CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS –
REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TO
AND RECOVERY OF
PROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – Where the
Source
Original judgment source is linked above.
Catchwords
CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS –REMUNERATION – STATUTORY REGULATION OF ENTITLEMENT TOAND RECOVERY OFPROGRESS PAYMENTS – ADJUDICATION OF PAYMENT CLAIMS – Where thefirst respondent made a payment claimagainst applicant under the Buildingand Construction Industry Payments Act 2004 (Qld) – Where theapplicant did not deliver a payment schedule – Where the applicantchallenges the adjudicator’sdecision in the respondent’s favour andthe validity of the payment claim – Where the payment claim was out oftime onthe face of respondent’s submissions to adjudicator –Whether the adjudicator erred in finding a valid payment claimand giving anadjudication decisionBuilding and Construction Industry Payments Act 2004 (Qld), r 17(2),r 17(4), r 19(2)(a), r 21(1)(b), r 21(2)(1), r 24(3), r 26(2)(a)Judicial Review Act 1992 (Qld), s 18(2)Barclay Mowlen Construction Ltd v Estate Property Holdings Pty Ltd
[2004]
NSWSC 649, cited
Brodyn Pty Ltd v Davenport [2004]
NSWCA 394
(2004) 61 NSWLR 421, considered
Brookhollow Pty Ltd v
R & R Consultants Pty Ltd & Anor [2006]
NSWSC 1, distinguished
Chase Oyster Bar Pty Ltd v Hamo
Industries Pty Ltd, followed
Fernendes Constructions v Tahmoor
Coal (trading as Centennial Coal) [2007]
NSWSC 381, cited
GW Enterprises Pty Ltd v Xentex Industries Pty Ltd
& Ors [2006]
QSC 399, considered
Hawkins Construction v Mac’s Industrial
Pipework [2001] NSWSC
815, cited
Kirk & Anor v Industrial Court of NSW & Anor
[2010] HCA 1
(2010) 239 CLR 531, cited
Neumann Contractors Pty Ltd v Traspunt No. 5
Pty Ltd [2010]
QCA 119
(2011) 2 Qd R 114, distinguished Northbuild Construction Pty
Ltd v Central Interior Linings Pty Ltd [2011] QCA 22, cited
Judgment (120 paragraphs)
[1]
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - REMUNERATION - STATUTORY REGULATION OF ENTITLEMENT TO AND RECOVERY OF PROGRESS PAYMENTS - ADJUDICATION OF PAYMENT CLAIMS - Where the first respondent made a payment claim against applicant under the Building and Construction Industry Payments Act 2004 (Qld) - Where the applicant did not deliver a payment schedule - Where the applicant challenges the adjudicator's decision in the respondent's favour and the validity of the payment claim - Where the payment claim was out of time on the face of respondent's submissions to adjudicator - Whether the adjudicator erred in finding a valid payment claim and giving an adjudication decision
[2]
Building and Construction Industry Payments Act 2004 (Qld), r 17(2), r 17(4), r 19(2)(a), r 21(1)(b), r 21(2)(1), r 24(3), r 26(2)(a)
[3]
Barclay Mowlen Construction Ltd v Estate Property Holdings Pty Ltd[2004] NSWSC 649, cited
Neumann Contractors Pty Ltd v Traspunt No. 5 Pty Ltd[2010] QCA 119; (2011) 2 Qd R 114, distinguished Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd[2011] QCA 22, cited
[13]
[1] JACKSON J: South East Civil and Drainage Contractors Pty Ltd ("South East") applies for a declaration that an adjudication decision of the second respondent dated 10 January 2013 is void and liable to be set aside. The adjudication decision was purportedly made under the Building and Construction Industry Payments Act 2004 (Qld) ("BCIPA"). South East was the respondent to the adjudication decision. AMGW Pty Ltd ("AMGW") was the claimant. Only a few of the evidentiary facts need to be set out for the purpose of deciding this application.
