Supreme Court of WA|2011-07-14|Before: Martin J

RE GRAHAM ANSTEE-BROOK; EX PARTE MOUNT GIBSON MINING LTD [2011] WASC 172 (14 July 2011)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : RE GRAHAM ANSTEE-BROOK; EX PARTE MOUNT GIBSON MINING LTD [2011] WASC 172

MATTER : An application for a writ of certiorari against Mr Graham Anstee-Brook, Adjudicator appointed under the Construction Contracts Act 2004 (WA)

Prerogative writ - Certiorari - Order nisi - Threshold for grant - Jurisdictional error - Reasons of adjudicator - Authority of Superintendent's Representative - Procedural fairness - Denial - Privative clause

Second Respondent : Mr C Zelestis QC & Mr M Feutril

Anisminic Ltd v Foreign Compensation Commission [1968] UKHL 6; [1969] 2 AC 147

Bredyn Pty Ltd v Davenport [2004] NSWCA 394

Craig v The State of South Australia [1995] HCA 58; (1995) 184 CLR 163

Donges v Ratcliffe [1975] 1 NSWLR 501

Eclipse Resources v Department of Environment and Conservation [2010] WASC 360

General Steel Industries Inc v Commissioner for Railways of New South Wales [1964] HCA 69; (1964) 112 CLR 125

Inland Revenue Commissioners v National Federation of Self-Employed And Small Businesses Ltd [1981] UKHL 2; [1982] AC 617

Kirk v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) (2010) 239 CLR 531

McKay v Commissioner of Police [2006] WASC 189

Monaco v Arnedo Pty Ltd (Unreported, WASC, Full Court, Library No 940481, 6 September 1994)

O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19

Pantorno v The Queen [1989] HCA 18; (1986) 166 CLR 466

Police & The State of South Australia v Lymberopoulos [2007] SASC 247; (2007) 98 SASR 433

R v Watson; Ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248

Re Baker; Ex parte Johnston (1981) 55 ALJR 191

Re Carey; Ex parte Exclude Holdings Pty Ltd [2006] WASCA 219; (2006) 32 WAR 501

Re Cazaly Iron Ltd v The Hon John Bowler MLA, Minister for Resources & Ors [2006] WASCA 282

Re Her Honour Judge Schoombee; Ex parte Attorney General for Western Australia [2011] WASC 23

Re McTiernan; Ex parte Coogee Coastal Action Coalition Inc [2004] WASC 264

Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

Talbot v Lane (1994) 14 WAR 120

The Queen v Cook; Ex parte Twigg (1980) 147 CLR 15; [1980] HCA 36

Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80

Woodley v Minister for Indigenous Affairs [2009] WASC 251

1 The applicant seeks on its amended notice of originating motion of 1 June 2011 an order nisi for a writ of certiorari to quash the decision of the first respondent, who was appointed as an adjudicator under the Construction Contracts Act 2004 (WA) in respect of a construction contract dispute between the applicant (Mount Gibson) and the second respondent (Downer).

2 Essentially, Downer claims (as contractor) against Mount Gibson (as principal) for payment in respect of work done under arrangements concerning the construction of a road in the mid-west region of Western Australia. Mount Gibson refused the payment sought by Downer. The payment dispute was referred to Mr Anstee-Brook (first respondent - who does not participate) for adjudication under the Construction Contracts Act.

3 Part of Mr Anstee-Brook's determination of 19 April 2011, awarded Downer $1,269,060.50 in respect of services performed as regards rock blasting and removal costs. The adjudicator rejected Mount Gibson's position on this issue.

4 At the heart of the dispute is an oral agreement contended for by Downer, asserted as made between its representative, Mr Samir Derviskadic, with Mr Greg Smith, the Superintendent's Representative (as that position is understood under the construction contract).

5 Mr Anstee-Brook found first that terms of an oral agreement regarding the level of rate remuneration payment to Downer (ie, the rates for rock blasting work) had been concluded on 27 August 2010. There appears to have been little, if any, dispute over an extension of time being allowed to Downer by the Superintendent for it to complete the extra rock blasting and removal work. The issue of controversy appears only to have been over the rate at which payment was to be rendered to Downer for this work, with Mount Gibson contending for a lesser global rate.

6 On the question of the rate of payment as agreed between Downer's representative and the Superintendent's Representative, the only challenge is to the extent of the Representatives' authority to conclude such an agreement binding Mount Gibson.

7 The present application by Mount Gibson for prerogative relief does not challenge what the adjudicator found to have passed verbally between Smith and Derviskadic in the relevant oral discussions in August 2010. Rather, Mount Gibson simply refutes the authority of the Superintendent's Representative to bind it by his concluded oral arrangements with Downer's representative.

8 An authority challenge by Mount Gibson was raised before Mr Anstee-Brook. But it was rejected. The adjudicator found that the Superintendent's Representative did have authority to bind Mount Gibson to such an oral agreement, on the basis of either express or alternatively, ostensible authority.

9 On this application for prerogative relief by certiorari, Mount Gibson contends that the adjudicator made jurisdictional errors, as well as errors of law ascertainable on the face of the record regarding the authority issue which are sufficient to sustain the grant of prerogative relief quashing the adjudicator's decision.

10 The application for an order nisi was made returnable before me in chambers on Wednesday, 1 June 2011, at a special appointment. Pursuant to O 56 r 1(1)(a) and O 56 r 2(1) of the Rules of the Supreme Court 1971 (WA) (RSC), it is a common practice for the return of applications for orders nisi seeking certiorari to be moved ex parte, contrast RSC O 56 r 7 as regards the hearing of an application for an order absolute. However, in this case, Downer, the second respondent, attended. No objection was raised by Mount Gibson to Downer being heard in opposition to the making of the order nisi that was sought. Nor was there objection raised to Mount Gibson amending the grounds of its originating motion on the day of hearing.

11 Both Mount Gibson and Downer filed extensive written submissions in support of their respective positions regarding an order nisi. Those submissions were then buttressed by oral arguments put by respective senior counsel. At that time both Mount Gibson and Downer indicated through counsel that should I be eventually persuaded at the requisite standard to grant an order nisi, that Mount Gibson's future application seeking the order nisi be made absolute, should be made returnable before a single judge, rather than before the Court of Appeal: see RSC O 56 r 2(2)(b)(i). In practical terms, given such a position, should I be persuaded in due course to grant an order nisi, it is likely that Mount Gibson's motion seeking an order absolute would once again be returnable before me in court or chambers. That being the prospect, I have at least some longer term conceptual comfort within the task of assessing whether Mount Gibson has, at this point, raised an arguable case for an order nisi which may ultimately be later capable of being made absolute at a future hearing before me. That assists me in the personal resolution of any conceptual dichotomy between the arguability of a ground that nevertheless may not have reasonable prospects of success of sustaining an order absolute: see Woodley v Minister for Indigenous Affairs [2009] WASC 251 [37].

12 For convenience, I will set out the grounds raised under pars (a), (b) and (b1) of Mount Gibson's amended originating motion. The arguability of each ground is important and should be individually assessed: see RSC O 56 r 6:

(a) The First Respondent's determination that the Applicant was obliged to pay the Second Respondent $1,269,060.50 in respect of the claim for drilling and blasting and rock excavation of $2,404,326.98 (Rock Claim) is vitiated by error of law on the face of the record.

