Court of Appeal (WA)|2018-03-14|Before: Martin CJ

SAMSUNG C&T CORPORATION -v- DURO FELGUERA AUSTRALIA PTY LTD [2018] WASCA 27 (14 March 2018)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : SAMSUNG C&T CORPORATION -v- DURO FELGUERA AUSTRALIA PTY LTD [2018] WASCA 27

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : SAMSUNG C&T CORPORATION -v- LOOTS [2016] WASC 330

File No : CIV 1185 of 2016, CIV 1255 of 2016, CIV 1899 of 2016, CIV 1905 of 2016

Administrative law - Judicial review - Determination by adjudicator under Construction Contracts Act 2004 (WA) - Whether adjudicator had jurisdiction to consider and determine dispute that included claims for payment for 'construction work' and work excluded from the definition of 'construction work' - Whether adjudicator had jurisdiction to erroneously determine whether work for which payment was sought was 'construction work'

First Respondent : Mr S K Dharmananda SC & Mr T J Porter

AB v The State of Western Australia; AH v The State of Western Australia [2011] HCA 42; (2011) 244 CLR 390

Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564

Australian Heritage Commission v Mount Isa Mines Ltd [1997] HCA 10; (1997) 187 CLR 297

Corporation of the City of Enfield v Development Assessment Commission [2000] HCA 5; (2000) 199 CLR 135

Duro Felguera Australia Pty Ltd v Samsung C&T Corporation [2018] WASC 28

Field Deployment Solutions Pty Ltd v SC Projects Australia Pty Ltd [2015] WASC 60

Forrest & Forrest Pty Ltd v The Honourable William Richard Marmion, Minister For Mines and Petroleum [2017] WASCA 153; (2017) 51 WAR 425

Gedeon v Commissioner of the New South Wales Crime Commission [2008] HCA 43; (2008) 236 CLR

Houssein v Under Secretary, Department of Industrial Relations & Technology (NSW) [1982] HCA 2; (1982) 148 CLR 88

Kirk v Industrial Court of New South Wales [2010] HCA 1; (2010) 239 CLR 531

Laing O'Rourke Australia Construction Pty Ltd v Samsung C&T Corporation [2016] WASCA 130; (2016) 50 WAR 399

Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5

Minister for Immigration and Multicultural Affairs v Eshetu [1999] HCA 21; (1999) 197 CLR 611

Minister for Lands (NSW) v Jeremias [1917] HCA 41; (1917) 23 CLR 322

Perrinepod Pty Ltd v Georgiou Building Pty Ltd [2011] WASCA 217; (2011) 43 WAR 319

Plaintiff M70/2011 v Minister for Immigration & Citizenship [2011] HCA 32; (2011) 244 CLR 144

Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57; (2000) 204 CLR 82

Samsung C&T Corporation v Loots [2016] WASC 330

Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd [2016] HCA 52; (2016) 340 ALR 193

Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd [2012] QCA 276; [2013] 2 Qd R 75

Timbarra Protection Coalition Inc v Ross Mining NL [1999] NSWCA 8; (1999) 46 NSWLR 55

Woolworths Ltd v Pallas Newco Pty Ltd [2004] NSWCA 422; (2004) 61 NSWLR 707

1 The appellant, Samsung C&T Corporation (Samsung), is, with Roy Hill Holdings Pty Ltd, the head contractor for the Roy Hill Iron Ore Project (the Project). The Project involves the development of an open cut mine for the extraction of iron ore, with associated processing, rail and port facilities in the Pilbara region of Western Australia.

2 Samsung and the first respondent, Duro Felguera Australia Pty Ltd (Duro), are parties to a subcontract for the performance by Duro of various works required for the Project.[1] Disputes arose between Samsung and Duro with respect to Duro's entitlement to payment for work performed pursuant to the subcontract. Duro referred a number of those disputes to adjudication pursuant to the provisions of the Construction Contracts Act 2004 (WA) (the CCA).[2] One of the disputes the subject of this appeal was adjudicated by the second respondent, Mr P C Loots, and another by the third respondent, Mr Chidambara Raj Chidambaranadar Baskaran. Each adjudicator determined that Samsung was liable to make a payment to Duro, and determined the amount of the payment due.

3 Duro commenced proceedings for the enforcement of those determinations. Samsung commenced judicial review proceedings in which it challenged the validity of the determinations made by the adjudicators on various grounds. Those grounds included the assertion that the determinations were invalid because they included components relating to the payment for works which are excluded from the definition of construction work under the CCA because they were works for the construction of plant for the purposes of extracting mineral bearing substances.[3]

4 The trial judge concluded that each adjudicator had erroneously concluded that some of the works the subject of his determination were construction work within the meaning of the CCA when he should have concluded that some, but not all of those works, were excluded from that meaning. However, the trial judge concluded that the erroneous characterisation of some portions of the work the subject of each adjudicator's determination was an error made by the adjudicator in the exercise of the jurisdiction conferred upon him by the CCA. It followed that the determinations were not invalidated by the errors made by each adjudicator. Samsung's judicial review proceedings were dismissed, and Duro's applications for enforcement of the determinations were granted.

5 Samsung appeals from those decisions. The only issues in the appeal are whether the trial judge was correct to conclude that each adjudicator had jurisdiction to determine a claim by Duro for payment in respect of work which included both construction work and work excluded from the definition of construction work and, if so, whether each adjudicator had jurisdiction to erroneously determine whether work for which payment was sought was, in fact, construction work.

6 For the reasons which follow,[4] the trial judge was correct to conclude that each of those issues should be resolved in the affirmative. Consequently, Samsung's appeal should be dismissed.

The Construction Contracts Act 2004 (WA)

7 The preamble to the CCA identifies three primary purposes of the Act, namely:

to prohibit or modify certain provisions in construction contracts;
to imply provisions in construction contracts about certain matters if there are no written provisions about the matters in the contracts;
to provide a means for adjudicating payment disputes arising under construction contracts[.]

8 Given those purposes, and the title to the Act, it is hardly surprising that the existence of a construction contract is central to the operation of the CCA. That expression is defined to mean:

... a contract or other agreement, whether in writing or not, under which a person (the contractor) has one or more of these obligations -

(a) to carry out construction work;

(b) to supply to the site where construction work is being carried out any goods that are related to construction work by virtue of section 5(1);

(c) to provide, on or off the site where construction work is being carried out, professional services that are related to the construction work by virtue of section 5(2);

(d) to provide, on the site where construction work is being carried out, on-site services that are related to the construction work by virtue of section 5(3)(b);[5]

... construction work means any of the following work on a site in WA -

(a) reclaiming, draining, or preventing the subsidence, movement or erosion of, land;

(b) installing, altering, repairing, restoring, maintaining, extending, dismantling, demolishing, or removing, any works, apparatus, fittings, machinery, or plant, associated with any work referred to in paragraph (a);

(c) constructing the whole or a part of any civil works, or a building or structure, that forms or will form, whether permanently or not and whether in WA or not, part of land or the sea bed whether above or below it;

(d) fixing or installing on or in any thing referred to in paragraph (c) any fittings forming, or to form, whether permanently or not, part of the thing, including -

(i) fittings for electricity, gas, water, fuel oil, air, sanitation, irrigation, telecommunications, air-conditioning, heating, ventilation, fire protection, cleaning, the security of the thing, and the safety of people; and

(ii) lifts, escalators, insulation, furniture and furnishings;

(e) altering, repairing, restoring, maintaining, extending, dismantling, demolishing or removing any thing referred to in paragraph (c) or any fittings described in paragraph (d) that form part of that thing;

(f) any work that is preparatory to, necessary for, an integral part of, or for the completion of, any work referred to in paragraph (a), (b), (c), (d) or (e), including -

(i) site or earth works, excavating, earthmoving, tunnelling or boring; and

(ii) laying foundations; and

(iii) erecting, maintaining or dismantling temporary works, a temporary building, or a temporary structure including a crane or other lifting equipment, and scaffolding; and

(iv) cleaning, painting, decorating or treating any surface; and

(v) site restoration and landscaping;

(g) any work that is prescribed by regulations to be construction work for the purposes of this Act.

