Consideration
26 In our view, there is nothing of substance in grounds 1 and 2 of the notice of appeal.
27 In our opinion, the obligations on an applicant who is proceeding ex parte do not apply to a person who files an adjudication certificate as a judgment for a debt in a court of competent jurisdiction under s 25 of the New South Wales Act.
28 As noted by Keane CJ in Birdon Pty Ltd v Houben Marine Pty Ltd [2011] FCAFC 126; (2011) 197 FCR 25 at [33], the New South Wales Act is not concerned to give effect to the rights of the parties under a construction agreement and it expressly leaves the determination of those rights to the courts. The process for which the Act provides does not involve a determination, even of a provisional kind, of the actual rights of the parties under their construction contract. At [155], Buchanan J cited with approval the judgment of the New South Wales Court of Appeal in Falgat Constructions Pty Ltd v Equity Australia Corporation Pty Ltd [2005] NSWCA 49; (2005) 62 NSWLR 385 (Falgat) at [22] to the effect that the New South Wales Act confers statutory rights on a builder to receive an interim or progress payment and enables that right to be determined informally, summarily and quickly, and then summarily enforced without prejudice to the common law rights of both parties which can be determined in the normal manner. In our view, the obligation on a person filing an adjudication certificate is the obligation stated in s 25(2).
29 Further, on the facts found by the primary judge the respondent did not breach any duty of candour to disclose to the Local Court that the amount of $27,500 had in fact been paid to the respondent because, on those facts, the respondent had a genuine belief that the amount of $27,500 had not in fact been paid to it by the appellant. Also, on those facts, it was not contrary to the determination by the adjudicator that the respondent did not intend to account to the appellant for the payment of $27,500.
30 We reject grounds 1 and 2 of the grounds of appeal.
31 Ground 3 invokes Croker and the appellant's written submissions at [3.9] make it clear that he contends that the Local Court judgment was a nullity.
32 In Croker, the dispositive reasoning of the Full Court was that the respondent's submissions rested on the false premise that the certificate of taxation issued by the High Court's taxing officer was registered in the Local Court. The respondent's lodgement of a certified copy of the certificate was not authorised by s 105(1) of the Service and Execution of Process Act 1992 (Cth). The High Court was not a court of rendition for the purposes of s 105. The purported "registration" of the certificate of taxation as a judgment by the registrar of the Local Court was a mere clerical entry in the records of that court and was not an order pronounced or a judgment given by a superior court of record. Such an entry was invalid and of no effect. The registration was a nullity. The clerical entry was completely ineffective in law. The consequence was that the bankruptcy notice relied upon a non-existent judgment of the Local Court with the result that the bankruptcy notice failed because a fact essential to its validity, which it alleged to have existed, did not in fact exist: (Croker at [10]-[11].)
33 The central question on the present appeal is, therefore, whether non-compliance with s 25(2) of the New South Wales Act had the consequence that the "judgment" referred to in s 25(1) was not in law a judgment and was of no legal effect so as to found the bankruptcy notice.
34 In our view, the proper construction of s 25 is that an adjudication certificate only becomes enforceable as a judgment for a debt when it "may be filed" and it "cannot be filed" unless it is accompanied by the affidavit specified in s 25(2). The affidavit is, in our view, a part of the administrative process permitted by the New South Wales Act, a pre-requisite to the filing and essential to the legal effectiveness of the filing. The intention of the provision is that, absent the affidavit, the adjudication certificate may not be filed as a judgment for a debt and therefore does not become enforceable as such a judgment. In our opinion, this construction of the provision is consistent with the approach in Falgat at [22], the effect of which we have set out at [28] above. In our view, the summary nature of the process is entirely consistent with requiring compliance with the express words of s 25(2) that an adjudication certificate cannot be filed unless accompanied by an affidavit stating that the whole or any part of the adjudicated amount has not been paid at the time the certificate is filed. The statutory enforcement mechanism "as a judgment for a debt … and … enforceable accordingly" is dependent for its legal efficacy on compliance with the statutory pre-requisite. Filing of an adjudication certificate which is not accompanied by the required affidavit does not attract the statutory regime of the New South Wales Act and, therefore, the adjudication certificate is not filed as a judgment for a debt and is not enforceable accordingly.