Particulars

(i) The record included, inter alia, the Second Respondent's Adjudication Application and the provisions of a contract between the parties dated 29 July 2011 (the Contract).

(ii) According to the Adjudication Application, the Rock Claim was calculated on the basis of rates claimed by the Second Respondent to have been the subject of an oral agreement between the Second Respondent's representative and the Superintendent's Representative on 27 August 2010.

(iii) The alleged oral agreement was inconsistent with the terms of the Contract, clause 43 of which stipulated that none of the provisions of the contract could be varied except in writing.

(iv) Further, the alleged oral agreement was one which the Superintendent's Representative did not have authority to make, having regard to:

(1) the confined nature of the Superintendent's functions under the Contract and, in particular, the specific provisions of clause 36.1 of the Contract;

(2) the fact that, if and to the extent that a superintendent under a construction contract is an agent for the owner, the superintendent's authority does not extend to varying the terms of the contract on behalf of the owner otherwise than in accordance with any variation mechanism prescribed by the contract itself.

(v) In view of the matters alleged in particulars (iii) and (iv) above, the Second Respondent was not entitled to rely on any alleged oral agreement as a basis for claiming that the rates for payment were otherwise than as prescribed by the Contract.

(vi) Further, the record included the First Respondent's reasons for his determination.

(vii) In his reasons, the First Respondent erred in law in that he:

(1) concluded that the Superintendent's Representative had actual authority to make the alleged oral agreement without providing any reasons for that conclusion and without having regard to, and notwithstanding, the matters alleged in particulars (iii) and (iv) above.

(2) concluded that the Superintendent's Representative had ostensible authority to make the alleged oral agreement without providing any reasons for that conclusion and without having regard to the matters alleged in particulars (iii) and (iv) above.

(3) concluded that the Applicant was estopped from denying the efficacy of the alleged oral agreement without having regard to, and notwithstanding, the matters alleged in particular (v) above.

(b) The First Respondent's determination that the Applicant was obliged to pay the Second Respondent $1,269,060.50 in respect of the Rock Claim is vitiated by jurisdictional error.

Particulars

(i) The First Respondent failed to give any or adequate reasons for the conclusions that:

(1) the Superintendent's Representative had actual authority to make the alleged oral agreement; and

(2) the Superintendent's Representative had ostensible authority to make the alleged oral agreement.

in contravention of s 36(d) of the Construction Contracts Act 2004 (WA).

(ii) The First Respondent made his determination on a basis not argued by either party, namely, that the Superintendent's Representative had ostensible authority to make the alleged oral agreement, and in so doing denied the Applicant natural justice.

(b1) The First Respondent's determination that the Applicant was obliged to pay the Second Respondent $1,269,060.50 in respect of the Rock Claim should be quashed as the First Respondent made his determination:

(i) materially on the basis that the Superintendent's Representative had ostensible authority to make the oral 'August Agreement' on behalf of the Applicant; and

(ii) without the Applicant being given an opportunity to address the First Respondent on that matter; and, so

(iii) without the Applicant being accorded procedural fairness.

Certiorari against adjudicator under the Construction Contracts Act 2004

13 As explained in Craig v The State of South Australia [1995] HCA 58; (1995) 184 CLR 163, 175 by the plurality (Brennan, Deane, Toohey, Gaudron and McHugh JJ):

[C]ertiorari is a process by which a superior court, in the exercise of original jurisdiction, supervises the acts of an inferior court or other tribunal. It is not an appellate procedure enabling either a general review of the order or decision of the inferior court or tribunal or a substitution of the order or decision which the superior courts thinks should have been made. Where the writ runs, it merely enables the quashing of the impugned order or decision upon one or more of a number of distinct established grounds, most importantly jurisdictional error, failure to observe some applicable requirement of procedural fairness, fraud and 'error of law on the face of the record'. Where the writ is sought on the ground of jurisdictional error, breach of procedural fairness or fraud, the superior court entertaining an application for certiorari can, subject to applicable procedural and evidentiary rules, take account of any relevant material placed before it. In contrast, where relief is sought on the ground of error of law on the face of the record, the superior court is restricted to the 'record' of the inferior court or tribunal and the writ will enable the quashing of the impugned order or decision only on the ground that it is affected by some error of law which is disclosed by that record.

14 In Craig, the plurality explained jurisdictional error at between (176 - 180). From (180 - 183) they explained the history of the writ of certiorari and its availability in circumstances where an error of law on the face of the record could be established. A conceptual distinction between certiorari grounded upon jurisdictional error in contrast to certiorari grounded upon error of law on the face of the record is readily apparent.

15 As regards certiorari, the plurality's observations at between (176 - 180) draw a distinction between two scenarios of jurisdictional error. The first is the potential grant of certiorari against the orders of inferior courts. The second manifests the wider scope of certiorari where there is jurisdictional error by 'those other tribunals exercising governmental powers which are also amenable to the writ' (176). At (179) the plurality said this about the distinctions in assessing jurisdictional error as between administrative tribunals and inferior courts:

If such an administrative tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or reach a mistaken conclusion and the tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.

16 Accordingly, the scope of certiorari as regards potential jurisdictional error vis a vis tribunals is wider (i.e. in contrast to the position of an inferior court). At (179) the plurality in Craig continued:

In contrast, the ordinary jurisdiction of a court of law encompasses authority to decide questions of law, as well as questions of fact, involved in matters it has jurisdiction to determine. The identification of relevant issues, the formulation of relevant questions and the determination of what is and what is not relevant evidence are all routine steps in the discharge of that ordinary jurisdiction. Demonstrable mistake in the identification of such issues or the formulation of such questions will commonly involve error of law which may, if an appeal is available and is pursued, be corrected by an appellate court and, depending on the circumstances, found an order setting aside the order or decision of the inferior court. Such a mistake on the part of an inferior court entrusted with authority to identify, formulate and determine such issues and questions will not, however, ordinarily constitute jurisdictional error. Similarly, a failure by an inferior court to take into account some matter which it was, as a matter of law, required to take into account in determining a question within jurisdiction or reliance by such a court upon some irrelevant matter upon which it was, as a matter of law, not entitled to rely in determining such a question will not ordinarily involve jurisdictional error.

17 In the present case, the first issue that arises conceptually, as regards the potential grant of an order nisi by writ for certiorari is whether the orders made by Mr Anstee-Brook under the Construction Contracts Act as adjudicator, should be assessed as akin to orders of a tribunal. Alternatively, is an adjudicator under this Act to be viewed from the perspective of a narrower scope for certiorari in respect of jurisdictional error, akin to that of an inferior court?

18 By reference to the core nature of the adjudication process described in Part 3 Div 3 and Div 4 of the Construction Contracts Act (s 30 - s 41), my assessment is that the intrinsic nature of the process involving an adjudicator acting under the Construction Contracts Act is more akin to that of a tribunal process, rather than the curial processes of an inferior court. I note that under Part 4 of the Construction Contracts Act (s 48(1)):

An individual is eligible to be a registered adjudicator if he or she has the qualifications and experienced prescribed by the regulations.

19 I refer at greater length in due course to the scope and structure of the Construction Contracts Act. But for present purposes, and at least at the order nisi level, I propose to approach the matter upon the basis of a wider potential scope for the applicant to establish potential jurisdictional error in accordance with the Craig dichotomy.