[14]
[2] It is common ground that there was a relevant "construction contract" between the parties. It is also not apparently in dispute that AMGW had undertaken to supply goods as "related goods and services" under the contract. Thus AMGW was entitled to a progress payment under s 12 of BCIPA. The conversion of that entitlement to a debt which is payable or an amount which is recoverable depends, in this case, on the operation of later sections of BCIPA, which require the service of a valid payment claim for a progress payment.
[15]
[3] On 23 November 2012, AMGW sent an email attaching tax invoice number 357 dated 23 November 2012 to South East. The invoice stated it was for "Supply Only - Real-Crete Sleepers (100mm/80mm/65mm) = 120,248 m2 'as per specification provided'" and "Supply Only - 150mm Steel Posts as required for Retaining Wall Top of Block" for a total amount of $27,512.74. Allowance was then made to credit invoice number 241 which was stated to be "as agreed" in the sum of $735.68. After adding freight of $255.00, the balance due was stated to be $27,032.06. The tax invoice was endorsed with the following statement ("the endorsement"):
[16]
"This is a claim under the Building and Construction Industry Security of (sic) Payment Act 2004 Queensland".
[17]
[4] Also on 23 November 2012, within an hour of receiving tax invoice number 357, South East responded by email attaching a copy of a letter written by McLaughlin & Associates Lawyers to Sciacca Lawyers dated 8 May 2012. The original letter had been sent 6 months earlier. It stated that an engineering report obtained by South East from Rainbow Engineering Services was attached and sought a response as to AMGW's attitude to the replacement of the precast concrete panels "that will overcome the present difficulties". The letter alternatively proposed supply of replacement panels by a third party supplier, with any costs which exceeded the amount which would have been payable to AMGW to be paid by AMGW, together with costs incurred by South East wasted in relation to the initial installation as well as costs of removal of the existing sleepers.
[18]
[5] On 12 December 2012, South East received a letter from AMGW dated 11 December 2012 stating that South East had failed to provide a payment schedule "within the time allowed by the Building and Construction Industry Security of (sic) Payment Act 2004 Qld" in response to AMGW's payment claim dated 23 November 2012 for $27,032.06, and asserting that, as a consequence, South East had become liable to pay the whole amount of the claim by the due date. AMGW further stated that it was electing to apply for adjudication of the payment claim and gave notice that South East had five business days in which to serve a payment schedule or pay the payment claim in full.
[19]
[6] On 13 December 2012, Quinn & Scattini Lawyers, for South East, sent an email to AMGW stating they had been handed a notice "purported (sic) to be under section 221(2) (sic) of the Building and Construction Industry Security of (sic) Payment Act 2004 (Qld)" and that South East had advised that it had received no payment claim "purportedly" dated 23 November 2012 for an amount of $27,032.06.
[20]
[7] On 21 December 2012, Quinn & Scattini Lawyers, for South East, sent another email to AMGW complaining that they had received no response to the last mentioned email and stating that the email dated 21 December 2012 should be regarded as a payment schedule. The 21 December email continued:
[21]
"Our client will not be paying the claim for the following reasons:
[22]
Our client has not been served a (sic) payment claim pursuant to the provisions of the Act as an invoice has only been e-mailed to him and no details has (sic) been provided to him about the service thereof and when it was done;
[23]
The invoice dated 23 November 2012 does not specify the particulars of the work as required by the Act and presumably relates to materials delivered on or about the 26 October 2011, in other words more than 12 months after the materials were supplied, contrary to the provisions section 17.4(b) of the Act;
[24]
Our client has already provided you with reports outlining the defects in the materials and that it (sic) is unsuitable to be used for building purposes;
[25]
Our client has a counter-claim against yours for the costs incurred in building a wall with defective materials to demolish that and to rebuild it with suitable materials which would be greater than your clients claim"
[26]
[8] On 21 December 2012, AMGW made an adjudication application. AMGW as claimant chose to include 10 pages of typed submissions as relevant to the application[1]. Inter alia, AMGW's submissions stated that:
[27]
(a) "the goods were supplied to site... on 22 October 2011";
[28]
(b) "the final invoice, No244, in the sum of $27,032.06 for the product issued on 24/11/11...";
[29]
(c) "[s]ubsequently the same goods were re-invoiced (invoice No 357) in accordance with the Act on 23/11/12...";
[30]
(d) "the unpaid goods to fulfil the contract works were provided in full in October 2011"; and
[31]
(e) "the respondent's had the full benefit of the supply product since October 2011". (emphasis added)
[32]
[9] On 10 January 2013, the second respondent made the adjudication decision. Paragraph 1 recorded that "[t]he claimant invoiced the respondent on 24/11/11 for $27,032.06 for the remainder of the products provided". The adjudication decision also recorded that "the claimant sent the respondent another invoice dated 23/11/12 for the same materials (as in the invoice of 24/11/11) and the same amount. This invoice was endorsed as a claim under the Act. It is the payment claim that the claimant seeks to have adjudicated".