10 Section 4(1) of the CCA defines civil works to include:

(a) a road, railway, tramway, aircraft runway, canal, waterway, harbour, port or marina; and

(b) a line or cable for electricity or telecommunications; and

(c) a pipeline for water, gas, oil, sewage or other material; and

(d) a path, pavement, ramp, tunnel, slipway, dam, well, aqueduct, drain, levee, seawall or retaining wall; and

(e) any works, apparatus, fittings, machinery or plant associated with any works referred to in paragraph (a), (b), (c) or (d);

(3) Despite subsection (2) construction work does not include any of the following work on a site in WA -

(a) drilling for the purposes of discovering or extracting oil or natural gas, whether on land or not;

(b) constructing a shaft, pit or quarry, or drilling, for the purposes of discovering or extracting any mineral bearing or other substance;

(c) constructing any plant for the purposes of extracting or processing oil, natural gas or any derivative of natural gas, or any mineral bearing or other substance;

(d) constructing, installing, altering, repairing, restoring, maintaining, extending, dismantling, demolishing, or removing, wholly artistic works, including sculptures, installations and murals;

(e) work prescribed by the regulations not to be construction work for the purposes of this Act.

Contracts to carry out 'construction work' and other work which is not 'construction work'

12 It is apparent from the definitions which I have set out above that there will be contracts which provide for a range of work to be carried out, some of which is construction work, and some of which is not construction work, either because it does not fall within the primary definition of construction work or because it is excluded from that definition by the operation of s 4(3) of the CCA. As will appear, the subcontract between Samsung and Duro is such a contract.

13 Samsung's initial contention that its subcontract with Duro was not a construction contract was abandoned on the second day of the hearing before the trial judge. Since then Samsung has accepted[6] that the subcontract is a construction contract notwithstanding that it provides for the performance of work which is not construction work in addition to the performance of construction work. On the face of it, that concession is properly made given that the expression construction contract is defined to mean a contract under which a person has an obligation to carry out construction work. There is nothing in the definition, or in any other provision of the CCA, which would support the proposition that a contract is only a construction contract if the only obligations which are to be performed pursuant to its terms are construction work. To the contrary, there are provisions in the CCA which expressly contemplate that a contract may be a construction contract under the Act to a certain extent only[7] or may give rise to obligations which do not come within the definition of construction contract and therefore not within the definition of construction work.[8]

14 Nevertheless, because of Samsung's concession, no argument was directed to the question of whether the definition of construction contract admits of a process of characterisation to be undertaken by reference to the relative proportions of the work to be performed pursuant to the contract which is construction work, and that which is not construction work. So, the question of whether there is a class of contracts not properly characterised as construction contracts because only a miniscule proportion of the work to be carried out pursuant to their terms is construction work is a question for another day. At all events, it has never been suggested that the subcontract in this case is such a contract.

15 As I have noted, one of the purposes of the CCA is to prohibit or modify certain provisions in construction contracts. That purpose is effected by s 9 - s 12 of the Act. Those sections apply to provisions in a construction contract. There is nothing in their terms which would limit their operation to the obligations to carry out construction work imposed under such contracts. Absent argument to the contrary,[9] those sections appear to apply to all construction contracts, including contracts under which the contractor is obliged to carry out work which is construction work and work which is not construction work.

16 I have also noted that another purpose of the CCA is to imply provisions in construction contracts dealing with certain matters if there are no written provisions dealing with those matters in the contracts. That purpose is effected by s 13 - s 23 of the CCA. Like the sections of the CCA dealing with prohibited provisions, the sections dealing with implied provisions apply to a construction contract. There is no provision of the CCA limiting their operation to that part of a construction contract which gives rise to obligations to carry out construction work. So, absent argument to the contrary,[10] those sections appear to apply to construction contracts under which the contractor is obliged to carry out both construction work and other work which is not construction work.

17 As I have noted, the third primary purpose of the CCA is to provide for the adjudication of payment disputes arising under construction contracts. That purpose is effected by Pt 3 of the CCA. Within that part, s 30 provides:

The object of an adjudication of a payment dispute is to determine the dispute fairly and as quickly, informally and inexpensively as possible.

18 Payments made pursuant to the determination of an adjudicator with respect to a payment dispute arising from a claim for past performance of a contractor's obligations have an interim character, in that they are 'to be taken to be an advance towards the total amount payable under the contract'.[11] Further, s 45 of the CCA provides that Pt 3 of the Act does not prevent a party to a construction contract from instituting proceedings before an arbitrator or a court in relation to a dispute or other matter arising under the contract, and further provides that such an arbitrator or court must, in making any award or judgment, allow for payments made or to be made pursuant to a determination under the CCA, and may order restitution of any such amounts paid. It is proceedings of the kind envisaged by s 45 which will authoritatively determine the rights and obligations of the parties to a construction contract. By contrast, the adjudicator's function is limited to the determination of whether a party is obliged to make a payment by way of advance towards the satisfaction of the rights and obligations ultimately determined by an arbitrator or a court.

19 These provisions are entirely consistent with the description of the adjudication process provided in the Second Reading Speech for the Bill which became the CCA:[12]

When a party to a construction contract believes it has not been paid in accordance with the contract, the Bill provides a rapid adjudication process that operates in parallel to any other legal or contractual remedy. The rapid adjudication process allows an experienced and independent adjudicator to review the claim and, when satisfied that some payment is due, make a binding determination for money to be paid. The rapid adjudication process is a trade-off between speed and efficiency on the one hand, and contractual and legal precision on the other. Its primary aim is to keep the money flowing in the contracting chain by enforcing timely payment and sidelining protracted or complex disputes. The process is kept simple, and therefore cheap and accessible, even for small claims. In most cases the parties will be satisfied by an independent determination and will get on with the job. If a party is not satisfied, it retains its full rights to go to court or use any other dispute resolution mechanism available under the contract. In the meantime, the determination stands, and any payments ordered must be made on account pending an award under the more formal and precise process.

20 Part 3 of the CCA empowers an adjudicator to determine a payment dispute. That expression is, in effect, defined by s 6 of the CCA which provides:

For the purposes of this Act, a payment dispute arises if -

(a) by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full, or the claim has been rejected or wholly or partly disputed; or

(b) by the time when any money retained by a party under the contract is due to be paid under the contract, the money has not been paid; or

(c) by the time when any security held by a party under the contract is due to be returned under the contract, the security has not been returned.

21 It should be noted that, of the three categories of payment dispute for which s 6 provides, only the first is conditioned upon the existence of a payment claim. I will return to the significance of that observation after referring to the meaning of payment claim.

