The Act was designed to ensure prompt payment and, for this purpose, the Act set up a unique form of adjudication of disputes over the amount due for payment. Parliament intended that a progress payment, on account, should be made promptly and that any disputes over the amount finally due should be decided separately. The final determination could be by a court or by an agreed alternative dispute resolution procedure. But meanwhile the claimant's entitlement, if in dispute, would be decided on an interim basis by an adjudicator, and that interim entitlement would be paid. However, some claimants have had difficulty enforcing payment of the debt due under the Act. To enforce payment, the claimant has had to obtain a judgment of a court. At present this involves taking out a summons in the appropriate court. The respondent has 28 days to lodge a defence or cross-claim. Then there is a hearing before a magistrate or judge, who has to decide whether to enter summary judgment for the statutory debt or set the matter down for a full hearing.
By raising in court defences such as that the work does not have the value claimed or that the claimant has breached the contract by doing defective work, some respondents have been able to delay making a progress payment for a long time. Those respondents have forced claimants to incur considerable legal costs. They have effectively defeated the intention of the Act. To overcome the problem, the bill clarifies that in court proceedings by a claimant to enforce payment of the debt due under the Act, a respondent will not be able to bring any cross-claim against the claimant and will not be able to raise any defence in relation to matters arising under the contraction contract. A respondent who wants to raise these matters must do so in a payment schedule in response to a payment claim under the Act, or in separate proceedings.
Cash flow is the lifeblood of the construction industry. Final determination of disputes is often very time consuming and costly. We are determined that, pending final determination of all disputes, contractors and subcontractors should be able to obtain a prompt interim payment on account, as always intended under the Act. To reinforce this determination, the bill provides that after an adjudication the respondent must pay the claimant the adjudicated amount. The existing legislation gives the respondent the options of paying the adjudicated amount or providing security for payment of the amount. Experience has shown that where respondents have taken the security option, they have then not taken steps to expedite the final resolution of the dispute.
…
"There will be some instances where a court may set aside the judgment. The respondent may be able to demonstrate to the court that the requirements of the Act have not been complied with; for example, that there has not been a valid adjudication. But in proceedings to set aside the judgment the respondent will not be entitled to bring a cross-claim or to raise any defence in relation to maters arising under the construction contract or to challenge the determination by the adjudicator. Adjudication is an expedited procedure. The adjudicator has only 10 business days in which to make a decision. There will be instances when the progress payment determined by the adjudicator will be more or less than the entitlement finally determined to be due under the contract. However, it is better that progress payments be made promptly on an interim basis, assessed by an independent party, rather than they be delayed indefinitely until all issues are finally determined.
…"
First issue: is relief in principle available?
21 The first issue really resolves into two questions.
22 The first question is whether, apart from any privative effect the Act might have, relief in the nature of prerogative relief would be in principle available, under s 69 of the Supreme Court Act 1970, against an adjudicator appointed under s 19 of the Act. (I do not think that it is relevant that the adjudicator is "taken to have been appointed", and shall use the simpler form "appointed" where necessary to describe what it is that happens when an adjudicator accepts, under s 19(2), an adjudication application.) In other words, is an adjudicator a "tribunal" against whom relief under s 69 of the Supreme Court Act might lie?
23 The second question is whether (assuming that the answer to the first question is "yes") the Act, on its proper construction, excludes judicial review in the nature of prerogative relief.
24 It is necessary to go into these matters at some length because it was by no means clear from the submissions for Grosvenor whether or not it conceded that judicial review was, in principle, available. Thus, in para 29 of Grosvenor's written submissions, it was said that:
"… at the very broadest level, at the conceptual level so to speak, - beyond verbal ambiguity - the legislation is not immediately declarative of the right of the parties to judicial review. … The structure of the Act takes the allegedly public official, the Adjudicator, is to take away resort in the prerogative writs for ordinary errors of law by effectively providing that the only way in which the Adjudicator's Determination may be set aside is by the issue of traditional process in litigation or arbitration."
