LAING O'ROURKE AUSTRALIA CONSTRUCTION PTY LTD -v- SAMSUNG C & T CORPORATION [2015] WASC 237 (3 July 2015)

4 By the end of the hearing there were three issues to be determined.

5 The first issue is whether the first of the determinations should be quashed because there was no payment dispute (as defined by the Act), or alternatively because the adjudicator did not properly form an opinion that there was a payment dispute.

6 The first issue should be determined negatively (that is, in LORAC's favour). This is essentially because s 6(a) of the Act should be construed as providing that a payment dispute arises when a payment claim is rejected or disputed, even if the time for payment under the construction contract has not yet arisen. It is common ground that the relevant payment claim had been disputed by the time at which LORAC made the first adjudication application.

7 The second issue is whether both determinations should be quashed because the adjudicator failed to exercise or understand his adjudicative function, adopted illogical and irrational reasoning or made an unreasonable decision.

8 The second issue should be determined in Samsung's favour on the ground that the adjudicator failed to exercise or understand his adjudicative function, and so committed jurisdictional error. In summary, the adjudicator committed jurisdictional error by failing to resolve the payment disputes by reference to the terms of the Subcontract which were before him, thereby misapprehending the nature of his function. It follows that the determinations were not authorised by the Act, and are invalid.

9 The third issue is whether leave to enforce the determinations should be refused because the determinations are invalid, or because the payments on account required by those determinations have already been made under the Interim Deed. This third issue is determined in Samsung's favour. Leave to enforce will be refused on both grounds.

10 In the result, I would grant certiorari to quash the determinations and refuse leave to enforce the determinations in the same manner as judgments of this court.

11 My reasons for reaching these conclusions follow.

12 In Field Deployment Solutions Pty Ltd v SC Projects Australia Pty Ltd,[1] I considered the general structure and operation of the Act. The following summary is based on that account.

13 The Act is, by its long title, intended to provide a means for adjudicating payment disputes arising under 'construction contracts'. It achieves this purpose by providing for a party to a 'payment dispute' to apply to have the dispute adjudicated by an adjudicator,[2] who must either dismiss the application in prescribed circumstances or determine the liability of a party to the payment dispute to make a payment and any interest thereon.[3] A determination is binding on parties to the construction contract, and creates a statutory liability to pay an amount under a determination on or before the date specified in the determination.[4] With the leave of a court of competent jurisdiction, a determination may be registered and enforced as a judgment of the court.[5]

14 In Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd,[6] Pullin JA (with whom other members of the court agreed) described the purpose of the Act in the following terms:

The broad purpose of the Act, insofar as it relates to payment disputes, is to ensure that, in construction contracts, progress claims are paid on time and that principals obliged to pay do not act as their own judge and jury and hold up payment on their own assertion that they have a defence warranting refusal to pay. It is a 'pay now, argue later' system, with the primary aim of keeping the money flowing by enforcing timely payment. If a payment dispute arises, then the Act provides for a system of rapid and summary adjudication which is conducted without any oral hearing. If the adjudicator, having received written submissions, makes a determination that the payment has to be made, then that determination gives rise to a debt 'presently due' and payable by the principal. (citations omitted)

15 The general object of the Act has also been described by Kenneth Martin J in the following terms, with which I agree:[7]

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 [Act] do not make the adjudicator's decision on the payment of funds final (save as to the capacity to obtain and enforce payment).

16 A determination under pt 3 of the Act does not finally determine the rights of the parties to the payment dispute concerning a payment claim made under the construction contract. Part 3 does not prevent a party to a construction contract from instituting proceedings before an arbitrator or other person, or a court or other body, in relation to a dispute or other matter arising under the contract.[8] Subject to limited exceptions, evidence of anything said or done in the adjudication is not admissible in other proceedings.[9]

An arbitrator or other person or a court or other body dealing with a matter arising under a construction contract:

(a) must, in making any award, judgment or order, allow for any amount that has been or is to be paid to a party under a determination of a payment dispute arising under the contract; and

(b) may make orders for the restitution of any amount so paid, and any other appropriate orders as to such a determination.

18 That is, a court or arbitrator may determine a dispute arising under a construction contract on its merits without reference to what was said or done in the adjudication. If an adjudicator determines that a payment is due and a court or arbitrator subsequently determines that no payment or a lesser payment is due, then the court or arbitrator may make orders for the repayment of amounts paid under the adjudicator's determination.

19 An adjudicator's determination does not, therefore, finally determine the rights, duties or liabilities of any party to a construction contract. A party who is dissatisfied with the adjudicator's determination that they are liable to make a payment may institute legal proceedings which might determine that no liability, or a lesser liability, arises. That may result in an order for restitution of amounts paid under an adjudicator's determination. Equally, a claimant who is dissatisfied with an adjudicator's decision to dismiss their adjudication application, or an adjudicator's determination that a respondent is not liable to pay a claimed amount, is able to institute legal proceedings in support of their claim.

20 The Act provides for an expedited process for adjudication. An application for adjudication must be prepared and served within 28 days after the payment dispute arises.[10] Other parties to the contract have 14 days after the adjudication application is served on them to prepare and serve their response.[11] Both the application and response must set out or attach all the information, documentation and submissions on which the party making it relies in the adjudication.[12] The appointed adjudicator must either make a decision or determination within 14 days after service of the response or, if no response is served, 14 days after the last date on which a response is required to be served.[13] The time for the adjudicator to make his or her determination may only be extended with the consent of the parties to the payment dispute.[14] If the application is not dismissed or determined within time it is taken to have been dismissed.[15]

21 The adjudicator is not bound by the rules of evidence.[16] The object of the adjudication is to determine the payment dispute fairly and as quickly, informally and inexpensively as possible.[17]

22 The adjudicator may have a law degree but need not be a legal practitioner.[18] The adjudicator must act informally and, if possible, make a determination on the basis of the application, the response and the attachments to those documents.[19]

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.

24 Section 46 of the Act permits an aggrieved party to apply to the State Administrative Tribunal for a review of an adjudicator's decision to dismiss an application without making a determination of its merits under s 31(2)(a) of the Act. It does not create any right of review in a case such as the present, where the adjudicator makes a determination under s 31(2)(b) of the Act. Section 46(3) provides that, except as provided by s 46(1), a decision or determination of an adjudicator on an adjudication cannot be appealed or reviewed.

25 Section 42 and s 43 of the Act provide two means of enforcing determinations. Section 42 provides for a selfhelp remedy, entitling a contractor who has not been paid in accordance with a determination to suspend the performance of its obligations without being liable for damages or forfeiting its rights under the contract.

A determination may, with the leave of a court of competent jurisdiction, be enforced in the same manner as a judgment or order of the court to the same effect, and if such leave is given, judgment may be entered in terms of the determination.

27 In addition, a contractor which obtains a determination in its favour may issue a statutory demand to the principal, if (as will often be the case) the principal is a company incorporated under the Corporations Act 2001 (Cth). The fact that the underlying liability is disputed will not ordinarily be a ground for setting aside the statutory demand.[20]

28 The subject to which the Act applies is a 'construction contract'. Detailed provisions of s 3 s 5 of the Act define that term. While a proper understanding of the concept demands attention to the entirety of the definitional provisions, I will not recite the whole of the provisions due to their length. Given that both parties accepted that the Subcontract was a construction contract, it suffices to note that the definition includes a contract under which a person has an obligation to carry out 'construction work' on a site in Western Australia.[21]

29 The operation of the Act in relation to a contract depends, in many respects, on its status as a 'construction contract'. For example, the right of a party to a contract to make an adjudication application depends on the contract being a construction contract. Section 31(2)(a)(i) of the Act provides that an appointed adjudicator must dismiss an application without making a determination of its merits if the contract concerned is not a construction contract. Section 38 makes an adjudicator's determination 'binding on the parties to the construction contract', requiring that the relevant contract be a construction contract before the parties to it are bound by the adjudication.

30 Relevantly for the purposes of these proceedings, a 'payment claim' is defined by s 3 of the Act as:

[A] claim made under a construction contract ... by the contractor to the principal for payment of an amount in relation to the performance by the contractor of its obligations under the contract.

31 To be a payment claim the claim must be made 'under a construction contract'. In Delmere Holdings Pty Ltd v Green,[22] Kenneth Martin J made the following observations about this requirement, with which I agree:

It is also clear that the chosen phrase 'under a construction contract' is relatively narrow in ambit. For instance, the terminology of a dispute 'in relation to', or surrounding a construction contract, is not the chosen terminology. The dispute must be 'under' the parties' construction contract. So, for instance, a claim in quasi contract, such as a quantum meruit claim seeking only a reasonable remuneration, such as where the underlying contract was uncertain, or had failed for some reason, would not present a dispute arising 'under' the construction contract for the purposes of the [Act]. (original emphasis)

32 It has been held that Northern Territory legislation, broadly similar to the Act, requires a payment claim to be a claim for money in accordance with or subject to the conditions of a construction contract.[23] There is merit in this view being applied to the Act as, without such a requirement, the mere assertion of a right to claim under a construction contract would be sufficient to invoke the adjudication procedure. Such an assertion would then create a right to make a claim otherwise than by reference to the terms of the relevant construction contract (including the terms implied by the Act).

33 The definition of 'payment claim' is fundamental, as a 'payment claim' is a necessary element of the definition of a 'payment dispute'.

34 The definition of the term 'payment dispute' is critical to the operation of pt 3 of the Act. A party to a construction contract may only apply for adjudication under pt 3 if a payment dispute arises under the contract.[24]

35 Section 6 of the Act defines 'payment dispute' in the following terms:

For the purposes of this Act, a payment dispute arises if:

(a) by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full, or the claim has been rejected or wholly or partly disputed;

(b) by the time when any money retained by a party under the contract is due to be paid under the contract, the money has not been paid; or

(c) by the time when any security held by a party under the contract is due to be returned under the contract, the security has not been returned.

36 On 21 February 2014 Samsung and LORAC entered into the Subcontract. The Subcontract provided for LORAC to undertake landside port construction work, referred to as Subcontract Works, for the Roy Hill Project in the Pilbara.

37 The Subcontract incorporated general conditions of subcontract (General Conditions), amended from an Australian Standard.[25] I have set out the provisions of the General Conditions of most relevance to the resolution of the present dispute in appendix 1 to these reasons. To assist the understanding of these reasons I set out below a very general summary of the central terms.

38 Clause 2.1 of the General Conditions required LORAC to carry out relevant works, and for Samsung to pay LORAC the 'Subcontract Sum' adjusted by any additions or deductions made pursuant to the Subcontract. Clause 1.1 of the General Conditions defines 'Subcontract Sum' by reference to the value of the Subcontract Works actually performed, and provides a basis for the calculation of that value. Clause 2.3(c) of the General Conditions provides that the Subcontract Works will be measured at 'Practical Completion', to the extent they have not already been measured.

39 Under cl 37.1 of the General Conditions, LORAC was entitled to claim certification of its entitlement to the Subcontract Sum progressively. Clause 37.1(b) provided for LORAC to issue a Progress Claim, stating the value of works completed in accordance with the Subcontract up to the date of the Progress Claim, by the 25th day of each calendar month. Clause 37.1(c) required Samsung's representative to issue a Progress Certificate, which stated the amount which he or she considered to be then payable on account of the Subcontract Sum, by the 10th day of the following month. Clause 37.2 provided for LORAC to issue a 'Payment Claim'[26] in the amount of the Progress Certificate, within 2 days after the issue of a Progress Certificate. If Samsung failed to issue a Progress Certificate then the amount of the Payment Claim was the amount of the corresponding Progress Claim. Clause 37.3 required payment to occur on or before the last day of the month in which a Payment Claim was submitted.

40 Samsung's obligation to make payments under cl 37.3 was subject to its right under cl 37.8 to deduct amounts otherwise owed by LORAC to Samsung. Clause 37.8 was the only part of cl 37 which was expressed to survive termination of the Subcontract.

41 Clause 37.6 provided for the eventual issue of a Final Payment Claim, and the issue of a Final Certificate evidencing the moneys finally due and payable between Samsung and LORAC 'on any account whatsoever in connection with the subject matter of the Subcontract'.

42 Clause 39A.1 of the General Conditions gave Samsung the right to terminate the Subcontract 'at any time for its sole convenience'. Such termination was expressed to be without prejudice to the rights of either party to recover damages in respect of any prior breach of contract by the other party.

43 Clause 39A.2 of the General Conditions made provision as to LORAC's rights and obligations where the Subcontract was terminated under cl 39A.1. Subject to cl 37.8, cl 39A.2(a) entitled LORAC to payment of certain amounts 'reasonably determined by [Samsung's] Representative', up to the Subcontract Sum. LORAC was obliged to take all steps possible to mitigate certain costs, immediately hand over certain documents and cause certain plant and materials to be delivered to Samsung. Clause 39A.2 was expressed to survive termination of the Subcontract under cl 39A.1.

44 Until January 2015, claims for progress payments were made in the manner contemplated by cl 37. On one occasion, a dispute as to one of the progress payments was determined under the Act. The total amount paid by Samsung up to 23 January 2015 was $78,711,508 exclusive of GST.[27]

45 On 27 January 2015 LORAC submitted its January Progress Claim to Samsung, in which LORAC valued the relevant works at $43,443,517.

46 On 1 February 2015 Samsung responded to the January Progress Claim by a document which has been described in these proceedings as an 'assessment'. It is not necessary for me to determine the contractual character of this document in these proceedings.

47 Samsung's Progress Certificate was due to be given to LORAC by 10 February 2015. However, on that date, Samsung terminated the Subcontract for convenience under cl 39A.1 without having issued a Progress Certificate. No January Payment Claim had been issued by LORAC at that time.

48 On 21 February 2015, Samsung and LORAC entered into an 'Interim Deed', headed 'without prejudice'. The Interim Deed is a relatively short document, and I set out in full at appendix 2 to these reasons. Again, I will provide a very general summary of the provisions.

49 The Interim Deed recites entry into, and termination of, the Subcontract and the parties' interim agreement. Clause 2.1(a) of the Interim Deed obliged Samsung to pay LORAC $45 million.[28] Thirty million dollars was payable on execution of the Interim Deed, and a total of $15 million was to be paid on the novation of specified subcontracts and supply agreements to Samsung. Clause 5.1 of the Interim Deed contained LORAC's agreement to use reasonable endeavours to procure the novations within a specified time. Clause 2.2 provided that the payment of $45 million was on account only.

50 Clause 2.1(b) of the Interim Deed obliged Samsung to pay to LORAC the sums due to it under cl 39A.2 of the Subcontract. Certain specified matters were included in cl 2.1(b)(i) cl 2.1(b)(iv) of the Interim Deed, in terms which generally reflect those of cl 39A.2(a)(i) cl 39A.2(a)(iv) of the General Conditions. It is common ground between the parties that the differences are not material to the present applications.

51 The payments described in cl 2.1(a) and cl 2.1(b) of the Interim Deed were together described as 'Termination Costs'.

52 Clause 2.1(c) obliged Samsung to pay to LORAC costs for Subcontract Works carried out between the termination of the Subcontract and the novation of the specified agreements. The costs were to be assessed as those which would have been payable at the date of novation if the Subcontract had not been terminated. These were referred to as 'Pre-Novation Costs'.

53 Clause 10 of the Interim Deed indicated that the Interim Deed was entered into solely in connection with the practical handover and transition of the relevant works following termination of the Subcontract.

54 On 24 February 2015, Samsung paid LORAC $30 million, exclusive of GST, under the Interim Deed.

55 On 25 February 2015 LORAC submitted a claim for $54,713,156.47 in respect of works carried on prior to termination of the Subcontract (February Claim). Samsung has previously disputed LORAC's entitlement to submit the February Claim on the ground that it did not claim the whole of LORAC's asserted entitlements under cl 39A.2. Samsung did not press this contention for the purposes of the present applications.

56 At about the same time LORAC removed or retained certain construction materials to be used for the landside port works, on the basis that it had not been paid the amount which it claimed for those materials.[29]

57 On 3 March 2015 LORAC applied to have a payment dispute, which it contended had arisen in relation to the January Progress Claim, adjudicated under pt 3 of the Act (First Adjudication Application). Samsung accepts that it had disputed the January Progress Claim by 3 March 2015, but contends that the time when the amount claimed was due to be paid under the Subcontract had not then arrived.

