGC's behalf that this ground of Citygate's challenge to the first determination relied upon facts asserted by it but not supported by evidence and that there was no basis upon which I could make the factual findings sought by Citygate.

76 Generally, the Adjudicator's summary of the background to each variation claim was lengthy and appeared to be comprehensive. By way of example in relation to CV 143 the Adjudicator summarised events that took place over 11 months from January 2014 to November 2014 and referred to at least seven documents or items of correspondence. None of those documents were, however, in evidence before me.

77 It is impossible for me to make the findings of fact Citygate requires to sustain this ground. Essentially, Citygate is asking the Court to hold that the Adjudicator's conclusions in relation to these claims were incorrect without putting the materials upon which the Adjudicator reached his decision before the Court. Ground 3 is not made out.

Ground 4 - did the Adjudicator fail to make a determination on the balance of probabilities as required by s 31(2)(b) of the Act?

78 Citygate sought to sustain this ground by reference to a number of statements made by the Adjudicator in annexure A as to his understanding of his function. It was submitted that these statements taken with the manner in which the Adjudicator had dealt with specific claims in annexure B demonstrated the Adjudicator had not determined whether Citygate was liable to make a payment in respect of the payment dispute on the balance of probabilities.

79 I set out below the relevant extracts from annexure A.

1. The intention of the legislature when drafting the CC Act is indisputably for adjudicators take a pragmatic approach to payment disputes and, where possible, consider the merits rather than dismiss contentions of the parties on legal technicalities. I believe that extends to some account to contractual technicalities.
2. The object of the CC Act as express [sic] in the Act and should there be any doubt, as supported by the relevant pages in Hansard, is to strike a balance between legal and contractual precision and a consideration of the underlying merits. I believe the intention of the CC Act are [sic] better served by a liberal approach to the subjective text.
3. Finding payment certificate to be invalid, leading to a deemed certificate, is an all or nothing decision. Despite my conclusion above that I will not accept the entire Payment Claim is invalid leading to a deemed certificate, I believe some of the items that lacked details to the extent that, had they been a payment certificate in isolation, I would have rejected that payment certificate and found a deemed certificate.
4. I believe the CC Act allows me sufficient flexibility to be harsh on terms rejected with little or no explanation. Not to do so would rob BGC of its right to adjudication on that issue for ever. When I encounter extreme examples I will treat them as though they were a 'partially deemed certificate'. This approach may not be acceptable in a black letter environment, but I believe in an adjudication under the framework provided in the CC Act this pragmatic approach serves the Act better than a win all/lose all approach.
5. No doubt, whether I am right or wrong will one day be tested in the SAT or the courts.

1. BGC's alternative submission on the payment certificate is a rather technical one. The argument is that Citygate could only do this by set off under clause 42.1 or a correcting certificate under clause 42.2, but that Citygate has not claimed it did either.
2. I prefer the approach of Citygate, which submits a correcting certificate does not necessarily need to be a stand-alone certificate. The comments by DC J O'Neill's on clause 42.2 of the Contract in his decision in Merym provide the best approach to my mind.
3. The 2 extracts from Merym that were provided by Citygate explain the approach I would take. They are:

61.1 'any error which has been discovered in any previous certificate [extending] to an error induced by misapprehension on the part of the superintendent as to the manner in which he is obliged to deal with ... '

61.2 'at any time from time to time, the Superintendent may by a further certificate correct any error which has been discovered in any previous certificate ... '

1. This approach is consistent with my approach on other comparable issues.

62.1 Citygate suggests at times claims are stale because the 'dispute has existed since ...'. A payment dispute under the CC Act is a technical term determined by the application of section 6 to the facts. In most of these situations, a payment dispute under the CC Act has not arisen. No matter how confrontational the parties, they should consider the issue as perhaps no more than an argument at that stage. An argument about a variation cannot escalate to be a dispute until BGC submits it as part of a payment claim. A variation request is not a payment claim, no matter how many times BGC submits it or changes it. Exchanges of correspondence, emails and meeting cannot be construed as a payment dispute.

62.2 Converse to the above, once a claim is submitted in a payment claim and rejected or not paid, the unpaid or rejected amount is the subject of a payment dispute. A claim for the disputed part of the claim can be submitted again but any opportunity to have a claim based on the subject matter of the disputed part of the claim adjudicated is permanently lost. Changing the description, price or other characteristic of the claim or subject matter does not change that fact.

62.3 However, if a contractor has submitted a claim, which is approved in full or in part by the principal, it has not been disputed. The claim sits in all future claims as part of the accounting process but that is not a claim in a money sense. Should that claim or part of a claim be disputed, or approval reversed, in payment certificate issued in response to a future payment claim, a dispute then arises. It [sic] such a situation the claim is not stale, but as fresh as the morning air and ripe for adjudication.

62.4 In many of its submissions on variations, BGC has submitted that I should prefer it's [sic] more detailed analysis and evidence over that of Citygate. Where that occurs, I agree. Facts and supporting documents always trump opinions. BGC has not raised this as a specific point in its submissions, but has used the argument many times when considering specific variations. I will be applying that principle throughout my analysis of the variations, and do not see the need to repeat detailed reasons on each of the many occasions.

1. The CC Act is often referred to as a quick and dirty approach to resolving payment disputes. By its nature, a quick and dirty process will include subjective analysis more often than other approaches may involve. With that in mind, long delays in considering variations can influence the subjective part of my assessment given the objective of the CC Act to keep money flowing and the freedom encouraged by it in section 32.

80 As K Martin J observed in Red Ink Homes Pty Ltd v Court [2014] WASC 52 at [64] frequently (as in this case) adjudicators will not be lawyers (although the Adjudicator may have held a law degree) and when a court scrutinises an adjudicator's reasons considerable allowances need to be made to reflect the exigencies of the 'triage relief regime' within which adjudicators are called upon to make decisions.