[33]
[10] As appears from the matters set out above, South East had not served a payment schedule, in response to tax invoice number 357 received on 23 November 2012, within the time allowed by s 21(2) of BCIPA.
[34]
[11] In consequence, the adjudicator held in the adjudication decision as follows:
[35]
"I accept the claimant's contention that [South East's lawyers 21 December 2012 letter] is not a payment schedule under the Act served within the time allowed by the Act. Consequently, under section 24(3) of the Act the respondent is not entitled to make an adjudication response.
[36]
... It appears to me that if the respondent wishes (sic) to raise section 17(4) as a reason for withholding payment the respondent had to do so in a payment schedule served within the times allowed by the Act. The respondent did not do so. I am not satisfied the adjudication application is invalid."
[37]
[12] Thus, an unusual situation has arisen in this case. Although not satisfied as to invalidity, the adjudicator found that the payment claim was served on 23 November 2012 and that the last supply of the goods to which the claim relates was reflected in tax invoice number 244 dated 24 November 2011. That invoice had a place for the specification of a delivery date but no date was specified. I will return to the facts about the date of the last supply.
[38]
[13] South East raised four contentions as to the invalidity of the adjudication decision. It is necessary to consider only two of them.
[39]
Invoice number 357 stated that it was made under BCIPA
[40]
[14] It is convenient to first consider South East's contention that tax invoice number 357 was not a payment claim within the meaning of s 17(2) of BCIPA because it did not state that it was made under BCIPA. The main point was that the invoice identified BCIPA as the "Building and Construction Industry Security of Payments Act 2004 Queensland" and that the words "Security of" do not appear in the short title of BCIPA. Those words do appear in the short titles of the comparable New South Wales and Victorian Acts. However, it is plain that the endorsement on the invoice was purporting to identify a Queensland Act because of the use of the word "Queensland". Also, the New South Wales and Victorian Acts do not have the year "2004" in their short titles. That year is appropriate only to BCIPA.
[41]
[15] In support of its submissions, South East referred to and sought to distinguish two cases: Barclay Mowlen Construction Ltd v Estate Property Holdings Pty Ltd[2] and Hawkins Construction v Mac's Industrial Pipework[3]. Reference can also be made, in the same way, to Fernendes Constructions v Tahmoor Coal (trading as Centennial Coal)[4]. In the last case, McDougall J suggested that the approach to the construction of a document purporting to be a payment claim under the New South Wales Act should reflect in substance the approach to the construction of commercial contracts.
[42]
[16] I do not need to opine on the question whether that approach is apt to the interpretation of a statute, particularly one which confers rights of the kind which BCIPA confers and which has, in other contexts, been described as "draconian" in its effect. It is enough to decide this case that I do not think that a reader of the endorsement on tax invoice number 357 is left in any doubt that AMGW asserted that tax invoice number 357 was a claim under BCIPA. I conclude that the endorsement was sufficient to satisfy the requirement that a payment claim must state that it is made under that Act.
