Northbuild Construction P/L v Central Interior Linings P/L & Ors [2011] QCA 22
[2011] QCA 22
Court of Appeal (Qld)|2011-02-18|Before: Margaret McMurdo P, Chesterman and White, JJA, Separate reasons for judgment of each member of the Court, each, concurring as to the order made
Margaret McMurdo P, Chesterman and White, JJA, Separate reasons for judgment of each member of the Court, each
Catchwords
ADMINISTRATIVE LAW – JUDICIAL REVIEW – PRIVATIVE CLAUSES
– PARTICULAR CASES – where appellant seeks declaratory
and
injunctive relief – where appellant does not seek relief under Judicial
Source
Original judgment source is linked above.
Catchwords
ADMINISTRATIVE LAW – JUDICIAL REVIEW – PRIVATIVE CLAUSES– PARTICULAR CASES – where appellant seeks declaratoryandinjunctive relief – where appellant does not seek relief under JudicialReview Act 1991 (Qld) – where issues of judicial review were argued bycounsel – whether adjudication decisions made under the Building andConstruction Industry Payments Act 2004 (Qld) (Payments Act) aresubject to judicial review for jurisdictional error – whether the primaryJudge erred in applying the grounds set outin Brodyn to determinewhether the adjudication decision was validCONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS –REMUNERATION – RECOVERY – where appellant was headcontractor underconstruction contract – where appellant entered into sub-contract withfirst respondent – where firstrespondent brought a payment claim underthe Payments Act – where appellant disputed the claim – wherefirst respondent made an adjudication application to the second respondent
pursuant to s 21 of the Payments Act – where adjudicator decided in
favour of first respondent – where appellant sought declaration that
adjudication was
void or liable to be set aside and injunctions restraining the
first and third respondents from enforcing the adjudication decision
–
where the primary judge dismissed the appellant’s application –
whether there must be a bona fide attempt by the adjudicator to exercise
the power under legislation – role of good faith – whether the
adjudicator made
a genuine attempt to exercise the power given to him under the
Payments Act – whether the adjudicator disregarded the
appellant’s material in making his decision – whether the
adjudicator
denied the appellant natural justice – whether the primary
Judge erred in upholding the adjudicator’s decision
Building and
Construction Industry Payments Act 2004 (Qld), s 12, s 13,
s 14, s 17, s 18, s 19, s 21, s 26, Pt 3 Div 1 and
Div 2, s 31(4)(a)(iii), s 100
Constitution of Queensland 2001 (Qld), s 58
Judicial
Review Act 1991 (Qld), s 18, Sch 1, s 48
Justice and Other
Legislation Amendment Act 2007 (Qld), s 91
Supreme Court Act
1995 (Qld), s 128
Supreme Court of Queensland Act 1991 (Qld), s 18(2),
s 56(2), s 69(1), s 118E
ACN 060 559 971Pty Ltd v O’Brien [2008] 2 Qd R 396
[2007] QSC
91, cited
Bezzina Developers Pty Ltd v Deemah Stone (Qld) Pty
Ltd [2008] 2 Qd R 495
[2008] QCA
213, cited
Bloomer Constructions (Qld) Pty Ltd v
O’Sullivan & Anor [2009] QSC 220, cited
Brodyn Pty
Ltd t/as Time Cost and Quality v Davenport (2004) 61 NSWLR 421
[2004] NSWCA
394, considered
Cant Contracting Pty Ltd v Casella [2007] 2 Qd
R 13
[2006]
QCA 538, cited
Chase Oyster Bar v Hamo Industries (2010)
272 ALR 750
[2010] NSWCA 190, considered
Clancy v Butchers’
Shop Employees Union (1904) 1 CLR 181
[1904] HCA 9,
cited
Craig v South Australia (1995) 184 CLR 163
[1995]
HCA 58, cited
De Neefe Signs Pty Ltd v Build1 (Qld) Pty Ltd
Traffic Technologies Traffic Hire Pty Ltd v Build1 (Qld) Pty Ltd [2010] QSC
279, not followed
Grocon Constructors v Planit Cocciardi Joint
Venture (No 2) [2009] VSC 426, cited
Hansen Yuncken Pty Ltd v
Ian James Ericson trading as Flea’s Concreting [2010] QSC 156,
cited
Holmwood Holdings Pty Ltd v Halkat Electrical Contractors Pty
Ltd [2005] NSWSC 1129, followed
Intero Hospitality Projects P/L
v Empire Interior (Australia) P/L & Anor [2008] QCA
83, cited
JJ McDonald & Sons Engineering Pty Ltd v Gall
[2005] QSC 305, cited
John Holland Pty Limited v TAC
Pacific Pty Limited [2010] 1 Qd R 302
[2009] QSC 205,
cited
John Holland Pty Ltd v Roads and Traffic Authority of New
South Wales [2007] NSWCA 19, cited
Kirk v Industrial Court
(NSW) (2010) 239 CLR 531
[2010] HCA 1, applied
Metroplex
Management Pty Ltd v Brisbane City Council [2010] QCA
333, cited
Minimax Fire Fighting Systems Pty Ltd v Bremore
Engineering (WA) Pty Ltd [2007] QSC 333, cited
Minister for
Immigration and Citizenship v SZMDS (2010) 240 CLR 611
[2010] HCA 16,
cited
Minister for Immigration and Multicultural and Indigenous
Affairs v NAOS of 2002 [2003] FCAFC 142, considered
Minister
for Immigration and Multicultural and Indigenous Affairs v SBAN [2002] FCAFC
431, considered
Northbuild Construction Pty Ltd v Central Interior
Linings Pty Ltd & Ors [2010] QSC 95, related
Owners of Shin
Kobe Maru v Empire Shipping Co Inc (1994) 181 CLR 404
[1994] HCA 54,
cited
Project Blue Sky Inc v Australian Broadcasting Authority (1998)
194 CLR 355
[1998] HCA 28, cited
Queensland Bulk Water Supply
Authority v McDonald Keen Group Pty Ltd (in liq) [2010] 2 Qd R 322
[2010] QCA
7, followed
R v Hickman
Ex parte Fox and Clinton (1945) 70
CLR 598
[1945] HCA 53, considered
SBBS v Minister for Immigration
and Multicultural and Indigenous Affairs (2002) 194 ALR 749
[2002] FCAFC
361, considered
Shellbridge Pty Ltd v Rider Hunt Sydney Pty Ltd
[2005] NSWSC 1152, cited
State of Queensland v Epoca Constructions Pty Ltd
[2006] QSC 324, cited
Uniting Church of Australia Property Trust (Qld)
v Davenport [2009] QSC 134, cited
Judgment (387 paragraphs)
[1]
ADMINISTRATIVE LAW - JUDICIAL REVIEW - PRIVATIVE CLAUSES - PARTICULAR CASES - where appellant seeks declaratory and injunctive relief - where appellant does not seek relief under Judicial Review Act1991 (Qld) - where issues of judicial review were argued by counsel - whether adjudication decisions made under the Building and Construction Industry Payments Act 2004 (Qld) (Payments Act) are subject to judicial review for jurisdictional error - whether the primary Judge erred in applying the grounds set out in Brodyn to determine whether the adjudication decision was valid
[2]
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - RECOVERY - where appellant was head contractor under construction contract - where appellant entered into sub-contract with first respondent - where first respondent brought a payment claim under the Payments Act - where appellant disputed the claim - where first respondent made an adjudication application to the second respondent pursuant to s 21 of the Payments Act - where adjudicator decided in favour of first respondent - where appellant sought declaration that adjudication was void or liable to be set aside and injunctions restraining the first and third respondents from enforcing the adjudication decision - where the primary judge dismissed the appellant's application - whether there must be a bona fide attempt by the adjudicator to exercise the power under legislation - role of good faith - whether the adjudicator made a genuine attempt to exercise the power given to him under the Payments Act - whether the adjudicator disregarded the appellant's material in making his decision - whether the adjudicator denied the appellant natural justice - whether the primary Judge erred in upholding the adjudicator's decision
[3]
Building and Construction Industry Payments Act 2004 (Qld), s 12, s 13, s 14, s 17, s 18, s 19, s 21, s 26, Pt 3 Div 1 and Div 2, s 31(4)(a)(iii), s 100
SBBS v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 194 ALR 749; [2002] FCAFC 361, considered
[36]
Shellbridge Pty Ltd v Rider Hunt Sydney Pty Ltd[2005] NSWSC 1152, cited
[37]
State of Queensland v Epoca Constructions Pty Ltd[2006] QSC 324, cited
[38]
Uniting Church of Australia Property Trust (Qld) v Davenport[2009] QSC 134, cited
[39]
[1] MARGARET McMURDO P: The appellant, Northbuild Construction Pty Ltd, and the first respondent, Central Interior Linings Pty Ltd, were in dispute over a construction contract. They referred their dispute to the third respondent, Philip Davenport, a registered adjudicator, under the Building and Construction Industry Payments Act 2004 (the Payments Act). The appellant was dissatisfied with the adjudicator's decision and applied to the primary judge for a declaration that it "was void or liable to be set aside". The primary judge refused that application with costs. The appellant appealed to this Court under s 69(1) Supreme Court of Queensland Act 1991.
[40]
[2] The appellant's grounds of appeal, contained in an amended notice of appeal handed up at the hearing, are set out in White JA's reasons at [49] and [50].
[41]
[3] White JA has helpfully summarised the scheme established by the Payments Act in her reasons at [52] to [66]. In essence, it provides for the speedy, interim only determination by adjudicators of disputed claims under construction contracts. These adjudications are not intended to be scrutinised in the same way as considered final determinations: Bezzina Developers Pty Ltd v Deemah Stone (Qld) Pty Ltd[1] and Intero Hospitality Projects Pty Ltd v Empire Interior (Australia) Pty Ltd.[2]
[42]
[4] Indeed, it seems the legislature intended they be excluded from judicial review by the Supreme Court. The Judicial Review Act 1991s 18(2) provides:
[43]
(a) affect the operation of an enactment mentioned in schedule 1, part 1; or
[44]
(b) apply to decisions made, proposed to be made, or required to be made, under an enactment mentioned in schedule 1, part 2."
[45]
[5] In 2007, the Judicial Review Act was amended so that adjudication decisions like the one the subject of this appeal under pt 3, div 2 of the Payments Act were included in sch 1, pt 2 of the Judicial Review Act.[3] The relevant explanatory notes to the amending Act[4] stated:
[46]
"The amendment will fully exempt the decisions of adjudicators made under the [Payments Act] from review under the Judicial Review Act 1991. This amendment is consistent with the objective of the [Payments Act] to create a dispute resolution process whereby adjudicators can quickly resolve payment disputes between parties to a construction contract on an interim basis."
[47]
[6] The 2007 amendment and explanatory note strongly suggest that the legislature intended to exclude from judicial review by the Supreme Court all administrative decisions under enactments listed in sch 1, pt 2 to the Judicial Review Act, including judicial review of an adjudicator's decision under the Payments Act. But the High Court in Kirk v Industrial Court (NSW)[5] has recently made clear that the legislature cannot exclude the power of a State Supreme Court to exercise its supervisory jurisdiction as to jurisdictional error in executive and judicial decision-making. See s 58 Constitution of Queensland 2001; Craig v South Australia[6] and Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture (No 2).[7] There is no doubt that an adjudicator's decision under the Payments Act is an administrative decision over which the Supreme Court of Queensland has a supervisory jurisdiction, despite s 18(2) Judicial Review Act: Hansen Yuncken Pty Ltd v Ericson;[8] Grocon Constructors; and Chase Oyster Bar v Hamo Industries Pty Ltd.[9]
[48]
[7] True it is that the primary judge's decision preceded Kirk, Hansen Yuncken and Chase Oyster Bar. His Honour followed a line of authorities accepting the correctness of the approach taken in Brodyn Pty Ltd v Davenport[10] to New South Wales legislation comparable to the Payments Act, an approach revised since his Honour's decision by the New South Wales Court of Appeal in Chase Oyster Bar in the light of Kirk. But his Honour rejected the appellant's contentions that the adjudicator succumbed to jurisdictional error. It follows that, if his Honour was correct in so doing, the appeal to this Court must fail.
[49]
[8] White JA has set out the relevant facts in the dispute between the appellant and the first respondent. I respectfully agree with her Honour's analysis at [97] to [127] of the appellant's contentions as to the adjudicator's reasons and the primary judge's consideration of them. Even adopting the broad approach to jurisdictional error urged upon this Court and the primary court by the appellant, the judge was right to conclude that the appellant did not demonstrate any jurisdictional error on the part of the adjudicator. That conclusion means that the appeal must be dismissed.