81 In Cape Range Electrical Contractors Pty Ltd v Austral Construction Pty Ltd [2012] WASC 304, Pritchard J made observations to a similar effect. Her Honour referred to the relatively confined role of an adjudicator in conducting an adjudication under the Act and at [56] to [58] made observations about the reasons to be given by adjudicators that are particularly apposite to Citygate's criticisms of the Adjudicator's reasons.

Against this background, it cannot be said that the Parliament intended that an adjudicator would express himself or herself with the same degree of legal precision as would a court in examining the terms of a contract, or in applying the requirements of the CC Act in the context of a particular contract, or that an adjudicator would be expected to deal with arguments other than those expressly raised by the parties in relation to the construction of the contract the subject of the adjudication.

Other provisions of the CC Act and the CC Regulations concerning the content of a determination also reinforce this conclusion. It is clear from s 36 of the CC Act that a determination must be in writing, and must contain certain information of a limited nature, including information set out in the CC Regulations (including the name of the adjudicator, of the applicant and respondent, and the date of the adjudication), the amount to be paid and the date by which it is to be paid, and must give reasons for the determination. These provisions appear to be concerned with ensuring that the outcome of an adjudication is known with certainty by the parties to the payment dispute and by courts or arbitrators who may be called upon to resolve broader disputes arising under the construction contract (and which overlap with the subject of the payment dispute) and in doing so, will be required to take into account the outcome of an adjudication.

These considerations suggest that, in assessing whether an adjudicator has made errors of a kind which would render a determination invalid, it would be entirely inapt to engage in a 'line by line' scrutiny of a determination. To do so would be to risk descending into a merits review of an adjudicator's determination. Further, an approach of that kind would have the potential to undermine the objectives of the CC Act to facilitate an informal and speedy means for resolving payment disputes between parties to construction contracts, while preserving a right to litigate or arbitrate about any substantive areas of dispute underlying those payment disputes. (footnotes omitted)

82 To make good its contention that the Adjudicator did not resolve the payment dispute on the balance of probabilities Citygate relies on two matters: first, the observations made by the Adjudicator in the passages of annexure A, which I have set out above; secondly, the Adjudicator's conclusions in relation to 12 variation claims.

83 I do not infer from the Adjudicator's observations in the paragraphs of annexure A to which reference has been made that he misunderstood the task he had to perform or how he had to go about determining the payment dispute, especially when those passages are read with annexure B, in which he refers on several occasions to the need to determine claims on the balance of probabilities. That said, with respect to the Adjudicator, it is not helpful to include in a determination references to the adjudication process being a 'quick and dirty process' and like remarks. Such remarks do not instil confidence in the process. Moreover, there is a danger such observations form a gloss on the requirements of the Act which distract from the task adjudicators are bound to perform.

84 Turning now to the Adjudicator's treatment of the 12 variations on which Citygate focuses, the relevant variations were those numbered 158, 212, 285, 318, 331, 387, 414, 118, 146, 155, 169 and 309.

85 It is undoubtedly the case the Adjudicator was under great pressure to finalise the first determination within time. With respect to the Adjudicator, and no doubt due to his desire to comply with the deadline to which he was working, it is apparent that errors have been made. In the reasons given by the Adjudicator in respect of variation 212 it is apparent that he considered the claim to be 'stale' or made out of time, and that it should not be allowed in favour of BGC, but the amount claimed was entered into the incorrect column by the Adjudicator and allowed in error. The same mistake was made in respect of variation 118 where the amount allowed in error was $13,709.

86 In my view, however, these were errors within jurisdiction that were capable of being addressed by the invocation of the slip rule. They were not errors that suggest the Adjudicator misunderstood his task or approached his task otherwise than with an appreciation that the payment claims had to be determined on the balance of probabilities.

87 I have given close consideration to the other 10 variation claims relied upon by Citygate to support its submission that the Adjudicator failed to make a determination of the payment dispute on the balance of probabilities. Some of the reasons given by the Adjudicator are cryptic but, read in the overall context of the first determination, they do not support Citygate's case on ground 4. If the Adjudicator made errors, they were errors within jurisdiction.

88 Citygate made two additional substantive submissions, nominally under the heading of ground 4, though in truth they asserted qualitatively different errors and I have treated them as unpleaded grounds of review.

89 First, it was contended that the Adjudicator had made arithmetical errors in annexure B. It was contended that the aggregate of the amounts in column two of annexure B, 'Amounts conceded as payable by Citygate', was $726,116.90 and not $719,454.11 as recorded by the Adjudicator. It was submitted that there was no way of determining from the reasons what 'the Adjudicator's sums ought rationally be', and thus there had been a failure to comply with s 36 of the Act and jurisdictional error. It was also contended that the total payable, if the amounts conceded were ignored, was $1,264,148.63 and not $1,256,819.56.

90 In my view, these are precisely the kind of material arithmetical errors that the parties were at liberty to apply to the Adjudicator to correct pursuant to s 41(2)(b) of the Act. BGC submitted that the failure by Citygate to avail itself of the right to apply to the Adjudicator to correct these errors was a powerful factor against the grant of a discretionary remedy in the form of judicial review. I accept that submission, albeit that in the light of my conclusions in respect of ground 1, I do not get to the point of having to consider such discretionary factors.

91 The second additional substantive submission made by Citygate under this ground was that the Adjudicator had determined the payment dispute otherwise than by reference to the terms of the Contract. The basal proposition on which Citygate relies in support of this submission is not controversial. A payment dispute must be determined by reference to the terms of the construction contract under which the payment claim arose.

92 In its written submissions Citygate developed its argument as follows:

• The Superintendent's certificate issued under cl 42.1 of the General Conditions was binding between the parties as to the quantum of claims.
• Clause 42.1 provided for payment of the amount specified in the Superintendent's certificate to be made within 14 days and so Citygate submitted, 'In the absence of compliance with the certificate no relevant payment dispute has arisen'.
• The contractually conclusive effect of the Superintendent's certificate is that moneys sought by BGC were not owing.
• Before the Adjudicator could make a determination in BGC's favour he had to identify some non-compliance with the contract by Citygate.
• The Adjudicator had not done so and there was a failure by the Adjudicator to identify and apply correctly the terms of the Contract and he had thus acted beyond power thereby invaliding the determination.