25 However, in paras 32-36 and following of those submissions, Grosvenor appeared to concede that judicial review may be available where there was "jurisdictional error" that went "to a fundamental matter of jurisdiction". Again, in para 41, Grosvenor appeared to concede that judicial review might be available where there was denial of natural justice, although it appeared to be submitted (and if it were, it was in my view correctly submitted) that the requirement of natural justice must be considered having regard to the legislative scheme.
26 As to the first question: an adjudicator who is appointed under the Act has the power to make a determination that is binding on the parties to the adjudication. The ultimate enforceability of that determination follows from the provisions of ss 24 and 25 of the Act whereby, if the adjudicated amount is not paid in accordance with s 23, the claimant may obtain an adjudication certificate and file it with the court "as a judgment for a debt" which is "enforceable accordingly".
27 Certainly, the adjudication is not final, in the sense that, if it later be found that the adjudicated amount was excessive, restitution may be ordered (s 32(3)(b)); and, in any event, the adjudicated amount must be taken into account in any proceedings that finally determine the balance due between the parties to the adjudication (s 32(3)(a)). However, subject to those provisions, the determination of the adjudicator is binding upon the parties. That is confirmed by s 25. An adjudication certificate has effect as a judgment when it is filed in a court of competent jurisdiction. That judgment may be set aside in some circumstances: see sub s (4). But it cannot be set aside by reason of any cross-claim or matter or defence, or any "challenge [to] the adjudicator's determination".
28 In Craig v The State of South Australia (1995) 184 CLR 163, the court at 174-5 considered the jurisdiction of a superior court to grant relief in the nature of prerogative relief. Their Honours said that relief in the nature of certiorari "went only to an inferior court or to certain tribunals exercising governmental powers" (citations omitted). Their Honours referred to R v Electricity Commissioners; ex parte London Electricity Joint Committee Co (1920) Ltd [1924] 1 KB 171, 205, Ridge v Baldwin [1964] AC 40, 74-9 and O'Reilly v Mackman [1983] 2 AC 237, 279, as indicating "the tribunals other than courts which are amenable to the writ".
29 In the first of those cases, Atkin LJ, at the reference given, said:
"Wherever any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority, they are subject to the controlling jurisdiction of the Kings' Bench Division exercised in these writs."
30 In the second of those cases, at the reference given, Lord Reid considered a number of the earlier cases, including the judgment of Atkin LJ just referred to. His Lordship said, at 75, that the duty to act judicially could arise simply from the tribunal's duty to determine what the rights of an individual should be: it was not necessary that there should be something more to impose on it such a duty.
31 In the third of those cases, at the reference given, Lord Diplock referred to and, as he put it, "broadened" what Atkin LJ had said by omitting, as a separate requirement (in terms of Atkin LJ's formulation) the reference to "having the duty to act judicially". Having referred to what Lord Reid had said in Ridge, Lord Diplock said:
"Wherever any person or body of persons has authority conferred by legislation to make decisions of the kind I have described [i.e., by reference to an earlier passage, determinations of questions affecting the common law or statutory rights or obligations of other persons as individuals] it is amenable to the remedy of an order to quash its decision either for error of law in reaching it or for failure to act fairly towards the person who will be adversely affected by the decision by failing to observe either one or other of the two fundamental rights accorded to him by the rules of natural justice or fairness, viz to have afforded to him a reasonable opportunity of learning what is alleged against him and of putting forward his own case in answer to it, and to the absence of any personal bias against him on the part of the person by whom the decision falls to be made."
32 I therefore conclude, in answer to the question posed in para 22 above, that, apart from any privative effect the Act might have, relief under s 69 of the Supreme Court Act would, in principle, lie against an adjudicator appointed under s 19 of the Act.