58 Also on 3 March 2015, Samsung made its second payment, in the amount of $10 million, exclusive of GST, under the Interim Deed.

59 On 5 - 6 March 2015, Edelman J heard an application in separate proceedings commenced by Samsung for injunctions preventing LORAC from removing or interfering with relevant construction materials, and requiring LORAC to deliver materials to Samsung. On 9 March 2015, Edelman J granted an injunction having this effect.[30]

60 On 20 March 2015, Samsung paid LORAC the third instalment of $5 million under the Interim Deed. At this time the whole of the payment of $45 million on account had been made under the Interim Deed, and the total amount paid by Samsung to LORAC under the Subcontract and Interim Deed was $123,715,372 exclusive of GST.

61 On 1 April 2015 Mr Graham AnsteeBrook, who had been appointed as the adjudicator to determine the alleged payment dispute relating to the January Progress Claim, delivered his determination (First Determination). He determined that Samsung must pay LORAC $20,965,076 by no later than 5.00 pm on 13 April 2015.

No dismissal without determination on the merits

62 The adjudicator considered the matters referred to in s 31(2)(a) of the Act and concluded, in effect, that he was not required to dismiss the First Adjudication Application without making a determination of its merits. In relation to the requirements of s 26 of the Act, the adjudicator treated the January Progress Claim as the 'payment claim' for the purposes of the Act. He appears to have treated the response to that claim on 1 February 2015 as disputing the claim, so as to give rise to a payment dispute for the purposes of the Act before the First Adjudication Application was made on 3 March 2015.[31]

63 The adjudicator considered various claims for certain categories of Subcontract Works, and concluded that Samsung was liable to pay LORAC $20,870,302 in respect of the January Progress Claim. In determining the amount payable by Samsung to LORAC the adjudicator did not refer to cl 39A.2(a) of the General Conditions.

64 The adjudicator also made an award of interest of $94,774 from 11 February 2015 until 2 April 2015. The adjudicator's reasons do not explain why he chose the day after the termination of the Subcontract as the date from which interest would be payable. The adjudicator rejected Samsung's submission that there should be no payment because there had been no default, although he did not explain why.

65 In the course of his reasons, the adjudicator noted the Interim Deed and the parties' submissions in relation to that document. He referred to information contained in a statutory declaration as to a draft of the Interim Deed, which had contained a specific provision for payment in respect of the January Progress Certificate, before referring to the terms of the executed deed. He said:

Of note is that the [Interim Deed] makes no mention of the payment claim and progress certificate which in my view are the subject of this adjudication. On the contrary at clause 4.2 of the [Interim Deed] the following is found:

Nothing herein shall prejudice the right of a party to institute proceedings to enforce obligations due under this Deed to preserve any statutory entitlements or to seek adjunctive or urgent declaratory relief.

In my view it was always open to [Samsung] to ensure clarity if [Samsung] wished the payments under the [Interim Deed] to be made in respect of the claims the subject of this adjudication. I infer from the failure of [Samsung] to do so that there was nothing in the [Interim Deed] to preclude LORAC making an application for adjudication or applying for any other relief pursuant to clause 4.2 of the [Interim Deed] and determine that the [Interim Deed] and the payments thereunder do not preclude LORAC from a determination under this Application. Further I determine that any payments made pursuant to the [Interim Deed] were not payments on account of any claims by LORAC the subject of this adjudication. (original emphasis)

66 On 7 April 2015, LORAC applied to have a payment dispute, which it contended had arisen in relation to the February Claim, adjudicated under pt 3 of the Act (Second Adjudication Application). Samsung accepts that it had disputed the February Claim by 7 April 2015. Mr AnsteeBrook was again appointed to adjudicate that dispute.

67 The adjudicator determined the Second Adjudication Application in two parts, on 1 and 4 May 2015 (Second Determination). In these proceedings no issue was taken as to this bifurcation. On 1 May 2015, the adjudicator determined that Samsung must pay LORAC $8,287,786.01 by no later than 5.00 pm on 8 May 2015. On 4 May 2015 the adjudicator determined that Samsung must pay LORAC an additional $14,887,656 by the same time, with interest calculated from 5 May 2015.

No dismissal without determination on the merits

68 The adjudicator again considered the matters referred to in s 31(2)(a) of the Act and concluded, in effect, that he was not required to dismiss the First Adjudication Application without making a determination of its merits. There is no longer any challenge to that conclusion in these proceedings.

69 In its response to the Second Adjudication Application, Samsung in effect contended that:

1. It had paid, or been determined liable to pay, $144,680,448 exclusive of GST, being $123,715,372 paid under the Subcontract and the Interim Deed and $20,965,076 which was the subject of the First Determination.
2. It had calculated the Subcontract Sum adjusted in accordance with the Subcontract as $127,639,635.
3. It had, therefore, already paid $17,040,813 more than the maximum amount which could be payable under cl 39A.2(a), and so could not be liable to pay any further amount.

70 The adjudicator dealt with this issue in the following terms:

I am of the opinion that there are too many vagaries to assess the capped amount given the allegations by [Samsung] of damages claims and any further claims which will be brought by LORAC (as stated in the Application) pursuant to clause 39A.2. Such claims pursuant to the Interim Deed must include any entitlement that LORAC has pursuant to clause 2.1(c) of the Interim Deed.

I am not satisfied as to any quantum of any capped amount and this argument of [Samsung] is rejected. (original emphasis)

71 In its response to the Second Adjudication Application, Samsung also claimed that it was entitled to set off the sum of $49,620,821.92 from moneys otherwise due to Samsung, under cl 37.8(b) of the General Conditions. Clause 37.8(b) allowed Samsung to deduct from any moneys otherwise due to Samsung 'any Claim to money which [Samsung], acting reasonably and bona fide, considers will become a debt due and payable under the Subcontract or otherwise at law'.

72 In support of that contention, Samsung relied on a statutory declaration of Mr Paul Halstead. Mr Halstead said that Samsung considered it would likely have heads of claim, which included damages incurred as a result of LORAC's unlawful withholding of materials that had been the subject of the injunction proceedings before Edelman J. Mr Halstead said this withholding was likely to cause Samsung delay in the works under the head contract it had with Roy Hill Holdings Pty Ltd. The head contract provided for Samsung to pay liquidated damages of approximately $55,900,000 per month that it is delayed in reaching the relevant completion milestone under the head contract, being 'first ore on ship'. Mr Halstead noted that it was not possible to finally assess the precise amount of damages, as first ore on ship had not yet been achieved. He said:

However, in [Samsung's] view, a reasonable assessment of the debt that will become due and payable by [LORAC] is the amount of the liquidated damages which [Samsung] will be liable to pay under the Head Contract as a result of the delay which may be caused by [LORAC's] unlawful conduct.

73 Mr Halstead estimated those liquidated damages would amount to $49,620,821.92, based on a delay of 27 days (being the time between the termination of the Subcontract on 10 February 2015 and the return of the material on 9 March 2015).

74 The adjudicator dealt with this issue in the following terms:

Clause 37.8(b) refers to any Claim to money which the Contractor ... By reference to the definition of Claim this clause is ambiguous in that the definition of Claim refers to an increase in the Subcontract Sum. Clause 37.8(b) refers to a Claim which the Contractor may have which would not increase the Contract Sum but under this clause is used to setoff claims by [Samsung] against LORAC.

[Samsung] must thus rely on clause 37.8(a) which entitles a set off in respect of any debt or money due from LORAC to [Samsung].

Halstead states that he has not been able to make a full assessment of [Samsung]'s claims against LORAC but that it will be likely to have at least the following heads of claim against LORAC. I am not satisfied that there is sufficient evidence to support the requirement that there is any debt or other money due from LORAC to [Samsung] and any entitlement to a setoff claimed by [Samsung] is rejected. (original emphasis)

75 The Second Determination dealt with a number of particulars of the disputed claim.

76 One aspect of the payment dispute before the adjudicator concerned costs claimed by LORAC in relation to accelerating certain works in relation to 'screen house bins'.

77 It is unnecessary in these reasons to descend into the details of that dispute. However, it is relevant to note that the adjudicator resolved this question on the basis that Samsung had accepted that it had some responsibility for the acceleration measures taken by LORAC. This alleged acceptance was found in an email dated 13 November 2014, in which a representative of Samsung indicated that Samsung would 'consider compensating [LORAC] by [a] mechanism' which involved making certain payments. The offer was said to be 'a without prejudice offer' and Samsung 'reserve[d] its rights under the Subcontract if both parties cannot reach agreement'. The offer was never accepted.

Whilst there is a substantial dispute between the parties as to liability I am satisfied that [Samsung] accepted that it has some responsibility for the acceleration measures taken by LORAC. Whilst the offer in the correspondence of 13 November 2015 is said to be without prejudice in my view the without prejudice aspect related to the quantum of the amounts to be paid as opposed to there being an acknowledgement by [Samsung] that LORAC was entitled to some payment.

The contention that LORAC's claims for acceleration should be dismissed is rejected.

79 The adjudicator later repeated those comments, accepted LORAC's method of calculating the claim and allowed $7,248,600.90 in respect of acceleration.[32]

80 In the course of his reasons, the adjudicator dealt with Samsung's submission that the $45 million paid under the Interim Deed had been paid in part satisfaction of its liability under cl 39A.2. He observed:

LORAC argues that the payment of $45 million was in respect of LORAC's claims for payment which had been submitted prior to Christmas 2014 which were outstanding at the time of executing the Interim Deed and which exceeded the amount payable under the Interim Deed. This is the evidence given by Marcus Alan Carne in his statutory declaration (Carne) which forms part of the Application.

Carne gives evidence that he was involved in the negotiation of the Interim Deed and was involved in the events leading up to the execution of the Interim Deed. (original emphasis)

81 After noting that there was 'no denial by [Samsung] of the allegation by Carne as to the reasons for paying the $45 million', and other matters, the adjudicator continued:

I accept the evidence of Carne and note that clause 2.1 of the Interim Deed provides for three discrete payment regimes being payment of $45 million, payment pursuant to clause 39A.2 of the subcontract and payment in respect of Subcontract Works post termination. The Interim Deed whilst stating that payments are on account provides further that nothing in the Deed prejudices a party's right to institute proceedings and preserves any statutory entitlements. That I find includes an entitlement to make this Application.

Given the structure of the Interim Deed in clause 2.1 it was open to [Samsung] at the time of negotiating the Interim Deed to clearly stipulate that the payment of $45 million was to be linked to amounts due to LORAC under clause 39A.2. No such link was made.

I am not persuaded that the payment of $45 million is to be set off against any amount that may be due under the February Claim.

82 When the above passages are considered in light of the evidence of Mr Carne, it appears that the adjudicator resolved the construction of the Interim Deed by reference to Mr Carne's subjective understanding of its provisions.

83 For the purpose of considering whether interest was payable, the adjudicator identified the date of default in payment.

84 In essence, the adjudicator concluded that, because cl 39A.2 does not prescribe how a claim is to be made, s 16 of the Act implied the provisions in cl 5 of sch 1 to the Act as to how LORAC was to make a payment claim under cl 39A.2.

85 The adjudicator also accepted LORAC's submission that a term implied by s 18 of, and cl 7(3) in sch 1 to, the Act required payment of the amount within 28 days after receipt of the payment claim.

86 Before me, both parties accepted the correctness of this conclusion.

87 The adjudicator therefore allowed interest from 26 March 2015 to the date of the determination.

88 On 5 May 2015, LORAC commenced proceedings by originating summons for leave to enforce the First Determination under s 43(2) of the Act (CIV 1644 of 2015). On the same day Samsung applied for judicial review, seeking a writ of certiorari to quash the First Determination and a declaration (CIV 1645 of 2015).

89 On 18 May 2015, Samsung applied for judicial review, seeking a writ of certiorari to quash the Second Determination and a declaration (CIV 1733 of 2015). On 26 May 2015, LORAC sought leave to enforce the Second Determination under s 43(2) of the Act (CIV 1793 of 2015).

90 All matters were admitted to my CMC list, and came on for directions before me on 27 May 2015. At that time I made directions listing all matters for hearing on 10 and 11 June 2015.

91 The grounds on which judicial review was sought were amended at the commencement of the hearing on 10 June 2015, and further amended on the morning of 11 June 2015, to take account of developments in the parties' written and oral submissions.

92 By the end of the hearing there were three issues for my resolution, which, broadly expressed, were:

1. Should the First Determination be quashed because there was no payment dispute, or alternatively because the adjudicator did not properly form an opinion that there was a payment dispute?
2. Should the First and Second Determinations be quashed because the adjudicator failed to exercise or understand his adjudicative function, adopted illogical and irrational reasoning or made an unreasonable decision?
3. Should leave to enforce the First and Second Determinations be refused because the determinations are invalid or because the payments on account required by those determinations have already been made under the Interim Deed?

General principles to be applied in a judicial review application

93 Before turning to consider these issues, I note some of the general principles to be kept in mind.

94 Section 46 of the Act provides that, except to the limited extent provided for in that section, a decision or determination of an adjudicator on an adjudication cannot be appealed or reviewed. It is established that s 46 of the Act does not preclude this court from exercising its constitutionally protected supervisory jurisdiction to grant relief on account of jurisdictional error so as to enforce the limits on the exercise of State executive and judicial power by persons and bodies other than this court.[33]

95 Samsung accepts that to succeed in the judicial review application it must demonstrate jurisdictional error.

96 The concept of jurisdictional error was described in the following terms by Hayne J in Re Refugee Review Tribunal; ex parte Aala:[34]

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.

97 This passage was quoted with approved by the plurality in Kirk.[35]

98 It follows from this definition of the concept that, where action taken in the purported exercise of a statutory power is sought to be impugned for jurisdictional error, the only question will be whether what was done was authorised by the empowering legislation. The answer to that question will turn on the identification of the limits of the 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.

99 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 representative democracy'.[36]

100 Those rules require primary attention to be directed to the text of the relevant provisions.[37] There must be regard to the language of the statute viewed as a whole, considered in its context.[38] An important part of that context will be the purpose of the legislation, ascertained from what the legislation says (rather than any assumption about the desired or desirable reach or operation of the relevant provisions).[39] Once the purpose of the legislation is established, a construction that would promote that purpose shall be preferred to a construction that would not do so.[40]

101 Some rules of statutory construction relate to assumptions which are to be made in reading legislation. For example, it is presumed that legislation does not overthrow fundamental principles or depart from the general system of law without expressing that intention with irresistible clearness.[41] Where two alternative constructions of legislation are open, that which is consonant with the common law is to be preferred.[42]

102 Other rules of statutory construction concern what are often referred to as grounds of judicial review. For example, common law rules of statutory construction will assume that the rules of procedural fairness condition the valid exercise of certain statutory powers.[43] Grounds of review such as taking irrelevant considerations into account, or failing to take relevant considerations into account, are based on a construction of legislation as either prohibiting or requiring that regard be had to those matters.[44] A ground of review which asserts improper purpose asserts that a power was exercised for a purpose not authorised by the relevant Act.[45] A ground which asserts misapprehension of the nature or limits of the relevant statutory power[46] reflects a requirement of the law that a decisionmaker understand his or her statutory powers and obligations.[47]

103 Where the alleged jurisdictional error arises out of a failure to comply with legislative requirements, it is necessary to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. Answering that question is also a matter of construction of the relevant legislation, having regard to the language of the relevant provision and the scope and object of the whole statute.[48]

104 An assertion of jurisdictional error in relation to the exercise of a statutory power is therefore a contention that the holder has purported exercised his or her power other than in accordance with the conditions for the valid exercise of the relevant power. The identification of the conditions which mark the limits of the holder's authority to decide is purely a matter of statutory construction. Those limits are to be identified by the application of common law and statutory rules of construction to the language which Parliament has chosen understood in the context in which it appears.

105 Therefore, the issues raised in the present case are to be resolved by construing the Act to identify the limits on the adjudicator's power to determine a payment dispute, followed by a factual inquiry to see if he has transgressed those limits on his authority. Put simply, the question is whether the First and Second Determinations were authorised by the Act.

106 Submissions in this case were directed to the issue of whether the existence of a payment dispute in relation to a payment claim under a construction contract was a 'jurisdictional fact'.