93 In oral submissions counsel for Citygate contended that BGC could not 'adjudicate the finality of the certificate' and that it was bound by the certificate unless it was challenged by the service of a notice of dispute pursuant to cl 7 of the General Conditions.

94 The relevant parts of cl 42.1 of the General Conditions reads as follows:

42.1 Payment Claims, Certificates, Calculations and Time for Payment

At the times for payment claims stated in the Annexure and upon issue of a Certificate of Practical Completion and within the time prescribed by Clause 42.7, the Contractor shall deliver to the Superintendent claims for payment supported by evidence of the amount due to the Contactor and such information as the Superintendent may reasonably require. Claims for payment shall include the value of work carried out by the Contractor in the performance of the Contract to that time together with all amounts due to the Contractor arising out of or in connection with the Contract or for any alleged breach thereof.

Within 14 days after receipt of a claim for payment, the Superintendent shall issue to the Principal and to the Contractor a payment certificate stating the amount of the payment which, in the opinion of the Superintendent, is to be made by the Principal to the Contractor or by the Contractor to the Principal. The Superintendent shall set out in the certificate the calculations employed to arrive at the amount and, if the amount is more or less than the amount claimed by the Contractor, the reasons for the difference. The Superintendent shall allow in any payment certificate issued pursuant to this Clause 42.1 or any Final Certificate issued pursuant to Clause 42.8 or a Certificate issued pursuant to Clause 44.6, amounts paid under the Contract and amounts otherwise due from the Principal to the Contractor and/or due from the Contractor to the Principal arising out of or in connection with the Contract including but not limited to any amount due or to be credited under any provision of the Contract.

If the Contractor fails to make a claim for payment under Clause 42.1, the superintendent may nevertheless issue a payment certificate.

Subject to the provisions of the Contract, within 28 days after receipt by the Superintendent of a claim for payment or within 14 days of issue by the Superintendent of the Superintendent's payment certificate, whichever is the earlier, the Principal shall pay to the Contractor or the Contractor shall pay to the Principal, as the case may be, an amount not less than the amount shown in the Certificate as due to the Contractor or to the Principal as the case may be, or if no payment certificate has been issued, the Principal shall pay the amount of the Contractor's claim. A payment made pursuant to this Clause shall not prejudice the right of either party to dispute under Clause 47 whether the amount so paid is the amount properly due and payable and on determination (whether under Clause 47 or as otherwise agreed) of the amount so properly due and payable, the Principal or Contractor, as the case may be, shall be liable to pay the difference between the amount of such payment and the amount so properly due and payable.

Payment of moneys shall not be evidence of the value of work or an admission of liability or evidence that work has been executed satisfactorily but shall be a payment on account only, except as provided by Clause 42.8.

42.6 Effect of Certificates

The issue of a payment certificate or a Certificate of Practical Completion shall not constitute approval of any work or other matter nor shall it prejudice any claim by the Principal or the Contractor.

96 The dispute resolution provision contained in cl 47 provides for the service of a notice of dispute followed thereafter by various forms of alternative dispute resolution and if those fail to achieve a negotiated outcome, by arbitration.

97 I do not accept Citygate's submission that the Adjudicator failed to determine the payment dispute in accordance with the terms of the Contract by failing to recognise what Citygate contends was the conclusive nature of payment certificate 14.

98 The express terms of cl 42.1 make it clear that a payment certificate states the amount of the payment that has to be made 'in the opinion of the Superintendent'. A payment certificate does not purport to be a final determination of the parties' entitlements. The opposite is the case. Payments made pursuant to a payment certificate issued in accordance with cl 42.1 are on account only and are not to be taken as evidence of the value of the work. Clause 42 provides that the issue of a payment certificate shall not prejudice any claim by the Principal or the Contractor.

99 In my view, there is nothing in cl 42.1 of the General Conditions that operated to prevent the Adjudicator from determining the payment claims made in the manner in which he did; and, in doing so, he did not fail to determine the payment dispute in accordance with the terms of the Contract.

Ground 5 - did the Adjudicator receive 'rebuttal material' from BGC contrary to s 32(1) of the Act?

100 Citygate's written submissions did not address this ground. In oral submissions it was submitted that the 'Adjudicator took into account rebuttal materials outside of his powers and functions' (ts 10, 23 October 2015).

101 On 21 January 2015 Citygate served its response to the first application. On 23 January 2015 BGC's solicitors sought leave to make submissions in answer to the response on grounds that:

Citygate's Response contains reasons for the Superintendent's assessment of the variations which have not previously been provided to BGC and which could not therefore have been anticipated by BGC in the Application.

102 In an email sent on 26 January 2015 the Adjudicator made the following request:

Pursuant to section 32(2)(a), I request you provide a submission addressing any issues raised in the response to your application that had not previously been raised by the respondent. For the avoidance of doubt, this request is intended to cover reason [sic] for rejecting the payment claim that were not provided in the progress certificate but were later provided in the adjudication response.

103 The Adjudicator suggested a timetable for the delivery of submissions and ultimately, on 30 January 2015, BGC's solicitors provided the Adjudicator with submissions answering some of the matters raised in the Response.

104 Section 32 of the Act governs the procedure to be followed by adjudicators. Relevantly it provides:

(1) For the purposes of making a determination, an appointed adjudicator -

(a) must act informally and if possible make the determination on the basis of -

(i) the application and its attachments; and

(ii) if a response has been prepared and served in accordance with section 27, the response and its attachments;

and

(b) is not bound by the rules of evidence and may inform himself or herself in any way he or she thinks fit.

(2) In order to obtain sufficient information to make a determination, an appointed adjudicator may -

(a) request a party to make a, or a further, written submission or to provide information or documentation, and may set a deadline for doing so;

(b) request the parties to attend a conference with the adjudicator;

(c) unless all the parties object -

(i) inspect any work or thing to which the payment dispute relates, provided the occupier of any place concerned consents to the entry and inspection;

(ii) arrange for any thing to which the payment dispute relates to be tested, provided the owner of the thing consents to the testing;

(iii) engage an expert to investigate and report on any matter relevant to the payment dispute.