33 I turn now to the second question under this issue (see para 22 above).
34 Statutes that seek to limit or exclude the right of judicial review of administrative decisions are to be construed by reference to a presumption that the legislature does not intend to deprive citizens of their right of access to the courts, other than to the extent expressly stated or necessarily implied: Public Service Association (SA) v Federated Clerks Union of Australia, South Australian Branch (1991) 173 CLR 132, 160; Darling Casino Ltd v New South Wales Casino Control Authority (1997) 191 CLR 602, 633. Thus, a statement that a decision is final and conclusive is construed not to exclude certiorari for error of law on the face of the record; and a statement that a decision may not be called into question in a court of law is construed not to exclude review on the ground of jurisdictional error (at least, in the sense that it involved either a refusal to exercise jurisdiction, or an excess of jurisdiction): Darling Casino, loc. cit.
35 It is clear that Parliament has sought to limit challenges to the decisions of adjudicators: see, in particular, ss 25(4) and 30 of the Act. Those sections limit the right that a party to an adjudication might otherwise have to seek relief. However, consistent with what was said in Public Service Association and Darling Casino, they should not be taken to deprive parties of access to the courts other than to the extent that is expressly stated in them, or necessarily to be implied from them.
36 The relevant provisions of the Act - including principally, as I have indicated, ss 25(4) and 30 - do not approach, in their statement of privative intent, the language of the privative regulation considered by the High Court in R v Hickman: ex parte Fox and Clinton (1945) 70 CLR 598. In that case, the regulation provided that the decision of the relevant tribunal "shall not be challenged, appealed against, quashed or called into question, or be subject to prohibition, mandamus or injunction, in any court on any account whatever". That clause was held insufficient to protect either manifest jurisdictional errors or acts beyond power. See also Church of Scientology v Woodward (1982) 154 CLR 25, 55-56; Deputy Commissioner of Taxation v Richard Walter Pty Ltd (1995) 183 CLR 168, 180; Plaintiff S157/2002 v The Commonwealth (2003) 77 ALJR 454, 457, 459.
37 The limitations on the ability of a respondent to set aside a judgment flowing from the filing of an adjudication certificate cannot in terms apply where the respondent is seeking not to pursue that course but to quash the determination upon the ground that it is fatally vitiated by (for example) denial of natural justice, or manifest error of law. There is no basis for reading the prohibitions in s 25(4)(a) as extending beyond the context to which they are expressed to apply: namely, an application to set aside judgment.
38 Equally, there is nothing in s 30 to indicate that the legislature intended to exclude judicial review. On the contrary, in my view, the reference in sub s (1) to personal liability of an adjudicator is an indication that the legislature was seeking to protect adjudicators from civil liability for (by way of example) erroneous adjudications. It is not an apt use of language to describe an application for relief in the nature of certiorari or prohibition as one that seeks to enforce a personal liability against the person or body to whom the application is directed.
39 It must follow, I think, that the Act does not exclude the power of the Court to review, and where necessary grant relief, under s 69 of the Supreme Court Act, the determinations of adjudicators made under s 22 of the Act.
40 I therefore conclude that the determination of an adjudicator made pursuant to s 22 of the Act is in principle susceptible to judicial review.
41 I should say that both Musico and Grosvenor made extensive reference to English and Scottish decisions, dealing with the equivalents in England and Scotland of the Act. I have not referred to those decisions because there are substantial differences between the scheme and text of the Act and the scheme and text of the legislation considered in those English and Scottish decisions. Nonetheless, those decisions may be said to confirm two things. Firstly, in general, they confirm that judicial review is in principle available. Secondly (and this is particularly relevant to the second issue), they suggest that the courts should not be quick to intervene.
Second issue: on what grounds may judicial review be available?
42 In general, as the authorities to which I have already referred establish, where judicial review is available, it may lie by reason of refusal to exercise jurisdiction, excess of jurisdiction (i.e., acting beyond power) or denial of natural justice. Further, Musico rely on s 69(3) of the Supreme Court Act for the proposition that relief in the nature of certiorari may lie to quash a determination made on the basis of an error of law that appears on the face of the record of the proceedings.
