"[38] The effect of Rojo's solicitors communication of 23 December 2005 [advising that Rojo did not propose to proceed to make an application for adjudication and that accordingly, Jillcris was not required to provide a payment schedule in accordance with s 17 (2) (b)]:
i. was not to restore the position to that which it had been prior to Rojo having made the election provided for in s 15 (2) (a) as between the two inconsistent routes;
ii. was that Rojo had waived its anterior rights to proceed by curial process to recover the unpaid portion of acclaimed amount as a debt."
39 In Kell & Rigby Pty Limited v Guardian International Properties Pty Ltd [2007] NSWSC 554, Bergin J considered a similar point, although one arising on a different factual basis. In that case, the payment claim had been served, and a payment schedule had been provided but outside the time limit under s 14(4)(b). The claimant gave no notice pursuant to s 17(2)(a). Nonetheless, matters proceeded as far as the making of an adjudication application, the provision of an adjudication response, and the consideration of the dispute by the adjudicator. When the problem was discovered, the parties submitted to the adjudicator that he should not determine the application because of the claimant's failure to comply with s 17(2)(a). He appears to have acceded to that view.
40 The claimant then commenced proceedings in this Court for recovery of the claimed amount. The defendant submitted, as Bergin J recorded at para [9], "that the plaintiff is precluded from bringing these proceedings because it elected to pursue the adjudication option under s 15 (2)(a)(ii) of the Act instead of pursuing the curial option under...s 15(2)(a)(i) of the Act".
41 Her Honour referred to the decisions of Einstein J in Schokman and Rojo. However, she concluded that there was a significant distinction. In this case, her Honour held, the adjudication application was a nullity because of the failure to perform the mandatory condition laid down by s 17(2). Her Honour relied on the decision of McHugh JA in G J Coles & Co Ltd v Retail Trade Industrial Tribunal (1986) 7 NSWLR 503 at 522. Thus, her Honour held at para [25], "[t]he act of filing and serving [the adjudication application] was incapable of creating legal consequences, including the legal consequence of the making of an election under s 15(2) of the Act".
42 Her Honour's decision confirms that the election is one between bringing proceedings in a Court and making an adjudication application. It confirms further that the election is not made unless there is an effective choice to pursue one course or the other.
The competing contentions
43 Before I turn to the questions involved, I will note the competing positions of the parties.
44 Mr Drummond submitted that there was no question of election between alternative and inconsistent rights. He submitted that what was involved was, at most, an election between alternative and inconsistent remedies. If an election had been made, it was an election to pursue a remedy, and not the election of an inconsistent right. He submitted that an election between inconsistent remedies did not become binding until the remedy elected was pursued to judgment: United Australia Limited v Barclays Bank Limited [1941] AC 1. (I note that although that case concerned an alleged election to sue one of two tortfeasors, it is clear that their Lordships' analysis applies equally where the election is to pursue one of two remedies against the same tortfeasor for the same loss.)
45 Mr Drummond submitted in the alternative that, at least in the case of election between statutory alternative remedies, it was necessary that the elector should know not just the material facts giving rise to the right to elect but also of the right itself: Latter v Council of the Shire of Muswellbrook (1936) 56 CLR 422; O'Connor v S.P. Bray Limited (1937) 56 CLR 464. He submitted that there was no evidence that Rojo knew of the statutory right to elect.
46 Mr Drummond submitted further that, regardless of the classification of the statutory alternatives provided by s 15(2)(a), the right to sue given by sub-para (i) could not be lost even if Rojo had pursued the alternative course of adjudication. This, he submitted, followed from the objects of the Act as set out in s 3 and from the wording of s 14(4) read in conjunction with s 15(1). He laid particular stress on the fact that failure to provide a payment schedule meant that "the respondent becomes liable to pay the claimed amount...".
47 Mr Drummond submitted further that the second statutory alternative, provided by s 15(2)(a)(ii), was to "make an adjudication application....". He submitted that nothing less than this would constitute, or trigger, any election. Specifically, and to some extent in the alternative, Mr Drummond submitted that the mere service of a notice of intention in accordance with s 17(2(a)) could not constitute, or trigger, the election. He submitted that it was no more than a statement of present intention, and did not commit the giver of the notice to proceed with adjudication.
48 Further, Mr Drummond submitted, by analogy with the reasoning of Bergin J in Kell & Rigby at para [24], that an act that of itself created no legal consequences - the service of a notice of intention - could not constitute an election.
49 Mr Southwick submitted that the point was covered by the reasoning and conclusions of Einstein J in Rojo. He submitted, in substance, that Einstein J was correct both in his approach to the problem and in his resolution of it. Although Mr Southwick accepted that I was not bound by his Honour's reasoning, he submitted that, the reasoning being correct, I should adopt and apply it.
50 As to the question of knowledge, Mr Southwick submitted that it was plain that Rojo, through its solicitors, was aware not only of the relevant facts but also of the alternative and inconsistent rights given by s 15(2)(a). He submitted, in accordance with what Bergin J had said in Kell & Rigby at para [21], that the question, whether an election had been made, depends upon the facts of the particular case. In this case, he submitted, Mr Nolan's letter of 19 December 2005 was unequivocally a statement of intention to apply for adjudication.
51 Before I turn to a resolution of those competing contentions, I shall indicate briefly what this case does not decide.
What this case does not decide
52 The extreme position taken by Rojo is that there can never be an election so as to prevent a claimant from proceeding to a court after it has tried the remedy of adjudication. In other words, the extreme position taken by Rojo is that the decision of Einstein J on the earlier application in this case is in all circumstances incorrect.