20 In this particular case, the first respondent was a qualified legal practitioner. But by reference to the Act and its Regulations, it seems that a legal qualification is not a necessary prerequisite for appointment as an adjudicator in terms of eligibility.

21 Regulation 9(2) of the Construction Contracts Regulations 2004 (WA) permits diverse classes of persons to be appointed to the position of adjudicator including individuals with degrees from universities or other tertiary institutions not just in law, but extending to the fields of architecture, engineering, quantity surveying, building surveying, building, construction, and project management. See also subregulations 9(3) and 9(4).

22 Accordingly, the jurisdictional error is to be assessed here, in my view, by reference to the standard applicable to tribunals, rather than to an inferior court.

Threshold for order nisi for prerogative writ of certiorari

23 In Thiess Pty Ltd v MCC Mining (Western Australia) Pty Ltd [2011] WASC 80 Corboy J observed upon what might be assessed as some differences in local curial approaches to the evaluation standard used by a court in deciding whether or not it is appropriate to grant an order nisi for certiorari. Traditionally, the threshold for order nisi relief has not been a high one. A low threshold is conformable with a practice identifiable under the rules of this Court, essentially envisaging an application for the order nisi made on an ex parte basis, with the order (if obtained) then made returnable seeking the order absolute before the Full Court (now the Court of Appeal).

24 In Re Cazaly Iron Ltd v The Hon John Bowler MLA, Minister for Resources & Ors [2006] WASCA 282, in the context of assessing an application to amend grounds in an order nisi already granted, Buss JA applied a threshold grounded upon the notion of arguability of grounds relied upon, see [6], [76] (reasonably arguable), [80] (reasonably arguable case), at [80] 'not so clearly untenable that it cannot succeed', and [86] (not reasonably arguable).

25 At [55], by reference to the speech of Lord Diplock in Inland Revenue Commissioners v National Federation of Self-Employed And Small Businesses Ltd [1981] UKHL 2; [1982] AC 617, followed in Western Australia in Talbot v Lane (1994) 14 WAR 120, 152 - 153 by Malcolm CJ (with whom Kennedy and Ipp JJ agreed), Buss JA observed:

[55] In my opinion, the test to be applied and the approach to be taken at the order nisi stage, where prerogative relief is not sought in respect of quasi criminal proceedings, are, in general, those approved by the Full Court in Talbot.

If, however, the application raises matters of factual and legal complexity, a 'quick perusal of the material then available' may not be sufficient to determine whether an applicant has a reasonably arguable case. Some greater scrutiny may be necessary. The observations of McLure J (as she then was) in Re McTiernan are not inconsistent with Talbot. The test and approach at the order nisi stage also apply to an application for leave to amend the grounds of an order nisi, at least where the application is made before its return. If the proposed amended ground is so clearly untenable that it cannot succeed, leave to amend should not be granted. Also, there must be evidence to support any factual findings which the applicant asserts in the proposed amended grounds.

27 I refer as well to the subsequent observations by Martin CJ in McKay v Commissioner of Police [2006] WASC 189 [3] and in Woodley v Minister for Indigenous Affairs [2009] WASC 251 [37], as to it being inappropriate to grant an order nisi on an arguable case if the case is assessed overall to have no reasonable prospect of success. As to that, see observations by Corboy J in Re Her Honour Judge Schoombee; Ex parte Attorney General for Western Australia [2011] WASC 23 [11] - [18] and Eclipse Resources v Department of Environment and Conservation [2010] WASC 360 [45] - [52].

28 I find it is unhelpful to lay down unduly semantic or inflexible tests regarding an order nisi threshold. The potential arguability of grounds advanced by an applicant seeking the order nisi must be evaluated on the merits of each individual case, in the invariably unique underlying contexts of each application. If an argument advanced by the applicant is purely one of law, it may be capable of being more safely evaluated as to its long term merit in contrast to arguments rooted around contentious facts. A cautious approach to the summary dismissal of pleaded causes of action, classically explained by Barwick CJ in General Steel Industries Inc v Commissioner for Railways of New South Wales [1964] HCA 69; (1964) 112 CLR 125, as referred to by McLure J (as she then was) in Re McTiernan; Ex parte Coogee Coastal Action Coalition Inc [2004] WASC 264 can provide a helpful analogue in some instanaces. However, grounds which can be safely evaluated as ultimately being bound to fail (meaning that the argument presents with negligible prospect of ultimately sustaining an order absolute) can hardly surmount the order nisi threshold. The assessment threshold for an order nisi should not be set at such a low level as to facilitate the wasteful furtherance of meritless arguments, on meritless grounds, on meritless applications.

A legislative hurdle to challenging the adjudicator's decision under the Construction Contracts Act 2004

29 Section 46 of the Construction Contracts Act relevantly provides:

Review, limited right of

(1) A person who is aggrieved by a decision made under section 31(2)(a) may apply to the State Administrative Tribunal for a review of the decision.

...

(3) Except as provided by subsection (1) a decision or determination of an adjudicator on an adjudication cannot be appealed or reviewed.

30 Section 46(3) was enacted in 2004, six years before the decision in Kirk v Industrial Relations Commission of New South Wales; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) (2010) 239 CLR 531.

31 Section 41(3) may be read as a privative clause, manifesting a legislative intent to totally exclude rights of review by prerogative writ of certiorari, against a decision of an adjudicator under the Construction Contracts Act. But the decision in Kirk clearly inhibits the achievement of such a wide exclusionary objective for a certiorari challenge grounded upon jurisdictional error.

32 The state of the law, post Kirk regarding jurisdictional error challenges now being understood as preserved for State courts by reason of Ch III of the Constitution was uncontroversial between the parties. In Thiess Pty Ltd v MCC, Corboy J summarised the effect of Kirk as regards s 46(3) at between [78] - [82]. His Honour said [80]:

So construed, I consider that s 46(3) does not prevent an aggrieved respondent from seeking prerogative relief in respect of a decision by an adjudicator to refuse to dismiss an adjudication application under s 31(2)(a).

In any event, State legislation may preclude judicial review by a State Supreme Court for error of law on the face of the record but not for jurisdictional error: Kirk.

34 I agree. Corboy J was referring to Kirk at [100], where the plurality had said:

This is not to say that there can be no legislation affecting the availability of judicial review in the State Supreme Courts. It is not to say that no privative provision is valid. Rather, the observations made about the constitutional significance of the supervisory jurisdiction of the State Supreme Courts point to the continued need for, and utility of, the distinction between jurisdictional and non-jurisdictional error in the Australian constitutional context. The distinction marks the relevant limit on State legislative power. Legislation which would take from a State Supreme Court power to grant relief on account of jurisdictional error is beyond State legislative power. Legislation which denies the availability of relief for non-jurisdictional error of law appearing on the face of the record is not beyond power.

35 The present application is different to those dealt with by Beech J in O'Donnell Griffin Pty Ltd v John Holland Pty Ltd [2009] WASC 19 and by Corboy J, in Thiess. I am not dealing with scenarios of an adjudicator's summary dismissal, or refusal to summarily dismiss, an application under s 31(2)(a). The underlying facts presenting in the present case saw this adjudicator, Mr Anstee-Brook, reach his determination on the merits.