...

(6) To the extent that the practice and procedure in relation to adjudications is not regulated by this Part or the regulations, an appointed adjudicator may determine his or her own procedure.

105 In my view, the Adjudicator had power to ask BGC to provide what Citygate has characterised as 'rebuttal materials' and, thereafter, was at liberty to take those materials into account in the course of making his determination. By doing so, he did not exceed his authority to decide and made no jurisdictional error. Ground 5 is not made out.

106 Citygate relied on the following grounds to challenge the second determination.

(1) The second determination was delivered after the time prescribed in s 31(1) of the Act and the second application is thereby deemed dismissed under s 31(3) of the Act.

(2) The Adjudicator was disqualified from adjudicating the application as, contrary to s 29 of the Act, he had a material personal interest in the payment dispute in that fees charged for a prior adjudication between the parties were subject to being returned on the suggestion of BGC.

(3) In the alternative to (1), the Adjudicator received rebuttal materials from BGC, contrary to s 32(1) of the Act.

(4) In the alternative to (1), the Adjudicator did not comply with s 26(2)(a) of the Act and, in particular, regulation 4 of the Construction Contracts Regulations 2004 (WA) and the second application should have been dismissed.

(5) In the alternative to (1), the second determination allowed payment claims (as defined in the Act) on which the Adjudicator had no jurisdiction to adjudicate, pursuant to s 26 of the Act, as those payment claims were out of time.

(6) The Adjudicator failed to make the second determination on the balance of probabilities, contrary to s 31(2)(b) of the Act, and on the application and its attachments and the response and its attachments, contrary to s 32(1)(a) and (b) of the Act.

(7) In the alternative to (6), the Adjudicator failed to give reasons for the second determination, contrary to s 36(d) of the Act.

Ground 1: was the second application determined within the prescribed time?

107 It is common ground that the prescribed time for the making of the second determination was extended to midnight on 5 May 2015.

108 At 3.37 pm on 5 May 2015 the Adjudicator sent an email to the parties' solicitors requesting payment of his fees prior to the provision of the second determination. The relevant part of the email read as follows:

Subject to confirmation of payment into my bank account, as allowed under s44(4), I will email my determination tonight. I request each party pay the amount of $5,775.00 into my account and provide a transmittal document once payment has been made.

109 Mr Jones went on to set out details of his bank account.

110 At 4.57 pm on 5 May 2015 BGC's solicitors provided evidence that BGC had authorised its bank to pay the Adjudicator $5,775 and the amount would be received in the Adjudicator's bank account the following day.

111 Citygate received notice of the Adjudicator's request for payment too late to be able to arrange transfer of the funds into the Adjudicator's account by bank transfer, but its director, Mr Geoff Prosser, sent the Adjudicator an email at 5.05 pm on 5 May 2015 attaching a copy of a letter enclosing a cheque made payable to the Adjudicator in the sum of $5,775 which he stated had been posted that afternoon.

112 Citygate's letter of 5 May 2015 and the cheque for its share of the Adjudicator's fees were not received by the Adjudicator until 8 May 2015.

113 At 4.23 pm on 8 May 2015 the Adjudicator sent an email to the parties' solicitors attaching the second determination.

114 It was submitted on Citygate's behalf that the Adjudicator's request for payment of his fees was 'a device by which he could give himself more time' and that I should infer that the second determination had not been completed by midnight on 5 May 2015. It was contended that inference arose from the fact the request was made and from the fact that when the second determination was provided to the parties on 8 May 2015 it was not complete.

115 Section 44(4) of the Act must be read with s 44(2). They provide as follows:

(2) If an appointed adjudicator, within the prescribed time in section 31(2), dismisses an application for adjudication or makes a determination of the dispute, he or she is entitled -

(i) at a rate agreed between the adjudicator and the parties that is not more than the maximum rate, if any, prescribed by the regulations; or

(ii) if a rate was not agreed, at the rate published under section 51 in respect of the adjudicator; and

(b) to be reimbursed any expenses reasonably incurred in connection with that work.

...

(4) Despite subsection (2), an appointed adjudicator may refuse to communicate his or her decision or determination under section 31(2) or 34(2) or subsection (10) until he or she has been paid and reimbursed in accordance with subsection (2).

116 I am not prepared to draw the inference that the Adjudicator had not made the second determination by midnight on 5 May 2015 and that his request for advance payment of his fees was made in an attempt to buy time. The content of the Adjudicator's email sent 3.37 pm on 5 May 2015 negates such an inference. When he sent the email he did not know that Citygate would encounter the difficulties it did encounter in arranging for payment of its share of the Adjudicator's fees. Had Citygate been able to arrange for its bank to transfer funds into the Adjudicator's account, the Adjudicator could well have been required to provide his determination on the evening of 5 May or, at the latest, on 6 May 2015. I will return to the question of whether the second determination was incomplete when dealing with ground 7. Any omissions in the second determination may reflect on whether the second determination complies with the requirements of s 36 of the Act rather than on whether the Adjudicator had used his statutory right to seek payment of his fees before communicating the determination to the parties for an ulterior purpose.

Ground 2: was the Adjudicator disqualified because he had a material personal intetest in the payment dispute the subject of the second application?

118 I have referred to the correspondence between the parties' solicitors and the Adjudicator in which this issue was first raised in my consideration of ground 1 of the challenge to the first determination.

119 In its written submissions Citygate put its argument in support of this ground somewhat tentatively. It was submitted that because the first determination was affected by 'numerous jurisdictional errors', the Adjudicator 'would appear to have some interest in the outcome of the adjudication' of the second application, that is 'to either get paid or retain the funds he received for adjudicating the dispute on Payment Claim 14'. In oral submissions, counsel for Citygate put the proposition on which Citygate relied more directly:

CLIFFORD, MR: So the party that's saying it wants its money back is the party that has got the extant application for 16 in front of him. And so, objectively viewed, there's a person sitting there being asked to make a determination. If he makes that determination in favour of the party that says it may want its costs back, he's going to have less problems than if he makes it the other way.

