EQ Constructions Pty Ltd v A-Civil Aust Pty Ltd [2021] NSWSC 1604 | Case summary

CONSIDERATION AND DETERMINATION

At the time relevant to these proceedings, s 8 of the SOP Act entitled a person who had undertaken to carry out construction work or to supply related goods or services under a construction contract to a progress payment on and from each reference date.
Section 4 defined "construction contract" as "a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party".
The definition of "construction work" in s 5 included "the construction, alteration, repair, restoration, maintenance, extension, demolition or dismantling of buildings or structures forming, or to form, part of the land (whether permanent or not)" and "any operation which forms an integral part of, or is preparatory to or is for rendering complete" work of that kind.
The term "related goods and services" was defined in s 6(1) as meaning: … any of the following goods and services: (a) goods of the following kind: (i) materials and components to form part of any building, structure or work arising from construction work, (ii) plant or materials (whether supplied by sale, hire or otherwise) for use in connection with the carrying out of construction work, (b) services of the following kind: (i) the provision of labour to carry out construction work, (ii) architectural, design, surveying, or quantity surveying services in relation to construction work, (iii) building, engineering, interior or exterior decoration or landscape advisory services in relation to construction work, (c) goods and services of a kind prescribed by the regulations for the purposes of this subsection.
Neither party suggested that there were any regulations prescribing goods or services relevant to these proceedings.
Section 13 of the SOP Act set out the first step in the procedure for recovering progress payments. That section relevantly provided: 13 Payment claims (1) A person referred to in section 8(1) who is or who claims to be entitled to a progress payment (the claimant) may serve a payment claim on the person who, under the construction contract concerned, is or may be liable to make the payment. (2) A payment claim: (a) must identify the construction work (or related goods and services) to which the progress payment relates, and (b) must indicate the amount of the progress payment that the claimant claims to be due (the claimed amount), and (c) if the construction contract is connected with an exempt residential construction contract, must state that it is made under this Act. … (4) A payment claim may be served only within: (a) the period determined by or in accordance with the terms of the construction contract, or (b) the period of 12 months after the construction work to which the claim relates was last carried out (or the related goods and services to which the claim relates were last supplied), whichever is the later. …
It is common ground that the Contract did not provide for the service of payment claims within periods that could be determined in accordance with its terms, and so s 13(4)(a) of the SOP Act did not apply. The payment claim was required to be served within the time period specified in s 13(4)(b).
Section 13(4)(b) will be satisfied if some of the construction work to which the payment claim relates was carried out (or if some of the related goods and services were supplied) within the 12 month period stipulated in that section: Estate Property Holdings Pty Ltd v Barclay Mowlem Construction Pty Ltd (2004) 61 NSWLR 515; [2004] NSWCA 393 (Estate Property Holdings) at [17]-[21] (Hodgson JA, Mason P and Giles JA agreeing).
The parties' submissions raised a threshold question about whether this is a matter to be determined objectively by the Court on an application for judicial review of an adjudicator's decision on the grounds of jurisdictional error.
In Icon Co (NSW) Pty Ltd v Australia Avenue Developments Pty Ltd [2018] NSWCA 339 (Icon), at [13] Basten JA said (Meagher and Leeming JJA agreeing) (citations omitted): "It is a fundamental principle that the engagement of a statutory power may depend either upon the existence of an identified state of affairs, or a state of satisfaction of the decision-maker as to an identified state of affairs. In the first category, the actual state of affairs, being the criterion of engagement of the power, is described as a 'jurisdictional fact', meaning that the lawful exercise of the power may ultimately depend upon a finding of a court exercising judicial review as to whether or not the required state of affairs existed. The second category is sometimes also said to involve a jurisdictional fact, but only in the sense that the relevant fact is an opinion formed by the decision‑maker; in that case a reviewing court can only be concerned with the existence and lawful formation of the opinion."