36 Mr Anstee-Brook found, as a fact, that an oral agreement concerning rock blasting and a settled rate of remuneration had been concluded. He found that the Superintendent's Representative ordered Downer to do the work. He further found that the oral agreement bound Mount Gibson. Mr Anstee-Brook concluded that the Superintendent's Representative had express authority, or alternatively, ostensible authority to bind Mount Gibson to the concluded oral agreement.

37 On the order nisi hearing before me, it was contended by Mount Gibson that Kirk had also allowed some residual scope for judicial review in the face of a strongly worded privative clause on the basis of error of law on the face of the record, not merely for jurisdictional error. I disagree. Paragraph 100 of the reasons in Kirk to which I have referred above, is to the contrary.

38 But a question remains. How far does s 46(3) go as a privative clause towards denying certiorari at all? As drawn, s 46(3) simply uses the bland phrase 'cannot be appealed or reviewed'. Such privative wording is not strong or explicit; compare in contrast s 35 of the Magistrates Court Act 2004. That provision, also enacted in 2004, is far stronger and wider in its terms. It says:

A writ of mandamus, prohibition or certiorari may not be issued in respect of or directed to a Court officer.

39 Post Kirk, s 35 obviously overreaches. But its explicit breadth as against certioriari is wide and clear.

40 In O'Donnell [128] Beech J assessed s 46(3) as a privative clause. At [128] he said:

In my opinion, on a proper construction of the Act, when account is taken of s 46(1) (as I have construed it), s 46(3) and the Act as a whole reveal an intention to exclude the availability of certiorari in respect of an error regarding compliance with s 26 of the Act.

41 I propose to follow the view that s 46(3) is a privative clause debarring the pursuit of certiorari by error of law in the face of the record (but not for jurisdictional error) at least until the Court of Appeal delivers its reasons for decision concerning Perrinepod Pty Ltd v Georgiou Building Pty Ltd CACV 90 of 2010 (reserved for decision on 2 May 2011).

42 Senior counsel for Mount Gibson contended that where the grievance raised involved a denial of procedural fairness, that judicial review likewise could not be inhibited by a privative clause. That proposition does not seem to me to be directly supported by case authority. In Police & The State of South Australia v Lymberopoulos [2007] SASC 247; (2007) 98 SASR 433, Doyle CJ observed:

I am not persuaded that the failure to accord procedural fairness, that is, the failure to hear Mr Lymberopoulos fairly, has the effect of making the Magistrate's decision one that is made without jurisdiction, or in excess of jurisdiction.
The failure to accord procedural fairness did not cause the Magistrate to make a decision of a kind beyond his powers. He did not do something that he lacked authority to do. There is no indication that he misapprehended the nature of his function or power. He did not disregard any provision of the Expiation Act. No doubt Parliament assumed and expected that when the Magistrates Court exercised jurisdiction under the Expiation Act it would act in accordance with the requirements of procedural fairness. It does not follow that this expectation is a condition of the vesting or exercise of the jurisdiction. The requirement of procedural fairness arises, by implication, from the fact that the jurisdiction under the Expiation Act is conferred on a court, and from the fact that there is nothing in the Expiation Act that displaces the requirement to accord procedural fairness.

43 But a failure to comply with the applicable requirements of procedural fairness has been recognised as an independent basis for the making of an order in the nature of certiorari, albeit the error made may not be characterised as a jurisdictional error: see Lymberopoulos [44] (Doyle CJ) and Craig (175). By reference to the passage I earlier cited from Craig v South Australia identifying the bases for the grant of certiorari, Doyle CJ observed in Lymberopoulos [49] that:

If a failure to observe an applicable requirement of procedural fairness is no more than a form of jurisdictional error, as Mr Kourakis contends, it is difficult to understand why it was separately mentioned, let alone why it is placed on an equal footing with the other quite distinct grounds for the making of an order. This suggests it is a free standing ground.

44 Failure to accord procedural fairness as a free standing ground may be assessed on the basis referred to in Craig (176), by reference to any relevant material before the superior court that is asked to grant certiorari. That is in contrast to where certiorari is sought by reference merely to an asserted error of law on the face of the record: see Craig (175).

45 In Lymberopoulos, by reference to decisions of the High Court in R v Watson; Ex parte Armstrong [1976] HCA 39; (1976) 136 CLR 248, 263 and Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596, 617, Doyle CJ further observed [63]:

They appear to me to stand for the proposition that an exercise of power by an inferior court, made without observing applicable requirements of procedural fairness, can be prevented by an order in the nature of prohibition if the power has not yet been exercised, and can be quashed by an order in the nature of certiorari if the power has been exercised. That is so even though the anticipated error or actual error does not amount to jurisdictional error.

46 Those observations were made, as is apparent, in a context of certiorari being sought against the exercise of power by an inferior court. Contrast however the present situation of a decision making body more akin to a tribunal than an inferior court.

47 Lord Reid in Anisminic Ltd v Foreign Compensation Commission [1968] UKHL 6; [1969] 2 AC 147, 171, in the context of prerogative relief sought on the basis of asserted jurisdictional error by a tribunal (the Foreign Compensation Commission), said:

It may have failed in the course of the inquiry to comply with the requirements of natural justice ... I do not intend this list to be exhaustive. But if it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly.

(my emphasis)

48 In Craig, the plurality, by reference to those observations by Lord Reid, said (179):

We consider that Lord Reid's comments should not be accepted here as an authoritative statement of what constitutes jurisdictional error by an inferior court for the purposes of certiorari. In that regard, it is important to bear in mind a crucial distinction which exists between administrative tribunals and courts of law.

At least in the absence of a contrary intent in the statute or other instrument which established it, an administrative tribunal lacks authority either to authoritatively determine questions of law or to make an order or decision otherwise than in accordance with the law.

50 In present circumstances then, for reasons essentially as explained by Doyle CJ in Lymberopoulos, the ground of challenge based upon denial of procedural fairness falls into a category distinct to the challenge grounded upon pure jurisdictional error. Certiorari is nevertheless available, unless expressly excluded by statute. Lord Diplock's observations in Anisminic, read as being confined in their applicability in Australia just to administrative tribunals, expressly mention a failure (in the course of an inquiry) to comply with the requirements of 'natural justice'. These observations as to natural justice may be taken as being akin to the more contemporary terminology of procedural fairness, or more correctly, a denial thereof.

51 In all the circumstances then, subject to possible exclusion by statute in express terms, a grant of certiorari looks to be potentially open, based upon the ground of asserted denial of procedural fairness.

52 I do not assess the terms of s 46(3) as so clear as to be assessed as an attempt to exclude challenges based on an asserted denial of procedural fairness. The language would need to be far more explicit to advance that objective.

53 In the context of a challenge raising a denial of procedural fairness as a ground against a decision maker (that I assess to be more akin to a tribunal than a court), I do not read s 46(3) as wide enough or clear enough to exclude certiorari.

54 I am in the end prepared to accept that, for the purposes of considering order nisi arguments, that the ground asserted by Mount Gibson (save for ground (a) as regards error of law on the face of the record), could constitute, if made out, a basis for establishing arguable errors. Post Kirk, it is clear that jurisdictional errors cannot be removed from potential judicial review by a State court under a privative clause however widely drawn. So also I would conclude for a denial of procedural fairness unless s 46(3) were amended to clearly and explicitly remove that basis for certiorari.