107 A 'jurisdictional fact' is simply a condition for the existence of jurisdiction, or authority, to exercise a statutory power;[49] ie, one kind of condition for the valid exercise of a statutory power. The legislature may decide to make the valid exercise of a statutory power conditional upon the existence of some set of circumstances. If those circumstances do not exist then the person to whom the statutory power is directed does not have the authority to exercise the power. In reviewing the lawfulness of the purported exercise of the power, the court may determine whether those circumstances in fact exist.

108 The phrase 'jurisdictional fact' has been described as awkward.[50] The use of the phrase may have a greater tendency to confuse than enlighten the debate. For one thing the 'jurisdictional fact' need not be a fact. It may be a complex of elements.[51] The decisionmaker's assessment or evaluation may be an element of the 'jurisdictional fact' or it may be the jurisdictional fact itself. For example, where a power is expressly conditioned upon the formation of a state of mind by the decisionmaker (such as an opinion, belief, state of satisfaction or suspicion) the existence of the state of mind itself will constitute a jurisdictional fact.[52]

109 The language has been further refined by referring to 'jurisdictional facts' in the 'broad' and 'narrow' sense. In Perrinepod, Murphy JA referred to 'jurisdictional facts in the narrow sense' as facts which must actually exist for the decisionmaker's ultimate actions to be valid. A 'jurisdictional fact in the broad sense' was one defined by reference to the belief or opinion of the decisionmaker.[53] The use of these terms in the context of the Act was discussed by Kenneth Martin J in Delmere Holdings,[54] where he expressed 'a degree of unease in proceeding too much further with any attempted application of a nomenclature characterisation as between broad and narrow jurisdictional facts' in light of recent developments to which he referred.

110 A further complication under the Act is that s 31(2)(a) operates by imposing a duty rather than conferring a power. 'Jurisdictional facts' usually condition the valid exercise of a statutory power or discretion. In the case of the Act, the valid exercise of the power to make a determination under s 31(2)(b) is conditioned by the absence of a duty to dismiss under s 31(2)(a) of the Act. That is, an adjudicator does not have the authority to determine an application which must be summarily dismissed under s 31(2)(a) of the Act.[55]

111 The term 'jurisdictional fact' is well established by authority. However, in light of the above issues, I find it more useful to approach the task by an inquiry into the conditions for the valid exercise of the relevant power, identifying whether they are objective facts or the existence of a state of mind in the adjudicator. That different use of language does not reflect any substantive difference to the approach taken using the terminology 'jurisdictional fact'.

112 The grounds for judicial review also challenge the adjudicator's decision on the ground of unreasonableness.

113 In Eshetu,[56] Gleeson CJ and McHugh J observed:

Someone who disagrees strongly with someone else's process of reasoning on an issue of fact may express such disagreement by describing the reasoning as 'illogical' or 'unreasonable', or even 'so unreasonable that no reasonable person could adopt it'. If these are merely emphatic ways of saying that the reasoning is wrong, then they may have no particular legal consequence.

114 To give an allegation of unreasonableness the consequence of invalidating an exercise of statutory power, it is necessary to identify a requirement of reasonableness as a condition for the valid exercise of the power. This may occur in a number of ways. It may be that the statute confers a discretionary power with an implied requirement of reasonableness as a condition for the valid exercise of the power.[57] If the valid exercise of the power is conditioned by the decision-maker forming an opinion, it may be that the there is an implied condition that the opinion be reasonably formed.[58]

115 A decision which is regarded as unreasonable may also give rise to an inference that some other kind of jurisdictional error has been made. This process of inferring error is well known to the law.[59] The concept was illustrated by Dixon J in Avon Downs Pty Ltd v Federal Commissioner of Taxation,[60] in the following terms:

If the result appears to be unreasonable on the supposition that he addressed himself to the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, then it may be a proper inference that it is a false supposition. It is not necessary that you should be sure of the precise particular in which he has gone wrong. It is enough that you can see that in some way he must have failed in the discharge of his exact function according to law.

116 That illustration was given in a context where the relevant Commissioner lacked jurisdiction to decide questions of law, unlike the present case. However, in the present case it remains open to infer error by reference to the result reached, on the basis that the result could not have been arrived at if no jurisdictional error was made, so long as the result is not explicable by a non-jurisdictional error of law. An inference of jurisdictional error may also be supported by comments made in the adjudicator's reasons, either alone or in combination with the result at which the adjudicator arrived. As will become apparent, I have found the impugned determinations to be unreasonable in this last sense.

First issue: existence of a payment dispute Grounds

117 In contending that the First Determination was invalid by reference to the absence of a 'payment dispute' for the purposes of the Act, senior counsel for Samsung advanced the following five propositions, which reflect the amended grounds:

1. There can be no 'payment dispute' under the Act until the time when the amount claimed would be due for payment if the contract were performed according to its terms.
2. Once the Subcontract was terminated, the only relevant right to payment was under cl 39A.2.
3. The due date for payment under cl 39A.2 had not been reached by the time of the First Adjudication Application, so there was no 'payment dispute' within the meaning of the Act.
4. The adjudicator lacked jurisdiction to make the First Determination under s 31(2)(b) of the Act because there was no payment dispute.
5. Alternatively to 4, the adjudicator made a jurisdictional error by misconstruing s 6(a) of the Act (because he proceeded on the basis that a payment dispute could arise before payment was due).

First proposition: proper construction of s 6(a) of the Act

119 Senior counsel's argument depends on the correctness of the first proposition, which turns on the proper construction of s 6(a) of the Act. I have set out the text of s 6(a) above.

120 Senior counsel for Samsung submits that s 6(a) should be construed as providing that a payment dispute arises if:

1. by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full; or
2. by the time when the amount claimed in a payment claim is due to be paid under the contract, the claim has been rejected or wholly or partly disputed.

121 By contrast, senior counsel for LORAC submits that s 6(a) should be construed as providing that a payment dispute arises if:

1. by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full; or
2. the claim has been rejected or wholly or partly disputed.

122 That is, the dispute as to the proper construction of s 6(a) of the Act turns on whether the opening words of par (a) attach to all the words in the remainder of that paragraph, or only to the words 'the amount has not been paid in full'.

123 This question is not answered by reference to any authority binding on me.

124 It is evident that, in Cape Range,[61] Pritchard J read s 6(a) in the manner for which Samsung contends. However, Pritchard J's comment was made in the course of dealing with what the adjudicator in that case had considered. The issue agitated before me did not appear to be the subject of any significant contention between the parties in Cape Range.

125 In Field Deployment,[62] I made some observations about how s 6(a) of the Act might be construed in a manner which assumed that the opening words of the paragraph qualified everything that remained. However, I did not attempt to resolve any constructional issues concerning s 6(a) in that appeal, and did not have the benefit of submissions in relation to the issue when I made those observations.

126 In Alliance Contracting Pty Ltd v James,[63] Beech J found that a payment dispute arose in circumstances where a notice of dispute of a final certificate for payment was given 14 days after the issue of the certificate, but payment was not due until 42 days after the last day of the month in which the certificate was issued.[64] However, the question of whether a payment dispute could arise before payment was due does not appear to have been agitated in the parties' submissions in that case. Beech J did not expressly consider the competing constructions advanced in this case.

127 The issue was argued before and considered by the State Administrative Tribunal in Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes (WA) Pty Ltd[65] and Fuel Tank & Pipe Pty Ltd and Decmil Australia Pty Ltd.[66] In those cases, the Tribunal adopted the construction of s 6(a) now advanced by LORAC. While I find the reasoning adopted by the Tribunal in those cases to be persuasive, the decision of an administrative tribunal is clearly not binding on me.[67]

128 The issue was also considered in the context of broadly similar legislation to the Act by Barr J in Northern Territory v Urban and Rural Contracting Pty Ltd.[68] In that case, Barr J construed the Northern Territory provision in a manner consistent with the approach Samsung advocates. However, Barr J was dealing with different legislation, and distinguished the Tribunal decisions to which I have referred by reference to differences in the legislation.[69]

129 Therefore, such authority as exists on the question is conflicting and the issue was not live in many of the cases to which counsel referred. The question posed in this case has not been resolved by previous authority.

130 There are two considerations which lead me to favour the construction of s 6(a) of the Act advanced by LORAC.

131 First, the words 'or the claim has been rejected or wholly or partly disputed' are rendered otiose by Samsung's construction. On Samsung's construction, that limb of s 6(a) could only apply where a payment claim is rejected or disputed by the time it is due to be paid, but is nevertheless paid in full at that time. That seems an unlikely scenario. Moreover, if the scenario did arise then there could be no point to the adjudication process for which the Act provides. That process is designed to achieve a payment on account which does not finally determine the rights, duties or liabilities of any party. If payment has been made, by whatever means,[70] then there would be no point to an adjudication leading to a requirement that a party was liable to pay, on account, an amount which it had already paid.

132 This is a factor which influenced the Tribunal in the cases referred to above. The Tribunal referred to the constructional rule that a 'court construing a statutory provision must strive to give meaning to every word of the provision'.[71] I find the Tribunal's reasoning persuasive, and do not favour an approach which denies any practical operation to the concluding words of s 6(a) of the Act.

133 In contrast, LORAC's construction does give practical content to the concluding words of s 6(a) of the Act. On that construction, a payment dispute arises when a payment claim is disputed or rejected prior to the date when payment is due, or when the amount claimed is not paid in full on the due date.

134 Secondly, LORAC's construction of s 6(a) better achieves the purpose of the legislation. That purpose includes providing for a speedy resolution of disputes to ensure that contractors are paid on time and the money continues to 'flow'.

135 The terms implied by the Act, in the absence of written provision in a construction contract, expressly contemplate that a payment claim may be rejected or disputed before it is due. Those terms require notice of dispute to be given 14 days after receiving a payment claim but do not require payment until 28 days after the claim is received.[72] When the construction contract contains written terms, payment may be required up to 50 days after it is claimed.[73] A payment claim may be rejected or disputed immediately after it is made. The regime provided for by the Act allows for disputes to arise a significant time before payment is due.

136 It is inconsistent with the purpose of the Act to require a contractor whose payment claim is immediately rejected or disputed to wait until payment is due before making the application under s 26 of the Act which commences the adjudication process. Contractors are more likely to be paid on time if they can institute the adjudication process as soon as a payment claim is disputed, as opposed to being able to institute that process only after payment is due. LORAC's construction advances the purpose of the adjudication regime established by the Act, while Samsung's construction detracts from the achievement of that purpose.

137 Senior counsel for Samsung made a number of submissions against a construction of s 6(a) of the Act which would allow a payment dispute to arise before payment is due. I consider those submissions below, and conclude they do not demonstrate LORAC's proposed construction to be incorrect.

138 Samsung relies on what it says is the increased certainty produced by its proposed construction. It notes that, when s 6(a) refers to 'the time when the amount claimed in a payment claim is due to be paid under the contract', it is referring to a time period that can always be calculated once a payment claim has been made. It can be calculated by reference to the time within which, on a proper construction of the contract, payment would be due if the contract were performed according to its terms in respect of a claim of the kind made.

139 Samsung says that, by contrast, LORAC's construction would give rise to factual disputes as to when payment claim was rejected or disputed. It points to the debate in the present case (which it is unnecessary for me to resolve) as to whether Samsung's 'assessment' of 1 February 2015 constituted a notice disputing the claim, and to examples of debates of that kind in other cases in the Tribunal.

140 Samsung points out that the identification of the date when a payment dispute arises is of critical importance. Under s 26(1) of the Act an adjudication application can only be made within 28 days after a payment dispute arises. If a contractor makes an application too early, they may only discover the error when the adjudicator dismisses the application under s 31(2)(a)(ii) of the Act. By that time, which could be up to 28 days after the contractor made the adjudication application,[74] the time for making another application is likely to have expired.

141 While there is some force to these submissions, Samsung's construction of s 6(a) does not remove the potential for uncertainty as to when a payment dispute arises. Uncertainty may also arise from the terms of the relevant construction contract as to when payment is due. There is nothing in the material before me to indicate that disputes as to the meaning of payment provisions in a contract are apt to arise less often than factual disputes concerning whether a payment claim has been rejected or disputed. Nor is there anything to show that legal disputes as to the operation of the contract will be easier to resolve than factual disputes as to whether a claim has been disputed or rejected, particularly by those who are charged with the administration of construction contracts. In these circumstances, considerations of certainty do not demand adoption of Samsung's construction of s 6(a) of the Act.

142 Samsung also submits that it is unlikely that Parliament intended parties to be strictly barred from bringing a claim under s 26 of the Act by reference to a time period calculated from a date before payment was due under the construction contract.

143 I do not accept that submission. It is consistent with the general scheme of the Act that a party to a construction contract be required to act promptly once a payment claim is rejected or disputed. On Samsung's construction, a claim for payment due after 50 days could be immediately rejected or disputed. The party making the claim would then be required to wait 50 days, and could wait a further 28 days thereafter, before making an adjudication application. It is incongruous that a responding party should be put to the onerous timeframes provided for in the Act if the institution of the adjudication process is delayed in that manner.

144 Samsung submits that it would be fundamentally inconsistent with the evident purpose of the Act if a party could invoke the adjudication procedure in the Act by making a payment claim outside the process provided for in the contract (including provisions implied by the Act). This would also result in a fundamental interference with the common law contractual rights of the parties and, it is submitted, any ambiguity is to be resolved by preferring a construction which does not lead to that outcome. Samsung submits that LORAC's construction would allow a payment claim to be made which was not provided for in the contract and the claim to then be used to generate a payment dispute before the time when the amount the subject of the claim would be due to be paid under the contract, if the contract were performed according to its terms.

145 I accept that the Act should not be construed so as to require payment to be made before it is due under the contract. However, LORAC's proposed construction of s 6(a) of the Act does not produce that result. Section 31(2)(b)(ii) requires an adjudicator to determine the date on or before which a relevant amount is to be paid. That provision should not be construed as enabling the adjudicator to determine that payment is to be made before it is due. Section 31(2)(b)(ii) preserves the contractual capacity of parties to agree when payment is due, subject to the provisions of pt 2 of the Act.

146 In my view, there is no interference with contractual provisions if a dispute is determined before payment is due, so long as the determination does not require payment to be made before it is due under the terms of the relevant construction contract.

147 Samsung submits that the provisions of s 33 of the Act as to predetermination interest support its position.

148 Section 33(1)(a) applies if 'the payment is overdue under the construction contract', while s 33(2)(b) applies 'otherwise'. Section 33(1)(a) contemplates that a payment dispute may be determined when payment is not overdue under the contract. That aspect of the provision tends to support LORAC's construction.

149 Section 33(1)(b) of the Act, in a case to which it applies, confers a discretionary power to award interest 'from the date the payment dispute arose'. Samsung contends that this provision favours its construction of s 6(a), which avoids a payment dispute arising and therefore interest being awarded at a date before payment is due under the construction contract. This is a factor favouring Samsung's construction, but it is not compelling. The same result can be achieved by construing s 33 as not authorising an adjudicator to interfere with existing contractual rights, so that s 33(1)(b) would not authorise the awarding of interest from a date before the payment was due under the relevant construction contract.

150 Samsung contends that the structure of s 6 of the Act indicates that the opening words of s 6(a) qualify the whole of the paragraph and not merely its first limb.

151 Samsung says that, where the Act describes a list of matters each of which may (or must) apply, then it uses separate subsections. Samsung contends that it is inconsistent with the grammatical structure of the Act for the words 'or the claim has been rejected or wholly or partly disputed' to be read as unqualified by the opening words to s 6(a). Samsung says that s 6(b) and s 6(c) support its construction as those paragraphs define when a payment dispute arises by reference to when retention amounts are due to be paid and when security is due to be returned under the contract.

152 However, s 6(a) to s 6(c) each deal with a different subject matter. Section 6(a) of the Act deals with payment claims, s 6(b) deals with the return of retained money and s 6(c) deals with the return of securities. It is consistent with that structure to deal in a single paragraph with all circumstances where a payment dispute arises from a payment claim, even if different circumstances may lead to the payment dispute arising at different times. A comparison with s 6(b) and s 6(c) is not helpful because those paragraphs do not have the additional limb which is present in s 6(a).