22 The expression payment claim is defined by s 3 of the CCA to mean:

... a claim made under a construction contract -

(a) by the contractor to the principal for payment of an amount in relation to the performance by the contractor of its obligations under the contract; or

(b) by the principal to the contractor for payment of an amount in relation to the performance or non-performance by the contractor of its obligations under the contract[.]

23 So, by this definition, a payment claim must be for payment of an amount in relation to the performance or non-performance by the contractor of its obligations under the contract. It follows that attention must be directed to the meaning of the word obligations for the purposes of the CCA.

24 Section 3 of the CCA defines obligations in relation to a contractor to mean 'those of the obligations described in the definition of construction contract that the contractor has under the construction contract.'

25 As I have already noted, this definition assumes that a construction contract may impose an obligation upon a contractor to perform works described in the definition of construction contract and other works which are not so described. In that context, the effect of the definition is to limit the meaning of payment claim to a claim for payment for works described in the definition of construction contract, and to exclude from a payment claim any claim for payment for works that are not so described - either because they fall outside the primary definition of construction work,[13] or because they are expressly excluded from the meaning of construction work by s 4(3) of the CCA. The limitation upon the meaning of payment claim imposed by the definition of obligations has given rise to the issues in this appeal.

26 I noted above that the existence of a payment claim conditions only one of the three categories of payment dispute described in s 6 of the CCA. It follows that the ambit of each of the other two categories of payment dispute is not limited by the limitation imposed by the definition of obligations to which I have just referred. The CCA confers jurisdiction upon an adjudicator to determine a payment dispute arising under a construction contract in relation to the payment of retention moneys, or the return of security held by a party without imposing any obligation upon an adjudicator to determine the extent to which the retention moneys or security related to the performance of construction work.[14] By contrast, when a payment dispute arises from the non-payment, rejection or disputation of a payment claim, the definition given to obligations requires attention to be directed to the question of whether the work for which payment is claimed is work described in the definition of construction contract.

27 Samsung contends that if the claim for payment giving rise to a payment dispute includes a claim for payment for work not described in the definition of construction contract, the claim for payment is not a payment claim, with the result that there is no payment dispute for an adjudicator to determine, even in respect of any claim for payment for work described in the definition of construction contract included within the claim. Put another way, Samsung contends that if a claim for payment includes a claim for work described in the definition of construction contract, and other work not described in that definition, an adjudicator has no jurisdiction to determine any dispute arising from the claim, even to the extent of the claim for payment for work described in the definition of construction contract.

28 In the alternative, Samsung contends that if an adjudicator has jurisdiction to determine a payment dispute arising from a claim for payment for works described in the definition of construction contract and other works not so described, the adjudicator's jurisdiction is limited to the determination of that part of the dispute which relates to a claim for payment for work described in the definition of construction contract. Samsung further contends that if an adjudicator errs in his or her assessment of whether the work for which payment is claimed is work described in the definition of construction contract and erroneously includes within his or her determination a dispute relating to a claim for payment for works not so described, the adjudicator's determination is void in its entirety, and is of no effect because the adjudicator has exceeded the jurisdiction conferred upon him or her by the CCA.

29 On the other hand, Duro contends that, on the proper construction of the CCA, the jurisdiction of an adjudicator to determine a payment dispute does not depend upon the payment claim giving rise to the dispute being limited only to a claim for payment for work described in the definition of construction contract. Duro contends that, on its proper construction, the CCA confers jurisdiction upon an adjudicator to determine a payment dispute arising from a payment claim which includes a claim for payment for work described in the definition of construction contract and other work not so described. In answer to Samsung's alternative contention, Duro contends that the CCA confers upon an adjudicator jurisdiction to determine whether work the subject of any claim for payment giving rise to a payment dispute is, or is not, work performed by a contractor in the discharge of obligations described in the definition of construction contract. Accordingly, according to Duro, an error by an adjudicator with respect to the proper characterisation of the work for which payment is claimed[15] is an error in the exercise of the jurisdiction conferred upon an adjudicator by the CCA, and provides no ground for judicial review.

30 The trial judge simultaneously heard five applications for judicial review brought by Samsung - each application relating to a separate determination made by an adjudicator in favour of Duro. His Honour also heard five applications by Duro for leave to enforce those determinations. All ten applications are dealt with in a single set of reasons.[16]

31 The determinations the subject of this appeal are the determination made by Mr Loots characterised by the trial judge as the First Determination, and the determination made by Mr Chidambara Raj characterised by the trial judge as the Fifth Determination.[17]

32 The trial judge noted[18] that each of the adjudicators had proceeded on the basis that it was necessary to determine whether each item of work for which payment was claimed was work described within the definition of construction contract.[19] For the reasons which he gave, the trial judge concluded[20] that in making the First and Fifth Determinations, each adjudicator erroneously concluded that some of the items of work for which payment was claimed were work described in the definition of construction contract, whereas in fact some of those works were not so described, essentially because the work fell within work excluded from construction work by s 4(3)(c) of the CCA.[21] Duro does not challenge the trial judge's conclusion that each adjudicator erred by including within the relevant determination its claim for payment for work not described in the definition of construction contract. Its opposition to Samsung's appeal is based on the proposition that such errors were made in the exercise of the jurisdiction conferred upon each adjudicator by the CCA. It follows that it is unnecessary to recite the reasons given by the trial judge for his conclusion that each adjudicator erred, or to catalogue the items of work and the corresponding claims for payment which were the subject of those errors.

33 In his reasons for concluding that the First and Fifth Determinations were valid notwithstanding the errors which he had found, the trial judge addressed Samsung's argument on the basis that it was limited to what I have described as Samsung's first contention - namely, the contention that a dispute arising from a claim for payment for works which include any items of work not described in the definition of construction contract is not a payment dispute which enlivens the jurisdiction of an adjudicator in any respect.[22] By ground 3 of its appeal, Samsung asserts that it advanced what I have described as its alternative contention before the trial judge, and complains that the trial judge failed to deal with it. Duro contests Samsung's assertion that the matter was advanced in argument before the trial judge, but accepts that Samsung's contention is limited to a proposition of law, and that it would suffer no prejudice if Samsung is now permitted to advance the argument on appeal.[23] In light of Duro's position, it is appropriate to receive and deal with the contention which I have described as Samsung's alternative contention, irrespective of whether or not that proposition was put to the trial judge. It is therefore unnecessary to determine Samsung's third ground of appeal.

34 Before referring (briefly) to the reasons given by the trial judge for rejecting what I have described as Samsung's first contention, it is appropriate to refer to a number of provisions of the CCA relating to the adjudication process. Section 25 of the CCA provides that any party to a construction contract may apply to have a payment dispute adjudicated unless certain circumstances[24] have occurred. Section 26 of the CCA prescribes the manner in which the right conferred by s 25 is to be exercised. It provides:

26. Applying for adjudication

(1) To apply to have a payment dispute adjudicated, a party to the contract, within 28 days after the dispute arises or, if applicable, within the period provided for by section 37(2)(b), must -

(a) prepare a written application for adjudication; and

(b) serve it on each other party to the contract; and

(c) serve it -

(i) if the parties to the contract have appointed a registered adjudicator and that adjudicator consents, on the adjudicator;

(ii) if the parties to the contract have appointed a prescribed appointor, on that appointor;

(iii) otherwise, on a prescribed appointor chosen by the party;

and

(d) provide any deposit or security for the costs of the adjudication that the adjudicator or the prescribed appointor requires under section 44(8) or (9).