55 So then, for the purpose of arguments at the order nisi stage, there are, broadly speaking, two distilled challenges sought to be raised by Mount Gibson. If sufficiently arguable as a matter of merit, they could sustain jurisdictional errors, or as regards procedural fairness, be sufficiently akin thereto to be so assessed. On that basis, they would be capable of sustaining the prerogative writ of certiorari, notwithstanding s 46(3) of the Construction Contracts Act.

56 To better appreciate the core grievances sought to be raised by Mount Gibson, it is necessary to have a better understanding of the purpose, object, process and functioning of the Construction Contracts Act.

57 In O'Donnell, Beech J discussed the provisions of this Act: see [40] - [61]. I respectfully adopt that analysis, with a caveat as to the precise scope of s 46(3) as a privative clause, pending the awaited decision of the Court of Appeal to which I have referred and one further matter. The second qualification arises as a result of Kirk and the legislature's consequent ability to totally exclude judicial review for jurisdictional error, thereby qualifying, to that extent, the absoluteness of an observation seen at [122(b)] in O'Donnell.

58 In Thiess v MCC Mining (Western Australia) Ltd, Corboy J also reviewed the Construction Contracts Act, not only in this State but by reference to analogous legislation in other States: see generally, [40] - [47] and [48] - [69]. I gratefully adopt that analysis as well.

59 In brief summary then (which I can afford with the benefit of the comprehensive analysis of the Act in those two decisions), the Construction Contracts Act was designed to provide quick and informal, but fundamentally 'interim' relief to a party to a construction contract in circumstances where that party claimed an entitlement to payment under the contract but had been denied. The word 'interim' needs qualification. The obligation to pay once assessed by an adjudicator is a final decision as regards the obligation to pay. It is fully enforceable but the outcome may be varied by subsequent events. See Beech J in O'Donnell [54], [93], [100] (referring to Bredyn Pty Ltd v Davenport [2004] NSWCA 394 [98] (Hodgson JA)).

60 It is of fundamental importance, in my view, to understand that the object of this legislation was to attempt to reform earlier unacceptable scenarios of inequality of bargaining power in the construction contract environment. Contractors were highly vulnerable to being hurt by being kept out of funds due to them by an ongoing legal dispute in circumstances where they had performed the contracted work, but had not been paid. It is easy to see how a contractor who is leveraged and pressed for funds may lack the time, opportunity or resources to press its position to a result in a drawn out fight for payment against a well resourced principal, in a protracted arbitration or contested litigation. The speedy and informal procedures delivered as reforms by the Construction Contracts Act do not make the adjudicator's decision on the payment of funds final (save as to the capacity to obtain and enforce payment). In the present case, if Mount Gibson were to pay over funds presently at issue to Downer on the adjudication, Mount Gibson would continue to hold the full opportunity to pursue the recoupment of those funds at a later time, through the more formal and leisurely processes available to it, under arbitration or in litigation. Section 40 of the Construction Contracts Act refers to a payment on an adjudication, in effect, being taken to be an 'advance' towards a total amount payable under the contract by the principal to the contractor. See also s 45(4)(b) concerning orders for restitution, as to any amount later found to be paid over on the adjudication.

61 Evidence of things said or done in the adjudication also receive quarantined treatment by s 45(3) of the Construction Contracts Act. It provides:

Evidence of anything said or done in an adjudication is not admissible before an arbitrator or other person or a court or other body, except for the purpose of an application made under s 29(3) or on an appeal made under s 46.

62 Again, the process envisaged before an adjudicator under the Construction Contracts Act presents more as the workings of a tribunal, rather than following the curial method. Rules of evidence do not apply (s 32(1)(b)). The process is very much in the nature of quick, remedial and informal triage intervention.

63 The essentially interim character of this opportunity for a contractor to obtain payment of a disputed amount under the Construction Contracts Act is relevant, I find, to assessing, in proper statutory context, the two core arguments advanced by Mount Gibson in support of the order nisi for certiorari. Furthermore, it will be remembered that the prerogative relief through a writ of certiorari, ultimately remains discretionary.

64 As to discretion, availability of prerogative relief will be undermined by circumstances where parties could avail themselves of alternative remedies by way of rehearing, appeal or review. Circumstances where parties have been granted and hold alternative review options bear upon the availability of prerogative relief as a matter of discretion. That is particularly so, in this overall statutory context, bearing in mind the remedial character of the problems this legislation was intended to reform. As to the use of the discretion to deny certiorari where there lies another review option, see for instance, the High Court's decision in The Queen v Cook; Ex parte Twigg (1980) 147 CLR 15; [1980] HCA 36 [29], [30] and [34] (rights of appeal held by way of rehearing to the Family Court in that case against a judge of the Family Court); Re Baker; Ex parte Johnston (1981) 55 ALJR 191 and Martin CJ in Re Carey; Ex parte Exclude Holdings Pty Ltd [2006] WASCA 219; (2006) 32 WAR 501 [128] - [140].

First ground: Reasons as to authority of Superintendent's Representative

65 The first main argument raised in support of prerogative relief by Mount Gibson is to the effect that the adjudicator failed to give any or adequate reasons for his decision that the Superintendent's Representative did have express authority from Mount Gibson to reach an oral agreement with Downer as regards rates for the rock blasting and excavation work.

66 Towards this jurisdictional error submission, it is necessary to note that s 36 of the Construction Contracts Act provides that an appointed adjudicator's decision made under s 31(2)(b) must - '(d) give reasons for the determination'.

67 In Kirk [83] the plurality in a context of explaining 'error of law on the face of the record', as regards reasons, said, 'But at least in some cases the failure to give reasons may constitute a failure to exercise jurisdiction [215]'. See footnote [215] referring to Donges v Ratcliffe [1975] 1 NSWLR 501, 511 and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, 277.

68 Mount Gibson contends, in effect, that the adjudicator merely stated conclusions about authority, express and ostensible so that there is a manifest deficiency by a lack of any real reasoning to support those, in effect, blandly delivered legal conclusions.

69 I accept for the purposes of present order nisi arguments that s 31(2)(b), as regards the requirement for reasons by the adjudicator, delivers a jurisdictional prerequisite under the Construction Contracts Act in relation to an adjudicator's exercise of his function within jurisdiction. On that basis, a failure to give reasons, if established, would constitute an arguable jurisdictional error in the Craig v South Australia sense, and so falling outside the parameters of any privative protection from s 46(3), in any event.

70 I proceed on the basis that a failure to meet the Act's statutory requirement to provide reasons could amount to an arguable jurisdictional error sufficient to sustain certiorari, if that can be made out.

71 This adjudicator did provide written reasons for his determination. These are found in the affidavit of David Garth Berg filed 16 May 2011, attachment DGB11, the adjudication determination of 19 April 2011. The determination ranges across some 21 pages (see pages 150 to 170 of Mr Berg's affidavit). Putting aside a heading page, contents, index, formal identification of the parties, followed by the adjudicator's actual determination comprising six paragraphs, (a) through (f) inclusive (page 4 of 21), the reasons range across pages 5 through 21 (of 21).

72 On my analysis, it looks to be that the challenge sought to be raised by Mount Gibson is essentially an argument over alleged inadequacy in the adjudicator's reasons on the issues of both express and ostensible authority, resolved in the end against Mount Gibson. But inadequacy of the reasons is quite a different thing to what is referred to and mandated under s 36(d). It says only that reasons must be given for the determination, saying nothing about their adequacy.