[43]
[17] South East also contended that, because AMGW failed to bring South East's notice to the difference between tax invoice number 357 and tax invoice number 244 and because the size of the font of the endorsement was so small, AMGW had in effect failed to state that the payment claim was made under BCIPA. I reject that contention as well. The font is small, but it is legible. There was no obligation upon AMGW, in my view, to draw South East's attention to the difference between tax invoice number 244 and tax invoice number 357.
[44]
Payment claim more than 12 months after last supply
[45]
[18] South East's director, Robert James Wilson, deposed before me that the retaining wall components were delivered on 22 October 2011. In its written submissions, South East contended that it is not controversial that the last supply which was the subject of the payment claim was made on that date. In oral argument, it appeared to me that AMGW's representative largely agreed that was so. There was an attempt to rely on later meetings between the parties, when discussing whether the goods were defective, as extending the date of last supply, but I reject the suggestion that any matter of that kind could arguably constitute a supply which was the subject of tax invoice number 357. In relevant respects, tax invoice number 357 was identical to tax invoice number 244 dated 24 November 2011.
[46]
[19] However, the date of the last supply does not appear in the adjudication decision. It did appear, more than clearly, in AMGW's submissions contained in the adjudication application, as previously set out. In other words, AMGW's last supply of related goods and services for the purpose of the payment claim it made under BCIPA was clearly stated in the submissions of AMGW, as claimant, contained in the adjudication application, to have occurred more than 12 months before service of the payment claim.
[47]
[20] Section 17(4) of BCIPA relevantly provides that "a payment claim may be served only within" 12 months after the goods to which the claim relates were last supplied. However, the adjudicator ignored that and took the position that for South East to raise s 17(4) as a reason for withholding payment, it was required to include that reason in a payment schedule served within time, which it had not done.
[48]
[21] An important question of construction of BCIPA is whether a payment claim served out of time, in contravention of s 17(4), is a payment claim for the purposes of the subsequent sections of BCIPA, which create rights and obligations to payment in a specified sum in particular circumstances.
[49]
[22] Where a claimant elects to make an adjudication application, within the meaning of s 21(1)(b) of BCIPA, a respondent who has not already served a payment schedule is afforded a second opportunity to serve a payment schedule within five business days after receiving the claimant's notice under s 21(2)(a). In this case, that notice was AMGW's letter to South East dated 11 December 2012, which was received by South East on 12 December 2012. Five business days after that expired at the end of 19 December 2012.
[50]
[23] Thus, it is not suggested that Quinn & Scattini's emailed letter to AMGW dated 21 December 2012 was served within those five business days. Accordingly, by s 24(3) of BCIPA, South East was precluded from giving an adjudication response to the adjudicator, because it had not served a payment schedule on AMGW within the time specified in s 21(2)(b). The adjudicator rightly, therefore, disregarded what was contained in South East's adjudication response dated 9 January 2013.
[51]
[24] However, the question remains whether the adjudicator was entitled to ignore AMGW's contravention of s 17(4) in the discharge of his obligation to consider the matters specified pursuant to s 26(2) of BCIPA. Under that sub-section, the adjudicator is obliged to consider both "the provisions of" BCIPA, and "the payment claim to which the application relates, together with all submissions ... that have been properly made by the claimant in support of the claim".
[52]
[25] What occurred in this case was that because the point that the payment claim being served out of time was not taken by South East in a payment schedule, the adjudicator found himself "not satisfied that the adjudication application was invalid".
[53]
[26] Although not referred to by any of the parties in this case, there appear to be a number of cases which are potentially relevant to the contention that a payment claim served in contravention of s 17(4) is invalid.
