56 Did the plaintiff form an erroneous conclusion that the adjudication application was made without a valid payment schedule? It is clear that the person who received the adjudication application was Mr Mark Diver. He was also the person who opened the email that enclosed the payment claim and he was aware that it had been sent at 3.06pm on 6 November 2008. He also noticed on opening the adjudication application that the date of the payment claim was 6 November 2008. He was aware that no notice pursuant to 17 (2) had been received and he took steps to have the matter raised with the adjudicator. In discussions with his co-workers at the time he acknowledged that he might not have been able to lodge a thorough adjudication response dealing with the factual matters because the payment schedule was invalid as it was out of time. Nevertheless he did all the work necessary to deal with the factual matters that would be in the adjudication response and he commenced work on it.
57 It seems that Mr Diver was then informed that a decision had been made to make submissions to the adjudicator about the lack of s 17 (2) notice. It is also to be noted that Mr Diver was well aware that he opened the email on 7 November 2008.
58 Reliance on a representation is a commonly expressed way of enquiring into loss or damage by conduct contravening the proscription on engaging in misleading or deceptive conduct. In Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 at 525 Mason CJ and Dawson, Gaudron and McHugh JJ said that when concerned with contravention in the form of misleading or deceptive conduct constituted by misrepresentation -
"in this situation, as at common law, acts done by the representee in reliance upon the misrepresentation constitute a sufficient connexion to satisfy the concept of causation."
59 As has been said, it should not be forgotten, in determining reliance, that the essential question is causation. Causation in law is not a scientific matter, but as was said in March v E & M Stramare Pty Ltd (1991) 171 CLR 506 at 515, repeating from Fitzgerald v Penn (1954) 91 CLR 268 at 277-8, it is "ultimately a matter of common sense".
60 What is the connection between the conduct of the defendant and the plaintiff's alleged erroneous assumption about the lack of notice under s 17(2)? The plaintiff had at the latest until 16 December 2008 to lodge an adjudication response. On 15 December after 5 pm the plaintiff's solicitor received from the defendant the facsimile attaching proof of receipt of the payment claim, which it made it clear the defendant intended to assert that notice had been served in time. Given that Mr Diver knew all the facts as to service of the email it is hard to see how the receipt of the adjudication application constituted misleading and deceptive conduct. He knew before receiving the adjudication application that the email had been sent on 6 November 2008. What seems to have happened is the realisation of the affect of the late service of his payment schedule occurred to him and some decision was made, not by him, but by Mr Hughes or someone advising the company, that the best way forward was to address the lack of notice under s 17 (2).
61 Mr Diver does not himself say that he made the decision which way to proceed.
62 The other matter to note is that the alleged misrepresentation is conduct, as I have pointed out, in relation to what appears in an adjudication application. That is but a document in which one side is putting forward to an adjudicator its contentions as to the fact and circumstances. It was open for the defendant to put its own contentions forward as to service and if they were that service was effected on 7 November 2008 that it could rely upon the payment schedule. As discussed, the decision in Parkdale makes it clear that it would be wrong to look at these contentions without regard to the wider circumstances.
63 In the absence of evidence from the person who made the decision as to which way to proceed, I am not satisfied that what is said to be the misleading conduct caused the actions to be taken. Having regard to the nature of the document being merely a party's contention as to what would be advanced in a disputed adjudication they also could not be said to be on their face misleading and deceptive.
Denial of natural justice
64 Brodyn Pty Ltd t/as Time Cost and Quality v Davenport, 61 NSWLR 421 [2004] NSWCA 394 His Honour Mr Justice Hodgson dealt with the questions of natural justice at para 57 in these terms:
"[57] The circumstance that the legislation requires notice to the respondent and an opportunity to the respondent to make submissions (ss.17(1) and (2), 20, 21(1), 22(2)(d)) confirms that natural justice is to be afforded to the extent contemplated by these provisions; and in my opinion, such is the importance generally of natural justice that one can infer a legislative intention that this is essential to validity, so that if there is a failure by the adjudicator to receive and consider submissions, occasioned by breach of these provisions, the determination will be a nullity. On this basis, I agree with the result reached in Emag Constructions Pty. Limited v. Highrise Concrete Contractors (Aust) Pty. Limited [2003] NSWSC 903. I note there is some controversy as to whether denial of natural justice generally results in voidness or voidability (see for example Ridge v. Baldwin [1964] AC 40, Durayappah v. Fernando [1967] 2 AC 337, Banks v. Transport Regulation Board (Vic) (1968) 119 CLR 222 at 233, Calvin v. Carr [1980] AC 574 at 589-90, Minister for Immigration v. Bhardwaj (2002) 209 CLR 597 at 630-34); but in my opinion, in cases such as this where there is a disclosed legislative intention to make a particular measure of natural justice a pre-condition of validity, failure to afford that measure of natural justice does make the determination void.'
65 In effect the plaintiff says there was a denial of natural justice in that an adjudicator received submissions on 15 December 2008, which the adjudicator accepted, and that the plaintiff lost the opportunity to put an adjudication response.
66 The plaintiff's written submissions included the following:
"The nature, effect and gravity of the error are such as to have brought about a situation in which an assumed state of affairs which up to after 5pm on the last date for the lodgement of an Adjudication Response was the only state of affairs known to Reed constructions was overturned either by the Adjudicator concluding that a completely different set of facts applied or alternatively as the result of a submission as to the circumstances by Eire. Eire was not entitled to assert a position different to the one contained in its Adjudication Application, certainly not without a request from the Adjudicator.