73 It will be easy to comprehend that an argument which dissects an adjudicator's written reasons across many issues, until seizing upon one particular issue with a view to exposing asserted inadequacies in the reasoning, is a fundamentally different grievance to a wider complaint that no reasons at all have been provided.

74 I must reject the reasons ground at the outset because the ground in truth seeks to cavil over the adequacy of the adjudicator's reasons upon the selected issue of authority. To allow such a challenge would undermine the quick, informal and interim nature of what is intended by the Construction Contracts Act. The authority challenge concerning one aspect of the arbitrator's reasoning does not seem to me to rise to the level of constituting an arguable jurisdictional error, measured against the content of s 36(d) which, on my analysis, deals with something else, ie, the provision by the adjudicator of reasons per se. On that basis, arguable jurisdictional error on this ground has not been demonstrated.

75 For completeness, however, I will assess the merits of that argument. That requires that I set out passages from the adjudicator's delivered reasons.

76 What follows is found in s 11 of the adjudicator's reasons.

11. ROCK CLAIM

(a) The Applicant claims the sum of $2,404,326.98 in respect of:

rock cutting at various sections as described in the Contract;
mobilisation of rock breakers;
drill and blast for excavation of the Wannara Road.

(b) The Applicant relies on the August Agreement to justify this claim alternatively the Applicant submits that if it is found that there is no August Agreement then the Applicant is entitled to be paid for this work in accordance with the Schedule of Rates.

(c) I have already dealt with the Repeated Claims and must determine in respect of this claim whether payment for all or any of the remaining claim for this item of $1,269,060.50 is to be paid. At paragraph 21.3 of the Applicant's Submissions the Applicant claims that there is no dispute about the quantity of rock drilled and blasted and refers to correspondence and certification for payment which refers to rock quantities. The certification for payment is at a rate lower than is claimed by the Applicant.

In none of the materials provided by the Respondent does the Respondent take issue with that claim and therefore my only decision is whether all or part of the $1,269,060.50 is to be paid.

(d) The Applicant's evidence in relation to the August Agreement is in the Application but more importantly is dealt with in SD Dated.

(e) SD states that on 27 August 2010 he met with the Superintendent's Representative to discuss Contract rates. SD claims that at that meeting he and the Superintendent's Representative agreed to vary the Contract as follows:

the Applicant would be paid costs plus 15% for all rock drill and blast work under the Contract performed in the bridge area which was estimated at approximately 11000m3.
the Applicant would be paid $42.15 per cubic metres for rock loading and transport to the ROM pad in accordance with S302.08 of Schedule 2 of Part 3 of the Contract;
the rate in S302.07 of Part 3 of the Contract for rock cutting ($185.00 per cubic metre) would apply to all other drill and blast or rock cutting.

(f) In paragraphs 3.4 and 3.5 of SD Dated facts are provided regarding site meetings between SD and the Superintendent's Representative on 16 December 2010 and early January 2011 when the Superintendent's Representative confirmed the August Agreement and an email to the Superintendent regarding the terms of the August Agreement.

(g) The Respondent's denial of the Applicant's entitlement to payment based on the August Agreement is to be found in the Respondent's Application and the statutory declarations of KB and the Superintendent. Significantly there is no statutory declaration from the Superintendent's Representative supporting the Respondent's position and more importantly denying that the August Agreement was concluded.

(h) Although KB and the Superintendent have sworn statutory declarations in support of the Respondent's position the Superintendent's Representative has not done so. Neither KB nor the Superintendent have denied that the August Agreement was concluded. This together with the failure of the Superintendent's Representative to provide a statutory declaration entitles me to draw adverse findings in relation to the Respondent's position and find support for my view that the August Agreement was concluded.

(i) I will deal with each of the matters raised by the Respondent in turn.

(j) The Respondent's basic premise is that the Applicant's version of events resulting in the August Agreement is improbable. I am disinclined to accept that proposition and am more inclined to think that it is improbable that the Applicant and in particular SD would concoct the facts which form the basis of the August Agreement.

(k) The Respondent argues that I should find that the August Agreement was not concluded as the Applicant's version of events is improbable. The Respondent expands on this notion at paragraph 37 of the Respondent's submissions.

The Applicant's starting point is to claim $4,428,093.62 and yet the Applicant makes a proposal to reduce its entitlement to approximately $2m.
This arrangement is at a time when the Applicant has incurred a loss of $103.8m and is seeking $279m in new capital to deal with the impact of a troubled rail project.

(l) A contrary view is that the Superintendent's Representative who was faced with a substantial claim of approximately $4m for rock drilling and blasting accepted a proposal from the Applicant which would save the Respondent's approximately $2m.

(m) Whilst the issues raised by the Respondent are arguable they are in my view not sufficiently persuasive. In an ideal world the Contract would be followed to the letter but in my experience that is very seldom the case. Every effort is made by those on site to ensure that the works progress.

(n) The proposition by the Respondent that SD may have subjectively formed a view that the August Agreement had been concluded is the very issue that I must determine. I once again highlight the fact that there is no statutory declaration from the Superintendent's Representative denying the existence of the August Agreement.

(o) The Respondent argues that the Superintendent was not authorised to amend the Contract and accordingly the Superintendent's Representative could not have been so authorised and therefore the Superintendent's Representative could not have been at the meeting on 27 August 2010 as the agent of the Respondent.

(p) The Respondent relies on Peninsula Belmain Pty Ltd v Abbi Group Pty Ltd (2002) 18 BCL322 (NSW Court of Appeal) to restrict the powers of the Superintendent's Representative as agent of the Respondent.

(q) The role of a Superintendent extends beyond that of a mere certifier. A few examples are:

directions by the Superintendent on as to interpretation and construction of documents (GC8.1);
directions as to rectify defective work (GC14.2);
directions as to the order and time of performing the work (GC32).

(r) Whilst the authority of a Superintendent is limited that would not of itself mean that the Superintendent's Representative was not able to agree to changing rates of the method of payment under a contract. I am satisfied that under the circumstances where substantial rock had been found that even if as a matter of fact the Superintendent's Representative did not have authority SD was entitled to assume that the Superintendent's Representative had such authority.

At the time of the August Agreement the Superintendent's Representative was faced with a possible claim of approximately $4,000,000 and would have viewed the offer of SD to reduce that to approximately $2,400,000 as very attractive. In my view that would have been a very real incentive to accept SD's offer.

(s) The Respondent argues that the Applicant has made no attempt to demonstrate that the requirements for the formation of a legally binding agreement have been satisfied. The only issue raised by the Respondent is a lack of consideration. In my view the argument has no merit in that if the August Agreement was concluded consideration can be found in the Applicant carrying out the work.

(t) The Respondent refers to GC43 which provides:

Except as provided by law or in equity or elsewhere in the Contract none of the provisions of the Contract shall be varied waived discharged or released except with the prior written consent of the parties.

I accept that there has been no prior consent by the parties to vary the Contract.

(u) Whilst the August Agreement may not be enforceable at law given the provisions of the Contract in my view there are equitable considerations to be taken into account.

(v) In paragraph 22 of the Applicant's Submissions the Applicant enumerates a series of events including:

following the August Agreement the Applicant performed the rock cutting and drill and blast work;
at the meeting on 11 November 2010 attended by SD the Superintendent's Representative KB and others the Applicant was only then advised for the first time that it would not be paid for rock cut drill and blast work at the rates agreed in the August Agreement.