In fact, I would contend that it's reasonable to conclude that if he had dismissed the 16 application, for the reasons we've advanced, he almost certainly was facing a costs of the claims back from BGC. So he's sitting there thinking, 'What shall I do?' (ts 17.3, 5 November 2015)

120 Citygate submitted that, as a consequence of the Adjudicator having a material personal interest, he was disqualified from adjudicating the dispute by reason of the operation of s 29 of the Act and thus had no authority to make a determination in respect of the payment dispute. Section 29 of the Act is in the following terms:

(1) An appointed adjudicator who has a material personal interest in the payment dispute concerned or in the construction contract under which the dispute has arisen or in any party to the contract is disqualified from adjudicating the dispute.

(2) If an appointed adjudicator is disqualified -

(a) the adjudicator must notify the parties in writing of the disqualification and the reasons for it;

(b) unless, within 5 days after the date of the adjudicator's notice, all of the parties in writing authorise the adjudicator to continue as the appointed adjudicator, the adjudicator's appointment ceases;

(c) the applicant may again apply for adjudication in accordance with section 26(1); and

(d) the period commencing on the date when the adjudicator was served with the application for adjudication and ending on and including the date when the adjudicator notifies the parties under paragraph (a) does not count for the purposes of section 26(1).

(3) A party to a payment dispute may apply to the State Administrative Tribunal for a declaration that an appointed adjudicator is disqualified under subsection (1).

(4) The application must be made before the person is notified of a decision or determination made under section 31(2).

121 There is no definition of 'material personal interest' in the Act. Neither party referred me to any authorities. In my view, a material interest is one of a real or substantial nature that might be seen as having the capacity to influence the manner in which an adjudicator adjudicated a dispute. In making this observation I draw upon Murray J's consideration in McGellin v Mount King Mining NL (1998) 144 FLR 288 of the meaning of the term 'material personal interest' as it appeared in s 232A of the Corporations Law.

122 For s 29(1) of the Act to apply, an adjudicator must have a material personal interest in the 'payment dispute' or the 'construction contract'.

123 In my view, the interest Citygate was alleging the Adjudicator had in this case was not a 'material personal interest' in the payment dispute he was called upon to adjudicate. He had no interest in that dispute. Moreover, the premise on which Citygate's submission is based, namely, if the Adjudicator allowed the second application, BGC would be less likely to seek to recover the fees it incurred in respect of the first application, is a false one. BGC would be no less likely to make a claim for the recovery of fees it incurred in respect of the first application if the second application was successful than it would if it was unsuccessful.

125 Although I have disposed of ground 2 on the basis that the Adjudicator did not have a material personal interest in the 'payment dispute' between Citygate and BGC, I wish to add that nothing I have said in the course of my reasoning on this ground should be taken as an adverse reflection on the Adjudicator. The situation in which the Adjudicator found himself was not one of his making. He had accepted the appointment to adjudicate the second application before he was aware of any challenge to the first determination. There is no evidence the Adjudicator failed to act impartially or that he acted otherwise than with probity.

Ground 3: did the Adjudicator receive 'rebuttal material' from BGC contrary to s 32(1) of the Act ?

126 I have referred to the provisions of s 32(2)(a) of the Act in my consideration of ground 5 of the challenge to the first determination.

127 Citygate's response to the second application was served on 2 April 2015. By email to the Adjudicator sent on 8 April 2015, BGC's solicitors sought leave to respond as it was contended that Citygate's response referred to 'entirely new documents'. By email sent on 14 April 2015 to BGC's solicitors, the Adjudicator stated 'a submission on any new material in the response will be accepted until midnight on Wednesday, 15 April 2015'. These email exchanges were copied to Citygate's solicitors. BGC served its responsive submissions on 15 April 2015.

128 In permitting BGC to make responsive submissions, I consider that the Adjudicator was acting within the power conferred upon him by s 32(2)(a) of the Act. It is true that the Adjudicator's email of 14 April 2015 was not couched in terms of a 'request' from him for BGC to make further submissions but, given the emphasis on resolving payment disputes informally (see s 30 of the Act), no significance should be attached to the fact that the words used by the Adjudicator did not reflect the language of s 32(2)(a) of the Act.

Ground 4: did the second application fail to comply with s 26 of the Act by reason of the omission of Citygate's ABN?

130 It was submitted on Citygate's behalf that the second application should have been dismissed because it did not include Citygate's ABN on the application. Thus, it was submitted, one of the core jurisdictional facts conditioning the Adjudicator's power to determine the second application, namely, an application prepared and served in accordance with s 26, did not exist.

131 BGC accepted that Citygate's ABN was not specifically included as part of Citygate's contact details. Citygate's ABN appeared, however, in many of the documents which were attached to the application. BGC's primary contention was that the inclusion of the ABN in the attachments to an application was sufficient to comply with the Act and the regulations made pursuant to it, the Construction Contracts Regulations 2004 (WA) (the Regulations). BGC advanced a secondary contention to the effect that the inclusion of the prescribed information was not a mandatory requirement but one that was of a directory nature.

132 Section 26 of the Act prescribes how an adjudication application must be prepared and what it must contain:

(1) To apply to have a payment dispute adjudicated, a party to the contract, within 28 days after the dispute arises or, if applicable, within the period provided for by section 37(2)(b), must -

(a) prepare a written application for adjudication;

(b) serve it on each other party to the contract;

(c) serve it -

(i) if the parties to the contract have appointed a registered adjudicator and that adjudicator consents, on the adjudicator;

(ii) if the parties to the contract have appointed a prescribed appointor, on that appointor;

(iii) otherwise, on a prescribed appointor chosen by the party; and

(d) provide any deposit or security for the costs of the adjudication that the adjudicator or the prescribed appointor requires under section 44(8) or (9).