153 There was some debate before me about the location of the commas in s 6(a) of the Act. While the second comma in the paragraph clearly divides s 6(a) into two limbs, I am unable to determine by reference to punctuation alone whether the second limb of s 6(a) is qualified by the opening words as to timing.

154 The submissions of both parties referred to parliamentary material in the form of the Minister's second reading speech and the explanatory memoranda to the Bill for the Act. The Minister's speech identified the purpose for which the Act was enacted, but otherwise the parliamentary material did not, in my view, establish either Samsung's or LORAC's construction of s 6(a) of the Act to be correct.

155 For the above reasons, I prefer LORAC's construction of s 6(a) of the Act. In my view the opening words as to timing do not qualify the words appearing after the second comma in the paragraph. Therefore, a payment dispute will arise for the purposes of the Act when a payment claim is rejected or disputed, even if the time for payment provided for by the construction contract had not arrived.

156 That conclusion is sufficient to lead to the rejection of Samsung's argument concerning the existence of a payment dispute. However, because the matters were fully argued, I will express my views as to the other limbs of Samsung's argument. In summary, I accept Samsung's other propositions and would have granted certiorari to quash the First Determination if Samsung's argument as to the proper construction of s 6(a) of the Act were correct.

Second proposition: liability to make payment after termination

157 An appropriate starting point in considering the proper construction of the Subcontract is to recall the observations of Gibbs J in Australian Broadcasting Commission v Australasian Performing Right Association Ltd:[75]

It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust.

158 That passage emphasises the importance of the objective meaning of the words used to express contractual intention in the construction of the resulting contract. Gibbs J went on to deal with the approach to be taken when the language is open to more than one construction, either on its own terms or in light of other potentially inconsistent parts of the same instrument. However, that discussion did not detract from the imperative to give effect to language which is, having regard to the context in which it appears, unambiguous.

159 More recently, the plurality in Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd observed:[76]

The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'. As Arden LJ observed in Re Golden Key Ltd, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption 'that the parties ... intended to produce a commercial result'. A commercial contract is to be construed so as to avoid it 'making commercial nonsense or working commercial inconvenience'. (footnotes omitted)

160 No party suggests that I should have regard to any extrinsic material in construing the Subcontract.

161 In my view, it is clear that the right to receive progress payments under cl 37 of the General Conditions does not survive termination of the contact. This is made plain by the fact that only cl 37.8 is expressed to survive termination. That implies that the other parts of cl 37 do not survive termination.

162 Further, there is no need for the right to receive progress payments to continue after termination. Once the Subcontract was terminated, LORAC's obligation to continue performance of the contract was brought to an end. In those circumstances, there was no longer any need for ongoing progress payments to fund the activities necessary to undertake the Subcontract Works.

163 Once the Subcontract is terminated the right to obtain progress payments under cl 37 ceases and is substituted by an entitlement under cl 39A.2(a)(i) to the amount for Subcontract Works carried out prior to the date of termination (subject to any set off and the requirement that the total amount payable under cl 39A.2 not exceed the adjusted Subcontract Sum).

164 Clause 39A.2(a) provides for an entitlement to an amount reasonably determined as being that 'which would have been payable if the Subcontract had not been terminated' and LORAC submitted a relevant Payment Claim. That hypothetical language shows that provisions in cl 37 for progressive payments on account do not continue after termination of the Subcontract. The claim under cl 39A.2 is a final claim.[77]

165 The view I have reached as to cl 37 is consistent with that formed by Ball J in Patrick Stevedores,[78] considering provisions based on the same Australian Standard as that used for the General Conditions.

166 For the above reasons, I accept Samsung's second proposition identified above at [117].

Third proposition: time when payment under cl 39A.2 is required

167 All parties accept that the terms implied by the Act into the Subcontract have the effect that the amount provided for in cl 39A.2 is payable 28 days after a claim for payment under cl 39A.2 is made.

168 As no payment claim was made under cl 39A.2 until 25 February 2015, no payment was due under that clause when the First Adjudication Application was made on 3 March 2015. Had I accepted Samsung's construction of s 6(a) of the Act, no payment dispute would have arisen by that time.

169 It follows from my acceptance of LORAC's construction of s 6(a) of the Act that a payment dispute arose in respect of the January Progress Claim by 1 February 2015, on the adjudicator's understanding of the assessment given by Samsung on that day. However, while a payment dispute may have arisen at that time, LORAC's right to receive payment under cl 37 had been extinguished by the termination of the contract by the time the First Adjudication Application was made.

Fourth proposition: payment dispute as a condition for the valid exercise of power

170 For the following reasons I accept Samsung's submission that the actual existence of a payment dispute, as opposed to the adjudicator's reasonable satisfaction as to the existence of a payment dispute, is a condition to the valid exercise of the power conferred by s 31(2)(b) of the Act.

Relationship between s 31(2)(a) and s 31(2)(b) of the Act

171 There are a number of elements to the operation of s 31(2) of the Act:

1. Section 31(2)(a) confers a power to dismiss an adjudication application without making a determination of its merits.
2. By using the term 'must', Parliament has imposed a duty on the adjudicator to exercise that power in a case where it arises.
3. Subparagraphs (2)(a)(i) (2)(a)(iv) identify the circumstances in which the power conferred by s 31(2)(a), and the duty to exercise the power, arises.
4. Section 31(2)(b) imposes a duty on the adjudicator to make a relevant determination where the circumstances giving rise to the duty to dismiss the application do not exist.

172 As Murphy JA noted in Perrinepod:[79]

Section 31(2)(a) itself is expressed in terms conferring jurisdiction on an appointed adjudicator - to dismiss an application. It is the proper exercise (or nonexercise) of that power or function, in its own right, which determines whether s 31(2)(b) has any application. The statutory language is clear. The two are alternative functions. In s 31(2), an appointed adjudicator may not determine an application on its merits if it is required to be dismissed under s 31(2)(a). In other words, an appointed adjudicator may not proceed under s 31(2)(b) to determine an application on its merits if the application is one which must be summarily dismissed under s 31(2)(a). If an appointed adjudicator were purportedly to proceed to determine an application under s 31(2)(b) which ought to have been dismissed under s 31(2)(a), the adjudicator would be acting unlawfully and without power.

173 The circumstances which give rise to the power and duty to dismiss an adjudication application have not been clearly defined by decisions of this court. A number of single judge decisions have held that the question is not whether the criteria in s 31(2)(a) are actually met. Judges in those cases have approached the issue by reference to the conclusion drawn by the adjudicator, and the process by which the adjudicator came to that decision. On that approach, the question is whether the adjudicator's conclusion as to the existence of circumstances which give rise to the duty to dismiss the application can be impugned on grounds on which jurisdictional error may be established.[80]

174 The cases referred to in the previous paragraph have not identified the precise content of the condition for the existence of an adjudicator's power and duty to dismiss an adjudication application without determining its merits. Is the condition the formation by the adjudicator of the opinion that one of the criteria in s 31(2)(a) applies? Is it a state of satisfaction as to one of those criteria, and if so what standard of satisfaction is required? Could the state of mind, the existence of which gives rise to the duty to dismiss an adjudication application without determining its merits, be a suspicion, reasonable belief or some other mental state?

175 The cases do not explain how a valid adjudication application can be made under s 25 and s 26 of the Act, which allow an adjudication application only '[i]f a payment dispute arises under a construction contract', when there is no actual construction contract. Nor do the cases explain how an adjudication determination becomes binding on the 'parties to the construction contract' under s 38 where the contract concerned is not actually a construction contract, contrary to the view of the adjudicator.

176 Part of the analysis in the decided cases appears to depend on the availability of an inference, described by Pritchard J in Cape Range,[81] that:

the Parliament must have intended that the decisionmaker should be able to authoritatively determine the existence or nonexistence of a jurisdictional fact.[82]

177 It is doubtful whether Parliament may confer jurisdiction on a decisionmaker to authoritatively determine the existence or nonexistence of a jurisdictional fact, so as to preclude this court from considering whether a jurisdictional fact exists in the exercise of its constitutionally entrenched judicial review jurisdiction. While a decisionmaker has to decide whether or not facts which are essential preconditions of jurisdiction exist, he or she cannot give himself or herself additional jurisdiction by making a wrong decision as to the existence of such facts.[83]

178 The High Court's decision in Parisienne Basket Shoes, referred to by Pritchard J and the other cases she cites, do not establish the proposition that Parliament may empower an administrative body to authoritatively determine the existence of a jurisdictional fact. Rather that decision, and in particular the passage of Dixon J at (391), is concerned with the question of whether a particular fact, and if so which fact, is jurisdictional.

179 A common feature of a court is that it has jurisdiction to determine whether a claim that is made in the court is within its jurisdiction; that is, a court has jurisdiction to determine its own jurisdiction.[84] Australian superior courts commonly have authority to make a binding decision as the extent of their own jurisdiction, so that an order of such a court is valid until set aside.[85] However those orders are subject to review by way of appeal and, in some cases, judicial review for jurisdictional error,[86] and the force given to an order is spent once the order is set aside.[87]

180 Given the inherently judicial nature of the function of determining the extent of a body's jurisdiction, it would ordinarily require very clear language before a statute could properly be construed as conferring an authority to making binding determinations of its own jurisdiction on a body other than a court. I strongly doubt whether the Act manifests such an intention.

181 But even if the Act does give an adjudicator jurisdiction to determine the extent of his or her jurisdiction, such a determination is subject to judicial review by this court. It is for this court on judicial review to determine whether a jurisdictional fact exists. If a body's jurisdiction does not depend on the existence of a fact then the fact is not jurisdictional. If a 'fact' (whether an objective state of affairs or the existence of a state of mind) is jurisdictional (ie, a condition for the valid exercise of a statutory power) then it must be for the court charged with determining whether the power has been validly exercised to determine whether that 'fact' exists (ie, whether the statutory power could be validly exercised).

182 If this court is to consider whether an adjudicator has exceeded the limits of his or her jurisdiction then it must be for this court to identify those limits.

183 For the above reasons, I have reservations about the approach which treats the matters specified in s 31(2)(a)(i) s 31(2)(a)(iii) of the Act as jurisdictional facts in the 'broad sense' which an adjudicator is empowered to authoritatively determine. It is, however, unnecessary to resolve that question, as in the present case the issue can be resolved by reference to s 31(2)(b) of the Act. I turn to consider that provision.

184 Even if it is accepted that the conditions identified in s 31(2)(a) of the Act are 'jurisdictional facts in the broad sense' it is still necessary to consider the limits of the power conferred by s 31(2)(b) of the Act.

Function of the adjudicator under s 31(2)(b) of the Act

185 The only function conferred by s 31(2)(b) of the Act is to determine whether 'any party to the payment dispute is liable to make a payment'. This is a function which can only be performed if there is a payment dispute.

186 The limits of the adjudicator's power under s 31(2)(b) of the Act were described by Beech J in the following terms, with which I agree, in Alliance Contracting:[88]

In my view, the determination by an adjudicator of whether any party to a payment dispute is liable to make a payment involves, and is limited to, determining whether the recipient of the payment claim (the non-payment or rejection of which constitutes the payment dispute) is liable to make a payment in respect of that payment claim. So, on my construction, the adjudicator's power is confined to accepting, wholly or in part, or rejecting that the recipient of that payment claim must pay that claim to the party which made the claim. The function of the adjudicator is to determine the merits of the payment claim the disputing of which constitutes the payment dispute, and to determine whether any party to that payment dispute is liable to make a payment in respect of that payment claim.

187 For the adjudicator to exercise that function there must be a payment dispute. For there to be a payment dispute, other than in respect of retained money or security, there must be a payment claim. As a payment claim is defined to be a 'claim made under a construction contract', this requires that there be a construction contract. The authority conferred by s 31(2)(b) is relevantly an authority to determine a payment dispute in relation to a payment claim under a construction contract. There is no authority to deal with something which is not a payment dispute.

188 Therefore, if there is no payment dispute (including because there is no payment claim or no construction contract) then there is nothing which an adjudicator has power to determine under s 31(2)(b) of the Act. In my view the actual existence of a payment dispute (and a payment claim and construction contract) is essential before the power under s 31(2)(b) arises. That is, the actual existence of a payment dispute (and not merely the adjudicator's opinion that a payment dispute exists) is a 'jurisdictional fact' which is a condition to the existence of the power conferred by s 31(2)(b) of the Act.

189 The conclusion I have reached as to the construction of s 31(2)(b) of the Act is consistent with the balance of the Act. The purpose of the Act is to 'provide a means for adjudicating payment disputes arising under construction contracts'. It is not an Act to provide for the adjudication of things which are not payment disputes under agreements which are not construction contracts, but which an adjudicator mistakenly thinks bear that character. A person only has a right to apply for adjudication under s 25 of the Act '[i]f a payment dispute arises under a construction contract'. Once a determination is made, s 38 of the Act only provides for the determination to be binding 'on the parties to the construction contract under which the payment dispute concerned arose'. A determination which does not relate to an actual payment dispute arising under an actual construction contract is not binding on anyone.

Payment dispute as to a payment claim under a construction contract

190 For the above reasons, I agree with the conclusion of Kenneth Martin J, in Delmere Holdings,[89] that a 'payment dispute' and a 'payment claim' arising under a 'construction contract' are core, objective jurisdictional facts. Put another way, an adjudicator is only authorised by s 31(2)(b) of the Act to determine an actual payment dispute about an actual payment claim arising under an actual construction contract. Even if an adjudicator is not obliged by s 31(2)(a) to dismiss an adjudication application, he or she has no relevant power under s 31(2)(b) to determine anything other than a payment dispute concerning a payment claim made under a construction contract.

191 LORAC says, in effect, that it is incongruous if it is sufficient for the purpose of s 31(2)(a) that an adjudicator's obligation to dismiss an application depends on the adjudicator's state of mind about matters which include the existence of a construction contract and payment dispute, but the adjudicator's authority to make a determination under s 31(2)(b) depends on the objective existence of a payment dispute and construction contract. There is some force in that submission, although it tends to support the proposition that the matters referred to in s 31(2)(a)(i) and s 31(2)(a)(ii) of the Act are objective requirements. Such a conclusion, which I acknowledge is inconsistent with a large number of single judge decisions of this court, would be supported by the fact that s 31(2)(a)(iv) expressly refers to the adjudicator's satisfaction of the matters referred to in that subparagraph while the other limbs of s 31(2)(a) do not.

192 Further, it is clear that an adjudicator may lack power to make a determination under s 31(2)(b) of the Act even when he or she is not required to dismiss an application under s 31(2)(a). For example, that may be the case where a second application is made,[90] or where the claim is in substance a quantum meruit claim which does not arise under the construction contract. Section 31(2)(a) of the Act does not exhaustively define the circumstances in which it is necessary to dismiss an adjudication application without determining the merits of the claim.

193 For the above reasons I accept Samsung's fourth proposition identified above.

Fifth proposition: misunderstanding provisions which confer power

194 Even if I were incorrect in concluding that an actual payment dispute was necessary, and the formation by the adjudicator of an opinion about that matter was sufficient, jurisdictional error would still be established in the present case if Samsung's preferred construction were to be adopted.

195 If the condition for the existence of the relevant power is an opinion, then the opinion must be one which could be formed by a reasonable person with a proper understanding of the legislation in question.[91] Nothing in the Act rebuts the common law presumption to that effect. In the present case the question at issue is whether the rejection or dispute of a payment claim which is not yet due is sufficient to give rise to a payment dispute. The answer to that question turns on the proper construction of the Act, and any opinion which involves a misconstruction of the Act will not be an opinion of the kind necessary to give rise to the power and duty to dismiss the adjudication application.

196 In the present case it is evident from the adjudicator's reasons that he considered that rejecting or disputing a payment claim was sufficient to give rise to a payment dispute. If Samsung's construction of s 6(a) were correct, then the adjudicator's opinion that there was a payment dispute would necessarily have involved misconstruction of the Act, which would imply that an opinion of the requisite kind has not been formed.

197 However, as I have rejected Samsung's submissions as to the proper construction of s 6(a) of the Act, it follows that the adjudicator properly construed the Act and correctly concluded that a payment dispute had arisen when the First Adjudication Application was made.