His Honour observed that there are different aspects of the SOP Act which fall into each category, notwithstanding that the Act does not expressly refer to the opinion or satisfaction of the adjudicator. In the context of the statutory scheme created by the SOP Act with the objects described by the High Court in Probuild, a requirement stipulated in the Act is more amenable to being construed as falling within the first category if it "is readily determined and little inconvenience is generally caused by identifying it as an essential precondition to the exercise of the relevant powers": Icon at [14].
EQC submitted that the question whether a payment claim that is the subject of an adjudication application under the SOP Act has been served within the 12 month time period specified in s 13(4)(b) is a jurisdictional fact within the first category identified by Basten JA in Icon. It was submitted that the Court has jurisdiction to quash an adjudicator's determination for jurisdictional error if the adjudicator wrongly determined that the payment claim was served within that 12 month period.
A-Civil submitted that s 13(4)(b) falls into the second category referred to in Icon. That is to say, provided that the adjudicator is satisfied that the payment claim was served within the requisite 12 month period and that opinion is lawfully formed, the adjudicator's determination of the payment claim is not amenable to judicial review on the grounds that the payment claim was served outside the period specified in s 13(4)(b).
In my opinion, s 13(4)(b) falls into the second category identified by Basten JA in Icon for the reasons explained by Stevenson J in obiter dicta in TWT Property Group Pty Ltd v Cenric Group Pty Ltd [2020] NSWSC 72 (TWT Property) at [104]-[106]: "104 Section 13(4)(b) of the Act posits an enquiry as to whether, as a matter of fact, the payment claim relates to work carried out within a particular period. That involves consideration of the payment claim itself. This is clearly a Category Two matter and one for the adjudicator: e.g. Downer Construction (Australia) Pty Ltd v Energy Australia (2007) 69 NSWLR 72; [2007] NSWCA 49 at [87] (Giles JA). It also involves consideration of the factual question of when the 'construction work' took place. That factual enquiry might be quite complex. 105 The nature of that enquiry may be contrasted with matters 'readily determined' with 'little inconvenience' such as whether an adjudication application was notified within 20 business days following the due date for payment (see s 17(2)(a) of the Act), a matter which, as Basten JA observed, has been held to be within Category One: see Icon Co at [14]; Chase Oyster Bar at [53], [96], [285]). 106 To my mind, the enquiry called upon by s 13(4)(b) is quintessentially one that the legislature left to the adjudicator and to thus be one within Basten JA's Category Two."
In deference to the very detailed submissions made by counsel for both parties, I will explain my reasons in a little more detail.
Stevenson J's dicta in TWT Property identifies in succinct terms the reasons why the legislative scheme of the SOP Act favours the construction of s 13(4)(b) as falling within the second category referred to by Basten JA in Icon. His Honour's acknowledgement of the potential factual complexity of the enquiry at [104] is consistent with the following observations of Palmer J in Multiplex Constructions Pty Ltd v Luikens [2003] NSWSC 1140 at [76]: [1] "A payment claim and a payment schedule are, in many cases, given and received by parties who are experienced in the building industry and are familiar with the particular building contract, the history of construction of the project and the broad issues which have produced the dispute as to the claimant's payment claim. a payment claim and a payment schedule must be produced quickly; much that is contained therein in an abbreviated form which would be meaningless to the uninformed reader will be understood readily by the parties themselves. A payment claim and a payment schedule should not, therefore, be required to be as precise and as particularised as a pleading in the Supreme Court. Nevertheless, precision and particularity must be required to a degree reasonably sufficient to apprise the parties of the real issues in the dispute."
Palmer J's observations were made in relation to the requirements of ss 13(1) and (2) and 14(1), (2) and (3) of the SOP Act. However, the realities identified by his Honour in the passage above are some of the reasons why a complex factual enquiry may need to be undertaken in order to determine when construction work to which a payment claim relates was last carried out, notwithstanding the requirement in s 13(2)(a) of the SOP Act that the payment claim identify the work to which it relates. Additional areas of potential complexity include that matters of specialist judgment may be involved in assessing the nature or character of the work and that assessment may in turn affect the determination about when some of the construction work to which the payment claim relates was last carried out: see Estate Property Holdings at [20].