(a) must be prepared in accordance with, and contain the information prescribed by, the regulations;

(b) must set out the details of, or have attached to it -

(i) the construction contract involved or relevant extracts of it; and

(ii) any payment claim that has given rise to the payment dispute;

and

(c) must set out or have attached to it all the information, documentation and submissions on which the party making it relies in the adjudication.

(3) A prescribed appointor that is served with an application for adjudication made under subsection (1) must comply with section 28.

133 Regulations 3, 4 and 5 of the Regulations provide:

In these regulations, unless the contrary intention appears -

ABN means Australian Business Number as defined in section 41 of the A New Tax System (Australian Business Number) Act 1999 of the Commonwealth;

ACN means Australian Company Number as defined in section 9 of the Corporations Act 2000 of the Commonwealth;

contact details has the meaning given in regulation 4.

If a person is required by these regulations to give the contact details of a person, the person required to give the details must give the address, telephone and facsimile numbers and ABN of the person or the person's business (or ACN of the person if there is no ABN) to the extent to which the person required to give the details knows those details.

1. Prescribed information in application for adjudication

For the purposes of section 26(2)(a) of the Act, an application to have a payment dispute adjudicated must, in addition to the other information required by section 26(2) of the Act, contain -

(a) the name of the appointed adjudicator or prescribed appointor and the adjudicator's or appointor's contact details;

(b) the applicant's name and contact details; and

(c) the respondent's name and contact details.

134 Section 26(1)(a) of the Act provides that an application for adjudication must be in writing, but neither the Act nor the Regulations prescribe a particular form.

135 The question raised by this ground is one of statutory construction: what constitutes an application for the purpose of s 26 of the Act and how must the contact details of the respondent be included?

136 The starting point is the wording of the Act and the Regulations. Citygate's submissions involved drawing a distinction between the 'application' to which reference is made in s 26(2)(a) and the 'application' to which reference is made in s 26(2)(c) of the Act (ts 56.1, 5 November 2015). It was submitted on Citygate's behalf that it was not sufficient for a respondent's contact details to be included in the attachments to an application.

137 There is no textual warrant for the distinction Citygate wishes to draw. Section 26(2) sets out in three subparagraphs the requirements of an application for adjudication.

138 Moreover, I accept, as BGC submitted, that references to an 'application for adjudication' and an 'application' must be given the same meaning wherever they appear in the Act. Sections 26(3) and 28 refer to an application being served on a prescribed appointor. Section 27 refers to an application being served on a respondent and sets out the requirement on the part of a respondent to provide a response. Neither s 26(3) nor s 28 draws any distinction between an application and its attachments.

139 Section 26(2)(c) does appear to draw a distinction between an application and documents attached to it, but when regard is had to the object of the adjudication process, namely, the determination of a dispute 'fairly and as quickly, informally and inexpensively as possible' (s 30), in my view, there is no basis for construing s 26(2)(a) as prohibiting a respondent's contact details being included in the attachments to an application. Having regard to that object, and having regard to the fact that there is no prescribed 'application' form, it is undesirable to construe the Act in a way that introduces artificial and formal rules into a process that the Act provides should be informal.

140 In my view, the fact that Citygate's ABN appeared in the attachments to the application was sufficient and the application was prepared and served in accordance with s 26 of the Act.

Ground 5 - second determination: did the second determination adjudicate upon claims that were out of time?

142 The contentions of the parties in relation to this ground were essentially of the same nature as those made in relation to ground 3 of the challenge to the first determination. The evidence before me does not enable me to make the factual findings required by Citygate to sustain this ground. Thus ground 5 is not made out.

Ground 6 - did the Adjudicator fail to make a determination on the balance of probabilities as required by s 31(2)(b) of the Act?

143 I have read the second determination carefully. Taking the Adjudicator's reasons as a whole, I am not persuaded that the Adjudicator misunderstood the task he was required to perform and, as a result, failed to determine the payment dispute on the balance of probabilities.

Ground 7 - did the Adjudicator fail to give reasons for the second determination in accordance with s 36(d) of the Act?

144 Section 36 of the Act sets out the requirements of a determination under s 31(2)(b) of the Act.

An appointed adjudicator's decision made under section 31(2)(b) must -

(a) be in writing;

(b) be prepared in accordance with, and contain the information prescribed by, the regulations;

(c) state -

(i) the amount to be paid and the date on or before which it is to be paid; or

(ii) the security to be returned and the date on or before which it is to be returned,

as the case requires;

(d) give reasons for the determination;

(e) identify any information in it that, because of its confidential nature, is not suitable for publication by the Building Commissioner under section 50;

(f) be given to the parties to the adjudication; and

(g) be given to the Building Commissioner.

145 The reasons provided by an adjudicator must show that the adjudicator has turned his mind to the dispute and addressed the issues. There is no requirement that the reasons be elaborate, lengthy or detailed. They must, however, adequately explain the basis for the determination and demonstrate that the adjudicator has adopted a rational approach to the determination of the payment dispute: Zurich Bay Holdings Pty Ltd v Brookfield Multiplex Engineering and Infrastructure Pty Ltd [2014] WASC 39 [15] - [16] (Le Miere J) citing McDougall J's observations in Clyde Bergemann Senior Thermal Pty Ltd v Varley Power Services Pty Ltd [2011] NSWSC 1039 [66] - [67].

146 A court must be careful to avoid turning an examination of the reasons of an adjudicator into a reconsideration of the merits of a decision: Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, 291 (Kirby J).

147 Payment certificate 16 was the subject of the second determination. The payment certificate set out:

(a) sums the Superintendent had certified were due to BGC by Citygate; and

(b) sums the Superintendent had certified were due by BGC to Citygate, these included 'negative variations' (that is allowances to Citygate in respect of cost savings achieved by using less expensive materials or reductions in the scope of the works).