(a) must be prepared in accordance with, and contain the information prescribed by, the regulations; and

(b) must set out the details of, or have attached to it -

(i) the construction contract involved or relevant extracts of it; and

(ii) any payment claim that has given rise to the payment dispute;

and

(c) must set out or have attached to it all the information, documentation and submissions on which the party making it relies in the adjudication.

(3) A prescribed appointor that is served with an application for adjudication made under subsection (1) must comply with section 28.

35 Section 28 of the CCA provides that a prescribed appointor must appoint a registered adjudicator within five days after being served with an application.

36 Section 27 of the CCA provides that a party to a construction contract served with an application for adjudication must prepare and serve a written response to that application within 14 days of the date of service.

31**. Adjudicator's functions**

(1) In this section -

prescribed time means -

(a) if the appointed adjudicator is served with a response under section 27(1) - 14 days after the date of the service of the response;

(b) if the appointed adjudicator is not served with a response under section 27(1) - 14 days after the last date on which a response is required to be served under section 27(1).

(2) An appointed adjudicator must, within the prescribed time or any extension of it made under section 32(3)(a) -

(a) dismiss the application without making a determination of its merits if -

(i) the contract concerned is not a construction contract; or

(ii) the application has not been prepared and served in accordance with section 26; or

(iii) an arbitrator or other person or a court or other body dealing with a matter arising under a construction contract makes an order, judgment or other finding about the dispute that is the subject of the application; or

(iv) satisfied that it is not possible to fairly make a determination because of the complexity of the matter or the prescribed time or any extension of it is not sufficient for any other reason;

(b) otherwise, determine on the balance of probabilities whether any party to the payment dispute is liable to make a payment, or to return any security and, if so, determine -

(i) the amount to be paid or returned and any interest payable on it under section 33; and

(ii) the date on or before which the amount is to be paid, or the security is to be returned, as the case requires.

(3) If an application is not dismissed or determined under subsection (2) within the prescribed time, or any extension of it made under section 32(3)(a), the application is to be taken to have been dismissed when the time has elapsed.

The trial judge's reasons for concluding that each adjudicator had jurisdiction

38 The trial judge gave detailed reasons for his rejection of what I have described as Samsung's first contention. The brief precis of those reasons which follows refers only to the principal components of that process of reasoning.

39 The trial judge concluded that the question of whether there was no payment dispute because there was no payment claim was not a matter to be addressed in the course of the exercise of an adjudicator's power to dismiss an application without making a determination of its merits,[25] but was a question to be addressed in the course of determining whether any party to the payment dispute is liable to make a payment.[26] In his view the question of whether there was no payment dispute because there was no payment claim was not a matter to be addressed by an adjudicator in the performance of the obligation imposed by s 31(2)(a)(ii), which requires an adjudicator to determine whether the application has been prepared and served in accordance with s 26. In the view of the trial judge, the content of that obligation was informed by the terms of s 26, which imposed the following requirements:[27]

(1) the preparation of a written application meeting the requirements of s 26(2);

(2) service of the application in accordance with s 26(1)(b) and (c); and

(3) each of which are done within the time prescribed by s 26.

40 In his view, 'the language of s 31(2)(a)(ii) is directed to the requirements as to time, service, form and content in s 26, and does not naturally encompass the questions, of a fundamentally different character, of whether there is a payment dispute or payment claim at all',[28] relying upon Perrinepod and Laing O'Rourke Australia Construction Pty Ltd v Samsung C&T Corporation.[29]

41 The trial judge accepted Samsung's proposition that while the CCA does not restrict the expression construction contract to mean only contracts in which the only obligations imposed upon the contractor are the performance of works described in the definition of that expression, the CCA does reveal a scheme by which the legislature has differentiated between provisions of the Act which apply to construction contracts generally, and provisions of the Act which apply only to obligations, thereby restricting their application to the performance of works described in the definition of construction contract. The trial judge accepted that one such provision is the definition of payment claim,[30] which in turn is incorporated into par (a) of the definition of payment dispute.

42 However, the trial judge rejected Samsung's contention that a claim for payment which included a claim for any item which is not work described in the definition of construction contract cannot give rise to a payment dispute which an adjudicator has jurisdiction to determine.[31] In his view, a claim for payment was a payment claim 'if and to the extent that it claims an amount in relation to the performance of [work described in the definition of construction contract]'.[32] The trial judge preferred that view of the operation of the CCA to an alternative construction, advanced by Duro, to the effect that a claim for payment was a payment claim 'if, on an overall assessment of the claim as a whole, a substantial amount of the work described in the claim is [work of a kind described in the definition of construction contract]'.[33]

43 The trial judge noted, as have I, that a construction contract may give rise to obligations to perform work described in the definition of construction contract, and other work not so described. It followed that a payment claim under such a contract may well include claims for payment for both kinds of work.[34] The trial judge was unable to find any provision in the CCA which supported the proposition that a payment claim was restricted to claims for payment of amounts that related exclusively to works described in the definition of construction contract. In the view of the trial judge, Samsung's contention involved reading the definition of payment claim as if it contained the word 'only', or perhaps 'solely', when no such word is used in the definition; and the trial judge could not find any textual support for the restrictive reading for which Samsung contended elsewhere in the CCA.[35]

44 The trial judge thought it unlikely that the legislature would contemplate that parties to a construction contract which involved the performance of works described in the definition of construction contract and other works not so described would be required to submit separate progress claims in respect of each category of work, an outcome which he considered to be highly inconvenient. He noted that on Samsung's construction of the CCA, if a contractor made an error in the characterisation of different categories of work, the contractor would lose the right to apply for an adjudication if the claim was not paid. In the view of the trial judge, these consequences of the construction for which Samsung contended were highly unworkable and therefore highly unlikely to have been intended by the legislature.[36]

45 The trial judge reinforced that conclusion by the observation that there may well be contracts for the performance of work described in the definition of construction contract and other work not so described which required the contractor to submit a single progress claim for payment at prescribed intervals. He noted that on Samsung's construction of the CCA, such a contractor would never be able to avail itself of the right to adjudication conferred by the Act - another outcome which he considered an unlikely objective to attribute to the legislature.[37] The trial judge noted that the construction of the CCA which he preferred would not require a contractor to make separate progress claims and would operate sensibly in the context of legislation which contemplated that a construction contract could impose obligations to perform works described in the definition of that term, and other works not so described.[38]

46 Further, in the trial judge's view, a construction of the CCA which required an adjudicator to determine which items within a claim for payment were in fact part of a payment claim as part of the process of determination under s 31(2)(b) was entirely workable and more likely to have been intended than the construction propounded by Samsung.[39]

47 In the view of the trial judge, it followed that an error in relation to the characterisation of a particular item of work for which payment was claimed would be an error within the performance of the jurisdiction conferred upon the adjudicator and would not invalidate the determination.[40]

48 The trial judge reinforced his conclusion with the observation that s 26 of the CCA did not require an applicant to provide a copy of the claim for payment giving rise to the dispute to the adjudicator - rather, it was sufficient if the adjudication application set out details of the claim. Accordingly, the trial judge noted that an adjudicator would not necessarily have sufficient information to determine whether each item of work in respect of which payment was claimed was work described in the definition of construction contract at the time the adjudicator is required to determine whether to dismiss the application summarily without a determination of its merits.[41]

49 As Duro no longer propounds the construction of the CCA which it advanced before the trial judge,[42] it is unnecessary to refer to the trial judge's reasons for preferring his construction of the Act to that for which Duro contended.