The words "may be served only within" in s 13(4)(b) are words of a kind that are typically construed as mandatory. That is a textual consideration that favours a construction of s 13(4)(b) of the SOP Act as a first category jurisdictional fact: Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393; [2010] NSWCA 190 (Chase Oyster Bar) at [40]-[41] (Spigelman CJ, Basten JA agreeing at [96]) and [225]-[228] (McDougall J).
However, those words in s 13(4)(b) must be construed in the context of the structure of the legislative scheme of the SOP Act, as the Court of Appeal emphasised in Chase Oyster Bar at [42] (Spigelman CJ, Basten JA agreeing at [96]). [2]
As the High Court explained in Probuild, the object of the SOP Act is to provide a quick procedure for interim progress payments so as to avoid cashflow interruptions to the business of construction contractors, whilst preserving the parties' rights under the construction contract. In my opinion, it would undermine that object if s 13(4)(b) were construed as rendering an adjudicator's decision open to challenge on the grounds of alleged jurisdictional error in each and every case in which there was a dispute about the scope of the payment claim and whether it included a claim for work last carried out within the 12 month period. It serves the object of the Act if the adjudicator's decision in relation to s 13(4)(b), provided that it is lawfully made, is not reviewable by the Court for alleged error. Any such error is not entrenched for all time and does not preclude a party from enforcing its contractual rights under the construction contract in civil proceedings. The risk that a party advantaged by an underpayment or overpayment resulting from an adjudicator's error may later become incapable of meeting an order for payment or restitution in civil proceedings does not tell against the construction of s 13(4)(b) as a second category matter. Rather, that is simply a consequence of the coherent application of the legislative scheme and the manner in which that scheme has assigned financial risk to the parties to a construction contract: SOP Act, s 32; Probuild at [38]-[40], [46] and [51] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ).
Counsel for EQC submitted that, if s 13(4)(b) is construed as a second category matter, this precludes the Court from considering whether the payment claim was a valid payment claim in proceedings commenced by the payment claimant under s 15(2)(a)(i) and s 16(2)(a)(i) of the SOP Act in circumstances where the respondent is not entitled in those proceedings to bring any cross-claim against the claimant or raise any defence in relation to matters arising under the construction contract. It was submitted that this consequence favours the construction of s 13(4)(b) as a first category matter that is for the Court to consider and determine for itself.
I reject that submission. Proceedings under s 15(2)(a)(i) and s 16(2)(a)(i) of the SOP Act may be commenced by the payment claimant as an alternative to adjudication in circumstances where the respondent has failed to provide any payment schedule and failed to pay the claimed amount, or where the respondent has provided a payment schedule but has failed to pay the scheduled amount. The proceedings are for the recovery of the unpaid portion of the claimed amount or the scheduled amount as a statutory debt due to the payment claimant. The respondent is not entitled to bring any cross-claim or raise any defence in relation to matters arising under the construction contract. However, s 15(4)(a) and s 16(4)(a) provide that the Court is not to give judgment in favour of the claimant unless it is satisfied that the circumstances in s 15(1) and s 16(1) (respectively) exist. Those circumstances include that the claimant has served a payment claim on the respondent. The construction of s 13(4)(b) as a second category matter in relation to which an adjudicator's decision is not reviewable for error of fact or law does not preclude the Court from determining whether a payment claim has been served in accordance with s 13 (including s 13(4)(b)) in proceedings commenced by a claimant under s 15(2)(a)(i) or s 16(2)(a)(i). Indeed, the Court is required to do so by s 15(4)(a) and s 16(4)(a). The fact that the Court is required to do so in that context, where an adjudicator has not made any prior finding about the same question, does not support a construction of the SOP Act that would render an adjudicator's finding about that matter (made in the different context of an adjudication application) reviewable by the Court. The parties' rights under the construction contract are preserved by s 32 of the SOP Act, irrespective of whether the payment claimant chooses to sue for the unpaid portion of the claimed amount or scheduled amount under s 15(2)(a)(i) or s 16(2)(a)(i) or to make an adjudication application under s 15(2)(a)(ii) or s 16(2)(a)(ii).