[50]
[9] This Court did not hear detailed submissions as to the appropriate procedure to be followed in seeking relief from the Supreme Court in cases of jurisdictional error by decision-makers under legislation listed in sch 1 to the Judicial Review Act. The appellant's application to the Trial Division of the Supreme Court for a declaration was brought "Pursuant to section 128 of the Supreme Court Act 1995 or alternatively the inherent jurisdiction of the Supreme Court, [for] a declaration". My preliminary view is that this was an appropriate way to proceed in view of s 58 Constitution of Queensland, s 56(2)Supreme Court of Queensland Act 1991, s 128 Supreme Court Act 1995 and pt 5 Judicial Review Act.
[51]
[10] I agree with White JA that the appeal must be dismissed with costs.
[52]
[11] CHESTERMAN JA: The appellant was engaged as head contractor to build a number of home units at Runaway Bay in Queensland. It subcontracted the plastering and carpentry works to the respondent. On 1 September 2009 the respondent made a payment claim under the Building and Construction Industry Payments Act 2004 ("Payments Act") for an amount of $1,398,031.56. The appellant submitted a payment schedule disputing the claim which was then referred to adjudication. The adjudicator, a party to the appeal, awarded $856,594 to the respondent together with interest and the costs of the adjudication. The appellant commenced proceedings in the Trial Division seeking a declaration that the adjudication decision was void and injunctions prohibiting the respondent from acting pursuant to the adjudication. Martin J dismissed the application on 9 April 2010. The appeal was brought against that dismissal.
[53]
[12] The terms of the subcontract and relevant provisions of the Payments Act are set out in the reasons for judgment of White JA and need not be repeated. I gratefully adopt her Honour's comprehensive recital of the facts and the legislation.
[54]
[13] The appellant's originating application sought a declaration, pursuant to s 128 of the Supreme Court Act 1995 or, the court's inherent jurisdiction, that the decision of the adjudicator delivered on 16 October 2009 was void "or liable to be set aside" on four grounds:
[55]
(i) The adjudicator failed to consider or make a bona fide attempt to consider the issues raised by the appellant in its payment schedule;
[56]
(ii) The adjudicator failed to make a bona fide attempt to consider the appellant's submissions or evidence;
(iii) The adjudicator failed to consider issues raised by the appellant in its payment schedule and adjudication response;
[57]
(iv) The adjudicator failed to take into account matters required to be considered in s 26(2)(a), (b) and (d) of the Payments Act.
[58]
[14] The fourth ground adds nothing to the other three. The appellant sought as well an order that the adjudication decision be set aside or stayed permanently, and injunctions restraining the respondent from enforcing the adjudication decision in any manner allowed by the Payments Act.
[59]
[15] The appellant's complaint was, in essence, that the adjudicator did not consider the appellant's detailed factual answer to the payment claim because of the size and difficulty of the task. Martin J rejected the contention. The evidence and arguments are examined in White JA's reasons. Her Honour concluded that the adjudicator did give adequate consideration to the appellant's case and that the primary judge was correct in that finding. I respectfully agree with her Honour's analysis and conclusion.
[60]
[16] Martin J accepted the correctness of the approach taken to the Payments Act in Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at 441:
[61]
" ... for a document purporting to be an adjudicator's determination to have the strong legal effect provided by the Act, it must satisfy whatever are the conditions laid down by the Act as essential for there to be such a determination. If it does not, the purported determination will not in truth be an adjudicator's determination within the meaning of the Act: it will be void and not merely voidable. A court of competent jurisdiction could in those circumstances grant relief by way of declaration or injunction ... . What then are the conditions laid down for the existence of an adjudicator's determination? The basic and essential requirements appear to include the following:
[62]
The service by the claimant on the respondent of a payment claim ...;
[63]
The reference of the application to an eligible adjudicator ...;
The determination by the adjudicator of this application ... .
[64]
The relevant sections contain more detailed requirements ... A question arises whether any non-compliance with any of these requirements has the effect that a purported determination is void ..."
[65]
[17] This approach has been frequently taken in judgments in the Trial Division and in this Court see e.g. Queensland Bulk Water Supply Authority v McDonald Keen Group Pty Ltd (in liq) [2010] QCA 7; [2010] 2 Qd R 322 at 333.
[66]
[18] There was a second aspect to the judgment in Brodyn. Hodgson JA (with whom Mason P and Giles JA agreed) held that the terms of the relevant legislation in New South Wales, which is all but identical to the Payments Act, precluded prerogative relief in the nature of certiorari. Philip McMurdo J noted this aspect of the case in Hansen Yuncken Pty Ltd v Ian James Ericson trading as Flea's Concreting [2010] QSC 156 at [6] as did McDougall J in Chase Oyster Bar v Hamo Industries [2010] NSWCA 190 at [112].
[67]
[19] In its grounds of appeal, in addition to asserting that Martin J erred in holding that the adjudicator had made a genuine attempt to determine the adjudication in accordance with the Payments Act and had not denied the appellant natural justice, the appellant asserted:
[68]
(v) The learned Primary Judge erred in applying Brodyn ... and proceeding on the basis that the adjudication decision could only be declared void ... on the grounds set out in the decision;
[69]
(vi) The learned Primary Judge erred in proceeding on the basis that the adjudication decision could not be set aside for jurisdictional error.
[70]
[20] The appellant submitted that grounds 5 and 6 were established by the decision of the High Court in Kirk v Industrial Court (NSW) [2010] HCA 1; (2010) 239 CLR 531 which held, relevantly, that (581):
[71]
"Legislation which would take from a State Supreme Court power to grant relief on account of jurisdictional error is beyond State legislative power."
[72]
The appellant submitted that as a consequence s 18(2) of the Judicial Review Act 1991 ("JR Act") cannot operate so as to prevent the Supreme Court reviewing adjudications made under the Payments Act on the ground of jurisdictional error.
[73]
[21] The appellant submitted that the adjudicator's refusal to consider its material denied it natural justice and amounted to "jurisdictional error" in the adjudication. The adjudicator's alleged failure was also relied upon as constituting non-compliance with the statutory preconditions to a valid adjudication. The submission may be accepted but its utility for the appellant depends upon the correctness of the factual hypothesis that the adjudicator did not have regard to the appellant's material. Martin J's finding to the contrary, endorsed by White JA, means that there was no jurisdictional error nor failure to comply with the Payments Act. That is enough to dispose of the appeal.
[74]
[22] Had the appellant made good its contention the court would have had to address the question: what, if any, is the basis of its jurisdiction to grant relief? The question does not have to be answered but the point was fully argued and will undoubtedly arise again. Litigation generated by contentious adjudications under the Payments Act is prolific.
[75]
[23] Despite consideration of the issue being obiter dicta I express a tentative opinion in the hope that it may be of some assistance in future cases.
[76]
[24] Before the inclusion of the Payments Act in Schedule 1 Part 2 of the JR Act what I have called the second aspect of Brodyn was not applied in Queensland. The respondent's submissions identified a number of cases in which decisions of adjudicators were reviewed pursuant to the provisions of the JR Act: State of Queensland v Epoca Constructions Pty Ltd [2006] QSC 324; ACN 060 559 971 v O'Brien [2008] QCA 213; [2008] 2 Qd R 495; JJ McDonald & Sons Engineering Pty Ltd v Rics Dispute Resolution Service Qld [2005] QSC 305; Minimax Fire Fighting Systems Pty Ltd v Bremore Engineering (WA) Pty Ltd [2007] QSC 333; Bezzina Developers Pty Ltd v Deemah Stone (Qld) Pty Ltd [2008] QCA 213; [2008] 2 Qd R 495. The point appears to have been persuasively settled by Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture (No 2) [2009] VSC 426; (2009) 26 VR 172.
[77]
[25] That Brodyn offered a different basis for challenging adjudications to that provided by the JR Act was not always recognised in the cases. The conceptual principles underlying the two bases are different and when a right to relief is established the remedies are different. An adjudication decision made where the essential statutory pre-requisites have not been satisfied is void and a court may make a declaration to that effect and/or enjoin any attempt to give effect to the decision. Where the adjudication decision is affected by legal error in the decision making process the court may prohibit the adjudicator from proceeding further or quash the decision. There is scope for overlap in the application of the principles. The same facts may establish non-compliance with the statutory pre-conditions and legal error in the decision making. The present case affords one example. Another may be where an adjudicator has not been properly appointed, or the dispute has not been referred to him in accordance with the Payments Act. The adjudicator would lack power to make the adjudication, quintessential jurisdictional error.
[78]
[26] By an amendment made to the JR Act in 2007 the Payments Act was added to Schedule 1, Part 2 so that s 18(2) of the JR Act became relevant. It provides that the JR Act:
[79]
(b) apply to decisions made ... under an enactment mentioned in schedule 1, part 2."
[80]
[27] I expressed the opinion in Intero Hospitality Projects Pty Ltd v Empire Interior (Australia) Pty Ltd [2008] QCA 83 that the effect of the 2007 amendment was to preclude review of adjudications under Part 3 of the JR Act but to permit them pursuant to Part 5 of the Act (which regulates the jurisdiction the court formerly had to control proceedings of inferior courts and domestic tribunals). Importantly the power of the court conferred by s 48 which applies to both Parts 3 and 5 would enable the court to stay or dismiss applications for review in a wide variety of circumstances. Daubney J expressed the same opinion in Uniting Church in Australia Property Trust (Qld) v Davenport [2009] QSC 134. White JA in Bloomer Constructions (Qld) Pty Ltd v O'Sullivan [2009] QSC 220 and Fraser JA (with whom the President and Keane JA agreed) in Bezzina Developers v Deemah Stone (Qld) Pty Ltd [2008] QCA 213; [2008] 2 Qd R 495 held that subsequent to the 2007 amendment adjudications were no longer reviewable under either Part of the JR Act.
[81]
[28] The conclusion I expressed has, I think, the advantage of convenience. It permits reviews of erroneous adjudications on limited grounds (error of law on the face of the record and jurisdictional error) subject to the salutary power to refuse to entertain applications on the broad grounds described in s 48. It would prevent the invalidation of any part of the JR Act by reason of the ratio expressed in Kirk.
[82]
[29] It must be said however that the opinion was expressed without benefit of argument on the point which was not relevant to the outcome of Intero and without any critical examination. (The responsibility was mine: I imply no criticism of Counsel.) It must be accepted that the plain terms of s 18(2) are against the conclusion, as Fraser JA pointed out in Bezzina. The section says that the JR Act "does not apply" inter alia to the Payments Act. Part 3 of the JR Act is, self evidently, a part of the Act which does not apply. To arrive at the conclusion I favoured in Intero one must add notionally to s 18(2) the words "Part 3 of". To derive the meaning of a statute different from the apparent one by the insertion of additional words is an improper mode of construction in the absence of compelling textual or contextual indications that the addition is necessary to arrive at the true meaning intended by Parliament. The principle is discussed in Metroplex Management Pty Ltd v Brisbane City Council [2010] QCA 333 [25] to [47].
[83]
[30] To the extent that Brodyn decided that jurisdiction to order relief in the nature of certiorari or prohibition was precluded by the terms of the Payments Act it has now been reversed by the judgments in Chase Oyster Bar. Spigelman CJ at [27] and [32] appears to have doubted whether Brodyn did in fact decide that prerogative relief could not be granted in respect of an adjudication though, according to McDougall J, [112] that was widely thought to be its effect.
[84]
[31] Basten JA [90] also thought that Brodyn had decided that the New South Wales equivalent of the Payments Act had excluded:
[85]
"...the availability of this Court's supervisory jurisdiction, by way of relief in the nature of prerogative writs, not only in relation to error of law on the face of the record, but more generally in relation to jurisdictional error..."
[86]
His Honour disagreed with that result. He thought nothing in the terms of the legislation indicated an intention that the court's supervisory jurisdiction be excluded. The conclusion owed nothing to the decision of the High Court in Kirk. See [86] to [91]. Spigelman CJ agreed.
[87]
[32] The result, it seems to me, is that Brodyn remains authority for its first proposition: that adjudications which do not comply with the essential statutory requirements are void and the court may, when non-compliance has been demonstrated, make declarations and/or grant injunctions to prevent a void adjudication being acted on. The second proposition reversed by Chase Oyster Bar, which in turn decided that the court has jurisdiction to grant prerogative relief with respect to adjudications affected by error on the face of the record or jurisdictional error cannot be applied in Queensland, at least without additional analysis, because of the complication, not present in New South Wales, afforded by s 18(2) and the inclusion of the Payments Act in the Schedule. What does s 18(2) of the JR Act mean for the Payments Act, and is its meaning affected by Kirk?