43 In principle, I think that review of adjudications made under the Act could be undertaken on jurisdictional grounds (i.e., refusing to exercise, or acting in excess of, jurisdiction) or denial of natural justice. Although Grosvenor's written submissions on this issue were unclear, it appears to be the case, from what was said in oral submissions, that Grosvenor accepted that review could be undertaken on jurisdictional grounds, although I think that Grosvenor took a narrower view than did Musico of what might fall under this general rubric. I deal below with the question of jurisdictional errors of law.
44 Grosvenor's position, in relation to the availability of judicial review on the ground of denial of natural justice, was even less clear. It noted in para 41 of its submissions that, in the context of the procedure for which the Act provided, there must be some "relaxation in our expectations of the requirements of natural justice". If, by that, Grosvenor intended to submit that the application, or content, must be analysed by reference to the statutory context, then I agree. If, however, Grosvenor were intending to submit that the two fundamental rights, summarised by Lord Diplock in O'Reilly at 279 (see para [31] above), did not apply at all (recognising that the first of them must be read in the context of the statutory scheme), then I disagree. It was submitted that "[t]he Act must limit the application of the familiar principles of natural justice where the decision is only an interim decision". Again, if by this it were intended to submit that the content and application of the principles must be read in the context of the statutory scheme, then I agree. But if it were intended to submit that the basic principles had no application, then I disagree.
45 In my opinion, an adjudicator under the Act is obliged to afford the parties to the adjudication natural justice, there being no indication of any legislative intention to exclude that fundamental right: see Haoucher v Minister for Immigration and Ethnic Affairs (1990) 169 CLR 648; see also O'Reilly. However, the content must depend upon the circumstances of the particular case and, of course, the legislative scheme.
46 In some cases, an error of law may lead to jurisdictional error, although the distinction between jurisdictional and non-jurisdictional errors of law is easier to state than to apply.
47 In Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147, 171 Lord Reid said:
"[T]here are many cases where, although the tribunal had jurisdiction to enter on the inquiry, it has done or failed to do something in the course of the inquiry which is of such a nature that its decision is a nullity. It may have given its decision in bad faith. It may have made a decision which it had no power to make. It may have failed in the course of the inquiry to comply with the requirements of natural justice. It may in perfect good faith have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some other question which was not remitted to it. It may have refused to take into account something which it was required to take into account. Or it may have based its decision on some matter which, under the provisions setting it up, it had no right to take into account. I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly". (emphasis supplied)
48 His Lordship's statement was cited with apparent approval, in relation to administrative tribunals, in Craig at 178.
49 The decision in Craig at 179 established that, in the absence of a contrary intention in the statute or other constituting instrument, an administrative tribunal lacks power either authoritatively to determine questions of law or to make an order or decision otherwise than in accordance with the law.
50 Accordingly, there will be cases where a decision otherwise than in accordance with the applicable law involves jurisdictional error. As the court said in Craig, after stating the principles referred to in the preceding paragraph:
"If such an administrative tribunal [i.e., one lacking judicial power] falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances to make an erroneous finding or to reach a mistaken conclusion, and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it". (emphasis supplied)
51 The position of an adjudicator under the Act is not completely analogous to that of an administrative tribunal of the kind referred to by the court in Craig. Nor, of course, is it closely analogous to that of an inferior court (which, as the court pointed out in Craig at 179-180, has "authority to decide questions of law, as well as questions of fact", so that an error of law in the determination of issues before it will not ordinarily lead to jurisdictional error). The position is, in my view, closely analogous to that of an expert by whose determination the parties have agreed to be bound (see, for example, A Hudson Pty Ltd v Legal & General Life of Aust Ltd (1985) 1 NSWLR 701). This approach was confirmed by the English Court of Appeal in Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2000] BLR 522 (although, for the reasons given in para [41] above, care needs to be taken in seeking to apply decisions on a different legislative scheme).