Contrary to EQC's submissions, I do not consider that SHA Premier Constructions Pty Ltd v Niclin Constructions Pty Ltd [2020] QSC 307 (SHA Premier) supports the construction of s 13(4)(b) of the SOP Act as a first category matter. That case was concerned with the Building Industry Fairness (Security of Payment) Act 2017 (Qld) (the Qld Act). Relevantly, s 75(3) of the Qld Act provided that a payment claim relating to a final payment must be given before the end of a specified time period. Bond J held (at [38], my emphasis, citations omitted): "… on the proper construction of the Act, the valid exercise of an adjudicator's jurisdiction is conditioned on the claim having been given before the end of the longest of the periods provided by s 75(3). Whether or not that has occurred is an objective fact. In the taxonomy I have adopted, it would be an objective jurisdictional fact. I have already explained that when a challenge is brought to the existence of an objective jurisdictional fact, the Court's function is to consider the question de novo on the evidence before it at the time the challenge is advanced."
Bond J had earlier explained the taxonomy referred to above in the following terms (at [23], citations omitted): "Reference to a jurisdictional fact may be a reference to the existence of some objective fact or condition. Alternatively, it may be a reference to a repository of power having a particular state of mind, for example, having reached a particular state of satisfaction or having made a particular determination. Leeming JA, writing extra-judicially, has distinguished between a precondition to the exercise of power which turns on 'the existence of a fact in the real world' and a precondition which requires the repository of power to have a particular 'state of mind'. Derrington J, also writing extra-judicially, made the same distinction by reference to the terms 'objective jurisdictional facts' and 'subjective jurisdictional facts'. I will adopt the latter taxonomy."
Thus, his Honour construed s 75(3) of the Qld Act as a jurisdictional fact falling within Basten JA's first category in Icon because the final payment claim either was or was not served within the specified time period and that is a matter that is capable of objective determination.
I am bound by Icon, in which the Court of Appeal recognised that the preconditions to the exercise of the adjudicator's jurisdiction under SOP Act may fall into the second category, notwithstanding that they are described in terms of objective fact without expressly referring to the opinion or satisfaction of the adjudicator. Whether such matters fall into the first or the second category is a question of construction to be determined in accordance with the established principles that require the words of the relevant provision to be considered in the context of the statute as a whole. Unlike s 75(3) of the Qld Act, s 13(4)(b) of the SOP Act is not limited to final payments. For the reasons already explained above, I consider that s 13(4)(b), considered in the context of the SOP Act as a whole and having regard to the object of that Act as explained by the High Court in Probuild, is a second category matter.