[54]
[27] First, in Brookhollow Pty Ltd v R & R Consultants Pty Ltd & Anor[5] a declaration was sought that an adjudication decision was void. As in this case, the respondent had failed to serve a payment schedule in time and was precluded from lodging an adjudication response. Like this case, one of the grounds on which it challenged the adjudication decision was that the payment claim was not served within 12 months after the construction work to which the claim related was last carried out. Palmer J held as follows:
[55]
"An assertion that service of a payment claim is prohibited under s 13(4) or (5) is like a defence in bar. ... A respondent to a payment claim may have a reason for electing not to raise such a defence: the payment claim may raise for determination an issue which will inevitably have to be determined in subsequent payment claims and the respondent may wish the issue to be resolved sooner rather than later.
[56]
However if the respondent does elect to raise a defence in bar founded on s 13(4) or (5) adjudication of that defence will require examination of the relevant terms of the contract, possibly the facts relating to the work performed and the time of performance and possibly also the content of previous payment claims. ...
[57]
In my opinion, the scheme of the Act in general and of s 13 and s 14 in particular requires that a defence in bar to a payment claim founded on s 13(4) or (5), like any other defence said to defeat or reduce the claim, must be raised in a timeously served payment schedule. If it is not, then the defence may not be relied upon to set aside or restrain enforcement of the adjudication determination as a nullity ..."[6]
[58]
[28] That decision was a determination of the question of construction of the equivalent New South Wales Act section.
[59]
[29] A similar point was raised in relation to BCIPA in GW Enterprises Pty Ltd v Xentex Industries Pty Ltd & Ors[7]. In that case, a respondent provided further submissions which identified that the payment claim was made in excess of 12 months from the date when the last construction work were carried out as part of its adjudication response. It submitted that the payment claim contravened s 17(4) of BCIPA. The adjudicator rejected the contention, referring to the decision in Brookhollow. Peter Lyons J held:
[60]
"The applicant accepts that the issue of the timing of the payment claim was not raised in its payment schedule as required by s 18 but submits that the omission should not be fatal as the adjudicator was required to consider the timing of the claim to determine if it was a valid payment claim. The applicant states that the adjudication is a nullity because the payment claim was not a valid payment claim as it was out of time and accordingly there was nothing that the adjudicator could validly adjudicate.
[61]
I am not satisfied that on the face of the payment claim it would have appeared that the claim did not comply with the requirements of s 17 of the BCIPA. The BCIPA provides that a payment claim may be served in a period of 12 months after the construction work was last carried (sic). The payment claim sets out that the claim related to 'Painting Services, Various Sites within the State of Queensland' and the last invoice date was 31 January 2005. On this basis the contract and the invoices are just the starting point as the crucial date is the date the work was last carried out. Given that the payment claim was dated 12 July 2006 it would not have been apparent from the face of the payment claim that all construction work had necessarily been completed by July 2005. There was always the possibility that work was done after the last invoice date, and there was, as I have noted, material before the adjudicator showing evidence of work being done on the sites as late as August 2005."[8]
[62]
[30] His Honour went on to refer to Brookhollow, but not the passage which I have extracted above, and continued:
[63]
"In the circumstances of the current case I am not satisfied that the payment claim was a nullity on the ground that it should have been apparent from the face of it that it was out of time."[9]
[64]
[31] The present case seems to fall between the circumstances considered in Brookhollow on one side and GW Enterprises on the other. It cannot be said, in the present case, that the date when the goods were last supplied was not before the adjudicator. The material properly before the adjudicator as to that date was AMGW's own submission. It clearly disclosed that the last supply was more than 12 months before the service of the payment claim.
[65]
[32] On the other hand, Palmer J's reasoning in Brookhollow, as set out above, is not confined to whether or not it was apparent to the adjudicator that the payment claim was served out of time. On the contrary, Palmer J treated the proper construction of the equivalent section of the New South Wales Act as operating in a way that requires a respondent who wishes to rely upon s 17(4) to raise it in a validly served payment schedule, or the point is gone.