50 There are three grounds of appeal although, as I have noted,[43] it is unnecessary to address or determine the third ground. The first two grounds of appeal correspond to what I have described as Samsung's first and alternative contentions. Ground one asserts that an adjudicator lacks jurisdiction to consider and determine an application claiming payment if any of the work for which payment is claimed is not work of the kind described in the definition of construction contract. The second ground - advanced in the alternative to the first - asserts that the trial judge should have found that each adjudicator exceeded the jurisdiction conferred upon him by erroneously including within his determination amounts relating to work performed by the contractor which was not work of a kind described in the definition of construction contract. The second ground further asserts that because the trial judge correctly held that the court had no power to sever a determination as between those parts which were valid and those parts which were invalid, it followed that any component of a determination which fell outside the jurisdiction conferred upon the adjudicator invalidated that determination entirely.

51 Samsung contends that the CCA as a whole manifests an intention to confine the scope of the adjudication process for which Pt 3 provides in a number of fundamental respects. Relevantly to this case, Samsung points to the express exclusion of work generally described as mining work from the definition of construction work. That exclusion limits the definition of payment claim, through its incorporation of the definition of obligations, which then flows through to the definition of payment dispute in s 6(a).[44]

52 Samsung contends that another important limitation upon the adjudication process is the obligation of summary dismissal imposed upon an adjudicator in certain circumstances by s 31(2)(a). The first subparagraph of that provision excludes claims under contracts which are not construction contracts from the adjudication process. Samsung contends that the second subparagraph, relating to the adjudication application's compliance with the requirements of s 26, is the means by which the adjudication process is confined to payment disputes. Samsung submits that this objective is evident from the requirement in s 26(2) to either set out the details of, or attach to the application any claim for payment that has given rise to the dispute.[45] Samsung contends that when s 31(2)(a)(ii) is construed as it contends, it manifests a legislative intention to the effect that a payment dispute (at least where the dispute arises from a payment claim) must be restricted only to disputes with respect to claims for payment for work of a kind described in the definition of construction contract.[46] Samsung further submits that the inclusion of a claim for payment for any other work in a claim referred to an adjudicator for determination deprives the adjudicator of jurisdiction entirely (in its first contention) or at least in respect of that part of the claim which falls outside work defined in the definition of construction contract (in its alternative contention).

53 Samsung submits, in effect, that unless its contentions are accepted, the evident legislative purpose of restricting the process of adjudication to claims for work described in the definition of construction contract will be thwarted, and the parties to such contracts rendered vulnerable to erroneous determinations by adjudicators with respect to the proper characterisation of the work for which payment is claimed.[47]

54 Samsung also submits that it would have been open to the legislature to expressly provide that an adjudicator had authority to determine, in the exercise of his or her jurisdiction, whether a particular item of work fell within a payment claim, but it has not done so.[48]

55 Samsung further contends that the obligations imposed by s 26 will provide an adjudicator with all that is required to determine whether the claim for payment relates to work described in the definition of construction contract. Samsung further submits that if adequate information is not provided to the adjudicator upon that subject by an applicant, with the result that the determination of the adjudicator is later set aside because the adjudicator has exceeded jurisdiction, that will be the consequence of the applicant's failure to provide adequate information at the time the application is submitted.[49]

56 Samsung further submits that because an adjudicator has no statutory power to sever or amend an application, or summarily dismiss only part of an application, it follows that an application which includes a claim for payment for any work not described in the definition of construction contract must be dismissed entirely pursuant to s 31(2)(a)(ii) because it exceeds the jurisdiction conferred upon the adjudicator.[50]

57 In support of its alternative contention, Samsung submits that if, contrary to its first contention, an adjudicator does have jurisdiction to determine a dispute arising from a claim for payment which includes both work described in the definition of construction contract, and work not so described, that jurisdiction is limited to the determination of claims for payment for work falling in the former category. Accordingly, if an adjudicator erroneously includes within his or her determination an amount in respect of a claim for payment for work not described in the definition of construction contract, the adjudicator has exceeded his or her jurisdiction and the determination is entirely void (because there is no power to sever that part of a determination which is invalid from that which is valid).[51]

58 Samsung referred in argument to the decision of the High Court in Southern Han Breakfast Point Pty Ltd (in liq) v Lewence Construction Pty Ltd.[52] Although that decision contains a helpful observation with respect to the limited utility of the expression 'jurisdictional fact' in a context such as this,[53] the issues involved in that case, and the differences in the legislation considered by the court, are far removed from the issues in this case.

59 Unsurprisingly, Duro relies heavily upon the arguments which found favour with the trial judge in opposing Samsung's appeal. As I have already summarised the reasoning of the trial judge, it is unnecessary to repeat those aspects of his reasons upon which Duro relies.

60 Duro emphasises the unworkability of the construction of the CCA for which Samsung contends. It refers to the fact that adjudicators are not required to be legally qualified[54] and that it would be entirely impractical for an adjudicator to assess, on the basis of the limited information required to be provided pursuant to s 26 of the CCA, whether each of the items of work within the claim was an obligation at the point of deciding whether to summarily dismiss an application pursuant to s 31(2)(a)(ii).[55] Duro points out that the determination as to whether each item of work for which payment is claimed constitutes the performance of an obligation would require the adjudicator to determine:[56]

(a) the extent of the obligations imposed upon the contractor by the subcontract;

(c) whether or not the work is work of a kind described in the definition of construction contract which, in the case of work excluded from that definition by s 4(3) of the CCA, would often require assessments to be made as to the ultimate purpose for which the work was required - a matter which may not be within the knowledge of the contractor.

61 Duro submits that these are issues which will often be complex and require the exercise of an evaluative judgment. It says these issues are matters properly determined in the exercise of the jurisdiction conferred upon an adjudicator, rather than as a condition of the adjudicator's jurisdiction, or by way of preliminary assessment prior to the determination of the merits of the claim.[57]

62 In this context, Duro points out that construction projects routinely involve subcontracting, in which progress payments will often be sought by contractors in respect of work performed by subcontractors. Duro points out that in this context, if a contractor sought remuneration from the head contractor in respect of work performed by its subcontractor which was not in fact construction work, the adjudicator would have no jurisdiction to determine the claim.[58]

63 Duro further points out that in many cases it may be difficult to segregate items of work for which payment is claimed into work of a kind described in the definition of construction contract, and work not so described, citing as examples claims for preliminaries, or for off-site overheads, which might relate to both categories of work. Further, some personnel for whom the contractor is entitled to remuneration at daily rates specified in the contract might, on any given day, perform some work of a kind described in the definition of construction contract, and other work not so described.[59]

64 Duro also reiterates the trial judge's reasons with respect to the unworkability of requiring separate progress claims to be made in respect of each category of work, and the prospect that a contract may well require that only one claim for progress payment be made.[60]

65 Duro also points out that the restriction imposed by the term obligations does not have the vitality and significance which Samsung would attribute to it. Duro notes that two of the three categories of payment dispute identified by s 6 of the CCA are not defined by reference to obligations, with the result that an adjudicator has jurisdiction to resolve payment disputes in those categories without regard to the distinction between work as described in the definition of construction contract and work not so described.[61]

66 Given the nomenclature engaged in previous decisions in this area, the submissions of the parties are understandably replete with references to 'jurisdictional facts' and the characterisation of those facts as either 'narrow' or 'broad'. I respectfully agree with the observations of the High Court in Southern Han to the effect that nomenclature of that kind is often nothing more than a label for the conclusion for which a party contends.[62]

67 In this case the questions raised by Samsung's appeal are:

(a) whether the jurisdiction of an adjudicator to determine a payment dispute arising from a payment claim is conditional upon the dispute being exclusively limited to claims for payment for work described in the definition of construction contract; or in the alternative

(b) whether the jurisdiction of an adjudicator is conditional upon the adjudicator correctly assessing whether each and every item of work for which payment is claimed is work described in the definition of construction contract.