EQC also relied on Maxcon Constructions v Vadasz (No. 2) (2017) 127 SASR 193; [2017] SASCFC 2 (Maxcon Constructions), which was cited by Bond J in support of the construction of s 75(3) of the Qld Act in SHA Premier. In Maxcon Constructions, the Full Court of the Supreme Court of South Australia followed the decision of the New South Wales Court of Appeal in Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No 2) [2016] NSWCA 379 [3] in holding that the Building and Construction Industry Security of Payment Act 2009 (SA) (the SA Act) impliedly excluded certiorari for non‑jurisdictional error of law on the face of the record of an adjudication determination under that Act. The adjudicator had determined that a provision of the construction contract in that case was a "pay when paid" provision that was void by reason of s 12 of the SA Act. The Full Court held that the adjudicator's decision was wrong because he had misconstrued s 12, but that this was not a jurisdictional error. In the course of his reasons for judgment, Blue J (with whom Lovell J agreed) said (at [119]-[120], citations omitted): "119 There are several provisions of the Act which define or affect the jurisdiction of an adjudicator and the criteria enlivening the exercise of jurisdiction by an adjudicator. Without necessarily being exhaustive, they may be assumed to include: 1 the existence of a construction contract (as defined in s 5) between the parties; 2 service by a claimant of a payment claim in accordance with s 13(2) within the time limit in s 13(4); 3 application in writing by a claimant for adjudication of a payment claim made to an authorised nominating authority in circumstances prescribed by s 17(1) and (2) within the time limit in s 17(3)(c), s 17(3)(d) or s 17(3)(e) identifying the payment claim and the payment schedule (if any) to which it relates; 4 the adjudicator is eligible under s 18 and appointed by the chosen authorised nominating authority and accepts appointment pursuant to s 19; 5 the adjudicator determines the amount of the progress payment (if any) to be paid by the respondent to the claimant, the date on which it became or becomes payable and the rate of interest payable thereon in accordance with s 22(1); 6 the adjudication determination is in writing and includes the reasons for the determination in accordance with s 22(3); 7 the adjudicator considers only the matters identified in s 22(2) and considers an adjudication response only if it is made within the time limit in s 21(2) and a payment schedule was served within the time limit in s 14(4) and where applicable s 17(2)(b). 120 If objectively a defined criterion is not present, or if the adjudicator wrongly determines that it is present, the adjudicator will not have jurisdiction to adjudicate the dispute or (depending on severance principles) the relevant element of the dispute."
Section 13(4) of the SA Act is in the same terms as s 13(4) of the SOP Act, save that the time period in s 13(4)(b) of the SA Act is 6 months rather than 12 months.
On my reading of Maxcon Constructions at [119]-[120], Blue J was merely identifying provisions that define or affect the adjudicator's jurisdiction and did not express a view about whether the "defined criterion" in s 13(4), properly construed, is the objective fact of service of a payment claim within the specified time period or the adjudicator's satisfaction that the payment claim was served within that time frame. Either way, s 13(4) is properly described as a provision affecting the adjudicator's jurisdiction. In any event, as Stevenson J observed in TWT Property (at [99]), the passages set out above are obiter dicta. The issues in Maxcon Constructions did not require the Full Court of the Supreme Court of South Australia to consider or determine whether s 13(4) of the SOP Act falls with the first category or second category described by Basten JA in Icon after the Full Court had delivered judgment in Maxcon Constructions.
In dismissing the appeal from the decision of the Full Court in Maxcon Constructions, [4] the High Court did not refer to the obiter dicta at [119]-[120] of the judgment of Blue J: Maxcon Constructions Pty Ltd v Vadasz (2018) 264 CLR 46; [2018] HCA 5.
I note that, in including s 13(4) of the SA Act in the list at [119] of Maxcon Constructions, Blue J cited "by analogy" the decision of the Court of Appeal in Chase Oyster Bar in relation to s 17(2)(a) of the SOP Act. Section 17(2)(a) provides that an adjudication application "cannot be made" unless the claimant has notified the respondent within a specified period following the due date for payment of the claimant's intention to apply for adjudication of the payment claim. The due date for payment is specified in s 11 of the SOP Act by reference to the date on which the payment claim is made. The Court of Appeal held that compliance with the time limit in s 17(2)(a) for giving of notice of the intention to apply for adjudication is an essential condition for a valid adjudication application: Chase Oyster Bar at [33]-[56] (Spigelman CJ), [96]-[101] (Basten JA) and [211]-[244] (McDougall J).