On these and the other facts presented in paragraph 22 the Applicant claims that the Superintendent and therefore the Respondent is estopped from denying the existence of the August Agreement.

(w) I am satisfied that the August Agreement was concluded and reject the Respondent's position on a lack of authority alternatively he had ostensible authority. Given the equitable provisions of GC43 alternatively in equity I am satisfied that the Contract was amended in accordance with the August Agreement and the Respondent is estopped from resiling therefrom and that the Applicant is entitled to payment of $1,269,060.50.

77 As regards evidence before the adjudicator supporting his reasons, I would note by reference to exhibit DGB1 to Mr Berg's affidavit (volume 1 of 4), two statutory declarations of Mr Samir Derviskadic of 14 February 2011 and 11 March 2011 (the earlier is scheduled to the latter).

78 In the first statutory declaration at par 3 under the heading 'Rock excavation agreement', Mr Derviskadic said:

3.1 On 27 August 2010 I attended a meeting with Mr Greg Smith (the Superintendent's Representative) to discuss the Contract rates.

3.2 I advised Mr Smith that if the rates in Part 3 of the Contract (namely 801.03), were to be used to value the drill and blast works at the bridge over Wannara East Road, the cost to MGM would be in excess of $2 million. I advised that Downer was willing to agree alternate rates to replace the existing Contract rates in order to reduce the cost to the MGM.

3.3 Mr Smith and I agreed that the Contract would be varied as follows:

(a) Downer would be paid cost plus 15% for all rock drill and blast work under the Contract performed in the Bridge area of Wannara East Road. It was submitted that Downer would drill and blast approximately 11,000 cubic metres.

(b) Downer would be paid $42.15 per cubic metre for rock loading and transport to the ROM pad, as per section 3.02.08 of schedule 2 of part 3 of the Contract.

(c) The rate in section 302.07 of part 3 of the Contract for rock cutting ($185/cubic metre) would apply to all other drill and blast or rock cutting work not included in the term of the Agreement described in paragraph (a) above.

See also pars 3.4 and 3.5 and 4.6. Mr Derviskadic concluded:

4.7 Consequently, Downer's total claim for the relevant rock cutting, drilling, blasting and bulk excavation is $3,371,623.26.

4.8 The effect of the Agreement is a cost saving to MGM of $2,007,766.65 from what Downer would have been entitled to under the Contract if not for the Agreement.

79 In a second statutory declaration, Mr Derviskadic gave additional evidence about his meeting of 27 August 2010 with Mr Smith. He referred to it as a routine meeting: see pars 27 and 28 of Mr Derviskadic's statutory declaration under the Construction Contracts Act 2004 (WA) of 11 March 2011. He then said [29]:

The reason I proposed the alternative pricing arrangement were as follows:

(a) The rate of $191.62 for rock drilling and blasting was a rate which was intended to apply to small quantities of rock. By mid August 2010, it was clear to me that the quantity of rock would be in the thousands of cubic metres.

(b) This meant that the cost to MGM would be substantial. In my estimation at the time, the cost of rock drilling and blasting alone would be in the order of over $2 million.

(c) Before the meeting of 27 August 2010, I formed the view that it would be fair to offer to do the rock drilling and blasting work on a cost plus basis and charge a markup for Downer's overhead and margin.

80 For completeness, I also mention some aspects of the underlying construction contract, which is described as 'MGM-EHH-C5017', entitled 'Road Construction at Great Northern Highway'. The contract is found in vol 1 of 4 as exhibit DGB1 to Mr Berg's affidavit of 13 May 2011.

81 The contract document is in parts, as usual with construction contracts. Part 1 contains the form of agreement between Mount Gibson Mining Ltd and Downer EDI Works Pty Ltd which would appear to have been accepted by the latter corporation on 29 July 2010. Part 2 of that construction contract defines the scope of work. Part 3 contains price and information schedule. Part 4 contains general conditions of contract by reference to AS4000-1997 (amended). Part 5 contains the special conditions of contract, with the contract drawings found in Part 6. Finally, Part 7 contains the contract specifications.

82 The position of the Superintendent and the Superintendent's Representative are dealt with in the general conditions, see the definition of both positions under cl 1 of the general conditions which pertain throughout the contract, except where the context otherwise requires.

83 Clauses 20 and 21 deal specifically with the position of the Superintendent and the Superintendent's Representative. Clause 34.5 deals with extensions of time by the Superintendent, defined as an 'EOT'. The Superintendent has a role in the certification of practical completion (cl 34.6), liquidated damages (cl 34.7) and delay damages (cl 34.9). Clause 36 deals with variations and circumstances in which a contractor may direct by writing the variation of contractual conditions by a variation order, see also cl 33.6 and, as to pricing, cl 36.4 as regards the pricing of variations by the Superintendent. Clause 37.1 deals with progress claims and the issue of a certificate (cl 37.2) by the Superintendent regarding the payment of monies due from the principal to the contractor pursuant to a progress claim.

84 Within exhibit DGB2 to the affidavit of Mr Berg is two volumes of materials put before the adjudicator by Mount Gibson Mining Ltd. I refer to a statutory declaration of Peter George Panek, project manager, sworn 17 March 2011. I refer in particular to Mr Panek's observations about pricing schedules (pars 13 through 18) and his observations about 'the alleged August agreement' between pars 28 through 35. At par 28 in that section, Mr Panek said by reference to Mr Derviskadic's statutory declaration:

As stated above, neither I nor Mr Smith had or have any authority to agree to amendments to the Contract and I do not accept that any agreement binding on the contracting parties was reached in discussions between Mr Smith and Mr Derviskadic.

85 At pars 41 and 42 of Mr Panek's statutory declaration, under a heading 'Downer's claims in relation to rock cutting, drilling and blasting', Mr Panek said:

I rejected the above rock excavation claims contained in progress claims 5 and 6 in my progress certificates 5 and 6, copies of which are attached (pp3 and pp4 respectively). I note that I did certify payment for the applicable volumes of these items at the rate of $42.15.
In relation to the last item in the Rock Excavation Schedule of progress claim 7 ('section 6 rock excavation'), I certified payment at $42.15 for the applicable volumes of this item. I note that this work was carried out to the GNH Component. The applicable pricing schedule for the GNH Component, schedule 3, does not include a rate for bulk excavation of rock. However, the nature of this work is similar to the work in the Wannara Road section (schedule 2). Accordingly, I considered this to be an appropriate rate to be used in assessing the claim and I did so in accordance with general condition 36.4 of the Contract.

86 As I have said, as regards the issue of authority of the Superintendent's Representative, reasons were given. The real attack sought to be raised against those reasons is that they effectively state a bare conclusion, rather than providing a coherent and properly reasoned basis for the conclusions of express and ostensible authority. That criticism puts the challenge too highly I think, once the abbreviated nature of the process and the statutory protective intent of the Construction Contracts Act is properly understood.

87 The adjudicator reached a decision in a context of the parties' very extensive written cases provided to him. They respectively comprised, from Downer, four bound volumes of materials and, from Mount Gibson, two bound volumes of materials. I have referred to a fraction only of that material, found attached to Mr Berg's affidavit. It was not necessary in that context for the adjudicator to set out large components of these written materials in his reasons. His reasons however must be assessed, in that overall context.