[88]
[33] The conclusion, which I think now should be accepted, that adjudication decisions under the Payments Act are not reviewable under the JR Act does not mean that the court's supervisory jurisdiction over adjudicators has been removed. That opinion is dictated by Kirk. If the effect of s 18(2) of the JR Act were to prohibit the exercise by the Supreme Court of its jurisdiction to grant prerogative relief the section would be unconstitutional and of no effect. The High Court said (580-581):
[89]
"The supervisory jurisdiction of the Supreme Courts was at federation, and remains, the mechanism for the determination and the enforcement of the limits on the exercise of State executive and judicial power by persons and bodies other than the Supreme Court. That supervisory role of the Supreme Courts exercised through the grant of prohibition, certiorari and mandamus (and habeas corpus) was, and is, a defining characteristic of those courts. ... To deprive a State Supreme Court of its supervisory jurisdiction enforcing the limits on the exercise of State executive and judicial power by persons and bodies other than that Court would be to create islands of power immune from supervision and restraint. ... it would remove from the relevant State Supreme Court one of its defining characteristics. ... Legislation which would take from a State Supreme Court power to grant relief on account of jurisdictional error is beyond State legislative power."
[90]
[34] But s 18(2) is not in terms privative. As Basten JA pointed out in Chase Oyster Bar [89] a constraint on the court's jurisdiction will require express language, or at least a clear and unambiguous implication. His Honour referred to Owners of The Ship Shin Kobe Maru v Empire Shipping Co Inc (1994) 181 CLR 404 and Kirk. In the latter case the existence of the constitutional prohibition led the Court to construe the privative enactment so that it did not deprive the Supreme Court of supervisory jurisdiction over jurisdictional error.
[91]
[35] Section 18(2) does not purport to destroy the court's pre-existing jurisdiction to control the unlawful exercise of power by inferior courts and tribunals. Kirk suggests it should not be read that way. Kirk also decided that an enactment which purported to deprive the court of all supervisory jurisdiction would be invalid. Section 18(2) says only that the JR Act cannot be used as a means of exercising supervisory power. Section s 10 would seem to recognise the continued existence of the pre-statutory jurisdiction. It provides that rights conferred by the JR Act are in an addition to any other rights the person has to seek review of administrative decisions. Likewise s 41, in Part 5 of the JR Act, does not purport to abolish or remove the court's pre-existing jurisdiction to supervise inferior tribunals and decision makers. It regulates the manner in which the court is to undertake such a review and alters the nature of the relief that might be granted. But if the Act does not apply, s 41 does not apply so one is left with the pre-statutory jurisdiction of the Supreme Court described in Kirk (at 580). Fryberg J came to the same conclusion in De Neefe Signs Pty Ltd v Build1 (Qld) Pty Ltd [2010] QSC 279 at [13].
[92]
[36] His Honour's observation that "the old practice" would revive so that a preliminary application for a prerogative writ would be made to the Trial Division but argued at length before the Court of Appeal is, with respect to his Honour, inaccurate. The "old practice" was provided for by Order 81 of the Supreme Court Rules. That order was repealed by s 58(2) of the JR Act, as originally enacted, which inserted Schedule 4 into the Act which set out the new procedures. A year later the contents of Schedule 4 were transferred to the Rules of the Supreme Court, becoming O 81. Those rules expired on 30 June 1999 with the implementation of the UCPR. There is nothing in the new rules which regulates procedure for prerogative relief not brought under the JR Act. Accordingly s 118E(1) of the Supreme Court of Queensland Act 1991 applies. It provides:
[93]
"To the extent that the conduct of a proceeding is not provided for by rules of court or practice directions, the court may make the orders and give the directions it considers appropriate for the conduct of the proceeding."
[94]
Pursuant to this power a judge of the Trial Division would hear and determine applications for prerogative relief.
[95]
[37] The situation appears thus to be that an adjudication decision may be impugned on the basis described in Brodyn, that essential statutory pre-conditions have not been complied with, and by application for a prerogative writ on the grounds of error of law on the face of the record or jurisdictional error or, presumably, any other ground recognised by pre JR Act jurisprudence.
[96]
[38] One suspects this result is not what Parliament hoped for when it enacted s 18(2). The availability of the court's supervisory jurisdiction which pre-dated the JR Act will extend to all of the enactments listed in Schedule 1 Part 2. It will not be confined to the Payments Act.
[97]
[39] The orders should be as proposed by White JA.
[98]
[40] WHITE JA: The appellant ("Northbuild") was the head contractor for the construction of an apartment complex of 119 residential units known as Harmony Apartments Broadwater at Runaway Bay, Queensland, housed in six separate apartment buildings.[11] On 26 September 2008 it entered into a sub-contract with the first respondent ("CIL") for the provision of carpentry and plastering works to the complex for the lump sum of $3,310,954.05 including GST.
[99]
[41] The contract was terminated by Northbuild on or about 3 August 2009 due to alleged want of diligence and competence by CIL when the contract works, according to Northbuild, were 90 per cent complete.[12] Northbuild had paid $2,909,670.87 to CIL under the contract to that date. CIL accepted the termination as a repudiation of the contract on 4 August 2009. CIL contended that the works were 95 per cent complete as at 4 August.[13]
[100]
[42] On 1 September 2009 CIL served Payment Claim No. 18 dated 28 August 2009 on Northbuild in the amount of $1,398,031.56 (subsequently reduced to $1,227,804.53 in the adjudication claim). This claim was made up of contract work completed to date as per an attached schedule in the amount of $3,151,888.56 (work under the contract outstanding of $267,669.27) plus variations claimed as per a schedule in the amount of $1,028,720.09 (reduced to $985,586.84 in the adjudication claim). It was stated to be a payment claim under the Building and Construction Industry Payments Act 2004 (Qld) ("the Payments Act").[14]
[101]
[43] Northbuild served its Payment Schedule in response on 14 September 2009 stating that "$Nil" was payable under the contract. Northbuild attached a number of schedules identifying the basis for withholding money with respect to the variations, the project status, and the cost to complete the contract works and asserted a contractual set-off in the amount of $671,155.59 against any amount found to be due and payable to CIL arising from a claim for liquidated damages and the cost to complete the works.
[102]
[44] CIL made an adjudication application on 28 September 2009 to the second respondent, Adjudicate Today Pty Ltd, pursuant to s 21 of the Payments Act for the nomination of an adjudicator to determine the disputed payment claim. The nominated adjudicator, the third respondent, accepted the nomination on 1 October 2009.
[103]
[45] In its application CIL included statutory declarations by individuals concerned in carrying out the subcontract, a report prepared by Currie & Brown (Australia) Pty Ltd ("the Currie & Brown Report") dated 28 September 2009 on which it relied in relation to the claimed variations, and a report prepared by King Planning Pty Ltd ("the King Planning Report") of the same date to support its estimate about the completion status of the contract works before termination.
[104]
[46] Northbuild made its response on 6 October 2009. It relied on a number of statutory declarations by persons associated with the contract works, together with an expert report by Turner & Townsend Pty Ltd ("the Turner & Townsend Report") dated 6 October 2009 with respect to the variation claims and an expert report by Solid Support Delay Analysis Pty Ltd ("the Solid Support Report") dated 5 October 2009 about the project status.
[105]
[47] The adjudicator made his decision and dated it 12 October 2009. On 16 October 2009 his decision was forwarded by the second respondent to the parties, awarding $856,594 inclusive of GST plus interest and the costs of the adjudication to CIL.
[106]
[48] By originating application filed 29 October 2009 Northbuild sought a declaration that the adjudication was void or liable to be set aside on the grounds that the adjudicator failed:
[107]
• to consider or make a bona fide attempt to consider the issues raised by Northbuild in its payment schedule;
[108]
• to make a bona fide attempt to consider Northbuild's submissions and/or supporting evidence contained in its adjudication response;
[109]
• to consider issues raised by Northbuild in its payment schedule and adjudication response;
[110]
• to take into account matters he was required to consider pursuant to sections 26(2)(a), 26(2)(b) and 26(2)(d) of the Payments Act.
[111]
Northbuild sought orders setting aside or, alternatively, permanently staying the adjudication decision; an injunction to restrain CIL from requesting an adjudication certificate; an injunction restraining CIL from seeking to rely upon or enforce the adjudication decision; and an injunction directed to the adjudicator to restrain him from issuing an adjudication certificate to CIL.
[112]
[49] On 9 April 2010 judgment was given dismissing Northbuild's application with costs. Northbuild appeals that judgment on the grounds that the primary Judge erred in holding that:
[113]
• the adjudicator's approach to valuation of the work under the contract did not demonstrate that he had failed to make a genuine attempt to exercise the power given to him under the Payments Act;
[114]
• the adjudicator's approach to CIL's delay claim did not demonstrate that he had failed to make a genuine attempt to exercise the power given to him under the Payments Act;
[115]
• the adjudicator did not "essentially disregard" Northbuild's material in relation to the valuation of the work under the contract and the assessment of CIL's delay claim; and
[116]
• the adjudicator did not deny Northbuild natural justice.
[117]
[50] Counsel for Northbuild sought to amend its grounds of appeal by adding two further grounds, namely, that the primary Judge erred:
[118]
• in applying Brodyn Pty Ltd v Davenport[15] and proceeding on the basis that the adjudication decision could only be declared void or quashed on the grounds set out in Brodyn; and
[119]
• in assuming that the adjudication decision could not be set aside for jurisdictional error.
[120]
Northbuild raised for the first time in its appeal submissions the question whether an adjudicator's decision made under the Payments Act is subject to review for jurisdictional error under the Judicial Review Act 1991 (Qld) in light of s 18 of that Act which excludes the operation of the Judicial Review Act from decisions made under certain enactments mentioned in Sch 1 Pt 2 which includes Pt 3 Div 2 of the Payments Act (adjudication decisions). This involved a consideration of the principles discussed in Kirk v Industrial Court (NSW).[16] No relief of a prerogative kind was sought by Northbuild either pursuant to the Judicial Review Act or otherwise in its originating application. It sought, and continues to seek, a declaration and injunctive relief but not by way of an application for review as envisaged in s 43(2) of the Judicial Review Act.
[121]
[51] Accordingly, the relationship between the Judicial Review Act, particularly relief pursuant to Pt 5, the Payments Act and the survival of pre Judicial Review Act remedies in the nature of the prerogative writs does not squarely arise. However, these issues have been fully argued by counsel and the regular reliance on statements in Brodyn in Queensland courts which the New South Wales Court of Appeal has said recently are incorrect insofar as they might exclude review for jurisdictional error,[17] suggest that the appeal should be considered in that broader context. Before doing so, it is appropriate to look at the scheme of the Payments Act.
[122]
[52] Although the Payments Act has operated for some years now and been the subject of frequent litigation, the nature of the issues raised on this appeal suggests that an overview of its relevant provisions should be summarised. The purpose of the Payments Act is to ensure that a person undertaking to carry out construction work or provide goods and services under a construction contract will be able to recover progress payments whether or not the construction contract makes provision for payments of that kind. The Explanatory Note to the Bill explained that security of payment had been an issue in the building and construction industry over many decades. The Royal Commission into the Building and Construction Industry called for legislative intervention because traditional remedies in contract law were considered insufficient to address concerns. As the Explanatory Note mentioned, the failure of any one party in the contractual chain to honour its obligations would often cause a domino effect on other parties, resulting in restricted cash flow and, in some cases, insolvency. This would occur in many cases long before rights under the relevant contract or subcontract could be litigated and determined.
[123]
[53] To that end the Payments Act established a statutory based system of rapid adjudication for the interim resolution of "payment on account" disputes involving building and construction work contracts. There can be no contracting out of Payments Act entitlements.[18] The adjudication is conducted by an independent adjudicator with relevant expertise. If the decision of the adjudicator in whole or in part favours the applicant for a progress payment, the respondent to that claim is required to pay the specified amount directed by the adjudicator to the claimant. Decisions by the adjudicator are enforceable in any court of competent jurisdiction on the filing of an adjudication certificate which will operate as a judgment debt. This rapid adjudication does not extinguish a party's ordinary contractual rights to obtain a final resolution of a payment dispute by a court or tribunal relevantly endowed with jurisdiction to hear such a dispute.[19] But, importantly, in order to effect its purpose of a quick resolution of disputes and to maintain cash flow, the Payments Act provides for only limited recourse to the courts in respect of the adjudication.