In my opinion, the Court of Appeal's decision in relation to s 17(2)(a) in Chase Oyster Bar is not determinative of the question whether s 13(4)(b) is a first category or second category jurisdictional matter. As I have already acknowledged, the words in s 13(4)(b) ("may be served only within") are words of a kind typically construed as mandatory, similarly to the words in s 17(2)(a) that the Court of Appeal considered were significant in Chase Oyster Bar ("cannot be made unless"): at [40]-[41] (Spigelman CJ, Basten JA agreeing at [96]) and [225]-[228] (McDougall J); see also FitzJersey v Atlas Construction Group [2017] NSWSC 340 (FitzJersey) at [25]-[26] (McDougall J). However, the features of the structure of the SOP Act that the Court of Appeal referred to in construing s 17(2)(a) in Chase Oyster Bar do not support a construction of s 13(4)(b) as a first category jurisdictional fact. In particular, the question whether a payment claim has been served within the time frame stipulated in s 13(4)(b) depends on the proper characterisation of the construction work (or related goods and services) to which the payment claim relates and the time at which that construction work was last carried out. As explained earlier in these reasons, that may involve a complex factual inquiry, including consideration of the payment claim to which the adjudication application relates, the provisions of the construction contract and the results of any inspection carried out by the adjudicator, in addition to consideration of the terms of s 13(4)(b) itself. These are all matters that the adjudicator is required to consider in determining the adjudication application under s 22. By contrast, the question whether a notice of intention has been given within the time required by s 17(2)(a) of the SOP Act requires only the application of a precise sequence of time stipulations that are imposed by ss 11, 14 and 17 of the SOP Act commencing from the time at which the payment claim is made. It is a matter that is unlikely to be complex and, indeed, is "peculiarly within the control of the claimant": Chase Oyster Bar at [42]-[50] (Spigelman CJ, Basten JA agreeing at [96]) and at [218] (McDougall J).
As counsel for EQC emphasised, service of a payment claim in accordance with s 13(4) of the SOP Act is the starting point for the sequence of time stipulations under ss 11, 14 and 17 referred to above, and this series of provisions was described by the Court of Appeal in Chase Oyster Bar and by the High Court in Probuild as having the intended result that "each party knows precisely where they stand at any point in time": Chase Oyster Bar at [46]-[48] (Spigelman CJ, Basten JA agreeing); Probuild at [36] (Kiefel CJ, Bell, Keane, Nettle and Gordon JJ). For the reasons explained immediately above, the time stipulation in s 13(4)(b) raises factual questions of a very different character than the time stipulations in ss 11, 14 and 17. Those factual questions raised by s 13(4)(b) are inherently likely to be the subject of dispute between the parties to the construction contract. Chase Oyster Bar and the High Court in Probuild were not concerned specifically with s 13(4)(b). I understand the description of the intended result of the series of provisions as describing the object of the time stipulations in ss 11, 14 and 17 that commence to run once a payment claim has been served in accordance with s 13(4).
For the reasons explained above, I respectfully disagree with the tentative remarks made by McDougall J in FitzJersey (at [25]-[26]) in the context of an amendment application that Chase Oyster Bar provides substantial support for Blue J's inclusion of s 13(4)(b) in a list of jurisdictional matters to be determined as a matter of objective fact in Maxcon Constructions at [119].
My analysis of the different contextual considerations attending s 13(4)(b) compared to s 17(2)(a) of the SOP Act and my conclusion that s 13(4)(b) is a second category matter are consistent with Basten JA's construction of s 13(2) of the SOP Act in Coordinated Construction Co Pty Ltd v Climatech (Canberra) Pty Ltd (2005) 21 BCL 364; [2005] NSWCA 229 at [45], which was referred to with approval by McDougall J in Chase Oyster Bar at [223]-[224] (Basten JA agreeing with McDougall J at [96]).
Counsel for EQC relied on Clarence Street Pty Ltd v Isis Projects Pty Ltd (2005) 64 NSWLR 248; [2005] NSWCA 391 (Clarence Street) as determining that "satisfaction of s 13(2) is a jurisdictional requirement to be considered by the Court". That is correct, insofar as proceedings to recover a statutory debt under s 15(2)(a)(i) of the SOP Act are concerned. That was the nature of the proceedings in Clarence Street and the context in which the Court of Appeal considered the requirements of s 13(2). For the reasons explained at [53] above, Clarence Street is not authority for the proposition that s 13(2) (or, by analogy, s 13(4)(b)) is a first category rather than a second category jurisdictional matter.