198 For the above reasons, Samsung's application for certiorari to quash the First Determination on the ground that there was no 'payment dispute' fails because the adjudicator correctly concluded that a payment dispute had arisen when the First Adjudication Application was made. Under s 6(a) of the Act, it is sufficient that the payment claim was rejected or disputed, and not necessary that payment be due when LORAC made the First Adjudication Application. In those circumstances neither prerogative nor declaratory relief is warranted on that ground.

199 However, had I favoured Samsung's construction of s 6(a) of the Act, I would have been prepared to grant certiorari to quash the First Determination on the ground that the adjudicator had no power to determine the First Adjudication Application in the absence of a payment dispute, or alternatively on the ground that the adjudicator made a jurisdictional error in misconstruing s 6(a) of the Act.

Second issue: whether the determinations were authorised by s 31(2)(b) of the Act Grounds

200 Samsung contends that the First and Second Determinations are both vitiated by jurisdictional error on the grounds that:

(a) under the [Act], the adjudicative function entrusted to the Adjudicator was required to be exercised by reference to the terms of the [Subcontract] and the Interim Deed (being the relevant construction contracts) as properly construed in accordance with common law principles and the Adjudicator did not so exercise his adjudicative function;

(b) the Adjudicator misconstrued the [Act] provisions as to the nature and extent of his adjudicative function by not determining the liability of Samsung to make a payment, if any, by reference to the terms of the relevant construction contracts;

(c) the reasoning of the Adjudicator manifested illogicality or irrationality; and

(d) the decision of the Adjudicator requiring Samsung to make a payment was so unreasonable in result that no reasonable adjudicator would have so concluded.

201 The circumstances in which an inferior court would commit jurisdictional error were considered by the High Court in Craig. In that case the High Court distinguished between inferior courts which were amenable to certiorari, constituted wholly or partly by persons with formal legal training and forming part of the ordinary hierarchical judicial structure, and other tribunals. Speaking in general terms, the High Court said that, in contrast to other tribunals:[92]

[T]he ordinary jurisdiction of a court of law encompasses authority to decide questions of law, as well as questions of fact, involved in matters which it has jurisdiction to determine. The identification of relevant issues, the formulation of relevant questions and the determination of what is and what is not relevant evidence are all routine steps in the discharge of that ordinary jurisdiction. Demonstrable mistake in the identification of such issues or the formulation of such questions will commonly involve error of law which may, if an appeal is available and is pursued, be corrected by an appellate court and, depending on the circumstances, found an order setting aside the order or decision of the inferior court. Such a mistake on the part of an inferior court entrusted with authority to identify, formulate and determine such issues and questions will not, however, ordinarily constitute jurisdictional error.

202 It may be noted that an adjudicator has neither of the two central characteristics of an inferior court identified in Craig. Generally, an adjudicator will not have legal qualifications, and an adjudicator is not part of the judicial hierarchy (so that the decisions of an adjudicator under s 31(2)(b) of the Act are not subject to appeal to a court).

203 However, in Perrinepod, Murphy JA, with whom Martin CJ agreed, observed:

Finally, although it is unnecessary to resolve in this appeal the scope of judicial review in respect of determinations under s 32(1)(b), I agree with Beech J in O'Donnell [102], with whom Corboy J has also expressed agreement in Thiess v MCC [59], that an appointed adjudicator's determination under s 31(2)(b) is not amenable to judicial review for non-jurisdictional error of law. I agree that the scheme and purpose of the Act, which, as the long title indicates, is 'to provide a means for adjudicating payment disputes arising under construction contracts', is more consistent with an appointed adjudicator being akin to an inferior court rather than an administrative tribunal for certiorari purposes, when exercising the power to make a determination under s 31(2)(b).

204 The comparison of the adjudicator to an inferior court can be useful, but the status of the authority whose decision is subject to judicial review as an inferior court, or akin to an inferior court, is not the critical issue. That issue remains, as I have explained, whether the adjudicator's decision is authorised by the Act. The answer to that question turns on the extent of the authority to decide questions of law conferred by the Act.

205 This point is illustrated by the decision in Kirk.[93] The passage from Craig which I have quoted above was referred to by the plurality in Kirk. After referring to the assumptions which lay behind the conclusions expressed in Craig, the plurality said:

When certiorari is sought, there is often an issue about whether the decision is open to review. If 'authoritative' is used in the sense of 'final', a decision could be described as 'authoritative' only if certiorari will not lie to correct error in the decision. To observe that inferior courts generally have authority to decide questions of law 'authoritatively' is not to conclude that the determination of any particular question is not open to review by a superior court. Whether a particular decision reached is open to review is a question that remains unanswered. The 'authoritative' decisions of inferior courts are those decisions which are not attended by jurisdictional error. That directs attention to what is meant in this context by 'jurisdiction' and 'jurisdictional'. It suggests that the observation that inferior courts have authority to decide questions of law 'authoritatively' is at least unhelpful [70].

206 In Kirk, the Industrial Court was found to have committed jurisdictional error by convicting and sentencing Mr Kirk and his company when it had no power to do so, because an offence against the relevant legislation had not been proven; and by misapprehending the limits of its power by permitting the prosecution to call Mr Kirk as a witness in the trial.[94] Kirk illustrates the importance of attention being given to the limits of the power of the authority whose decision is subject to judicial review, rather than whether the authority purporting to exercise that power is to be classified as an inferior court. As is the case for a tribunal, an error of law by an inferior court can result in the court exceeding the limits on its power to make an impugned decision.

207 In Barrett v Coroner's Court of South Australia,[95] the Full Court of the South Australian Supreme Court considered an argument that a coroner's court had committed jurisdictional error in its application of the 'born alive rule'. The court concluded that the coroner had not made any relevant error of law. However, in the course of rejecting the application for judicial review in that case, Peek J observed that:

Having correctly formulated the test, it is my view that even if his Honour then went on to err in his analysis of the evidence, or in the application of the correct test to the evidence before him, such later error would not be a jurisdictional error and would not be amenable to judicial review on that or on any other basis [147].

208 This passage was cited with evident approval, in a different statutory context, by Forrest J in Commissioner of Australian Federal Police v Magistrates' Court of Victoria.[96] Implicit in this statement is the proposition that a court's decision may be subject to judicial review for jurisdictional error if it does not correctly formulate the relevant test, or fails to apply the correct test to the evidence.

The adjudicator's function under s 31(2)(b) of the Act

209 The relevant function of the adjudicator under s 31(2)(b) of the Act is to 'determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment'. The nature of the task is further informed by s 3 of the Act, which defines 'determination' to mean a determination of the 'merits of a payment dispute'.

210 The language of s 31(2)(b) and associated definitions indicates that the question the adjudicator is required to address is a legal question. The provision refers to a legal standard of proof. The subject of the payment dispute is a claim made under a construction contract for payment of an amount in relation to the performance of the contractor's obligations under the contract. In that context the 'liability' referred to in s 31(2)(b) of the Act must be a legal liability. The question which the adjudicator is required to address is whether a party is legally liable to pay a claim made under a construction contract.

211 Further, as Beech J observed in the passage from Alliance Contracting quoted above at [186], the adjudicator's power is confined to accepting, wholly or in part, or rejecting that the recipient of a payment claim must pay that claim to the party which made it.

212 Determining the merits of a payment dispute will require the adjudicator to apply the relevant law to the terms of the contract which are before him or her and the facts concerning the performance of relevant obligations as he or she finds them to be.

213 The Act applies to a construction contract, which by the definition of 'construction work' in s 4 of the Act will concern a site in Western Australia, irrespective of whether the contract is expressed to be governed by the law of a place other than Western Australia.[97] In such cases, the adjudicator will be required to apply the choice of law rules of this State and the law identified by the application of those rules in order to determine the existence of the relevant legal liability. This is not an issue in the present case, where both the Subcontract and the Interim Deed expressly identify the law of Western Australia as the proper law of the contract.[98]

214 Therefore, in the present case the adjudicator was required to apply the common law of Australia relating to contractual construction, as modified by applicable State and Commonwealth legislation (including the Act) to the provisions of the Subcontract.

215 For the provisions of pt 3 of the Act to have practical utility, the adjudicator must be given authority to wrongly determine some questions of law without the resulting determination being necessarily invalid. That proposition is supported by:

1. the purpose of the Act;
2. the adjudication process for which the Act provides, involving an expedited determination by a person who will not ordinarily have legal qualifications; and
3. the provisions enabling the parties to a payment dispute to subsequently litigate the legal merits of the claim.

216 The proposition that not every error by an adjudicator in the interpretation of a construction contract is a jurisdictional error finds support in decisions of courts construing legislation which is broadly similar to the Act. It has been held that, under similar Queensland legislation:[99]

An adjudicator who misconstrues or misapplies a relevant contractual provision and, as a result, does not correctly decide the amount of the progress payment, if any, to be paid to the claimant does not, for that reason alone, make a jurisdictional error.

217 In Northbuild Construction Sunshine Coast Pty Ltd v Beyfield Pty Ltd,[100] Philip McMurdo J observed:

To determine an application, an adjudicator must identify the relevant terms of the contract upon which the claim is made and then apply the facts, as he or she finds them to be, to those terms upon their proper interpretation. The identification of the terms and the interpretation of those terms are thereby questions which the adjudicator must answer in the exercise of his jurisdiction. It follows that an error in the identification of the terms or in their interpretation will not be a jurisdictional error.

However, where it appears that an adjudicator is not meaning to apply the contract, as he or she interprets it, but is instead allowing the claim upon some other basis, the position is different, because the adjudicator is thereby misunderstanding the scope of the adjudicator's jurisdiction. (citations omitted)

218 I do not read the last paragraph quoted above as expressing the view that an adjudicator will not make a jurisdictional error so long as he or she means to apply the contract. Rather, the passage provides one example of how an adjudicator may commit jurisdictional error by misunderstanding the scope of his or her jurisdiction. Nor do I understand these decisions to deny that a misconstruction of a contractual provision might amount to a jurisdictional error in circumstances where the error gives rise to an inference that the adjudicator has misunderstood the nature or scope of his or her statutory function.

219 I agree with Samsung's submission that s 31(2)(b) requires that the liability to make the relevant payment must be ascertained by reference to the terms of the construction contract which are before the adjudicator. The adjudicator will fail to perform that task, and will misapprehend his or her statutory function, if the adjudicator determines the merits of the payment dispute otherwise than by reference to the terms of the construction contract which are before him or her. To act in that manner is to exceed the authority conferred by s 31(2)(b) of the Act. However, a determination of the merits of a payment dispute by reference to the terms of the construction contract will not be invalid merely because those terms are misconstrued.

220 LORAC submits that s 31(2)(b) only requires the adjudicator to genuinely engage with the task entrusted to him, namely to consider the payment dispute and determine it on its merits. In LORAC's submission, it is sufficient if the adjudicator has considered the construction contract and made a genuine attempt to properly construe it. In support of that submission, senior counsel for LORAC refers to the provisions of the Act (identified above) which facilitate the speedy, informal determination of a payment dispute by a person without legal qualifications. LORAC also notes that a person determined liable to make a payment under a construction contract can seek to establish that they were not actually liable in a court of law, and recover the amount paid.

221 These considerations do not justify a conclusion that the adjudicator can validly determine a payment dispute other than by reference to the terms of the construction contract which are before him or her. To construe the Act in that manner would involve attributing to the Act an intention to interfere with contractual rights by having the obligations of the parties to that contract determined otherwise than by reference to the terms to which they have agreed. Unmistakably clear language would be required to achieve that result (see [101] above).

222 Further, the fact that a party may, by action in a court of law, subsequently recover amounts paid as required by a determination under the Act does not mean that the rights of that party are not significantly affected by the requirement to make the payment. That is illustrated by the present case in which Samsung has been determined liable to pay over $44 million. Payment disputes under the Act clearly have the potential to involve tens of millions of dollars, and the requirement to pay sums of that order has the potential to impact on the solvency of even large corporations. In that regard it is relevant to note that a determination under pt 3 of the Act can support a statutory demand under the Corporations Act, which is not readily set aside by pointing to a dispute about the actual liability to make the payment.[101] The ability of a contractor to repay amounts paid as required by a determination will depend on the solvency of the contractor at the time recovery is ordered by a court of law. The intention to attribute those consequences to a party to a construction contract other than by reference to the terms of the contract should not lightly be attributed to Parliament.

223 It was implicit in some of the submissions advanced by LORAC that some greater allowance was necessary for adjudicators who, generally lacking legal training, would not have the capacity to resolve disputes turning on the proper construction of complicated contracts according to law. Senior counsel said that an adjudicator could not be expected to know what Mason J said in Codelfa,[102] or to understand the controversy relating to the reasons for refusing special leave to appeal in Western Export Services Inc v Jireh International Pty Ltd.[103] So much may be accepted.

224 However, Parliament cannot, in my view, be taken to have contemplated that payment disputes involving tens of millions of dollars and turning on questions of contractual construction would be resolved other than by reference to the contractual provisions.

225 If an adjudicator is faced with a payment dispute raising legal problems he or she is not able to resolve within the limited time for which the Act provides, the proper approach would be to dismiss the application without determining its merits under s 31(2)(a)(iv). That is the mechanism provided for dealing with a complex payment dispute of the present character.

226 Given that mechanism, provisions for a speedy determination of disputes by a person who need have no legal qualifications do not justify reading s 31(2)(b) to authorise the determination of payment disputes other than by reference to the terms of the construction contract which the parties have chosen to govern their rights, duties and liabilities in relation to each other.

227 LORAC noted that s 26(2)(b)(i) of the Act does not require the whole of the construction contract involved to be placed before the adjudicator, and it will be sufficient if relevant extracts are included in the application. I do not think that this provision is inconsistent with identifying the adjudicator's function by reference to the provisions of the construction contract which are before the adjudicator. The adjudicator will not commit jurisdictional error by failing to determine a payment dispute by reference to contractual provisions which are not before him or her. An adjudicator could not be required to deal with contractual construction arguments other than those expressly raised by the parties.[104] However, if relevant contractual provisions are provided, the adjudicator's function is to determine the merits of the payment dispute by reference to those provisions.

Whether the adjudicator performed and understood his function in making the First Determination

228 In making the First Determination, the adjudicator did not refer to cl 39A.2 of the General Conditions at all. Although he referred to cl 37 of the General Conditions in deciding whether there was a payment dispute,[105] the adjudicator did not consider whether cl 37 survived termination of the Subcontract. He did not deal with the argument, advanced by Samsung in its response to the First Adjudication Application, that as a consequence of the termination of the Subcontract the payment regime under cl 37 came to an end and cl 39A.2(a) of the General Conditions provided a new regime.[106] The adjudicator did not identify the provision of the Subcontract which, after termination, gave rise to a liability for Samsung to make a relevant payment.

Clauses 37 and 39A.2 after termination for convenience

229 Had the adjudicator considered this issue, the only reasonable conclusion to which he could have come was that, other than cl 37.8, none of the provisions of cl 37 of the General Conditions survived termination of the Subcontract. After termination, the only right which LORAC could have for payment in respect of work conducted prior to termination was found in cl 39A.2(a). In my view, the effect of cl 37 and cl 39A.2 of the General Conditions was clear, and the Subcontract could not reasonably be construed so as to permit LORAC to make Payment Claims under cl 37 after termination.

230 The problem which LORAC then faced was that the payment claim with which the adjudicator was dealing (namely the January Progress Claim) was not a claim for payment under cl 39A.2(a) of the General Conditions. The payment dispute which was the subject of the determination concerned Samsung's liability to pay the January Progress Claim purportedly issued under cl 37.1(b) of the General Conditions.

231 The dispute as to January Progress Claim gave rise to a payment dispute for the purposes of the Act. The adjudicator had jurisdiction to determine the merits of the payment dispute concerning the January Progress Claim. However, in determining the merits of the payment dispute, the adjudicator was required to consider whether the terms of the Subcontract created a liability to pay that claim.

232 The only reasonable answer to that question was that the General Conditions did not create any liability to pay the January Progress Claim in circumstances where the Subcontract had been terminated before a Progress Certificate had been issued under cl 37.1(c) or cl 37.1(f) of the General Conditions or a Payment Claim had been made under cl 37.2 of the General Conditions. The clauses which provided for the issue of a Progress Certificate and Payment Claim had terminated, as had cl 37.3 of the General Conditions which created the obligation to pay the amount shown on a tax invoice accompanying a Payment Claim.