[124]
[54] The Payments Act applies only to construction contracts,[20] which means a "contract, agreement or other arrangement under which one party undertakes to carry out construction work for, or to supply related goods and services to, another party."[21] "Construction work" is defined in s 10. The right to a progress payment is established by s 12 irrespective of any provisions in the construction contract, and, if the amount of a progress payment is not able to be calculated under the contract, then by s 13(b) the value of the construction work is the basis for calculation.[22] The manner of valuing construction work is set out in s 14 by reference to the contract or, in the absence of provisions, by having regard to the contract price, other rates or prices in the contract, any agreed variation and the cost of rectifying defective work.
[125]
[55] The progress payment under a construction contract becomes payable pursuant to the provisions of the contract, or in the absence of such a provision, 10 business days after a payment claim for the progress payment has been made in accordance with Pt 3.
[126]
[56] Part 3 Div 1 sets out the procedure for recovering progress payments. A person who claims to be entitled to a progress payment, described as the claimant, may serve a payment claim on the person who, under the construction contract, is or may be liable to make the payment, described as the respondent. A payment claim must identify the construction work or related goods and services to which it relates, the amount of the progress payment said to be payable and state that it is made under the Payments Act.[23]
[127]
[57] A respondent who is served with a payment claim may reply to that claim by serving a payment schedule on the claimant. It must identify the payment claim to which it relates and the amount of the payment, if any, which the respondent proposes to make. If that amount is less than the amount claimed, the payment schedule must state why that amount is less and, if it is less because the respondent is withholding payment for any reason, the reasons for withholding that payment.[24] If a claimant serves a payment claim on a respondent and the respondent does not serve a payment schedule within the earlier of the time required by the construction contract or 10 business days after receipt of the payment claim, the respondent becomes liable to pay the claimed amount to the claimant on the due date for the progress payment.[25] If the respondent fails to pay the whole or any part of the claimed amount, the claimant may recover the unpaid portion of the claimed amount from the respondent as a debt owing in any court of competent jurisdiction, or make an adjudication application.[26]
[128]
[58] If a claimant starts proceedings to recover the unpaid portion of the claimed amount from the respondent as a debt, judgment in favour of the claimant may not be given unless the court is satisfied of the existence of the circumstances giving rise to the entitlement to the claim as set out in s 19(1).[27] Furthermore, the respondent is not, in those proceedings, entitled to bring any counter-claim against the claimant or to raise any defence in relation to matters arising under the construction contract.[28] Similarly, if a respondent serves a payment schedule within time, states an amount that the respondent proposes to pay to the claimant and fails to pay any of that amount by the due date, the claimant may recover the unpaid portion of that amount from the respondent as a debt.[29] If a claimant starts proceedings to recover the unpaid portion of the amount from the respondent as a debt, judgment in favour of the claimant is not to be given unless the court is satisfied of the existence of the circumstances entitling the claimant to judgment and the respondent is not, in those proceedings, entitled to bring any counter-claim or raise any defence in relation to matters arising under the construction contract.[30]
[129]
[59] Part 3 Div 2, which is now excluded from the purview of the Judicial Review Act, deals with the adjudication of disputes about a payment claim by an adjudicator. A claimant may apply for adjudication of a payment claim if the respondent serves a payment schedule and the amount is less than the claimed amount or the respondent fails to pay the whole or any part of the amount identified for payment in the payment schedule or, if the respondent fails to serve a payment schedule or fails to pay the whole or any part of the claimed amount by the due date.[31] An adjudication application must be made to an authorised nominating authority chosen by the claimant and within quite limited time frames, for example, where a payment schedule has been received, within 10 business days.[32] Apart from administrative matters, the adjudication application may contain the submissions relevant to the application which the claimant chooses to include.[33] A copy must be served on the respondent.[34] The authorised nominating authority must refer the application as soon as practicable to a person eligible to be an adjudicator under the provisions in the Payments Act.[35] If the respondent has given a payment schedule, the respondent may give to the adjudicator a response to the claimant's adjudication application within either five business days after receiving a copy of the application or two business days after receiving notice of an adjudicator's acceptance of the application.[36] A respondent cannot include in the response any reasons for withholding payment unless those reasons had already been included in the payment schedule served on the claimant.[37]
[130]
[60] An adjudicator must not decide an adjudication application until after the end of the period within which the respondent may give its response; subject to those limitations an adjudicator must decide an adjudication application "as quickly as possible" and, in any case, within 10 business days after the earlier of the receipt of the adjudication response or when the response ought to have been received; or within the further time the claimant and the respondent may agree, whether before or after the end of the 10 business days.[38] An adjudicator may ask for further written submissions from either party and must give the other party an opportunity to comment; may set deadlines for further submissions and comments; may call a conference of the parties; and may carry out an inspection of any matter to which the claim relates.[39]
[131]
[61] By s 26 an adjudicator is to decide the amount of the progress payment, if any, to be paid by the respondent to the claimant and the date upon which it becomes due and payable together with the rate of interest. In deciding an adjudication application the adjudicator is to consider certain matters "only":[40]
[132]
• the provisions of the Payments Act and, to the extent relevant, the provisions of the Queensland Building Services Authority Act 1991 Pt 4A;
[133]
• the provisions of the construction contract from which the application arose;
[134]
• the payment claim together with all submissions, including relevant documentation, that have been properly made by the claimant in support of the claim;
[135]
• the payment schedule, if any, to which the application relates together with all submissions, including relevant documentation, that have been properly made by the respondent in support of the schedule; and
[136]
• the results of any inspection carried out by the adjudicator of any matter to which the claim relates.
[137]
The extent to which an adjudicator has adhered to the directive in s 26 (and its interstate analogues) and whether failure to do so and in what degree and its consequences has been productive of much judicial analysis[41] starting in New South Wales where the equivalent of the Payments Act was introduced in 1999.[42]
[138]
[62] Returning to the scheme of Pt 3 Div 2, the adjudicator's decision must be in writing and:[43]
[139]
"include the reasons for the decision, unless the claimant and the respondent have both asked the adjudicator not to include the reasons in the decision."
[140]
[63] If an adjudicator decides that the respondent is required to pay an adjudicated amount the respondent must pay that amount on or before five business days from the notification of the decision or an identified date.[44] If the respondent fails to pay the whole or any part of that amount, the claimant may ask the authorised nominating authority to provide an adjudication certificate and may serve notice on the respondent of the claimant's intention to suspend work.[45] By s 30(3) an adjudication certificate sets out, in addition to formal matters, the amount to be paid including interest and fees.
[141]
[64] By s 31 an adjudication certificate may be filed as a judgment for a debt and may be enforced in any court of competent jurisdiction. It may not be filed unless it is accompanied by an affidavit by the claimant stating that the whole or part of the adjudicated amount has not been paid at the time the certificate is filed. If the respondent commences proceedings to have any such judgment set aside the respondent may not, "in those proceedings", bring any counter-claim or raise any defence in relation to matters arising under the construction contract or "challenge the adjudicator's decision" [46] and is required to pay into court as security the unpaid portion of the adjudicated amount pending the final decision in those proceedings.
[142]
[65] Part 4 concerns the administrative structure of this scheme for progress payments. An adjudication registry established under the Payments Act registers entities applying to be an authorised nominating authority with relevant qualifications and only an authorised nominating authority may nominate an adjudicator. Individuals with suitable qualifications may be registered as adjudicators and only a registered adjudicator may be nominated to perform an adjudication under the Payments Act. There is provision for suspension and cancellation of either registration.[47] An adjudicator or authorised nominating authority will not be personally liable for anything done or omitted to be done in good faith in performing their respective functions.[48]
[143]
[66] Making clear that the regime under the Payments Act is essentially interim in nature, s 100 provides that nothing in Pt 3 (adjudication decisions) affects any rights that a party to a construction contract may have under the contract or may have under Pt 2 (right to progress payments) or, apart from the Payments Act, in relation to anything done or omitted to be done under the contract. In any civil proceedings the court must have regard to any payments made under Pt 3 either by way of allowance or an order for restitution.
[144]
[67] An adjudication decision made under Pt 3 Div 2 of the Payments Act may not be reviewed under the procedures provided for in the Judicial Review Act. Section 18(2) of that Act provides, relevantly,
[145]
(b) apply to decisions made, proposed to be made, or required to be made, under an enactment mentioned in schedule 1, part 2."
[146]
By amendment to the Judicial Review Act in 2007,[49] Sch 1 Pt 2 includes Pt 3 Div 2 (adjudication decisions) of the Payments Act.
[147]
[68] Prior to that amendment it was uncontroversial in Queensland that an adjudicator's decision was amenable to review under the Judicial Review Act, either pursuant to Pt 3 or Pt 5, since such a decision was made under an enactment and was a decision made in the exercise of statutory powers carrying out a statutory process affecting rights.[50] The Payments Act contains no general privative provision excluding review of an adjudicator's decision, merely the limited prohibition in s 31(4)(a) which is confined to proceedings to set aside a judgment entered automatically on filing an adjudication certificate. It is only in respect of those proceedings that the adjudicator's certificate may not be challenged and only if it is truly "a decision" which brought it within the Payments Act. If it were not a decision reached in conformity with the requirements of the Payments Act, it was amenable to review on the basis of jurisdictional error. That latter comment is subject to the close reliance in Queensland courts on statements in Brodyn which might, arguably, have been thought to express "jurisdictional error" in a particular way.
[148]
[69] Justice Hodgson in Brodyn[51] agreed with McDougall J in Musico[52] that the scheme of the New South Wales Act appeared to be against the availability of judicial review on the basis of non-jurisdictional error of law. However, he noted:[53]
[149]
"... it is plain in my opinion that for a document purporting to be an adjudicator's determination to have the strong legal effect provided by the Act, it must satisfy whatever are the conditions laid down by the Act as essential for there to be such a determination. If it does not, the purported determination will not in truth be an adjudicator's determination within the meaning of the Act: it will be void and not merely voidable. A court of competent jurisdiction could in those circumstances grant relief by way of declaration or injunction, without the need to quash the determination by means of an order the nature of certiorari."
[150]
His Honour identified the "basic and essential requirements" for a valid adjudication decision, which included the existence of a construction contract, the service of a payment claim, the making of an adjudication application to an authorised nominating authority, the reference to an eligible adjudicator who accepts the application, the determination by the adjudicator of the application by determining the amount of the progress payment, the date upon which it became due and the rate of interest and the issue of a determination in writing.[54]
[151]
[70] His Honour mentioned other more detailed requirements, such as the content of payment claims, the time when an adjudication application can be made and its contents and the matters required to be considered by the adjudicator in the New South Wales equivalent to s 26. His Honour then said:
[152]
"A question arises whether any non-compliance with any of these requirements has the effect that a purported determination is void, that is, is not in truth an adjudicator's determination. That question has been approached in the first instance decision by asking whether an error by the adjudicator in determining whether any of these requirements is satisfied is a jurisdictional or non-jurisdictional error. I think that approach has tended to cast the net too widely; and I think it is preferable to ask whether a requirement being considered was intended by the legislature to be an essential pre-condition for the existence of an adjudicator's determination." [emphasis added][55]
[153]
His Honour concluded that the legislature did not intend that exact compliance with all the more detailed requirements was essential to the existence of a determination, referring to Project Blue Sky Inc v Australian Broadcasting Authority,[56] and added:[57]
[154]
"What was intended to be essential was compliance with the basic requirements (and those set out above may not be exhaustive), a bona fide attempt by the adjudicator to exercise the relevant power relating to the subject matter of the legislation and reasonably capable of reference to this power (cf R v Hickman; Ex parte Fox and Clinton[1945] HCA 53; (1945) 70 CLR 598), and no substantial denial of the measure of natural justice that the Act requires to be given. If the basic requirements are not complied with, or if a purported determination is not such a bona fide attempt, or if there is a substantial denial of this measure of natural justice, then in my opinion a purported determination will be void and not merely voidable, because there will then not, in my opinion, be satisfaction of requirements that the legislature has indicated as essential to the existence of a determination. If a question is raised before an adjudicator as to whether more detailed requirements have been exactly complied with, a failure to address that question could indicate that there was not a bona fide attempt to exercise the power; but if the question is addressed, then the determination will not be made void simply because of an erroneous decision that they were complied with or as to the consequences of non-compliance."