68 Those issues are to be resolved on the proper construction of the CCA. Although the taxonomy to which I have referred may have been helpful in the development of some of the principles in cases of this kind, I do not find it assists the resolution of the issues in this appeal.

69 It is also entirely understandable for the parties to have made extensive reference to previous decisions in this area. However, the issues in this appeal have not arisen for previous determination in Western Australia, either at first instance or on appeal. Although each side has referred to the reasons of Murphy JA[63] in Perrinepod, and to my reasons[64] and to the reasons of McLure P in Laing O'Rourke, the issues involved in those cases were rather different to the issues arising in this appeal. In those circumstances it is preferable to address the issues directly rather than by way of inferences said to be drawn from reasons directed at other issues.

70 The parties have also referred to decisions in other Australian jurisdictions, including the decision in Thiess Pty Ltd v Warren Brothers Earthmoving Pty Ltd[65] in which a very similar issue arose for determination. In Thiess, the Queensland Court of Appeal held that the determination of the extent of the work the subject of any payment claim which constituted construction work or related goods and services was a matter for the adjudicator to determine within the exercise of the jurisdiction conferred upon him by the relevant legislation, rather than as a condition upon which his jurisdiction depended.[66] However, because of the significant differences between the CCA and the corresponding legislation in other Australian jurisdictions,[67] it would be dangerous to place significant reliance upon decisions from other jurisdictions without detailed analysis of the extent to which they may have been influenced by differences in the relevant statutory texts.

71 In the result, in this case it is preferable to address the issues as issues of statutory construction, applying conventional principles to that task.[68]

72 There are three fundamental defects in Samsung's arguments. First, they attribute a scope and purpose to the combined effect of s 31(2)(a)(ii) and s 26 which cannot be sustained from the text of those sections read in the context of the CCA as a whole. Second, there are no words in the CCA capable of bearing the construction that the jurisdiction of an adjudicator is conditioned upon either the payment dispute being limited to claims for payment for works described in the definition of construction contract and no other works, or a correct determination by the adjudicator as to the works the subject of any payment dispute which come within the definition of construction contract. Third, there is no implication to be drawn from the CCA as a whole to the effect that the legislature should be taken to have intended the outcomes for which Samsung contends - to the contrary, any implications to be drawn from the scheme of the Act as a whole are diametrically opposed to Samsung's contentions.

73 By s 31(2)(a)(ii), the matter which an adjudicator must determine prior to embarking upon the determination of the merits of a payment dispute is whether the application has 'been prepared and served in accordance with section 26'. The operative words of the paragraph are clearly directed to compliance with the form and service requirements imposed by s 26. The words 'prepared and served' are not capable of imposing upon an adjudicator the obligation of making a preliminary assessment of the merits of the application and, in particular, determining whether the work for which payment was claimed was work carried out by the contractor in the performance of its obligations under the contract.

74 The construction derived from the natural and ordinary meaning of the words used in s 31(2)(a)(ii) is confirmed by a consideration of the requirements imposed by s 26. Those requirements are directed to:

(a) the time within which an application must be prepared and served;

So, the obligation imposed upon an adjudicator to determine whether an application has been 'prepared and served' in accordance with s 26[69] is, quite clearly and unequivocally, an obligation to determine whether the requirements of time, form and service imposed by s 26 have been satisfied. There are no words in either s 31(2)(a)(ii) or s 26 capable of connoting that any greater obligation is imposed upon an adjudicator prior to embarking upon the determination of an application on its merits.

75 With respect to the trial judge, I would not draw significant support for this view of the sections from the fact that s 26(2)(b) permits an applicant to merely set out the details of any claim for payment that has given rise to the payment dispute. That is because subparagraph (c) requires an applicant to also attach to the application all the information, documentation and submissions on which the applicant relies. So, in a case in which the payment dispute arises from a claim for payment for works performed, an applicant is required to attach to the application all materials upon which it relies for the assertion that the work for which payment is claimed was carried out in the performance of obligations imposed by the relevant contract.

76 However, significant support for the construction compelled by the natural and ordinary meaning of the words used in both sections is derived from the context in which the adjudicator is required to assess the matters specified in s 31(2)(a)(ii). Those matters are to be assessed by the adjudicator prior to embarking upon the determination of the dispute on its merits. Because of the time limits imposed by the CCA in the interests of expeditious resolution, an adjudicator may well be required to undertake the assessments required by s 31(2)(a)(ii) before receiving materials or submissions from the respondent to the application. As Duro points out, assessment of whether the work for which payment is claimed was carried out in the performance of obligations imposed by the relevant contract is not limited to the question of whether the work is of a kind described in the definition of construction contract, but also requires an assessment of the obligations imposed by the relevant contract and the nature and purpose of the work actually performed. In many cases, these will be the critical matters which an adjudicator is required to determine in the resolution of the merits of the dispute.

77 Samsung accepts that the assessment of the extent of the obligations imposed upon a contractor by the relevant contract and the extent to which those obligations have been performed are matters to be determined by the adjudicator in the exercise of the jurisdiction conferred by the CCA, and that error in the assessment of those obligations does not take the adjudicator beyond jurisdiction.[70] The legislation provides no basis for taking a different approach in relation to the assessment and determination of that component of the definition of obligations which requires the applicant to establish that the work for which payment is claimed is work of a kind described in the definition of construction contract. Nor does the legislation provide any basis for Samsung's assertion that the latter issue (but not the former issue) must be assessed and determined by the adjudicator as a preliminary matter, prior to embarking upon the merits of the payment dispute, in circumstances in which the adjudicator may not have the benefit of materials and submissions provided by the respondent to the application.

78 This view of the operation of the sections is further reinforced by a consideration of the issues which must be determined by an adjudicator when it is contended that work for which payment is claimed and which would otherwise be construction work is excluded from that definition by s 4(3) of the CCA. First, an assertion to the effect that work for which payment is claimed is excluded by the operation of ss 4(3) will be to the advantage of the respondent. However, on Samsung's construction of the CCA, an adjudicator may be required to make that determination before receiving materials and submissions from the respondent. Second, the work which is excluded from the definition of construction work by ss 4(3)(a)-(c) is characterised by the purpose for which the work is being carried out. That purpose may not be known to the contractor, and is more likely to be known to the respondent. A contractor required to undertake excavation work may not know the purpose for which the excavation is required and therefore may not know whether the work falls within s 4(3). However, the issues will usually be more complex than this somewhat facile example and may require a detailed assessment of the role played by a particular item of work in the construction of a large and complex project. There is nothing in the language of the CCA which would enable an intention to be attributed to the legislature to the effect that an adjudicator should undertake an assessment of that kind as a preliminary matter, before embarking upon the merits of the dispute, perhaps in the absence of submissions and materials from the respondent.