148 The second determination comprised a narrative section and an annexure, annexure A, in the form of a schedule. In the narrative section the Adjudicator recorded that Citygate was liable to pay BGC the sum of $392,145 plus GST. The balance of the narrative section followed the structure of the narrative in annexure A of the first determination: the Adjudicator dealt with the issue of jurisdiction, summarised the parties' principal contentions and made some general observations about his approach.

149 The schedule in annexure A had two columns. It extended over 100 pages and dealt with 55 'variation claims' and nine 'backcharges', that is, amounts alleged to be due by BGC to Citygate. The total of the alleged backcharges was $259,927. In the first column, by reference to each item in dispute, the Adjudicator recorded in narrative form the substance of BGC's case, and in many, but not all, cases the substance of Citygate's response, followed by a summary of BGC's further submissions and thereafter the heading 'Determination'. In respect of most of the 64 items, under the heading 'Determination', the Adjudicator stated his conclusion in respect of the item and gave brief reasons. In respect of nine out of the 64 items in dispute the Adjudicator entered a dollar amount in the 'Awarded' column, opposite the 'Determination' in the first column.

150 Extensive submissions were made on Citygate's behalf about the deficiencies in the second adjudication. The submissions were made in support of the overarching submission that the Adjudicator had failed to discharge his statutory function. The primary contentions were as follows.

151 First, although the Adjudicator had included a space in annexure A for the insertion of a total of the amounts awarded by him, no total was inserted only the symbols @sum(. The aggregate of the nine dollar amounts entered in the Awarded column was $174,651 and not $392,145 as set out in the narrative section of the second determination. It is not possible to work out from annexure A or the narrative how the Adjudicator arrived at the figure of $392,145. BGC's counsel produced an explanatory schedule which reconciled the figures on the basis of various assumptions about the Adjudicator's reasoning. It was submitted on Citygate's behalf that the assumptions should not be made.

152 Secondly, it appears that the Adjudicator has adopted an inconsistent approach to the same item which appeared in annexure A under different headings. Citygate contended that the Adjudicator's approach was irrational and perverse.

153 To analyse the allegation of irrationality it is necessary to go into some detail. Contract variation (CV) 454 was in dispute. The subject of the dispute was the allowance to be made in Citygate's favour in respect of a change in the specification of the glass to be installed in certain parts of the building. The change specified the installation of a less expensive type of glass with a consequent reduction in price. BGC contended that the allowance in Citygate's favour (a negative variation) should be $15,311. Citygate contended that the allowance in its favour should be $42,555 up to the end of the period covered by payment certificate 16. Citygate contended that as further glass was installed in the course of future works, the total amount of the allowance in its favour would increase to $104,520. I pause to emphasise two features of this dispute: first, it was not contended by Citygate that the allowance in its favour in payment certificate 16 should have been $104,520, it sought an allowance of $42,555; secondly, BGC was not claiming a positive amount in its favour, it had clearly identified the issue in dispute as being the extent of the allowance to be made in Citygate's favour. After summarising the submissions of the parties, the Adjudicator recorded:

DETERMINATION

The quantity surveying exercise of confirming or otherwise the difference in quantities of 8% is beyond the scope of an adjudication.

The difference in rates of $15 per metre square as opposed to $40 per metre square is another matter. However, there is no mention of the difference in the square metre rate in the initial application, nor in the response.

In its supplementary submission, the applicant was only permitted to address new issues raised in the response that it was not, and reasonably could not have been aware. The issue of the rate does not fall into that category. In my opinion, I cannot consider the applicant's further submission.

Furthermore, I have not been provided with any evidence of the $15 rate.

154 The $15 rate was the rate contended for by BGC in support of its argument that the allowance should be $15,311 and the $40 rate was that contended for by Citygate in support of its argument that the allowance should be $42,555. The reasons given under the heading 'Determination' suggest that the Adjudicator was minded to resolve the issue in Citygate's favour but, in the Awarded column, the Adjudicator awarded as a positive payment to be made by Citygate to BGC the sum of $104,520. This is not an amount that BGC claimed. This is not the amount of the allowance then claimed by Citygate.

155 It was submitted on BGC's behalf that the inclusion of the figure of $104,520 in the 'Awarded' column was an accidental error that Citygate could request be corrected under the Act. Removing the figure from the 'Awarded' column would, however, not resolve the issue because it is not possible to discern what decision the Adjudicator had in fact made.

156 Moreover, I do not think that it can be assumed that the Adjudicator made an accidental error of the nature attributed to him by BGC's counsel. This is because when the same issue arose in the context of one of the 'backcharge' amounts claimed by Citygate, the Adjudicator appears to have made a deliberate decision to award a (different) positive amount to BGC.

157 One of the backcharge claims was recorded in annexure A under the heading 'Glass credit for Sunenergy 8.38 to Clear 10.38' (see CV 454). Under this heading in the first column of annexure A the Adjudicator repeated BGC's submissions as they had appeared in the section dealing with CV 454. He did not repeat Citygate's response. He included the word 'Response' but inserted no remarks but immediately after the Adjudicator repeated BGC's further submissions as they had been set out where he dealt with CV 454. Under the heading 'Determination' the Adjudicator wrote:

The large difference between the parties has not been explained. Proper reasons are required before such a large reduction.

158 In the Awarded column the Adjudicator included the figure of $42,555. Thus he awarded $42,555 to BGC when the issue to be decided was whether the allowance to be made in Citygate's favour should be $15,311 or $42,555.

159 Having regard to what the Adjudicator has recorded when he has dealt with the issue of the change in the glass specification for a second time, I do not consider that it can be assumed that the Adjudicator made an accidental error when he included $104,520 in the Awarded column in respect of CV 454.

160 The net result of Adjudicator's determinations in respect of the change in the glass specification is the award of a positive amount of $147,075 to BGC in respect of a dispute about whether the allowance to Citygate should be $15,311 or $42,555. In my view, this result is irrational.

161 The calculations prepared by BGC in an attempt to reconcile the Adjudicator's calculations of the amount he determined should be paid by BGC included as monies due to BGC the amounts of $104,520 and $42,555.