[155]
[71] The relief sought in Brodyn was an order in the nature of certiorari pursuant to s 69 of the Supreme Court Act 1970 (NSW). Section 69(1)(d) and (e) are similar in effect to s 41(1) and (2) of the Judicial Review Act but s 69, as a whole, is much wider in its subject matter than ss 41, 42 and 43. The "privative" provision in the Building and Construction Industry Security of Payment Act 1999 (NSW) is almost identical to s 31(4)(a)(iii) ("may not challenge an adjudicator's decision") of the Payments Act. It was the conclusion emphasised in the passage quoted above which inclined his Honour against prerogative relief, while noting that declaratory and injunctive relief continued to be available. That passage was scrutinised in Chase Oyster Bar v Hamo Industries by the New South Wales Court of Appeal on a case stated.[58] The court was concerned, inter alia, to examine the Brodyn conclusion that orders in the nature of certiorari were unavailable against a decision of an adjudicator in the context of the statutory prohibition the equivalent of s 31(4)(a)(iii). The court interpreted that passage as rejecting the appropriateness of applying the distinction between "jurisdictional" and "non-jurisdictional" error because his Honour had said that to do so would be to "cast the net too widely". His Honour's favoured expression, "an essential pre-condition", was thought unlikely to be intended as encompassed within, but narrower than, the scope of "jurisdictional error".
[156]
[72] However, the centrality of the distinction between jurisdictional and non-jurisdictional error had been identified in Craig v South Australia[59] and Kirk v Industrial Court (NSW)[60] and, by the latter case, gave "this distinction a constitutional dimension in State law".[61] Spigelman CJ added that it had:[62]
[157]
"... placed this distinction at the centre of Australian administrative law jurisprudence, in a manner which is not consistent with the reasoning in Brodyn, on one view of that reasoning",
[158]
which had suggested that as a matter of statutory construction, a provision can constitute "jurisdictional error" but not "an essential pre-condition".[63] To that extent Brodyn was held to be in error because review for jurisdictional error may not be excluded as a matter of constitutional principle.
[159]
[73] The question, supposing that it is otherwise relevant to this appeal, is what effect the 2007 amendments have on the availability of review in the courts of this State of an adjudication decision made under the Payments Act. The availability of review under Pt 5 of the Judicial Review Act after 2007 has been the subject of different views in this Court. In Bezzina Developers Pty Ltd v Deemah Stone (Qld) Pty Ltd[64] Fraser JA, with whom the President and Keane JA agreed, said of the effect of those amendments:[65]
[160]
"From the commencement of [the 2007 amending Act], adjudication decisions are not reviewable under the Judicial Review Act1991."
[161]
"In my respectful opinion, adjudications are no longer reviewable under any part of the Judicial Review Act1991: cf Intero Hospitality Projects Pty Ltd v Empire Interior (Australia) Pty Ltd[2008] QCA 83 at [61]."
[162]
Those observations were obiter since the legislation did not apply to the subject matter of the appeal. In Intero Hospitality Projects Pty Ltd v Empire Interior (Australia) Pty Ltd,[66] Chesterman J's (as his Honour then was) observations that relief under Pt 5 would continue to be available were obiter. His Honour did not have the benefit of complete argument, although his Honour continued, also obiter, to adhere to that view in J Hutchinson Pty Ltd v Galform Pty Ltd & Ors.[67]
[163]
[74] In Bloomer Constructions (Qld) Pty Ltd v O'Sullivan & Anor,[68] I concluded that the 2007 amendments operated to exclude the whole of the Judicial Review Act as a means of curial review of an adjudication decision under the Payments Act, both by virtue of the plain meaning of the words and by reference to the Explanatory Notes.[69] In Bloomer I noted that s 97 of the Queensland Building Services Authority Act 1991 (Qld) excluded the Judicial Review Act in relation to "a proceeding for a minor domestic building dispute" decided by the Commercial and Consumer Tribunal except where:[70]
[164]
"(a) the tribunal had or has no jurisdiction under the Act to hear and decide the proceeding; or
[165]
(b) a breach of the rules of natural justice happened in relation to a party to the proceeding."
[166]
This demonstrated that the legislature, in a complementary Act to the Payments Act, had expressly turned its mind to the question of "saving" what might, broadly, be termed Pt 5 reviews. If there were an intention to do so when Pt 3 Div 2 of the Payments Act was excluded from the Judicial Review Act, there was a legislative model available. That conclusion did not entail, however, the result that such decisions are unreviewable. As Philip McMurdo J reasoned in Cant Contracting Pty Ltd v Casella & Anor[71] it cannot be supposed that the legislature intended, by removing Pt 3 Div 2 decisions from consideration under the Judicial Review Act, to render immune from curial supervision a decision by an adjudicator which he was not empowered to give.
[167]
[75] An adjudication decision under the Payments Act is one that is, as a matter of constitutional principle,[72] amenable to review by this Court and s 10 of the Judicial Review Act expressly preserves any other rights:
[168]
"(1) The rights conferred by this Act on a person to make an application to the court in relation to a reviewable matter are in addition to any other rights that the person has to seek a review of the matter (whether by the court, another court or a tribunal, authority or person).
[169]
(2) Subject to section 41, the existence of a remedy by way of an application for review does not exclude any jurisdiction of the court to grant other relief."
[170]
The question is whether the appropriate course is to seek an order for review under Pt 5 on the basis that the adjudicator's decision was made without authority, that is, beyond the jurisdiction accorded by the Payments Act, and thus, not a decision to which that Act applied, or by some other process. In De Neefe Signs Pty Ltd v Build1 (Qld) Pty Ltd; Traffic Technologies Traffic Hire Pty Ltd v Build1 (Qld) Pty Ltd,[73] Fryberg J suggested that, if Pt 5 of the Judicial Review Act did not apply to an adjudicator's decision, then the prerogative writs abolished by s 41(1) of that Act would still be available.[74] However, s 41(1) of the Judicial Review Act is plainly intended to abolish that earlier practice generally. It states:
[171]
"The prerogative writs of mandamus, prohibition or certiorari are no longer to be issued by the Court."
"In an enactment in force immediately before the commencement of this Act, a reference to a writ of mandamus, prohibition or certiorari is taken to be a reference to an order of a kind that the court is empowered to make under this section."
[174]
Section 10(2) makes plain by its reference to s 41 that those procedures are not, in some manner, in abeyance. The previous Rules of the Supreme Court provided for the procedure for an application for a prerogative writ.[75] They were replaced by the Uniform Civil Procedure Rules ("UCPR") which commenced on 1 July 1999.
[175]
[76] Chapter 14 Pt 4 of the UCPR concerns statutory orders of review and review applications but is confined to review applications under the Judicial Review Act.[76] The UCPR contemplate in rr 564 - 569 a close correspondence between an application brought for a statutory order of review and an application for review pursuant to Pt 5 of the Judicial Review Act. There is otherwise no provision in the UCPR for a review in the nature of certiorari or the other prerogative writs. The provisions in the Interdict Act of 1867 concerning the prerogative writs were included in the Supreme Court Act 1995 in sections 164 and following. However, s 134 of the Supreme Court of Queensland Act 1991 provides that in any inconsistency, both direct and covering the field between the Supreme Court Act 1995 and the Supreme Court of Queensland Act 1991, the latter prevails to the extent of any inconsistency. Included in the definition of "this Act", referring to the Supreme Court of Queensland Act 1991, are the UCPR made under that Act. This would suggest that there is no longer available any dedicated process outside the Judicial Review Act for review of the kind which previously led to the issue of the prerogative writs.
"(1) To the extent that the conduct of a proceeding is not provided for by rules of court or practice directions, the court may make the orders and give the directions it considers appropriate for the conduct of the proceeding.
[178]
(2) In making an order or giving a direction, the court may have regard to practices and procedures of the court, including rules of the court, in force before the commencement of the Uniform Civil Procedure Rules.
[179]
(3) This section does not limit any inherent or other power of a court or judge to control proceedings."
[180]
"The court [to] make an order, give a direction or leave to do anything else that it is authorised to do on such terms and conditions (if any) as the court considers appropriate."
[181]
A party seeking to challenge an adjudicator's decision made under the Payments Act for jurisdictional error could bring an application under r 8 of the UCPR for appropriate orders, including restraining orders, or seek directions. The party could also argue, as mentioned above, that the Pt 5 procedure continued to be applicable to a "decision" which was not a decision under the Payments Act.
[182]
[78] In these proceedings Northbuild sought and continues to seek declaratory and injunctive relief. Although the legislature clearly seeks a "fast track" investigation into an entitlement, on an interim basis, to a progress payment, there is nothing in the language of the Payments Act in the nature of a privative clause attempting to exclude the supervisory role of the Supreme Court and s 31(4)(a) does not do so. It is a reference only to proceedings to have a judgment based on an adjudication certificate set aside and that must be in respect of an adjudication reached in conformity with the Payments Act. After Kirk v Industrial Court (NSW),[77] the exclusion of Pt 3 Div 2 from the Judicial Review Act is limited to review of decisions not infected by jurisdictional error. Even before Kirk (and Craig[78]) longstanding authority demonstrates that a prohibition against challenging an administrative decision would be interpreted to mean a decision not infected by jurisdictional error.[79]
[183]
[79] The "only" matters which an adjudicator may consider in reaching a decision are the provisions of the Payments Act, the terms of the construction contract, the payment claim and response and all submissions properly made so that if the adjudicator departed from that list and considered, for example, what he regarded as a "fair thing" he would have made a decision without authority and, if he truly disregarded a claimant's submissions, his decision would not be one envisaged by the Payments Act.
[184]
[80] Accepting the criticisms which have been levelled at Brodyn on the question of the availability of prerogative review for jurisdictional error, Hodgson JA's observation that an adjudicator's purported decision would be void if it did not meet the statutory conditions essential for a valid decision are unexceptional. So, too, where the necessary level of procedural fairness had not been accorded to a party.[80] By quoting extensively from and relying on passages in Brodyn the primary Judge did not fall into error, since he considered whether the adjudicator had performed the task assigned to him by s 26 which did not require, in this case, any articulation of the distinction between adherence to "basic requirements" and jurisdictional error.
[185]
[81] The phrase "bona fide attempt" or "acting in good faith" describes an implied condition of validity for discretionary decisions. Although the articulation of good faith has been regularly employed, a definition has proved elusive, no doubt due to its chameleon qualities and depending very much on the context.[81]
[186]
[82] When Hodgson JA said in Brodyn that there must be a bona fide attempt by the adjudicator to exercise the power under the legislation, he referred to R v Hickman; Ex parte Fox and Clinton.[82] That case required the reconciliation of apparently mandatory provisions of certain regulations with a privative provision in legislation precluding curial review of decisions of an employment tribunal. Dixon J said:[83]
[187]
"Such a clause is interpreted as meaning that no decision which is in fact given by the body concerned shall be invalidated on the ground that it has not conformed to the requirements governing its proceedings or the exercise of its authority or has not confined its acts within the limits laid down by the instrument giving it authority, provided always that its decision is a bona fide attempt to exercise its power, that it relates to the subject matter of the legislation, and that it is reasonably capable of reference to the power given to the body."
[188]
[83] Two schools of thought have emerged from the more recent cases - whether there is a dichotomy between "good faith" and "bad faith" or whether there is some middle ground. The tests are described as broad[84] or narrow.[85] Northbuild favoured the broad view expressed by Brereton J in Holmwood Holdings where, after a thorough analysis of the relevant authorities, his Honour said:[86]
[189]
"I have concluded, for the reasons which follow, that, in the present context, the broader view should apply, and in particular that recklessness or capriciousness on the part of an arbitrator [sic] in the performance of his or her function, such as to establish the absence of a genuine or conscientious attempt to perform the adjudicator's function - short of a wilful and deliberate failure to attempt to perform the function - can amount to a want of good faith."
[190]
[84] His Honour suggested that there were no policy interests for protecting an adjudicator who did not make a genuine or conscientious attempt to reach the correct decision or who acted capriciously in performing the adjudication function. A lack of honest endeavour to undertake the relevant function would be an indicator of a want of good faith. His Honour concluded:[87]
[191]
"Accordingly, good faith as a condition of validity of the exercise of an adjudicator's power to make a determination requires more than mere honesty. It requires faithfulness to the obligation. It requires a conscientious effort to perform the obligation. And it does not admit of capriciousness."
[192]
[85] On appeal Giles JA, with whom Santow and Tobias JJA agreed, declined to approach the controversy by reference to the good faith exercise of the statutory power, preferring instead to enquire whether the adjudicator had made a determination by a process related to a consideration of the matters he was statutorily required to consider.