233 Therefore, the only reasonable manner in which the payment dispute concerning the January Progress Claim could have been resolved by reference to the terms of the Subcontract was to determine that Samsung was not liable to pay the January Progress Claim, because the clauses which would otherwise have given rise to Samsung's liability to pay that claim had not survived termination of the Subcontract.

234 In all the circumstances, the inference to be drawn from:

1. the failure of the adjudicator to refer to cl 39A.2(a) of the General Conditions or explain how relevant parts of cl 37 survived termination; and
2. the adjudicator's conclusion as to liability, which could not have been reached on any reasonable application of the terms of the Subcontract,

was that the adjudicator failed to determine the payment dispute by reference to the terms of the Subcontract. This means that the adjudicator failed to engage in the task which s 31(2)(b) of the Act required him to undertake, and must have misapprehended the nature of the function which he was required to perform. The Act did not authorise the First Determination, which was the product of that exercise.

235 The inference that the adjudicator failed to determine the payment dispute by reference to the terms of the Subcontract is also supported by the manner in which the adjudicator dealt with interest in the First Determination. The adjudicator awarded interest from 11 February 2015, the day after the Subcontract was terminated. In doing so, he rejected a submission that there should be no interest awarded because there had been no default.

236 However, there are no provisions of the Subcontract which could reasonably have led the adjudicator to the view that payment was due, so that interest was payable, from 11 February 2015. Clause 39A.2 might reasonably have been construed as requiring the Contractor's Representative to make a determination under that clause within a reasonable time.[107] An alternative, which both parties now accept to be correct, is that a determination and payment was to be made within 28 days of a claim under the terms implied by s 15 and s 18 of the Act. However, on no reasonable application of the terms of the Subcontract was payment due by 11 February 2015. That the adjudicator arrived at a conclusion which could not reasonably be supported by the application of the terms of the Subcontract supports the conclusion that he did not apply those terms in the First Determination.

Whether the adjudicator performed and understood his function in making the Second Determination

237 The adjudicator did refer to cl 39A.2(a) of the General Conditions in making the Second Determination. The question remains whether he determined the payment dispute concerning the February Claim by reference to that term of the Subcontract, in a manner authorised by s 31(2)(b) of the Act.

238 Determining whether Samsung was liable to pay the amount claimed in the February Claim under cl 39A.2(a) of the General Conditions required the adjudicator to consider a number of elements. Before the adjudicator could have been properly satisfied that Samsung was liable to make a payment of an amount to LORAC under cl 39A.2(a) of the General Conditions, he needed to be satisfied on the balance of probabilities of three matters:

1. The amount would have been payable for the Subcontract Works which were the subject of the February Claim had the Subcontract not been terminated and had LORAC submitted a Payment Claim for those works.
2. The payment of that amount would not, when added to amounts already paid or payable to LORAC, be more than the Subcontract Sum adjusted in accordance with the Subcontract.
3. Samsung was not entitled to deduct money from that amount under cl 37.8 of the General Conditions.

239 In my view, the adjudicator did not address the second and third of these matters by reference to the terms of the Subcontract in the manner required by s 37(2)(b) of the Act.

240 In relation to the Subcontract Sum, the adjudicator noted, and did not reject, Samsung's submission that the adjusted Subcontract Sum was provisionally calculated at $127,639,635. He concluded that 'there are too many vagaries to assess' that amount and that he was not satisfied as to any quantum of that amount.

241 However, before he could find that Samsung was liable, the adjudicator had to be satisfied that the payment he was ordering would not result in the total payments exceeding the adjusted Subcontract Sum. Section 31(2)(b) of the Act required that he be satisfied Samsung was liable on the balance of probabilities.

242 By determining that Samsung was liable to pay without finding that the adjusted Subcontract Sum would not be exceeded, the adjudicator failed to apply the standard of proof mandated by s 31(2)(b) of the Act, and failed to apply the concluding words of cl 39A.2(a) in determining the dispute.

243 In relation to the claimed set off, the adjudicator found that cl 37.8(b), on which Samsung relied, was ambiguous. He saw this ambiguity as arising from the definition of 'Claim', which he understood as relating only to claims for an increase in the Subcontract Sum. In this regard, the adjudicator made a clear error in construing the term 'Claim', which was defined in cl 1.1 of the General Conditions. It is true that the first limb of that definition relates only to claims for an increase in the Subcontract Sum. However, the second, independent, limb of the definition includes any claim 'for payment of money (including damages) ... under, arising out of, or in any way connected with, the Subcontract'.

244 That misconstruction of the Subcontract does not itself invalidate the Second Determination. As I have observed, mere misconstruction of the contract will not, of itself, constitute jurisdictional error.

245 However, the adjudicator did not merely make an error in relation to the construction of the term 'Claim'. The adjudicator's error led him to the view that cl 37.8(b) was ambiguous. Having reached that conclusion, the adjudicator did not then resolve the ambiguity and come to a conclusion about the proper construction of cl 37.8(b). Rather, he ignored the clause and proceeded to resolve this aspect of the payment dispute by reference to cl 37.8(a) of the General Conditions, on which Samsung did not rely. In this manner the adjudicator failed to apply a clause of the Subcontract on which Samsung relied, and which he had identified as potentially applicable, to the determination of the payment dispute. That failure does, in my view, constitute jurisdictional error.

246 There is some merit to LORAC's submission that s 37.8(b) was not in fact engaged on the evidence which Samsung produced in this case (see [72] above). However, the point remains that the adjudicator did not determine that aspect of the payment dispute on that basis. The fact that he did not determine this aspect of the dispute by reference to the applicable contractual terms which Samsung had identified illustrates the failure by the adjudicator to undertake the statutory task.

247 Further, the adjudicator resolved the dispute about LORAC's acceleration claim by reference to what was said by a representative of Samsung in a letter attempting to resolve a dispute about the matter. That the letter was written on a 'without prejudice' basis does not require a conclusion that the adjudicator committed jurisdictional error. That the adjudicator was clearly mistaken about the fact that Samsung admitted liability in that letter also does not entail jurisdictional error. However, the fact that the adjudicator resolved the dispute about the acceleration claim by reference to what was said in the letter, rather than what was provided for in the Subcontract, is another example of the adjudicator failing to resolve the payment dispute by reference to the terms of the Subcontract.

248 In both the First Determination and the Second Determination, the adjudicator failed in fundamental respects to determine the relevant payment dispute by reference to the terms of the Subcontract. In doing so, the adjudicator failed to determine the payment disputes in a manner authorised by s 31(2)(b) of the Act, and evidenced a misapprehension of the nature and scope of the function he was required to perform under that subsection. It follows that the purported determinations are invalid, and certiorari should issue to quash them. LORAC did not submit that certiorari should be refused on discretionary grounds.

249 The above conclusions mean that it is unnecessary for me to resolve those aspects of Samsung's grounds which contend that the reasoning of the adjudicator 'manifested illogicality or irrationality' or that the determinations were 'so unreasonable in result that no reasonable adjudicator would have so concluded'.

250 It is also unnecessary for me to resolve the question of whether a fundamental misunderstanding of the rules of contractual construction would constitute a jurisdictional error by the adjudicator. This question was raised in relation to the Interim Deed, which the adjudicator construed in the Second Determination by reference to the subjective understanding of Mr Carne, one of the participants in negotiations between the parties. If the Interim Deed formed part of the 'construction contract' for the purposes of the Act, then I would be sympathetic to an argument that the adjudicator committed jurisdictional error by fundamentally misunderstanding the applicable principles of construction in that respect.

251 However, it does not appear that the Interim Deed forms part of a construction contract. While cl 2.1(c) provides for LORAC to be paid for certain post-termination works, the Interim Deed does not itself oblige LORAC to carry out construction work or supply goods or services so as to bring the Interim Deed, as a standalone document, within the Act's definition of a construction contract.

252 The Subcontract, which clearly is a construction contract, had been terminated by the time the Interim Deed was executed. While some provisions of the Subcontract survived termination, none of those provisions required LORAC to carry out construction work or provide relevant goods or services. The terms of the Interim Deed combined with the provisions of the Subcontract which survived termination do not constitute a construction contract.

253 In any event, the Interim Deed is expressed, in cl 12, to be the entire agreement in relation to the rights and obligations of the parties for the purposes of the Interim Deed.

254 Therefore, the Interim Deed does not fall within the statutory definition of 'construction contract'.

255 Samsung's submission that the adjudicator's approach to the construction of the Interim Deed was affected by jurisdictional error was largely predicated on the Interim Deed forming part of the construction contract. I have concluded that the First and Second Determinations are invalid for other reasons. In these circumstances I do not decide whether jurisdictional error was involved in approaching the construction of the Interim Deed by reference to the subjective views of a party to its negotiation.

Third issue: leave to enforce determinations Principles

256 The principles governing the exercise of the court's discretion under s 43(2) of the Act to grant leave on an application to enforce an adjudicator's determination are well established.

257 As the Act does not identify the matters relevant to whether leave should be granted under s 43 of the Act, it is necessary to have regard to the context, objects, purpose and policy of the legislation in exercising the power conferred by that section.[108]

258 The court ought to grant leave to enforce a determination of an adjudicator as a judgment of the court, unless it is satisfied that a valid reason exists to refuse a grant of leave.[109] The purpose of the Act identified above, in particular the aim to 'keep money flowing', gives rise to a predisposition in favour of a grant of leave. Prima facie, a party in whose favour a determination is made is entitled to enforce it, and it is for the party obliged to pay to show a reason why the determination should not be enforced.[110]

259 The fact that a debtor alleges the existence of claims against the other party which could be set off against the determination will not ordinarily justify the refusal of leave.[111] Nor is an application for leave to enforce a determination ordinarily the occasion for challenging the correctness of the determination or, in the absence of a pending application for judicial review, its validity.[112] There are no closed categories of circumstances that may be relevant to the question of whether leave should be granted.[113]

260 Leave to enforce should be refused as the First and Second Determinations are invalid, and should be quashed by the issue of a writ of certiorari.

261 There is a further reason, quite apart from the invalidity of the determinations, why leave to enforce the First and Second Determinations should be refused. Leave should be refused on the ground that the payment required by those determinations has already been made, through the payment of $45 million pursuant to cl 2.1(a) of the Interim Deed.

262 To explain this second reason, it is necessary to say something about the proper construction of the Interim Deed, and to identify what the payment required by the Interim Deed was for.

263 It has not been necessary to resolve the question of whether the adjudicator made a jurisdictional error by reference to the manner in which his reasons for determinations dealt with the Interim Deed. However, it is appropriate to consider the proper construction of the Interim Deed for the purpose of deciding whether leave to enforce should be refused on the ground that the payments required by the determinations have already been made.

264 LORAC accepted that the Interim Deed was properly construed by reference to its terms and the terms of the Subcontract. It is necessary and permissible to have regard to the terms of the Subcontract, as the Subcontract is expressly referred to in the Interim Deed.[114] LORAC submitted that it was not necessary to have regard to other extrinsic material. I accept that submission.

265 The Background to the Interim Deed recites entry into the Subcontract and termination of the Subcontract on 10 February 2015. The Deed was executed 11 days later on 21 February 2015. The context in which the Interim Deed was executed was, on the face of the Interim Deed, one in which LORAC's right to receive progress payments had terminated and cl 39A.2(a) of the General Conditions entitled LORAC to receive payments of the amounts referred to in that clause as reasonably determined by the Contractor's Representative. It may be inferred from the nature and complexity of the Subcontract and the Subcontract Works that finally determining LORAC's entitlement under cl 39A.2(a) of the General Conditions would occupy some time.

266 The only substantive new obligations imposed on LORAC by the Interim Deed were to use reasonable endeavours to procure the novation of agreements referred to in cl 5.1 of the Interim Deed, and to facilitate the transfer of hire agreements and purchase orders referred to in cl 6 of the Interim Deed. The amounts referred to in cl 2.1 of the Deed were payable on execution of the Deed and novation of relevant agreements. It is inconceivable that $45 million would be paid merely for executing the Deed and using reasonable endeavours to novate contractors' agreements. Those acts by LORAC could not have a value of anywhere approaching $45 million to Samsung.

267 In answer to the above point, LORAC contends that the law does not inquire into the adequacy, but only the existence, of consideration. However, that approach is taken for the purpose of considering whether a contractual obligation has arisen. It is permissible, in construing the Interim Deed in a businesslike manner, to do so in a manner which avoids making the Deed a commercial nonsense. In my view it would be commercial nonsense to regard the payment of $45 million as being merely payment for the execution of the Deed and the use of reasonable endeavours to procure the novation of certain contracts.

268 Clause 2.2 of the Interim Deed provides that the payment referred to in cl 2.1(a) 'shall be on account only' and 'shall not constitute evidence that [LORAC] has completed any WUSC'. A payment on account must be for some other liability. The liability for which the Subcontract provided on termination was the liability under cl 39A.2(a).

269 The reference to WUSC (a term defined in cl 1.1 of the Subcontract to mean work which LORAC may be required to carry out under the Subcontract) indicates that the payment is for Subcontract Works undertaken prior to termination. In those circumstances it is to be inferred that the payment required by cl 2.1(a) of the Interim Deed is a payment on account in respect of the liability under cl 39A.2(a) consequent upon termination of the Subcontract.

270 This conclusion is reinforced by the reference to costs due under cl 39A.2 of the General Conditions in cl 2.1(b) of the Interim Deed. It is also supported by the words '(together, the Termination Costs)' after cl 2.1(b); by the 'Interim' nature of the Deed; and by cl 10 of the Interim Deed which provides in part:

This Deed is entered into solely in connection with the practical handover and transition of WUSC following termination of the Subcontract by [Samsung].

271 In that context the proper construction of the Interim Deed is that cl 2.1(a) provides for payment of $45 million on account of Samsung's liability to make the payment required by cl 39A.2(a), pending determination of the amount of that liability. The obligation to pay the costs due under cl 39A.2 is restated in cl 2.1(b) of the Interim Deed.

272 Clause 4.2 of the Interim Deed provides that the Interim Deed does not prejudice a party's right to institute certain proceedings or seek certain remedies. This clause recognises that LORAC could still make an adjudication application under the Act. However, cl 4.2 does not require payments under the Interim Deed to be ignored when an adjudicator determines a payment dispute or LORAC seeks leave to enforce such a determination.

273 Samsung sought to further support this construction of the Interim Deed by noting that there is no evidence of any claim by LORAC under the Subcontract, other than under cl 39A.2(a), known to both parties at the time of its execution, to which the requirement to pay $45 million could be referable. I agree that this extrinsic evidence (or lack thereof) tends to support the conclusion which I have reached and for which Samsung contends. However, as the Interim Deed is, in my view, clear on its terms, it is unnecessary for me to rely on this material.

274 Therefore, the payment of $45 million under cl 2.1(a) of the Interim Deed was a payment on account by Samsung to LORAC in respect of Samsung's liability to make a termination payment under cl 39A.2(a).

275 The effect of the determinations, if they were valid, would be to require Samsung to make a payment on account to LORAC in respect of Samsung's liability which could only be derived from cl 39A.2(a).

276 There is no evidence that the $45 million has been applied to some other liability.

277 It follows, in my view, that Samsung has already made the payment which would have been required by the First and Second Determinations if those determinations were validly made.

278 That is not to say that the payment of $45 million resulted in a liability in Samsung's favour which could be set off against any amount payable under a determination. Rather, the payment itself could only have been attributed to Samsung's liability under cl 39A.2(a) of the Subcontract to which the determinations related.

279 Nor does any question arise as to determining to which of two debts a payment is to be attributed.[115] In this case there is a single liability under cl 39A.2(a) of the General Conditions to which both the payments under the Interim Deed and the payments required by the First and Second Determinations relate. I would not exercise my discretion to grant leave to enforce the already satisfied determinations in those circumstances.

280 For the above reasons, I will make orders quashing the First and Second Determinations made by the adjudicator, and will refuse LORAC leave to enforce those determinations.