[66]
[33] Palmer J's reasoning was considered in Neumann Contractors Pty Ltd v Traspunt No. 5 Pty Ltd[10]. However, that case did not decide the question which is presented on the facts of the present case, nor did it directly endorse or criticise Palmer J's reasoning, as it would apply to this case.
[67]
[34] However, Neumann has some significance, in my view. Where a payment claim is served on a respondent who does not serve a payment schedule in response, the claimant has the option of either suing in a court on the debt created under s 19(2)(a)(i) or making an adjudication application under s 21(1)(b). If the claimant chooses to sue on the debt, Neumann is authority that it there is a real prospect that the respondent may defend on the basis that the debt is not owing because the payment claim was invalid because of non-compliance with a provision of BCIPA, even though that point was not taken in a validly served payment schedule.
[68]
[35] If, in those circumstances, a respondent is entitled to raise non-compliance with s 17(4), it might be seen as inconsistent that a respondent could not do so if the claimant chooses the alternative pathway of making an adjudication application. Against that, it can be said that a respondent has the ability to raise the point in its second opportunity to serve a payment schedule under s 21(2)(b) of BCIPA. However, there does not seem to be any obvious contextual reason to conclude that it was intended that non-compliance leading to invalidity can be relied on in the curial pathway under s 19(2)(a)(i) but not on the adjudication application pathway made under s 19(2)(a)(ii) and s 21, where the point of invalidity is not taken in a payment schedule in either case.
[69]
[36] Further, the analogy drawn by Palmer J in Brookhollow between a respondent's right to elect not to raise a contravention of s 17(4) and a plea in bar in curial proceedings is imperfect, in my view.
[70]
[37] First, it fails to take account of the statutory obligation that s 26(2)(a) and (b) of BCIPA imposes on an adjudicator "to consider" the provisions of BCIPA and all submissions properly made[11]. It seems inconsistent with those obligations to conclude that an invalidity apparent in carrying them out may be ignored because a respondent failed to take the point in a payment schedule.
[71]
[38] Secondly, in drawing any analogy between a plea in bar, meaning in this context a curial defence that a claim is filed out of time under a limitation statute, and the operation of s 17(4), it should be remembered that the operation of a limitation statute as a defence in curial proceedings is a matter of legal history, not the modern approach to statutory interpretation.
[72]
[39] The introduction of a statute based time limit within which to bring an action was a seventeenth century development: s 3 of the Statute of Limitations 1623 (Eng). Legislatures around the common law world followed that model. In some places, such as the ACT, the original English statute was the relevant provision until relatively recently. Also common in Australia was the adoption of the revised 1939 English model of the limitation section,[12] or its New South Wales counterpart of 1969,[13] which respectively provided in effect[14] as follows:
[73]
"no action shall be brought after the expiration of [x] years after the date on which the cause of action accrued";[15] or
[74]
"an action is not maintainable if brought after the expiration of a limitation period of [x] years running from the date on which the cause of action first accrues."
[75]
[40] With a modern approach to statutory interpretation, and absent hundreds of years of case law as to the meaning of the sections' progenitors, such a provision might have been construed as a positive statutory prohibition against starting a proceeding after expiry of the time limited from the day when the cause of action accrued. It might be thought that a major purpose of such a provision would be to prevent any statute barred claim from being heard at trial - "no action shall be brought". And it tends to bring the law into disrepute for a court to determine simultaneously at trial that a plaintiff has a good claim but the proceeding must be dismissed because it was started too late under a limitation section. As well, the modern world of procedural law recognises that the bringing of a proceeding and its prompt disposition are not just matters for the parties - they involve the use of important public resources and the role and standing of the courts in the administration of justice.
