(c) Election
28Cruz submitted that s 15(2) provides a clear choice of remedy to a claimant, and that in the present case the claimant chose the adjudication path by virtue of its letter of 19 April 2010. Cruz relied on the decision of Einstein J in Rojo Building Pty Limited v Jillcris Pty Limited [2006] NSWSC 309 as providing support for this submission.
29In Rojo it appears that a payment claim was served by the claimant. Thereafter, when no payment schedule had been received by the claimant, it gave a notice under s 17(2) of its intention to apply for adjudication of the payment claim on the respondent. The following day the respondent provided a payment schedule to the claimant. There was a dispute about whether the payment schedule was provided in response to the service of the payment claim or to the notice under s 17(2).
30In any event, the claimant subsequently advised the respondent that it did not propose to proceed to make an application for adjudication under s 17(1), and it brought proceedings in this Court, in which it sought summary judgment of the claim against the respondent. The application for summary judgment was heard by Einstein J.
31Einstein J appeared to accept that the payment schedule was given in response to the s 17(2) notice because he said at [18]:
It is plain that once Jillcris received the s 17(2)(a) and (b) notifications, its anterior failure to provide a payment schedule within the time delimited by s 14 is no longer visited with Rojo's initial right to recover the unpaid portion of the claimed amount as a debt by curial process. Rather, Jillcris has been given an alternate statutory opportunity to provide a payment schedule within an entirely different bracket of time: five (5) business days after receiving the Rojo notification of intent to apply for adjudication. Effectively the case presently being pursued by Rojo would deny Jillcris' said alternate statutory opportunity. Indeed, that alternate statutory opportunity had been exercised even prior to Rojo's endeavour to withdraw its notice of intention to apply for adjudication.
32A little later in the judgment Einstein J made reference to his earlier decision in Schokman v Xception Construction Pty Ltd [2005] NSWSC 297 and then said this in Rojo :
[35] On the particular facts before the Court in that case, the Court observed that it cannot have been the intention of the legislature to permit a claimant [in a circumstance where no payment schedule has been provided], to make an adjudication application in relation to the payment claim and later, in the event that the adjudication miscarried, to pursue curial proceedings to recover the unpaid portion of the claimed amount from the respondent as a debt. This would expose a respondent not to one set of interim procedures aimed at a swift (albeit interim) result, but to two such interim sets of procedures.
[36] Once Rojo had served its s 17 (2) notice of intent to make an adjudication application [it being quite plain that certainly by 22 December 2005 that service had been effected], Jillcris became entitled to exercise its statutory right to provide a payment schedule within five business days of service of the notice of intent to apply for adjudication. In those circumstances Rojo, having elected:
i. not to proceed by the route provided for in s 15 (2) (a) [vide by proceeding to recover the unpaid portion of the claimed amount as a debt by curial process],
ii. instead to make an adjudication application under s 17 (1) (b) became disentitled from restoring the position ante .
[37] Rojo's election had now triggered a statutory right in Jillcris. That step having been taken, Jillcris was entitled to exercise that statutory right.
[38] The effect of Rojo's solicitors communication of 23 December 2005 [advising that Rojo did not propose to proceed to make an application for adjudication and that accordingly, Jillcris was not required to provide a payment schedule in accordance with s 17 (2) (b)]:
i. was not to restore the position to that which it had been prior to Rojo having made the election provided for in s 15 (2) (a) as between the two inconsistent routes;
ii. was that Rojo had waived its anterior rights to proceed by curial process to recover the unpaid portion of acclaimed amount as a debt.
The strictures imposed by the Act
[39] Many of the authorities have focused upon the strictures imposed by the Act and upon the need for formal compliance with the provisions of the Act. The scheme of the Act is unforgiving in terms of the technicalities which require to be observed. There is no room for a claimant to approbate and reprobate. There is another party to be considered. There is no room for a claimant to leave a respondent in any form of doubt as to precisely what course is being followed by the claimant. Nor is there room for a respondent to leave a claimant in any form of doubt as to precisely what course is being followed by the respondent.
33In those circumstances, his Honour dismissed the application for summary judgment. He also ordered that if Rojo had not notified the Commercial List Judge by a certain time and date that it wished to continue the proceedings and/or sought leave to amend the summons, the summons was taken to be dismissed at that time and date.
34Rojo notified the Commercial List Judge that it wished to continue with the proceedings. As a result, it came before McDougall J for final hearing - see Rojo Building v Jillcris [2006] NSWSC 649 at [36]. As a result of the way the matter had been dealt with by Einstein J the question of whether there was an issue estoppel in respect of the issue decided by Einstein J concerning an election was raised.
35McDougall J determined that as there had been an opportunity for a final hearing and a full debate on the point before Einstein J he would not, as a matter of discretion, permit the parties to have what he described as "another bite of the cherry". He then went on to say at [52]:
If the decision of Einstein J is wrong, so be it. But that, in my view, is a matter to be determined by the Court of Appeal in the usual way, and not by another single Judge of this Court upon an attempt to reargue the same point between the same parties.