[193]
[86] In the face of strongly worded privative clauses in the Migration Act 1958 (Cth), a number of Federal Court decisions have arrived at some propositions, applied more widely than to the refugee cases, couched in the language of bad faith. The Full Federal Court in SBBS v Minister for Immigration and Multicultural and Indigenous Affairs[88] identified nine propositions about the absence of good faith/presence of bad faith which, in the seventh and ninth, were modified by subsequent decisions:
[194]
• first, an allegation of bad faith is a serious matter involving personal fault on the part of the decision-maker;
[195]
• second, the allegation is not to be lightly made and must be clearly alleged and proved;
[196]
• third, there are many ways in which bad faith can occur and it is not possible to give a comprehensive definition;
[197]
• fourth, the presence or absence of honesty will often be crucial;
[198]
• fifth, the circumstances in which the Court will find that an administrative decision-maker has not acted in good faith are rare and extreme, especially where all the applicant relies upon is the written reasons for the decision under review;
[199]
• sixth, mere error or irrationality does not of itself demonstrate lack of good faith and bad faith is not to be found simply because of poor decision making, it being a large step to jump from a decision involving errors of fact and law to a finding that the decision-maker did not undertake its task in a way which involves personal criticism;
[200]
• seventh, the errors of fact or law and illogicality will not demonstrate bad faith in the absence of other circumstances which show capriciousness;
[201]
• eighth, the Court must make a decision as to whether or not bad faith is shown by inference from what the Tribunal has done or failed to do and from the extent to which the reasons disclose how the Tribunal approached its task; and
[202]
• ninth, it is not necessary to demonstrate that the decision-maker knew the decision was wrong. It is sufficient to demonstrate recklessness in the exercise of the power.
[203]
[87] In Minister for Immigration and Multicultural and Indigenous Affairs v SBAN,[89] the Full Federal Court considered the nine propositions and added a qualification to the ninth:[90]
[204]
"As with other areas of the law where wrongful intent is in issue, reckless indifference may be the equivalent of intent. But this is not to say that the test is objective. The inquiry is directed to the actual state of mind of the decision-maker. There is no such thing as deemed or constructive bad faith. It is the ultimate decision ... which must be shown to have been taken in bad faith. Illogical factual findings or procedural blunders along the way will usually not be sufficient to base a finding of bad faith. Such defects can be equally explicable as the result of obtuseness, overwork, forgetfulness, irritability or other human failings not inconsistent with an honest attempt to discharge the decision-maker's duty.
[205]
Questions of professional ethics arise. An allegation of bad faith, like an allegation of fraud, should not be advanced by an advocate unless there are proper grounds for doing so ...
[206]
Bad faith may manifest itself in the form of actual bias. Actual bias in this context is a state of mind so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or argument may be presented. It is something more than a tendency of mind or predisposition ... Apprehended bias, resting as it does on what may be observed objectively, as distinct from the actual state of mind of the decision-maker, is quite different. While it has been suggested that actual bias may occur subconsciously, that would not establish bad faith in the relevant sense ..."
[207]
[88] In Minister for Immigration and Multicultural and Indigenous Affairs v NAOS of 2002,[91] the Full Federal Court reviewed the nine propositions in SBBS, the qualification of the ninth in SBAN and doubted the usefulness of the seventh, namely that errors of fact or law and illogicality will not demonstrate bad faith in the absence of other circumstances which show capriciousness. The court said:[92]
[208]
"The concept of capriciousness is encountered in the law in circumstances which are concerned with unreasonableness ... A motivation may be a conscious or unconscious stimulus for action. The qualification added by Heerey and Kiefel JJ in SBAN to the ninth proposition stated by the Full Court in SBBS is important, and we agree with it. Indeed it should be extended to the seventh proposition so as to make it clear that want of bona fides will only be made out in such circumstances where whim or fancy has consciously been preferred to considered judgment."
[209]
[89] The learned authors, Sir William Wade and Professor CF Forsyth observed:[93]
[210]
"'in good faith' means merely 'for legitimate reasons'. Contrary to the natural sense of the words, they impute no moral obliquity."
[211]
They also commented, in a passage referred to with approval by Aronson, Dyer and Groves:[94]
[212]
"Bad faith ... scarcely has an independent existence as an independent ground of invalidity."
[213]
[90] In Queensland Bulk Water Supply Authority v McDonald Keen Group Pty Ltd (in liq),[95] a case concerning an adjudicator's decision under the Payments Act, Holmes JA, with whom Fraser JA and Fryberg J agreed, after considering Holmwood Holdings, SBBS, SBAD and NAOS, said:[96]
[214]
"I incline to the view that the absence of good faith may not be the exact converse of bad faith, and I agree with the learned primary judge that the content of what is required may vary according to context. But I am not entirely convinced of the significance his Honour attributed to the context here, and, more particularly, to the interim character of the arbitrator's decision. In that context, of the Payments Act which is designed to provide an expeditious mechanism for payment, and which allows of further proceedings, unaffected by the arbitrator's decision, to determine the parties' contractual rights, I think there is a good deal to be said for a narrow approach to questions of good faith."
[215]
The narrow approach would require an honest endeavour to carry out the task directed by the Payments Act uninfected by whim or fancy.
[216]
[91] Northbuild submitted that preference for the narrow view ought to be rejected principally because the immigration cases[97] were decided in a different statutory regime containing a true privative clause[98] and that the narrow view was inconsistent with the treatment of "good faith" in other contexts.[99] Northbuild contended that good faith required more than subjective honesty and demanded "a genuine attempt" to perform the task.[100] Northbuild argued that there was no reason to protect the decisions of adjudicators who failed to act conscientiously or acted arbitrarily, capriciously or unreasonably. Northbuild further submitted that the interim nature of the Payments Act was not a sound basis for preferring the narrow view and, while rights were not finally determined, an arbitrator's decision could have significance in as much as large sums of money may be awarded, the award is enforceable immediately, and legal proceedings to rectify wrongly ordered payments could take years. The appropriate test of "good faith" offered by Northbuild in respect of an adjudicator acting under a reference pursuant to the Payments Act was:[101]
[217]
"... the minimum level of fidelity to the task, or conscientious effort to perform the function, that would be objectively expected from a trained, expert adjudicator. This will not be satisfied by arbitrary or capricious decision making, or a decision that no reasonable adjudicator could reach, even if there is no evidence of dishonesty or wilful default."
[218]
[92] CIL responded that this approach looked close to a merits review, noting that the nature of the adjudication process with its constrained time frames, relative informality and interim character carried the likelihood of errors. In John Holland Pty Ltd v TAC Pacific Pty Ltd,[102] Applegarth J had observed:[103]
[219]
"... in circumstances in which adjudicators are required to determine complex legal issues quickly, the detection of flaws in reasoning or poorly expressed reasons in an adjudication decision do not compel the conclusion that the adjudicator did not attempt to understand and apply the contract. Adjudicators provide their determinations in a "somewhat pressure cooker environment". In some instances the adjudicator "cannot possibly, in the time available and in which the determination is to be brought down, give the type of care and attention to the dispute capable of being provided upon a full curial hearing". The Court should be slow to conclude that adjudicators who work under the very tight deadlines imposed by the Act, and who, in seeking to do their best, make a mistake, have not acted in good faith." (citations omitted)
[220]
This, CIL submitted, meant that "good faith" in an adjudication must encompass the probability of error. Northbuild does not contest this proposition, merely that the error not be arbitrary or capricious.
[221]
[93] CIL challenged Northbuild's submission that the serious consequences that flow from the adjudication decision, including the payment of large sums of money, would dictate a more exacting standard for adjudicators. The aim of the legislature is to protect builders and subcontractors from the serious consequences attendant upon a cash flow starvation. Keane JA (as his Honour then was) in R J Neller Building Pty Ltd v Ainsworth[104] noted that the risk that a builder might not be able to refund monies ultimately found to be due, should be regarded as a risk which, as a matter of policy in the commercial context in which the Payments Act applies, "the legislature has, prima facie at least, assigned to the owner".
[222]
[94] CIL submitted that the notion of good faith must be conditioned by the context of the role of an adjudicator under the Payments Act and, while the pre-conditions to the exercise of jurisdiction must be met, the scheme of the Act does not import perfection in the decision-making process and the bar as to what constitutes good faith must be set accordingly. The interim nature of the adjudicator's determination has been identified by this Court in Intero Hospitality Projects Pty Ltd v Empire Interior (Australia) Pty Ltd & Anor.[105] The appropriate redress for an erroneous adjudication, CIL argued, whether in law or in fact, is to bring proceedings which are preserved under the Payments Act in s 100.
[223]
[95] Finally, CIL submitted that the test proposed by Northbuild is unworkable because, in the time constraints, it may not be possible or appropriate to articulate fully the reasons for preferring one expert over another, particularly if the adjudicator has the same expertise as the experts called. CIL contended that no purpose would be served by extensive reasons independent of those embedded within the expert opinion preferred by the adjudicator, particularly as an important purpose of detailed reasons is to facilitate an appeal and there is none from an adjudicator's decision.
[224]
[96] The discussion in Minister for Immigration and Citizenship v SZMDS[106] concerning the relationship between jurisdictional error in respect of reasoning which is "clearly unjust", "arbitrary", "capricious" and "Wednesbury unreasonable"[107] demonstrates that attaching these descriptors to the good faith debate possibly adds little more than did the original understanding of good faith in the review of statutory decision making that the power must be exercised honestly for the purpose for which it was given. As the New South Wales Court of Appeal did in Holmwood, the enquiry should focus more on whether the adjudicator has performed the function demanded by the Payments Act and less on pursuing elusive synonyms, keeping always in mind that the legislative intent dictates a person with recognised expertise in the area be selected for the task by an informed body and this, necessarily, facilitates the rapid decision making required.
[225]
[97] An adjudicator is to decide the amount of the progress payment, if any, to be paid by a respondent to the claimant, the date on which it becomes payable and the rate of interest. How an adjudicator must approach that task is mandated by s 26(2):
[226]
"(2) In deciding an adjudication application, the adjudicator is to consider the following matters only -
[227]
(a) the provisions of this Act and, to the extent they are relevant, the provisions of the Queensland Building Services Authority Act 1991, part 4A;
[228]
(b) the provisions of the construction contract from which the application arose;
[229]
(c) the payment claim to which the application relates, together with all submissions, including relevant documentation, that have been properly made by the claimant in support of the claim;
[230]
(d) the payment schedule, if any, to which the application relates, together with all submissions, including relevant documentation, that have been properly made by the respondent in support of the schedule;
[231]
(e) the results of any inspection carried out by the adjudicator of any matter to which the claim relates."
[232]
[98] There were two major components to CIL's progress claim - the value of the works completed under the contract which led to competing estimates of the extent to which the works had been completed or, in other words, what remained to be done. The second concerned the costs associated with the delay caused by variations directed by Northbuild to be carried out by CIL. In addition to addressing those matters in its response schedule, Northbuild claimed liquidated damages for failure to complete the works on time and the cost to complete those works under the contract which it claimed as a set-off against any amount which might be ordered to be paid to CIL. The adjudicator's decision about those matters is not an aspect of the appeal but they are discussed briefly to comprehend the whole of the adjudicator's reasons and the extent of the work which he needed to do.
[233]
[99] Northbuild contended that the additional works/variations claimed did not constitute variations but were included within the scope of the contract works or were agreed as to price at a meeting on 19 March 2009 and confirmed by an email sent by Mr Andreev of CIL to Northbuild. Clause 6 of the General Conditions of Contract and clause 21 of the Special Conditions identified the process to be followed for variations. Northbuild identified the alleged variations which it said were included within the scope of the works in a table marked "Schedule 2" and incorporated into the payment schedule. There were some variations previously agreed but for which CIL allegedly claimed extra and those were set out in Schedule 2. Overpayments for some variations were also identified by Northbuild in Schedule 2.
[234]
[100] Northbuild contended that the claim was not made in accordance with the contract in as much as cl 3(d) specifically set out the manner in which the progress claim was to be made and alleged that CIL failed to provide sufficient details to identify the works or substantiate the amounts or to provide signed statutory declarations. Although Northbuild complained that the claimed amount was unreasonable and inflated and not payable under the contract, it reviewed each claimed variation and provided its assessment of the maximum possible value of the claim. This was also set out in Schedule 2.
[235]
[101] Northbuild set out in Schedule 3 the works completed at the date of termination of the contract.