[76]
[41] But things are not that way at all in the interpretation of limitation statutes. The interpretation by the courts has been that a limitation statute does not operate as a positive prohibition against starting a claim. Instead, a defendant may plead the statute as a defence to a claim.[16] The defence can be lost by contract or an estoppel or waiver, irrespective of whether or not the passage of time has prejudiced the fair hearing of the matter.[17]
[77]
[42] Nevertheless, the idea of the accrual of a cause of action informs the operation of a limitation statute. There is no close analogy to accrual in s 17(4). Section 17(4) is part of a series of procedural requirements for the making of a payment claim. The making of a valid payment claim is a necessary element of obtaining the right to recover an entitlement to a progress payment under BCIPA.
[78]
[43] Thirdly, it should not be forgotten that the right granted by BCIPA is a statutory right to payment on account, usually on a monthly basis following the relevant work or supply. It does not establish any final entitlement to payment.
[79]
[44] Fourthly, a number of cases, including Brodyn Pty Ltd v Davenport[18], recognise that the validity of a complying payment claim is a jurisdictional element of obtaining entitlement to payment of a progress payment as a debt.
[80]
[45] The conclusion to which I would come, uninstructed by authority, is that a respondent's failure to take the point of non-compliance with s 17(4) in a payment schedule does not authorise an adjudicator to ignore the point, where it is apparent on the face of the material which the adjudicator is obliged to consider under s 26(2).
[81]
[46] I am not persuaded to come to a contrary view by the reasoning in Brookhollow. In my view, nothing supports the application to BCIPA of the interpretation which has been given to limitation statutes in respect of stale causes of action the subject of curial proceedings.
[82]
[47] It then becomes necessary to consider the consequences of non-compliance with s 17(4) and the adjudicator's error in failing to have regard to it.
[83]
[48] BCIPA does not expressly provide for any consequence of non-compliance with s 17(4). The question is whether it makes a payment claim served out of time invalid. That question is to be resolved as a matter of construction of BCIPA.[19] There are some analogous cases of assistance. First among them is Brodyn. In that case, the following important passage appears:
[84]
"What then are the conditions laid down for the existence of an adjudicator's determination? The basic and essential requirements appear to include the following:
[85]
1. The existence of a construction contract between the claimant and the respondent, to which the Act applies (ss 7 and 8).
[86]
2. The service by the claimant on the respondent of a payment claim (s 13).
[87]
3. The making of an adjudication application by the claimant to an authorised nominating authority (s 17).
[88]
4. The reference of the application to an eligible adjudicator, who accepts the application (s 18 and s 19).
[89]
5. The determination by the adjudicator of this application (ss 19(2) and 21(5)), by determining the amount of the progress payment, the date on which it becomes or became due and the rate of interest payable (s 22(1)) and the issue of a determination in writing (s 22(3)(a)).
[90]
The relevant sections contain more detailed requirements: for example, s 13(2) as to the content of payment claims; s 17 as to the time when an adjudication application can be made and as to its contents; s 21 as to the time when an adjudication application may be determined; and s 22 as to the matters to be considered by the adjudicator and the provision of reasons. A question arises whether any non-compliance with any of these requirements has the effect that a purported determination is void, that is, is not in truth an adjudicator's determination. That question has been approached in the first instance decision by asking whether an error by the adjudicator in determining whether any of these requirements is satisfied is a jurisdictional or non-jurisdictional error. I think that approach has tended to cast the net too widely; and I think it is preferable to ask whether a requirement being considered was intended by the legislature to be an essential pre-condition for the existence of an adjudicator's determination.