His Honour thereafter ordered that the summons be dismissed and the Plaintiff was to pay the Defendant's costs of the proceedings. That judgment was given on 22 June 2006.
36Rojo ultimately appealed from McDougall J's judgment and Einstein J's judgment: Rojo Building Pty Limited v Jillcris Pty Limited [2007] NSWCA 68 . The Court of Appeal held that McDougall J was in error and that Rojo had been deprived of an opportunity to have a final determination of its claim. In the course of his judgment Hodgson JA (with whom Mason P and Ipp JA agreed) said:
[20] In saying that the result before Einstein J was correct, I am neither agreeing nor disagreeing with his view on the statutory construction. However, in my opinion, McDougall J should have embarked on a final hearing, permitting Einstein J's view on statutory construction to be challenged.
37The matter then came before McDougall J again on 11 July 2007: Rojo Building Pty Limited v Jillcris Pty Limited [2007] NSWSC 880. His Honour identified the fundamental question he had to decide was whether Rojo, having given notice of its intention to make an adjudication application, had to proceed with that statutory alternative or was permitted to withdraw its notification and follow the alternative statutory remedy - see at [5].
38His Honour then set out the facts and said that the primary issue raised a number of questions, the first and second of which were whether Rojo had made any election and, if so, what that election was. His Honour then discussed the interlocutory judgment of Einstein J, the earlier decision of Einstein J in Schokman and the decision of Bergin J in Kell & Rigby Pty Limited v Guardian International Properties Pty Ltd [2007] NSWSC 554.
39When considering the first question of whether an election had been made his Honour said this:
[63] As both the language of s 17(2) and the decision of Bergin J in Kell & Rigby make plain, an adjudication application cannot be made until notice has been given under s 17(2)(a) and the respondent has been given five business days thereafter to provide a payment schedule. The provision of a notice under s 17(2)(a) gives the respondent a right: a further opportunity to provide a payment schedule. But neither the giving of a notice under s 17(2)(a) nor (if it happens) the provision of a payment schedule under s 17(2)(b) constitutes the making of an adjudication application. The claimant is not bound to apply for adjudication after the payment schedule is provided. It may decide, for any number of reasons, not to press the dispute further. For the reasons that I have given, I express no view as to whether the claimant could retreat to the other statutory alternative given by s 15(2)(a).
[64] For present purposes, I am prepared to assume that s 15(2)(a) does provide for inconsistent alternatives, and that it does raise a question of election. That I think would be an election between remedies, not an election between rights. The right is to be paid the progress payment, or the statutory liability created by s 14(4). Section 15(2)(a) provides alternative remedies whereby that right can be enforced.
[65] But, assuming that s 15(2)(a) does entail the notion of election, it is an election between bringing proceedings in a court and making an adjudication application. As I have said, a notice of intention to apply for adjudication does not amount to making an adjudication application. It is a procedural, although necessary, precondition to the making of such an application.
[66] In those circumstances, I do not accept that the mere giving of a notice under s 17(2)(a) is of itself sufficient to constitute, or to trigger, the making of any election for which s 15 (2)(a) provides.
40His Honour thereafter directed entry of judgment for Rojo against Jillcris in the sum of $251,537.09 with interest and made various ancillary orders including a costs order.
41The conclusion to which McDougall J came in his judgment of 12 July 2007 would appear to be inconsistent with the judgment of Einstein J in that Einstein J considered that an election was made when the notice under s 17(2) was given - see at [36], whereas McDougall J held that the mere giving of the notice was not sufficient to constitute the making of any election under s 15(2)(a) - see at [63] and [66].
42It must be said that Einstein J did not have the full detail of the facts in evidence before him and appears to have been influenced by the fact that his view was that a payment schedule had been provided in response to the s 17(2) notice.
43In my opinion, and with great respect to Einstein J, the judgment of McDougall J is to be preferred.
44In Kell & Rigby Bergin J appeared to distinguish the notice of intention to make the adjudication application and the making of the application itself - see at [24]. Similarly, McDougall J in Rojo at [63] stressed that the adjudication application itself could not be made until the s 17(2) notice had been given and that the giving of the notice was not the making of the application. In the light of what s 17(3) prescribes in relation to the adjudication application, the distinction between the notice of intention and the application itself must be a correct distinction.
45It follows, therefore, that the giving of a notice under s 17(2) does not, without anything more, amount to an election between the remedies provided in s 15(2)(a). That is the more so when, as here, there is no evidence that the respondent has acted in any way on the basis that the s 17(2) notice has been served, whether by providing the payment schedule that s 17(2)(b) provides for, or otherwise.
46For these reasons, Cromer has not made an election that prevents the claim made in the present proceedings.