For completeness, I note that A-Civil relied on Pacific General Securities Ltd v Soliman & Sons Pty Ltd (2006) 196 FLR 388; [2006] NSWSC 13 (Pacific General Securities) as supporting a construction of s 13(4)(b) as a second category matter. I accept the submission made by counsel for EQC that this case, and the authorities referred to in it, addressed a different question that arose under the legal principles appliable at that time and before the Court of Appeal's judgment in Chase Oyster Bar. That question was: is s 13(4) a "basic and essential requirement" under the SOP Act which must be satisfied in order for an adjudicator's determination to be valid and binding? The judgment of the Court of Appeal in Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421; [2004] NSWCA 394 (Brodyn) was the genesis of the "basic and essential requirement" analysis in Pacific General Securities. Whilst Brodyn remains good law to the extent that the Court of Appeal concluded that relief in the nature of certiorari is not available to quash an adjudicator's determination on grounds other than jurisdictional error, the requirements of the SOP Act that go to the adjudicator's jurisdiction, and whether those requirements fall into the first or second category referred to in Icon, is assessed by reference to the principles of statutory construction applied in Chase Oyster Bar: see Probuild at [52], citing with approval the judgment the Court of Appeal below in Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No. 2) (2016) 95 NSWLR 157; [2016] NSWCA 379 at [84]-[86] (Basten JA, Bathurst CJ, Beazley P, Macfarlan and Leeming JJA agreeing).
I do not find it necessary to refer to the remaining authorities cited in the parties' submissions which addressed sections of the SOP Act other than s 13(4)(b). The relevance of those cases to the issue concerning s 13(4)(b) in these proceedings is not apparent to me and was not articulated in the submissions.
Because s 13(4)(b) of the SOP Act falls into the second category of jurisdictional facts identified by Basten JA in Icon, EQC must demonstrate that the adjudicator did not lawfully form an opinion that the construction work or related goods and services to which the payment claim relates includes at least some construction work that was last carried out (or some related goods and services that were last supplied) within the period of 12 months prior to service of the payment claim on 21 December 2020.
Having carefully considered paragraphs 75 to 81 of the adjudicator's reasons in the context of the adjudicator's account of the evidence and submissions relied on by the parties at paragraphs 69 to 74 and in the context of the reasons as a whole, I accept EQC's submissions that the adjudicator did not form any opinion at all about the issue referred to immediately above. Despite having correctly stated the effect of s 13(4)(b) in the second sentence of paragraph 75 (reading "work" as referring to "construction work" or "related goods and services" as defined in the SOP Act), the adjudicator posited a different question in the third sentence of paragraph 75. That question was limited to whether some work had been performed during the 12 month period prior to service of the payment claim. It did not address whether the payment claim related to any such construction work performed during that period.
With respect, paragraph 77 of the adjudicator's reasons does not make grammatical sense and its meaning is unclear. However, it is clear from the substance of paragraphs 75 to 81 read as a whole that the adjudicator was not addressing in paragraph 77 the substance of s 13(4)(b) of the SOP Act as construed by the Court of Appeal in Estate Property Holdings.
A-Civil's submissions, referred to in paragraph 77 of the adjudicator's reasons refer to case law concerning s 13(4)(b), assert that some work that is the subject of the payment claim was carried out within 12 months prior to the date of service (without identifying any work relied on in support of that assertion, and without referring to the demobilisation activities on 21 January 2020), and emphasise the width of the definition of "construction work" in the SOP Act. [5]
Paragraphs 78 to 80 of the adjudicator's reasons are directed to the question whether the demobilisation work was done on 21 January 2020 (this being the only work identified by A-Civil as having been carried out within the 12 months prior to service of the payment claim), whether it was done whilst the Contract [6] remained on foot and whether it was "construction work" within the meaning of the SOP Act.