35 Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393 concerned the language in s 17 of the New South Wales Act which provided that an adjudication application "cannot be made unless" the claimant had notified the respondent within the period of 20 business days immediately following the due date for payment of the claimant's intention to apply for adjudication of the payment claim and the respondent had been given an opportunity to provide a payment schedule to the claimant within five business days after receiving the claimant's notice. The relevance of the case is the similarity between the language "[a]n adjudication application … cannot be made" in s 17 and the language "cannot be filed under this section" in s 25(2). The New South Wales Court of Appeal held that compliance with the time limit specified in s 17(2)(a) was an essential condition for a valid adjudication application. As Basten JA said at [96], in agreeing with the Chief Justice's reasons at [31]-[53] of the judgment and with McDougall J, the language of the provision ("cannot be made unless") was intractable and neither the structure nor the purpose of the Act suggested a different conclusion. See also Kitchen Xchange v Formacon Building Services [2014] NSWSC 1602, and the dicta of Allsop P (as his Honour then was) in Dualcorp Pty Ltd v Remo Constructions Pty Ltd [2009] NSWCA 69; (2009) 74 NSWLR 190 at [14] in relation to s 13 of the New South Wales Act, as follows:
The terms of s 13(5) are a prohibition. The words "cannot serve more than one payment claim" are a sufficiently clear statutory indication that a document purporting to be a payment claim that is in respect of the same reference date as a previous claim is not a payment claim under the [Building and Construction Industry Security of Payment] Act and does not attract the statutory regime of the Act.
In The Trustees of the Roman Catholic Church for the Diocese of Lismore v T F Woollam and Son [2012] NSWSC 1559 at [49] McDougall J relied on this reasoning to say:
As I have indicated already, any other approach would set at naught the statutory prohibition. And if the statutory prohibition is not to be given effect, then the subsection serves no useful purpose. It would be as though s 13(5) reads to the effect that a claimant cannot serve more than one payment claim in respect of each reference date but, if it does so, the payment claim nonetheless initiates the statutory enforcement or recovery mechanisms.
36 The respondent referred to Matthews v SPI Electricity Pty Ltd; SPI Electricity Pty Ltd v Utility Services Corp Ltd (Ruling No 1) [2011] VSC 167; (2011) 34 VR 560 (Matthews) but that was a case which concerned whether or not a group proceeding asserting a common law cause of action commenced in the Supreme Court of Victoria by a firm of solicitors in a person's name but without his authority or knowledge was void or a nullity.
37 More generally relevant, in our view, is the decision of the High Court in Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364, relied on in Matthews. The provision then under consideration was s 151C of the Workers Compensation Act 1987 (NSW). That section provided that a person to whom compensation was payable under that Act was not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until six months had elapsed since notice of the injury was given to the employer. On the day prior to the trial of Mr Gordon's common law damages claim, the employer gave notice that it proposed to rely upon the non-compliance with s 151C and to argue that the proceeding was invalid or a nullity. The employer failed. There are a number of important distinctions between the statutory provision in that case and the present provision. Most importantly, s 151C was construed as postponing the remedy for the common law right to initiate proceedings, whereas in the present appeal the right to obtain a judgment is entirely statutory. Further, s 25 does not postpone any remedy: it is not a question of a person's entitlement to commence judicial proceedings in a superior court. In our view, the present provision is not concerned with mere timing. Nor can it be characterised as a procedural law giving rise to a mere irregularity.
38 For the reasons we have given in [34] above, we do not accept the respondent's submission that there were two acts involved in s 25(1): first, the filing of an adjudication certificate as a judgment debt and, secondly, the issue of the judgment, that submission being to the effect that the second act was unaffected by the legal efficacy of the first. For similar reasons we do not accept the relevance of the distinction the respondent sought to draw between the position of the Local Court in Croker and the present case. In Croker, the Court held there was no power to issue a judgment under the Service and Execution of Process Act 1992 (Cth). In our opinion, on the proper construction of s 25 of the New South Wales Act, in the absence of an affidavit complying with s 25(2), the adjudication certificate is not one which may be filed as a judgment in the Local Court and be enforceable accordingly.
39 The respondent placed particular reliance on the decision of Northrop J in Re King but in our view the statutory provision there under consideration was quite different. Section 61(1) of the Supreme Court Act 1986 (Vic) provided that a solicitor must not commence proceedings to recover costs until after the solicitor had complied with that section, except where there was a solicitor-client agreement. Having found that s 61 had not been complied with, Northrop J proceeded on the basis that non-compliance with the section merely made a claim for costs unenforceable and such non-compliance did not go to the validity of the claim: a provision such as s 61 did not prevent a petition being granted, provided the debt was in fact in existence. The fundamental difference between that statutory provision and the provision under consideration in the present case is that under the New South Wales Act there is no underlying existing debt apart from that conferred by the legislation. We repeat our reasoning in [34] above. The effect of s 25 of the New South Wales Act is that there is no judgment to go behind.
40 Similarly, in each of Ferguson and Amos, the factual context was not analogous because in each of those cases there was a relevant judgment. In Ferguson, there was a default judgment of the Supreme Court of New South Wales for moneys lent. In Amos, there was a costs order made by the District Court of Queensland.