53 Underlying the extreme position taken by Rojo is the proposition that, by force of s 14(4), a respondent always remains liable to pay the claimed amount once it has failed to provide a payment schedule within the requisite time limited by s 14(4).
54 Section 3 (3)(c) makes it clear that the legislature intended that any dispute over a payment claim should be dealt with by adjudication. There can only be a disputed claim if there is a valid payment schedule. A valid payment schedule may be provided:
(1) within the time limit prescribed by s 14(4); or
(2) where a claimant gives notice of intention to proceed to adjudication under s 17(2)(a), within the further time limit prescribed by s 17(2)(b).
55 In either case - and, relevantly for present purposes, specifically in the second - there will be a valid payment schedule and, therefore, a dispute between the parties on the terms of the payment claim and the payment schedule.
56 The legislature provided for the consequences, in terms of adjudication, of provision of a payment schedule within the further time prescribed by s 17(2)(b). It did not provide for the consequences in terms of court proceedings. Where a claimant seeks to enforce its rights by adjudication pursuant to s 15(2)(a)(ii), it must accept the consequence that a legitimate argument may be raised in defence of the claim. It would be quite extraordinary if, in those circumstances, the claimant could proceed to adjudication, lose before the adjudicator because of the issues raised in the s 17(2(b)) payment schedule, and then proceed to enforce the payment claim in a Court pursuant to s 15 (2)(a)(i) on the basis that there remains a statutory liability pursuant to s 14(4).
57 Those considerations suggest strongly that, once a s 17(2)(a) notice is given and a s 17(2)(b) payment schedule is provided in response within five business days thereafter, it is no longer open to the claimant to seek to enforce the payment claim by proceedings in a court. That tentative analysis is reinforced by s 3(3)(c) which, as I have said, suggests that once there is a disputed claim it is to be referred to adjudication. In other words, it suggests that once there is a disputed claim, it ought not to be dealt with in a court on the basis that it is not disputed.
58 It is, however, unnecessary for me to express a concluded view on that question. It does not arise on the facts of this case. In my view, it is one that should be left until it does arise.
59 In the meantime, I respectfully suggest that the legislature turn its attention to this aspect of the legislative scheme, with a view to expressing clearly and directly what consequences should follow, both for s 14(4) and for s 15(2)(a)(i), if a s 17(2)(b) payment schedule is given validly in response to a s 17(2)(a) notice of intention.
60 I now turn to the questions on which the resolution of this case depends.
First and second questions: what if any election was made?
61 The starting point is that Jillcris' payment schedule was not provided in response to Rojo's s 17(2)(a) notice. Specifically, and adopting the language of s 17(2)(b), Jillcris did not provide a payment schedule for Rojo "within five business days after receiving" that notice. Nor does Jillcris seek to make any case that it relied on Mr Nolan's letter of 19 December 2005 in making its decision (assuming - a matter on which the evidence is silent - that any relevant decision was made) not to avail itself of the opportunity given by s 17(2)(b).
62 As a matter of construction, the alternatives for which s 15 (2)(a) provides are:
(1) enforcement of the liability for which s 14(4) provides in a court; or
(2) enforcement of that liability by making an adjudication application.
63 As both the language of s 17(2) and the decision of Bergin J in Kell & Rigby make plain, an adjudication application cannot be made until notice has been given under s 17(2)(a) and the respondent has been given five business days thereafter to provide a payment schedule. The provision of a notice under s 17(2)(a) gives the respondent a right: a further opportunity to provide a payment schedule. But neither the giving of a notice under s 17(2)(a) nor (if it happens) the provision of a payment schedule under s 17(2)(b) constitutes the making of an adjudication application. The claimant is not bound to apply for adjudication after the payment schedule is provided. It may decide, for any number of reasons, not to press the dispute further. For the reasons that I have given, I express no view as to whether the claimant could retreat to the other statutory alternative given by s 15(2)(a).
64 For present purposes, I am prepared to assume that s 15(2)(a) does provide for inconsistent alternatives, and that it does raise a question of election. That I think would be an election between remedies, not an election between rights. The right is to be paid the progress payment, or the statutory liability created by s 14(4). Section 15(2)(a) provides alternative remedies whereby that right can be enforced.
65 But, assuming that s 15(2)(a) does entail the notion of election, it is an election between bringing proceedings in a court and making an adjudication application. As I have said, a notice of intention to apply for adjudication does not amount to making an adjudication application. It is a procedural, although necessary, precondition to the making of such an application.
66 In those circumstances, I do not accept that the mere giving of a notice under s 17(2)(a) is of itself sufficient to constitute, or to trigger, the making of any election for which s 15 (2)(a) provides.
67 There was some debate as to whether an act that amounts to an election may be withdrawn before it is in some way acted upon. The decision of Stephen J in Sargent v A.S.L. Developments Limited (1974) 131 CLR 634 at 647 suggests that it may not. The decision of Jordan CJ in Miller v Miller (1945) 45 SR (NSW) 73 at 75 suggests that it may: at least as long as the party to whom the election is communicated does not incur detriment in reliance upon the communication.
68 The question in those cases arose in the context of election at law between alternative and inconsistent rights. For the reasons that I have given, I think that what is involved here is at most a question of election between alternative and inconsistent statutory remedies. The application by analogy of legal doctrines relating to election between inconsistent rights to statutory election between inconsistent remedies requires careful consideration. Specifically, it requires consideration of the extent to which the common law doctrine can sit with the statutory scheme. Since I have concluded that there was no election, it is unnecessary to pursue that topic further.
Third question: consequences of any election