[236]
[102] For completeness, Northbuild set out its entitlement to set-off, being liquidated damages payable during the period in which the works were not at practical completion in the sum of $50,000, plus liquidated damages under the head contract for failure to complete on time in the sum of $300,000, together with the costs incurred by Northbuild as a result of CIL failing to complete the works in the sum of $487,308.59. From these amounts was deleted the cash retention of $166,153, making a set-off claim of $671,155.59, the basis for which was set out in detail. Schedule 4 incorporated the amounts of the set-off.
[237]
[103] Northbuild noted that under the contract it was entitled to recover the costs of completing the works that CIL failed to complete by the completion date. It set out detail of those costings. In summary, Northbuild assessed the payment claim and its set-offs as:
[238]
[104] Northbuild complained that the adjudicator failed to have regard to its submissions and thus did not carry out his mandate pursuant to s 26(2)(d). The adjudication reasons are in 133 paragraphs over 23 pages. The adjudicator noted that the adjudication application comprised six large springback folders, including 91 pages of submissions and that the adjudication response comprised two boxes of files, containing 11 folders and 37 pages of submissions. The parties also provided him with many statutory declarations and four expert reports. He noted that there were 73 separate variation claims. The issues involved the interpretation of the contract; whether a variation had been agreed on 19 March 2009; competing assessments of how much of the sub-contract had been completed at the date of termination; the assessment of the variation claims; the entitlement to liquidated damages; and the value of the contract works. The adjudicator appeared particularly frustrated by the internal inconsistency, as he saw it, in Northbuild's material. As early as para [5] of his reasons he noted that:[108]
[239]
"The claimant claims that the Contract works were 95% complete. At [50] in the adjudication response, the respondent says that the WUC was 87% complete. At [96] the respondent adopts 90% and at [214] the respondent adopts 89%. The differences in the respondent's valuations of the Contractworks are not very significant but they illustrate some of the many contradictions in the respondent's submissions and the difficulty of actually valuing the Contract works."
[240]
[105] The adjudicator summarised what was in contention and his decision as follows:[109]
[241]
"6] The difference between the claimant's valuation of $3,151,888 and the respondent's valuation of $2,975,558 is $176,330. That is ultimately the amount in issue when it comes to valuing the Contract works. For reasons following, I finally adopt the claimant's valuation of $3,151,888.
[242]
7] When it comes to variations, the claimant claims $985,586. The respondent allows $102,903. The amount in issue is $882,683. For reasons covered below, I ultimately assess the value of variations at $614,376. That is $511,473 more than the respondent allows.
[243]
8] The respondent claims an entitlement to set off:
[244]
9] The respondent claims that the claimant owes the respondent $1,028,106. For reasons covered below, I am not satisfied that the respondent is entitled to either the alleged liquidated damages or the alleged costs to complete. I allow no set off.
[245]
10] I arrive at an adjudicated amount of $856,594 inclusive of GST calculated as follows:
[246]
[106] The adjudicator noted the dispute between the parties as to whether the respondent lawfully terminated the contract on 4 August 2009 or whether Northbuild repudiated the contract. He eventually concluded, after examining the relevant material, that Northbuild was not justified in terminating the contract for the grounds advanced. He noted that nothing turned on this insofar as the amount of progress payment was concerned, but it did effect the set-off.
[247]
[107] Northbuild had contended that the payment claim made by CIL did not comply with s 17(2) of the Payments Act in that it failed to identify the construction works the subject of the claim. No complaint is made about the adjudicator's finding that the payment claim did so. It was contended by Northbuild that cl 3(d) of the contract specifically set out the manner in which claims were to be made and, since CIL had not complied, no amount was due. The adjudicator assessed those provisions in the contract as machinery provisions and concluded that the Payments Act provided another provision for making a claim and gave effect to it. Again, that finding is not the subject of any complaint. It is the manner in which the adjudicator dealt with the claim for variations (including the delay claims) and the valuation of the work done under the contract which Northbuild contended demonstrated that he did not approach and carry out his task in good faith, or, "have regard to" its submissions. The primary Judge, after quoting extensively from the judgment of Hodgson JA in Brodyn,[110] concluded in a passage about which there can be no criticism:[111]
[248]
"In summary, what is required of an adjudicator is that he or she make a genuine attempt to understand and apply the relevant contract and to exercise the power in accordance with the Act."
[249]
His Honour admonished that in assessing the decision of an adjudicator where there is a claim of want of bona fides:[112]
[250]
"It does not assist in the determination of such a question to simply cherry pick particular paragraphs from a lengthy decision and, by pointing at them alone, attempt to show an absence of bona fides."
[251]
His Honour adopted the approach described by Barrett J in Shellbridge Pty Ltd v Rider Hunt Sydney Pty Ltd[113] and by Hodgson JA in John Holland Pty Limited v Roads and Traffic Authority of NSW.[114] In Shellbridge, Barrett J said:[115]
[252]
"... the whole of the content and tenor of an adjudication may be called in aid in deciding whether particular submissions were considered in the way the Act requires. Inference is permissible. The question is not to be approached solely by reference to the presence or absence of explicit statements referring expressly to the submissions."
"The relevant requirement of s 22(2) [s 26 of the Payments Act] is that the adjudicator consider the provisions of the Act, the provisions of the contract and submissions duly made. If an adjudicator does consider the provisions of the Act and the contract which he or she believes to be relevant, and considers those of the submissions that he or she believes to have been duly made, I do not think an accidental or erroneous omission to consider a particular provision of the Act or a particular provision of the contract, or a particular submission, could either wholly invalidate a determination, or invalidate it as regards any part affected by the omission. One could express this by saying that such an accidental or erroneous omission does not amount to a failure to comply with s 22(2), so long as the specified classes of considerations are addressed ..."
[255]
Although not referred to by the primary Judge, in John Holland Basten JA[117] noted, firmly, that authority to decide the scope of the right conferred by the Act or, if relevant, the scope of the right under the construction contract rests conclusively with the adjudicator.
[256]
[108] The primary Judge also referred to observations of Hodgson JA in Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd where he expressed a view of the role of the adjudicator not materially different from that of Basten JA:[118]
[257]
"The adjudicator's duty is to come to a view as to what is properly payable, on what the adjudicator considers to be the true construction of the contract and the Act and the true merits of the claim."
[258]
At a minimum, the primary Judge noted, the adjudicator must consider the complete submissions of the claimant and the respondent.
[259]
[109] Northbuild pointed to the following pages in the adjudicator's reasons to demonstrate that he had disregarded its submissions:
[260]
"30] It is unrealistic for the respondent to expect an adjudicator to sort through 73 variation claims [the majority of which are each for less than $5,000] and the volumes of material provided by the parties with respect thereto and work out the extent, if any, to which the alleged additional work is work included in the scope of the original contract."
[261]
"48] The payment schedule is a voluminous document. It includes 4 schedules, each a spreadsheet. Mr. Haughton [the QA/Administration Manager with Northbuild] does not say where in the payment schedule, or schedules attached, the alleged specific amounts are shown. Mr. Haughton does not say for how many of the 73 variation claims an amount was allegedly agreed. Nowhere does Mr. Haughton or the respondent set out a list of the allegedly agreed amounts or a total. The respondent expects the adjudicator to work out for himself the alleged agreed amounts."
[262]
[110] The reference to the variations agreed is a reference to an alleged agreement reached between Northbuild and CIL on 19 March 2009 relating to a number of variations. Northbuild contended that an agreement had been reached between their respective representatives at a meeting that day while CIL contended that it had not. In its response schedule Northbuild dealt with the 73 claimed variations and under the heading "Total Amount Approved" identified particular sums which it contended had been agreed. Mr Andreev (of CIL) in his statutory declaration said that each of the variations had been worked through with Northbuild and Northbuild proposed payment of certain amounts for certain variations but that CIL was to review all the figures proposed by Northbuild. This account was supported by another CIL employee. On the other hand, Mr Haughton and Mr Findlay, Northbuild's construction director, broadly stated that a number of variations were agreed at a specific amount and indicated that they were in the payment schedule. The email of 24 March 2009, which Northbuild, through Mr Haughton, contended evidenced the agreement on 19 March 2009 about most, if not all, the variations was examined by the adjudicator. He concluded that it did not confirm the alleged agreement by Northbuild or its terms:[119]
[263]
"Without evidence of the actual words spoken, I am not prepared to make any assumption that there was an agreement made or as to the terms of any agreement made at the meeting."
[264]
This was a conclusion that the primary Judge held to be both reasoned and reasonable and clearly he was correct.
[265]
[111] As the primary Judge noted, the adjudicator dealt with the claim under four broad headings which reflected the claim and the response:
[266]
• The liability to pay for, and the value of, variation work.
[267]
• Northbuild's claim for liquidated damages for failure to complete the works by the date for practical completion.
[268]
• Northbuild's claim for damages based on the termination of the construction contract and the cost to complete the work required under the contract.
[269]
His Honour dealt with those challenged and the adjudicator's approach to them.[120]
[270]
[112] CIL claimed that the work under the contract excluding variations was 95 per cent complete at termination. The adjudicator noted the three different percentages put forward in different places by Northbuild in its response material. Northbuild was critical about the manner in which the adjudicator dealt with the material it provided concerning the works completed under the contract. Northbuild contended it strongly indicated a want of bona fides in the adjudicator because he gave no detailed reasons about his rejection of the material. The adjudicator noted that Mr Haughton had exhibited corrected assessment sheets to his statutory declaration which was not identical to the assessment sheet, schedule 3 to the payment schedule and that CIL had had no opportunity to address it. The adjudicator described Northbuild's assessment of the works completed under the contract:
[271]
"119] The assessment sheets are spreadsheets that list buildings, units within the buildings and 6 categories of work for each unit. Each category of work within each unit is then ascribed a value. Then the percentage complete of that item is assessed and an amount is determined based upon the value which has been ascribed to the item. The many hundreds of individual amounts are then added and the total compared to the Contract Sum is taken to be the percentage complete. This seems a very cumbersome, time consuming and not very accurate method of assessing the value of the work. I am not satisfied that that method can actually value the whole of the Contract works to within a percentage or two or even 5%. It still involves subjective assessments."
[272]
[113] The primary Judge did not accept that Northbuild was justified in criticising those reasons. He said:[121]
[273]
"The arbitrator is a person who is selected for his particular skills and abilities with respect to the assessment of disputes under building contracts and this type of view is one which a person in the arbitrator's position should be able to form if it is appropriate."
[274]
It is clear that the adjudicator considered Northbuild's submissions about the value of the work but did not accept them. He was entitled not to do so. It was not a rejection on a whim; he gave a proper reason for doing so. His Honour was correct.
[275]
[114] The adjudicator then considered the methodology of CIL with respect to the works completed under the contract. He noted that Mr Andreev had assessed the contract works at 95 per cent complete. He added:[122]
[276]
"I am satisfied that his assessment is reasonable. I do not consider that by going through the many hundreds of individual assessments of individual items and examining the photographs and notations in the two lever arch folders relied upon by Mr. Haughton I could arrive at a more accurate assessment than that made by Mr. Andreev who has intimate knowledge of the project."
[277]
"The adjudicated amount is only an amount paid on account. For the purpose of a progress payment it is not necessary for me to carry out the detailed examination that the respondent would have me carry out. The parties can have the exact amount determined in other proceedings. I am satisfied that the value of the Contract works is the amount assessed by the claimant."
[278]
[115] The primary Judge rejected the submission of Northbuild that it was irrational to prefer the approach of CIL to the detailed analysis put forward by Northbuild. The adjudicator had plainly examined Northbuild's material. He did not choose to engage in the particular process advanced by Northbuild. His Honour did not regard this as indicative of a failure to make a genuine attempt to exercise the power given under the Payments Act. His Honour observed:[124]
[279]
"An application of this sort is not an appeal from a decision of an arbitrator [sic] but a much more limited examination of what has been done. That examination has to take place within the confines of the Payments Act and its purposes and, in making that examination, it is essential that the context of the legislative provisions and the particular case itself be taken into account."
[280]
As his Honour realised, the purpose for the progress claim process in Pt 3 of the Payments Act and the considerable administrative edifice established by it, is to ensure that only appropriately qualified persons can be adjudicators and only appointing entities who are registered as having sufficient understanding of what is required in respect of any particular adjudication are given the power of appointment. As the adjudicator and the primary Judge recognised, it is a fundamental mistake to regard the adjudication process as akin to a civil proceeding or to an arbitration. To do so would defeat the point of the Payments Act.