[91]
In my opinion, the reasons given above for excluding judicial review on the basis of non-jurisdictional error of law justify the conclusion that the legislature did not intend that exact compliance with all the more detailed requirements was essential to the existence of a determination: cf Project BlueSky Inc v Australian Broadcasting Authority[1998] HCA 28; (1998) 194 CLR 355 at 390-391. What was intended to be essential was compliance with the basic requirements (and those set out above may not be exhaustive), a bona fide attempt by the adjudicator to exercise the relevant power relating to the subject matter of the legislation and reasonably capable of reference to this power (cf R v Hickman; Ex parte Fox and Clinton[1945] HCA 53; (1945) 70 CLR 598), and no substantial denial of the measure of natural justice that the Act requires to be given. If the basic requirements are not complied with, or if a purported determination is not such a bona fide attempt, or if there is a substantial denial of this measure of natural justice, then in my opinion a purported determination will be void and not merely voidable, because there will then not, in my opinion, be satisfaction of requirements that the legislature has indicated as essential to the existence of a determination. If a question is raised before an adjudicator as to whether more detailed requirements have been exactly complied with, a failure to address that question could indicate that there was not a bona fide attempt to exercise the power; but if the question is addressed, then the determination will not be made void simply because of an erroneous decision that they were complied with or as to the consequences of non-compliance."[20]
[92]
[49] On that reasoning, non-compliance with s 17(4), as one of the "detailed requirements", might not make a payment claim void. But that view was expressed as obiter dicta and was not expressed specifically in relation to the requirement under s 17(4)[21]. Moreover, it is difficult, in my view, to comprehend why Parliament enacted a requirement that a payment claim must be served - "only" - within a particular time period but did not intend that failure to do so would be a failure to comply with a "basic requirement" of the right to recover a payment on that payment claim.
[93]
[50] I prefer the approach Spigelman CJ adopted in relation to the time limit for bringing an adjudication application in Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd[22]:
[94]
"Similarly, an 'integer or element of the right'... is
[95]
its exercise by application made within the time specified. (David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; (1995) 184 CLR 265 at 277)...
[96]
This detailed series of time provisions is carefully calibrated to ensure expeditious resolution of any dispute with respect to payments in the building industry. The time limits are a critical aspect of the scheme's purpose to ensure prompt resolution of disputes about payment. It is commercially important that each party knows precisely where they stand at any point of time. Such certainty is of considerable commercial value."
[97]
[51] The conclusion to which I have come in this case is that the payment claim as made was invalid because of non-compliance with s 17(4) and, since that matter was apparent on the face of the claimant's submissions validly made to the adjudicator, and he was aware of the point, he was obliged to consider the operation of s 17(4) in making his adjudication decision. It is unnecessary to consider any wider question, and I do not do so.
[98]
[52] The ability of the court to interfere with an adjudication decision is restricted in Queensland by the operation of s 18(2) of the Judicial Review Act 1992 (Qld). In effect, that sub-section provides that the Judicial Review Act does not apply to an adjudication decision made under BCIPA. In 2011, the Court of Appeal considered the effect of that sub-section: Northbuild Construction Pty Ltd v Central Interior Linings Pty Ltd[23]. In obiter dicta, the Court indicated a preference for the view that the proper construction of s 18(2) is that "the exclusion of Pt 3 Div 2 from the Judicial Review Act is limited to review of decisions not infected by jurisdictional error"[24].
[99]
[53] The concept of "jurisdictional error" was revisited by the High Court in detail in Kirk & Anor v Industrial Court of NSW & Anor[25]. The joint reasons of six members of the court reiterated the "lack of authority of an administrative tribunal (at least in the absence of a contrary intent in the statute or other instrument establishing it) 'either to authoritatively determine questions of law or to make an order or decision otherwise than in accordance with the law'"[26].
[100]
[54] In my view, there is nothing in the language or context of s 26 of BCIPA to establish a contrary intention in the case of an adjudicator's misconstruction of the operation of that section in relation to apparent non-compliance with s 17(4). In the circumstances of this case, the adjudicator did not have authority to wrongly determine that the payment claim was valid by putting aside non-compliance with s 17(4) because the point was not raised in a payment schedule. That was a misapprehension of the limits of the adjudicator's functions or powers.
[101]
[55] It follows, in my view, that the applicant has established that the payment claim was invalid and that the adjudication decision was invalid. A declaration should be made in the terms set out on the front page of these reasons.
[102]
[56] It is unnecessary to consider any of South East's other contentions as to invalidity.
[103]
[57] I will hear the parties on costs. My provisional view is that costs should follow the event.