79 For these reasons, Samsung's reliance upon the combined operation of s 31(2)(a)(ii) and s 26, which was a central plank in its arguments, is misplaced.

80 The identification of the conditions which must be satisfied in order to enliven the jurisdiction of a decision-maker, and the ambit of the jurisdiction conferred upon a decision-maker, turn upon the proper construction of the legislation conferring the relevant power.[71] Once Samsung's reliance upon s 31(2)(a)(ii) and s 26 of the CCA is rejected (for the reasons I have given), there are no other express provisions in the CCA capable of supporting Samsung's contentions. Clearly, the definition of obligations differentiates between work of a kind described in the definition of construction contract, and other work not so described. The legislature has engaged that word to differentiate between those categories of work for some but not all of the purposes of the Act. So, it is clear that the legislature intends an adjudicator to differentiate between those categories of work when determining a payment dispute arising from a claim for payment. However, the legislative intention evident in those provisions of the CCA is very different to the attribution of an intention to the legislature, drawn from the words used in the CCA, to the effect that:

(a) the inclusion of any work of a kind not described in the definition of construction contract in a claim for payment deprives an adjudicator of jurisdiction to determine a dispute arising from that claim; or

(b) the jurisdiction of an adjudicator depends upon the correct assessment of whether or not work for which payment is claimed is work of a kind described in the definition of construction contract.

There are no words in the CCA capable of sustaining either of these intentions.

81 Samsung seeks to overcome this fundamental deficiency in its argument by emphasising what it asserts to be the fundamental significance of the definition of obligations, and the limitation incorporated in that definition by reference to work described in the definition of construction contract. However, Samsung's arguments overstate the significance of this limitation for a number of reasons. First, as I have already noted, an applicant must satisfy the adjudicator of a number of matters in order to make out a claim for payment in respect of work carried out in the performance of its obligations under the relevant contract. Included in those matters are:

(a) the fact that the work was satisfactorily carried out;

(b) that the terms of the construction contract required the contractor to carry out the work;

(d) the amount which the contractor is entitled to be paid for the performance of the work pursuant to the terms of the contract.

82 There is nothing in the provisions of the CCA or the inherent nature of the requirements which an applicant must satisfy in order to make out a claim for payment which would support the conclusion that matters (a), (b) and (d) above are matters to be determined by the adjudicator in the exercise of the jurisdiction conferred by the CCA, including the jurisdiction to make wrong decisions in respect of those matters, whereas the correct assessment of (c) above is a condition of the adjudicator's exercise of jurisdiction, or that the inclusion of any work not falling within (c) above in the claim for payment deprives the adjudicator of jurisdiction entirely.

83 Further, the significance which Samsung would attribute to the distinction between work of a kind described in the definition of construction contract and other work not so described in the definition of obligations is not sustained by a consideration of the CCA as a whole. As I have already noted, that distinction does not bear upon those parts of the Act which prohibit terms in a construction contract, or which imply terms into a construction contract.[72] Further, as I have also noted, the distinction between work of a kind described in the definition of construction contract, and other work not so described, has no bearing upon an adjudicator's jurisdiction to determine two out of the three categories of payment dispute described in s 6 of the CCA.

84 Further, and significantly, in s 31 of the CCA, the legislature has specifically addressed the question of the conditions which must be satisfied before an adjudicator embarks upon the exercise of the jurisdiction conferred. As Samsung's reliance upon s 31(2)(a)(ii) must be rejected for the reasons I have given, it follows that the matters specified by the legislature in s 31 as conditions which must be satisfied before an adjudicator embarks upon the exercise of jurisdiction do not include either:

(a) the condition that the work for which payment is claimed is limited to work of a kind described in the definition of construction contract; or

(b) the assessment that the items of work for which payment is claimed are works of a kind described in the definition of construction contract.

85 The principle of statutory construction often described by the label expressio unius est exclusio alterius is, in some contexts, not a particularly strong guide to meaning.[73] However, in the context of the CCA, the omission of the matters for which Samsung contends from the list of conditions which must be satisfied before an adjudicator embarks upon the exercise of the jurisdiction conferred is a matter of some significance.

86 For these reasons, once Samsung's arguments based upon s 31(2)(a)(ii) and s 26 are rejected, there is nothing else in the text of the CCA capable of supporting Samsung's contentions. To the contrary, there are provisions in the CCA, including the matters which must be addressed by an adjudicator in the exercise of the jurisdiction to determine whether a contractor is entitled to payment for work carried out in the performance of the contractor's obligations under the contract, and the specification of the conditions which must be met before the adjudicator can exercise the jurisdiction conferred, which tell strongly against Samsung's contentions.

An implication to be drawn from the CCA as a whole

87 In the absence of express words, it might nevertheless be concluded that the legislature intended the jurisdiction conferred upon a decision-maker by an Act to be conditional upon a particular matter or matters by way of implication drawn from the Act as a whole. However, there are a number of reasons why the matters for which Samsung contends cannot be drawn by implication from the CCA.

88 First, as I have noted in the preceding paragraphs, to the extent that implications can be drawn from the provisions of the CCA as a whole, those implications are diametrically opposed to Samsung's contentions.

89 Second, to the extent that an inference of legislative intention can be drawn from the consequences of the construction for which Samsung contends, those consequences are so impractical and so unworkable as to tell strongly against Samsung's contentions. I have set out above the observations made by the trial judge with respect to the unworkability of Samsung's contentions, and the additional arguments advanced by Duro in that respect. For present purposes it is sufficient to say that I respectfully agree with all that was said by the trial judge on this topic, and accept each of the arguments advanced by Duro in this respect, with the result that it is unnecessary for those matters to be reiterated here. When the impractical and unworkable consequences of Samsung's contentions are placed in the context of the legislative object of determining disputes fairly and as quickly, informally and inexpensively as possible in order to 'keep the money flowing', it is clear that the consequences of Samsung's contentions would be antithetical to that legislative objective.

90 For these reasons, the trial judge was correct to conclude that the jurisdiction of an adjudicator does not depend upon the payment dispute being limited to claims for payment for work of a kind described in the definition of construction contract. Further, Samsung's assertion that an adjudicator's jurisdiction depends upon the correct assessment of whether work for which payment is claimed is of a kind described in the definition of construction contract must be rejected. Rather, the assessment of whether work for which payment is claimed is of a kind described in the definition of construction contract is a matter to be determined by an adjudicator in the exercise of the jurisdiction conferred upon him or her by the CCA. It follows that error in the exercise of that jurisdiction does not give rise to any ground of judicial review or result in the invalidity of

the determinations made. Accordingly, grounds 1 and 2 of the appeal have not been made out, and Samsung's appeal should be dismissed.

91 This is an appeal by the appellant (Samsung) against a decision of Beech J in Samsung C&T Corporation v Loots[74] (primary decision). The primary decision dealt with, amongst other things, certain challenges by Samsung, on the grounds of alleged jurisdictional error, to various adjudications in favour of the respondent (Duro) under the Construction Contracts Act 2004 (WA) (the Act).[75]

92 There are three grounds of appeal. Ground 3 alleges, in effect, that the primary judge erred in misapprehending aspects of Samsung's arguments in the primary proceedings. Duro disputes that, but accepts that the substantive matters sought to be argued by Samsung in the appeal are questions of law and may properly be agitated on appeal in any event.[76] Accordingly, any misapprehension by the primary judge as to the scope of the relevant arguments by Samsung does not affect the substantive outcome of this appeal.