[281]
[116] An adjudicator must have regard to the provisions of the construction contract when adjudicating the dispute between the parties. The provisions of the contract about the valuation of variations was, therefore, of importance. The adjudicator considered Northbuild's submissions about the construction of clauses 6 and 21. Northbuild contended that since CIL had allegedly failed to comply with those clauses in relation to each variation, no amount was due and payable for the additional work. The adjudicator disagreed with Northbuild's approach to those provisions in the contract. He observed:[125]
[282]
"The respondent does not appear to appreciate the contradiction between contending that no amount is due and contending that an amount has been agreed."
[283]
Northbuild did not contend before the adjudicator that it did not orally direct variations.
[284]
[117] Clause 6(a) provided that CIL must not vary the contract works except in accordance with a written direction from Northbuild. In default of a written direction, the adjudicator concluded that Northbuild's remedy lay in damages and damages may not be claimed under the Payments Act. He concluded that cl 6(a) did not provide any reason for withholding payment for any variations.
[285]
[118] Clause 6(b) provided that CIL must notify Northbuild immediately upon becoming aware of any variation. The adjudicator concluded that any remedy was in damages and, therefore, provided no ground for withholding payment. He analysed cl 21(a) (which he rightly thought poorly drafted) which provided that additional works at Northbuild's request should not be carried out unless there was a written instruction. The adjudicator concluded that failure to have a written instruction would sound only in damages rather than precluding a payment claim. He observed that Northbuild's extensive submissions relating to waiver and estoppel were irrelevant.
[286]
[119] Clause 6(d) of the contract provided for the valuation of variation work:
[287]
"The price of a Variation shall be determined by agreement between the Builder and the Subcontractor, or in the absence of such agreement, the Builder must make a fair and reasonable valuation of the Variation."
[288]
Northbuild contended that CIL was not entitled to claim any amount beyond the amount previously agreed on 19 March 2009. The adjudicator noted that Northbuild did not state what this alleged amount was.
[289]
[120] The primary Judge noted that there were no objective parameters in the contract to guide the valuation of variations and that the adjudicator's task was similar to that described in cl 6(d), that is, "to make a fair and reasonable valuation of the variation work".[126] His Honour pointed out that the adjudicator having rejected Northbuild's contention that an agreement had been reached on 19 March 2009 about the value of some of the variations, the foundation for many of Northbuild's submissions was removed.
[290]
[121] The adjudicator noted that the payment claim attached to the spreadsheet with 73 variation claims amounted to $985,586. The amount allowed for variations by Northbuild was $102,903. The parties had made voluminous submissions about each of the variations supported by volumes of documents. The adjudicator said:[127]
[291]
"However, for the purposes of a progress payment, I don't consider it necessary for me to value every variation individually and decide every issue over each variation."
[292]
Northbuild contends that this is indicative of a failure by the adjudicator to make a bona fide endeavour to enter into the adjudication. There is no hint in his reasons and the reference to the voluminous material that the adjudicator had not considered all schedules, the full reports, statutory declarations and all of the submissions. Northbuild submitted that the adjudicator ought to have rejected CIL's experts. The adjudicator approached the expert opinions by noting that Mr O'Connor of Turner & Townsend was a quantity surveyor with considerable experience who worked with two assistants but he did not find the report of assistance. He commented that Mr O'Connor had not "even provided a total of the value he arrived at".[128] He noted values for 76 individual variations and said:[129]
[293]
"The respondent appears to assume that I will add up all the individual amounts. I don't know whether they add up to the total of $102,903 allowed by the respondent in the payment schedule. The respondent does not provide a total. I note that the values allowed by Mr O'Connor for individual variations are not always the amount allowed in the payment schedule."
[294]
As an example, the adjudicator referred to VO3 where Northbuild showed the amount approved in the Payment Schedule at $9,240 and Mr O'Connor showed the value as $7,111. The adjudicator noted that it was not open to Northbuild to claim in the adjudication response a value less than that allowed by it in the payment schedule. The major flaw in the Turner & Townsend report, he thought, was that the variations allegedly agreed at the meeting on 19 March 2009 had not been valued in the report. Since the adjudicator was not persuaded of that agreement, if the report were to have any value, it should have valued all the variations.
[295]
[122] The adjudicator demonstrated his difficulty with Northbuild's submissions by referring to [183] of the adjudication response:
[296]
"In the even [sic] that the adjudicator is minded to award a value for such variations (other than those which have already been valued by agreement) then the Respondent submits that the adjudicator ought to adopt the values attributed to those variations in the Turner & Townsend report rather than the Curry and Brown [sic] report."
[297]
But, the adjudicator noted Northbuild did not state what the amount was that had already been agreed and what the additional amount was that had been attributed by Turner & Townsend. He complained that Northbuild in its 37 page submission in the adjudication response did not identify which of the alleged 73 variations were in the first category and which were in the second:[130]
[298]
"Presumably the respondent expects the adjudicator to wend his way through the 3 versions attached to the email [of 24 March 2009], the schedules attached to the payment schedule and the Turner and Townsend report to find out which variations the respondent alleges were agreed and the amounts agreed and which are the other variations and the amounts attributed by Turner and Townsend."
[299]
The adjudicator indicated that he was not prepared to undertake "such a mammoth task".
[300]
[123] The primary Judge did not suggest that an adjudicator should undertake a task of that dimension, given the purpose and object of the Payments Act. The Turner & Townsend report had not been included in the payment schedule so that CIL had had no opportunity to comment on it. The Currie & Brown report had been included in the adjudication application to which Northbuild was able to respond. It was prepared by Mr John Roberts, a quantity surveyor with considerable experience. The adjudicator said that he was impressed with his approach which was appropriate for valuing progress payments on account with 73 variation claims. Mr Roberts started with the 18 more substantial variations for which CIL claimed $793,507 which he valued at $404,082. He took 15 variations with a claimed value exceeding $5,000 each for which $110,254 was claimed and arrived at a value of $59,759. Mr Roberts then took the remaining 40 variations for which the claimed value of each was below $5,000 and assumed a value of 48 per cent of the amount claimed for each valuation. He assessed at $111,258 the part of the variation costs attributable to delay and disruption associated with those variations. His total of $614,376 was considerably less than that claimed by CIL. The adjudicator concluded that Mr Roberts' valuations were conservative but reasonable.
[301]
[124] This approach, Northbuild contended, was another example of the adjudicator failing to give proper attention to the detail of its submissions. The adjudicator said that it was not just a matter of agreeing or disagreeing with one party's valuation or the other, what had to be determined in an adjudication under the Payments Act was:[131]
[302]
"... a value for the purpose of a payment on account. The final determination of the value of each variation is a different matter. It is for expert determination, litigation or arbitration. It does not appear to me that the Act contemplates that the adjudicator will separately value 73 variation claims. The Act contemplates an expedited process not the process that would be involved in separately valuing every single variation. That could take many weeks and would necessitate seeking countless further submissions from the parties. It seems to me that for the purpose of a progress payment on account, the pragmatic approach of Mr Roberts to valuing variations is just what the contract and the Act contemplate."
[303]
The primary Judge noted that the abbreviated method of valuation was, largely, only with respect to the claim for the items less than $5,000 and, given the intention of the Payments Act and the objects for an adjudication under that Act, he was not persuaded that this demonstrated a want of dedication to the task. As his Honour noted, the adjudicator clearly gave consideration to all the material provided by Northbuild but, in effect, preferred the approach contended for in its "fall back" position by CIL - that of Mr Roberts. The adjudicator approached this aspect of his task fully cognisant of all the competing contentions. He made a genuine and honest attempt to give effect to his understanding (which has not been shown to be erroneous) of what the Payments Act and the contract required him to do. Even on the broader test advocated by Northbuild, there was nothing capricious or arbitrary in what he did.
[304]
[125] The adjudicator also needed to deal with the value of the variations which included the delay cost in carrying out those variations. He noted that Northbuild had suspended the works for funding reasons for four months and that CIL on resumption had to remobilise its workforce. He accepted that the variations caused CIL to take longer to carry out the works than scheduled, but, like Northbuild, he was unable to ascertain within each variation claim that aspect of the claim which could be attributed to delay events. He said he could "see no better way to value the extra cost consequent upon the extra time than that adopted in the Currie and Brown report".[132] He noted that the expert reports of King Planning and Solid Support, said it would be time consuming, "perhaps even an impossible task", to ascertain within each variation claim that aspect of the claim which could be attributed to delay events.
[305]
[126] Northbuild had argued that these were really extension of time issues or a matter for damages. The adjudicator disagreed. He concluded that the delay was an integral part of the assessment of the value of the variations. The primary Judge observed there was nothing remarkable in preferring the Currie & Brown approach. No error is discernable in his understanding of the contract and the Payments Act.
[306]
[127] Northbuild contended that the adjudicator did not allow its voice to be heard because he disregarded its submissions and effectively failed to accord it procedural fairness. His Honour disagreed adding:[133]
[307]
"The adjudicator is not required to set out every detail of every part of every report or other document provided by a party to the adjudication. An adjudicator must, in compliance with the provisions of the Act, consider all the material and, in setting out the reasons, should either explicitly or implicitly state that regard has been had to them."
[308]
As will be apparent from what has gone before, his Honour was correct to conclude that the adjudicator had appropriately considered all that he was required to consider under the Payments Act including the very detailed submissions from Northbuild.
[309]
[128] Northbuild has not demonstrated that the learned primary Judge fell into error in the ways contended for in the grounds of appeal. I would dismiss the appeal with costs.
[46]Payments Act, s 31(4)(a) and (b). It is s 31(4)(a)(iii) which is said to be "privative" in nature.
[330]
[49]Justice and Other Legislation Amendment Act 2007 (Qld).
[331]
[50]Craig v South Australia(1995) 184 CLR 163; [1995] HCA 58; State of Queensland v EpocaConstructions Pty Ltd[2006] QSC 324 per Philippides J at [23]. See the discussion by Vickery J in Grocon Constructors Pty Ltd v Planit Cocciardi Joint Venture (No. 2)[2009] VSC 426.
[69]Justice and Other Legislation Amendment Bill 2007 Explanatory Notes, p 22: "The amendment [of the Judicial Review Act1991] will fully exempt the decisions of adjudicators made under the Building and Construction Industry Payments Act2004 from review under the Judicial Review Act 1991. This amendment is consistent with the objective of the Building and Construction Industry Payments Act2004 to create a dispute resolution process whereby adjudicators can quickly resolve payment disputes between parties to a construction contract on an interim basis."
[346]
[70]Queensland Building Services Authority Act 1991 (Qld), s 97(2).
[81] The expression "good faith" in s 107 of the Payments Act in a different Part of the Act throws little light on its meaning although Hodgson JA in John Holland Pty Limited v Roads & Traffic Authority of New South Wales & Ors[2007] NSWCA 19 at [60] and [61] suggested that it would be rare that a decision could be invalidated for lack of bona fides by conduct that would not also lose the immunity given by the equivalent of s 107. Those words are not actually in Pt 3 Div 2 when referring to an adjudicator's duties but imposed as part of the traditional administrative law armory for limiting the operation of privative clauses, see discussion in Aronson, Dyer & Groves, Judicial Review of Administrative Action 4th ed, Lawbook Co, 2009 in Chapter 17.
[83] Ibid at 615 (see also at 616-7), Basten JA doubted its applicability in circumstances where there is no privative provision, in Coordinated Construction Co Pty Ltd v JM Hargreaves (NSW) Pty Ltd[2005] NSWCA 228; (2005) 63 NSWLR 385. In Holmwood Holdings Pty Ltd v Halkat Electrical Contractors Pty Ltd[2005] NSWSC 1129 Brereton J, at first instance, at [68], noted this comment but suggested that Hodgson JA was saying no more than that there were certain minimum requirements of validity which could not be ousted by the scheme of the Act, which included, at least, those referred to by Dixon J in Hickman. Basten JA did not suggest that an adjudicator is not required to carry out his task in good faith. In The King v Murray; Ex parte Proctor(1949) 77 CLR 387; [1949] HCA 10 Dixon J, again, in respect to a privative provision, spoke of an honest attempt to deal with the subject matter of the power, at 400.
[357]
[84] As by Brereton J in Holmwood Holdings Pty Ltd v Halkat Electrical Contractors Pty Ltd[2005] NSWSC 1129 at first instance.
[358]
[85] As in Queensland Bulk Water Supply Authority v McDonald Keen Group Pty Ltd (in liq)[2010] QCA 7.
[97]SBBS v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 194 ALR 749; [2002] FCAFC 361; Minister for Immigration and Multicultural and Indigenous Affairs v SBAN[2002] FCAFC 431.