The Adjudicator did not prior to the making of his determination, convey to Reed Constructions that he intended to treat the evidence and submissions provided by Eire as amounting to an alteration of the alleged date of service of the Payment Claim. As a result of the conduct of either the Adjudicator or Eire, Reed Constructions was not given the opportunity to address the substantive issues of the Payment Claim in an Adjudication Response.
The failure of the Adjudicator to seek submissions or give Reed Constructions an opportunity to deal with the Adjudication on an altered factual basis was a denial of natural justice: John Goss Projects Pty Ltd v Leighton Contractors Pty Ltd , [2006] NSWSC 798 particularly at [31] and [33] see also Brereton J in Fifty Property Investments v O'Mara [2006] NSWSC 428 at [44]-[45].
67 In Plaza West Pty Ltd v Simon's Earthworks (NSW) Pty Ltd & Anor [2008] NSWCA 279 the Court of Appeal was again concerned with what was said to be the error by an adjudicator and a denial of procedural fairness. The Court said at 31 to 37 the following:
31 In my view, the above arguments of the appellant are without substance. The adjudicator, in a meticulous determination, dealt with all relevant arguments. He adjudicated upon the payment claim put forward by s 17(1). He dealt with every submission put to him by the parties. He came to the view that he was not required to examine the payment schedule line by line in answer (as would have been required under s 9(b)) because of his (erroneous on this hypothesis) view of the operation of cl 37(2) and s 9(a).
32 There may have been a legal error but that did not mean that the adjudicator did not fulfil his statutory task in s 22. This is especially so when it is recognised that a legal submission reflected by the cases at [26] above was not put to him. Thus his error was brought about by the way the parties conducted the matter before him. There may be occasions where a tribunal despite dealing with a matter on the basis of the approach taken by the parties can still be seen to have failed to attend to its required task: see, eg, Kuswardana v Minister for Immigration and Ethnic Affairs (1981) 35 ALR 186. Here, the adjudicator attended to the task of dealing with the adjudication claim by dealing with the matters required by s 22(2).
33 The second argument put on appeal was to the effect that the adjudicator had failed to afford procedural fairness to the appellant in not dealing with the payment schedule line by line. It was submitted that a failure to deal with submissions put to the adjudicator was a breach of the rules of procedural fairness.
34 The appellant accepted during the course of argument that the operation of this submission was dependent, in substance, upon the success of the first argument. Given that the first argument fails this leads to the failure of this submission. Nevertheless, it is appropriate to make some further comments. There was no failure to afford procedural fairness. The adjudicator attended to all the submissions put by both parties. He came to the view that he did not need to deal with aspects of the submissions of the appellant because of the view (erroneous as I have said) of the operation of cl 37(2) of the contract pursuant to s 9(a). This was not ignoring the submissions of the appellant; it was dealing with them, appropriately on the hypothesis that he worked upon, and from which he was not dissuaded by the submissions of the parties.
35 Reference was made to the case of Firedam Civil Engineering v KJP Constructions [2007] NSWSC 1162. In that case, Austin J concluded that an adjudicator had denied a party procedural fairness by not dealing with its payment schedule on the basis that the payment schedule was served late. The case can be distinguished on the simple basis that here the adjudicator did not disregard the submissions of the appellant. Rather, though he had regard to them, he did not, on the way he approached the matter, have to deal with them in full.
36 Reference was also made to the decision of White J in Reiby Street Apartments v Winterton Constructions [2006] NSWSC 375 where White J also concluded that there had a breach of procedural fairness in disregarding matters put to him in the payment schedule and adjudication response because of mistaken views as to the facts and law. Once again the case can be distinguished on the basis that here the adjudicator did not ignore the submissions.
37 For my part, I would wish to reserve the question as to the correctness of the reasoning (though not necessarily the result) in both Firedam and Reiby Street. If an adjudicator in attending to the task in s 22 comes to the view (mistakenly by reference to the facts or law) that one aspect of the payment schedule does not arise for consideration, it is at best a problematic proposition that the failure to deal with such submissions or such aspects of the payment schedule is a denial of procedural fairness. The appropriate question is to ascertain whether the statutory task laid down for the adjudicator has been complied with. That is not, of course, to say that procedural fairness should not be afforded to the parties in the adjudication.
68 What has happened is that at a time prior to the time for putting in an adjudication response the plaintiff made a decision to raise the question of whether there was a valid adjudication application. An alternative would have been to contend for a later date of service. Such a course was attended with difficulties but could have included the material that had been included in the payment schedule that was served.
69 In their submissions to the adjudicator of 12 December 2008 the plaintiff presumably accepted that their submissions were ones that the adjudicator was obliged to consider under s 22 (2). They expected a response and naturally gave a copy of their submissions to the other side. The adjudicator quite properly accepted the defendant's submissions on this aspect and it is also plain from his reasons that he accepted and considered the response provided by the plaintiff on 17 December 2008.
70 It seems to me that there is no lack of procedural fairness. It is perfectly plain that the plaintiff made a decision to pursue a particular course rather than another course such as contending for service on 7 November 2008 and the supply of an adjudication response. It may well be that the correct determination of the service question may well have meant that that alternative course may have been unsuccessful. However, it should not be forgotten that the plaintiff's choice to proceed down its chosen path was one taken during the time within which an adjudication response could have been made.
71 In these circumstances I do not see that there is any denial of natural justice.
72 I dismiss the summons with costs.
**********