93 Grounds 1 and 2 of the appeal are to be understood in the context that the Act provides for the adjudication of 'payment disputes' (as defined). In general terms, and as explained in detail later, 'payment disputes' are confined to certain disputes concerning 'construction work' (as defined) or the provision of goods and services related to certain 'construction work'.

94 The term 'construction work' excludes work in respect of certain activities in the areas of oil and gas and mining which, for the purposes of this introduction, may be described in shorthand as 'mining work'.

95 The primary judge found that certain adjudicators went beyond determining disputes in respect of 'construction work' and also determined disputes that involved 'mining work'.

96 Ground 1 alleges, in effect, that an adjudicator is bound, on the proper construction of the Act, to dismiss, under s 31(2)(a) of the Act, any

application for adjudication which includes a claim in respect of 'mining work' in addition to 'construction work'. Samsung accordingly contends, in effect, that the primary judge should have found that certain applications, which included claims in respect of 'mining work', should have been dismissed under s 31(2)(a)(i) of the Act and that the adjudicators who considered and determined such applications, instead of dismissing them, thereby exceeded their jurisdiction. The effect of this contention is that the adjudicators had no jurisdiction to determine those aspects of the dispute which properly included claims in respect of 'construction work', because s 31(2)(a)(i) required the whole application to be dismissed at the outset. Alternatively, Samsung contends that so much of each application as included mining work should have been dismissed, and there was no valid determination of the remaining part of the application because there can be no severance of part of the determination.

97 Ground 2 is in the alternative to ground 1. By ground 2, Samsung alleges that even if such an application for adjudication is not dismissed at the outset under s 31(2)(a), an adjudicator has no jurisdiction to determine such a (hybrid) dispute under s 31(2)(b) of the Act. Samsung contends that any purported determination of such a (hybrid) dispute involves jurisdictional error with the consequence that the whole determination is invalid and void.

98 On the question of total invalidity, Samsung relies on other findings by the primary judge to the effect that an adjudicator's determination which is affected by jurisdictional error is inseverable and wholly void. The question of severability in relation to an adjudicator's determination is an issue raised in a related appeal by Duro in CACV 108 of 2016 (Duro's appeal). For the reasons given in relation to Duro's appeal,[77] in our view, severance under the common law is available in respect of an adjudicator's determination under s 31(2)(b) of the Act.

99 In this appeal, we would dismiss ground 1, and uphold ground 2.

100 The Act has a number of interrelated provisions, and our reasons for this conclusion involve, at the outset, a consideration of the scheme and operation of the Act as a whole.

101 The Act came into operation on 1 January 2005. The relevant provisions of the Act for the purposes of the appeal are those in force before the commencement of the Construction Contracts Amendment Act 2016 (WA).

to prohibit or modify certain provisions in construction contracts;
to imply provisions in construction contracts about certain matters if there are no written provisions about the matters in the contracts;
to provide a means for adjudicating payment disputes arising under construction contracts,

103 In Perrinepod Pty Ltd v Georgiou Building Pty Ltd,[78] it was observed:

[T]he object of the [statutory] scheme is to determine payment disputes arising out of construction contracts 'fairly and as quickly, informally and inexpensively as possible' (s 30), with the primary aim of keeping the money flowing down the contractual chain. That purpose is confirmed by the following passage taken from the Minister's Second Reading Speech (WA Hansard, 3 March 2004, 275):

'When a party to a construction contract believes it has not been paid in accordance with the contract, the Bill provides a rapid adjudication process that operates in parallel to any other legal or contractual remedy. The rapid adjudication process allows an experienced and independent adjudicator to review the claim and, when satisfied that some payment is due, make a binding determination for money to be paid. The rapid adjudication process is a trade-off between speed and efficiency on the one hand, and contractual and legal precision on the other. Its primary aim is to keep the money flowing in the contracting chain by enforcing timely payment and sidelining protracted or complex disputes. The process is kept simple, and therefore cheap and accessible, even for small claims. In most cases the parties will be satisfied by an independent determination and will get on with the job. If a party is not satisfied, it retains its full rights to go to court or use any other dispute resolution mechanism available under the contract. In the meantime, the determination stands, and any payments ordered must be made on account pending an award under the more formal and precise process.'

... [T]he scheme of the Act contains a bias in favour of the payment of money in accordance with adjudication determinations in furtherance of the underlying purpose of maintaining the flow of money. As indicated in the above passage from the Second Reading Speech, contractual and legal precision is required necessarily to yield, to a degree, to allow for the speedy resolution of disputes.

104 Observations to similar effect were made in Laing O'Rourke Australia Construction Pty Ltd v Samsung C&T Corporation.[79]

105 Section 6 defines 'payment dispute', and provides for the circumstances in which a 'payment dispute arises'. Section 6 provides:

For the purpose of this Act, a payment dispute arises if -

(a) by the time when the amount claimed in a payment claim is due to be paid under the contract, the amount has not been paid in full, or the claim has been rejected or wholly or partly disputed; or

(b) by the time when any money retained by a party under the contract is due to be paid under the contract, the money has not been paid; or

(c) by the time when any security held by a party under the contract is due to be returned under the contract, the security has not been returned. (emphasis added)

106 In s 6, the word 'contract' is, evidently, in its context, a reference to 'construction contract', which is a defined term.[80] The term 'payment claim', referred to in s 6(a), is also a defined term. Both are referred to below.

107 For the reasons given in [154] - [159] below, each of the elements of 'payment dispute' in s 6 is, on the proper construction of s 6, concerned principally if not exclusively with the contractor's 'obligations' (as defined in s 3) under the 'construction contract'.

108 The Act applies to a 'construction contract' entered into after the Act comes into operation: s 7(1). It applies to a 'construction contract' irrespective of its form (whether wholly, or partly, oral or written), irrespective of where it was entered into, and irrespective of whether it is expressed to be governed by the law of a place other than Western Australia: s 7(2).

109 A 'construction contract' is defined by reference to 'obligations' with respect to 'construction work'. The term 'obligations' is itself defined by reference to the 'obligations' referred to in the definition of 'construction contract'. The two are related. The definitions are set out below.

obligations, in relation to a contractor, means those of the obligations described in the definition of construction contract that the contractor has under the construction contract[.]

111 Section 3 defines 'construction contract' as follows:

construction contract means a contract or other agreement, whether in writing or not, under which a person (the contractor) has one or more of these obligations -

(a) to carry out construction work;

(b) to supply to the site where construction work is being carried out any goods that are related to construction work by virtue of section 5(1);

(c) to provide, on or off the site where construction work is being carried out, professional services that are related to the construction work by virtue of section 5(2);

(d) to provide, on the site where construction work is being carried out, on-site services that are related to the construction work by virtue of section 5(3)(b)[.] (emphasis added)

112 The Act, through s 5(1), s 5(2) and s 5(3)(b), makes provision for when goods and services (professional or on-site as the case may be) are 'related to construction work'.

SAMSUNG C&T CORPORATION -v- DURO FELGUERA AUSTRALIA PTY LTD [2018] WASCA 27 (14 March 2018)

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SAMSUNG C&T CORPORATION -v- DURO FELGUERA AUSTRALIA PTY LTD [2018] WASCA 27 (14 March 2018)

Legislation Cited (4)

Cases Cited (17)