1.1 Definitions

Claim includes any claim for an increase in the Subcontract Sum (including an adjustment to the Rates and Prices or the Bill of Quantities), for payment of money (including damages) or for an EOT:

(a) under, arising out of, or in any way in connection with, the Subcontract, including any Direction of the Contractor's Representative;

(b) arising out of, or in any way in connection with WUSC, the Subcontract Works, or either party's conduct before the Subcontract; or

(c) otherwise at law or in equity, including by statute, in tort (for negligence or otherwise, including negligent misrepresentation) or for restitution;

...

Payment Claim means the claim for payment to be submitted by the Subcontractor in accordance with clause 37.2.

...

Progress Certificate has the meaning in clause 37.1;

Progress Claim means the claims set out in clause 37.1(b);

Project means the Roy Hill iron ore project;

...

Subcontract means the agreement between the Contractor and the Subcontractor which comprises the documents set out in clause 2 of the formal Instrument of Agreement to which these General Conditions of Subcontract are attached;

Subcontract sum means the value of the Subcontract Works actually performed, calculated on the basis of:

(a) Rates and Prices multiplied by actual quantities performed; plus

(b) any lump sum items performed;

as set out in the Bill of Quantities and adjusted by any additions or deductions which may be required to be made under the Subcontract;

...

Subcontract Works means the whole of the work to be carried out and completed in accordance with the Subcontract, including Variations provided for by the Subcontract, which by the Subcontract is to be handed over to the Contractor;

...

WUSC means the Subcontract Works which the Subcontractor is or may be required to carry out and complete under the Subcontract and includes Variations, remedial Subcontract Works, Construction Plant and Subcontract Temporary Works,

and like words have a corresponding meaning.

1.2 Interpretation

In the contract:

...

(h) the law governing the Subcontract, its interpretation and construction, and any agreement to arbitrate in clause 42, is the law of the jurisdiction in Item 8;

...

2.1 Performance and payment

The Subcontractor shall carry out and complete WUSC in accordance with the Subcontract and Directions given by the Contractor's Representative under a provision of the Subcontract.

The Contractor shall pay the Subcontractor the Subcontract Sum adjusted by any additions or deductions made pursuant to the Subcontract.

2.1 No adjustment to Subcontract Sum and Rates and Prices

The Subcontractor acknowledges and agrees that:

(a) except as expressly provided for in this Subcontract, all Rates and Prices are gross rates and prices and include all margins for profit, overhead and attendance and all other matters and things necessary for the performance and completion of the Subcontract Works in accordance with this Subcontract;

(b) the Subcontract Sum represents its full and complete payment for:

(i) all matters and things necessary for the performance and completion of the Subcontract Works in accordance with this Subcontract; and

(ii) all of the Subcontractor's obligations under this Subcontract;

(c) except as expressly provided for in this Subcontract:

(i) the Subcontractor is not entitled to any adjustment in the Subcontract Sum or the Rates and Prices or to additional payment under this Subcontract or arising out of or in connection with:

(A) the Subcontract Works; or

(B) changes in Taxes or changes in Legislative Requirements (except as provided in clause 11.2);

(ii) the Subcontract Sum and the Rates and Prices are not subject to adjustment for rise and fall in respect of any site allowance or by reason of fluctuations in exchange rates or changes in the cost of labour and materials, or for any other matter, even where there is an extension of time to the Date for Practical Completion; and

(iii) the Rates and Prices shall not be subject to adjustment for the actual quantities; and

(iv) the Subcontract Sum shall be adjusted in respect of diesel by the difference between the price paid by the Subcontractor for the diesel used during the period up to the total quantity shown in Annexure Part I and the dollar amount identified in Annexure Part I.

2.3 Adjustment for actual quantities

(a) The Contractor does not warrant the accuracy of the descriptions or items in the Bill of Quantities.

(b) The Contractor's Representative may, at any time prior to Practical Completion, require any part of the Subcontract Works to be measured in which case clause 2.3(d) will apply.

(c) The parties agree that the Subcontract Works will be measured at Practical Completion to the extent not already measured at the election of the contractor's Representative pursuant to clause 2.3(b). Clauses 2.3(d) will apply to the measurement of that part of the Subcontract Works at Practical Completion.

(d) The Contractor's Representative shall:

(i) measure items of the Subcontract Works unless they are specified as lump sum items in the Bill of Quantities;

(ii) measure the net actual quantity of the relevant item of the Subcontract Works;

(iii) perform the measurement in accordance with Annexure Part I;

(e) The parties agree that Rates and Prices set out in the Bill of Quantities shall apply to items of the Subcontract Works even if the actual quantities are different to the quantities specified in the Bill of Quantities.

...

37.1 Progress claims and certificates

(a) The Subcontractor shall be entitled to claim certification of its entitlement to the Subcontract Sum progressively in accordance with this clause 37 .1.

(b) No later than 4:00 pm on the 25th day of the calendar month of the date of commencement of the WUSC and no later than 4:00pm on the 25th Day of each calendar month thereafter until the month in which the Date of Practical Completion occurs, the Subcontractor shall prepare and deliver to the Contractor's Representative a written Progress Claim which:

(i) is in a form approved by the Contractor;

(ii) includes the value of WUSC completed by the Subcontractor in accordance with the Subcontract up to the date of the Progress Claim (ascertained by multiplying the relevant Rates and Prices and the corresponding quantities actually performed then adding the value of any items completed for which there is a fixed price or fixed lump sum in the Bill of Quantities) and sufficient evidence of that WUSC to enable the Contractor's Representative to assess the Subcontract value thereof;

(iii) includes a clear allocation of the amount in the Progress Claim between WUSC performed on or in connection with the Project's minesite and WUSC performed elsewhere on or in connection with the rest of the Site or Subcontract Works (or both); and

(iv) may include details of other moneys then due to the Subcontractor pursuant to provisions of the Subcontract.

(c) The Contractor's Representative shall, by the 10th day of the following month from such a Progress Claim, issue to the Subcontractor a Progress Certificate which states:

(i) the value of WUSC completed in accordance with the Subcontract up to the date of the Progress Claim; less

(ii) the value of WUSC completed in accordance with the Subcontract up to the date of the previous Progress Claim; less

(iii) the Retention Amount (save where the Retention Limit has been or will be exceeded in which case the amount to be retained shall only be such part of the relevant Retention Amount so as not to exceed the Retention Limit); less

(iv) any other amount the Contractor is entitled to retain, deduct, withhold or set-off under this Subcontract; and

(v) the resulting amount (if any) which the Contractor's Representative considers to be then payable by the Contractor to the Subcontractor on account of the Subcontract Sum.

(d) If the amount in clause 37.1(c)(v) is less than the amount claimed in the Progress Claim, the Progress Certificate shall state:

(i) the reason why the said amount is less than the amount claimed in the Progress Claim; and

(ii) if the reason for the difference is that the Contractor is entitled to retain, deduct, withhold or setoff payment for any reason, the reason for the retention, deduction, withholding or setting-off payment.

(e) Failure by the Contractor's Representative to set out in a Progress Certificate an amount which the Contractor is entitled to retain, deduct, withhold or set-off from the amount which would otherwise be payable to the Subcontractor by the Contractor will not prejudice the Contractor's right to subsequently exercise its right to retain, deduct, withhold or set-off any amount under this Subcontract.

(f) If the Subcontractor does not make a Progress Claim in accordance with this clause 37.1, the Contractor's Representative may issue the Progress Certificate with details of the calculations set out above in clause 37.1(c) above.

37.2 Payment claims

(a) Subject to clause 37.10, within 2 days after the issue of a Progress Certificate under clause 37.1(c) or 37.1(f) in each calendar month after the first month from the Date of Subcontract until the month in which the Date of Practical Completion occurs, the Subcontractor shall be entitled to prepare and deliver to the Contractor a Payment Claim in a format agreed with the Contractor. The amount of each Payment Claim shall be the amount of the Progress Certificate issued under clause 37.1 (c) or 37.1(f) for the value of the WUSC performed in the month prior to the month of the Payment Claim or, if the Contractor's Representative fails to issue a Progress Certificate, the amount of the corresponding Progress Claim submitted under clause 37.1(b) on the first day of same month in which the Payment Claim is issued

(b) The Payment Claim must set out a clear allocation of the amount in the Payment Claim between WUSC on or in connection with the Project's minesite and WUSC performed on or in connection with the rest of the Site or Subcontract Works (or both).

(c) The Subcontractor's Payment Claim must be accompanied by separate valid tax invoices for each currency in respect of which payment is claimed.

37.3 Payment

Provided the Subcontractor has complied in full with clause 37.10 and subject to clause 37.8, the Contractor shall pay the amount shown on any invoice submitted in accordance with clause 37.2 above on or before the last day of the month on which the Payment Claim is submitted.

37.4 Payment on account only

Neither a Progress Certificate nor an invoice nor payment of moneys shall be evidence that the subject WUSC has been carried out satisfactorily. Payment other than Final Payment shall be payment on account only. At any time and from time to time, the Contractor's Representative may by a further certificate correct any error which has been discovered in any previous certificate, other than a Certificate of Practical Completion.

The Contractor may audit the Subcontractor's books and records in so far as they relate to the WUSC or have audits carried out by an auditing firm appointed by the Contractor in its absolute discretion.

...

37.6 Final payment claim and certificate

Within 28 days after the latter of the expiry of the last Defects Liability Period or the rectification by the Subcontractor of all Defects in accordance with clause 35, the Subcontractor shall give the Contractor's Representative a written Final Payment Claim endorsed 'Final Payment Claim' being a Progress Claim together with all other Claims whatsoever in connection with the subject matter of the Subcontract. Within 20 days after the receipt by the Contractor's Representative of the Final Payment Claim, the Contractor's Representative shall issue to both the Subcontractor and the Contractor a Final Certificate evidencing the moneys finally due and payable between the Subcontractor and the Contractor on any account whatsoever in connection with the subject matter of the Subcontract.

Those moneys certified as due and payable shall be paid by the Contractor or the Subcontractor, as the case may be, within 25 days after the debtor receives the Final Certificate.

After the date for submitting the Final Payment Claim has passed, the Subcontractor releases the Contractor from any new or additional Claim in respect of any fact, matter or thing arising out of or in connection with the Subcontract Works, the WUSC or the Subcontract except for any Claim included in the Final Payment Claim submitted in compliance with this clause 37.6.

37.7 Interest

Interest in Item 35 shall be due and payable after the date of default in payment.

37.8 Right of set-off

The Contractor may deduct from any moneys otherwise due to the Subcontractor:

(a) any debt or other moneys due from the Subcontractor to the Contractor under the Subcontract; or

(b) any Claim to money which the Contractor, acting reasonably and bona fide, considers will become a debt due and payable,

under the Subcontract or otherwise at law, and if the moneys due to the Subcontractor are insufficient to discharge the debt or Claim, the Contractor may have recourse to any Security or retention provided by the Subcontractor or both.

The rights given to the Contractor under this clause 37.8 are in addition to and do not limit or affect any other rights of the Contractor under the Subcontract or at law and nothing in the clause affects the right of the Contractor to recover from the Subcontractor the whole of the debt or Claim in question or any balance that remains owing.

Failure by the Contractor to deduct from an amount otherwise due to the Subcontractor any amount which the Contractor is entitled to deduct under this clause 37.8, will not prejudice the Contractor's right to subsequently exercise its right of deduction under this clause.

This clause 37.8 will survive any termination of the Subcontract.

37.9 Security of Payment Legislation

(a) In this clause 37.9, 'Security of Payment Act' means any legislation which provides for rapid interim adjudication of claims under construction contracts under a policy to promote security of payment.

(b) If the Security of Payment Act applies:

(i) the Subcontractor must ensure that, within 12 hours after any notice is given or received under the Security of Payment Act by the Subcontractor or any Subsubcontractors, a copy of that notice is given to the Contractor's Representative and the Superintendent;

(ii) the Contractor's Representative will act as the Contractor's agent for the purposes of issuing payment schedules pursuant to the Security of Payment Act (where applicable);

(iii) the parties agree that for the purpose of the Security of Payment Act the authorised nominating authority shall be one of:

(A) the Institute of Arbitrators and Mediators Australia; or

(B) LEADR,

which persons may be amended as agreed by the parties in writing from time to time;

(iv) if a Sub-subcontractor becomes entitled to suspend Subcontract Works under a Sub-subcontract pursuant to the Security of Payment Act because of a failure by the Subcontractor to pay moneys due and payable to the Subsubcontractor, the Subcontractor must provide the Contractor's Representative with immediate notice of such suspension and the Contractor may pay to the Subsubcontractor the amount owing to the Subsubcontractor in respect of that Subcontract Works, and any amount so paid by the Contractor shall be a debt due and immediately payable from the Subcontractor to the Contractor; and

(v) the Subcontractor indemnifies the Contractor against all damages, losses, costs and expenses suffered or incurred by the Contractor as a result of the Subcontractor's failure to pay any Subcontractor.

(c) Nothing in this clause 37.9 will prevent a party from contending that this Subcontract is not a construction contract as that term is defined in the Construction Contracts Act 2004 (WA).

...

39A Termination for convenience

39A.l Right to terminate

Without prejudice to any of the Contractor's other rights or entitlements or powers under the Subcontract, the Contractor:

(a) may at any time for its sole convenience, including where the Main Contract has been terminated, by written notice to the Subcontractor terminate the Subcontract from the date stated in the notice; and

(b) may thereafter either itself or by third parties complete the uncompleted part of WUSC.

The termination of the Subcontract by the Contractor pursuant to this clause 39A.l shall be without prejudice to the rights of either party to recover damages in respect of any prior breach of contract by the other party.

39A.2 Costs

If the Contractor terminates the Subcontract under clause 39A.l, the Subcontractor:

(a) subject to clause 37.8 and the limitations (if any) set out in clause 6 of the Formal Instrument of Agreement, shall be entitled to payment of the following amounts as reasonably determined by the Contractor's Representative:

(i) for Subcontract Works carried out prior to the date of termination the amount which would have been payable if the Subcontract had not been terminated and the Subcontractor submitted a Payment Claim for Subcontract Works carried out to the date of termination;

(ii) the cost of plant or materials reasonably ordered by the Subcontractor for the Subcontract Works for which the Subcontractor is legally bound to pay provided that:

(A) the value of the plant or materials is not included in the amount payable under clause 39A.2(a)(i); and

(B) title in the plant and materials shall vest in the Contractor upon payment;

(iii) the reasonable cost of removing from the Site all labour, Constructional Plant and other things used in connection with WUSC,

(iv) the cancellation charge for the Sub-subcontracts and Subcontractor's Consultants.

but in no case shall the total amount payable to the Subcontractor under this clause 39A.2(a), when added to other amounts already paid and payable to the Subcontractor, be more than the Subcontract Sum as adjusted in accordance with the Subcontract; and

(b) shall:

(i) take all steps possible to mitigate the costs referred to in clauses 39A.2(a)(ii), (iii) and (iv);

(ii) immediately hand over to the Contractor all copies of any documents provided by the Contractor under this Subcontract; and

(iii) cause to be delivered to the Contractor any plant and materials referred to in clause 39A.2(a)(ii) or any unfixed plant and materials for which the Contractor has paid pursuant to clause 37 .2.

The amount to which the Subcontractor is entitled under this clause 39A.2 shall be a limitation upon the Contractor's liability to the Subcontractor arising out of, or in any way in connection with, the termination of the Subcontract and the Subcontractor shall not make any Claim against the Contractor arising out of, or in any way in connection with, the termination of the Subcontract other than for the amount payable under this clause 39A.2 (as may be limited by clause 6 of the Formal Instrument of Agreement).

After the Subcontractor has satisfied its obligations under this clause 39A.2, the Contractor shall release all Securities to the Subcontractor then held by the Contractor.

This clause 39A.2 shall survive termination of the Subcontract by the Contractor under clause 39A.l.

Between:

(1) Samsung C&T Corporation (ABN 49 160 079 470) of 2 Bagot Road, Subiaco, Western Australia 6008 (Contractor)

(2) Laing O'Rourke Australia Construction Pty Ltd (ABN 39 112 099 000) of Level 1, 3 Craig Street Burswood, Western Australia 6100 (Subcontractor).

Background

(A) On 21 February 2014, the Contractor and the Subcontractor entered into subcontract ROYSCT-S014 the (Subcontract) to construct certain Subcontract Works (Subcontract Works).

(B) On 10 February 2015, the Subcontract was terminated by the Contractor.