The adjudicator's analysis in paragraphs 76 to 80 of the reasons culminate in the finding recorded in paragraph 81. I have set out the whole of paragraphs 75 to 81 at [21] above, but it is convenient to repeat the terms of the finding in paragraph 81: "I find construction work and/or goods and related services work has been performed during the period 22 December 2019 to 21 December 2020 and accordingly, the Payment Claim is valid."
With respect, that finding determines only the erroneously formulated question in the third sentence of paragraph 75 of the adjudicator's reasons. Contrary to A-Civil's submissions made in these proceedings, the adjudicator has made no finding, and has formed no opinion, about whether some of the construction work (or related goods and services) to which the payment claim relates was carried out (or supplied) during the 12 month period stipulated in s 13(4)(b) of the SOP Act.
As counsel for EQC submitted, it is plain that the adjudicator was led into error by paragraph 49 of A-Civil's submission (referred to in paragraph 77 of the adjudicator's reasons) that the Court of Appeal had decided in Estate Property Holdings that "a payment claim is valid if it relates to construction work carried out in excess of 12 months from the date of the payment claim so long as a portion of the contract work was carried out by a claimant within the preceding twelve months from the date of the Payment Claim". That submission misstated the Court of Appeal's reasons for judgment in Estate Property Holdings. The judgment of Hodgson JA, with whom Mason P and Giles JA agreed, held that "'construction work … to which the claim relates' in s 13(4)(b) is also the construction work for which payment is claimed in the claim; and accordingly, the requirement of s 13(4)(b) is that some of that construction work be carried out in the relevant twelve month period" (my emphasis): (2004) 61 NSWLR 515 at [18].
Having misstated the law in paragraph 49 of its submissions, the balance of A-Civil's submissions to the adjudicator relating to the s 13(4)(b) jurisdictional issues focussed on the demobilisation activities having been carried out within 12 months prior to service of the payment claim, without addressing the question whether the payment claim related to that work. Presumably, that reflects the reality that there was nothing of substance that A-Civil could have said in support of a submission that the payment claim related to the demobilisation activities carried out on 21 January 2020. In these proceedings, counsel for A-Civil candidly acknowledged in oral submissions the demobilisation activities were the only work that had been carried out within 12 months prior to the service of the payment claim, that the work described in the payment claim (including the schedule and other accompanying documents) did not refer to those demobilisation activities and that the monetary amount claimed did not include any amount for those activities. Although a payment claim need not describe the construction work to which it relates in a level of detail that identifies each and every discrete aspect of that work, the payment claim must nevertheless relate to some work that was last carried out within the requisite period. A payment claim that neither refers to nor includes any monetary amount for the only work identified by the claimant has having carried out within that period, is not a payment claim relating to that work.
For those reasons, there will be declaration that the adjudicator's determination made on 6 April 2021 is void for jurisdictional error. The first defendant did not identify any discretionary reason why such the declaration should not be made. The jurisdictional error lies in the adjudicator's failure to make a finding or form an opinion that some of the construction work (or related goods and services) to which A-Civil's payment claim related was carried out (or supplied) during the 12 month period stipulated in s 13(4)(b) of the SOP Act. An erroneous finding about the question posited by s 13(4)(b) would not constitute jurisdictional error. However, the adjudicator made no finding about that question in this case.
That conclusion renders it unnecessary to address the other issues referred to at [30]-[31] above.
As the adjudicator's determination is to be declared void, it is appropriate that an order also be made for the money paid into court pursuant to the interim order referred to at [24] above to be paid out of court to EQC.
There is no apparent reason why costs should not follow the event. Neither party indicated that they would wish to be heard in relation to costs after publication of my reasons for judgment. Accordingly, there will be an order that A-Civil pay EQC's costs of the proceedings in such amount as may be agreed or assessed.

EQ Constructions Pty Ltd v A-Civil Aust Pty Ltd

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