162 Citygate's third contention as to why the Adjudicator had not discharged his statutory function concerned the nine backcharges in Citygate's favour. In respect of each of these disputed items the Adjudicator has set out BGC's submissions and its further submission, but has not referred to Citygate's response. In some instances under the heading 'Response' the Adjudicator has put 'xxxxxxx'. Other than in three instances, nothing has been recorded by the Adjudicator under the heading 'Determination'. In three instances amounts have been entered in the 'Awarded' column. BGC is able to reconcile the total awarded in its favour by the second determination by assuming that the allowances claimed by Citygate have been approved by the Adjudicator other than in those instances in which he has entered an amount in the Awarded column. BGC submits that it should be inferred that the Adjudicator has considered Citygate's response in respect of these items. I do not accept this submission. It is incumbent on an adjudicator to make it plain in the reasons that he or she has engaged with the issues. Making no remarks under the heading 'Determination' in respect of six of nine these items in dispute and omitting any reference to the response made by Citygate does not disclose that the Adjudicator engaged with the issues. The reasons should make plain what the Adjudicator has determined and why. The authorities make it clear that the reasons do not have to be detailed or elaborate but an adjudicator cannot omit to give reasons entirely in respect of significant items and leave the parties to work out for themselves the basis upon which a determination has been made.

163 Citygate's fourth contention concerned a number of variations listed in annexure A in respect of which there was a dispute between the parties as to whether the relevant amount claimed by BGC had been awarded to it by the first determination. It appeared that in the second application BGC contended that the amounts awarded in the first determination in respect of many items of work had been deducted from the amounts otherwise certified as due by Citygate to BGC in payment certificate 16. BGC's argument was that Citygate was 'clawing back' amounts awarded against it in the first determination because the Superintendent had certified them as deductions from the amount certified as payable by Citygate in payment certificate 16. In respect of a number of these claims under the heading Determination, the Adjudicator recorded:

Payments under the CC Act are payments on account that may be revisited in another forum such as arbitration or a court. However, it would make a mockery of the CC Act if a party to the adjudication could simply reverse the determination in a subsequent certificate. This matter is subject to a determination pursuant to adjudicating payment claim 14 and that determination must be enforced.

164 In respect of these claims, in most instances no amounts were listed in the Awarded column of the schedule as being due by Citygate to BGC. In one instance (CV 45) the Adjudicator recited BGC's submissions that $66,686 had been awarded to it in the first determination but deducted from it in payment certificate 16. Under the heading 'Determination' the words set out above appear and in the Awarded column the Adjudicator has inserted '$0.00'. This would suggest that in respect of those items in which the Adjudicator had inserted the verbal formula I have set out above he was not intending to award any amount to BGC.

165 Parenthetically, although initially there was controversy at the hearing, ultimately the agreed position appeared to be that the amounts awarded pursuant to the first determination and alleged to have been deducted from payment certificate 16 had not in fact been deducted (ts 39, 19 November 2015)

166 BGC's reconciliation demonstrated that if an allowance was made in BGC's favour in respect of all of the amounts claimed in the second application which were awarded as part of the first determination, together with allowances in BGC's favour in respect of certain other sums about which there was a lack of clarity, the total was $392,145.

167 The fundamental difficulty is that it is not possible to know from the second determination what approach the Adjudicator has taken and what he has awarded.

168 Adjudicators are required to determine payment disputes within a very limited time frame. Often the disputes are substantial and complex. The dispute arising from payment certificate 16 merits that description. In considering the Adjudicator's reasons I am mindful of the considerable pressure under which he was required to complete his task.

169 Allowing appropriate latitude to the Adjudicator, after careful consideration of the second determination, I have reached the conclusion that the Adjudicator has failed to exercise the jurisdiction conferred upon him by the Act. The reasons included in the second determination do not demonstrate that the Adjudicator has adopted a rational approach to the payment dispute. In this respect, I refer in particular to my analysis of the Adjudicator's treatment of the dispute arising from the change in the specification of the glass.

170 The reasons do not disclose that the Adjudicator has engaged with or determined the payment disputes in relation to six out of the nine 'backcharge' items and do not disclose how, and if, he has determined the payment disputes in relation to the claims that amounts awarded in the first determination have been deducted from amounts otherwise certified as due to BGC in payment certificate 16.

171 All of these deficiencies are reflected in the impossibility of ascertaining from the contents of the second determination how the Adjudicator has arrived at the figure of $392,145 as being the amount to be paid by Citygate.

172 A failure to exercise the statutory jurisdiction is a jurisdictional error, Bauen Constructions v Westwood Interiors [2010] NSWSC 1359 at [27] per McDougall J; Lahey Constructions Pty Ltd v Trident Civil Contracting Pty Ltd [2013] NSWSC 176 at [53] per Stevenson J.

173 For those reasons I conclude that ground 7 has been made out and I would quash the second determination.

174 No submissions were made to me as to whether a failure to provide reasons or a failure to provide adequate reasons invalidates a decision made under the Act. Whether it does so or not involves a question of statutory construction attracting the application of the principles discussed in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [91]. In the light of the basis of the conclusion I have reached in respect of ground 7 it is not necessary for me to address this potentially difficult question and as I have not received submissions on it, I will not do so.

175 As I have decided that both the first determination and the second determination should be quashed, it follows that BGC's application for leave to enforce the determinations should be dismissed. I would add the following observation. On BGC's case the second determination included an amount awarded in its favour in respect of CV 454 to which it was not entitled. The amount was substantial. As noted, it submits that the error could be corrected by an application pursuant to s 41(2) of the Act. BGC has not, however, approached the Adjudicator to correct the second determination, but has applied to this court for leave to enforce it. BGC has done so knowing that the second determination is for an amount significantly more than the amount it says would be due if the required correction was made. I have not heard argument on this point but it is difficult to see how the court could be persuaded to exercise its jurisdiction to grant leave to enforce a determination as a judgment of the court when the party applying for such leave acknowledged the amount of the determination was incorrect.