(C) The Contractor and Subcontractor have agreed to an interim agreement in accordance with the terms set out in this Deed.

It is agreed as follows:

1.1 In this Deed, unless the context otherwise requires, words and expressions have the same meaning as in the Subcontract and the following words and expressions have the following meanings:

Advance Payment Guarantee means the security provided by the subcontractor under the Subcontract.

Deed means this document, including any schedule or annexure to it.

Critical Novation Agreements means the subcontracts or supply agreements to be novated to the Contractor or its nominee listed in Schedule 1.

Hire Agreements and Purchase Orders means the agreements listed in Schedule 3 between the Subcontractor and third parties.

Other Novation Agreements means the subcontracts or supply agreements to be novated to the Contractor or its nominee listed in Schedule 2.

Performance Security means the Security provided by the Subcontractor under clause 5.1 of the Subcontract and held by the Contractor.

Related Body Corporate has the meaning given to that term in section 50 of the Corporations Act 2001 (Cth).

Related Entity means, in relation to a party, any Related Body Corporate of the party and any past or present officer, employee or agent of the party or one of its Related Bodies Corporate.

1.2 A provision of this Deed must not be construed to the disadvantage of a party merely because that party was responsible for the preparation of the Deed or the inclusion of the provision in the Deed.

1.3 If an act must be done on a specified day that is not a Business Day, it must be done instead on the next Business Day.

2.1 The Contractor must, pay to the Subcontractor:

(i) AUD30 million upon execution of this Deed, this being a pre-condition to all other obligations under this Deed;

(ii) AUD10 million upon novation of the Critical Novation Agreements;

(iii) AUD5 million upon novation of the Other Novation Agreements.

(b) Costs due to the Subcontractor under clause 39A.2 of the Subcontract including:

(i) for Subcontract Works carried out prior to the date of termination, being the amount which would have been payable if the Subcontract had not been terminated and the Subcontractor submitted a Payment Claim for Subcontract Works carried out to the date of termination;

(ii) the cost of plant or materials reasonably ordered by the Subcontractor for the Subcontract Works for which the Subcontractor is obliged to pay under the Subcontract provided the value of the plant or materials is not included in the amount payable under clause (i);

(iii) the reasonable costs of removing from Site all labour, Constructional Plant and other things used in connection with WUSC (Demobilisation Costs);

(iv) the cancellation charge for the Sub-subcontracts and Subcontractor's Consultants,

(c) the costs for Subcontract Works carried out on or from the date of termination of the Subcontract to the date of novation of the Subsubcontracts (including the Critical Novation Agreements and the Other Novation Agreements). The costs will be assessed by reference to the costs which would have been payable to the Subcontractor for the Subcontractor works at the date of novation of the Sub-contract, if the Subcontract had not been terminated. (PreNovation Costs);

2.2 The payment of moneys referred to in clause 2.1(a) shall be on account only and shall not constitute:

(a) evidence that the Subcontractor has completed any WUSC; or

(b) a release or discharge by either party of any claim.

If GST is payable in relation to a supply made under or in connection with this Subcontract then the party ('Recipient') providing consideration to another party ('Supplier') for that supply must pay an additional amount to the Supplier equal to the GST payable in relation to that supply at the same time as any other consideration is to be first provided for that supply subject to the issue of a valid invoice by the Supplier to the Recipient.

4.1 In considering the Subcontractors entitlement under 39A.2 the Contractor and Subcontractor agree to negotiate in good faith using best endeavours to resolve all differences, disputes and Claims and achieve a negotiated outcome.

4.2 Nothing herein shall prejudice the right of a party to institute proceedings to enforce obligations due under this Deed, to preserve any statutory entitlements or to seek injunctive or urgent declaratory relief.

5.1 Over and above the continuing obligations of the Subcontractor under clause 39A of the Subcontract, but subject to the return of the Advance Payment Security and the Security referred to in clause 7.1 of this Deed, to the Subcontractor, the Subcontractor has agreed to:

(a) use reasonable endeavours to procure the novation of the Critical Novation Agreements within 7 days of the Date of the Deed; and

(b) use reasonable endeavours to procure the novation of the Other Novation Agreements within 28 days of the date of this Deed.

5.2 Where any work is undertaken by the Contractor or another contractor or subcontractor that was previously part of the Subcontractor's WUSC, the Subcontractor is not liable for the work carried out by the other contractor, or the consequences of any of those acts or omissions in carrying out work by another contractor or subcontractor.

6.1 The Subcontractor agrees to use reasonable endeavours to facilitate the transfer of the Hire Agreements and Purchase Orders to the Contractor or its nominee. The Contractor will pay the Subcontractor the costs incurred under the Hire Agreements and Purchase Orders and associated with this clause in accordance with 2.1(b) and 2.1(c) of this Deed.

6.2 The Subcontractor undertakes to advise and inform the Contractor if any commercial offer from the third party in relation to the Hire Agreements and Purchase Orders is inconsistent with the current contractual arrangement between the Subcontractor and the third party.

7.1 Contemporaneous with execution of the Deed, the Contractor shall return the Advance Payment Guarantee held by the Contractor.

7.2 Upon completion of novation to the Contractor of all Critical Novation Agreements under clause 5.1(a) of this Deed the Contractor shall return the Performance Securities. In exchange for the return of the Performance Securities, the Subcontractor shall procure in favour of the Contractor a single Security, in substantially the same form as the Performance Security (unless otherwise agreed by the Contractor) in the amount of $7.5 million (Replacement Security), which expires 12 months after the Effective Date.

7.3 Unless 48 hours notice is provided in advance of any call on the Replacement Security or the Performance Securities, the Contractor will not call on the Replacement Security or the Performance Security from the Effective Date until its release under clause 7.2.

8.1 The parties shall each bear their own legal costs in relation to the preparation and execution of this Deed.

9.1 Each party warrants and represents to the other with respect to itself that it has the full right, power and authority to execute, deliver and perform this Deed.

This Deed is entered into solely in connection with the practical handover and transition of WUSC following termination of the Subcontract by the Contractor. It is not, and will not be represented or construed by the parties as, an admission of liability or wrongdoing on the part of either party to this Deed or any other person or entity.

If any provision of this Deed is found to be void or unenforceable, that provision will be deemed to be deleted from this Deed and the remaining provisions of this Deed will continue in full force and effect and the parties shall use their respective reasonable endeavours to procure that any such provision is replaced by a provision which is valid and enforceable, and which gives effect to the spirit and intent of this Deed.

12.1 This Deed constitutes the entire understanding and agreement between the parties in relation to the rights and obligations of the parties for the purpose of this deed.

The parties acknowledge and affirm the obligations under Clause 8.5 of the Subcontract.

14.1 This Deed shall be governed by, and construed in accordance with, the laws of Western Australia and the Commonwealth of Australia.

14.2 Any dispute arising out of or in connection with, or concerning the carrying into effect of, this Deed shall be referred to arbitration. The arbitration shall be administered in accordance with Clause 42 of the Subcontract.

15.1 This Deed may be executed in any number of counterparts. Each counterpart is an original but the counterparts together are one and the same instrument.

[1] Field Deployment Solutions Pty Ltd v SC Projects Australia Pty Ltd [2015] WASC 60 [17].

[6] Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91 [55].

[7] Re AnsteeBrook; Ex parte Mount Gibson Mining Ltd [2011] WASC 172; (2011) 42 WAR 35 [60]; see also Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217; (2011) 43 WAR 319 [60].

[12] Section 26(2)(c) and s 27(2)(c) of the Act.

[14] Section 31(2) and s 32(3)(a) of the Act.

[15] Section 31(3) of the Act. In the case of such a deemed dismissal the applicant may make another adjudication application within 28 days after the previous application is taken to have been dismissed: see s 26(1) and s 37(2) of the Act.

[18] Section 48(1) of the Act read with reg 9 of the Construction Contracts Regulations 2004 (WA).

[21] Section 3 (paragraph (a) of the definition of 'construction contract'), read with s 4, of the Act.

[22] Delmere Holdings Pty Ltd v Green [2015] WASC 148 [39].

[23] K & J Burns Electrical Pty Ltd v GRD Group (NT) Pty Ltd [2011] NTCA 1; (2011) 29 NTLR 1 [151], [236].

[26] Neither party contended that a 'payment claim' for the purposes of the Act was to be equated with a 'Payment Claim' for the purposes of cl 37.

[27] Attachment DD2 to affidavit of Danilo Dragovic sworn 2 June 2015 page 17, and Further Supplementary Affidavit of Marcus Carne sworn 4 June 2015, being $123,715,372.36 - $45,000,000 - $3,863.92.

[28] In fact a total of $49.5 million was paid, in accordance with cl 3 which also required the payment of GST where applicable.

[29] See Samsung C & T Corporation v Laing O'Rourke Australia Construction Pty Ltd [2015] WASC 83 [54] [58].

[31] See paragraphs 8.1 - 8.4, 13.3 and 13.8 of the First Determination.

[32] Paragraphs 19.11 19.14 of the Second Determination.

[33] Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531 [99] - [100]; Perrinepod [121] - [126].

[34] Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82 [163].

[36] Zheng v Cai [2009] HCA 52; (2009) 239 CLR 446 [28].

[37] Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 [47]; Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; (2012) 250 CLR 503 [39].

[38] Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 [69]; Plaintiff S4/2014 v Minister for Immigration [2014] HCA 34; (2014) 88 ALJR 847 [42].

[39] Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378 [26]; Minister for Employment and Workplace Relations v Gribbles Radiology Pty Ltd [2005] HCA 9; (2005) 222 CLR 194 [21].

[40] Section 18 of the Interpretation Act 1984 (WA).

[41] Saeed v Minister for Immigration [2010] HCA 23; (2010) 241 CLR 252 [15].

[42] Balog v Independent Commission Against Corruption [1990] HCA 28; (1990) 169 CLR 625, 635 636.

[43] Plaintiff S10/2011 v Minister for Immigration [2012] HCA 31; (2012) 246 CLR 636 [97].

[44] Minister for Aboriginal Affairs v PekoWallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, 39 40; A v Corruption and Crime Commission [2013] WASCA 288; (2013) 306 ALR 491 [88] - [90].

[45] Thompson v Randwick Corporation [1950] HCA 33; (1950) 81 CLR 87; R v Toohey; Ex parte Northern Land Council [1981] HCA 74; (1981) 151 CLR 170, 186, 233; Hunter v Minister for Planning [2012] WASC 247 [24].

[46] Kirk [72]; Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, 177 178.

[49] Gedeon v Commissioner of the NSW Crime Commission [2008] HCA 43; (2008) 236 CLR 120 [43]; Craig (177).

[50] Minister for Immigration v Eshetu [1999] HCA 21; (1999) 197 CLR 611 [130].

[51] Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135 [28].

[52] Plaintiff M70/2011 v Minister for Immigration [2011] HCA 32; (2011) 244 CLR 144 [57].

[53] Perrinepod [101] - [102]; see also Cape Range Electrical Contractors Pty Ltd v Austral Construction Pty Ltd [2012] WASC 304 [73] - [74].

[54] Delmere Holdings [91] - [100].

[57] Li [64] - [65], [88] - [89].

[58] R v Connell; Ex parte Hetton Bellbird Collieries Ltd [1944] HCA 42; (1944) 69 CLR 407, 432; Li [90]; A v Corruption and Crime Commission [120] [122].

[59] House v The King [1936] HCA 40; (1936) 55 CLR 499, 505; Wilson v The State of Western Australia [2010] WASCA 82 [2]; Li [85].

[60] Avon Downs Pty Ltd v Federal Commissioner of Taxation [1949] HCA 26; (1949) 78 CLR 353, 360.

[63] Alliance Contracting Pty Ltd v James [2014] WASC 212.

[64] Alliance Contracting [5], [13] - [15], [61] - [62].

[65] Blackadder Scaffolding Services (Aust) Pty Ltd and Mirvac Homes (WA) Pty Ltd [2009] WASAT 133.

[66] Fuel Tank & Pipe Pty Ltd and Decmil Australia Pty Ltd [2010] WASAT 165.

[67] See Mustac v Medical Board of Western Australia [2007] WASCA 128 [37] - [48].

[68] Northern Territory v Urban and Rural Contracting Pty Ltd [2012] NTSC 22 [16] - [20].

[69] Urban and Rural Contracting [26] - [27].

[70] cf Urban and Rural Contracting [29].

[71] Project Blue Sky [71], cited in Fuel Tank & Pipe [19].

[72] Clause 7(1) and 7(3) of sch 1 to the Act.

[73] Section 10 of the Act.

[74] Allowing for the 14 days which the other party has to respond under s 27(1) of the Act, and the 14 days thereafter which the adjudicator has to deal with the application under s 31 of the Act.

[75] Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99, 109; Nannup Timber Processing Pty Ltd v Minister for Commerce [2014] WASC 438 [57].

[76] Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35].

[77] See Patrick Stevedores Operations No. 2 Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd [2014] NSWSC 1413 [32].

[80] See Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80 [60] - [73]; Cape Range [74] - [75], [81] - [84]; Re Ellis; Ex parte Triple M Mechanical Services Pty Ltd [No 2] [2013] WASC 161 [84] - [88]; WQube Port of Dampier v Philip Loots of Kahlia Nominees Ltd [2014] WASC 331 [77] [83]; Red Ink Homes Pty Ltd v Court [2014] WASC 52 [85] - [90]; Hamersley Iron Pty Ltd v James [2015] WASC 10 [53] - [54].

[82] Parisienne Basket Shoes Pty Ltd v Whyte [1938] HCA 7; (1938) 59 CLR 369, 391; Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55 [41]; Chase Oyster Bar Pty Ltd v Hamo Industries Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393 [167]; Thiess [63] [64].

[83] R v Blakeley; Ex parte Association of Architects, Engineers, Surveyors and Draughtsmen of Australia [1950] HCA 40; (1950) 82 CLR 54 at 69 71, 90 91, 97 98; Fifty Property Investments Pty Ltd v O'Mara [2006] NSWSC 428 [18]; Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2012] QCA 276; [2013] 2 Qd R 75 [77].

[84] State of New South Wales v Kable [2013] HCA 26; (2013) 252 CLR 118 [31], [34].

[85] Re Macks; Ex parte Saint [2000] HCA 62; (2000) 204 CLR 158 [19] [23], [49] [53], [214] [216], [328] [343]; Kable [32] [36].

[86] For example, by engaging the original jurisdiction of the High Court under s 75(v) of the Constitution.

[89] Delmere Holdings [38] - [49], [102] - [104].

[90] Sections 25(a) and 41(1)(b) of the Act.

[91] A v Corruption and Crime Commissioner [121] and Cape Range [74].

[95] Barrett v Coroner's Court of South Australia [2010] SASCFC 70; (2010) 108 SASR 568.

[96] Commissioner of Australian Federal Police v Magistrates' Court of Victoria [2011] VSC 3 [44].

[97] Section 7(2)(c) of the Act.

[98] Clause 1.2(h) of the General Conditions, read with item 8 in the annexure to the General Conditions; cl 14.1 of the Interim Deed.

[99] BM Alliance Coal Operations Pty Ltd v BGC Contracting Pty Ltd [2012] QSC 346 [8], approved in Watpac Construction (Qld) Pty Ltd v KLM Group Ltd [2013] QSC 236 [24].

[100] Northbuild Construction Sunshine Coast Pty Ltd v Beyfield Pty Ltd [2014] QSC 80 [29] [30].

[102] Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337, 352.

[103] Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; (2011) 282 ALR 604.

[105] Page 14 of the First Determination.

[106] Affidavit of Danilo Dragovic sworn 5 May 2015, 267 (Adjudication Response, paragraphs 94 - 95).

[107] See Samsung C & T Corporation [77].

[108] O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2008] WASC 58; (2008) 36 WAR 479 [13]; Thiess v MCC [25].

[111] Cape Range [156] - [157]; O'Donnell Griffin [68], [70]; Hamersley Iron [116(3)].

[112] O'Donnell Griffin [43] - [45] and cases there cited.

[114] Nannup Timber Processing Pty Ltd v Minister for Commerce [2014] WASC 438 [25(a)] and authorities there cited.

[115] As to which see Re Walsh; Ex parte Deputy Commissioner of Taxation (NSW) [1982] FCA 88; (1982) 42 ALR 727, 728 729.