88 The key oral agreement was found to have been reached between Derviskadic and Smith, in circumstances where there was, effectively, no rival version of evidence given by Mr Smith, the Superintendent's Representative. As a result, the adjudicator only had Downer's version of the oral events. That was obviously one factor in the adjudicator's decision: see the reasons under heading Rock Claim (h), on page 15 of 21 (page 164 of Mr Berg's attachment to his affidavit). There it is said:

Although KB and the Superintendent have sworn statutory declarations in support of the Respondent's position, the Superintendent's Representative has not done so. Neither KB nor the Superintendent have denied that the August Agreement was concluded. This, together with the failure of the Superintendent's Representative to provide a statutory declaration, entitles me to draw adverse findings in relation to the Respondent's position and find support for my view that the August Agreement was concluded.

89 The (absence of) authority argument was dealt with by the adjudicator in the same Rock Claim section of reasons under pars (o) through (r), inclusive as cited above. The adjudicator there also dealt with and rejected, the argument that this oral agreement was reached contrary to the terms of the General Conditions cl 43: see (t) through (w) cited above.

90 As is apparent from pars (t) - (w) above, the adjudicator was ultimately satisfied as a fact that an oral agreement had been concluded upon the level of rates to be paid to Downer for the required rock removal and blasting work. This factual finding was well open to the adjudicator.

91 An extension of time had been uncontroversially allowed for this work which was performed. The only real question was over the level of the rate of payment to Downer.

92 The adjudicator's finding as to express authority is shortly stated. But to my mind, is adequate, when assessed in overall context. This is particularly so when the power of a Superintendent (and so, his Representative) under the General Conditions of contract is exposed. Those conditions allow a Superintendent (and the Representative) to approve a variation, see general condition 35.1.

93 A dispute over the level of rate for payment for the rock blasting excavation work carried out by Downer (in respect of which an extension of time was uncontroversially recognized as appropriate) is, in my assessment, akin to that of a variation claim, if not exactly so. The rock blasting work was required to be performed by Downer. No issue arose as to the Representative's authority over the work being required to be done, or the time extension being granted.

94 As senior counsel explained in submissions, the contract's specified rates actually could have been set at even higher rates for Downer than those the subject of ultimate agreement. In that case there would have been an exposure in Mount Gibson to a claim in the order of $4 million, rather than to the eventual claim of $2 million ($1 million only of which is in dispute). The Superintendent's Representative could therefore be seen to be acting strongly in Mount Gibson's interests in settling upon a lesser rate with Downer's representative. In all the circumstances, the finding as to express authority in someone who concluded the oral agreement with Downer - he having required the work to be performed and then granted an extension of time for it to be performed - was fully open and understandable on the evidence and the reasons, whilst brief, are not so brief as to be devoid of existence or rationality on the authority issue.

95 After that, the alternative finding as to ostensible authority was essentially unnecessary. It will be remembered that Mount Gibson took the benefit of the work performed and so in a restitutionary sense, was undoubtedly enriched by Downer after it carried out the work ordered by the Superintendent's Representative. The work was always to be paid for at some rate under the construction contract. If such work could be validly ordered to be performed by a person, to then contend that the same person was not held out as someone who could validly bind the principal to a settled rate arrangement for the work - presents to me as one sided, artificial and redolent of the sort of legalistic stumbling block the Construction Contracts Act was passed to reform.

96 I reach the conclusion that the arguments sought to be raised by Mount Gibson on its order nisi are ultimately bound to fail. They do not sustain, on my evaluation, any prospect of the ultimate issue of an order absolute on the 'failure to provide reasons' ground.

Second ground: Denial of procedural fairness

97 The second broad ground of challenge raised by Mount Gibson relates to the adjudicator's finding as to the ostensible authority of the Superintendent's Representative to bind Mount Gibson to an oral agreement, premised in the alternative, in the hypothetical absence of express authority being established.

98 The argument essentially is that the finding of ostensible authority was reached without reference to agreements in the submissions of the parties before the adjudicator: see for instance, Monaco v Arnedo Pty Ltd (Unreported, WASC, Full Court, Library No 940481, 6 September 1994), applying Pantorno v The Queen [1989] HCA 18; (1986) 166 CLR 466, 473. Effectively, then, the contention by Mount Gibson is that it was denied procedural fairness on the issue of ostensible authority, on which it ultimately failed, because the adjudicator reached his conclusion in the absence of the parties being able to fairly deal with and respond to this point, thereby denying Mount Gibson any, or any fair, opportunity to put opposing submissions to the adjudicator on the point.

99 Had it had the opportunity, Mount Gibson would have contended that the conclusion of ostensible authority was not open, given the limited range of functions of the Superintendent specified under the General Conditions in this construction contract. Therefore derivatively, as regarding the position of a Superintendent's Representative, authority to commit Mount Gibson to a higher level rate, was not as a matter of law, capable of being seen as a holding out by Mount Gibson to Downer.

100 However, Downer again pointed out that once a finding as to express authority was reached, any further alternative conclusion as to ostensible authority (buttressing the result of authority overall) was essentially surplusage. I agree. This would go to my discretion towards not granting prerogative relief by certiorari, even if there were assessed to be arguable merit in the ostensible authority challenge.

101 In any event, Downer says that based upon what occurred and, in particular, the ordering of the blasting and associated work by the Superintendent's Representative, there was a sufficient factual edifice available to sustain the adjudicator's conclusion as to ostensible authority.

102 The actual requirements of procedural fairness need to be assessed specifically, in their unique presenting contexts. Again of key significance is the consideration that the process for a contractor to seek a payment under the Construction Contracts Act is to proceed on an informal, speedy, but interim, basis before a body more akin to a tribunal than a court. This again, in my view, is the decisive consideration in assessing the metes and bounds of the requirement for procedural fairness in this particular context.

103 In such a context, particularly when there is still available at a later time, in another place or places, the substantive right of challenge against the payment (and the underlying authority conclusion), the approach of this adjudicator to resolving the ostensible authority point in the alternative did not on my assessment, arguably deny procedural fairness to Mount Gibson. The primary conclusion was as to the existence of express authority. The adjudicator's further observations concerning ostensible authority are to be read as a limited correlative augmentation to the primary conclusion.

104 Furthermore, there was within the written submissions made to the adjudicator an express reference made to 'implied authority': see Mr Panek's affidavit par 28, referred to above, and its reference to a denial of 'any authority'. Bearing in mind the informal character of the whole process, a lawyer's tripartite agency taxonomy, as between express, implied and ostensible authority, whilst a distinction recognised under the common law and familiar enough to lawyers, in overall context, is too fine a distinction. It cannot be assessed to sustain an argument that ostensible authority was not fairly opened up as a potential issue before this adjudicator. The issue as to this Superintendent's Representative's authority at large, in my assessment, was well and truly on the table before this adjudicator, in all its potential manifestations, express, implied or ostensible (or even by ratification after the event).

RE GRAHAM ANSTEE-BROOK; EX PARTE MOUNT GIBSON MINING LTD [2011] WASC 172 (14 July 2011)

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Judgment (206 paragraphs)

RE GRAHAM ANSTEE-BROOK; EX PARTE MOUNT GIBSON MINING LTD [2011] WASC 172 (14 July 2011)

Legislation Cited (3)

Cases Cited (12)