52 I therefore conclude that, where the determination of a dispute submitted to an adjudicator under the Act requires the adjudicator to consider issues of law, the adjudicator will not fall into jurisdictional error simply because he or she makes an error of law in the consideration and determination of those issues. It would be otherwise, as the High Court pointed out in Craig (echoing, I think, what Lord Reid said in Anisminic), if the error of law causes the adjudicator to make one or other (or more) of the jurisdictional errors that the court identified: in such a case, relief would lie, subject to any relevant discretionary considerations.
53 Musico submitted, by reference to the statement in Craig at 179 referred to in para [49] above, that an adjudicator would commit jurisdictional error if he or she made an error of law in the course of reaching his or her determination. The submission in effect is that, contrary to what Lord Reid said in Anisminic (see para [47] above), an adjudicator is not entitled to decide a question wrongly as rightly. I do not think that the High Court in Craig intended that the proposition on which Musico rely for this submission was unqualified and absolute; this is clear, if from nothing else, from the passage that I have set out in para [50] above. Indeed, the proposition for which Musico contend would effectively negate the distinction between jurisdictional and non jurisdictional error of law. I do not think that the court in Craig intended to achieve this; that would be inconsistent with what appears to be their approval, in the case of administrative tribunals, of that passage of Lord Reid's speech in Anisminic that I have set out in para [47] above.
54 I therefore conclude that relief will lie where jurisdictional error, including jurisdictional error of law on the face of the record, is shown. However, I do not think that relief will lie to quash the determination of an adjudicator upon the basis of non-jurisdictional error. That is because, in my view, the legislative scheme set out in s 25(4) of the Act is inconsistent with the availability of this ground of review.
55 By s 25(4)(a)(iii), a respondent seeking to set aside a judgment based on an adjudication certificate cannot challenge the adjudicator's determination. That must mean that in any such proceedings, the judgment cannot be set aside upon the basis that the adjudicator (for example) erred in law in some step of his or her reasoning. It would be quite inconsistent with the legislative intention that is evident in s 25(4) to permit a challenge to be raised, by way of relief in the nature of prerogative relief, upon the ground of error of law. The legislature could hardly be taken to have intended that, having forbidden entry by the front door, it was nonetheless happy for access to be obtained from the rear.
56 Further, in my opinion, where review may in principle be available, the availability of the particular ground must depend, among other things, upon an analysis of the relevant provisions of the Act.
57 For example, in relation to natural justice, the extent of the adjudicator's obligation to afford to a respondent to the adjudication application an opportunity to be heard is limited by s 21(2) of the Act, which provides that an adjudicator is not to consider an adjudication response made outside the time for such response to be lodged. This is reinforced by s 21(5), which provides, relevantly, that the adjudicator's power to determine an application is not affected by the failure of either or both of the parties to make a submission.
58 Musico relied upon the statement of McHugh J in Muin v Refugee Review Tribunal (2002) 76 ALJR 966, 989 [123] as follows:
"Natural justice requires that a person whose interests are likely to be affected by an exercise of power be given an opportunity to deal with matters adverse to his or her interests that the repository of the power proposes to take into account in exercising the power".
59 That requirement can, I think, be accommodated to the scheme of the Act. Section 21(4) enables an adjudicator to request further submissions from either party and to give the other party an opportunity to comment on those submissions. Where, after considering an adjudication application and an adjudication response, an adjudicator comes to the view that there was some matter, not traversed in them, that might cause him or her to deal with the application in a manner adverse to one or other party, the principle enunciated by McHugh J would ordinarily require that the adjudicator request further written submissions and comments thereon. But whether or not this principle is enlivened in a particular case must, necessarily, depend on an analysis of the "matter", and of its significance to the determination ultimately made by the adjudicator.
60 Further, and more generally, I think that the approach of the Court to an application for review of an adjudicator's determination should be guided by the evident legislative intention that such determinations are to be carried out informally and speedily, and in a manner that will enable erroneous determinations to be adjusted (i.e., in effect, corrected) upon a final hearing of the issues in dispute between the parties.